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February 16, 2006

The Weekly Wrap

Bring down those home prices
Hundreds talk affordable housing, builders' group responds

15 Questions for Scott Barton

The Weekly Wrap

RUNNING: It was the perfect way to end a week of perfect weather, hanging out on Clam Beach Saturday morning listening to the Marching Lumberjacks play their oddball David Bowie and A-ha covers. If you got there early enough, there was plenty of time to dig your toes into the sand and throw pebbles into the surf. Then, at around 11:45, the first runners started showing up on the horizon, eventually gasping their way to the finish line, to the cheers of friends and family. This was repeated 750 times throughout the early afternoon, as 750 participants in this year's Trinidad to Clam Beach found their way to the end of the run. The slower the runners, the louder the cheers, as those who finished first joined the chorus to congratulate their worn-down peers.

To a non-runner, it was all very mysterious and amusing. Lounging down on the beach, underneath the magnificent sun, the day seemed an inexplicable gift, a pat on the shoulder and a friendly chuck under the chin from whatever invisible forces jerk us this way and that throughout the cruel quotidian. Soon the chill winds and black clouds of February would return -- indeed, they were returning, right there on the beach, as the runners kept tromping toward the finish -- but for now, the day was glorious. Why ruin it by working yourself into a lather, forcing yourself to ache and pant and sweat? It would seem that one of the principal benefits of civilization is that no one has to run anymore, anywhere, ever again. Like stone tools or clothing made of untanned animal hides, the very act of moving yourself at anything greater than walking speed without mechanical assistance is outmoded and obsolete, and thank goodness for that.

This was put to a party of running freaks from Mendocino and Lake counties over dinner at Tomo that night. The runners were disoriented by the salvo at first, exhibiting just a glimmer of that confused hostility that so gladdens a killjoy's heart. Running just felt good, they said. ("Ha, ha!") It's a healthy, fun group activity. ("Moooo!") But Isabelle Brown of Lakeport finally hit upon a formula gauged to make an impression on a skeptic. Speaking slowly and pronouncing every word with the care of a preschool teacher desperately trying to keep her cool, she said, in effect: When through running, one is hungrier. After running, one can eat more.

This was a veiled threat. The sushi was on its way, and it would be served family-style.

ARKLEY AND OUT? That was quite a bombshell, dropped in there at the end of a small story in Saturday's Baton Rouge Advocate. In the story, entitled "N.O. called city of opportunity," Timothy Boone, a business reporter at the paper, mainly just gives an account of a speech at Lousiana State University's business school by one Robin Arkley II, of Eureka, Calif. According to the paper, Arkley is bullish on post-Katrina New Orleans. "The opportunities to build nice businesses are beyond belief," Arkley is quoted as saying. "The only way things could be better would be if they would make New Orleans and St. Bernard Parish tax-free zones."

Standard stuff, and interesting, but Boone probably had no idea how his final four throwaway sentences would likely be taken in Arkley's home town. "Arkley is in the process of solidifying his Baton Rouge ties," he writes. "He and his wife, Cherie, are leaving California and moving to the city. California's high taxes and weak business climate are causing the Arkleys to leave. 'California is a disaster of socialism,' [Arkley] jokingly said."

Jokingly? He doesn't know his man. Reached Tuesday, Arkley confirmed that the couple would be changing their official address to Baton Rouge, at least for tax purposes. "We're not going to sit around and pay California income taxes forever," he said. "California is imposing another tax for high-income people. At some point, you realize there are other ways." Arkley said that they are building a new home in Baton Rouge, and it should be completed in a year and a half. (They've owned a different home there for several years, he said.)

But though the couple may be spending more time in Baton Rouge over the coming years, he said, that doesn't mean they are abandoning Eureka. "Let's face it: Eureka is where we are, and it's our home, and it's been our home for 100 years," he said. "And it'll be our home for another 100 years." He said his principal business, Security National, will continue to be headquartered in Eureka, and that he is looking to expand the operation and to acquire another national business and relocate it to Humboldt County.

