We estimate there are about 1500 vacant, residentially zoned properties that CANNOT obtain water, sewer or fire protection services from the Cambria Community Service District (“District”). Without these services, residential property cannot be developed; a home cannot be built without water, sewer, and fire protection services. If the regulations that prevent or limit the provision of these services may have the effect of “taking” or removing development rights, a timely lawsuit must be filed to determine if a “taking” has (in fact) occurred, and to determine the amount of “just compensation” due to the affected landowners.

A short term result of the growth capping scheme has been to collapse the value of vacant lots; prime parcels within a mile of Cambria’s scenic coastline have sold for less than $10,000. While lowering land values may have been a desired result for some no growth stakeholders, it likely discourages property owners from litigating to protect their property and development rights. When your property may not be worth anything, how much is too much to spend on litigation costs?

Litigation costs can be considerable, and outcomes uncertain. For those landowners unwilling or unable to initiate individual litigation, the company offers consulting services that include landowners in our litigation strategy.

 The Regulatory Scheme:

 During the 1998 Periodic Review of the County of San Luis Obispo’s (“County”) Local Coastal Program (LCP), the California Coastal Commission (“Commission”) sought to limit future development in Cambria. In 2001, the Commission threatened to impose a building moratorium unless the build out of Cambria was limited.   

 In 2007, the County approved an update to its LCP, known as the North Coast Area Plan (NCAP). The NCAP limits the size and use of the District’s proposed desalination plant. The NCAP also includes a program that caused the District to adopt a growth limiting plan consistent with its Draft Buildout Reduction Program (BRP), a document carefully reviewed by County and Commission staff during the update process.

 In December 2007, the Commission certified the County’s NCAP update. By certifying the update, and despite the obvious and excessive impact on development rights, the Commission determined the NCAP update was consistent with the Coastal Act. However, this certification appears inconsistent because the Coastal Act prohibits the “taking” of development rights.

 Cambria has a history of water supply concerns, and the District declared a Water Code Section 350 emergency in 2001. To develop an additional source of water, the District adopted a Water Master Plan update (the final stage was adopted in August 2008) that will result in the construction of a desalination plant. However, the Commission did NOT want the desalination plant to produce enough water to support the development of all the existing legal lots; that objective ultimately resulted in the restrictions to the sizing and use of the desalination plant found in the NCAP.  Consequently, the plant will not be sized to provide the capacity to service the intended targets or victims of the growth capping scheme: the 1500 property owners that do not have waiting list positions for water and sewer service.

 The District’s Water Master Plan incorporates a Buildout Reduction Program (BRP) as a mitigation measure (required under CEQA) to limit the potential growth inducing impact of the plant. The BRP caps future development by limiting new water connections to those properties holding a District waiting list position.  It appears that District regulations may also limit new sewer service connections, which (if true) would help preserve the growth cap ceiling of 4650 single family residential dwellings. 

Applying the Regulatory Scheme to a specific parcel:

 Our litigation strategy CANNOT include a class action lawsuit. Before a taking claim (an inverse condemnation lawsuit) is ripe for adjudication, a landowner must attempt to have the challenged regulations applied to his property. That allows government agencies to determine the actual impact of the regulations, and allows for opportunities to work around sticking points utilizing variances or appeals. These lawsuits involve individually named plaintiffs who have completed certain steps before commencing litigation. Thus, only those landowners named in a lawsuit can or will be paid “just compensation.”

 In Cambria, the District refuses to apply its growth capping regulations to development applications. Numerous statutory and case law citations demonstrate that the District cannot play hide the ball: it must inform landowners whether they can (or cannot) obtain the services required to permit development. District Code indicates that all future water and sewer connections “shall” come from its waiting lists, and that the District’s waiting lists are closed. Because the waiting lists cannot be opened without exceeding the adopted growth cap limit, it is painfully clear that the District CANNOT provide water or sewer services to properties that do not have an existing waiting list position.

 The water moratorium does not affect this dispute. If and when the emergency is lifted, non-wait list holders will still not have a waiting list position, and they still will be unable to join the closed waiting lists. Therefore, properties without a wait list position are NOT future District customers; only properties with waiting list positions can be served in the future. Interestingly, the water emergency prevents current wait list holders from completing a successful taking claim.  They cannot prevail because the District has committed to serving them. There right to develop is not taken, but is merely delayed. The development rights of wait list holders are in limbo; they must wait for the desalination plant to be built. The District considers the wait list holders future customers because they will be served, if and when the water emergency is lifted.

