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Development deals tied to state budget sidestep 'green' rules

With efforts to change environmental law stymied, Gov. Jerry Brown and lawmakers craft loopholes for projects

Jerry Brown has built a reputation as an ardent environmentalist, but his experience as Oakland mayor taught him that too many regulations could stall or even strangle development.

After returning to the governor's office, he vowed to ease California's landmark environmental restrictions, saying it would be "the Lord's work."

That effort, resisted by environmentalists and powerful labor unions, sputtered out two years ago. Since then, Brown and Democratic lawmakers have instead struck deals giving special consideration to certain projects rather than confront the political difficulties of overhauling the law.

This year is no exception, with several such exemptions forged behind closed doors and built into the budget that lawmakers are scheduled to finalize Friday.

Under those deals, water recycling and groundwater replenishment projects would receive less environmental scrutiny. Reviews would also be expedited for a $200-million high-rise development in Hollywood and a new arena for the Warriors basketball team in San Francisco.

Because the arrangements are tied to the budget, they are not subject to the lengthy public review process required of most proposals in the Capitol.

The piecemeal approach to the 45-year-old California Environmental Quality Act, a law that has been a lightning rod for controversy, has frustrated defenders and critics alike.

Ann Notthoff, director of California advocacy for the Natural Resources Defense Council, described the exemptions as a "death of a thousand cuts." She said the law is adequately flexible, and skirting it undermines important protections.

What Brown and lawmakers are doing "is a removal of citizen input into really important projects that have the potential to change the nature of neighborhoods, and air and water quality," Notthoff said.

Opponents of the law disagree, saying it has been misused. They note that projects have been stalled by unions seeking better contracts for their laborers, business interests trying to block competitors and residents who simply don't want development nearby.

But even some who support looser rules say the lack of broad changes to the law creates an uneven playing field.

"It's not fair, simply because if you have resources and money, you can get things done," said Hasan Ikhrata, executive director of the Southern California Assn. of Governments. "You can get people to lobby for you.... CEQA should be for everyone."

Evan Westrup, spokesman for Brown, said the lack of a broad overhaul should not prevent exceptions for specific projects.

"The administration continues to support comprehensive CEQA reform, but in the meantime we are not going to pass up opportunities to achieve targeted reforms, like getting key water projects done in the face of California's drought crisis," Westrup said in a statement Thursday.

While Brown was Oakland's mayor, he successfully sought legislation in Sacramento that exempted from the law development in parts of Oakland.

When he was elected governor, Brown continued to criticize state red tape, saying some rules are not necessary to safeguard the environment.

"There are too many damn regulations," he said in 2011.

He made the comment while signing legislation to expedite environmental review of a football stadium proposed for downtown Los Angeles, a project that has since been sidelined.

That same year, Brown also approved legislation that grants streamlined reviews for efforts the governor declares to be "leadership projects" — those valued at $100 million or more that create a significant number of jobs and meet high environmental standards. Legal challenges to such projects also move faster.

The Warriors stadium and the Hollywood development were put on this fast track but are not in the clear yet because they may not complete the required environmental studies and certification by Jan. 1. Supportive lawmakers inserted into an unrelated budget bill a line giving the projects an extra year to have their reports certified.

State Sen. Mark Leno (D-San Francisco) said that without the new action, the Warriors arena project would "end up paying a penalty for the good work … which includes engaging the community and bringing along community support."

Opponents of the Warriors plan object to what they see as an unfair back-room deal.

"The city and the Warriors are using the fast-track process because the arena proposal is fatally flawed and cannot stand up to public scrutiny," said Sam Singer, a consultant for the Mission Bay Alliance, a San Francisco neighborhood organization.

In Hollywood, about 1,000 residents oppose the mixed-use, high-rise development planned for 8150 Sunset Blvd., which includes a 16-story building. Andrew Macpherson, treasurer of the group Save Sunset Boulevard, said average citizens are not being heard as lawmakers rush to change the deadline.

"It makes a mockery of democracy," he said.

In 2013, an attempt by former state Senate leader Darrell Steinberg (D-Sacramento) to make broad changes in the law ran aground in the face of opposition from environmentalists and unions. Ultimately, Steinberg narrowed his efforts significantly to focus mainly on expediting construction of a new arena for the Sacramento Kings basketball team.

"It is one of the toughest issues to grapple with in the Legislature," Steinberg said this week. "There are very long-held, strong opinions on both sides."

He added, "I just think the answer is to chip away, chip away, chip away, chip away."

Kathryn Phillips of the Sierra Club said she opposes an easing of rules for projects involving water recycling and groundwater replenishment.

"These are big public projects that could have an impact on local communities," Phillips said. "Those are all things that need to be analyzed."

Republicans, too, are frustrated, albeit for different reasons: They have tried and failed to obtain shorter environmental reviews for their own priorities.

Legislation to help speed construction of new reservoirs, for example, was shot down by the ruling Democrats this year even as they negotiated other projects intended to help with the drought.

"Picking and choosing favorite projects is not good policy," said Assemblyman James Gallagher (R-Nicolaus), author of the reservoir bill.

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