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HomeMy WebLinkAboutMILLS LAND - 1997-04-21MCCUTCHEN, DOYLE, 9ROWN & ENERSEN SAN FRANCISCO COUNscLoAS AT LAW LOS ANGtLES 1331 NORTH CAWF04NM SOULEVARO ZAH .Jean POST OFFICE Sox v WA6NUT CMCCM WALNUT CRer-K, CALrIFORNIA 94594 MCN4a PARR ?LLEPN0NE (310) 037.4000 FACSIN1LL► 4510) 078.539o KJ `47 November 13, 1995 Nov 141995 �FE: ri;:..-NI kk COMMUNITY DE',fELrv,PMENT Carl L. Williams, Chair and Commissioners California Coastal Commission South Coast Area 245 West Broadway, Suite 380 Long Beach, CA 90802 November 16 Agenda Item 8a City of Huntington Beach Local Coastal Program Amendment 2-94 Dear Commissioners: WASHINOTON. D.C. TAIPC1 AFFILWCA OPPICra BANQKON arlimO *HANGMAI OIRCCT OIAL NUMBCR INTERNET mnvememdbe.com This firm represents the Mills Land & Water Company, a small, family -owned company which owns property in the Area of Deferred Certification in Huntington Beach. This letter is submitted for your review and consideration in connection with the proposed Zoning Code Amendment designated 2-94. As you are no doubt aware, we are now in the seventeenth year of the Local Coastal Plan certification process. Nine of those years have been taken up in what ought to have been a straightforward process of adopting implementation zoning. Instead, for political or other reasons, that process has been both circuitous and protracted. In the interim, the property owners have been precluded from pursuing any potential projects. Mills is nonetheless gratified to see that, after years of submittals to the City and the Coastal Commission, many of their previously stated objections are finally being addressed. We are particularly encouraged that progress is being made with respect to acknowledgment and concern that the Local Coastal Plan implementation actions may result in precluding any viable economic use of the affected properties, at least at the Staff level, We are also encouraged by the proposed removal of certain of the restrictions being placed upon the Mills property, which were blatantly discriminatory. However, even if the Commission were to favorably consider Stafrs proposed modifications, there remain some serious legal issues with respect to the proposed zoning, and we ask that you consider Mills' suggestions for resolving these issues. If revised in accordance with these suggestions, the ordinance would still achieve the Commission's goal of resource protection. Mr. Carl L. Williams, Chair November 13,1995 Page 2 Before addressing the zoning proposal itself, however, it is necessary to mention Mills' ongoing objections to the designation of the Mills property as "Conservation" under the Local Coastal Plan, based upon an outdated and flawed Department of Fish and Game "study" depicting this area as "restorable wetlands." Absence of Juarkadon for the "Coastal Conservation "Designation and Zoning Application of the ultra -restrictive "Coastal Conservation" zoning can only be justified by a valid, factually -supported determination that: (1) There exists a viable and functioning wetlands or other environmentally sensitive and valuable ecosystem, that requires special protection, or (2) There exists a degraded wetlands which can be feasibly restored, as the term "feasible" is defined in the Coastal Act (Pub. Res. Code § 30109) Neither finding can be made on the basis of the record presently before this Commission. Throughout the course of the LCP proceedings for the ADC, both the City and the Commission have persisted in relying on a stale and inaccurate study by DFG as the basis for concluding that there are "degraded but restorable wetlands" located on the land owned by Mills and others, and that these "wetlands" must be preserved. The DFG depictions, which appear to beithe sole basis for designating the Mills and adjacent land as "wetlands", are not based on credible data or methods, and have been criticized by independent experts.' More egregious still is DFG's conclusion that the so-called wetlands identified in its study of the subject properties can "easily" be restored. This statement is unsupported by any technological data whatsoever, and defies common sense. Indeed DFG's simplistic suggestion that an adjacent flood -control channel can be used to inundate the dry land it has described as "wetlands" did not acknowledge or even address the lack of access to the channel itself.2 t Sae, e.g., November 16.1982 fetter from Maine biologist Richard 1. Vogl, submittal to the Coastal Commission in 1996 in connection with certification proceedings for the City's Land Use Plan for the ADC. 2 See, May 24, 1982 letter from Orange County Public Works Director Carl R. Nelson addressed to Fish & Game Biologist Don Schultz, which effectively precludes the use of flood control channel waters to inundate the Mills party. Mr. Carl L. Williams, Chair November 13, 1995 Page 3 Additionally, DFG provides no analysis at all of the technological or economic feasibility of its proposal to re-create historic wetlands at this location as required by statute.3 Irl the Vogl report previously submitted to the Commission, you were advised that DFG's proposal for restoration of the salt marsh by using runoff from the flood -control channel "will be more destructive than constructive, not only to the biological systems, but also to the adjacent manmade environment." Yet DFG has never addressed how a "wetlands" would be restored with water contaminated by toxic and hazardous wastes which are contained in the runoff from streets and other sources that drain into the channel. In sum, until such time as credible engineering and economic data is brought to bear on DFG's unsupported conclusion that the former wetlands can be "easily" re-created by breaching the flood -control levees, or at minimum, that DFG's proposal is feasible within the context of Coastal Act requirements, the "Conservation" designation for the Mills and CalTrans parcels is not based on substantial, credible evidence, Mills Comments on Coastal Staffls Proposed Modifications to the LCP Amendment 2-94 As a general matter, it should be noted that the numbering of the sections referenced in the Coastal Staff Report bears no relationship to the existing Huntington Beach Zoning and Subdivision Ordinance Code, since the Code was recodiSed and renumbered in its entirety effective November 2,1994. Accordingly, some effort should be made to coordinate with City staff regarding appropriate section numbers. This letter, however, conforms to the usage in the Staff Report. 9 9 ae• This section contains a recital that the ordinance does not authorize the City to exercise its power in away that will take or damage private property for public use, and is not intended to increase or decrease the rights of any property owner. This is the current "standard disclaimer" which is found in much of the recent legislation that imposes severe restrictions on property uses; and is thought to provide some measure of protection against takings claims. While Mills does not necessarily object to its inclusion in the ordinance, it should be noted that the provisions comprise only a statement of intent, which is not determinative of the effect or actual impact of the ordinance. The test of the validity of a regulatory ordinance is not its stated intent but the effect it has on the property it restricts. 