"This isn't a story," Arkley said, putting on his newsman's cap (he is the owner of the Eureka Reporter). "When I have a story, I'll call you."

NAMASTE: Hmm, moving to Baton Rouge, eh? Whither, then, Eureka's beloved but blighted Balloon Track?

Well, as far as anyone knew last Thursday night at the overflow continuation of Tuesday's public comment session before the city redevelopment board, Security National's Rob and Cherie Arkley still loomed large on the hometown development track, with buckets of cash and good intentions to buy the contaminated Union Pacific switching and maintenance yard, study it, put a cap on it and erect the elaborate mixed-use Marina Center. All they needed was a few zone changes to get the land out of public use and into something more amenable to shops, offices, homes and, um, Home Depot.

Zone changes generally kick up a few protests. Home Depots on small-town waterfronts whip up a frenzy. "It breaks my heart," said one public commenter. "I've been here all along, and it's been a dump the whole time," countered another. "Namaste I just want to say peace and blessings to everybody," soothed a nice woman. "Many, many sensible people are not here tonight," another woman sneered. "Corporate America is here to stay what is everybody afraid of?" a man said.

The meeting turned macabre when another guy told of three occasions at Home Depots where heavy stuff had fallen from a high-up shelf and crushed someone to death. Kaitlin Sopoci-Belknap called the Arkleys' proposal "ignorant" and said Union Pacific needs to be forced to thoroughly clean up the site, and then the public should decide what goes there. Old Town resident Louisa Rogers said the neighborhood has disappointed her. "People are not moving into Old Town Eureka does not have energy. I urge you to accept the proposal and negotiate like hell with the Arkleys." The council -- Chris Kerrigan alone dissenting -- complied, voting to let SN apply for the zone change.

Now, let the games begin: This Wednesday (Feb. 15), from 6:30 to 8:30 p.m. at the Wharfinger Building, several groups concerned that the city's on a runaway money train will hold a forum to talk big box, brownfields and bringing the public more powerfully into the debate. On Thursday, 4 to 7 p.m. at the Wharfinger, the Arkleys will hold an open house on their proposed Marina Center. We hear they're serving gumbo -- just kiddin'.

WILLIAMSON ACT: Developer Robert McKee won another round against the county last week in the ongoing battle over his subdivision of Tooby Ranch, which is under a Williamson Act contract. On Nov. 14, 2005, the county asked Humboldt County Superior Court Judge W. Bruce Watson to reconsider his Nov. 2 ruling, in which he said the county can't nullify property transfers McKee made to third-party buyers, nor can it unilaterally modify existing Williamson Act contracts. On Feb. 6, Watson ruled that "the County has not met its 'heavy burden' ... to prove both the reasonableness and necessity of the unilateral modification of the 1977 Tooby contract by the 1978 [amended] guidelines." Therefore, he said, "nullification of property transfers is not an issue."

The county's not happy about this, and after the ruling told local media that the judge's ruling contradicted the state's advice to the county and threatened to shake the foundation of the Williamson Act program statewide.

Deputy County Counsel Richard Hendry said on Tuesday that the county plans to file a writ with the First Appellate District Court in San Francisco "to have the [court] review whether the trial court committed an error of law." He also said Watson's ruling on the two issues in the McKee case "has no application to any other Williamson Act contracts."

PALCO SALE: On Thursday, Humboldt Watershed Council's Mark Lovelace announced to the media he'd "confirmed a secretive move by Maxxam" to sell off about a quarter of its Humboldt County land. Next day, Maxxam Inc. filed a notice with the Securities and Exchange Commission announcing proceedings to sell some 60,000 acres "to address future cash flow requirements." The land for sale is mostly ranch and recreational lands and "non-strategic timberlands" (Douglas fir). Also that day, Maxxam subsidiary Pacific Lumber Company sent a letter to employees announcing the move -- although they'd already read about it in the paper -- and deploring Lovelace's pre-emptive news release, calling it overblown and flawed. Palco said the company isn't beginning to rid itself of its holdings as prelude to bankruptcy, as Lovelace characterizes it, but is simply concentrating its efforts on redwood production. Lovelace, on Tuesday, countered that it's really the company's long-term plan to "do less and less and less" over time, then liquidate.

