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This post has been updated.
The developers of a sprawl housing project in Valley Center are facing two major challenges that threaten to kill the deal they’ve worked on for the last 10 years.
They seem to have found a potential solution – the latest in a years-long run of finding ways around major obstacles.
Accretive Investments, developer of the 1,700-home Lilac Hills Ranch in Valley Center, is turning to the ballot to get the project approved. On Tuesday, five North County residents filed paperwork to start gathering signatures to qualify a ballot initiative to approve the development, as first reported by the San Diego Business Journal.
If they gather enough signatures, it would provoke a countywide vote on the development.
Doing so allows the developer to overcome two major issues.
First is the loss of Supervisor Bill Horn’s vote for their project. The representative for the North County area was widely seen as supportive of the project – he’s generally pro-development, the developers gave $37,000 to a PAC that supported him, an ex-staffer was the project’s primary lobbyist and he owns 34 acres nearby that stood to increase substantially in value if it was approved.
The last issue forced Horn to say he wouldn’t vote on the project, after the state’s Fair Political Practices Commission twice ruled he had a conflict of interest. Without his vote, it wasn’t clear if the project would get three of the remaining four supervisors to approve it. Taking the question to voters directly could let the developers skirt that problem.
The second problem the developers are facing came from the state Supreme Court. In November, it ruled against an L.A. area sprawl project, a decision that may change how San Diego County requires projects like Lilac Hills Ranch to account for their greenhouse gas emissions.
A successful vote would also solve this problem. Getting it approved, however, is not only expensive, it comes with its own set of uncertainties.
Project proponents now need to gather 70,000 signatures by May to qualify for the November 2016 ballot. If they want voters to decide on an unscheduled, special election they would have to gather more than 135,000 signatures.
The initiative would approve the project by making necessary changes to various adopted development restrictions that would currently prohibit it, and require Accretive to pay for facilities and public services, including parks, water, an internal private road system and utility lines.
The notice submitted to the Registrar of Voters says failing to approve this project will exacerbate the county’s housing crisis and increasing housing costs in the county’s unincorporated areas.
The Board of Supervisors will have three options if proponents collect enough signatures to qualify for the ballot.
They can approve the development outright, without sending it to the voters. They can send the measure to the ballot. Or, they can also require a separate 30-day review of the project by county staff, and then decide between the first two options.
Going to the voters allows Lilac Hills Ranch to circumvent a few steps in the normal development process.
For one, Accretive might be following the trend of using ballot initiatives to get around the state’s environmental law.
The California Supreme Court last August ruled that if a project gets enough signatures to put it on the ballot, a city council can approve it without going to voters and without a California Environmental Quality Act review, which requires big projects to disclose their environmental impacts and reduce as many of them as possible. The decision has paved the way for companies, governments and individuals to use the initiative process to sidestep CEQA and get projects approved.
That’s what Rick Caruso is doing for his mall project in Carlsbad.
Sidestepping CEQA is an even more appealing option after the way developers account for their greenhouse gas emissions was thrown into question last year. Lilac Hills Ranch and other pending projects in the county may need to make major changes to their environmental reports, based on that ruling.
In January, Accretive told the Union-Tribune it was pulling the project from a Board of Supervisor vote due to the ruling.
That was news to county planners responsible for working on the project.
Accretive went to the paper with its announcement without informing the county of any formal decision, according to emails obtained by Voice of San Diego through a records request.
County planner Mark Slovick sent the company a letter days later asking to clarify what it intended to do. The developer had three options, Slovick wrote:
• Revise the greenhouse gas emissions chapter in their environmental impact
• Take the project to hearing by the Board of Supervisors anyway, understanding the greenhouse gas aspect of the environmental review may be challenged in court
• Formally withdraw the project
Accretive President Jon Rilling clarified that the developers never withdrew the project, and they didn’t intend to.
“We are very hopeful, and cautiously confident, that this continued collaboration will allow us and the County to reach a conclusion within the next 6 months,” wrote Rilling.
It seems Accretive opted for neither of the three options. If the project makes it to the polls and is approved by voters, it doesn’t have to meet the new greenhouse gas standards and it couldn’t be sued over the issue.
Accretive representatives did not yet return messages requesting comment Thursday.
Catherine Engberg, a lawyer for the Cleveland National Forest Foundation, said the organization was prepared to sue Lilac Hills Ranch on its emissions if the project had been approved by the Board of Supervisors.
“The Supreme Court has made clear that the methodology used by Lilac Hills Ranch to calculate its greenhouse gas impacts fails to comply with the law,” Engberg said. “Rather than fix that analysis to show the true extent of the project’s significant impacts, it’s making an end-run around CEQA and going straight to the voters to approve Accretive’s leap frog, profit-driven proposal.”
The Supreme Court ruling may have stymied Lilac Hills, but it doesn’t appear to have done the same to every major project in the county seeking approval.
For instance, Stephen Haase, a senior executive at Baldwin & Sons, is expected to bring his project, Otay Village 13, before the Board of Supervisors this year.
He said the court ruling introduced some uncertainty for developers, but he doesn’t think it leaves his project in a bind.
“Today it is uncertain, but at some point it will become certain,” Haase said. “The reason I feel good about our project is we’ve used other methodology. Once we understand what the County wants us to do, we’ll go do it.”
Haase said the company used multiple methodologies to calculate its greenhouse gas emissions, so it could still be approved if it was suddenly held to a different, more rigorous standard.
A countywide initiative will be costly for Accretive, too.
In Carlsbad, Caruso Affiliated has spent more than $7 million on its initiative, according to the most recent financial disclosures, and that project needed to collect a fraction of the signatures Accretive will need countywide.
Rachel Laing, a political consultant who has worked with signature-gathering and initiative campaigns, said she estimates gathering the 70,000 signatures and campaigning if it qualifies for the ballot would cost the company up to $3 million.
Ryan Clumpner, a political consultant, said he would estimate the signature gathering easily reaching hundreds of thousands of dollars.
“It could get very costly very quickly,” Clumpner said.
Since November 2016 is a presidential election, there will likely be state ballot measures competing for signatures at the same time Accretive is, driving up the wages of the paid signature-gatherers needed to get to 70,000 signatures.
If the measure qualifies, advertising and campaigning will also be more expensive, said Clumpner and Laing. Since there will be so many races and items on the ballot, prices for most things will go up as different interests compete for airtime and voter attention.
The fact that Accretive has to persuade the entire county to support its Valley Center project could be a blessing or a curse for the developer, Clumpner said.
“It’s going to be very hard to get people to care about the issue and explain it to them,” he said. “At the same time because it’s so far away from most voters, it’s probably an easier sell than those who are right near the project. Your average voter isn’t going to feel a great deal of stake in the outcome.”
Developers often have a tough time persuading people to support a project, Clumpner said.
“On one hand it requires a lot of explanation and they have to show the benefits of what they’re offering,” he said. “But on the other hand, people often get skeptical of the money involved when they’re bombarded with advertising.”
It’s also difficult to tell how strong an opposition to a countywide initiative for the project can be. Often, business interests can fund opposition measures to development projects. In Carlsbad, it has been a competing mall. For One Paseo, a controversial development in Carmel Valley, it was neighboring businesses. For the Barrio Logan Community Plan, it was the shipping industry.
Since Valley Center hasn’t had a lot of development or big business investment thus far, it’s unclear who would be able to fund countywide opposition. Environmental groups in the county mainly oppose the project, but may not have the money to campaign.
This post has been updated to clarify that Rachel Laing’s estimate of a successful ballot initiative costing up to $3 million. That total includes gathering signatures and campaigning if a measure were to qualify for the ballot.