3 Public Resources Code § 30) 08 of the Act requires that any proposed wetlands restoration be "feasible," i.e., that it be capable of "being accomplished in a successful manner within a reasmuable period of time, taking into account economic, environmental, social and technological factors." W. Carl L. Williams, Chair November 13, 1995 Page 4 Se&Jipn9fQ-7.1,J Doi gnminn of the Dmjccj area and Section 969.7.dW(l ) Pufarnance Standards: The new proposed Section 969.7.1.1 requires that any application for development include a "development plan for the entirety of all parcels that are geographically contiguous and in common ownership." Proposed Section 969.7.6(A)(1) requires that such application will not be deemed complete unless the property owner has provided a mechanism by which all development rights in areas not subject to development would be permanently relinquished. 'There are several serious flaws in this legislative scheme. First, if the "designation of the project area" is intended to be a determinsfion of the relevant parcel for purposes of determining allowable uses to avoid a taking, then it is not a correct statement of the law. As is discussed in more detail below (see, pp. 7-9), the unit of property for which uses must be allowed depends entirely upon the facts and circumstances of each case, and cannot be decided by ordinance. Physical contiguity and common ownership are only two of several factors to be considered. Second, if this section is not so intended, but is intended merely as a planning tool, then it must be read to permit submission of development plans at the conceptual level only. It is extremely costly to prepare development plans and environmental reviews for specific project proposals, and it would be fundamentally unfair to require the expenditure of such costs on a development plan for an entire "designated project area" if the applicant proposed to develop only a small part of that area. Further, since the landowner may not know how his land can be economically used in the future, he should not be required to produce project plans which are hypothetical and serve no useful purpose. Third, under Staffs suggested modification to Section 969.7.1.1, a designated "project area" for which a development plan is required includes contiguous parcels under common ownership, and parcels that are subject to a purchase option by neighboring landowners. This provision is clearly discriminatory in purpose and effect since, as the Coastal Commission well knows, Mills is the only owner in the ADC with an option on neighboring property. Indeed, the Staff Report reflects the incorrect assumption that an option effectively constitutes ownership: "[The Mills] landlocked parcel ... is in common contiguous ownership with [the CalTrans] parcel adjacent to Beach Boulevard ...." (Staff Report at 39, 12, ref: Area 2 of the ADC) Fourth, Section 969.7.1.1 is deceptive. Standing alone, it appears to simply provide for coordinated planning. But when read together with Section 969.7.6(A)(1), it goes much farther: It requires an assurance that the landowner will dedicate to the public, in perpetuity, all potential development rights of any portion of a parcel that is designated Conservation. This is accomplished as follows: If a portion of a parcel is designated Visitor Serving Commercial and the balance designated Conservation, the VSC portion cannot be developed or subdivided except pursuant to an "overall development plan for the entirety of all parcels that are geographically contiguous Mr. Carl L. Williams, Chair November 13, 1995 Page 5 and in common ownership." As proposed by Staff, any portion of the parcel designated "Conservation" which is not proposed for development cannot simply be left in its undeveloped state. Linder Section 969.7.6(A)(1) [incorrectly described as a "performance standard"] the subdivision or development application will not even be considered until the City is satisfied that the "wetlands and environmentally sensitive habitat areas that are not subject to development shall be preserved through a conservation easement ... or other similar mechanism." Thus, by operation of these two Sections, all rights to any uses of the undeveloped "Conservation" portion of the parcel are subject to relinquishment in perpetuity in exchange for the City's consideration of a subdivision or development application. The combined effect of these provisions is unlawful. The take-home message of Nollan and Dolan is that exactions cannot be imposed unless there is some identified relationship between the project's impacts and the exaction. No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development. [Emphasis supplied] Dolan v. City of Tigard 114 S. Ct. 2309, 2319-20 (1994). See, also, Nollan v. California Coastal Comm'n, 493 U.S. 925 (1987). Without a specific project proposal, the City cannot know what the impacts of a project would be. Without identification of the project's impacts, the City cannot formulate appropriate mitigation measures, and cannot possibly articulate a nexus between the exaction and the impacts, as required by law and by the Constitution. The adoption of an "automatic" exaction by legislative fiat has no rational basis and, by definition, no evidentiary basis. Yet the effect of these ordinances is to require the landowner to give up all development rights irrespective of the nature and extent of the impacts — if any -- that the proposed subdivision or development would have on the "wetlands or environmentally sensitive habitat areas [ESHAs] " The Coastal Commission and the City cannot take away property rights by ordinance without risking liability for a regulatory taking and payment of compensation. The question of whether or not conservation easements are needed to protect resources cannot be determined by legislative action, it can only be resolved in an adjudicatory context, where all relevant evidence can be submitted and considered. The proper purpose of legislative action is not to identify mitigation measures, but to establish a performance standard and to ensure there is a process for applying that standard and devising measures to mitigate actual impacts. The ordinance, combined with the CEQA process provides these key elements. The performance standard is found in Section 969.7.7(C), which requires an applicant to demonstrate that the functional capacity of any ESHA is not adversely affected by the project. The process is set forth in the California Environmental Quality Act and in Section Mr. Carl L. Williams, Chair November 13,1995 Page 6 969.7.5.1 which essentially restates what is required in an EIR for a project. Section 969.7.6(A)(1) conflicts with these provisions because it requites a commitment to dedicate a permanent conservation