An appellate court has decided to allow Caltrans to transfer 130 acres near Carmel for use as a state park despite a constitutional provision prohibiting the sale of Caltrans property for less than market value. The court ruled that a constitutional exception for property in the coastal zone applied because about 20% of the property lies within the zone.

The land in question is in Hatton Canyon, a Monterey Pine forest supporting coastal habitat, diverse wildlife and public recreation. In 1956, Caltrans purchased 130 acres through Hatton Canyon for a potential realignment of Highway 1 east of Carmel.

Forty-five years later, the Legislature passed AB 434. The law declared the 130 acres to be surplus property in the coastal zone and transferred the land to the Department of Parks and Recreation.

A taxpayers group called Citizens for Hatton Canyon filed a lawsuit challenging the constitutionality of AB 434. The group contended the transfer violated the state constitution’s ban on disposing of Caltrans property for less than market value. Monterey County Superior Court Judge Michael Fields upheld the law. On appeal, so did a unanimous three-judge panel of the Sixth District Court of Appeal.

Article XXVI of the state constitution bars the sale for less than market value of Caltrans property acquired with tax revenues. An exception, however, is found in article XIX, § 9, which allows below-market sales when the property is in the coastal zone and is sold for a park.

In the Hatton Canyon case, only 24 acres of the 130 acres lie within the coastal zone. Citizens for Hatton Canyon argued that because only a portion of the property was within the coastal zone, the exception in article XIX, § 9, did not apply.

In ruling against the taxpayers’ group, the appellate court first pointed to the Coastal Act and to the Park and Recreational Facilities Act of 1984. The Coastal Act — which seeks to enhance the coastal zone environment and maximize public access to the coast — underlies the article XIX, § 9, exception, Presiding Justice Conrad Rushing wrote for the court. The 1984 park law re-emphasizes this commitment to the coast and declares an intent to acquire, develop and restore areas for recreation and conservation. Assembly Bill 434 furthered these policies, the court held.

"The Legislature’s objective, to promote the coastal habitat of Hatton Canyon by transferring the land to Parks, was entirely consistent with the strong public policy protected by article XIX, § 9, of the constitution," Rushing wrote.

Furthermore, the court was bound to accept the Legislature’s legal interpretation that the phrase "in the coastal zone" applied to properties that are only partially in the coastal zone, the court held.

"[T]he legislative intent of protecting coastal properties for the public good is actually better served by this more expansive interpretation of the term ‘in the coastal zone,’" Rushing wrote. "Such an interpretation is also entirely consistent with the constitutional objective of elevating the protection of the coastal zone above the protection of the state’s highway trust fund."

The Case:
Citizens for Hatton Canyon v. California Department of Transportation, No. H024449, 03 C.D.O.S. 9180, 2003 DJDAR 11520. Filed October 17, 2003.

The Lawyers:
For Citizens: Michael Masuda, Noland, Hamerly, Etienne & Hoss, (831) 424-1414.
For Caltrans: Antonio Anziano, Caltrans, (415) 904-5700.
For Department of Parks and Recreation: John Davidson, attorney general’s office, (415) 356-6365.