 We have submitted development applications to obtain the “service review” found in the District’s Water Master Plan. The service review is a mitigation measure in force and effect, and it “shall” be completed by the District before a landowner can initiate the land use permitting process with the County; when used in code, the term “shall” is mandatory. The land use permitting process is mandatory in the coastal zone to determine the permitted use of property. We believe the District refuses to provide the service review because the results will likely expose it (and the Commission and County) to considerable liability.

Litigation Strategy:

 Since the District refuses to act on submitted applications, we are now compelled to seek a court order to compel the service review and to act on the remaining submitted applications. We expect to commence litigation in October 2011 with a lawsuit (for a writ of mandate) to act on the applications, including the service review.  The writ of mandate action is relatively simple: Code of Civil Procedure Section 1085 is the statutory basis for a court order to have an agency complete an action required by regulation or law.    

 The writ of mandate action is the first phase of the litigation strategy.  After that action runs its course, we expect to use the results as the basis to file a claim for damages. At this time, we are attempting to educate affected landowners, and recommend that they take action to preserve their remaining rights.  For those that do not want to pursue independent litigation, we encourage them to join our existing group of 180 landowners.

 For those in receipt of our August 2011 correspondence and consulting agreement, time is of the essence.  At some point, the government’s attorneys must recognize that the growth capping scheme has the desired and intended impact on property owned by non-wait list holders: those properties cannot obtain water, sewer, or fire protection services.  Regulations arising out of land use authority (lawfully delegated by the land use authorities to the District) have worked a taking of development rights.

 A high school education is sufficient to read and understand the District’s BRP.

 The BRP says 873 properties will be purchased (and their development rights retired) to achieve the 4650 dwelling unit cap. The BRP anticipates that it will give land conservation partners water meters that will be auctioned to raise funds to acquire property. Once the development rights are retired, the property will be deeded to the District.  A clever slight of hand does not change the character and purpose of the program. The government is using police power to acquire property to achieve political objectives. Rather than admitting the scope of the growth capping scheme, the government expects a few landowners to shoulder the burden for benefits (a less developed coastal zone) enjoyed by many.

 When a court determines that a “taking” has occurred, “just compensation” is due and payable. The government does not get the luxury of waiting for money to come from the sale of water meters.  The government cannot collapse land values, and then profiting from the scheme by paying the collapsed or depressed value. Instead, “just compensation” will be determined by comparison with the value of properties that enjoy active services. Water meters alone (with a sewer connection permit, but no land) now sell for about $275,000, down from a peak of $370,000 in 2006. Thus, by adding the raw land value to the open market value for water and sewer service, we believe each property is worth at least $300,000.

 When the government’s attorneys appreciate that they hold losing cards, there will be an incentive to settle with our group.  The government will not want a court ruling that could be cited by other attorneys down the road; that could result in paying for the entire 1500 affected properties.  And if government continues to delay, we are likely to gain additional members which will cost more to settle; time is not their friend. However, a settlement will likely require us to take down this site and walk away quietly. In that case, those with us will obtain a settlement, and the rest will not.

 In the event this service conundrum requires litigation to judgment, our attorney will need to complete the exacting steps to ripen each landowner’s claim.  At some point, the litigation schedule may restrict his ability to add additional plaintiffs. For these reasons, we strongly recommend landowners consider joining our litigation strategy. 

 Success is not guaranteed, but our cause is righteous. If nothing else, our track record demonstrates the work ethic and tenacity required to succeed.

Our Litigator:

 We have hired Craig M. Collins, partner at Blum Collins LLP, to resolve and litigate this service conundrum. As a former partner at Berger & Norton, where he worked with Michael M. Berger, a nationally renowned inverse condemnation attorney, Mr. Collins is very well qualified to handle this matter.

 Mr. Collins has won multimillion dollar awards and settlements in taking cases. He has succeeded against the Commission at the Appellate Court level. Mr. Collins just (August 2011) won another taking case, where he represented a car dealership in Riverside against the State of California (CalTrans).

 We are very pleased with his efforts, and fully expect him to succeed.  

Want to help us?

 Alternatively, we support the property rights litigation of the Pacific Legal Foundation. We recommend making an on line contribution to PLF.

Contact US:

Mike Erickson can be reached at 760-806-0034. Gregg Berge can be reached at 951-587-1287. You can email us at UnclogCambria@cox.net.