Access Issue Sets Off Fight in Stockton : Developer’s Suit Seen as Bid to Discourage Opponents

Under a scorching August sun, an elderly bicyclist pedaled along the Calaveras River levee until he came to a barrier and a sign that read:

“NO TRESPASSING--this is private property!!! No jogging, no walking, no hunting, no fishing, no parking, no dog walking, no bicycling, no motorcycling, no cruising, no sightseeing, etc. etc. etc. without express written consent of the owner. Violators will be prosecuted.”

The cyclist and the sign are important symbols in a land-use dispute with implications that reach beyond this booming central California agribusiness center.

Alliance Sued

Greenlaw (Fritz) Grupe Jr. and his $250-million-a-year Grupe Development Co. have sued a local alliance of farmers, environmentalists and slow-growth advocates for $25 million, alleging that alliance members violated an agreement not to oppose a massive new Grupe development in north Stockton.

Several California land-use attorneys see these breach-of-contract allegations as part of an emerging pattern of massive developer lawsuits that are intended to discourage opposition to their projects.

“If Grupe can get away with this, then many other developers will do the same,” said Modesto attorney Richard Harriman. “There’s a lot riding on this lawsuit.”

Other lawyers think the Stockton case may help to clarify a murky area of the law: Do private landowners and developers or does the general public have a higher claim to use of state-owned waterways and levees?

The State Lands Commission has sued both Grupe and the city of Stockton, contending that the project would limit public access to what the commission’s suit calls “public waters,” including the Calaveras and San Joaquin rivers and two local sloughs.

All of this began with a Grupe proposal to build a 4,000-unit development called Brookside on 1,200 acres in north Stockton. Some of the most expensive homes would face the Calaveras River, which is why Grupe closed the levee to the bicycle riders, joggers, fishermen and casual strollers who once used it.

Public Access Issue

The Land Utilization Alliance, a loose-knit group that has been advocating what it calls “reasonable growth” in the Stockton area, doesn’t like large projects in general and was especially irritated by this one because it would deny public access to the river and the levee.

“We figure these levees are the right of the public to use,” said Wilbert Ruhl, a Lodi grape grower and alliance member. “Once they are lost, they’ll never be reclaimed.”

Members of the Stockton Bicycle Club, a member of the alliance, were distressed because the city was preparing to abandon a plan to build a bike path along the levee in favor of a Grupe proposal for a five-mile, $1.5-million “recreational path” that would run through the development.

Nelson Bahler, general counsel for Grupe, said people living in expensive homes in gated communities along the levee did not want to look out and see joggers, cyclists, fishermen and even more undesirable types in their yards.

Bahler noted that a Stockton City Council member said river access paths often became “escape routes for thieves and vandals” and added, “The people who chose to live here wanted security and now they’re opening their back door to the very thing they wanted to get away from.”

Last spring, as members of the Land Utilization Alliance were considering a lawsuit to block the Brookside development, they were contacted by Grupe executives Kevin Huber and Ron Addington and by a local attorney, Michael Hakeem, who often represents Grupe.

Earlier Agreement

“They approached us directly,” said Raj Ramaiya, an alliance organizer. “They said, ‘We are all local boys, we can come to an agreement, we don’t need any high-class lawyers.’ ”

The basis for the discussions was an agreement the alliance already had reached with another developer, A.G. Spanos, that would permit construction of another major north Stockton development in exchange for payments by Spanos of $300,000 to environmental trust funds intended to improve air and water quality, preserve farmland and encourage construction of low-income housing.

Bahler said company executives offered to negotiate with the alliance because they liked the general outlines of the Spanos agreement and because “we believe in cooperation. We do not believe in confrontation.”

The two sides met for several weeks, usually at the Duck Nook restaurant, not far from the small, sparsely furnished alliance office. Hakeem attended most of the meetings for Grupe but the alliance had no lawyer until the last meeting or two, when they were represented by Richard Harriman.

Negotiating without an attorney was a mistake, alliance leaders now concede.

“Let’s face it--we were set up,” said Linda Lindberg, a Linden gourd grower and alliance coordinator. “It’s an embarrassment. We were so naive we figured because Fritz (Grupe) was a local boy and still has relatives here, we just didn’t figure anything could be wrong. . . . We certainly should have had a lawyer or a third party there.”