How did he hear about the lands for sale before the company announced it? "They had been circulating some information publicly but discreetly," Lovelace says, and word just got around. "I basically heard about it from three different avenues from the lands end, from the financial end and from the regulatory end. And from just the little voices on the wind end."

BEACH RESCUE FAILS: An investigation is continuing into Saturday's U.S. Coast Guard helicopter crash off of Manila during a mission to rescue four people thrown from a fishing boat. Vesta Lorraine Baker, 78, and her son Charles Wayne Baker, 59, both of Eureka, stayed afloat for some time after the boat was hit by a rogue wave, but eventually drowned. The surviving passengers, Terry Winkle, 55, and the boat's owner, Richard Pincsak, 59, also of Eureka, stayed with the capsized 18-foot vessel until it was pushed in to shore by waves. Apart from Pincsak, no one was wearing a life vest. The four-member crew of the U.S. Coast Guard HH-65B Dolphin helicopter, which was dispatched to rescue the boaters, was uninjured. The cause of the helicopter crash was not released. A report will be forwarded to the state.


Bring down those home prices
Hundreds talk affordable housing, builders' group responds


Hundreds of people -- elected officials, members of the county planning staff, developers, contractors, representatives of non-profit agencies -- gathered at the Wharfinger Building Thursday for an all-day seminar on Humboldt County's housing crisis and what can be done about it. They brought with them gripes, schemes and hand-outs, and they shared their frustrations and ideas with each other before heading back to their places of employment.

According to the Humboldt Association of Realtors, housing affordability in Humboldt County stands at about 12 percent, meaning that only 12 percent of residents can afford an average home. The average household income in the county is about $37,000; the median home price is about $320,000. Everyone agrees that this is a problem. Few people agree on the solution. The idea behind the affordable housing summit was to develop a consensus on what could be done to bring prices down into the more affordable range.

That didn't happen, foremost because a major player -- the Northern California Association of Home Builders (NCHB) -- announced that it would boycott the meeting. The NCHB shares some of the same members as Humboldt Economic Land Plan, another group, one that has carried its protests against county land use policy to the state level. In their view, the talking has gone on long enough, and they say it's time for the county to start opening up additional land for development, now.

Still, attendees and presenters at the summit had a lot more to say about how to put a home into the average person's hands, and had interesting insights about why housing affordability has been steadily sinking in recent years.

Dan Johnson, owner and CEO of Danco Builders and one developer who did not boycott the summit, told attendees that his company has developed or is developing a total of five large-scale affordable housing developments -- three in Arcata, one in Ukiah and one in New Mexico, with many more underway, in five western states. He said that land is expensive in Humboldt County, and likely always will be -- that people simply want to live here more than they do other places. That and California's sometimes Byzantine regulatory process mean building for low-income people is always going to be a tough nut, comparatively.

"We don't attract outside developers here because of the complexities and because the market is too small," Johnson said.

Elizabeth Conner, director of the Humboldt Bay Housing Development Corporation (HBHDC), said that the critique offered by groups like NCHB and HELP -- that the county simply needs to open up more land for development in order for new home buyers to see some relief -- was off the mark, given the influence of state, national and global economic factors at play in the local housing market.

"Increasing the supply of land, alone, will not increase the supply of affordable housing," she said.

Instead, Conner -- who, with the HBHDC, works as a non-profit developer of new affordable housing -- said that other jurisdictions have great success with a variety of different and innovative regulatory schemes, some or all of which could be implemented here. Among them: inclusionary zoning, which is currently being looked at in the city of Arcata, and affordable housing overlay zones -- "the stick and the carrot," as she called them. Inclusionary zoning mandates that any new development exceeding a certain number of units make a percentage -- say, 10 percent -- available at prices that can be met by low- or very-low-income families. Overlay zones award bonuses, in the form of eased regulations or waived fees, to developers who wish to build low-income housing.