easement as part of the application, regardless of whether the project would adversely affect or, an the contrary, might even enhance the functional capacity of the ESHA. But the proper point in the process for exacting protections is not at the application stage, before the impacts have been identified. Exactions are properly imposed only at the findings stage, after the impact analysis is complete, as provided in Section 969.7.7(C). In short, Stairs proposed Section 969.7.6(A)(1) should be deleted as not legally supportable. If that Section were deleted, the ordinance would still meet the standard of "conformance with and adequacy to carry out the provisions of the ... Land Use Plan" because any proposed development would have to mitigate its impacts under CEQA and satisfy the performance standard set forth in Section 969.7.7(C). This is essentially the same process that is being proposed for the extension of Hamilton Avenue (Section 969.7.2.1). if that process satisfies the Commission's su dard for the street project, it should satisfy the standard with respect to other proposed projects. A final comment on Section 976.7.6(A)(1): The proposed section provides that the perpetual easement "need not authorize any public right of access or use" and that "exclusive use and possession of the area may remain with the applicant."4 These clauses appear to be intended as protection against a takings claim, because in Dolan the Court distinguished between a permanent use restriction and a dedication of land in fee to the public for active use. Those clauses, however, provide no protection to the City in this setting. To begin with, the Dolan analysis was conducted in the context of identifying and addressing the impacts of o project, and not in connection with the adoption of an ordinance requiring the relinquishment of development rights "up front," irrespective of a project's impacts. Further, although the Court identifies the "right to exclude others" as one of the most essential sticks in the bundle of property rights, the decision does not hold that regulatory action which preserves the right to exclude others but does not allow an economically viable use of the property does not constitute a taking. Indeed, the contrary is true, 4 The Staff Report indicates that this provision is intended to allow a property owner to retain his right to "sell protected parcels for use as mitigation sites by catides such as the ports." This "right" is of extremely dubious value since such sales in general are both tare and speculative. and since, as Mills has already noted, the "restorability" of these so-called wetlands in particular is highly questionable. In any avant, the proper time aad venue to determine the nature and extent of an exaction is when the project's impacts are identified and mitigation measures formulated. At that time, any residual property rights can be considered in connection with crafting the condition to be imposed on the development. The "savings" language is, in any event, only hortatory and not mandatory. Mr. Carl L. Williams, Chair November 13, 1995 Page 7 In Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992), for example, regulatory action precluded all use of Mr. Lucas' property, but did not require its dedication to active public use. The Court found this to be no less of a taking than a physical invasion of the property; [T]he Fifth Amendment is violated when land -use regulation ".. . denies an owner economically viable use of his land." [Citation] We have never set forth the justification for this rule. Perhaps it is simply, as Justice Brennan suggested, that total deprivation of beneficial use is, from the landowner's point of view, the equivalent of a physical appropriation.... . We think ... that when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a talang. Section gJ7 3.1 A=Jigatign fa econ igglly viable use determination. In suggesting the addition of this section, Staff purports to set forth the legal standards and relevant evidence for determining whether the application of the ordinance has deprived a property owner of any economically viable use. These provisions do not accurately reflect applicable law. More importantly, they are entirely unnecessary to satisfy the Commission's standard of ensuring the adequacy of the provisions to carry out the Land Use Plan. The opening paragraph provides that the economic viability determination "shall include the entirety of all parcels that are geographically contiguous and ... in common ownership...." The courts, however, have held that contiguity and common ownership alone do not determine the delineation of the "relevant parcel" for purposes of a takings analysis. Many other factors are involved including, for example, historical uses, physical characteristics, and applicable land use regulations.s The City of Huntington Beach cannot by adoption of an ordinance override the rules applied by the courts under constitutional principles. The remainder of the Section is also both incorrect and unnecessary. It provides an extensive list of information that a landowner is required to provide for the determination, whether or not that information is completely irrelevant or incompetent to establish the question of available economic use. For example, the landowner is required to state any "offers" to buy or to sell the property and the date and amount of the offer. Presumably, this information is required to assist the fact -finder in ascertaining the value of the land, yet an "offer" has no 1 See, e.g., Avain Harte Associates, Ltd. v County of Tuolumne, 217 Cal. App. 3d 71 (1190),, Aptos Seascape Corp. v. County Of Santa Crux, 138 Cal. App. 3d 494 (1982). Mr. Carl L. Williams, Chair November 13,1995 Page 8 probative value for proving market value of land. Nevertheless, under Section 969.7.30) any offers whatsoever -- no matter how bogus or contrived -- must be entered into evidence before the 4udicatory body 6 Similarly. evidence of the sale of a portion of the property is generally immaterial to a determination of whether the property under consideration has an economically viable use. Further, such evidence may not only be irrelevant, but afrmatively prejudicial to the landowner's position. In sum, before such evidence is required to be placed into evidence, the City must be required to articulate some basis for its relevance. It violates procedwal due process rights to adopt in advance requirements for the submission of evidence at an adjudicatory hearing which is either irrelevant or incompetent -- and therefore not probative of any issue before the hearing body -- and/or potentially prejudicial. Nor are such rules necessary. The legal standards for determining "economically viable use" are found in the case law which interpmU the takings clause. The factors to be considered in making that determination vary widely depending on the facts and circumstances of each ease, and are properly governed by the legal principles extant as of the date on which the adjudication is to take place. Any attempt to enumerate