Real Estate, Land Use and Environmental Law Blog - Up-to-date information on Real Estate, Land Use and Environmental Law

By Judy Davidoff and Alex Merritt

In the 2011 session, the California Legislature and the Governor passed several bills to amend CEQA. As summarized below, these bills streamline the review process for green projects, environmental leadership projects, and a proposed football stadium; relax water supply assessment requirements for photovoltaic and wind energy projects; and clarify requirements for naming and serving real parties in interest in CEQA lawsuits.

By Michael B. Wilmar & Alex Merritt

Last month the San Francisco Bay Conservation and Development Commission (BCDC) amended the San Francisco Bay Plan to include new findings and policies addressing climate change and sea level rise.

By Whitney Hodges & Olivier Theard

After months of CEQA litigation and political lobbying, including an appeal to the California Supreme Court (previous article can be found here), California's landmark climate change bill, the Global Warming Solutions Act of 2006 ("AB 32"), has been modified and appears ready to be implemented starting in January 2012.

By Randolph Visser, Olivier Theard and Whitney Hodges

This article is the latest in a series chronicling the first litigation challenge to AB 32 (the Global Warming Solutions Act) and the cap-and-trade program in Association of Irritated Residents, et al. v. California Air Resources Board, Case No. CPF-09-509562, ("Ass'n of Irritated Residents v. CARB").  Though environmental justice groups continue to object to cap-and-trade as the primary vehicle to reduce greenhouse ("GHG") emissions to 1990 levels by 2020, the California Supreme Court recently allowed California Air Resources Board's ("ARB") cap-and-trade implementation to move forward, and agency rule development continues.

By Olivier Theard

In an effort to protect children (and, to a lesser extent, adults) from toxic exposure, California has banned the use of the controversial chemical Bisphenol A (BPA) in baby bottles and sippy cups, and has eliminated certain loopholes in the existing ban on lead and cadmium in jewelry. These laws follow earlier efforts to ban chemicals potentially injurious to humans. For instance, California banned the use of phthalates (a chemical often found in children’s toys) in 2009.

This is the fourth in a series of blog entries monitoring the proposed elimination of redevelopment agencies.

By Michael Kiely and Phillip Tate

True to their promise, the California Redevelopment Association, or CRA, and the California League of Cities, or CLC, petitioned the California Supreme Court on July 15, 2011 for a writ of mandate challenging the Legislature's adoption of ABX1 26, providing for elimination of California redevelopment agencies (RDAs), and ABX1 27, exempting from elimination any RDA that agrees to make its share of a $1.7 billion voluntary contribution of its revenues to other local government needs.[1] The CRA also asked the Court to implement a temporary stay of ABX1 26 and 27 pending the outcome of the litigation. Separately, 10 Southern California cities and their redevelopment agencies[2] filed a complaint for declaratory and injunctive relief and a petition for a writ of mandate with the Superior Court for Sacramento County on September 26, 2011.

By James Rusk

The California Legislature last week passed two bills that would expedite judicial review of challenges to certain large development projects under the California Environmental Quality Act (CEQA). The first, SB 292 (Simitian), applies only to the proposed development of a new NFL football stadium and convention center in Los Angeles. The second, AB 900 (Steinberg), applies to various types of projects involving investment of more than $100 million that provide "high-wage, highly skilled" jobs for Californians and do not result in a net increase of greenhouse gas (GHG) emissions. Both bills would grant the state Courts of Appeal original jurisdiction over challenges to project approvals, bypassing the trial courts. Neither bill would significantly change the requirements for environmental analysis under CEQA.

By Dave Lanferman & Jeffrey Forrest

New legislation to automatically extend the life of currently existing tentative maps, vesting tentative maps and parcel maps for an additional 24 months has been approved. The new law, AB 208 (Fuentes) was signed by Governor Brown on July 15, 2011, and includes urgency provisions so that it goes into effect immediately. This bill adds new Government Code § 66452.23 to the Subdivision Map Act, and establishes an automatic statutory extension to the life of previously-approved tentative maps and parcel maps that had not expired as of July 15, 2011, and which would otherwise have expired prior to January 1, 2014. This new automatic statutory extension is in addition to any other extension provided by the Subdivision Map Act or local ordinance.

This is the third in a series of blog entries monitoring the proposed elimination of redevelopment agencies.

By Michael Kiely

Governor Jerry Brown has approved the "all cuts" 2011-2012 budget for the State of California, in the process signing the two trailer bills, ABX1 26, providing for elimination of California redevelopment agencies, called RDAs, effective October 1, 2011, and ABX1 27, exempting from elimination any RDA that agrees to make its share of a $1.7 billion voluntary contribution of its revenues to other local government needs.

