The California Supreme Court issued a ruling today handing a victory to a coalition of no-growth activists and environmental groups fighting a small residential development project in wealthy east Orange community of Orange Park Acres (OPA). After spending years enduring the hugely expensive and contentious development process, the ruling forces developer Milan Capital to re-start the entitlement process from scratch if it intends to develop the currently unused property.
The state Supreme Court did not rule on the merits of any aspect of the development, but on the question of whether the repeal of a general amendment 5hat was adopted as a technical clarification of the site’s land use designation doomed the project altogether.
The court ruled 7-0 that it did, but this is a case where the devil was literally in the details – so background is in order.
The Back Story
Ridgeline Equestrian Estates was a proposed development consisting of 39 luxury homes on 1-acre lots, built on the site of a defunct country club in the wealthy horse community of Orange Park Acres (OPA) – which itself is characterized by luxury homes on one and two acre lots. As part of the project, the developer would donate the land on which the OPA community had long been using as a riding arena, as well as riding trails.
Back in the 1970s, the Orange City Council approved the OPA Specific Plan under which the then Ridgeline Country Club was designated as other open space or low-density residential. For some now-unknowable reason, the low-density residential designation never made it from the council resolution to the actual map. As a result of that clerical error, that part of the land use designation passed from memory until 2010, when the Ridgeline project team – shortly after Orange’s approval of its 2010 General Plan Update – discovered the forgotten council resolution designating the country club site as open space and low density residential.
The Ridgeline project was opposed by a group of OPA homeowners allied with various environmentalist pressure groups, calling itself Orange Citizens for Parks and Recreation. They argued against changing the “open space” land use designation and claimed building the 39 homes deprived them of “recreational open space” – notwithstanding the fact that OPA is adjacent to tens of thousands of acres of county regional parks and protected open space:
Opponents advanced various demands, such as drastically reducing the number of homes, re-starting the country club (which had failed due to insufficient membership), turning the site into a public park (which the City of Orange had no money to do), or requiring the developer to donate equivalent acreage elsewhere to compensate for the loss of “recreational open space.”
Approval, Referendum and Litigation
After the Orange City Council approved the project in 2011, this coalition ran petition drives to put the three separate approval votes to a city-wide referendum. The zone change and development agreement referendum petitions lacked sufficient signatures, but the general plan amendment referendum qualified for the ballot.
The property owner sued to knock the referendum off the ballot, initially winning a superior court decision. Milan Capital argued the voter repeal of the general plan amendment would have no legal effect because the 1973 OPA Plan controlled the land use designation. Opponents appealed the ruling, which was reversed by the appellate court, which ordered the referendum back on the ballot but agreed to hear the matter after the election.
In November 2012, 56% of Orange voters cast “no” ballots in an expensive and confusing campaign, resulting in the formal repeal of the general plan amendment approval.
In July 2013, the state Court of Appeals upheld the city council’s approval of Ridgeline, deferring to the power of the city to fix errors in planning documents and policy maps “by reference to previously adopted 11 resolutions of the City Council” – i.e. the 1973 OPA Plan.
Opponents – represented by powerhouse environmental litigators Shute, Mihaly & Weinberger – appealed their defeat to the state Supreme Court, which agreed to review the ruling.
California Supreme Court Bides Its Time…Then Rules
And there the matter sat for the next three years until the issuance of today’s ruling:
“The main question before us is whether the 1973 resolution is part of the City‘s current general plan. The City frames its approval of Milan‘s development application and reliance on the 1973 resolution as an exercise of its legislative discretion to which we owe deference. But deference has limits. In light of the contents of the City‘s 2010 General Plan, no reasonable person could interpret that plan to include the 1973 resolution. Because we conclude that the City abused its discretion in interpreting the 2010 General Plan to permit residential development on the Property, we reverse the Court of Appeal‘s judgment upholding the City‘s approval of the Project.”
“For want of a nail,” as the saying goes. If the low density residential part of the 1973 council-approved land use designation had made it onto the policy map, Milan Capital would be able to develop its property – a project that would have been entirely consistent with the character and nature of Orange Park Acres.
This writer was a member of the Orange Planning Commission that unanimously approved the Ridgeline Equestrian Estates project in 2010. We made the right decision, as did the Orange City Council. The California Supreme Court ruling is unfortunate and wrong, but not unexpected. It is a liberal court, for starters. And the well-funded environmentalist groups calling the shots on this effort had retained the services of the very expensive Shute, Mihaly law firm. According to a knowledgeable source, Shute, Mihaly leveraged its relationships with the state Supreme Court clerks to wear down the justices – hence the extremely long review period.
It’s an open question as to whether Milan Capital will make another run at developing the site. If a development plan is devised to which Orange Citizens for Parks and Recreation leaders sign off and which still allows the developer to turn a profit, the approval process would be quicker and less expensive (such is the state of property rights in modern California).
A Cautionary Tale of NIMBY/Environmentalist Power
The Ridgeline saga is another cautionary tale on how the powerful environmental lobby, conjoined with affluent NIMBYs who want to pull of the drawbridge behind them, have weaponized our environmental and planning laws in order to stop the construction of more housing. The Ridgeline project would have added 39 luxury homes on one-acre lots to a rich horse community in which is zoned for one-acre (or larger) lots. Milan Capital didn’t try to get the property re-zone for half-acre lots or multi-family housing in order to squeeze more density onto the site. The developer – in contrast to past developments in OPA – proposed a beautiful residential project that was perfectly consonant with Orange Park Acres.
And it didn’t matter to a vocal group of affluent homeowners who believed they had a superior right to determine the use of Milan Capital’s property than did Milan Capital. They linked up with environmentalists who have little use for the idea of property rights, and today an weedy old country club sits unused and empty amidst as small sea of multi-million dollar estates.