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HomeMy WebLinkAbout12/8/2004 - STAFF REPORTS 12/01/2004 17: 12 3103148050 CHATTEN-BROWN&ASSOCI PAGE 02I08 CRATTEN-BROWN&ASSOCIATES TELEPHONE:(310)314-8040 3250 OCEAN PARTS BOULEVARD .. E•ma31: FACSEvMX; 010)314-8050 SUITE mu DPC a C(3AEAR.'THLAW.CON SANTA MONICA,CALIFORNIA 90405 ' www-cbaearfh[xw.cgm December 1, 2004 ,By Facsimile Original to follow in U.S. Mail Honorable Mayor and City Council City of Palm Springs 3200 ] . Tahquitz Canyon Way Palm Springs,1 CA 92262 Re: Opposition to Council-Initiated Ballot Measures For March 2005 Election i Honorable Mayor and Councilmembers: We have e reviewed the City Attorney's November 24, 2004 Memorandum regarding the Council-Initiated ballot measures and strongly oppose both measures. This City Council has had many opportunities to protect the Palm Springs mountains, and has not chosen to.do so. Now that the Mountain Preservation Initiative has qualified, the City proposes a bold measure that is fundamentally misleading and is based upon the false premise that the Initiative may require the payment of monetary damages for a regulatory taking. Furthermore, the Bond Measure is not exempt from CEQA review nor is the So- called Mountain Protection Act. Although the Protection Act is described in only the most vague terms, it is apparent that it too is subject to CEQA review, Moreover, it appears that it does very little, to protect our local,mountains. We will provide our additional comments on that measure after yve have had the opportunity to review it. The Bond Measure Is Based Upon The False Premise That The City Could Be Liable For Monetary Damages The-primary and express purpose of the bond measure is "to compensate property owners for legally valid claims for just compensation should [the] Initiative be approved." (Resolution, page 1), The proposed resolution recites that "the City Council has received written claims from various property owners alleging a substantial diminution of their property values if the Initiative is enacted." (Proposed Resolution, page 1.) Although the resolution claims the purpose is also to "acquire property for open space" and other l' `� � F 12/01/2024 17: 12 3103148050 CHATTEN-BROWN&ASSOCI PAGE 03/08 Honorable Mayor and City Council December 1, 2004 Page 2 of 5 Purposes, there are not recitals that explain this purpose. gbid.) Similarly, the proposed ordinance states portions of bond proceeds would be used"to compensate property owners where legally necessary for a partial or total taking of their property in the event a court . . . determines that the Initiative, though constitutional on its face, constitutes an unconstitutional taking of parcels of property as applied." (Ordinance,p, 2.) Payments for partial or total takings do not necessarily allow the City to acquire the properties involved. The statements in the Resolution and.Memorandum that there may be takings for which the City tray be liable for monetary damages as a result of the Mountain Preservation Initiative are contrary to well-established law. First, the Initiative will not result in the taking of property. It is well-established that a City has the right to down-zone prope for purposes of preserving open space. (See, e.g.,Agins v. City of Tiburon (1980) 4 47 U.S. 255; see also Shea Homes Limited Partnership v. County of Alameda (2003) 11.0 Cal. App. 4th 1246.) Accordingly, cities and counties throughout this state have adopted open space districts imposing density limits that far exceed the one house per 40 acres which the Initiative proposes. Regulation of the use of property does not cause a taking if it: 1) substantially advances legitimate state interests, and 2) does not deny the owner all economically viable use of his land. With regard to the fit st element, as Agins observes, California has determined that regulations that provide for pen space will reduce ill effects of urban sprawl, such as air, noise and water pollution, traffic congestion, destruction of scenic beauty. (Agins, supra, 447 U.S. at p. 261.) Such a governmental purpose has long been recognized as legitimate. There can be nod ubt that the Initiative satisfies this element given that it specifically articulates and advances these purposes. With respect to the second element, the clainrarrt must show a loss of all economically beneficial or productive use o the property so as to leave the property economically idle. (See Lucas v. South Carolina Coastal Council(1992) 505 U.S. 1003, 1019.) Generally, if permissible uses exist, a development restriction does not deny a property bolder the economically viable use Df his property. (See Agins, supra, 447 U.S. at p. 262; Hodel v. Virginia Surface Mining & Recl. Assn. (1981) 452 U.S. 264, 296.) .Even a significant diminution in value is insufficient to establish a regulatory taking. (Euclid v.Ambler Realty Co. (1926) 272 U.S. 365 [75 percent reduction in value because of zoning law insufficient to establish a taking]; lLadacheck v. Sebastian, (1915) 239 U.S. 394 [nearly 90 percent reduction in value because of use restriction insufficient to establish a taking].) Given that the Initiative allows for property to be used for residential purposes regardless of the size of the parcel, there are certainly productive and viable uses of the land. 12/01/2004 17:12 2103148050 CHATTEN-BROWN&ASSOCI PAGE 04/08 Honorable Mayor and City Council December 1, 2004 Page 3 of 5 It is quite surprising that the City Attorney's legal analysis of the bond does not even discuss the City's tight to establish an open space district and down-zone areas without resulting in a taking. Instead, we find only the unsupported assertion that"some valid claims may exist". (November 24, 2004 Memorandum, page 6) Second, and more importantly, even if a court did determine that a takings occurred, there is no possibility that the City would be required to pay a penny in damages even if claimant ivere successful in claiming that a takings. If court found the application of the Initiative would create a taking,the City could simply not apply the Initiative to that property. The California Supreme Court has ruled in Agins v. City of Tiburon, (1979) 24 Cal.3d 266, 272-273, that a claimant may not recover monetary damages based upon such regulatory takings, but rather must bring an action for declaratory relief or mandamus. As the Court explained: "We also accept the reasonable latitude which must be afforded public officials in the planning for and implementation of legitimate land use goals. These twin purposes will