Clarity Blog

August 9, 2010

What are the three biggest stories each week in the world of California land development?  You’ll find them right here each Monday, or follow LP&A all week long on Twitter at @LPALand for up-to-the-minute news and analysis.  This week:

1. Will the Drought Contingency Plan squeeze future land uses?

The California Department of Water Resources didn’t go so far as to blame your picket-fenced bit of the ‘burbs for causing the state’s ongoing water crisis, but it is looking at limiting future land uses as part of the solution.  According to its newly released Drought Contingency Plan, “development intensity has a direct relationship to water supply,” and since the state’s thirst for water outstrips available resources, that means builders best prepare for more regulation and limits on what they can do with their property.

>> Read the Full Report

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August 2, 2010

What are the three biggest stories each week in the world of California land development?  You’ll find them right here each Monday, or follow LP&A all week long on Twitter at @LPALand for up-to-the-minute news and analysis.  This week:

What could you do with this raw land?

1. Builders beginning to buy raw land with eye on market turnaround.

Standard Pacific CEO Ken Campbell made the news recently when he predicted a 2014 housing comeback and said he’s buying raw land in a big way.  That’s a sure sign the supply of already-approved lots is drying up … and it also means there will be a new wave of activism from the environmentalist/NIMBY cabal.  New legislation and policy have prioritized infill development and attempted to make greenfield development neighborhood non grata in California.  That will make entitlement a challenge … but one with great potential financial upsides for those who purchase wisely.

>> Read More

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What are the three biggest stories each week in the world of California land development?  You’ll find them right here each Monday, or follow LP&A all week long on Twitter at @LPALand for up-to-the-minute news and analysis.  This week:

1. Is Developing Alameda Point worth the hassle?

Alameda Point - What Could Have Been

The city of Alameda voted last week to terminate an exclusive negotiating agreement with SunCal for development of the city’s former Navy base, which closed 15 years ago.  SunCal invested nearly $15 million during its four-year process, but was stymied by ever-changing political winds, a city staff with personal agendas and a public that’s not happy without a fight on its hands.  SunCal came on board in 2006 after a partnership of Shea and Catellus got fed up and walked away, which begs the question:  Is developing Alameda Point worth the hassle?  >>Read More

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(Ed. Note: This post summarizes commentary written by Laer for the June 2010 issue of Builder News Magazine. You can read the full version here.)

The filing date for city council candidates across Southern California is fast approaching and campaign contribution requests will come just as fast.

As a public affairs consultant who has been involved in the approval of more than 400,000 homes, I’ve participated in many strategy sessions during election seasons, and have identified four fundamental ways our clients approach corporate campaign contributions:

• The pragmatists, who contribute to those considered most likely to get elected, so only “winning” investments are made
• The idealists, who contribute only to those who are likely to support building, even if it’s unlikely they’ll win
• The navel-gazers, who balance electability against support for the industry, and make highly nuanced contributions
• The deniers, who don’t make any campaign contributions at all, ever.

We’ve had clients take each of these approaches and subsequently get projects approved.  So which approach is best?  You can click here to read our full story on this topic featured in Builder News.

But the bottom line is campaign contributions are just a form of communications.  You are communicating through your money, and you are hoping your money will lead to access – the opportunity to communicate – after the election.  Consequently, the same rules apply to contributions as apply to all communications:

• Prepare your messages, and update them as circumstances change
• Seek to listen, not just to talk
• Act only after you’re fully prepared to respond to negative questions.

Lastly, be sure to make a contribution to the building industry PAC – even if you’re contributing separately, because the industry’s voice needs to be heard, too.

Did you follow Measure N on the June 8 primary ballot up in Sutter Creek? No? Well we did track it, because it was one of the only referenda in the primary challenging the approval of a housing project. At the polls, 586 residents of the Amador County town voted “yes,” and 594 voted “no,” meaning the City Council’s earlier approval of the proposed Gold Rush Ranch and Golf Resort has been overturned – by eight votes.

[Update: Absentee ballots turned the election around, swinging the results to a 12-vote victory for Gold Rush Ranch's advocates.]

