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CEQA Updates

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

Posts from August, 2016


FIRST APPELLATE DISTRICT UPHOLDS CITY’S RELIANCE ON CATEGORICAL EXEMPTIONS, PAVING THE WAY FOR PROPOSED ASPHALT PLANT IMPROVEMENTS

Friday, August 26th, 2016

BoDean Company, Inc. (“BoDean”) operates an asphalt plant in the City of Santa Rosa. The plant is a vested and legal nonconforming use that has been in continuous operation since approximately 1953. In November 2011, BoDean proposed to install three new storage silos, ancillary conveyors, three batchers, and an air filtration system. The upgrade would have no effect on the plant’s production or production capacity due to physical limitations and a condition contained in a permit issued by the Bay Area Air Quality Management District. Although proposed upgrades would not increase the plant’s production capacity, the new silos would increase the plant’s capacity to store asphalt.

The City of Santa Rosa approved a minor conditional use permit for the improvements to the asphalt plant and filed a notice of exemption reflecting its findings that the project is exempt from CEQA under the Class 1 (existing facilities) and Class 2 (replacement or reconstruction) categorical exemptions. Petitioner Citizens for Safe Neighbors (“Citizens”) sought a writ of mandate directing the City to set aside its approval of the project for failure to comply with CEQA. In Citizens for Safe Neighborhoods v. City of Santa Rosa, 2016 Cal. App. Unpub. LEXIS 6100, an unpublished opinion, Division Three of the First Appellate District upheld the trial court’s denial of Citizens’ petition for writ of mandate.

The court first reviewed the applicability of the Class 1 categorical exemption and found that there was substantial evidence in the record that the new silos constituted a negligible expansion of the plant’s facilities. In light of its conclusion that the project falls within the scope of the Class 1 exemption for existing facilities, the court indicated it was unnecessary to consider whether the project also qualified for a Class 2 exemption.

The court then turned to Citizens’ contention that the unusual circumstances exception precluded the use of a categorical exemption. The court applied last year’s Supreme Court decision Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086 (Berkeley Hillside), which articulated the two-step analysis for determining whether the unusual circumstances exception to a categorical exemption applies to a project. The first step is to determine whether the project exhibits any unusual circumstances; an inquiry reviewed under the substantial evidence standard of review. The second step is to consider whether an unusual circumstance, if present, gives rise to a potentially significant environmental impact; an inquiry reviewed under the fair argument standard of review.

Assuming that the plant improvements presented an unusual circumstance due to its location in close proximity to residences, the court focused its analysis on the second step – whether unusual circumstances give rise to a potentially significant impact. The court concluded that the record did not contain substantial evidence to support a fair argument that the plant upgrades would increase production. Accordingly, the court rejected Citizens’ arguments that plant improvements would result in significant environmental impact on aesthetics, air quality, health & safety, noise, odor, and traffic. The court found Citizens had not met its burden to establish the applicability of the unusual circumstances exception and the project was categorically exempt from CEQA as a minor alteration to existing facilities.

SUPREME COURT DEPUBLISHES PEOPLE FOR PROPER PLANNING V. CITY OF PALM SPRINGS

Monday, August 22nd, 2016

On August 17, 2016, the Supreme Court ordered People for Proper Planning v. City of Palm Springs (2016) 247 Cal.App.4th 640 depublished.

Since the Supreme Court issued Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, five decisions have been published concerning application of the “unusual circumstances” exception set forth in CEQA Guidelines section 15300.2, subdivision (c).

In three of the decisions, the courts upheld the lead agency’s use of the categorical exemptions at issue: (1) Berkeley Hillside Preservation v. City of Berkeley (2015) 241 Cal.App.4th 943, (2) Citizens for Environmental Responsibility v. State ex rel. 14th Dist. Ag. Assn. (2015) 242 Cal.App.4th 555, and (3) Walters v. City of Redondo Beach (2016) 1 Cal.App.5th 809.

In the other two decisions, the courts determined that the lead agency failed to comply with CEQA in relying on the categorical exemptions at issue: (1) Paulek v. Western Riverside County Regional Conservation Authority (2015) 238 Cal. App. 4th 583, and (2) People for Proper Planning.  The Supreme Court has now depublished both of these decisions.  Therefore, petitioners have not prevailed in any published opinion concerning application of the unusual circumstances exception to CEQA’s categorical exemptions since publication of Berkeley Hillside. (But see Save Our Schools v. Barstow Unified School Dist. Bd. of Education (2015) 240 Cal.App.4th 128 [holding that a proposed school project failed to meet the factual requirements to qualify for the Class 14 categorical exemption].)

Our law firm previously posted two blog entries on the People for Proper Planning.  For a discussion of the original People for Proper Planning opinion, please see http://www.thomaslaw.com/blog/fourth-district-holds-that-palm-springs-general-plan-amendment-is-not-categorically-exempt-in-published-opinion/. The Fourth District later modified its opinion, as discussed at http://www.thomaslaw.com/blog/fourth-appellate-district-modifies-published-opinion-on-the-unusual-circumstances-exception-to-categorical-exemptions/.

SIXTH DISTRICT CONFIRMS THAT SUBSTANTIAL EVIDENCE STANDARD OF REVIEW APPLIES TO AGENCY’S DETERMINATION OF WHETHER A RESOURCE IS HISTORICAL

Monday, August 22nd, 2016

In 2013, the City of San Jose proposed a project to demolish the Willow Glen Railroad Trestle (Trestle) and replace it with a new steel truss pedestrian bridge that would present less of a fire hazard and have a lower maintenance cost. The pedestrian bridge would service the City’s trail system. The Trestle was built in 1922, but according to two experts, the design was based on standard plans, parts of the Trestle were likely replaced during the last 30 to 40 years, and it was not associated with any important events or persons. Based on these reports, the City found that the Trestle was not an “historical resources” and therefore the project would not have a significant effect on the environment. Accordingly, the City adopted a mitigated negative declaration under CEQA.