be served bypreserving for the landowner, in' appropriate oases, declaratory relief or mandamus remedies. However, the use of inverse condemnation with its imposition of money damages upon the public entity would, in our view, unwisely inhibit the proper and necessary exercise of a valid police power" (Id. at 278.) In fact, the Agins Court specifically stated that monetary compensation is not available, in part, because of the concern that it would impair the public's ability to implement land use controls by means of direct initiatives. (Id. at 276.) Subsequent cases have consistently followed the Supreme Court's holding in Agins.1 (See, e.g., Hensler v_ City of Glendale(1994) 8 Cal. 4t1i 1, 14.) The City has an obligation to the voters not to make any false or misleading statements in connection with ballot measures. Therefore, no measure should be approved for the ballot that is founded upon the false premise that valid claims might exist that require payment. It is hard to understand how such a bond measure could be Nowhere in the proposed bond measure does the City Attorney even attempt to argue that there could be a legitimate claim for a complete denial of the use of the property. Indeed, any such contention would be absurd,given that the Initiative permits a single residence regardless of the size of the parcel. Thus, there is no basis for arguing that a claimant could seek damages as a temporary regulatory taking under First English Evangelical Lutheran Church of Glendale v. Los Angeles County (1987) 482 U.S. 304. 12/01/2004 17:12 3103148050 CHATTEN-BROWN&ASSOCI PAGE 05/68 Honorable Mayor and City Council December 1, 2004 Page 4 of 5 Placed upon the ballot, given that the City must inform the public that it is not only unnecessary, but fundamentally misleading, given that under Agins there is no possibility that the City will be liable for monetary damages. However, if you do put the measures on the ballot, our clients will insist that you make no argument that the bond measure is needed because of the Mountain Preservation Initiative. We believe that we could succeed in eliminating any such statement as false and misleading, and prohibited by Elections Code Section 9204. CEQA Review Must Be Conducted Prior To Approving the Placement of the Bond Measure or the Protection Act on the Ballot - California Environmental Quality Act ("CEQA") review is required before the City Council may approve placement of a measure on the ballot. (Friends of Sierra Madre v. City of Sierra Madre (2001) 25 CaLe 165.) The City Attorney's memorandum expresses a belief that "an acquisition fund for sensitive mountain arcas.is.categorically exempt from CEQA under Section 15313 of the CEQA Guidelines" (Memorandum, p. 6) and implies that the Mountain Protection Act is exempt pursuant to section 15307 or 15308 of the CEQA Guidelines. (Memorandum,p. 7.) These assertions of exemptions from CEQA are incorrect. Mather, the correct conclusion is the City Attorney's earlier recognition that"a ballot measure put before the voters by the City Council is not exempt from CEQA. (Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4' 165.)" (Memorandum, p. 4) Section 15313 of the CEQA Guidelities'was intended for acquisitions of land for fish and wildlife conservation, not for simply compensating landowners when the value of their property is diminished. There is no basis for concluding that all of the bond money will be used for wildlife conservation or open space preservation. One of the stated purposes of the bond measure is to pay money damages to litigants who have claimed that"there is not sufficient public benefit to justify the enactment" of the Initiative's regulations. (Bond Resolution, page 1.) While the use of fands for the other stated purpose (wildlife conservation and open space acquisition) may properly be exempt, the use of funds for compensation to property owners clearly is not. The bond measure clearly allows for property owners to be compensated on a regulatory takings claim, and there is no requirement that the City acquire the land under such circumstances. In fact, the property owner may still retain ownership and under the Mountain Preservation Initiative use the property for residential purposes. In no way would such expenditures be considered the acquisition of property for the purposes of conservation. Therefore the placement of the bond measure on the ballot is not exempt from CEQA pursuant to CEQA Guidelines Section 15313. It is impossible to evaluate the potential exemption of the San Jacinto-Santa Rosa �V 12/01/2004 17: 12 3103148050 CHATTEN-BROWN&ASSOCI PAGE 06108 Honorable Mayor and City Council December 1, 2004 Page 5 of 5 Mountain Protection Act since it is not written yet. However, the Memorandum's references to CEQA exemptions for these measures are similar to the questionable claims of exemptions that courts have struck down. (.Mountain ,Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105,125 ["Because a delisting removes rather than secures these protections [for protected species], the categorical exemption for actions assuring the maintenance, preservation or entrancement of a natural resource set forth in sections 15307 and 15308 of the Guidelines does not apply"); Wildlife Alive v. Chickering(1976) 18 Cal.3d. 190, 204-206 [categorical exemption for activities assuring maintenance, preservation, or enhancement of natural resource inapplicable to setting of hunting and fishing seasons]; International Longshoremen's & Warehousemen's Union v. Board-of Supervisors (1981), 116 Cal.App.3d 265, 275-276 [exemption inapplicable to agency action leading to relaxation of air quality standards relating to allowable levels of nitrogen oxide emissions].) We urge you not to place either of these proposed measures on the ballot. Sincerely, Douglas P. Carstens cc: David Aleshire, City Attorney Friends of Palm Springs Mountains FAM.,Springs MonnLlint\Com\Fivals�[.tt Cam�cil�Clenf Re Bond bfeAsn ,P[otCCUOA Act MAL.doc 12/01/2004 17:12 3103148050 CHATTEN—BROWN&ASSOCI PAGE 07/08 TELD'HFACSIMONE:(310)314-8040 CUATTE.,N-BROvO TN&AssociATES' EAPT1 FgCS]MlY,ti: (310)3148050 llPc(3CBnEnRTt-u,?.w.COnx 3250 OCEAN PARK BOULEVARD SUITE 300 SANTA MONICA,CALIFORNIA 90405 December 1, 2004 By Facsimile Original to foIl,ow in U.S. Mail Honorable Mayor and City Council City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 12e: Opposition to Council-Initiated Ballot Measures for March 2005 Election Honorable Mayor and Councilmembers: On behalf of our clients, Friends of Palm Springs Mountains, we