Unresolved Issues

By mid-May agreement was reached on most issues. The alliance agreed not to oppose the Brookside project before the City Planning Commission, the City Council or any other governmental body. Grupe, for its part, agreed to contribute $300,000 to the existing environmental trust funds and another $19,000 to a new water conservation fund.

Grupe also agreed to preserve a 50-acre wildlife habitat north of the project and also made other concessions to the alliance.

But the issues of the bike path and public access to the waterways and levees were not resolved.

“We agreed to disagree,” Bahler said.

Ramaiya said: “We agreed to put aside the bike path issue. They said, ‘If you want that, you’re going to have to go to court to get it,’ and we said, ‘All right, we’ll do that.’ ”

In early June the Stockton City Council approved Brookside by a 7-2 vote.

Mayor Barbara Fass, one of the two “no” votes, said that Grupe “is a wonderful developer and he builds beautiful projects” but that she voted against Brookside because “there should be public access to the waterways--Stockton is famous for its waterways and we’re promoting waterways, so this seems to be a contradiction.”

On July 5, the alliance filed suit in San Joaquin County Superior Court, seeking an injunction against the Brookside development over the public access issue as they had said they would. But the suit infuriated Grupe.

In a cross-complaint filed two weeks later, Grupe contends that the alliance suit raises legal challenges that “go far beyond the question of public access to the Calaveras River levee.”

$25 Million Sought

“We reached an agreement with them,” said Bahler, the Grupe general counsel. “We fully intend to perform and we expected (the alliance) and its members to do the same. . . . We don’t believe they are.”

The cross-complaint, filed on behalf of Grupe by San Francisco attorney John Briscoe, charges breach of contract, fraud and other misdeeds and seeks $25 million in damages from the alliance and from six individuals identified as alliance members.

“If you’re going to cause great damage to a company, I guess you ought to think about liability before you start,” Bahler said.

But it is not clear that the alliance suit has damaged Grupe, since heavy earth-moving equipment has been at work every day, clearing the project site.

The mood in the Grupe offices did not improve when the State Lands Commission also filed suit against the developer and the city of Stockton, contending that Brookside would violate both the state Constitution and a 1974 state law by limiting public access to state waterways.

California’s navigable waterways are owned by the state and administered by the State Lands Commission, which is made up of the lieutenant governor, the state controller and the state director of finance.

Law Changed

The Legislature changed the Subdivision Map Act in 1974 to provide for “reasonable” public access to state waterways. The law allows cities, counties and other local jurisdictions to determine how much access is reasonable but requires the State Lands Commission to make sure the public is not excluded from land that is on and along the waterways.

The commission concluded that the access Grupe was offering in the Brookside project was not sufficient and, when negotiations failed, filed suit.

Although lawyers on both sides agree that “reasonable access” is a vague standard, subject to endless interpretations, there is some hope that the Brookside case might help to clarify the law in this area.

Since Grupe filed its $25-million countersuit against the alliance, some of the 25 or 30 organizations that belong to the alliance have dropped out and others have muffled their opposition to the Brookside project.

That was the idea, in the opinion of some environmental and land-use attorneys, who believe the Grupe action is part of a new statewide developer strategy to hit local slow-growth groups with massive lawsuits in an attempt to silence opposition.

“The idea is to try to prevent anybody from stepping up to the line . . . to chill the opposition to a project,” said San Francisco attorney Bill Brockett, who represents a Sierra Club member who has been sued for $70 million for actions in opposing a major Perini Corp. project near Squaw Valley.

Other Lawsuits

Other suits have been aimed at environmentalists and homeowner groups in Thousand Oaks, Hanford, Morro Bay and other California communities in recent years.

“I think we’re beginning to see this as a kind of standard developer tactic,” said Carlyle Hall of the Center for Law in the Public Interest in Los Angeles. “It can have a chilling effect that is absolutely horrendous. Immediately, people think of losing their house, which is probably their largest asset.”

San Francisco attorney Richard Luskin said, “There is no good mechanism in our system today to deal with these kind of countersuits.”

Luskin said the target of the suit first must win the case, then turn around and sue the developer for malicious prosecution, a process that might take eight to 10 years.

However, Modesto attorney Richard Harriman said the Grupe countersuit might backfire on the developer.

Grupe’s actions have “galvanized the entire California environmental Bar to come to the rescue of this group,” Harriman said. “There is a realization that if Grupe is successful, then no citizens’ group will ever feel free again to enter into a pre-litigation agreement.”