Closer to our home in Orange County – and closer to our client list – was Mission Viejo’s Measure D. The ballot-box planning initiative grew out of public opposition to an assisted-living facility project we worked on – a project that died in the economic downturn long before Measure D was placed on the ballot. After a spirited campaign, 62.4 percent of Mission Viejo voters emphatically said “no” to ballot-box planning.

In other conflicting election results:

• Voters in the City of Brentwood denied an initiative making it possible to develop about 750 acres, but…
• Voters in Santa Clara paved the way for a new San Francisco 49ers stadium.

So what can the builder/developer community take away from these results?

On the surface, not much. Very different towns voted very differently on very different ballot measures. But the fact they were even on the ballot is a great example of the public’s current low regard for both government and private companies – and their growing desire to have more say in the development process.

Need more proof? Just look at PG&E’s Proposition 16. PG&E spent nearly $25 for each of the votes it got in favor of the company’s self-serving proposition. Opponents spent less than a nickel for each of the votes they gathered, successfully playing David to PG&E’s Goliath. Mercury Insurance suffered a similar, less costly, defeat on its corporate venture into propositions.

Neither proposition was particularly reprehensible, so the vote shows that Californians don’t like it when corporations try to make laws. The folks with Gold Rush Ranch may have suffered from a similar dislike and distrust of corporations.

Lack of Public Trust May Lead to More Referenda

So, if you’re a big corporation and there are laws you’d like passed, go through the legislature – voters can be too unpredictable.

And if you must launch or fight a referendum, know that it’s definitely winnable, but prepare for a tough slog because voters up and down the state have little trust in either government or big business, and are clamoring for more input in anything affecting their quality of life. Our approach has always been to get more than 50 percent of the community behind a project as we go through the city or county approval process, so our client is well prepared, should a referendum be in the cards. In today’s environment, planning for a referendum from the beginning will make it much easier to accomplish your goals in the end.

Here’s a troubling stat, from the Brandman University 2010 State of Orange County survey:

In 2000, 38 percent of Orange County residents felt their quality of life was going very well, and only nine percent thought it was going badly. In 2010, eight percent thought their quality of life was going very well and 35 percent thought it was going badly. This dramatic reversal means, at one level, a greater dissatisfaction with local government.

In our experience, there is a far greater chance decisions made by local government will be challenged by referenda in times like these, compared to more happy-go-lucky times.

As featured by the Orange County chapter of the Building Industry Association

Jobs, jobs, jobs – It’s a winning message for developers and builders right now. We are seeing this message resonate with all of the industry’s key target audiences more than ever, from decision-makers and city staffs to the general public and media. But how can you emphasize jobs when a full economic impact analysis isn’t part of your budget?

Enter the Center for Strategic Economic Research – or CSER.

The Center’s study on the economic “ripple effect” of homebuilding is quantitative confirmation of what we’ve always known: New homes mean more jobs.

Specifically:

• Every home built creates 2.4 jobs
• For every $1 spent building a home, $0.9 is generated 
• Each home generates more than $360,000 in economic activity, excluding the selling price

These are terrific metrics. They are also being used by builders across the state as confirmation of their project’s economic benefit. In fact, the CSER’s Deputy Director, Helen Schaubmayer recently told us that the study could be an immensely valuable tool for builders.

“As a result of this study being updated and published for several years, we are seeing builders leverage jobs-creation messages that they were previously unable to quantify. But builders also need to realize how to package and present these findings to the right audience. If they do, it could go a long way.”

We agree. Even the best jobs message can get cluttered with industry jargon. And having clarity to your message – especially one as important as jobs – is critical to a successful project.

Take a moment to review the study. We’ve also been told by the research director that a 2010 study is in the works and may be available this summer, so we’ll be sure to keep you posted.

A new, kid-friendly comedy, Furry Vengeance, hits theaters April 30, chronicling a cast of loveable critters as they conspire to make the life of a developer (played with maximum evil buffoonery by Brendan Fraser) a living hell.  But don’t take it from me, here’s how this lovely bit of slam-the-developer is being marketed:

This hilarious film depicts the inventive and clever ways forest animals fight back against thoughtless humans whose development plans encroach on their habitat.