write to supplement our previous correspondence of today. As we stated previously, there is no legal basis for the City to suggest to the voters that down-zoning land will result in the taking of property. This fact is further illustrated by the following chart, which provides a partial list of the density in open space areas in various city and counties. Please note that space does not permit a comprehensive list of the many jurisdictions that have adopted density regulations that are much more restrictive than that proposed by the Mountain Preservation Initiative, Cit, y/County Minimum Parcel Size Indian Wells 40 acres Marin County 60 acres Mill2itas 30 acres Monterey County 160 acres Napa County 160 acres Rancho Mirage 640 acres San Diego 40 acres Ventura 160 acres In addition,to gathering the information regarding density, we asked planners whether they were aware of any challenges to these low density regulations on the ground that the caused a taking. The answer was uniformly"No". t ; 12/01/2004 17:12 3103140050 CHATTEN-BROWN&ASSOCI PAGE 88108 City Council December .1, 2004 Page 2 of 2 This sllrvey information is further evidence that the bond nicasure is unnecessary as well as legally impermissible. We trust that this information will better inform you regarding trust that this will give you Thank you for your consideration. Sincerely', � Tan Chatten-Brown cc: David Aleshire, City Attorney Friends of Palm Springs Mountains 12/08/2004 12: 35 3103148050 CHATTEN-BROWN&ASSOCI PAGE 01/05 FAX TR Ns is SIGN CHATTEN-13ROWN&z ASSOCIATES 3250 OCEAN PARK BOULFVAILD,SUITE 300 SANTA MONICA, CAL,IFORNIA 90405-3219 TgL•(310)314.8040 FAX:(310)314-SO50 EMAIL!CBA@C13AEARTHLA.W.001N To: Honorable Mayor and City Council Date: December 8, 2004 c/o Patricia A. Sanders, City Clerk S FaIx#: (760) 322-8332 Pages: A (Including this cover sheet) From; Elizabeth Diaz for Douglas Carstens Subject Objections regarding the Council-Initiative Bond Measure Confidential Information If there are any problems with this transmission,please call(310)314-8046 THE INFORMATIONCONTAINEDINTME FACSIMPEM SSAGrB IS WPOWMTIONPROTECTEORVATTORNE ICLIENTANA'ORATTOANEY'S WORPPRODUf;TPkIV1LYGES, IT 1S INTPNOEO ONLY FOR T.HE USE OF THE INDIVMUAL NAMED ABOVE AND THE PRIVD.EGES ARE NOT WAIVED BY VIP U4 OF THIS HAVING RKEN SENTRY FACSE,ELE 1FTPIBPERSONACTUALLYRECD WGTE15FACSIMD.EOk ANYOTHERAEADEROFIHEFACSB14LEMNOTTIIEiNANMR2CfPIPNT,ORTHEEMPLOYEEOR AGENT RESPONSIBLE TO DELIVER IT TO THE NAMED RECIPIENT.ANY LSD,➢ISSEMINATION,➢UTWaUTYON OF COPYING OF THE COMMUNICATION IS STRICTLY PROHIBITED.IF YOU 11A V E kECEI V 4D THIS COMMUNICATION IN ERAOR.PLEASE IM MEDIATELYNOTIFY US DYTELEPHONE ORRE'fURN THE 0MeWAL MIESSAGB TO US AT THE ABOVE ADDRESS VIA TEMWMD STATES POSTAL SERVICE Comments: Hard copy will follow via U.S. Mail. I i i 12/08/2004 12:35 3103148050 CHATTEN—BROWN&ASSOCI PAGE 02105 CHATTEN-DROWN & ASSOCIATES T,E,LFPH0N1::(310)314-8040 3250 OCEAN PARK BOULEVARD CpM FACSINIILF: (310)3148050 SUITE300 JCB©CBAZARTe�AW..,_ .;�_ti-�'' SANTA MONICA,CALIFORNIA 904o5 www.cbaearthlaNvxQm December 8, 2004 By Facsimile Original to follow in U.S. Mail I3onorable Mayor and City Council City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Re: Objections regarding the Council-Initiated Bond Measure Honorable Mayor and Councilmembers: On behalf of our clients, Friends of Palm Springs Mountains, we write to object to the City's attempt to avoid the requirements of CEQA in connection with the proposed bond measure being considered for the March 8, 2004 ballot. Prior to the City Council's first approval of the bond measure on December 1, 2004, the City attorney notified the public that the basis for asserting a categorical exemption under CEQA was Section 15313 of the CEQA. Guidelines_ (Memorandum, p. 6) After we filed our opposition to the use of that exemption, David Alesbire informed me in a phone conversation on Decenabcr 2, 2004 that the City will attempt to use other exemptions to avoid CEQA review. In my follow-up email to Mr. Aleshire the next day, I asked him to identify any such exemptions. We have not yet received a response to that inquiry. We object to the City's attempt to find "new" exemptions after the first vote on the bond measure. This is fundamentally unfair and bars informed public debate on the first vote, and contrary to the public disclosure and public participation goals of CEQA. CEQA was enacted to ensure thoughtful consideration of how governmental actions may impact the environment and to promote public participation in the process. The City's attempt to contrive after-the-fact arguments in search of some exemption that would allow it to avoid the requirements of CEQA is squarely at odds with these purposes. 12/08/2004 12:35 3103140050 CHATTEN-BROWN&ASSOCI PAGE 03/05 Mayor and City Council December 8, 2004 Page 2 of 2 In our previous opposition to the bond measure, we pointed out that using property for residential purposes on existing parcels is generally not a conservation measure. As further support .for this point, I am enclosing a letter written by.Kurt Leuschner, a biologist, in which he explains how residential development on specific ,land within the Initiative's mountain region will harm sensitive habitat. We urge you to not put the bond measure on the ballot. Thank you for your consideration. Sincerely, Jan Chatten-Brawn .Attachment: Letter by Kurt Leuschner cc: David Aleshire Friends of Palm Springs Mountains 12/06/2004 12: 35 3103148050 CHATTEN-BROWN&ASSOCI PAGE 04/05 ATTACHMENT 12/08/2004 12:35 3103148050 CHATTEN-BROWN&ASSOCI PAGE 05/05 Analysis of Biological Report on Wasserman 'Development Company's Crescendo Project November 3, 2004 1 have received and reviewed the biological information regarding the Wessman Development Company's Crescendo project. Additionally, I toured the property myself in early October. Based upon this information, it is my opinion that the project has several biological impacts that are not adequately considered in the mitigated negative declaration for the property. 1) The bird and other wildlife surveys were performed at the time of year, December, when the fewest number of species is likely to be found. I recommend conducting multiple surveys at other times of the year(especially in the spring or summer) to get a more accurate assessment of the potential species that can be found on the project site. 2) The Biological Assessment and Impact Analysis states that no observations were made of the loggerhead shrike on or near the project site. The loggerhead shrike is considered a sensitive species. In my survey of the property 1 found suitable habitat for Loggerhead Shrikes supporting at least 5 or 6 individuals. Any shrikes living on the project site would be displaced by the development, which is a significant impact. 