Sierra Club v. City of Hayward

No. H-60181-0 (Cal. February 9, 1981)

ELR Digest

The California Supreme Court reverses a lower court judgment and rules that under the California Land Preservation Act, also known as the Williamson Act, land preservation contracts which forbid the development of agricultural land in exchange for reduced property taxes cannot be cancelled merely because development of the property will be more profitable than continued agricultural use. In order to prevent agricultural property from being rezoned for residential or commercial use and to prevent disorderly patterns of suburban development, local governments are empowered by the Act to establish agricultural preserves. The locality may enter into annually renewable contracts restricting the land to open space for a minimum of 10 years, in return for which the private landowner is guaranteed a stable tax base unaffected by the property's development potential. The contract automatically renews itself each year unless the landowner serves notice of nonrenewal, whereupon the property remains restricted for the balance of the 10-year contractual period, and the property taxes gradually return to the level of taxes on comparable nonrestricted land. However, the contract may be cancelled for a fee in extraordinary situations where the continued agricultural use of the property is neither necessary nor desirable and the public interest no longer requires that the contract be continued.

The City of Hayward entered into such a contract in 1969 with two co-owners of a 2,300-acre cattle ranch. In 1979 the city cancelled the contract as to a 93-acre parcel and granted a requested zoning change for construction of an upper-income housing development on that parcel. The city council determined that partial cancellation was in the public interest because removal of the parcel would not jeopardize continued use of the remaining land in the preserve and development would benefit urban dwellers requiring housing accommodations. The Sierra Club sued to enforce the contract, contending that the city council failed to make findings implicitly required by the cancellation provisions of the Williamson Act and failed to properly apply those provisions

Although the city's action was upheld at the trial and appellate court levels, the California Supreme Court rules that the mere fact that a housing development is more profitable than continued farming use is not a compelling public interest sufficient to justify cancellation of the contract and that the contract must continue to run its normal 10-year tenure absent an overriding public necessity. There is insufficient evidence to demonstrate that compliance with the nonrenewal process would have interfered with the city's orderly development or would have defeated any other purpose served by cancellation. It is inconsistent with the purposes of the Act to permit abrupt cancellation of the contract if nonrenewal would achieve the same result. Further, the record fails to indicate the reasons for the city's conclusion that the public interest in the open space use substantially outweighed the public interest in additional housing. Moreover, the record is devoid of evidence that the city complied with the Act in considering alternative uses of the restricted land. Finally, the court rules that the record does not set forth the changed conditions, other than increased development value, that now make agricultural operations unprofitable. The court therefore remands the case and directs the lower court to issue a writ of mandamus requiring the city to vacate its cancellation of the Williamson Act agreement. A dissenting opinion disagrees with the court's conclusion that cancellation of the contract is not in the public interest and thus inconsistent with the purposes of the Act.

The full text of this opinion is available from ELR (46 pp. $6.25, ELR Order No. C-1239).

Counsel for Appellants
Julie E. McDonald, Laurens H. Silver
Sierra Club Legal Defense Fund
311 California St., Suite 311, San Francisco CA 94104
(415) 398-1411

Counsel for Appellees
John W. Scanlon, City Attorney
22300 Foothill Blvd., Suite 1135, Hayward CA 94541
(415) 581-2345

Mosk, J.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]