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    Reversed! CA Appeal Court Rules State Approval Of Queensway Bay Tidelands Trust Exchange ("land swap") Was NOT Supported By Evidence; We Post Full Opinion

    (April 20, 2005) -- In a dramatic turn of events that could trigger a second look at uses in part of Queensway Bay (now "Pike @ Rainbow Harbor"), a CA Court of Appeal has invalidated approval given by the CA State Lands Commissions to a tidelands trust land exchange ("land swap" arranged by LB City Hall to help facilitate the commercial and entertainment element of the Queensway Bay project (now called the "Pike @ Rainbow Harbor"), ruling the land swap approval was not supported by the evidence. posts the Appeal Court opinion in full in pdf form on a link below.

    In September 2001, the State Lands Commission -- a three-person body comprised of the Lt. Governor, the State Controller and the Governor's Director of Finance -- approved giving up state tidelands designation on certain commercial footprints within the QW Bay tidelands areas in exchange for the state receiving from the City of LB parcels along the L.A. river and a freeway median that now carry tidelands designation.

    The Appeals Court reversal marks a significant victory for CA Earth Corps president Don May, a veteran environmental who doggedly pursued the appeal on principle after a lower court upheld actions of the State Lands Commission and LB City Hall.

    When the lower court upheld officialdom's actions in 2002, then-City Manager Henry Taboada said in a written release, "This [lower court] ruling validates the City's original stance that the Pike at Rainbow Harbor has always been environmentally sound" and Mayor Beverly O'Neill said at the time, "With all the legal issues behind us, we can now move forward with the largest and most vibrant waterfront development in Southern California."

    But in its analysis of the State Lands Commission and City Hall actions, the Court of Appeal's opinion said in pertinent part:

    Section 6307 [a state statute governing the tidelands] permits a land exchange only for the purposes of the improvement of navigation, aiding in reclamation, flood control protection, or of enhancing the configuration of the shoreline for the improvement of the water and upland on navigable rivers, sloughs, streams, lakes, bays, estuaries, inlets, or straits. The land must be exchanged for land of equal value. Once these conditions are met, the land may be exchanged. Only if an exchange takes place may the former public trust lands be filled and reclaimed after adoption of a finding by the [State Lands] Commission...

    ...The debate centers on whether the exchange will "enhance the configuration of the shoreline"...The Developer, Commission, and City all contend the Development Plan will enhance the use of and public access to the shoreline. Earth Corps argues the statutory requirement is not met.

    Under section 6307, an exchange is authorized in order "to enhance the configuration of the shoreline for the improvement of the water and upland." The Commission, in its findings in support of the exchange, stated: "The exchange agreement is in the best interests of the state and consistent with public trust needs to enhance the configuration and utility of the property adjacent to the shoreline for improvement of public access to the water and development of the upland. (Italics added.)...

    On appeal, Earth Corps argues the Development Plan "in no way affects the shoreline itself." According to Earth Corps, since the Queensway Bay parcels are separated from the shoreline by an expressway, termination of the public trust protection cannot enhance the configuration of the shoreline. Earth Corps also contends any enhancement of the shoreline must be the result of physical changes to the shoreline.

    Respondents present a variety of responses to this argument. The Developer points out the Queensway Bay parcels "have been covered in asphalt and remained unused for over 20 years, and in their current state pose an obstacle to the City’s development and use of its waterfront area." The Developer asserts it is indisputable the Development Plan as a whole "‘enhances the configuration of the [City’s] shoreline for the improvement of the water and upland.’"

    Unfortunately, although the Developer uses the magic words "enhances the configuration of the shoreline," its brief contains absolutely no discussion of what this enhancement entails. Instead, the Developer rather circuitously states the Commission concluded that the exchange "will enhance the configuration of the shoreline for the improvement of the waterfront area in the City by allowing for the completion of the Development Plan." In other words, removing the final obstacle to the Development Plan will enhance the shoreline.

    The Developer provides no authority for this assertion.

    The Commission argues the Queensway Bay parcels have been virtually unused for over 20 years, providing no significant trust benefit to the public. To fill this void, the development plan "is transforming the City’s filled tidelands adjacent to its downtown area into an area that will attract people to the shoreline and provide for public use of this previously unused or minimally used area." However, section 6307 does not permit exchanges to encourage or increase public use, nor does section 6307 exempt minimally used public trust land from its requirements.