those factors in advance cannot take into account the peculiarities of each case nor the changes that might occur in the law in the interim. It is enough to require the City to design a procedure through which the determination will be merle. The Commission's objective can be accomplished simply by combining the first sentence of Section 969.7.3.1 with Section 969.7.3.2. These combined provisions require the applicant to request the determination and present a primafacie case; they would require the City to bold an adjudicatory hearing to make the determination, and to adopt findings supported by the evidence. Staff has stated its concerts that without a "definitive determination" as to economically viable use "wetland protection [would be] jeopardized because some development may be allowed to adversely impact wetlands that is not necessary to avoid a takings." (Stab Report at 36) But in fact, this definitive determination is provided for in the ordinance even without Section 969.7.3.1. Further, this determination can (and should) be made without attempting to identify in advance the evidence required to be submitted and relied upon. Requiring the submittal of incompetent, irrelevant or prejudicial material in an adjudicatory proceeding violates fundamental notions of fairness. To achieve its goal, the Commission need only require the City to follow applicable legal standards in making its findings. 6 By way of analogy, one might look to the evidentiary standards governing erninent domain actions, where the type of evidence adduced to prove fair matkot value is strictly circumscribed. Mr. Carl L. Williams, Chair November 13,1995 Page 9 Section 969Economically viable " n In addition to incorporating the first sentence of Section 969.7.3.1 into this section, as suggested above, Mills proposes a revision to the text of this section in order to conform to applicable constitutional principles. As proposed, the Section provides that the "economically viable use determination must rest on the adoption of two findings: (a) no economically viable use, and (b) interference with reasonable investment -backed expectations. Actually, these are alternative, not cumulative theories of takings. The courts have clearly held that a regulation which prevents any economically viable use constitutes a taking, without reference to any investment -backed expectations. it is only when the result is something less than a "wipeout" that the courts will look further and consider the reasonable investment -backed expectations of the property owner and perhaps conclude that a taking has occurred, even though some viable use remains.' Accordingly, Mills would propose the following changes to Section 969.7.3.2: Prior to approving a coastal development permit for a use other than one provided for in the coastal conservation district, the decision -making authority shall make one of the following findings: (a) Based on the economic information provided by the applicant as well as any other relevant evidence, each use provided for in the coastal conservation district would not provide an economically viable use of the applicant's property. (b) Restricting the use of the applicant`s property to the uses provided for in the coastal conservation district would so interfere with the applicant's reasonable investment -backed expectations as to constitute a taking of the applieant's property. Se 3 F-gonomicab viable uses For the reasons just stated, similar changes should be made to the first sentence of Section 969.7.3.3, which restates the findings required under Section 969.7.3.2. Further, subsection (a) provides that the uses to be allowed shall be the "minimum" necessary to provide the applicant with an economically viable use. As r See, e.g., Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2895 n.8, (1992) "[T]he landowner whose deprivation is one step short of complete ... might not be able to claim the benefit of our categorical formulation, but, as we have acknowledged time and again, "the economic impact of 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 Cenrral Transportation Co. v. New York City, 438 U.S. 104,124 (1979). And see, Hoehne v. County ofSan Benito, 870 F. 2d 529 (9th Cir. 1989) [Ordinance permitting construction of one home on property but precluding any further subdivision of the property may constitute a taking.] Mr. Carl L. Williams, Chair November 13,1995 Page 10 articulated, this standard is unworkable, Nor is it necessary to achieve the Commission's stated goal, since the same standard is effectively carried out through the CEQA alternatives analysis process. Subsection (b) is also unnecessary, as it merely states the obvious. Canaidemtion of Attemj&= This section appears to do nothing more than instate, in different language, the CEQA requirements for an impacts and altesnatives analysis. If something different is intended, the Section should so state. Otherwise, it is mere surplusage, and can be deleted. Section 969.7. (A)f ll: Performan . SUmduds: This section requires an unlawful exaction, and should be deleted. (See discussion of Section 969.7.1.1 at pages 3-5, above.) Section 469.17.Q Reouir+ed F' di= This section should (1) incorporate the exception process and (2) be revised to reflect avoidance or mitigation of impacts, rather than language which suggests an affirmative duty to `maintain" habitat area. Mills would propose the following minor revisions: Except as provided under Section 969.7.3.2. Ffor any other project the applicant shall establish and the approving authority shall find that the project does not adversely affect the existing functional capacity of" any environmentally sensitive habitat area.- 6 WiNg MiRWROd. CEQA FFindin�s The record contains no discussion of mitigation measures or possible dlternativea, yet the findings state there are no feasible mitigation measures or alternatives that would reduce environmental impacts. These findings are not based on any evidence in the record, as required by CEQA Conclusion The family of owners of Mills Land & Water Company appreciates this opportunity to comment upon the Coastal Staffs proposed modifications to the Zoning Amendment submitted by the City of Huntington Beach. it is hoped that the comments will be given serious consideration, as they propose revisions to the ordinance that would improve its chances of surviving a legal challenge without compromising the Commission's goal of achieving consistency with the LUP. Mills also respectfully requests the Commission to consider and address -- at long last -- the validity of the DFG report which depicts the Mills land as easily restorable wetlands. The report is not only questionable in its conclusions concerning the nature of the property, but there is no evidentiary basis,'or other basis whatsoever, DFG's for conclusions concerning restorability. Mr. Carl L. Williams, Clair November 13, 1995 Page I I Thank you for your attention and your consideration of the Mills submittal. Very truly yours, f Maria P. Rivera 0 0 i J. CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY.CLERK CALIFORNIA 92648 CITY CLERK LETTER OF TRANSMITTAL REGARDING ITEM APPROVED BY THE CITY COUNCIL/REDEVELOPMENT AGENCY APPROVED ITEM i ..