For most of the summit, though, the spotlight was on Humboldt County Planning Director Kirk Girard, whose department oversees all planning and development in the county's unincorporated areas. Girard came with news: He said that according to recent numbers out of his office, the county had recently met its goals for new housing construction all the way into 2008, with some 2,100 new units built by private industry in the unincorporated areas since 2001. However, the county had still not met its state-mandated numbers for new housing affordable to low-income households, and was not likely to.

During a presentation in the afternoon, Girard outlined some of the problems that the county faces going forward. Foremost among them, he said, was the fact that most of our roads and sewage and water systems were built before 1978, the year that California rewrote its rules for financing public works projects.

"The infrastructure that houses are hooking up to was by and large built before Proposition 13," he said. "We are now at the limits of our pre-Prop. 13 infrastructure. Other counties hit that limit years ago."

Hitting that limit means that any new construction is bound to be expensive, especially in areas that are not currently served by sewer and water lines, he said. Either developers must agree to pay fees for these services up-front, or home owners must pay for them in the form of tax hikes (which are not likely to happen often, since post-Prop. 13 they require a 2/3 majority vote to pass).

One solution the county was working on, he said, was to institute a number of what are known as "Mello-Roos" districts around the county in order to pay for fire, water and sewage systems. Under Mello-Roos, developers may borrow the money to pay for new infrastructure up-front, passing the cost on to homeowners as part of their property tax bill afterward. Unlike regular tax hikes, they do not require a vote of the residents of a district.

Surprisingly, a consistent theme throughout the summit was the problem of NIMBYism. A variety of people said that promising affordable housing projects are often squashed because neighbors organize and rally to defeat them at the political level. Many expressed hope that educational efforts aimed at the citizenry, combined with the election of government representatives willing to take an unpopular stand, could provide the best hope yet for getting new projects through.

"My speculation is that the actions in this community speak louder than its words, in some cases," said Johnson. "Do we really want affordable housing?"

dingbat dingbat dingbat

A couple of days later, a group of people representing the NCHB gathered at the Fairhaven offices of Kramer Properties to explain why the organization refused to attend the summit and to respond to some of the ideas presented there. Two members of the NCHB's board of directors -- Nick Luchessi of Pacific Builders and Kramer Properties' Kurt Kramer -- had penned opinion pieces in the Times-Standard in the days leading up to the summit, Kramer's opening with a mouth-watering invocation of the housing market as it exists elsewhere.

"In the coming months, people will be able to purchase 64 new homes ranging from 1,050 square feet to 1,250 square feet," it began. "The price: Starting at $139,900." The kicker, of course, was that this was a Kramer Properties project in Salem, Ore., not here in Humboldt County.

Why not here? For Kramer, Luchessi and property manager Linda Disiere, another NHCB board member, the answer is simpler than it might seem, and it didn't require another all-day conference to figure out. The county hasn't planned adequately, they say, and the scarcity of currently buildable parcels has driven land prices through the roof.

"We need to have available lots to build, and we need to have a committed planning department," Kramer said. "There's a no-growth attitude in that department, and that needs to change."

For the NCHB, it all boils down to supply and demand. The county's policy is to plan only for a .25 percent yearly increase in population, and it only releases enough land to developers to meet that goal. That leads to a terrible scarcity in available lots, NCHB board members said. For every vacant lot that goes on the market, a bidding war between builders drives up land prices, and price of a finished home shoots up in suit.

Luchessi said that he knew this was an unpopular position to take, but that if elected officials didn't respond to the real needs of the community's poorest citizens the problem would only get much worse.

"They have to overcome the political opposition," he said. "There's always going to be political opposition to development. The neighbors are always going to be there with pitchforks and rakes. There just needs to be political will to say, 'This is the best thing for the community.'"



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