## Facts

- Santa Margarita Limited owned the Santa Margarita Ranch, an approximately 13,800-acre property in San Luis Obispo County, and sought long-range development.
- After disputes and litigation involving parcelization and future development, the landowner, the County, and community representatives entered mediation concerning long-range development of the ranch.
- The mediation produced a consensus framework that contemplated roughly 550 housing units and related nonresidential uses on about 1,800 acres, permanent open-space easements on at least 8,400 acres, and at least 3,600 acres under 40-year Williamson Act contracts.
- To implement the framework, the County and the landowner entered a development agreement under Government Code sections 65864–65869.5.
- The agreement provided regulatory stability for a defined term (up to five years) by fixing applicable land-use rules while the landowner prepared and submitted a specific plan.
- In exchange, the landowner agreed to prepare a specific plan consistent with County requirements, incorporate standards from the Salinas River Area Plan, complete required environmental review, and provide public benefits including land dedications for facilities (e.g., a public swimming pool, sewer-treatment plant, and cemetery expansion).
- The agreement contemplated later County processing and the ability to approve or disapprove the specific plan and later entitlements.
- An association and individual residents sought a writ of mandate to set aside the agreement, alleging statutory invalidity and an unlawful surrender of police power; the trial court denied relief, and plaintiffs appealed.

## Issues

1. Whether California’s Development Agreement Statute permits a development agreement directed at the planning stage before specific buildings or structures have been designed or approved.
2. Whether a time-limited zoning and land-use “freeze” in such an agreement unlawfully contracts away a county’s police power.

## Decision

- The Court of Appeal affirmed the judgment denying the writ petition.
- The court held the development agreement complied with the Development Agreement Statute even though it governed the planning stage and preceded site-specific project approvals.
- The court held the agreement’s time-limited regulatory-stability provisions did not unlawfully surrender the County’s police power.
- The court emphasized the agreement set a planning framework and did not itself confer final building entitlements.
- The court noted the County retained discretion to approve or disapprove the specific plan and subsequent approvals and that the project remained subject to environmental and other legal requirements.

## Legal Principles

- A development agreement may be used at the planning stage to allocate rights and duties for long-term development, so long as statutory requirements (including consistency findings) are satisfied.
- Providing time-limited regulatory stability is a core, statutorily authorized function of development agreements and is not invalid merely because it precedes detailed project design.
- A local agency does not unlawfully contract away its police power when it retains discretionary authority over later approvals, remains subject to overriding constitutional and statutory limits, and secures enforceable public benefits and developer obligations through the agreement.

## Conclusion

The court upheld a planning-stage development agreement for a large ranch, concluding the statute allows agreements that structure future specific-plan review and that a limited zoning freeze providing regulatory stability does not constitute an unconstitutional surrender of the county’s police power where the county retains decision-making authority and the agreement secures public benefits.


Santa Margarita Area Residents Together v. County of San Luis Obispo, 84 Cal. App. 4th 221, 100 Cal. Rptr. 2d 740 (Ct. App. 2000)