Thomas Law Blog

CEQA Updates

Keeping You Up-to-Date on the California Environmental Quality Act

Posts from September, 2015

“No one ever said it was easy to build a project in San Francisco”

Monday, September 28th, 2015

On September 17, 2015, the California First District Court of Appeal struck another blow to the beleaguered 8 Washington Street Project in Defend Our Waterfront v. California State Lands Commission, 2015 Cal. App. LEXIS 817, when it upheld the trial court’s ruling that a necessary land transfer between the State Lands Commission and the City of San Francisco did not qualify for an obscure CEQA exemption.

Developers San Francisco Waterfront Partners II, LLC and Pacific Waterfront Properties LLC have been attempting to build luxury condominiums on waterfront land near the San Francisco Ferry Building for almost a decade. In 2012, the project seemed to be on track. The Planning Commission certified the project’s FEIR, the Board of Supervisors affirmed the certification, and the developers were issued a conditional use authorization. At that point, only one hurdle remained—removing the public trust restrictions from the waterfront land.

The site for the project includes a parcel of property commonly referred to as “Seawall Lot 351,” which includes a public trust restriction due to the fact that the area was previously submerged land under the San Francisco Bay. To allow the development to proceed on Seawall Lot 351, the developer and the City devised a plan to transfer the lot out of the public trust and replace it with a different parcel of property pursuant to a land exchange agreement with the State Lands Commission. In August 2012, the State Lands Commission approved the land exchange agreement and found that the agreement is a statutorily exempt activity under CEQA pursuant to Public Resource Code section 21080.11.

Defend Our Waterfront (DOW) challenged the State Lands Commission’s reliance on the exemption. In early 2014, the trial court held the exemption was inapplicable and invalidated the land transfer.

On appeal, the First District upheld the lower court’s ruling. The Court began by rejecting State Lands Commission’s argument that DOW failed to exhaust their administrative remedies. DOW formed after the State Land Commission’s decision to approve the land swap. The State Lands Commission argued that Public Resources Code section 21177, subdivision (c), requires that a member of the after-formed organization must have raised the CEQA issue during the agency proceeding. The Court did not reach the merits of this argument because it determined that the State Lands Commission had provided inadequate notice of the meeting in violation of section 21177, subdivision (e), excusing DOW from the exhaustion requirement.

Specifically, the Court held that a meeting agenda posted on the State Lands Commission’s website stating that the land exchange agreement would be discussed, with no mention of CEQA, was insufficient to give the required notice that the project would be approved based on a statutory exemption. A hyperlink to a staff report that mentioned the CEQA exemption was added prior to the meeting; however, the Court found the extra step of clicking on the hyperlink to be inadequate notice and regardless, the link to the staff report was not added at least 10-days’ prior to the meeting as required under Government Code section 11125, subdivision (a). The Court further held that actual notice of the meeting/staff report did not satisfy CEQA’s notice requirement, nor was the notice requirement waived when one of DOW’s members’ failed to object to the exemption at the meeting.

On the merits of the challenge, the Court held that the Public Resource Code section 21080.11’s exemption for “settlements of title and boundary problems by the State Lands Commission and to exchanges or leases in connection with those settlements” applied only to instances where the State Lands Commission exercised its authority to settle land disputes. The Court rejected the State Lands Commission’s argument that it applied to title “problems” generally, finding that it was not required to defer to the State Lands Commission’s interpretation of the exemption because construing the scope of the CEQA exemption was a matter of “statutory interpretation” subject to de novo review.

Key Point:

The public must have sufficient notice under section 21177, subdivision (e), to trigger the exhaustion requirements. The notice must clearly state if any CEQA determinations will be discussed at the meeting and that statement must be in the notice itself, not in a hyperlinked document. This case also made clear that actual notice or waiver is no substitute for those notice requirements.

Paulek is Dead… Long Live Berkeley Hillside

Monday, September 14th, 2015

The California Supreme Court has depublished the Fourth Appellate District’s June 17, 2015 opinion in Paulek v. Western Riverside County Regional Conservation (2015) 238 Cal.App.4th 583 (Paulek).

The Paulek opinion erroneously stated that “when determining whether a categorical exemption applies, the question is whether a fair argument has been made that the project will have a significant effect on the environment.” (Id. at p. 605 [citing Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1099 (Berkeley Hillside)].) Berkeley Hillside does not stand for this proposition.

Two steps are required to determine whether a categorical exemption applies to a project. The first step is to determine whether the project fits within a categorical exemption; the second step is to consider whether an exception to the exemption applies.

