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What’s really going on in Half Moon Bay?

The city council of Half Moon Bay and its supporters are engaged in a high-stakes showdown with the California Coastal Commission and major environmental groups over a bill that would allow the city to escape a $41.1 million legal judgment won by a developer.

City officials say they’re fighting to save the city of 15,000 from bankruptcy and having to make severe cuts in public safety services. Those opposing AB 1991 say pro-development city officials turned down the help from the attorney general’s office because they want to establish a “template” for cutting environmental laws into “Swiss cheese,” according to some who testified against the bill.

AB 1991, from Assemblyman Gene Mullin, D-South San Francisco, is a necessary part of the settlement. The deal would allow developer Charles “Chop” Keenan to build houses on both the 24-acre parcel at the center of the lawsuit, as well as an adjacent property. The bill passed the Assembly local government committee during a contentious hearing last week. It would allow the settlement to go forward by taking away the ability of the Coastal Commission and other agencies to block the deal. Much of the debate centered on whether this settlement would provide a blueprint for other cities to skirt environmental laws in the future.

In her testimony before the Local Government Committee, Half Moon Bay Mayor Bonnie McClung contends this bill would have no wider impact. In order for the Half Moon Bay situation to apply to any other city, she claimed, those cities would have to meet three conditions: having a development barred by city-made wetlands, an already-approved development plan and a city facing a court-imposed fine that would bankrupt it.

“Without this perfect storm, no one can try to use AB 1991 as a precedent,” McClung said.

According to Mike Ferrera, who lost the 2005 mayor’s race against McClung by eight votes, city officials aren’t telling the whole story.

“You can say this doesn’t fit the legal definition of a precedent,” Ferrera said. “But what a template it is. It would be a cookie cutter up and down the state.”

There have been rumblings of compromise amendments to AB 1991 that would make the bill more palatable to environmentalists, but so far nothing has happened, according to Mullin.

“There are no amendments to date,” Mullin said. “We are open to suggestions, but the settlement language cannot be changed. We are hopeful that perhaps by strengthening the preamble language, those groups currently opposing would feel more confident that this is a one-of–a-kind rescue bill to save the city of Half Moon Bay.”

“The City continues to pursue AB 1991 as it’s the only real option that resolves this extremely unique situation,” said John Knox, an attorney with the firm Orrick Herrington, which is representing the city. “The City and Assemblymember Mullin have been and continue to be open to other creative solutions that actually work. The City becoming a developer of the parcels to generate revenue is not one of the solutions that works.”

This is a reference to comments made by opponents of the bill noting that if the bill did not pass, the city would owe Keenan $18 million—but would end up owning the land. The Coastal Commission has indicated a willingness to let the city or another developer build the 19 lots they originally approved for Keenan. In his testimony, Pete Price, lobbying for the California League of Conservation Voters, said the city could recoup at least $9 million.

City officials and their supports have tried to counter this claim by saying the land would not be worth as much in the city’s hands as in Keenan’s. AB 1991 would reset the permits around the land to where they were in 1990, when Keenan had one preliminary approval to build on the land. The city or any developer they sell too, Orrick claims, would have to start at square one.
Environmentalists are unmoved by this argument. Nineteen groups, including the Sierra Club and the Natural Resources Defense Council, signed onto an April 24 opposition letter. It claims that Half Moon Bay’s situation is “of its own doing” and “will set a powerful precedent for developers and cities to come to the legislature and seek similar exemptions.”

Much of the environmental opposition comes from the fact that the settlement gives Keenan the right not only to build more homes on Beechwood, the original piece of land that the city denied his right to build on, but on an adjacent property as well. The city also won the initial rounds of the dispute in state court, only losing when they landed in front of a known conservative judge, U.S. District Judge Vaughn Walker. Walker used a novel take on “takings” law, awarding Keenan $36.8 million plus attorney fees.
Environmental groups have criticized the city for signing a settlement that prevents them from appealing the ruling, claiming they had a good chance of getting the ruling overturned in the more friendly 9th Circuit.

The Coastal Commission voted unanimously on April 10 to oppose AB 1991. In her testimony before the Local Government Committee last week, the Commission’s legislative director, Sarah Christie, said that the Commission and the Attorney General’s office offered to put their “full weight” behind a legal appeal, but city officials spurned them.

“All the CCC offered was to help get an amicus brief filled by the Attorney General’s Office,” Knox said. “That wouldn’t have solved our problem nor would it have saved the City any money. No one offered to take over the City’s defense, indemnify the City or pay the City’s attorneys’ fees.”

Officials with the Commission and the AG’s office said these are things that they are not allowed to do by law. But Christie said they could have a lawyer with the Attorney General’s office in court with them—and that this would have carried a great deal of weight.

“It’s certainly not unusual for the Attorney General’s office to appear on a case such as this,” Christie said. “Particularly if the city had requested it, we could have worked something out.”

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