Cities Fear Ruling Will Limit Urban Renewal

A court decision invalidating a redevelopment zone in the Sierra ski town of Mammoth Lakes has city officials across California worried about new limits on urban renewal.

The state appeals court ruling quashed Mammoth Lakes’ 1,100-acre redevelopment project on the grounds that land in the project area--the mountain town’s core--was neither blighted nor sufficiently urbanized to qualify as a redevelopment zone.

The opinion was the third--and most comprehensive--appellate decision in two years to rap a city on the knuckles for an overreaching redevelopment plan.

Some are cheering what they see as appropriate court enforcement of legislative reforms passed in the early 1990s.

Others are worrying that the Mammoth decision, in particular, will make it tough to expand redevelopment zones or form new ones anywhere but in cities beset by classic slum conditions.

“I think it’s retrenching,” said Charles O. Lamoree, city attorney of Vacaville in Northern California. “I think it fundamentally is sending redevelopment back to the inner-city core.”

Bob Hargreaves of the Legal Advocacy Committee of the California League of Cities had a similar reaction.

“I think the courts . . . have interpreted what the Legislature did with a certain vengeance,” he said. “I think redevelopment is going to be more and more difficult.”

Mammoth Lakes officials are appealing the July decision, contending that it rewrites state redevelopment law.

The Mammoth redevelopment plan, adopted in 1997 and soon after challenged by a residents group, is a key part of the town’s efforts to play catch-up with glitzier Western ski resorts.

The redevelopment zone encompassed Mammoth’s central commercial area, more than 1,000 units of housing and portions of three partially developed resort areas.

The project included $136 million worth of improvements characterized in the 3rd Appellate District opinion as a “municipal wish list.”

Among them: an overhead gondola, a town amphitheater, child-care facilities, a municipal pool, airport expansion and a new headquarters for the police and fire departments.

“I can’t imagine a town that doesn’t have a dream for its community, but by the same token, redevelopment is not made for wish lists,” said former Mono County Supervisor Andrea Lawrence, a leader of the Friends of Mammoth. The group filed the suit against the redevelopment project, contending that the town had not adequately studied possible environmental effects or proved that the area was run down enough to justify redevelopment.

To handle the case, Friends of Mammoth hired Bruce Tepper, an attorney who is usually on the other side, representing the public sector, including redevelopment agencies.

“If cities don’t regulate themselves, then somebody else will regulate them,” said Tepper, adding that his firm periodically takes cases like the Mammoth one as a form of self-policing of the redevelopment industry.

“We’re trying to demonstrate to the Legislature they don’t need to undertake further reform,” he added.

Redevelopment became popular with cities after voters approved the property tax limits of Proposition 13 in 1978. More than half of the local redevelopment agencies in the state have been created since then.

“It does not mean blight suddenly broke out in California in the 1980s and 1990s,” said Peter Detwiler, a staff consultant for the state Senate’s local government committee.

Rather, cities have desperately sought new funding sources, including redevelopment--which allows them to keep any property tax increases that flow from redevelopment projects.

There are 373 active redevelopment agencies in California. Together they collect $1.8 billion a year in local tax increments.

Seven years ago, the Legislature reacted to what it saw as abuses of redevelopment law by tightening the legal requirements to form a redevelopment zone.

State appeals courts, interpreting those reforms, struck down a redevelopment project in Murrieta in 1998 and more recently one in Diamond Bar. Last week, the state Supreme Court refused to take up that city’s appeal.

William Carlson, executive director of the California Redevelopment Assn., said that in addition to applying tighter standards of blight, the Mammoth decision says that early environmental impact assessments of a redevelopment project should be substantially more detailed than they are now.

That, Carlson suggested, will be “very difficult, very expensive.”

The court fight over Mammoth’s redevelopment project has not stopped the town from pursuing other means of reinventing itself.

Officials successfully wooed Intrawest, a Canadian ski resort developer, to town. The company recently built Mammoth’s first 18-hole golf course and an upscale 174-unit condo complex. It is constructing $900,000 townhomes and has plans for more development.

Intrawest also recently entered into an agreement calling for the town to use future tax revenues to repay about $25 million that will be fronted by the company and the Mammoth Mountain ski operation. The money will be used to build parking garages and infrastructure near the mountain, as well as a new airport terminal.

Given those developments, the appeals court ruling is “not the end of the world,” said Mammoth Lakes Mayor Rick Wood.

Still, he called the decision “a surprise and a disappointment” that will hinder efforts to spruce up the rest of the town.