    Finally, the City contends the removal of the public trust designation will allow the development of the Queensway Bay parcels as a premier urban waterfront attraction to proceed without the delay caused by a title dispute. The exchange will also improve public access to the shoreline and "will facilitate access to the public trust resources of the tidelands area."

    Again, section 6307 does not allow for an exchange based upon facilitating access.

    The City also argues the exchange will enhance the configuration of the shoreline: "The Exchange effectively rearranges the tidelands so that they are now those actively utilized parcels located directly adjacent to the Los Angeles River, rather than those unused parcels located over 550 feet from Rainbow Harbor. This rearrangement of tidelands fits squarely within the definition of configuration."

    We find the City’s argument unconvincing. The City claims the exchange of the Queensway Bay parcels for the river parcels is a "rearrangement of [the] tidelands." However, a rearrangement of two parcels of land does not denote an enhancement of the configuration of the shoreline. The river parcels are not part of the shoreline, and the removal of the Queensway Bay parcels does not, in itself, enhance the shoreline.

    During oral argument, respondents urged us to read section 6307 as requiring that either the land conveyed or the land acquired enhance the configuration of the shoreline. Thus, under respondents’ theory, the proposed improvement of the river parcels "enhanced the configuration of the shoreline" and satisfied section 6307.

    We find such a construction does not comport with the language of section 6307. Section 6307 sets forth the purposes to be served by the exchange: "improvement of navigation, aid in reclamation, or for flood control protection, or to enhance the configuration of the shoreline." These purposes refer to the land to be conveyed, land "on navigable rivers, sloughs, [and] streams . . . ." Section 6307 then precludes any exchange that "substantially interfere[s] with the right of navigation and fishing in the waters involved." Once these conditions are met, the statute then allows the Commission to exchange "lands of equal value," subjecting the land acquired to the same status as the land conveyed. The purposes served by the exchange unambiguously refer to the land to be exchanged, not the land to be acquired.

    No one, not the Commission in its findings, the trial court in its ruling, or any of the respondents in their briefs, focuses squarely on section 6307’s requirement that the underlying purpose of the exchange be "to enhance the configuration of the shoreline for the improvement of the water and upland." Instead, the concept of access and utility creeps into the various analyses, as though development itself is an unquestionable "enhancement."

    We agree with Earth Corps that the use of the phrase "configuration of the shoreline for the improvement of the water and upland," when read in context, denotes a change to the physical shoreline or construction of an improvement at the shoreline. Section 6307 begins: "Whenever it appears to the commission to be in the best interests of the state, for the improvement of navigation, aid in reclamation, or for flood control protection, or to enhance the configuration of the shoreline for the improvement of the water and upland . . . the commission may exchange lands of equal value." (Italics added.)

    These purposes all evoke changes to the physical geography of the natural shoreline, such as dredging for improvement of navigation or filling for reclamation, or constructing improvements such as dikes and levees for flood control.

    Read in context, the goal of enhancing the configuration of the shoreline requires a change of the physical geography of the shoreline or the construction of an improvement to the shoreline. The exchange at issue does neither. It does not change the physical geography of the shoreline, nor does it add an improvement to the shoreline.

    After considering the record before us, we conclude the Commission’s finding that the exchange "enhance[s] the configuration . . . of . . . the shoreline for improvement of . . . water and . . . upland" is lacking in evidentiary support. In the absence of such evidence, the Commission erred in finding the exchange met the criteria set forth in section 6307...

    ...[T]he [State Lands] Commission must find the specific requirements of section 6307 are met before the exchange may take place. In the present case, these conditions have not been met, and the Commission may not exchange the Queensway Bay parcels for the river parcels.

    The Court of Appeal ruling effectively sending the issue back to the State Lands Commission...where Lt. Governor Bustamante remains the only person on the Commission who was involved with the now-invalidated deal; CA now has a new state Controller and a new Gubernatorial Director of Finance.

    The State Lands Commission and LB City Hall haven't announced what they plan to do next. (Their options include possibly appealing to the CA Supreme Court, which could hear the case of let the appeals court ruling stand).

    California Earth Corps. was represented on the appeal by Santa Monica-based attorneys Jan Chatten-Brown and Doug Carstens.

    To view the full Court of Appeal opinion -- a 3-0 decision -- in pdf form, click on Appeals Court Opinion in CA Earth Corps vs. State Lands Comm'n et al.

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