3) The list of potential birds that likely are found on this project site should be expanded to include the many migrant species, such as warblers, and more winter residents, especially flocks of sparrows. Sparrow species, such as White- crowned, Brewer's, Sage, Chipping and Savannah, would be displaced by the project. The impacts on these species should be considered. Attached to this analysis is a copy of my curriculum vitae setting forth my qualifications to comment on this matter. Kurt Lenschner Associate Professor of Natural Resources & Ornithology College of the Desert-Applied Sciences 43500 Monterey Avenue Palm Desert, CA 92260 Weston Investment Co. LLC A Real Estate Holding Company Administrative Off`ice 2154 ME, Broadway,Suite 200 ,TPnrt4tnd,' Oregon 97232-1590 =>` Mai6ngAddtessr T,0. Box 12127•Tort(and, Oregon 97212-0127 (Phone 503-284-9005 TiiX503-284-5458 December 8, 2004 Mayor Ron Oden and the Palm Springs City Council City of Palm Springs 3200 Tahquitz Canyon Way Palm Springs, CA 92262 Via Fax#760-323-8207 Honorable Mayor Oden; In the past year we purchased 70 acres within the Chino Canyon area, within the City of Palm Springs. Our action was predicated on meetings, which we had with the City Planning Staff wherein they detailed the"master plan" for the property and the logical allowable use. The Mountain Region Initiative, if passed, would have the affect of making this Property almost completely worthless! Naturally, this would have an immense economic impact on our company which we cannot allow to have happen. Therefore, we support the Council's decision to issue a bond to compensate owners for their losses if the initiative passes. I must complement the City and Council for their foresight in this regard. Please read this letter into the Record on our behalf, as we are unable to attend the Council meeting this evening. Sincerely, WF-STON INVESTMENT CO. LLC Keith R. Vernon Senior Vice President {J SCHLECHT, SHEVLIN & SHOENBERGER A LAW CORPORATION JAMES M. SCHLECHT LAWYERS TELEPHONE-,(76q)320,7161 JOHN C.SHEVLIN 801 EAST TAHQUITZ CANYON WAY,SUITE 100 TELECOPIER(760)323-1758 JON A. SHOENEERGER PALM SPRINGS, CALIFORNIA 92262 DANIEL T.JOHNSON E-MAIL ssslaw@ssslaw.com DAVID A. DARRIN MAILING ADDRESS ULRICI-I R.McNULTY P. O. BOX 2744 OF COUNSEL KAREN R. GRAHAM PALM SPRINGS, CALIFORNIA 92263-2744 RICK M STEIN i IN REPLY REFER TO: 6438-56 December 8, 2004 Honorable Mayor Ron Oden Honorable Members of the City Council City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 RE: HILLSIDE INITIATIVE AND THE POSSIBILITY OF A BOND ISSUE Dear Mayor Oden and Members of the City Council: This office represents Natbeck Investments and Mr.Jerry Ganz. They own 117 acres of undeveloped property fronting on South Palm Canyon Drive across the street from the new Indian Canyon Golf Course and immediately south of the existing project called Canyon Heights Condominium Project. Under existing City zoning which was in place when my client purchased this property many years ago, we can build two units to the acre for 234 units. Our client participated in a flood control study several years ago conducted at the request of the City of Palm Springs and the Riverside County Flood Control District. It was determined that approximately $8,000,000 of flood control improvements would be required in order to develop on this property. The property is now in escrow to be sold to a development firm from Orange County. We have had to inform them of the existence of the hillside initiative and as a consequence they refuse to further perform until it is determined whether that initiative will be approved by the citizens of Palm Springs at the March 8`I' election. By the terms of the hillside initiative, we could only build three homesites on this 117 acres if the hillside initiative passes. With all of the attendant costs to develop this site, and particularly flood control costs,the property would become valueless. The City is requiring South Palm Canyon Drive to be widened for the entire frontage of this property and the bridge crossing the wash would have to be widened. Along with all of the other development costs including the flood control mentioned above, there is just no feasible way to make sense out of developing this site for three homesites. SCHLECHT, SHEVLIN & SHOENBERGER A LAW CORPORATION LAWYERS Honorable Mayor Ron Oden December 8, 2004 Page 2 ' Our current buyer would cancel on us and we would lose a$13,500,000 sale. That would leave my client with no alternative but proceed against the City of Palm Springs to recover his damages. It seems to us the obvious intent of the backers of the hillside initiative is to keep all of this property as open space. They should have the courage to admit that and support a bond issue to buy up all of this property and leave it as open space if that is what they want. Accordingly, my client urges the City Council to put the contemplated bond issue on the March 8Ih ballot. Very truly yours, 0 �r J ES M. SCHLECHT J /ct SCHLECHT, SHEVLIN & SHOENBERGER A LAW CORPORATION JAMES M.SCHLECHT LAWYERS TELEPHONE (760)320-7161 JOHN C.SHEVLIN 801 CAST TAHQUITZ CANYON WAY,SUITE 100 TELECOPIER 760 323-1758 JON A. T.JOH SON PALM SPRINGS, CALIFORNIA 92262 ( ) DANIEL T.JOHNSON E-MAIL ssslaw®ssslaw.com DAVID A. DARRIN MAILING ADDRESS ULRICH R. McNULTY P. 0. BOX 2744 or couNS2L KAREN R. GRAHAM PALM SPRINGS, CALIFORNIA 92263-2744 RICK M. STEIN IN REPLY REFER TO: 9517-7 December 8, 2004 Honorable Mayor Ron Oden Honorable Members of the City Council City of Palm Springs 3200 E. Tahquitz Canyon Way Patin Springs, California 92262 RE: BOND ISSUE AND HILLSIDE INITIATIVE Dear Mayor Oden and Members of the City Council: This office represents Palm Hills Land Corp. the owner of the real property on which you recently approved the Palm Hills Specific Plan - Phase I. As you may recall,this site is approximately 900 acres and our approved plan would he constructed on about 300 acres with the balance of the property required to be left in open space. As you also know,the approval of the change to the General Plan to allow us to proceed ahead with that project has been challenged by signatures for a referendum which is now on the ballot for March 8a, If the referendum passes so that our approval is canceled or revoked and then the hillside initiative passes,that property for which we have spent some nine years of effort with the City of Palm Springs attempting to develop an approved Development Plan would result in our only being able to build eight lots on the roughly 300 acres as we have assumed that because of the various resource agencies objections, we would have to leave the remaining acreage in open space. Our engineers have done calculations on the cost of brining infrastructure up from East Palm Canyon into the Palm Hills site and even with a scaled back installation for only eight or nine lots, we are assured it would cost a minimum of$38,000,000. 