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Court Defers On General Plan, Density Bonuses

In a decision deferential to city officials, an appellate court has upheld the City of Vacaville's approval of an 860-acre project as compatible with the general plan. The decision also provides the first published ruling on the recently amended state density bonus law, which the court applies very broadly.

The First District Court of Appeal rejected slow-growth advocates' argument that the subdivision map was inconsistent with Vacaville's general plan, and that the city and developer abused the density bonus law to squeeze more units into the project.

The court's ruling on the density bonus issue has spurred a great deal of discussion. The court ruled that the city could provide a density bonus greater than prescribed in state law, and that the bonus need not be based on any particular local policy. Plus, the court ruled, a developer must designate only 35 units for senior citizens to be eligible for a density bonus of at least 20% for the entire project, no matter how large the project.

"This is an enormous gift to the development community," said Stuart Flashman, the attorney for project opponents.

"Some of the holdings about the density bonus law are really surprising," added Barbara Kautz, a municipal law attorney with Goldfarb & Lipman who was not involved in the case. The court goes out of its way to say that the provision of 35 non-income-restricted units for seniors is all that is needed for the 20% density bonus, she said. The court even uses the hypothetical example of a 2,000-unit project that would be eligible for 400 extra units if the developer provides a mere 35 age-restricted units. (The density bonus law permits bonuses for senior citizen housing developments, which are defined in the Civil Code as projects of 35 units or more.) It is doubtful the court's interpretation is what housing advocates have in mind, Kautz said.

On the issue of general plan compatibility, the court cites the Governor's Office of Planning and Research General Plan Guidelines and the landmark general plan case Corona-Norco Unified School District v. City of Corona, (1993) 17 Cal.App.4th 985. "An action, program, or project is consistent with the general plan if, considering all its aspects, it will further the objectives and policies of the general plan and not obstruct their attainment," the court ruled.

"State law does not require perfect conformity between a proposed project and the applicable general plan; ‘rather, to be "consistent," the subdivision map must be "compatible with the objectives, policies, general land uses, and programs specified in" the applicable plan,'" the court held, citing Sequoyah Hills Homeowners Assn. v. City of Oakland, (1993) 23 Cal.App.4th 704, 717.

Flashman contended the decision is actually a blow to general plan integrity.

"Unfortunately, there is a line of cases where courts of appeal are more and more deferential to the city. This one is about as far as you can go," Flashman contended. "The city can say it [the general plan] means whatever the city says it means. It's another piece of bad news for the average citizen."

Vacaville Deputy City Attorney Melinda Stewart rejected that characterization. "I wouldn't say it gives us unfettered authority. The city still has to act within the goals of the general plan," she said.

All general plans are written differently, and Vacaville's plan allows for a great deal of flexibility on some matters, which is what the court recognized, Stewart said.

After adopting an updated general plan in 1990, Vacaville followed up with the Lower Lagoon Valley Policy Plan for a lightly developed area between the city and nearby Fairfield. The policy plan called for development of a regional business park and upper-end housing of up to 730 units, as well as a golf course, regional park and open space. Nothing much happened until the city in June 2004 approved a specific plan and general plan amendment for Triad Communities of Seattle to permit 1,325 housing units, up to 1 million square feet of commercial and office space, and 50,000 square feet of retail space. The project was not popular.

Greenbelt Alliance sued over the project's environmental review, and other opponents gathered enough signatures to force a referendum election on the specific plan and general plan amendment. Triad then revised its plan and settled with Greenbelt Alliance. The new project called for 1,024 housing units, 700,000 square feet of office space, and 50,000 square feet of retail development. Although the project would exceed the policy plan's limitation on housing by about 300 units, the city found the project compatible because it would decrease potential office development and eliminate the possibility of big-box retail. The City Council approved the project and an addendum to the original environmental impact report in February 2005.

The group Friends of Lagoon Valley then sued over general plan consistency and application of the density bonus law. Solano County Superior Court Judge Donald Fretz ruled for the city and ordered Friends to pay Triad $12,000 to offset the cost of preparing the administrative record. On appeal, the First District upheld the ruling in its entirety.

