Lay of the Land

A Beachfront Hotel for Santa Cruz

Published on: January 19, 2015 | By Anne E. Mudge and Linda Klein

Digital rendering of the proposed La Bahia Hotel in Santa Cruz

The final chapter of the entitlement history of the La Bahia Hotel in the City of Santa Cruz suggests a telling lesson for oceanfront coastal zone projects: keep it simple. The proposed hotel is on the site of the La Bahia Apartments, which were developed in 1926 as luxury apartments and are designated as a local historic landmark. This entitlement story began with the City’s 1998 adoption of the Beach and South of Laurel Comprehensive Area Plan, which envisioned a revitalized beachfront area. The Area Plan contemplated revitalizing older lodging facilities along the shoreline and attracting a quality hotel to the beachfront at the site of the La Bahia Apartments. Parts of this Area Plan were adopted by the Coastal Commission and included in City’s Local Coastal Program (LCP). As with many coastal projects, transforming the vision into reality would have its challenges. In 2003, a hotel proposal was approved by the City, but with conditions of approval that resulted in the applicant deeming the project financially infeasible. In 2009, the City approved a coastal development permit (CDP) for another hotel project, but needed to first amend its LCP to do so. That amendment required Coastal Commission approval. The Commission rejected the amendment in 2011.

The Santa Cruz Seaside Company, the owner/operator of the Santa Cruz Beach Boardwalk, then stepped in and submitted a proposal for a 165-room beachfront hotel and conference/banquet facility. Notably, this project would not require amendment of the City’s Local Coastal Program, thus “keeping it simple.” As a result, it did not need Coastal Commission approval unless the City’s approval was appealed to the Commission and presented a substantial issue. Continue reading

Courts Say Exactions Must Have a Nexus

Published on: January 18, 2015 | By Alex DeGood

Here’s the continuing message from the courts to public agencies demanding money or land from developers: There must be a strong connection between your exaction and the impacts of a project or else the exaction violates the Constitution. Established more than two decades ago by the United States Supreme Court, the principles of “nexus” and “rough proportionality” can no longer be considered “new.” Yet, public agencies continue to explore the limits of the courts’ tolerance for “too much” in the way of exactions. In 2014, two California decisions, one state and one federal, told public agencies that they had gone too far.

The federal case (Levin v. City and County of San Francisco) addressed San Francisco’s rent control ordinance. Under the ordinance, if a landlord wants to remove a rent-controlled unit from the rental market, the landlord must pay the displaced tenant the lump sum equivalent of twenty-four months of the difference between the tenant’s controlled rent and the prevailing market rate rent for a similar unit. Additionally, that amount is increased based upon how long the tenant had resided in the unit, with many tenants owed well over $100,000 under the ordinance.

The federal district court found that a landlord’s decision to remove a unit from the rental market did not create the disparity between the controlled rental rate and the market rental rate. First, market rates are the product of economic factors that have nothing to do with the landlord. Second, the disparity between controlled rates and market rates exists only because the City chose to impose rent control. As a result, there was no valid connection between the rental disparity and the landlord’s removal of the unit from the rental market. Therefore, the court found that the ordinance was a taking without just compensation under the Fifth Amendment.

Similarly, in Bowman v. California Coastal Commission, a California court of appeal addressed a San Luis Obispo County requirement for dedication of a shoreline easement as a condition to the County’s approving the renovation of a house and barn on the same 400-acre site, but a mile from that shoreline. Continue reading

Welcome

Published on: December 9, 2014 | By David Waite and Tim Paone

Welcome to “Lay of the Land.” The contributors to this blog come principally from the ranks of the Land Use and Natural Resources Practice Group of Cox, Castle & Nicholson LLP. We hope to share with you the unique perspectives of a deep, experienced, and skilled group of land use practitioners. We are honored that Cox Castle & Nicholson was recently named the nation’s 2015 “Law Firm of the Year” for Land Use & Zoning by U.S. News & World Report and Best Lawyers.

If you would like to automatically receive “Lay of the Land,” please click here to subscribe. There is no obligation and you may easily unsubscribe at any time. Continue reading

KEEP AN EYE ON . . .

Published on: December 8, 2014 | By Our Land Use & Natural Resources Team

Here are several potential developments related to affordable housing and CEQA that you should watch for in the coming months:

. . . CEQA REFORM: As we move into 2015, there again will be calls for comprehensive CEQA reform. But will they be heeded? The need for reform is widely acknowledged, as it was by Governor Brown in his 2013 State of the State address: “We . . . need to rethink and streamline our regulatory procedures, particularly [CEQA].” An article in the Environmental Monitor said “In recent years there have been several attempts in the legislature to reform … CEQA. …[Y]et very few substantive changes have been made….” But that was in 1996, seventeen years before the Governor made his comments. Nothing substantive happened in between – or since.

What Do Lady Gaga, Conan O’Brien, and the California Legislature Have in Common?

Published on: December 8, 2014 | By Scott Birkey

California’s severe drought has set off alarms from the Capitol to the sound stages of Hollywood. The Governor has declared a State of Emergency and both Lady Gaga and Conan O’Brien have starred in “Save Our Water” public service announcements to promote water conservation measures. On the more impactful legislative front, the California Legislature has passed three pieces of legislation that together make up the “Sustainable Groundwater Management Act.” This new regulatory program may have significant land use implications, particularly in the case of general plan amendments, as it potentially adds a new layer of review to the entitlement process.