�.a� 90 City, state, '/See Attached Aciion Ag4oda4tem / �� (� Ix ATTENTION: DEPARTMENT: REGARDING: �- Date of Approval -A a%A % Enclosed For Your Records Is An Executed Copy Of The Above Referenced Item For Your Records. �.-& ei� Connie Brockway City Clerk Attachments: Remarks: �-y11,r,,cufL ActionAgen a Page Y '7/ Agreement Bonds RCA Deed Other Insurance h p nt RCAgreem nt Insurance Other f Name Department RCA agreement Insurance Other Name Department RCA Risk :Management Department Insurance Cope Agreement Insurance Other G:FD110.tvp agrmts'transltr (Telephone: 714-536-5227 ) • TOLLING AGREEMENT This TOLLING AGREEMENT ("Agreement") is made as of this 4th day of November 1996 by and between petitioner and plaintiff MILLS LAND & WATER COMPANY, a California corporation ("Mills"), and defendant and respondent CITY OF HUNTINGTON BEACH, a municipal corporation ("City"). RECITALS Action No. 739412. A. On December 2, 1994, Mills filed a petition for writ of mandate and complaint for declaratory relief and injunctive relief and damages in the Orange County Superior Court in the action, entitled Mills Land & Water Company v. The City of Huntington Beach and Does I through X, case No. 739412 ("Action No. 739412"). Action No. 739412 complained of the City's land use regulation of the real property located in the "White Hole" area of deferred certification as delineated by the California Coastal Commission for the City's Local Coastal Program, in general, and complained of Ordinance No. 3251-B and Resolution No. 6628, in particular, as an unconstitutional taking of private property for public use without payment of compensation. B. On July 24, 1995, Mills filed a third amended petition in Action No. 739412. The City filed a demurrer thereto which was heard on October 6, 1995. C. On May 8, 1996, the City served a notice of ruling that the Court sustained the demurrer without leave to amend. D. Judgment was entered in Action No. 739412 in favor of -the City and against Mills on June 18, 1996. 0 E. On August 6, 1996, the City served Notice of Entry of Judgment in Action No. 739412. F. Mills' notice of appeal of Action No. 739412 is due October 7, 1996. Action No. 763624. G. On March 18, 1996, the City adopted new and different zoning ordinances, Ordinance Nos. 3325 and 3326, and Resolutions 96-24 and 96-25, for the White Hole area where Mills' parcels are located, in place of the ordinance and resolution complained of in Action No. 739412. Following the adoption of the new ordinances and resolutions, the California Coastal Commission certified the City's Local Coastal Program, including the White Hole area, as complying with the requirements of the Coastal Act. H. On May 10, 1996, Mills filed a petition for writ of mandate and complaint for declaratory relief and damages in the Orange County Superior Court, entitled Mills Land & Water Company v. The City of Huntington Beach and Does I through X, case No. 763624 ("Action No. 763624"). Action No. 763624 involves the City's adoption of the new zoning ordinances and resolutions. I. On or about July 26, 1996, Mills and the City stipulated to extend the time for the City to respond to the petition in Action No. 763624 to August 26, 1996. The stipulation was intended to enable Mills and the City to discuss a possible tolling agreement whereby Mills would dismiss Action No. 763624 without prejudice, the passage of time as to all defenses to claims in the petition, e.g., the statute of limitations, would be tolled, and a development application with the City will be pursued. J. On or about September 18, 1996, the City filed a demurrer to the petition in Action No. 763624, which was continued for hearing on November 1, 1996. 2 • K. Mills and the City seek to enter into a tolling agreement whereby: Mills will dismiss Action No. 763624 without prejudice; the statute of limitations as to all claims contained in the petition will be tolled; and a development application will be pursued with the City and the City will process said application in accordance with all rules and regulations normally applicable to said applications. NOW, THEREFORE, in consideration of the foregoing recitals, and the terms and conditions hereinafter set forth, Mills and the City agree as follows: 1. DISMISSAL WITHOUT PREJUDICE. 1.1 Within five court days after a fully -executed copy of this agreement is received by Mills' counsel, Mills shall dismiss Action No. 763624 without prejudice pursuant to Code of Civil Procedure § 581 by filing a notice of dismissal without prejudice with the Court. 1.2 Each parry will bear any costs it incurred in Action No. 763624. 2. TOLLING OF STATUTES OF LIMITATION. 2.1 Mills and the City agree that any and all statutes of limitation and any other applicable statutory or common law time limitations or defenses based on the passage of time, including laches, shall be tolled from May 10, 1996 during the term of this Agreement as to any action, including without limitation, the filing of any proceeding however styled, in any federal or state court, which Mills or its successor in interest may wish to assert against the City which relates to the real property located in the former White Hole area in Huntington Beach, California (a "Future Action"). 3 • 3. DEVELOPMENT APPLICATION. 3.1 An application for a development permit will be pursued with the City; and the City will process said application in accordance with all rules and regulations normally applicable to said applications. 4. TERM OF AGREEMENT. 4.1 The term of this Agreement begins on May 10, 1996, and will last until 120 days after the City has reached a final decision regarding the application of the new ordinances and resolutions to the application for a development permit for real property located in the former White Hole area. 4.2 This Agreement may be extended by the mutual written consent of the parties or their successors in interest. 4.3 Nothing in this Agreement is intended to prevent Mills or its successor in interest from asserting a legal proceeding against the City in regard to the zoning and/or permitted use(s) for real property in the former White Hole Area owned by Mills or on which Mills holds an option to purchase, but the filing of any such action shall operate to terminate this Agreement. 5. REPRESENTATIONS AND UNDERSTANDINGS. 5.1. Each party represents that it has received independent legal counsel from its attorney or attorneys with respect to the advisability of executing the Agreement. 5.2. No party has relied upon any statement, representation, or promise of any other party (or of any officer, agent, employee, representative, or attorney for any other party) in executing the Agreement, except as expressly stated in the Agreement. 4 0 5.3. Each party represents that it has made such independent investigation of the facts and matters pertaining to the Agreement as it deems necessary. 