This is the second in a series of blog entries monitoring the proposal to eliminate redevelopment agencies.

By Michael Kiely

Yesterday, after heated and reportedly almost violent debate, both houses of the California State Legislature voted to pass ABX1 26, which would eliminate California redevelopment agencies, called RDAs, effective October 1, 2011, and ABX1 27, which would exempt from elimination any RDA that agreed to make its share of a $1.7 billion voluntary contribution of its revenues to other local government needs.

This is the first in a series of blog entries monitoring the proposal to eliminate redevelopment agencies and describing alternative public funding sources for redevelopment projects.

By Michael Kiely

After much discussion, debate and lobbying in the last three months, the fate of California's redevelopment agencies is still uncertain. Legislative bills to eliminate the agencies, called RDAs for short, have failed by a single vote. Many political leaders are still pushing for elimination; others are now actively searching for compromise solutions that will allow RDAs to survive. What appears certain at this point is that there will be less tax increment revenue available for real estate development in redevelopment project areas. As a result, development projects in these areas, already suffering from market forces and limited debt availability, will face an even bigger challenge.

By Keith Garner

On February 16, 2011, the U.S. Army Corps of Engineers published a notice of its proposal to reissue and modify 48 of the 49 existing Nationwide Permits (“NWPs”) and to issue two new NWPs and two new general conditions. The Corps proposes to let one NWP (47 – Pipeline Safety Program Designated Time Sensitive Inspections and Repairs) expire. Most of the current impact limits are retained, although waiver requirements for linear impacts have been clarified in seven NWPs and added to three existing NWPs. Additionally, the Corps proposes significant modifications to two NWPs:

By Sherwin Root

Mortgage lenders and brokers are aware that the new regulations on loan originator compensation (part of Regulation Z) will go into effect on April 1. One aspect of those regulations that has received little attention until just recently is that if the consumer pays the loan originator directly (which may be the case with mortgage brokers, but will not be the case with loan originators who are employed by the creditor), the regulations prohibit any other person from providing any compensation to a loan originator, directly or indirectly, in connection with that particular transaction. This means that, if a mortgage broker is paid by the consumer, (i) the mortgage broker cannot receive additional compensation from the lender, and (ii) the lender cannot also pay compensation to any of its internal loan originators in connection with that loan (with the possible exception of an hourly wage). It is also worth noting that payments to a loan originator made out of loan proceeds are considered compensation received directly from the consumer. There is some question as to whether this is exactly the result that the Federal Reserve Board intended. We understand that the Mortgage Bankers Association of America is seeking clarification from the Fed on this provision, so it is possible that some modification will be forthcoming. Barring that, though, mortgage lenders should be prepared to comply with the above limitations commencing April 1.

By Gregory E. Woodard

Proposition 23 would have suspended AB 32, California's 2006 global warming initiative, until unemployment fell under 5.5% for one year. The campaign was bitter, with both sides claiming doom and gloom whether Prop 23 passed or failed. The electorate spoke loudly and soundly defeated Prop 23, 61%-39%.

By Robert Uram & Keith Garner

On September 2, 2009, the State Water Resources Control Board (“State Board”) adopted a new General Permit for Discharges of Storm Water Associated with Construction Activities (“CGP”) that imposes significant new and potentially burdensome requirements for discharging storm water from construction sites. The CGP would apply to all construction activities disturbing one or more acres of land or to smaller areas that are part of a common plan for development, as well as to construction activities related to linear overhead/underground projects, which were previously covered under a separate general permit. Unless the CGP is challenged and set aside, the new permit will become effective on July 1, 2010, allowing current dischargers to get through the 2009-2010 rainy season before the new standards go into effect.

By Matthew Richardson

The IRS recently issued "safe harbor" guidance that home loans modified under the Home Affordable Modification Program (HAMP) will not adversely affect real estate mortgage investment conduits (REMICs). Without this guidance, payments from the US government to lenders and servicers of home loans under HAMP may have resulted in a 100% penalty tax and may have jeopardized the securitization vehicle's tax-advantaged classification as a REMIC.

By Keith R. Gercken

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 ("ARRA"). One of the significant Federal income tax changes included in ARRA was a provision allowing certain taxpayers to elect to defer the tax liability associated with certain "cancellation of debt" ("COD") income incurred in 2009 and 2010. The deferral election generally applies fairly broadly to COD income that is triggered with respect to debt instruments that are either completely forgiven, modified to provide for a reduced principal amount, or reacquired by the issuer (or a related party) in exchange for a cash payment, another debt instrument, corporate stock or a partnership interest, or as a contribution to capital. If the deferral election is properly made, any qualifying COD income realized in 2009 or 2010 will be recognized for tax purposes ratably over the 5-year period beginning in 2014 and ending in 2018 (inclusive).

