Chandis Securities Co. v. City of Dana Point

• Decision Date: 31 December 1996
• Docket Number: No. G018098,G018098
• Court: California Court of Appeals Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 757, 97 Daily Journal D.A.R. 1086 CHANDIS SECURITIES COMPANY et al., Plaintiffs and Appellants, v. CITY OF DANA POINT et al., Defendants and Respondents.

Page 481

60 Cal.Rptr.2d 481

52 Cal.App.4th 475, 97 Cal. Daily Op. Serv. 757,

97 Daily Journal D.A.R. 1086

CHANDIS SECURITIES COMPANY et al., Plaintiffs and Appellants, v. CITY OF DANA POINT et al., Defendants and Respondents.

No. G018098.

Court of Appeal, Fourth District, Division 3, California.

Dec. 31, 1996.

Review Denied April 2, 1997.

Gibson, Dunn & Crutcher, Richard G. Duncan, Jr., Jeffrey T. Thomas and Lee M. Gordon, Irvine, for Plaintiffs and Appellants.

Jerry M. Patterson, City Attorney, and Burke, Williams & Sorensen, Harold A. Bridges, Costa Mesa, Thomas L. Altmayer and Kenneth D. Rozell, Los Angeles, for Defendants and Respondents.

OPINION

RYLAARSDAM, Associate Justice.

Plaintiffs Chandis Securities Company, M.H. Sherman Company and Sherman Foundation sued defendants the City of Dana Point and its city council seeking to invalidate the results of two referendums by which the city's electorate failed to approve the adoption of a specific plan and a general plan amendment relating to plaintiffs' property, and to allow development of the land. The trial court granted defendants' motion for summary judgment and entered judgment for defendants. Plaintiffs contend the rejection of the referendums exceeded the city's police powers, violated their right to equal protection of the law and constituted a taking of property without just compensation. In addition, plaintiffs argue the referendums are invalid because they violate the consistency requirement of the Planning and Zoning Law (Gov.Code, § 65000 et seq.; all further statutory references are to the Government Code unless otherwise designated), and failed to satisfy the requirements of section 65589.5, subdivision (j). We find these arguments to be without merit and affirm.

FACTS

Plaintiffs own approximately 120 acres of undeveloped land along the coast in Dana Point known as the Headlands. Before Dana Point's incorporation, plaintiffs, the County of Orange and the California Coastal Commission had developed a specific plan for the Headlands designating 27 acres as visitor/recreation/commercial area, over 45 acres as recreation/open space/conservation area and permitting construction of two hotels and a maximum of 792 residences. The plan was never implemented.

Dana Point was incorporated as a general law city in 1989. It adopted a general plan which designated the Headlands as a specific plan area, listed land use designations of recreation/open space, residential and visitor/recreation/commercial, set guidelines allowing between 261 and 522 residential dwellings and one hotel, and designated over 61 acres of the property as open space. The subsequently enacted zoning code also required preparation of a specific plan for the Headlands before any development could occur.

Plaintiffs submitted a proposed specific plan for the Headlands in July 1992. After several public hearings and revisions, a plan was approved by the city council in April 1994. As approved, the plan provided for a maximum of 370 residential units, one hotel and 66.3 acres of recreation/open space/conservation area. In addition, the city council approved a general plan amendment to modify the recreation/open space/conservation element of the city's general plan, and certified the Headlands environmental impact report (EIR) as adequate and complete.

Petitions were timely filed placing referendums on the ballot to require voter approval of the general plan amendment (Measure C) and the Headlands' specific plan (Measure D). On November 8, 1994, both measures failed to receive the support of a majority of the city's voters, thus preventing enactment of the proposed specific plan and the general plan amendment.

DISCUSSION

1. Constitutional Claims

Plaintiffs contend the failure to approve Measures C and D violated their rights to due process and equal protection of the law, and constituted a taking under the Fifth Amendment of the federal Constitution. We disagree.

Dana Point's authority to regulate development of the Headlands is governed by the Planning and Zoning Law. In enacting this law, the Legislature found that "... California's land is an exhaustible resource ... essential to the economy, environment and general well-being of the people of California ..." (§ 65030), and "... decisions involving the future growth of the state ... should be guided by an effective planning process, including the local general plan, and should proceed within the framework of officially approved statewide goals and policies directed to land use, population growth and distribution, development, open space, resource preservation and utilization, air and water quality, and other related physical, social and economic development factors ..." (§ 65030.1). Thus, the Legislature has declared the state's land use policies include "protect[ing] California's land resource, to insure its preservation and use in ways which are economically and socially desirable in an attempt to improve the quality of life in California" (§ 65030), and ensuring "land use decisions be made with full knowledge of their economic and fiscal implications, giving consideration to short-term costs and benefits, and their relationship to long-term environmental impact as well as long-term costs and benefits" (§ 65030.2).