5.4. Each party represents that it has not previously assigned, transferred, granted, or purported to assign, transfer, or grant, any of the claims referred to in Action No. 739412 or Action No. 763624. 5.5. Each party agrees and is aware that each term of the Agreement is contractual and not merely a recital. 5.6. All parties irrevocably authorize and direct their respective attorneys to undertake the acts described in the Agreement and to undertake such other acts as may be reasonably necessary to effectuate the terms of the Agreement. 5.7. All parties agree to execute promptly such other documents and undertake promptly such other acts as may be reasonably necessary or desirable to effectuate the terms of the Agreement. 5.8. Nothing contained in the Agreement shall be construed as an admission of liability by any party to the Agreement. Indeed, each party expressly denies any liability to the other party, but has entered into this Agreement solely to avoid the costs of further litigation. 5.9. The rights and obligations of the parties shall be construed and enforced in accordance with, and governed by, the laws of the State of California. Any action to enforce the provisions of this Agreement shall be brought only in the California Superior Court, County of Orange. E • n 5.10. The Agreement is the entire agreement between the parties with respect to the subject matter of the Agreement and supersedes all prior and contemporaneous oral and written agreements and discussions. The Agreement may be amended only by an agreement in writing signed by the parties. 5.11. The Agreement is binding upon and shall inure to the benefit of each party and its successors, assigns, agents, and attorneys. 5.12. As used herein, any pronoun shall include the masculine, feminine or neuter and the singular or plural as the context and reference to a particular person, group of persons or entity may require. 5.13. Headings used herein are for convenience of reference only and shall not affect the interpretation of any paragraph. 5.14. The terms and conditions of the Agreement are the product of negotiations between the parties and shall be deemed to have been drafted by both parties jointly. 5.15. The Agreement may be executed in counterparts, and when each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one Agreement, which shall be binding and effective as to both parties. 5.16. If any provision of the Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall survive and continue in full force and effect without being impaired or invalidated in any way. G1 5.17. The Agreement is deemed effective as of May 10, 1996. PARTY SIGNATURES Dated: October 29, 1996 MILLS LAND & WATER COMPANY Dated: /--5', 1996 APPRCVED AS TO FORM: - City Attorney APPROVED AS TO FORM: Dated: ell.aM,3 , 1996 r Dated: 1996 CITY OF HUN_TINGTON BEACH ATTEST: .4By: ity Cler r M56,7 ;00? \T0LL7AGM . W F5 gy: ROBERT L Its: PRESIDEN' 3RE, JR. CITY OF HUNTINGTON BEACH B � 1 ---� /CITY ATTORNEY C Administrator HILL, FA ER & Bt;MLL LLP By: / l V" Sl�%. RTHUR B. COOK Attorn ys for MILLS LAND & WATER COMPANY MOORE, UTTER EVANS By: MARK D. RUTTER Attorneys for CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON BEACH By Aj9&4 Mayor 7 04 1197 - City Council/Redevelopment Oncy Minutes - Page 3 -=,- RECONVENE E The Mayor reconvened the regular meetings of the City Council and Redevelopment Agency in the Council Chamber. REPORT OF ACTION TAKEN AT CLOSED SESSION OF MARCH 17, 1997 - SETTLEMENT SOUTHERN CALIFORNIA UNDERGROUND VS. CITY - CASE NO. OCSC 765997 (120.80) The City Attorney referred to a communication from her office to the Mayor and City Council dated March 20, 1997, Subject. Report of Action Taken at Closed Session - Settlement - Southern California Underground vs. City, Case No. OCSC 765997. She presented the communication to the City Clerk. The City Attorney stated that pursuant to statutory obligation for legislative body to comply with Brown Act requirements by a "Report of Action Taken" in closed session (Government Code §5495.1(a), (3), (B)), she was making the following announcement to Council: "The City Council, by a vote of 7-0, on March 17, 1997, in closed session authorized settlement of Southern California Underground v. City of Huntington Beach, Orange County Superior Court Case No. 765997, by approving payment of $72,000 to Southern California Underground in full and complete satisfaction of the matter." A REPORT OF ACTION TAKEN AT CLOSED SESSION - TOLLING AGREEMENT - MILLS LAND AND WATER CO. V. CITY OF HUNTINGTON BEACH (120.80) The City Attorney referred to a communication from her office to the Mayor and City Council dated April 14, 1997, Subject. Report of Action Taken at Closed Session - Tolling Agreement - Mills Land And Water Co. V. City of Huntington Beach. She presented the communication to the City Clerk. The City Attorney stated that pursuant to statutory obligation for legislative body to comply with Brown Act requirements by a "Report of Action Taken" in closed session (Government Code §5495.1(a), (3), (B)) (We have just received this report from outside counsel), she was making the following announcement to Council: "The City Council, by a vote of 7-0, on October 7, 1996, in closed session authorized the Mayor to sign and the City Clerk to attest the proposed amended tolling agreement between the city and Mills Land and Water Company whereby the Mills Company will dismiss without prejudice Mills Land and Water Co. v. City of Huntington Beach, Orange County Superior Court Case No. 753624 and the appeal of the first Mills case will continue in the Appellate Court." CITY COUNCILfREDEVELOPMENT AGENCY ROLL CALL Present: ,!Mien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo Absent: None 871 0 HB CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION TO: FROM: DATE: SUBJECT: CONNIE BROCKWAY, City Clerk GAIL HUTTON, City Attorney June 5, 1997 Mills Land and Water Tolling Agreement This is the current version of the Mills Land and Water Tolling agreement. The 120 days refers to a period " the City reached a final decision regarding application of new ordinances and resolutions, etc. Also, this has been approved by all the other parties. GAIL HUTTON, City Attorney Ik Attachment: as above • MOORE, RUTTER 8 EVANS LAWYERS NEAL MOORE r ,i1� r'+ 1!1 f!'�: S9 EAST OCEAN BOULEVARD. SUI-E SOD MARK O. RI,TTER, -7 I •�:� .