16 'I,; SCHLECHT, SHEVLIN & SHOENBERGER A LAW CORPORATION LAWYLRS Honorable Mayor Ron Oden December 8, 2004 Page 2 In addition to this approximately 900 acres, our client owns approximately another 2,800 acres further up in Palm Hills. All of that property would be impacted in a detrimental way by the hillside initiative. Accordingly, my client urges the City Council to place a bond issue on the ballot so that the City of Palm Springs is in a position to deal with buying up all of the land on which the property values will he destroyed because of the hillside initiative. In the case of Palm Hills,I believe we would have to file a claim with the City for a minimum of$45,000,000 in damages. In a separate letter to you from Ken Bley of the law firm of Cox, Castle & Nicholson, he outlines why there is significant exposure to the City and suggests that the attorney for the sponsors for the hillside initiative who has written to the City down playing the risks of loss is wrong. Cox, Castle &Nicholson is one of the preeminent law firms in Southern California specializing in real estate and real estate development. They have an outstanding reputation and I think their opinion on this issue should be accepted by the City. Very truly yours, J ES M. SCHLECHT S/ct SCHLECHT, SHEVLIN & SHOENBERGER C1 _ A LAW CORPORATION ' JAMES M.SCHLECHT LAWYERS .y JOHN C. SI-IEVLIN TELEPJ�NE�(760),320-7161 801 EAST TAI-IQUITZ CANYON WAY,SUITE 100 TELECOPIHR(760)`323-1758 SON A. SHOENBERGER DANIEL T.JOHNSON PALM SPRINGS, CALIFORNIA 92262 E-MAIL ssslaw@ssslaw.com DAVID A.DARRIN MAILING ADDRESS ULRICH R. McNULTY OF COUNSEL KAREN R. GRAHAM P. O. BOX 2744 RICK M. STEIN PALM SPRINGS, CALIFORNIA 92263-2744 IN REPLY REFER TO: 9517-7 December 8, 2004 Honorable Mayor Ron Oden Honorable Members of the City Council City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, California 92262 RE: BOND ISSUE AND I4ILLSIDE INITIATIVE Dear Mayor Oden and Members of the City Council: This office represents Palm Hills Land Corp. , a California corporation, in connection with frontage land they own along East Palm Canyon Drive immediately east of the Rimrocks Shopping Center. This is a 76 acre parcel with approximately 26 acres of flat land facing East Palm Carryon Drive. The land is totally flat but incredible as it may sound,the hillside initiative has included this land within its boundaries. My client has this property in escrow and we have serious concern as to whether our buyer will complete the purchase in light of the hillside initiative. Under the terms of the initiative, since there is only 25 to 26 acres developable,it would appear that only one homesite could be placed on those 26 acres fronting on East Palm Canyon Drive. Keep in mind this property is immediately east of the Rimrocks Commercial Shopping Center and is across East Palm Canyon Drive from several high density condominium projects. As distinguished from several other letters I have written for clients,this property could be developed for one homesite but is anyone in their right mind going to conclude that anyone would want to buy that property for one homesite facing the busy highway? Forget it. It means again the property is going to be valueless. Again, my client would have to claim damages in the range of$6,000,000. VIA,eM. S JAMECHT JMS COX CAS T L E N I C H O L S O N ►— Cox, Castle &Nicholson LLP 2049 Century Puk East,2V Floor + Los Angeles,California 90067-3284 P 310.277.4222 F 310.277.7889 Kenneth B. Bley y r 310.284.2231 'Fvi `"I'r'�; :, kbley@coxcastle.com _ File No. 45957 u December 8, 2004 �� Honorable Ronald Qden, Mayor, and the Honorable Members of the City Council City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92265 Re: Proposed Bond Measure Dear Mayor Oden and Honorable Members of the City Council: In a letter dated December 1, 2004, Douglas P. Carstens argued that the City Council's proposed bond measure — to be placed on the March 8, 2005, ballot — to finance the acquisition of real property for open space, wildlife habitat and conservation purposes within the mountainous region subject to the Mountain Preservation Initiative should not be placed on the ballot. He based his opposition on the ground that there is no way that the Initiative could make the City liable for a taking of property and that, in any event, the bond measure could not be put on the ballot without first conducting environmental review under the California Environmental Quality Act ("CEQA"). Our client, Palm Hills Land Corporation, owns land within the area subject to the Initiative. Normally, Palm Hills would not be concerned about the Initiative because it exempts approved developments subject to a development agreement. Palm Hills has entered into a development agreement with the City. However, opponents of Palm Hills' development have qualified a referendum, which will also be on the March 8, 2005, ballot, which, if successful, will make land owned by Palm Hills subject to the Initiative. Palm Hills therefore feels it is important that you understand that Mr. Carstens's arguments are wrong on both counts. THE INITIATIVE CAN TAKE PROPERTY SUBJECT TO IT Mr. Carstens acknowledges that the United States Supreme Court has held that governmental regulation which deprives land of all viable economic use constitutes a taking, citing Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). However, he misstates the law when he contends that any governmental action which leaves a landowner with some modicum of use cannot constitute a taking. r— w .coxcastlexom Los Angels I Orange County I San Francisco Honorable Ronald Oden, Mayor, and the Honorable Members of the City Council December 8, 2004 Page 2 "This analysis errs in its assumption that the landowner whose deprivation is one step short of complete is not entitled to compensation. Such an owner might not be able to claim the benefit of our categorical formulation, but, as we have acknowledged time and again, `[tlhe