By John W. Chierichella and David S. Gallacher

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Tax Act of 2009 ("the Act" or "the Stimulus Bill") (P.L. 111-5) (H.R. 1). As widely reported in the media, the Stimulus Bill includes approximately $787 Billion in government spending and tax cuts. With regard to the government spending provisions (Division A of the Act, which appropriates approximately $520 Billion), the U.S. Government (as well as the State and local governments receiving this money) will disburse the funds through a number of different vehicles – namely government contracts, grants, cooperative agreements, and other transactions. The legislation is intended to deal with, on an expedited basis, economic conditions that many Americans have not experienced in their lifetimes and for which they want an accelerated cure. Those familiar with the federal acquisition and grant processes, however, know that immediacy is not built into those processes. Moreover, to the extent that the “need for speed” overtakes process, recipients of the funds will almost assuredly find themselves downrange from one of the most rigorous oversight regimes ever enacted. Companies, and even States and localities – should familiarize themselves with the full terms of the Faustian bargain they will be striking.  

By John R. Bonn

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Tax Act of 2009 ("ARRTA"). ARRTA contains significant potential Federal income tax relief for businesses. Some of the more important provisions are summarized in the remainder of this article.

By Misti Schmidt and Aaron Foxworthy

On August 4, 2008, San Francisco Mayor Gavin Newsom signed a new Green Building Ordinance (“Ordinance”) into law, amending the existing Building Code by inserting Chapter 13C. The goal of the Ordinance is to reduce the city’s carbon emissions to 20% below 1990 levels by 2012. The Ordinance aims to achieve that goal by phasing in more stringent building requirements over the next four years. The Ordinance provides that it will take effect 90 days from its adoption by the City (November 2, 2008), if the California Energy Commission (“CEC”) approves it by that time.[1]

By Ella Foley-Gannon and James Rusk

Responding to an order from the Orange County Superior Court, the State Water Resources Control Board (the “State Board”) has lifted a two-week-old moratorium on new construction in the Los Angeles region.  The State Board announced on Friday that it would resume processing new enrollments under the statewide NPDES Construction General Storm Water Permit (the “Construction General Permit”) and other statewide NPDES permits.  The State Board had suspended such enrollments just two weeks earlier, in response to a writ of mandate issued by the court in the Arcadia II litigation.  However, the court clarified on Friday that the writ does allow the State Board to implement the terms of NPDES permits, so long as those terms are not used to enforce numeric water quality standards.

By Ella Foley-Gannon and James Rusk

The State Water Resources Control Board (the “State Board”) has effectively imposed a moratorium on new construction within the Los Angeles region, in response to the Orange County Superior Court’s recent ruling in the Arcadia II litigation.  The State Board last week published two memoranda interpreting a writ of mandate issued on July 2 in the Arcadia II case, which involves a challenge to the storm water quality standards set forth in the Basin Plan for the Los Angeles Region.  According to the memoranda, the writ requires the State Board to stop processing enrollments under the statewide Construction General Storm Water Permit.  This interpretation will halt virtually all new construction projects that have not already obtained storm water permit coverage.  The State Board also has interpreted the writ as prohibiting any approvals or other actions to implement new TMDLs for receiving waters in the Los Angeles Region.

By Kyndra Casper and Olivier Theard

On July 11, 2008 the U.S. Environmental Protection Agency (EPA) released an Advance Notice of Proposed Rulemaking (ANPR) in response to the U.S. Supreme Court’s April 2007 decision in Massachusetts v. EPA, 549 U.S. 497 (2007).  In Massachusetts, the Court ruled that greenhouse gases (carbon dioxide, methane, nitrous oxide and hydrofluorocarbons) satisfy the Clean Air Act’s (CAA) definition of “air pollutant,” and thus can be regulated under the CAA if the EPA finds that greenhouse gas emissions constitute an “endangerment” to public health or welfare.

By Dave Lanferman & Jeffrey Forrest

“Urgency” legislation to automatically extend the life of existing tentative maps, vesting tentative maps (“VTMs”) and parcel maps (so long as the map was valid on July 15, 2008, and would otherwise expire before January 1, 2011) for an additional year was approved by the Legislature and Governor on July 15^th. The new law, SB 1185 (Lowenthal) (Stats. 2008, ch. 124), included urgency provisions so that it took effect immediately upon passage and signature by the Governor.  This automatic extension is in addition to any other extension provided by the Subdivision Map Act or local ordinance.  The bill also authorizes local governments to approve an additional year of discretionary extensions to the life of a tentative map, up to a total of six years (from the current five‑year limit).

