IRVINE, CA-A ballot-box referendum aimed at stopping the development of a tribal-gaming casino in Madera County has stirred the pot of ongoing concerns for developers in California. According to Gregory N. Weiler, an attorney with locally based law firm Palmieri Tyler, the ballot-box referendum can wreak havoc with developers' plans, even if they have jumped through all the hoops necessary to get a project approved.

Industry sources report that tribal watchdog group Stand Up California recently brought a lawsuit against the state aimed at stopping the development of a tribal-gaming casino by the North Fork Rancheria of Mono Indians along Highway 99 in Madera Count. The suit alleges that Governor Brown did not have the authority to grant the building of a casino with the tribe when he negotiated a compact with them last year because the land was not yet in federal trust. In addition to the suit, the group is aiming to defeat approval of the casino through a ballot-box referendum that would overturn the legislature's approval.

The situation points up just how damaging the ballot-box referendum can be to commercial real estate developers' plans throughout the state. “By and large, the consensus would be among industry professionals that the ballot-box referendum is not a good thing,” Weiler tells GlobeSt.com. “Sometimes, it can be used by the development community to break a logjam in anti-growth jurisdiction, which is really attractive if you have a county where the board is anti-growth, and it can go right to the voters.”

In the above scenario, a plus for developers of using the ballot-box referendum to get a development approved is that they don't have to comply with CEQA or environmental-impact regulations in order to gain the approval, Weiler explains. “If you have a county with only 30,000 voters, you can go get your initiative approved to change a property from agricultural to commercial, and if it qualifies, you don't have to do CEQA or EIRs.”

However, the overwhelming majority of ballot-box referenda are used to stop, thwart or control development. “It's just part of the Constitution—there's nothing that can be done to stop it,” says Weiler. “You can get everything approved and be challenged with a ballot-box referendum, and it will overturn all that work and money. It's very frustrating because you have so much upfront expenditure, and at the very end, the voters can simply say no. It eliminates certainty in the development process and is obviously very negative for the development community.”

To diffuse a potential referendum, many sophisticated commercial and residential developers will use the community outreach process, which allows stakeholders to voice their concerns and ask the developers questions about a proposed project and allows developers to assuage these concerns, says Weiler. “That's why there are so many scoping sessions” for proposed developments. “It's part of the political process.”

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