economic impact to the regulation on the claimant and ... the extent to which the regulation has interfered with distinct investment-backed expectations' are keenly relevant to takings analysis generally. Penn Central Transportation Co. v. New York City, 430 U.S. 104, 124 (1978)" Lucas, supra, 505 U.S. at 1019 n. 8. In other words, where there is some viable economic use left in land, the various factors set forth in Penn Central must be used. See, e.g., Palazzolo v. Rhode Island, 533 U.S. 606 (2001), where the Court held that the Rhode Island Supreme Court had erred in not applying the Penn Central factors where most of the land involved could only be developed with the grant of a coastal development permit. The permit was denied but the remaining land—outside of the wetlands regulation area—was still worth$200,000. "The court did not err in finding that petitioner failed to establish a deprivation of all economic value, for it is undisputed that the parcel retained significant worth for construction of a residence. The claims under Penn Central were not examined, and for this purpose this case should be remanded." 533 U.S. at 632. The Initiative requires a minimum lot size of 40 acres for each home for any lot not already in existence. There is no question that this will substantially diminish the value of the land so that, at the least, a determination of whether a taking has occurred will require an analysis under the factors set forth in Penn Central. However, it is also possible that the cost of providing the necessary infrastructure for even a single home on a 40 acre lot may exceed the value of the land in which case a taking will occur. Arastra Limited Partnership v. City of Palo Alto, 401 F. Supp. 962 (N.D. Calif. 1975), vacated by stipulation after settlement, 417 F. Supp. 1125 (N.D. Calif. 1976) (City had taken plaintiff's land when it zoned it for open space with a 10 acre minimum lot size where the cost of providing infrastructure would exceed the value of an improved lot). It is, of course, true that the City could, if it wished, allow development on a lot subject to the Initiative after a judicial determination that a taking had occurred. However, even in that case, the City would be required to pay just compensation for the period during which the Initiative prevented development. First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 322 (1987): Honorable Ronald Oden, Mayor, and the Honorable Members of the City Council December 8, 2004 Page 3 "Here we must assume that the Los Angeles County ordinance has denied appellant all use of its property for a considerable period of years, and we hold that invalidation of the ordinance without payment of fair value for the use of the property during this period of time would be a constitutionally insufficient remedy. ..." PLACING THE BOND MEASURE ON THE BALLOT DOES NOT REQUIRE ENVIRONMENTAL REVIEW UNDER CEQA As correctly pointed out by the letter from Thomas W. Hiltachk, the fact that the bond measure will be placed on the ballot by the City Council does not, by itself, require environmental review under CEQA. It is the result — not the means — which determine whether environmental review is required and the result, if the bond measure is put on the ballot, will be the possible acquisition of land to be kept in open space if the City Council so chooses. However, at this point, there is no way to know whether the money which will be authorized if the bond measure passes will ever be needed to purchase land from owners whose land has been taken by the Initiative. CEQA does not require environmental review when a governmental agency takes steps to make funds available without committing those funds to a specific project. This is because CEQA review is required only when a "project" is under consideration. Public Resources.Code § 21080(a). "Project" does not include "The creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment." CEQA Guidelines § 15378(b)(4). Thus, even if the acquisition of land taken by the Initiative in order to ensure that it remains in open space were to have adverse physical impacts — and keeping the land in its present, undeveloped state could not possibly have any such impacts — there would still be no need for environmental review under CEQA. Honorable Ronald Oden, Mayor, and the Honorable Members of the City Council December 8, 2004 Page 4 CONCLUSION Your farsighted desire to provide a funding mechanism to acquire open space for the benefit of all of the inhabitants of the City, whether or not that land has been taken as a result of the Initiative, is both sensible and fully justified by law. Accordingly, Palm Hills asks that you go forward with placing the bond measure on the ballot with the further hope that the inhabitants of Palm Springs will agree that having the money available is both reasonable and fair. Very truly yours, enneth . Bley KBB/kaj 4595N 117813v2 Cc: David J. Aleshire, Esq. ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ORDERING THE SUBMISSION OF A PROPOSITION FOR INCURRING BONDED DEBT TO THE QUALIFIED VOTERS OF THE CITY OF PALM SPRINGS AT THE SPECIAL ELECTION TO BE HELD ON MARCH 8, 2005 FOR THE PURPOSE OF FINANCING THE ACQUISITION OF REAL PROPERTY FOR OPEN SPACE, WILDLIFE HABITAT AND CONSERVATION PURPOSES WITHIN THE MOUNTAIN REGION ESTABLISHED BY MEASURE " " AND TO COMPENSATE PROPERTY OWNERS FOR TAKINGS WHICH MAY ARISE IN CONNECTION WITH SAID MEASURE SHOULD SUCH MEASURE BE ENACTED WHEREAS, an initiative measure ("Initiative") to establish a Mountain Region ('Region") designation over 55.5 square miles of land in the City of Palm Springs (the "City") and limit development to one residential unit per 40 acres of land within such Region was circulated and received sufficient signatures to be placed on the ballot, and on September 13, 2004 was declared sufficient by the City Clerk; and WHEREAS, the City Council on November 10, 2004 determined to place the measure on the March 8, 2005 ballot along with certain other measures; and WHEREAS, the City Council has received written claims from various property owners alleging a substantial diminution of their property values if Initiative is enacted, that they will be deprived of all value of their property, and that there is not sufficient public benefit to justify the enactment of such regulations, and that a regulatory taking of property without just compensation will result from the Initiative; and WHEREAS, the City Council has determined that general obligation bonds should be issued for the purpose of raising monies to