26 Cal. App. 5th 689
Cal. Ct. App. 5th2018Background
- In 2015 Moreno Valley adopted ordinances approving the World Logistics Center (WLC) and a development agreement between the City and Highland Fairview; CEQA litigation followed.
- An initiative (supported and funded by Highland Fairview) qualified that would repeal the City ordinance and adopt a substantially similar development agreement, substituting generic "Property Owners" for named developer parties.
- The City Council opted to adopt the initiative ordinance itself rather than submit it to the voters.
- Environmental groups challenged the City's adoption by petition for writ of mandate, arguing state law and the California Constitution bar adopting development agreements by initiative.
- The trial court denied relief; the Court of Appeal reversed, holding the Legislature intended exclusive delegation of development-agreement approval to local legislative bodies (subject to referendum), and therefore initiatives adopting development agreements are invalid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the development-agreement statute permits approval by initiative | The statute makes a development agreement a "legislative act" "subject to referendum" and omits any reference to initiative, showing legislative intent to preclude initiative and delegate approval exclusively to governing bodies | The statute's reference to "referendum" does not prove exclusion of initiative; omission does not necessarily show intent to preclude initiative | Held: Omission of "initiative," coupled with designation as a legislative act "subject to referendum," indicates legislative intent to limit approval to local legislative bodies (referendum preserved; initiative barred) |
| Whether development agreements implicate statewide concern so as to support exclusive delegation | Development agreements address a statewide problem (uncertainty from late vesting), are creature of statute and involve state regulatory interests, supporting inference of exclusive delegation | Development agreements concern local land use like zoning and thus are local matters; exemption language for charter cities undermines a statewide-concern finding | Held: Statutory scheme addresses statewide concerns (remedying late-vesting uncertainty and state interests in how agreements operate), supporting exclusive delegation |
| Whether the initiative process is compatible with the negotiated, statutory nature of development agreements | Initiatives foreclose negotiation and may allow developers to obtain vested rights without statutory safeguards (annual review, termination, amendment procedures), making initiative adoption incompatible with the statutory scheme | Parties negotiated the agreement here; initiative supporters can still provide accountability via voters and included terms; conflicts would be subject to invalidation | Held: Initiative process is fundamentally incompatible with the negotiated, ongoing, contract-like statutory structure of development agreements; statutory protections could be evaded by initiative adoption |
Key Cases Cited
- Avco Community Developers, Inc. v. South Coast Regional Com., 17 Cal.3d 785 (Cal. 1976) (common-law vesting rule and legislative response)
- Committee of Seven Thousand v. Superior Court, 45 Cal.3d 491 (Cal. 1988) (guidance on when statutes show exclusive delegation precluding initiative/referendum)
- DeVita v. County of Napa, 9 Cal.4th 763 (Cal. 1995) (presumption favoring initiative/ref. but rebuttable where Legislature intended exclusive delegation)
- Voters for Responsible Retirement v. Board of Supervisors, 8 Cal.4th 765 (Cal. 1994) (interpretation of constitutional referendum language)
- Meldrim v. Board of Supervisors, 57 Cal.App.3d 341 (Cal. Ct. App. 1976) (initiative barred where constitutional text gave compensation-setting to governing body subject to referendum)
- Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes, 191 Cal.App.4th 435 (Cal. Ct. App. 2010) (development agreements freeze zoning and provide assurances to developers)
- Santa Margarita Area Residents Together v. San Luis Obispo County Bd. of Supervisors, 84 Cal.App.4th 221 (Cal. Ct. App. 2000) (development agreements and negotiation context)
- Newsom v. Board of Supervisors, 205 Cal. 262 (Cal. 1928) (initiative incompatible with statutes intermingling legislative, administrative, quasi-judicial functions)