�_'+' - " - ' v N/.LLIAM O. EVANS,'PC LONG BEACH. CALIFORNIA 90802-5056 RICHARD J. VILKIN - TELEPHONE: (5621 435-4499 ry` f �. FACSIMILE: (5621 495-429a L] I MICHAEr J. EMLING OF COLNSEL ��'�f4 1 I`�4: i I.J I1•li-n-♦�417 May 27, 1997 Gail Hutton, City Attorney City of Huntington Beach 2000 Main Street P. O. Box 190 Huntington Beach, CA 92648 ORANGE COUNTY OFFICE 2!CO MAIN STREET, SUITE 28O HUNT'NGTON BEACH, CA 92648 TELEPHONE: ,714) 374-3333 FACSIMILE: S7141 374-939q Re: Mills Land & Water Co. v . City of Huntington Beach Your File . Claimant Our File Dear Ms. Hutton: Unknown Mills Land &-Water Company 2370 Enclosed herewith please find the original Tolling Agreement in the above -captioned matter. If you have any questions or additional requests, please don't hesitate to give me a call. Very,tjuly MARK D . RUTTER MDR:LMB 2370? tr-- hb7- clOriu^o--Agri _ Enclosure b�/ 97—-b�HH9- f� s, J X 5'Vo y C) f �1� TOLLING AGREEMENT This TOLLING AGREEMENT ("Agreement") is made as of this 4th day of November 1996 by and between petitioner and plaintiff MILLS LAND & WATER COMPANY, a California corporation ("Mills"), and defendant and respondent CITY OF HUNTINGTON BEACH, a municipal corporation ("City"). RECITALS Action No. 739412. A. On December 2, 1994, Mills filed a petition for writ of mandate and complaint for declaratory relief and injunctive relief and damages in the Orange County Superior Court in the action, entitled Mills Land & Water Company v. The Cily of Huntington Beach and Does I through X, case No. 739412 ("Action No. 739412"). Action No. 739412 complained of the City's land use regulation of the real property located in the "White Hole" area of deferred certification as delineated by the California Coastal Commission for the City's Local Coastal Program, in general, and complained of Ordinance No. 3251-B and Resolution No. 6628, in particular, as an unconstitutional taking of private property for public use without payment of compensation. B. On July 24, 1995, Mills filed a third amended petition in Action No. 739412. The City filed a demurrer thereto which was heard on October 6, 1995. C. On May 8, 1996, the City served a notice of ruling that the Court sustained the demurrer without leave to amend. - D. Judgment was entered in Action No. 739412 in favor of the City and against Mills on June 18, 1996. mn, CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION HuNTINQTON BFACH TO: Gail Hutton City Attorney FROM: Connie Brockway City Clerk DATE: February 12, 1997 SUBJECT: (1) SUSAN NEWMAN--MUTUAL COMPROMISE AND RELEASE -- ANNOUNCED TO PUBLIC AT JANUARY 21, 1997 COUNCIL MEETING (2) MILLS LAND AND WATER COMPANY VS. CITY OF HUNTINGTON BEACH (1) The City Clerk's Office is in.need of the Mutual Compromise and Release document referenced in the City Council minutes of January 21, 1997 (Susan Newman) to complete the public record. (2) Please let me know the status of the Tolling Agreement with Mills Land and Water Company relative to when it will be able to be announced in open session. Until then, I will keep it in pending and not affix the Mayor's and City Clerk's signatures. CB:cjg cc: Honorable Mayor and City Council Michael T. Uberuaga, City Administrator Attachments: Copy of Page 7, City Council Meeting Minutes of January 21, 1997 Copy of memo to Connie Brockway dated November 14, 1996, Subject: Mills Land & Water Co. V. City of Huntington Beach, Tolling Agreement Copy of memo, Closed Session File, stated October 9, 1996, Subject: Mills Land & Water v. City of Huntington Beach Copy of Page 257, Government Code, § 54957.1 Copy of memo to Gail Hutton dated November 14, 1996, Subject. Mills Land & Water Company v. City of Huntington Beach --Tolling Agreement Copy of Tolling Agreement dated November 4, 1996 cbmemos197-021 cg • HUNTINGTON BEACH M43 FROM: DATE: CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Connie Brockway, City Clerk Gail Hutton, City Attorney November 1451996 SUBJECT: Mills Land & Water Company v. City of Huntington Beach Tolling Agreement Please arrange for the Mayor to sign and attest to his signature on the attached Tolling Agreements which were approved in closed session October 7, 1996. See attached confidential attorney -client privilege, closed session file Re: Mills Land & Water Company v. The City of Huntington Beach report wherein at Paragraph 3 the minutes reflect the Council approved and authorized the Mayor to sign and the City Clerk to attest the proposed amended Tolling Agreement between the City and Mills Land & Water Company whereby the Mills Company will dismiss without prejudice Mills Land & 'Pater Company v. The City of Huntington Beach, OCSC Case No. 76 36 24 and the appeal of the first Mills case will continue in the Appellate Court. The Brown Act requires a report of action taken from closed sessions, however there is an exception from immediate_reportin of litigation -related action found in Government Code Section 54957.1(a)(3)(B) as follows: "If approval rests with some other party to the litigation or with the Court then as soon as the settlement becomes final and upon inquiry by any person the local agency shall disclose the fact of that approval and identify the substance of the agreement." This is an agreement, and part of a court pleading in the referenced case, it must still be approved by the Superior Court before it is final. Thus the exception to the Brown Act of reporting out this matter as provided for at the above quoted Government Code Section 54957,1(a)(3)(B) is applicable. I believe it is appropriate for both you and the Mayor to sign this agreement because the requirements of Charter Section 613 provide as follows: G1-1/s:G:Hutton-Mill 1114 Connie Brockway November 14, 1996 Page 2 "Execution of Contracts. Except as herein provided the City shall be bound by a contract only if it is made in writing and approved by the City Council and signed on behalf of the City by the Mayor and the City Clerk or by a City officer designated by the City Council and only upon the direction of the City Council ....." After the appropriate signatures have been affixed to the Tolling Agreement, it will be forwarded to the Superior Court for Court action approving/disapproving the Tolling Agreement. If it is approved we will notify you and the action can be promptly reported out in an open session. In the meantime, in order to resolve this lawsuit in a timely manner so that parties will not be forced to Iitigate where there has been agreement, the fully executed Tolling Agreement must be filed with the Court. If you are concerned about the act of formal approval in open session, that will be taken care of at the time the action is reported out. The legal theory supporting this follow up formal City Council action is deemed "nuns pro tunc" (now for then) action. In the meantime you will have this memorandum and copy of official closed session minutes to protect your office. Thank you for being so alert and your cooperation in securing the Mayor's signature and your own attestation will be much appreciated. Gail Hutton City Attorney c: Michael Uberuaga, City Administrator Joseph Barron, Deputy City Attorney Attachments: (1) October 9, 1996 Closed Session File minutes: Mills Land & Water Company v. The City of Huntington Beach (2) Government Code Section 54957.1: Closed Sessions; Public Report of Action Taken (3) Two (2) originals to be executed by the Mayor and City Clerk GEVs:G:HuttonA1i11I114 • CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HuNTNCT0% REACH CONFIDENTIAL ATTORNEY -CLIENT PRIVILEGE TO: CLOSED SESSION FILE FROM: GAIL HUTTON, City Attorney DATE: October 9, 1996 SUBJECT: Mills Land & Water v. City of Huntington Beach On Monday, October 7, 1996, the city council convened in closed session to discuss the referenced matter pursuant