acquire property for open space, wildlife habitat and conservation purposes within the Region and to compensate property owners for legally valid claims for just compensation should the Initiative be approved; and WHEREAS, the City Council has heretofore adopted, by a two-thirds vote of all the members of said Council, Resolution No. entitled "A Resolution of the City Council of the City of Palm Springs, California, Determining That Should Measure _ be Adopted, the Public Interest and Necessity Demand the Acquisition of Real Property for Open Space, Wildlife Habitat and Conservation Purposes within the Mountain Region Established by Measure _and to Compensate Property Owners for Takings which may arise in connection with said Measure and Making Findings Related Thereto' (the "Resolution"); and WHEREAS, this City Council has determined to finance the acquisition of real property for open space, wildlife habitat and conservation purposes within the Region and to compensate property owners for takings which may arise in connection with the Initiative through the issuance of general obligation bonds consistent with the provisions of Article XIIIA of the California Constitution, Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 of the California Government Code and the Charter of the City of Palm Springs; and 01003/0007/35451.03 WHEREAS, the City Council intends to use a portion of the proceeds of the bonds to acquire land within the Mountain Region as defined in the Initiative for open space, wildlife habitat and conservation purposes and to compensate property owners where legally necessary for a partial or total taking of their property in the event a court of competent jurisdiction determines that the Initiative, though constitutional on its face, constitutes an unconstitutional taking of property as applied; and WHEREAS, in order to provide for the issuance by the City of its general obligation bonds to finance the improvements described in the Resolution it is necessary for this City Council to pass an ordinance ordering the submission of the proposition of incurring bonded indebtedness for such purpose to the qualified voters of the City at a special municipal election ("Special Election"); and WHEREAS, the City Council desires to submit said ballot measure to the qualified voters of the City at Special Election to be held in the City on March 8, 2005 in conjunction with Initiative itself; and WHEREAS, the City Council desires to consolidate the Special Election with the election to be held within the City on March 8, 2005, and within the territory affected by the consolidation. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF PALM SPRINGS ORDAINS AS FOLLOWS: SECTION 1. That there shall be and there is hereby ordered a consolidated Special Election, to be held on March 8, 2005, for the purpose of submitting to the qualified electors of said City, the proposition set forth below. SECTION 2. That said proposition shall appear on the ballot for said Special Election in the following form: OPEN SPACE PRESERVATION WITHIN THE MOUNTAIN REGION Shall General Obligation Bonds in an amount up to $150 million be issued to acquire real property for open space, wildlife habitat and for conservation Yes purposes, and where legally necessary to compensate property owners for a taking of their No property, within the 55.5 square mile Mountain Region in the event Measure_is adopted? The City Council does hereby submit to the qualified voters of the City, at said Special Election, this Ordinance and the proposition set forth above. SECTION 3. The object and purpose of incurring the indebtedness is, within the 55.5 square mile Mountain Region as defined in the Initiative, to permit the acquisition of real property for open space, wildlife habitat and for conservation purposes, and where legally necessary to compensate property owners for a taking of their property in the event the Initiative is adopted and all costs related to the foregoing purposes as specified herein (the "Improvements"). The Improvements constitute a single purpose under Section 43609 of the California Government Code. SECTION 4. The maximum estimated cost of the Improvements is 150 million dollars ($150,000,000.00). The estimated cost includes (a) the actual costs of land acquisition, (b) the costs of appraisals, escrows, title, and related real estate costs, (c) the costs of improvements necessary to promote wildlife habitat, conservation, drainage and recreational purpose, (d) all consulting, expert, design and other professional service costs, (e) all necessary administrative and management costs, (f) all attorney fees, expert witness and litigation costs related to defending the Measure or litigation taking, inverse condemnation or other such claims or related to the other purposes hereof, (g) the legal and other fees incidental to or connected with the authorization, issuance and sale of the bonds, and the cost of printing the bonds and other costs and expenses incidental to or connected with the issuance and sale of the bonds, and (h) any other cost reasonably related to carrying out the purposes of this Measure. SECTION 5. The following accountability measures are hereby made a part of this Measure and Ordinance. (a) The specific purposes of the bonds are as stated in Sections 3 and 4 above. It is expressly stated that to the extent funds are utilized to pay to compensate property owners for takings of property, such funds may only be expended for such purposes to pay judgments issued in legal proceedings decided adverse to the City, or to settle such lawsuits where the settlement is sanctioned in an administrative or judicial proceeding and to pay the cost of defending such actions. (b) The proceeds of the bonds shall be applied to only the purposes stated above. (c) The proceeds of any bonds issued pursuant to this Measure and Ordinance shall be placed in a fund designated as the "Mountain Region Acquisition Fund". (d) The Finance Director and Treasurer of the City shall file an annual report with the City Council pursuant to Section 53411 of the Government Code. SECTION 6. The amount of the principal of the indebtedness to be incurred is not to exceed 150 million dollars ($150,000,000.00). The maximum rate of interest to be paid on the indebtedness shall be eight percent (8%) per annum, or such higher rate as may be permissible by the laws established for general obligation bonds of the City by the Legislature of the State of California. SECTION 7. The City Council does hereby submit to the qualified voters of the