Before this Act, regulation of groundwater pumping in California was virtually non-existent, with no meaningful statewide standards for groundwater management. This Act creates new standards and, in the process, merges groundwater management and local planning. Before a city or county can adopt any substantial amendment of its general plan, it will be required to review and consider applicable Groundwater Sustainability Plans. These Groundwater Sustainability Plans will be prepared by newly-established local “Groundwater Sustainability Agencies,” comprised of one or more local agencies. Not only must the city or county consider the applicable Plan, it also must refer the proposed general plan amendment for review and comment to the Groundwater Sustainability Agency. Continue reading

New Policy Clarification from USFWS on Whether to List a Species May Itself Require Clarification… Among Environmentalists, It’s “All the Range”

Published on: December 8, 2014 | By Scott Birkey

Sometimes “clarification” requires clarification. That is the case with a recent policy change announced by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service in June 2014 to “clarify” key terms central to the implementation of the Endangered Species Act. The new policy begs the question “How much significance does it take to be significant?”

The ESA is no stranger to controversy, both political and practical. As of November 2, 2014, 487 animals and 728 plants were listed as endangered in the United States. By the time a species is listed, its listing process likely has endured debate and disagreement over whether that species should be listed as endangered, threatened, or not at all. The listing of a species often leads to increased permitting complexity, costs, and delay for projects where that species or its habitat is found on site. Continue reading

The Sky’s the Limit – Sometimes

Published on: December 8, 2014 | By Scott Birkey

You probably haven’t spent much time wondering about who owns that sky above your house? You may be surprised to find out that, according to Public Utilities Code Section 21402, that sky is yours – to a point. So, what is this curious asset worth and, more to the point, what can you do with it? Scott and Lynn Powell, Humboldt County homeowners, found the answer the hard way.

The Powells wanted to make minor alterations to their home. “Fine” said the County, as long as the Powells provided an aircraft overflight easement as required by the County’s General Plan. The Powells, willing to assume the role of David to the County’s Goliath, filed suit, arguing that this requirement was not substantially related to the modification of their home and, in fact, resulted in a taking of their property. Under the Constitutions of the United States and California, the Powells filed an action for just compensation from the County. Goliath won. Continue reading

The Potential Impacts of SB 743: Did the Legislature Double Dribble?

Published on: December 7, 2014 | By JoAnn Hadfield, Tim Paone, and Tony Petros

Co-contributors: PlaceWorks, Tim Paone of Cox Castle & Nicholson, and Tony Petros of LSA Associates and a member of the Newport Beach City Council.

It went in as a bill to streamline approval of a basketball arena. It came out, in addition, as legislation that revolutionizes the way traffic impacts are evaluated under CEQA. SB 743 will change the focus of CEQA traffic impact analysis from avoiding or mitigating congestion to reducing greenhouse gas emissions and promoting multimodal transportation and infill development. It eliminates traditional “level of service” (LOS) analysis as the measure of traffic impacts and replaces it with “vehicle miles traveled” (VMT). The Governor’s Office of Planning and Research (OPR) was directed to prepare CEQA guidelines to implement this change. A “discussion draft” of proposed Guidelines was released in August. When and if approved, the Guidelines will take effect in “transit priority areas” immediately and then statewide in 2016.

Under the Guidelines, VMT measures “the amount and distance that a project might cause people to drive,” rather than congestion and delay. Changing the traffic methodology is intended to result in more sustainable communities. But will the Legislature’s direction be circumvented by local agencies whose residents (and voters) care more about how long it takes to get to work, school, and the grocery store than they do about global warming, sustainable living, and terms such as “multi-modal”? And what does SB 743 portend for California’s roadway infrastructure? Consider these facts: Continue reading

Project EIR or Program EIR? “A Rose By Any Other Name . . . .”

Published on: December 7, 2014 | By Andrew Sabey

You are entitling a large project to be built in phases which reflect market conditions, lending constraints, absorption rates, and your appetite for risk. The final phases of your project may not be built for ten or more years, when planning and marketing considerations may have changed. Your EIR cannot possibly evaluate every last detail of the overall project, but you want to get started with the initial phases NOW. So, you hear your CEQA consultants, your lawyers, and the agency’s staff anguishing over whether your EIR will be a “program” EIR or a “project” EIR. You’re hearing that what you call the EIR may be more important than what it says and that a wrong decision on the label may drop you into the black hole of CEQA litigation. Really? Can this be true? Continue reading

Density Bonus Update—Is AB 2222 Another Impediment to Solving California’s Affordable Housing Crisis?

Published on: December 7, 2014 | By David Waite and Andrew Fogg

In many cities throughout California, concerns about traffic have made the State Density Bonus Law (“DBL”) a four letter word. Developers who are otherwise willing to provide affordable units as a component of a market rate multifamily or mixed-use project are increasingly discouraged from doing so. And it’s not getting any easier. On September 27, 2014, Governor Brown signed AB 2222, amending the DBL in response to a growing perception that the DBL could be implemented in a manner that could result in a net loss of existing affordable housing units for new housing projects. The bill requires developers to identify and replace all of a property’s pre-existing affordable units to be eligible for a density bonus under the DBL. While that goal sounds reasonable, in practice, it may prove to be difficult to implement and will most likely not achieve the intended result of retaining and creating more affordable housing throughout California. Continue reading