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ULI San Diego Panel Discusses Water Supply's Impact on Development

August 28, 2008

ULI San Diego Panel Discusses Water Supply's Impact on Development

By MANDY JACKSON
      Limitations on development are very close on the horizon, at least in San Diego County , without creative solutions for offsetting new water use or producing new water supplies.
      That was the consensus of speakers on a panel hosted by the San Diego/Tijuana chapter of the Urban Land Institute on Aug. 12 at the University Club in downtown San Diego , who talked about constraints on the local water supply and strategies for new development.
      Moderating the panel, attorney Robin Munro of Worley Schwartz Garfield & Prairie LLP, said it has quickly become clear that water is hampering development. Munro said it may be the central constraint for projects in San Diego County .
      "Water politics will play an increasing role in development of the region," she said.
      The San Diego County Water Authority sells water to local water agencies in the region and gets the majority of its water from the Colorado River, which is in the eighth year of a drought, and the San Joaquin River Delta in Northern California, where a court order to shut down pumps sending water south is protecting small endangered fish called the Delta Smelt and limiting water supplies all over the state.
      The water authority is in the middle of a $3.6 billion capital improvement program that includes expansion of an existing reservoir, construction of pipelines and pumping stations, development of hydroelectric power and completion of a water treatment plant. The agency also is pursuing seawater desalination opportunities, enhanced outdoor landscape and conservation, and development of additional water recycling.
      Maureen Stapleton, general manager of the San Diego County Water Authority, said that due to drought in 1991, the region's water supply was cut by 31 percent. The water authority diversified its water supplies with an agreement to transfer water from the Imperial Irrigation District and the lining of the All American and Coachella canals. Conservation also continues to help maintain water supplies.
      Stapleton said the water authority continues to work on plans for increasing local water resources. It also is encouraging local agencies to adopt drought response ordinances with restrictions on wasteful water use and limits on new development that get tougher as water supplies see additional reductions.
      "If we don't get rain or snow in biblical proportions," Stapleton said restrictions on water use will become more severe in 2009. Limitations on the numbers of new water meters allowed in the region could become more severe.

      Laura Godfrey, an attorney at Latham & Watkins LLP in San Diego , outlined the impact of California Senate Bills 610 and 221, which became law in 2001 and require developers to identify sources of water for their projects.
      SB610 requires projects to obtain a water supply assessment for groundwater resources. SB221 prohibits approval of projects with more than 500 housing units and commercial construction with similar demand unless there is verification of adequate water to supply the development.
      The SB221 requirement must be fulfilled before an environmental-impact report is completed. SB610 compliance is required before a project can receive a subdivision map. Godfrey said there still is a lot of uncertainty regarding implementation of the seven-year-old bills because lawsuits still are pending on both pieces of legislation.
      Greg Fitchitt, development director in San Diego for Australian mall owner Westfield Group, said the company has been working with the city of San Diego water department on ideas for minimizing water use at Westfield UTC, a 1 million-square-foot regional mall where Westfield is planning a $1 billion expansion project. As a result of the negotiations, the expansion will net no new water use.
      "We already planned to be LEED-certified and hook up to the city's reclaimed water," Fitchitt said, noting plans for the expanded shopping center to be certified under the U.S. Green Building Council's Leadership in Energy and Environmental Design program.
      "The city offered that Westfield could offset its use by hooking up public facilities [around San Diego ] to the reclaimed water system," he said. "We won't use one more drop of water than we do now."
      As for new sources of water, Peter MacLaggan, senior vice president of project development for Poseidon Resources Corp., described the company's plans to build a seawater desalination plant in coastal Carlsbad, just north of San Diego .
      MacLaggan noted that there are 23,000 operating desalination plants around the world producing 3 billion gallons a day. He said San Diego County is the world's leader in producing the filters and other technology that goes into desalination plants.
      Poseidon's facility planned in Carlsbad is expected to supply enough water to meet 9 percent of the demand in San Diego County . Nine local water agencies have signed 30-year contracts to buy all of the water produced at the plant. MacLaggan said it is a higher-quality, drought-proof supply that will cost no more than current water resources.
      Four lawsuits have been filed by environmental groups because of the marine life that might get caught in the desalination plant's water intake system or be affected by twice-as-salty water discharged back into the Agua Hedionda Lagoon. Three of the lawsuits have been dismissed, but the litigants have indicated that they plan to file new lawsuits since the California Coastal Commission approved the project on Aug. 5.
      Munro said there are a lot of potential solutions to the region's water supply problems, but it will take political courage to move any of those plans forward.