City, at said Special Election to be held on March 8, 2005, this Ordinance and proposition set forth in Section 2 hereof. The City proposes to acquire the Improvements and to issue and sell general obligation bonds of the City pursuant to Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 of the California Government Code, in one or more series, in the maximum amount and for the objects and purposes set forth above if two-thirds of all qualified voters voting on the proposition set forth above vote in favor thereof. The bonds are to be general obligations of the City payable from and secured by taxes levied and collected in the manner prescribed by laws of the State of California. All of said bonds are to be equally and ratably secured, without priority, by the taxing power of the City. SECTION 8. The polls for said election shall be open on the day of said election in accordance with the California Elections Code. SECTION 9. The Special Election hereby called for March 8, 2005, shall be and is hereby ordered consolidated with any other election to be held within the City on said date, and within the territory affected by the consolidation. The election shall be held and conducted in C accordance with the provisions of law of the State of California. The Board of Supervisors of the County of Riverside ("Board") and the Riverside County Registrar of Voters (the "Registrar"), are hereby requested to order the consolidation of the municipal election hereby called with any other election to be held within the City on said date, and within the territory affected by the consolidation, and the Board and the Registrar are hereby authorized to canvass the returns of said municipal election, and said municipal election shall be held in all respects as if there were only one election and the form of ballot shall be as provided for the Special Election. Said Board shall certify the results of the canvass of the returns of said municipal election to the City Council which shall thereafter declare the results thereof. SECTION 10. All persons qualified to vote at the Special Election in the City upon the date of the election herein provided for shall be qualified to vote upon the proposition submitted at said Special Election. SECTION 11. Ballots for the election shall be provided in the form and in the number provided by law. On said ballots, in addition to any other printed matter which may be required by law, two voting squares shall be set off to the right of the proposition submitted at the election, in the manner provided by law, one having the word "YES" printed before it, and the other having the word "NO" printed before it. SECTION 12. Each voter to vote for the proposition and for the incurring of said indebtedness shall stamp or write a cross, or indicate by hole punch, computer, of other means, in the blank space opposite the word "YES" on the ballot to the right of the proposition; and each voter to vote against the proposition and against the incurring of the indebtedness shall stamp or write a cross, or indicate by hole punch or other means, in the blank space opposite the word "NO" on the ballot to the right of the proposition. SECTION 13. This Ordinance shall be published once a day for at least seven days in a newspaper published at least six days a week in the City, or once a week for two weeks in a newspaper published less than six days a week in the City. SECTION 14. That the City Clerk is hereby directed to file this Ordinance with the Board of Supervisors of the County of Riverside and the Registrar of Voters, the election official of the County of Riverside. SECTION 15. That the City Council authorizes election expenses to be paid to the County upon presentation of a properly approved bill. SECTION 16. That the City Clerk is hereby directed to publish notice of the election and a synopsis of the measure pursuant to Section 6061 of the Government Code and Section 12111 of the Elections Code. SECTION 17. That the City Council, pursuant to Elections Code 9280, hereby directs the City Clerk to transmit a copy of this Ordinance to the city attorney. The City Council hereby directs the city attorney, upon receipt of these items, to prepare an impartial analysis of the measure showing the effect of the measure on existing law and the operation of the measure pursuant to the Elections Code. SECTION 18. That the City Clerk is hereby authorized to receive arguments for and against the measure, and rebuttal arguments, make such arguments available for public examination and transmit such arguments to the Registrar of Voters and take such other action as may be necessary pursuant to the Elections Code to accomplish the purposes set forth in this Ordinance. SECTION 19. That the City Council hereby directs the City Finance Director to prepare or cause to be prepared the tax rate statement required pursuant to Section 9401 of the Elections Code and to submit such statement to the City Clerk to be included in the election material within the times required by the Elections Code. SECTION 20. This Ordinance shall become effective immediately upon its adoption by two-thirds vote of all the members of the City Council, but the bonds authorized hereunder may only be issued after adoption by the voters as set forth herein. SECTION 21. The proposition shall be adopted upon a two-thirds vote of the electorate voting in favor of the proposition at the Special Election. SECTION 22. That should this Ordinance be enacted by the voters, the City Council shall be authorized to determine the timing and series in which such bonds shall be issued and the manner in which all funds shall be expended, and shall have the authority to enact all measures necessary to carry out the purposes of this Ordinance. This Measure shall be liberally construed to carry out its purposes. SECTION 23. CEQA Finding. Adoption of this ordinance is not subject to CEQA by virtue of CEQA Guideline 15378(b) (4), as the creation of a government funding mechanism which does not involve any commitment to any specific project is not a "project." In the alternative, even if this funding mechanism could be found to be a project under CEQA, it would be categorically exempt from CEQA pursuant to 14 California Code of Regulations Sections 15307, 15308, 15313 and 15262. SECTION 24. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions thereof may be declared invalid or unconstitutional. ADOPTED AND APPROVED this day of 2004. AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By: By: City Clerk Mayor REVIEWED AND APPROVED AS TO FORM: f. F