to the litigation exception contained in Government Code Section 54956.9(a). Seven members of the council were present including Mayor Sullivan, Mayor Pro Tern Bauer, Harman, Garofalo, Dettloff, Green and Leipzig. Also in attendance were Michael Uberuaga, City Administrator; Melanie Fallon, Director of Community Development; Gail Hutton, City Attorney; and Mark Rutter, of Moore, Rutter & Evans, via conference call. Council approved and authorized the mayor to sign and the city clerk to attest the proposed, amended, tolling agreement between the city and Mills Land & Water Company whereby the Mills Company will dismiss without prejudice Mills Lane & Water Company v. City of Huntington Beach, O.C.S.C. Case No. 76 36 24, and the appeal of the first Mills case will continue in the appellate court. Vote 7-0. Nc GAIL HUTTON City Attorney GHlrjl Atac"men:s: '. Closed Session Notices 2. RecLest for City CCL:nc:l Action (Closed Sess:or.) GOVERNTMEN7 CODE § 5-4957.1 s&ssion unless so autnoriwd by the couned. Op-Atty.Gen. No. 289, 12-30-93. § 54957-1. Closed sessions; public report of action taken (a) The legislative 'DDdv of any local agency shall publicly report any action taken in closed session and the vote or abstention oi everw member presert thereon, as foBows: (1) Approval of an agreement concluding real estate negotiations pursuant to Section 54956.8 shall be reported after the agreement is final, as specified below - (A) If its own approval renders the agreement finaL the body shall report that approval and the substance of the agreement in open session at the public meeting during which the closed session is held. (B) If final approval rests with the other party to the negotiations, the local agency shall disclose the fact of that approva: and the substance of the agreement upon inquir�y by any person, as soon as the other party or its agent has informed the local agency of its approvaL (2) Approval given to * * * its legal counsel to defend, or seek or refrain from seeking appellate review or reief, or to enter as an an -&us curiae in any form of litigation as the result of a consultation under Section 54955.9 shall be reporlted in open session at the public meeting during which the closed session is held. The repon shall identify, if known, the adverse party or parties and the substance of the litigation. In the case of approval given to initiate or intervene in an action, the announcement need not identify- the act;on. the defendar!Ls, or other particulars, but shall specify that the direction to initiate or irtervene in an action has been given and t�at the action, the defendants, and t-lie other particulars sh&'J, once formally cornmenced, be disclosed to any person upon inquiry. unless to do so would jeopardize the agency's ability to effecv.pte senice of process on ore or more unserved parties, or that to do so would jeopardize its abihity to conc!ude exdsting settlement negotiations to it's advantage. (3) Approval given to w * * its ';egal cownsel of a setrJement of penc L-ng litigation, as defined in Section �56.9, at any stage prior to or during a judicial or quasi-judicial proceeding sh&'J be reported after the lernent is final, as specilfied beloxv- (A) If the legisla--.v body accepts a settlemert offer sig-ned by the opposing party, the body shall report its WeDtance and identiN the subs'ance of -he agreement in open sess-on at the public meeting during which �-ie closed sessicn Is held. (B) If final aDpraval rem with some other Party to the litigatio4r Aith ldhe cou&hen as soon as the ��; _F upon irquiry by an. set-Jerr7e—nMcome_ r�a_17`anff_y person, the loci] =gerxy s =aisclose the fact of that app roval. and ident-."- the sub5lpnce of the agreement. (4) Disposition reached as to claims discussed in closed session pursuant to Section 54956.95 shall be reported as soon as reached in a manner *,W identifies the name of the claimant, the name of the local agency claimed agyaLnzt. --he substance of the claim, and any moretary amount approved for payment and agreed .ip.-n by *e Ca-Imant. (5) Action taken 10 2PPUint. employ, dismiss, accept the resignation of, or otherwise affect the emplox7rert stz­us of a public ernployee in closed session pursuant to Section 54957 shall be reported at the pAlic meet4,g �uring which -..he closed session is held Any report required by this paragraph shall identify the title of the position. The general requirement of *this paragraph notwithstanding, the repom of a d;5-n4sSa1 or of -.he nonrenewal of an emp!oyrrent contract shall be deferred until the first pubbe meeting follo-aing -he exhaustion of administrative remedies, if any. f6) Approval of an agreemcnt cor.c'ud:ng labor negotiations with mpreserted employees pursuant to See, .ion 54957.6 S-all e rcp�r.ed after the agreernert is 'Ina] and has been accepted or ratilfl)ed by the other party. The report S'nall Identify the item approved ard the other party or parties to Ulie negotiation. (b) Repcils *,.-F'. are required o be made pursuant to th's section may be made orally or in wnting. The legislative Wy --2'1 pro-nde to anv nerson who has submitted a written request to the �egLslative bodyNxithin 24 hour-s- of the posdrg of the agenda, or to any person who has made a standLng request for all documentatic-n as part of a request for notice of meetings pursuant W Sect -on 54954.1 or 54956, if the requester is 1�resen'. a', *.he t:me the closed sess, on ends, copies of any contracts Fetflement agreemenm or other docume-.�s t-a-L we-e appmved or a6opled un -he closcd session. If the action taken resu�Ls in one or sub�* 'ar­.ve amendmentz to the related docamerts requiring retyping, the documents need not relea�ed urti] the retxl)Lng is completed during normal business hours, provided the Presid:nLy 0�1')ce­ of he legis'ative body or his or her designee orallysurnmarizzes the substance of amendmen-.s for z'-e 1--enep., of' -.he One-iment reques:er or any o-,her perKn present and requesting ­e irJorniation. Additions or changes indicated by underlin ; deletions by asterisks 257 OFFICE OF THE CITY CLERK CITY OF HUNTINGTON BEACH M04 MTER-DEPARTIMF-INT COMMUNICATION HUNTINCTON BEACH TO: Gail Hutton, City Attorney FROM: Connie Brockway, City Clerk SUBJECT. Mills Land & Water Company v. City of Huntington Beach Tolling Agreement DATE: November 14, 1996 Recently, I was asked by your office to obtain the signature of the Mayor and City Clerk on a Settlement Agreement relative to the Susan Newman litigation. At that time I requested, and you agreed, that your office or another city officer would sign the agreement presented to the judge and it would later be reported out at a meeting and the Mayor and Clerk signature affixed. I am requesting that your office again place different signature lines as you did on the above mentioned agreement and process it as last time. The City Charter section referred to refers to agreements approved by the City Council and does not mention agreements in closed session. Sincerely Connie Brockway City Clerk CC: Joe Barron, Deputy City Attorney CB/MemoMj11s/jc