With respect to the first step, published “authorities are in agreement that ‘the substantial evidence test governs . . . [a court’s] review of the [lead agency’s] factual determination that a project falls within a categorical exemption.’” (Banker’s Hill, Hillcrest, Park West Community Preservation Group v. City of San Diego (2006) 139 Cal.App.4th 249, 267.)

Berkeley Hills addressed the second step, specifically whether the “unusual circumstances” exception to categorical exemptions applied. The California Supreme Court determined that courts should apply the fair argument standard to the question of whether unusual circumstances caused a “reasonable possibility that the activity will have a significant effect on the environment.” (60 Cal.App.4th at p. 1114.) However, on the threshold question of whether the agency faced “unusual circumstances,” the Court held that the deferential substantial evidence standard should be applied. (Id.)

Fourth District Court of Appeal Re-Releases its Opinion Reversing the Denial of Petitioner Group’s Writ Petition

Friday, September 4th, 2015

Following rehearing on its own motion, the Fourth District Court of Appeal again reversed and remanded a case involving the closure of two public schools in the Barstow Unified School District (“BUSD” or “District”). (Save Our Schools v. Barstow Unified School Dist., 2015 Cal.App.LEXIS 779.) The court had previously vacated its July 14, 2015 unpublished opinion Save Our Schools v. Barstow Unified School Dist., 2015 Cal.App.Unpub. LEXIS 4926 on August 10, 2015.

The case involves a suit filed by Save Our Schools (“SOS”) challenging BUSD’s closure of two schools. BUSD closed the schools in 2013 after years of declining student enrollment in the school district. BUSD concluded its decision to close the schools was exempt from the California Environmental Quality Act (“CEQA”). Following the closures, SOS filed a petition for writ of mandate, alleging that insufficient evidence supported BUSD’s reliance on CEQA exemptions. The superior court denied their petition. On appeal, the Appellate Court reversed the judgment denying SOS’s petition. The court remanded the case to the trial court with directions to issue a peremptory writ of mandate to BUSD.

The court first provided an overview of CEQA’s three step process “to ensure that public agencies inform their decisions with environmental considerations.” The court indicated that at the preliminary review stage, the lead agency must determine whether an activity is a “project” and if so, whether the project is exempt from environmental review under CEQA. At the preliminary review stage, BUSD relied on Public Resources Code section 21080.18, exempting from CEQA review “the closing of any public school in which kindergarten or any of grades 1 through 12 is maintained or the transfer of student from that public school to another if the only physical changes involved are categorically exempt . . .” BUSD also relied on the class 14 exemption for “minor additions to schools.”

As defined in CEQA Guidelines section 15314, a minor addition to a school is defined as: (1) the addition of 10 of fewer classrooms; or (2) an increase in original student capacity of 25 percent or less. “Original student capacity” means the school’s physical space for housing students, or number of students that can be physically accommodated before the transfer. The court found that the administrative record failed to disclose the “[o]riginal student capacity” at any of the receptor schools. The court concluded it was possible some of the receptor schools were near capacity at the time of the closures and student transfers. The court stated this was a “critical gap in the evidence” that prevented BUSD from determining that school closures and the resulting transfers of their students were exempt from CEQA under the minor additions exemption.

The Court remanded the case to the trial court, concluding that the District violated CEQA because insufficient evidence supported its determination that school closures and resulting transfers were exempt from CEQA. Citing Voices of the Wetlands v. State Water Resources Control Bd. (2011) 52 Cal.4th 499, 425-435, the court indicated that following the trial court’s issuance of the peremptory writ on remand, the District may consider additional evidence not before it when determined that the closures and transfers were exempt from CEQA. If the District again determines that the closures and transfers were exempt from CEQA, the burden then shifts to SOS and those challenging the exemption determination to produce substantial evidence showing that an exception to the minor additions exemption applied. (Citing Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1104-1105.)

BUSD also argued that SOS’s petition was moot because the schools had been closed for two years at the time of the decision. The court disagreed. The court noted that, on remand, BUSD could determine that the closures were not exempt from CEQA, and the schools could be reopened or BUSD could adopt other mitigation to address adverse environmental effects—if any—of the closures and transfers.

Key Point:

Substantial evidence must support each element of a categorical exemption. Where, as in Save Our Schools, a critical gap exists in the evidence supporting an exemption determination, the court will reverse to allow the agency to reconsider their action based on substantial evidence.