Of course the story line doesn’t mention EIRs, open space dedications with management endowments in perpetuity, or any of that boring stuff.  Instead, it’s another piece from the same folks that brought us An Inconvenient Truth, targeting our kids with an eco-activism message. The movie’s marketing plans include a “Social Action Network” complete with materials and games to teach kids how to vilify development.  No, really.  Its goal is to “educate and engage future environmentalists” and to help kids – your kids – “develop skills and deeper knowledge of habitat and animal protection issues.”

Here at LP&A, we happen to think habitat and animal protection is a stellar idea.  We’ve been involved in the approvals of new communities whose developers have set aside a combined 350 square miles of protected open space – more by far than the producers of Furry Vengeance have protected, we’ll wager.  We just don’t like it when one-sided messages go straight from Hollywood to the next generation, complete with suggested school curricula and Furry Vengeance stuffed animals and lunch boxes.

Kids are Key

While we disagree with their one-sided, anti-development message, the Earth Goddess evangelists of Furry Vengeance got one thing right: Young kids are a powerful audience that shouldn’t be overlooked.  Reaching out to them can spread goodwill, combat rumors, and have a surprisingly positive impact on your approval process.  The alternative is to let a talking squirrel from Hollywood get the last word on your well-balanced proposed project.

The story of “man biting dog” is always more interesting than the ever-pedestrian “dog bites man” headline – the intrigue is inescapable.

So when I saw that the headline from today’s Endangered Earth, the Center for Biological Diversity’s weekly docket newsletter, read “CBD Does Not File Law Suit,” I was genuinely intrigued.

But alas, my optimism was dashed quicker than a West Virginian flying squirrel in a forest fire.  From the CBD’s post…

“The Center for Biological Diversity did not file suit yesterday against any state or federal agency for harming endangered species. Exxon and Walmart also reported no new litigation by the activist group. Asked about the development by The New York Times, Center director Kierán Suckling replied, “Well, we just thought . . . you know . . . it’s spring, let’s chill for day, take the dog for walk.”

The event met with mixed reaction from critics and supporters. Center member John Spark of Albuquerque, New Mexico, requested a return of his membership dues, complaining, “Spring schmring, I don’t contribute money so these guys can sit around on their butts. The world is overpopulationed, overpolluted, and underprotected, and I expect these guys to fix it right now. What are they going to do next, sleep?”

Interior Department spokesperson Hugh Snickery commended the Center. “I wish the Center would more take days off. We’ve got offshore oil leases to get out, BLM lands to overgraze, and species to ignore.”

Suckling declined Snickery’s offer of a world holidays calendar

Somewhere between “…let’s chill for a day…” and “Hugh Snickery” I was reminded to look at the calendar. Yep, it’s April 1.

So the egregious lawsuits will continue, including those against some of the best land-use projects around. The stall tactics and shake-downs will live on, while jobs-producing projects are gummed up by the CBD.

But at least we’re all clear now: for the CBD, everyday is lawsuit day.

City planners in the Bay Area city of Richmond are putting the finishing touches on the town’s new general plan and hope to include a first-in-the-nation “wellness element” in the document, which will guide how new development is processed.  Writes HealthyCal.org:

The new rules would require builders to show that residents have adequate access to healthy foods, medical services, public transit, affordable housing, recreation and open space, economic opportunity, safe neighborhoods, and environmentally sound, sustainable buildings.

Excuse us, but isn’t it the free market’s responsibility to provide residents with services like groceries (healthy or not), doctors and jobs? Isn’t it Richmond’s responsibility to make sure neighborhoods are safe? Aren’t homebuyers still free to choose whether to pay more for a recreation-rich neighborhood or less for one that’s not so well equipped? And ditto for the added price for “environmentally sound, sustainable buildings?” Whatever that means.

Richmond city planners need to realize that starry-eyed idealism comes at a cost.  Unless it dies a welcome death, the “wellness element” of Richmond’s draft general plan will not make Richmond’s economy any healthier. It will make the city less attractive to developers, who are likely to take their business – and the revenue new development generates for cities – elsewhere.