To the advantage of Nevada and other states, California officials for years have worked diligently to create a hostile business climate, leading many companies and residents to flee to more welcoming environs. Now that same regulatory hostility may inadvertently nudge the Oakland A’s into the arms of Las Vegas.
On Friday, a coalition of union interests, trucking companies and shipping-industry groups filed a lawsuit intended to scuttle a proposed new $12 billion waterfront project near the Port of Oakland that would include commercial and residential development along with a new ballpark for the major league team. The filing alleges that the plan fails to meet the environmental standards mandated by the California Environmental Quality Act.
The 52-year-old law has become a vehicle for all manner of legal mischief, particularly for those looking to cripple economic development. To make matters worse, California’s liberal courts have concluded that the law applies to any private project that needs government approval — in other words, to virtually every endeavor in the Golden State. The law offers wide latitude for plaintiffs to bring complaints, even allowing anonymous lawsuits.
This “has made CEQA the preferred lever of California’s infamously litigious NIMBYs (Not-in-My-Back-Yard-ers),” M. Nolan Gray, a professional city planner and a housing researcher at UCLA, wrote in The Atlantic last year. “Anyone with a few hundred bucks can drag developers to court, forcing projects to undergo years of delays and to pay hundreds of thousands of dollars in legal fees.”
As Mr. Nolan points out, this discourages development, driving up costs and allowing “special interests as varied as construction unions, neighborhood groups and business associations” to demand “concessions from a project before the public review even starts.”
Perhaps such motivation explains the Oakland stadium lawsuit. But the legal action only compounds the difficulties that the A’s have encountered in their 20-year effort to convince Oakland officials to lavish taxpayer money on a new ballpark. The court filing is “another sign of how challenging it is to do business in California,” A’s President David Kaval said.
For nearly a year, Mr. Kaval and the A’s have used the threat of relocation to Las Vegas as leverage against Oakland officials. It appeared that the gambit had worked when the Oakland City Council in February voted to move ahead with the waterfront development.
But the A’s have continued to investigate stadium sites in the Las Vegas area as a contingency. If the lawsuit proves a significant setback to the waterfront plan, the A’s will have increased incentive to become the latest and most high-profile enterprise to shed California’s bureaucratic straitjacket in favor of friendlier business climes.