Friends argued that the project was incompatible because it would increase traffic congestion beyond general plan thresholds, reduce the size of the policy plan's envisioned business park, and provide more housing than the plan allowed.

The court, however, ruled that Friends was reading the general plan's traffic congestion policies too strictly. The policies provide exceptions for projects such as this one, the court found. Plus the city required payment of impact fees for specific mitigation measures, and the City and Caltrans are working on a cooperative study of clogged freeway ramps, the court determined.

As for office development, the court conceded that the project's 700,000 square feet of office space is far less than the policy plan's 4 million square feet for offices and a hospital. But, Presiding Justice William McGuiness wrote, "This difference in square footage, while significant, does not in itself violate the city's plans."

Regarding the additional housing units, the court ruled that Friends' "argument construes the policies expressed in the plans too rigidly and ignores the flexibility city officials have in implementing them."

Citing Napa Citizens for Honest Government v. Napa County Bd. of Supervisors, (2001) 91 Cal.App.4th 342, 378, McGuiness wrote, "The question is not whether the square footage of the proposed development matches the square footage envisioned for various uses in planning documents, ‘but whether the project is compatible with, and does not frustrate, the general plan's goals and policies.'"

"Substantial evidence supports the city's conclusion that the residential development proposed in the project is compatible with general plan goals and policies," the court ruled.

On the density bonus law (Government Code § 65915), the court provided the first published interpretation of 2004 legislative amendments that established a sliding scale for mandatory density bonuses of 20% to 35% depending on the amount and type of housing a developer provides (see CP&DR, September 2004). Lagoon Valley project opponents argued that the 40.5% bonus Vacaville granted to Triad was beyond the statutorily allowed 35%, especially because the city has no ordinance permitting a greater bonus. The court disagreed.

"[I]t is clear that 35% represents the maximum amount of bonus a city is required to provide, not the minimum amount a developer can ever obtain," Boren wrote. In addition, he wrote, "Nothing in the density bonus law suggests that a municipality must enact an ordinance any time it wishes to provide more of a density bonus than is required by state law."

This part of the decision is particularly troubling to some planners because it means a city or county essentially may use ad-hoc density bonuses to supersede zoning.

But Stewart, the city's attorney, said the ruling simply lets cities decide on projects case-by-case. "It does give the city the authority and some flexibility in application of the density bonus statute," she said.

Vacaville granted the 40.5% bonus to what would have been a 730-unit project because Triad agreed to provide 100 age-restricted townhouses, 75 units of moderate-income housing, and amenities including parks and a fire station. Opponents argued the senior housing density bonus applies only to the age-restricted portion of the development. Again the court disagreed.

"Nothing in § 65915 states or suggests that the density bonus for senior citizen housing could not be applied to the development project as a whole," Boren wrote.

"We recognize that, under our interpretation," Boren continued, "the senior housing provision of § 65915 has the potential to create a windfall for developers in some circumstances."

Attorney Flashman said an appeal to the state Supreme Court is possible. Leaders of the California Chapter of the American Planning Association are talking about asking state lawmakers to clarify their intent on the density bonus provisions. Meanwhile, the project cannot proceed yet because — under Triad's settlement with Greenbelt Alliance — the developer must circulate an initiative to delineate an urban planning area. If the City Council declines to adopt the initiative, or if voters reject it, then Triad would be on the hook for huge open space mitigation fees before it could build.

The Case:
Friends of Lagoon Valley v. City of Vacaville, No. A113236, 07 C.D.O.S. 10460, 2007 DJDAR 13253. Filed August 28, 2007.
The Lawyers:
For Friends: Stuart Flashman, (510) 652-5373.
For the city: Melinda C.H. Stuart, city attorney's office, (707) 449-5105.
For Triad Communities: Clark Morrison, Cox, Castle & Nicholson, (415) 392-4200.