Arnel Development Co. v. City of Costa Mesa

• Decision Date: 01 December 1981
• Citation: 126 Cal.App.3d 330,178 Cal.Rptr. 723
• Court: California Court of Appeals Court of Appeals
• Parties: ARNEL DEVELOPMENT COMPANY, a California Corporation, et al., Petitioners and Appellants, v. CITY OF COSTA MESA, a municipal corporation, Respondents. SOUTH COAST PLAZA, a California partnership, Plaintiff and Appellant, v. CITY OF COSTA MESA, a municipal corporation, et al., Defendants andRespondents. Civ. 20505.

Page 723

178 Cal.Rptr. 723

126 Cal.App.3d 330

ARNEL DEVELOPMENT COMPANY, a California Corporation, et al., Petitioners and Appellants, v. CITY OF COSTA MESA, a municipal corporation, Respondents.

SOUTH COAST PLAZA, a California partnership, Plaintiff and Appellant, v. CITY OF COSTA MESA, a municipal corporation, et al., Defendants andRespondents.

Civ. 20505.

Court of Appeal, Fourth District, Division 2, California.

Dec. 1, 1981.

Rutan & Tucker, Leonard A. Hampel, and Robert S. Bower, Costa Mesa, for petitioners and appellants

Latham & Watkins, Robert E. Currie and Robert K. Break, Newport Beach, for plaintiff and appellant South Coast Plaza.

Thomas C. Wood, City Atty., Mark J. Huebsch, Asst. City Atty., Burke, Williams & Sorensen, Richard R. Terzian and Beatrice Joy Braun, Los Angeles, for defendant and respondent City of Costa Mesa.

Robert M. Myers, Venice, and Michael E. Wine, Los Angeles (Legal Aid Foundation of Los Angeles); John E. McDermott, Richard A. Rothschild, Los Angeles (Western Center on Law and Poverty, Inc.); Crystal C. Sims, Santa Ana (Legal Aid Society of Orange County) for Sharion Garrison and Betty Sue Webb.

Jennifer Soloway, Sacramento (State of California, Department of Housing and Community Development) as amici curiae in support of appellants.

OPINION

KAUFMAN, Acting Presiding Justice.

Plaintiff Arnel ¹ proposed to construct a 50-acre development consisting of 127 single-family residences and 539 apartment units (the Arnel development or the development). Objecting to this proposal, a neighborhood association circulated an initiative to rezone the Arnel property and two adjoining properties to single-family residential use. The voters approved the initiative by a narrow margin. Arnel instituted action No. 287707 in the Orange County Superior Court to invalidate the initiative ordinance. The same day South Coast Plaza, a California partnership, the owner of one of the adjoining properties instituted action No. 287708 for the same purpose. The actions were consolidated for all purposes in the trial court. Collectively, the plaintiffs in the consolidated cases will be referred to as the plaintiffs.

Following trial to the court, judgment upholding the initiative was rendered. Plaintiffs appealed contending the initiative ordinance was invalid for myriad reasons. We reversed the judgment, holding the rezoning ordinance was essentially adjudicatory rather that legislative in nature and was therefore not subject to the initiative process. Having so concluded, we did not pass upon the plaintiffs' numerous other contentions. The Supreme Court granted a hearing on its own motion and thereafter held the ordinance was legislative in nature and was therefore a proper subject for initiative. (Arnel Development Co. v. City of Costa Mesa (1980) 28 Cal.3d 511, 169 Cal.Rptr. 904, 620 P.2d 565.) The cause was then retransferred to this court for disposition in light of the Supreme Court's opinion. (Id., at p. 525, 169 Cal.Rptr. 904, 620 P.2d 565.)

On retransfer plaintiffs reassert most of their original contentions. Concluding that the initiative ordinance is invalid because it constitutes arbitrary and discriminatory rezoning in excess of the city's police power, we again reverse the judgment without reaching plaintiffs' other contentions.

The contiguous properties involved comprise some 68 acres located in the City of Costa Mesa (the city) which is a general law city. The Arnel property comprises some 50 acres bounded on the north and west by mostly residential property, on the east by the South Coast Plaza Shopping Center, the largest regional shopping center in the county, and by Bear Street, a major arterial highway, and on the south by the San Diego Freeway (Interstate 405). The South Coast Plaza property consists of some 13 acres and the property referred to by the parties as the Roberts property some 4.6 acres. Under the city's general plan, as amended in 1976, 8.5 acres of the Arnel property were designated as low density residential; the balance of the 68 acres was designated medium density residential. In November 1976 the city approved a specific plan for development of the Arnel property, and pursuant to that plan, rezoned the property PDR-LD (planned development residential-low density) and PDR-MD (planned development residential-medium density). The South Coast Plaza and Roberts properties retained A-1 (general agricultural) zoning.