Significantly, this legislation also extends the life of other existing state agency approvals that pertain to a development project included in a map extended by this bill.  However, the legislation does not extend the life of local agency project approvals (other than tentative or parcel map approvals), and developers, lenders, and others therefore need to be careful that such local agency approvals or entitlements do not expire and render moot the benefits of the automatic tentative map extension.

By Kyndra Joy Casper

On July 10 the Air Resources Board (ARB) released information about its revised draft regulation that will require retrofits and engine replacements on diesel-powered trucks and buses traversing California roadways beginning in 2012.  In contrast to the January, 2008 proposal to have fleets replace trucks twice in a nine-year span, the revised proposal will heavily rely on retrofitting during the first two years and will thereafter require only one truck replacement over eleven years.  This revised proposal will preserve important public health benefits at a lower cost.

By Randolph C. Visser and Kyndra Joy Casper

The Global Warming Solutions Act of 2006 (AB 32) requires the California Air Resources Board (ARB) to prepare a Scoping Plan to achieve reductions in greenhouse gas (GHG) emissions in California.  The AB 32  Draft Scoping Plan contains the main strategies California will use to reduce the GHGs that cause climate change.  On June 26, 2008 the ARB presented the initial Draft Scoping Plan to the ARB Board for review.

By Robert J. Uram and Chase Ensign

On May 15, 2008, the Army Corps of Engineers issued a public notice describing and seeking public comment on five templates that seek to standardize the process of obtaining approvals of proposals for mitigation banks.  The templates, which are available for use now, should expedite the review and approval of mitigation bank proposals to offset impacts to waters of the United States under the Section 404 permitting program of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899.  The templates are the products of many years of deliberation between the Corps, the Environmental Protection Agency, the Fish and Wildlife Service, the California Resources Agency, the National Marine Fisheries Service, the Natural Resources Conservation Service, and the California Department of Fish and Game.  The documents define the parameters of what credits are available for each mitigation bank and how the mitigation bank will operate.

By Olivier F. Theard and Kyndra Joy Casper

In an effort to reduce airborne diesel pollution, the California Air Resources Board has adopted a "no idling" rule for in-use off-road diesel-fueled vehicles, limiting idling for such vehicles to no more than 5 minutes.  The new rule will go into effect June 16, 2008.  This rule adds to a host of other off-road diesel-fueled vehicle regulations to reduce diesel particulate matter and criteria pollutant emissions.

By D. Matthew Richardson

In a recently-issued Revenue Procedure (Rev. Proc. 2008-28), the IRS states that the modification of certain mortgage loans under foreclosure prevention programs involving, for example, interest rate reductions, principal forgiveness, extensions of maturity and alterations in the timing of changes in an interest rate generally will not cause the IRS either to challenge the tax status of certain securitization vehicles that hold the loans or to assert that those modifications create a liability for tax on a prohibited transaction. This relief is granted to real estate mortgage investment conduits (REMICs) and investment trusts where the mortgage loan meets all of the following conditions:

By James E. Pugh

On April 22, 2008, the City of Los Angeles passed Ordinance No. 179820 and thereby established a city-wide “Green Building Program.”  The program is modeled after the U.S. Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) building standards.  The program addresses five key areas including: (1) site location; (2) water efficiency; (3) energy and atmosphere; (4) materials and resources; and (5) indoor environmental quality.  The new ordinance amends the Los Angeles Municipal Code (“LAMC”) by adding new Sections 16.10 and 16.11, which will likely have a considerable affect on the type of developments the City will approve.

By S. Keith Garner

On January 28, 2008, the U.S. Army Corps of Engineers modified the procedures for coordinating review of jurisdictional delineations involving significant nexus determinations with the EPA.  Significant nexus determinations are required under the Corps and EPA's joint Rapanos Guidance to determine whether the following aquatic features are jurisdictional under Section 404 of the Clean Water Act:  non-navigable tributaries that are not relatively permanent; wetlands adjacent to non-navigable tributaries that are not relatively permanent; and wetlands adjacent to but that do not directly abut a relatively permanent non-navigable tributary.

By Randolph C. Visser and Olivier F. Theard

Introduction: The California Air Resources Board (ARB) has proposed a new regulation aimed at reducing emissions of diesel particulate matter (PM), oxides of nitrogen and greenhouse gases from in-use, on-road diesel-fueled vehicles.

U.S. EPA has issued its final rule governing when a prospective purchaser or existing landowner may properly invoke one of three popular defenses to liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The defenses are commonly known as "innocent landowner," "prospective purchaser," and "contiguous property." The new EPA final rule specifies what a landowner or purchaser must do in terms of required investigation of potentially contaminated sites to qualify for these defenses in the face of a subsequent action under CERCLA.