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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We are big fans of the Public Policy Institute and its surveys of public opinion in California.  We like that its executive director, Mark Baldassare, came out of Chapman University here in OC, and we like even more that it presents a largely unpartisan take on what Californians are thinking.  But we’re disappointed in PPICs handling of AB32 and Proposition 23 – California’s “save the planet” global warming law, and the Nov. 2010 proposition to delay its implementation.

In a news release announcing the results of the institute’s annual Californians and the Environment survey, PPIC said:

… Californians’ views on another contentious environmental policy issue have held steady since last year. Two-thirds (67% today, 66% in 2009) favor the state law (AB 32) that requires California to reduce its greenhouse gas emissions to 1990 levels by 2020. AB 32 is the focus of renewed debate because Proposition 23 on the November ballot asks whether the law should be suspended until unemployment drops to 5.5% or below for a minimum of one year.

Because the ballot language has not been finalized, we posed a more general question about timing: Should the government take action to reduce emissions right away or wait until the state economy and job situation improve? A slim majority (53%) say California should act right away, while 42 percent say the state should wait.

Is that really what Californians said?  We don’t think so, and here’s why:

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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.

Amidst a recent hectic afternoon, one of our clients called to pick our brain about what LP&A sees as the latest trends in water agency communications.  Although it admittedly caught us off guard, it’s a great question that couldn’t have been posed at a better time, given the uncertainty of California’s water future and the swirling dynamics of public sentiment.  We share our answer below, but the bottom line is that the old ways of doing business no longer work in today’s changing environment.  Here’s why:

1. Water is no longer an issue that flies under the radar. These days water providers are asking a lot from their customers: Use less, pay more, vote for this (within the advocacy laws), don’t mind that sinkhole or pipe break.  Agencies that foster trusting relationships with their customers through proactive communications will reap the most benefits.

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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.

Can social media impact government policy decisions?  Even at the White House level?  A group of U.S. veterans thinks so.  Led with the help of lefty group Brave New Foundation, the Rethink Afghanistan campaign aimed to coerce, err…persuade, President Obama into providing an exit strategy for our troops in Afghanistan during Wednesday night’s State of the Union Address.  And how did they plan to wield such influence?   By bombarding the White House Facebook page with hundreds of posts demanding such language in the speech.

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We recently attended the Southern California Water Committee board of directors meeting and were very pleased by that group’s early and unanimous support of the $11 billion water bond that will be on this November’s ballot.

Laer Pearce & Associates played a small but important part in getting the comprehensive water legislation passed last November, pulling together a coalition of important local business organizations and taking their pro-water message to Orange County’s Sacramento delegation. We’re proud that an OC senator, Tom Harmon, was the deciding vote in favor of the bond.
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