To implement the foregoing policies, each California city must "adopt a comprehensive, long-term general plan for the physical development of the ... city" (§ 65300), which contains an integrated and internally consistent "statement of development policies ... setting forth objectives, principles, standards, and plan proposals" (§ 65302), and cover at least the following seven areas, called "elements": land use, traffic circulation, housing, conservation, open space, noise and safety. (§§ 65300.5, 65302, 65303; see also DeVita v. County of Napa (1995) 9 Cal.4th 763, 773, 38 Cal.Rptr.2d 699, 889 P.2d 1019.) After adopting a general plan, a city may also adopt a specific plan "for the systematic implementation of the general plan for all or part of the area covered by the general plan." (§ 65450.) "Among other things, a specific plan must contain standards and criteria by which development will proceed, and a program of implementation including regulations, programs, public works projects, and financing measures. [Citations.]" (Beck Development Co. v. Southern Pacific Transportation Co. (1996) 44 Cal.App.4th 1160, 1196, 52 Cal.Rptr.2d 518.)

The process for preparing, adopting and amending a general plan and a specific plan is the same. (§§ 65350 et seq., 65453, subd. (a).) In cases such as this, where the municipality has a separate planning commission to review and recommend action on plans, and the commission has made a recommendation on the adoption or amendment of a plan, "The legislative body shall adopt or amend a ... plan by resolution, which resolution shall be adopted by the affirmative vote of not less than a majority of the total membership of the legislative body. The legislative body may approve, modify, or disapprove the recommendation of the planning commission," but "any substantial modification proposed by the legislative body not previously considered by the commission during its hearings, shall first be referred to the planning commission for its recommendation." (§ 65356.) The adoption or amendment of a general plan or specific plan constitutes a legislative act. Thus, it is subject to the electorate's exercise of the power of referendum. (Yost v. Thomas (1984) 36 Cal.3d 561, 570, 205 Cal.Rptr. 801, 685 P.2d 1152; Nelson v. Carlson (1993) 17 Cal.App.4th 732, 737, fn. 4, 21 Cal.Rptr.2d 485.)

Plaintiffs argue that since their proposed specific plan along with the proposed general plan amendment complied with Dana Point's general plan, and the city council found this project superior to the alternative development proposals, the electorate's failure to approve Measures C and D was unreasonable. We disagree with this assertion. Simply because the city council acted reasonably in approving the proposed development plan does not invalidate the electorate's subsequent rejection of the referendums. The applicability of the power of referendum to the adoption of a specific plan implies the electorate may reject the proposed plan. A rule declaring the voters cannot reject a proposed specific plan falling within the parameters of the city's general plan would render the exercise of the power of referendum meaningless.

Judicial review of the failure to approve these proposals is limited to whether the electorate's decision was arbitrary or capricious. (Mitchell v. County of Orange (1985) 165 Cal.App.3d 1185, 1191-1192, 211 Cal.Rptr. 563.) "A law regulating or limiting the use of real property for the public welfare does not violate substantive due process as long as it is reasonably related to the accomplishment of a legitimate governmental interest. [Citations.]" (Terminal Plaza Corp. v. City and County of San Francisco (1986) 177 Cal.App.3d 892, 908, 223 Cal.Rptr. 379.)

The nature and locale of the Headlands, the number of elements implicated by the proposed specific plan for it, the extensive hearings and potential adverse impacts resulting from development on the property, reflect the city council's decision was not the only reasonable conclusion. In fact, the EIR prepared for the Headlands considered 11 other development alternatives, ranging from the level of development provided in the previous specific plan prepared when the property was under the county's control to a no-development option.

Plaintiffs' reliance on Arnel Development Co. v. City of Costa Mesa (1981) 126 Cal.App.3d 330, 178 Cal.Rptr. 723 is without merit. In Arnel, the court invalidated a homeowner group's initiative measure which had rezoned the plaintiffs' adjacent property for only single family residences to prohibit plaintiffs from building moderate income apartments on the land. At the time, the city had a...