Get smart

Mother Nature or the almighty dollar—what's the bigger obstacle to smart growth in Sacramento?

Listen to the rumblings from under the Capitol rotunda dome, and you’d surely finger the environment and, specifically, an oft-tossed four-letter word: CEQA.

For the acronym averse, it stands for California Environmental Quality Act, or the state’s oldest law protecting the Earth’s goods. Basically, CEQA makes it mandatory for local governments to evaluate a project’s ecological impact well before a shovel ever hits dirt. The law keeps the air and water clean and emissions to a minimum, and restricts noise and traffic, among other protections.

Lately, though, a bipartisan contingent says that CEQA victimizes smart growth—a sustainability-minded catch term for high-density, mixed-use, walkable and transit-friendly urban development. CEQA lawsuits stall projects for months, even years, which can cost developers hundreds of thousands of dollars, critics argue. Sometimes, the law discourages lenders from financing certain projects altogether. Now, these groups want to see the law not just tweaked, but reformed.

The catch is that here in Sacramento, CEQA is but an anthill when it comes to the undulations that forestall smart-growth development.

A more real culprit: money, money, money.

“It’s financing,” explained Bay Miry, developer with D&S Development, who specializes in urban-redevelopment projects such as the 700 block of K Street downtown and 1409 R Street (the building with Shady Lady Saloon and Magpie Cafe). “It’s always the toughest obstacle, making sure the lenders that are out there believe in those type of projects.”

Smart growth is a relatively new concept to banks and lenders. Previously, moneymen weren’t confident that sustainable urban-infill projects could be profitable. And, until the last 15 or so years, cities and local groups like the Sacramento Area Council of Governments didn’t include sustainability goals in their general plans or blueprints.

But many say the pendulum is now swinging, and banks are starting to grasp that smart growth is a new wave.

“Lenders are starting to really see the movement that more and more generations … want to live in the urban core,” Miry said.

So, urban-infill projects are moving dirt in Sacramento. La Valentina, a mixed-use residential-retail complex located at a light-rail stop, opened this past summer. The 7th & H Street Housing Community for lower-income residents opened late last year. And “net-zero” luxury apartments 16 Powerhouse complex should break ground this May.

But that’s hardly the 45,000 units worth of residential housing that was either in the pipe or being built in the region some 10 years ago, according to Mike McKeever, SACOG’s executive director.

“In the near term, the economics of development of all kinds are very, very severely challenged,” is how he put it.

This steep, wild decline and subsequent bumpy ride is not just the economy’s fault, either. “The abolishing of the redevelopment program in the state has taken away, at least for now, a very critical part of what helped those projects work,” McKeever reminded.

Over at the Capitol, however, there’s little discussion of the future of redevelopment and more movement to sate the anti-CEQA contingent’s thirst.

Earlier this year, for instance, Democratic state senator from Bakersfield Michael Rubio kicked off the legislative session with big chatter about exempting local agencies from CEQA review. He argued, essentially, that cities and counties today boast sufficient environmental protections as part of their general plans, so CEQA in many ways is redundant.

Rubio spent years building coalitions to reform CEQA. He had business and labor interests in his corner. 2013 was going to be the year the decades-old law lost its teeth. But then Rubio resigned from the statehouse—to go work for Chevron Corp.

Critics erupted at the chutzpah of his departure, and this unexpected move has stalled talks of significant CEQA reform. For now.

Still, some 20 bills that would pinch CEQA remain in the mix this session.

Some of these proposals embrace smart growth, such as Sacramento Senate President Pro Tem Darrell Steinberg’s Senate Bill 731. It won’t get a push until next year, according to those inside the building, but Steinberg’s bill would surgically streamline certain CEQA projects and financially incentivize local governments to update their smart-growth plans.

Steinberg and others call this the modernizing of CEQA, and it’s not a new effort. SACOG even helped pass Senate Bill 375 last year, which accomplished similar smart-growth-friendly goals. And the year before that, the senator passed a law that gives the governor power to cherry-pick blue-chip projects for CEQA exemptions (the proposed new Sacramento Kings arena, for instance, might qualify for such immunity).

“We need to take advantage of the opportunity to improve and strengthen this great law by making the process more efficient, timely and effective,” Steinberg said in a written statement.

Environmentalists argue that these and other CEQA bills are less prudent, or unnecessary. Republican state Sen. Tom Berryhill, for instance, introduced Senate Bill 787 last month; critics say it would offer carte blanche for exemptions and make it easier for municipalities to greenlight sprawl and polluting projects.

Meanwhile, the irony is that urban developers aren’t too worried about CEQA. “The nice thing about doing urban infill is that there aren’t a lot of environmental issues,” Miry responded, when asked if the law was an impediment.

Indeed, a 2012 survey by Gov. Jerry Brown’s Office of Planning and Research quizzed 540 state planning departments and discovered that infrastructure constraints, lot issues, a lack of funding or bad economy and NIMBYs were the biggest deterrents to urban infill. CEQA was 12th on this list of concerns.

So, while modernizing the state’s oldest environmental protection law will continue, Sacramentans want to see a focus on other priorities—such as persuading investors, reviving redevelopment, and updating city and county codes.

“The real challenge,” McKeever said, “is doing things fast enough to catch this next economic wave.”