On July 18, 1977, the city approved a final development plan for the Arnel property and a tentative tract map. In its final form, the Arnel project was to consist of 127 single-family residences on about 23 acres proximate to the existing residential uses and 539 apartment units on the remainder, some 23 net acres. Projected apartment rentals indicated that the project was intended primarily for moderate-income housing. In the City of Costa Mesa there was a deficiency of 6,000 units of low and moderate income housing.

Shortly after the city's approval of the Arnel development, the North Costa Mesa Homeowners Association (the Association) circulated an initiative petition to rezone the Arnel, South Coast Plaza, and Roberts properties to R-1 (single-family residential) zoning. ² On November 7, 1977, after submission of the signed initiative petition, the city council resolved to submit the initiative measure to the voters at the regular municipal election on March 7, 1978. At the election, the initiative was adopted by a vote of 4,295 in favor and 3,901 against. ³ Thereafter the city refused to process Arnel's applications for a final tract map and building permits. ⁴

Question: Is the initiative ordinance invalid because it constitutes arbitrary and discriminatory rezoning?

Answer: Yes.

More than 18 months of land use planning and more than 30 public hearings by appropriate public agencies had resulted in a determination in November 1976 that the appropriate zoning for the Arnel property consistent with the city's general plan was PDR-MD and PDR-LD, and that zoning was established by a duly enacted ordinance after approval of a specific plan. The initiative ordinance rezoning the property was adopted 16 months later without evidence of any significant change in conditions or circumstances and for the sole and specific purpose of defeating the Arnel development.

The trial court found that the initiative ordinance was adopted without consideration of chapters 3 and 4 of the Government Code relating to local planning and local zoning regulations or of the provisions of the Costa Mesa Municipal Code relating to planning for land use and the enactment and administration of zoning regulations and without any consideration of the elements of the city's general plan.

The court further found that the purpose of the proponents of the initiative ordinance was to rezone the described property to R-1 so as to limit the use of the property to single-family dwellings and thereby to defeat the specific planned development-the Arnel project-and to prevent development of the two adjoining parcels other than for single-family residential purposes; that the primary objective of the proponents of the initiative was to stop the development of apartments in the Arnel project notwithstanding the acute shortage of moderate income housing in the city; that if neither the Arnel project nor any similar project had been approved by the city there would have been no initiative campaign to rezone the property; and that the proponents of the initiative measure selected R-1 as the proposed rezoning classification without consideration of the various zoning alternatives or the best utilization of the property and only because an R-1 zoning classification constituted the fullest possible down zoning.

Defendants contend that the latter findings are not meaningful because the intent and purpose of the proponents are immaterial. They also contend that what was in the minds of the electorate in adopting the initiative is likewise immaterial. We are inclined to agree with these contentions. As to the second, however, we observe that while normally courts do not inquire into legislative motive, legislative purpose is a factor to be considered in determining whether a zoning ordinance is invalid as discriminatory (see discussion and cases cited, infra ), and the ballot arguments contained in the voters' pamphlet are frequently considered in determining the legislative or statutory purpose. (See, e. g., Board of Supervisors v. Lonergan (1980) 27 Cal.3d 855, 864-866, 161 Cal.Rptr. 254, 616 P.2d 802, cert. den. (1981) 450 U.S. 918 (67 L.Ed.2d 344, 101 S.Ct. 1362); White v. Davis (1975) 13 Cal.3d 757, 774-775, 120 Cal.Rptr. 94, 533 P.2d 222, including fn. 11.) The argument in favor of the initiative ordinance at hand as found in the voters' pamphlet discloses that the initiative was expressly directed at the Arnel development and that its specific purpose was to prevent the Arnel development. ⁵

The usual test when a zoning ordinance is attacked as being in excess of the police power is whether or not the ordinance bears a substantial and reasonable relationship to the public welfare. (E. g., Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 604-605, 135 Cal.Rptr. 41, 557 P.2d 473; G & D Holland Construction Co. v. City of Marysville (1970) 12 Cal.App.3d 989, 994, 91 Cal.Rptr. 227.) However, "(t)he principle limiting judicial inquiry into the legislative body's police power objectives does not bar scrutiny of a quite different issue, that of discrimination against a particular parcel of property. 'A city cannot unfairly discriminate against a particular parcel of land, and the courts may properly inquire as to whether the scheme of classification has been applied fairly and impartially in each instance.' (Wilkins v. City of San Bernardino, 29 Cal.2d 332, 338 (175 P.2d 542).)" (G & D Holland Construction Co. v. City of Marysville, supra, 12 Cal.App.3d...