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Developer Loses Challenge to Growth Control Measure

August 15, 2011

From the Morgan Hill Times – The City of Morgan Hill won a key decision in the 7-year-old lawsuit filed by Arcadia Development Co., avoiding a potential payout of $50 million in damages and keeping its voter-approved growth control ordinance undisturbed.

The California Court of Appeals, Sixth District, issued a ruling last Friday upholding Morgan Hill‘s residential growth control system after repeated challenges from Arcadia, who claimed the law singled them out by applying a “spot zoning” rule that did not affect any other developers. The rule prevented Arcadia from building a significantly more dense residential project, with many more houses than they are allowed as a result of the city’s policy and the recent ruling.

The appeals court’s decision last week means the city had a “rational reason” for adopting growth control and excluding Arcadia’s property from the city’s zoning restrictions, specifically to limit the strains of urban sprawl, city attorney Danny Wan said.

“The city was trying to prevent this over-explosion of development in the city, and a lack of sewer capacity” and other unpaid-for impacts on public infrastructure, Wan said. “The court said the city has a right to make decisions based on policy that may adversely impact certain property owners, and may even impact them solely, but as long as the city had a good rational policy basis for doing it, it was OK.”

Arcadia, Wan noted, was not singled out by name in the provisions of the ordinance approved by voters in 2004 as Measure C, though the measure’s supporters including the city knew the company planned to build on its roughly 80 acres near Hill Road and Barrett Avenue in southeast Morgan Hill.

In 1990, the city annexed Arcadia’s property during a singular window of time when Measure C’s predecessor, Measure P, was being circulated for signatures. Drafted by citizens, Measure P adopted amendments to the slow-growth system, strengthening its requirements and limiting the ability to add land to the city for residential development.

Measure P also included a clause providing that lands added to the city during the time the measure was circulating for signatures and the time it was ultimately adopted by residents – between March and December 1990 – would be limited to the density permitted under Santa Clara County’s General Plan. Arcadia’s property was added to the city during the time Measure P was circulating and therefore is limited to the amount of development permitted by Santa Clara County – or one unit per 20 acres, until 2020.

That provision was added to Measure P because its proponents feared a sudden rush of annexations by property owners on the city’s edges who foresaw the measure’s victory at the polls and might want to take advantage of the law which would allow them to build more homes for sale, Wan said.

As of 2009, Arcadia had received…to read the rest of this story, please click here.

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