Friends of the Willow Glen Trestle challenged the City’s approval of the project and argued that there was a fair argument that the Trestle was an historical resource. The trial court agreed and ordered the City to prepare an environmental impact report (EIR). In a published decision, Friends of the Willow Glen Trestle v. City of San Jose, 2016 Cal. App. LEXIS 676, the Sixth Appellate District determined that the correct standard of review is substantial evidence, not fair argument.

The crux of the opinion concerns the interpretation of Public Resources Code section 21084.1, which states that a project may have a significant effect on the environment if it “may cause a substantial adverse change in the significance of an historical resource.” A resource may be presumed to be historically or culturally significant if it is: (1) listed in, or determined to be eligible for listing in, the California Register of Historical Resources; (2) included in a local register of historical resources; or (3) deemed significant pursuant to criteria set forth in subdivision (g) of Section 5024.1. Even if a resource does not meet one of the above three standards, a lead agency is not precluded from “determining whether the resource may be an historical resource for purposes of this section.” This has been called the “discretionary” category of historical resources by the courts. In this case, the parties agreed that only the discretionary category could apply to the Trestle.

Pursuant to Public Resources Code section 21084.1, when a resource is presumed to be historically significant, a lead agency may still find that the resource is not historical if that decision is supported by “the preponderance of the evidence.” The Court held that this language necessarily establishes that the correct standard of review for a presumptively historical resource is substantial evidence. The Court then concluded that it would be inconceivable that the agency’s decision under the “discretionary” category would be subject to a less deferential standard of review than its decision regarding a resource that is presumed historical. This conclusion is supported by CEQA Guidelines section 15064.5, subdivision (a)(3) and two other appellate cases—Valley Advocates v. City of Fresno (2008) 160 Cal.App.4th 1039 and Citizens for Restoration of L Street v. City of Fresno (2014) 229 Cal.App.4th 340.  Thus, the Court concluded the trial court applied the wrong standard of review; the City’s conclusion that the Trestle is not historic is subject to the substantial evidence, and not the fair argument, standard of review.  The Court remanded for the trial court to apply the correct standard of review.

A remand to resolve additional substantive matters in CEQA litigation can take several years, particularly if a new appeal is filed after the remand. In enacting CEQA, the Legislature urged that CEQA review be completed “in the most efficient, expeditious manner in order to conserve the available financial, governmental, physical, and social resources with the objective that those resources may be better applied toward the mitigation of actual significant effects on the environment.” (Pub. Resources Code, § 21003, subd. (f).)  In certain circumstances, the Legislature also directed that “any court” reviewing a CEQA challenge “specifically address each of the alleged grounds for noncompliance” raised by a petitioner. (Pub. Resources Code, § 21005, subd. (c).)  Therefore, controlling statutes allow appellate courts to fully resolve the merits of a CEQA challenge.  By exercising such discretion courts can achieve CEQA’s objective to provide for expedited judicial review.

Key Point: The lead agency’s determination under section 21084.1 that a resource is or is not historical is subject to the substantial evidence standard of review.

THE ROSE FOUNDATION RELEASES REPORT ON CEQA’S ECONOMIC IMPACT

Thursday, August 18th, 2016

CEQA has been in effect since 1970, when it was signed into law by Governor Ronald Regan. Over the past 46 years, there have been many debates about the effect CEQA has on the California economy. In response to recent analyses that link CEQA to economic challenges in the State, the Rose Foundation for Communities and the Environment released a report on August 15, 2016 entitled “CEQA in the 21st Century: Environmental Quality, Economic Prosperity, and Sustainable Development in California.”

Key findings of the report include:

  • Since 2002, the state has averaged 195 CEQA lawsuits a year.
  • Lawsuits were filed for less than 1 out of every 100 projects reviewed under CEQA that were not considered exempt.
  • In San Francisco, only 14 environmental impact reports (EIRs) were prepared in the past three years (less than 5 EIRs per year).
  • Because California consistently ranks among the top states in terms of economic prosperity and development, the report concludes that the State’s environmental protections, including CEQA, have not constrained growth.

The full report can be accessed at: https://www.pcl.org/media/CEQA-in-the-21st-Century.pdf

IN UNPUBLISHED OPINION, COURT OF APPEAL UPHOLDS CEQA REVIEW FOR FRESNO’S FULTON MALL PROJECT

Monday, August 15th, 2016

The City of Fresno’s Fulton Street lies in the heart of its downtown and was once a bustling commerce center lined with numerous retailers. Suburbanization drew those retailers to the periphery of town in the 1950s. In the early 1960s, in an attempt to revive its urban core, the City turned Fulton Street into Fulton Mall, a 6-block pedestrian mall. Fulton Mall featured planting beds with shade trees, shrubs, and flowers; water fountains, pools, and streams; shade pavilions, siting areas, and playgrounds; and sculptures and mosaic artwork. Unfortunately, interest in Fulton Mall declined by the 1970s and it soon became plagued by high crime rates, deteriorating physical conditions, and low lease rates.

In 2011, the City of Fresno released a draft Fulton Corridor Specific Plan that identified three ways of improving Fulton Mall: (1) reintroduce two-way car traffic throughout the Mall; (2) reintroduce two-way car traffic but keep selected original features of the Mall; or (3) keep the Mall as pedestrian only and invest funding in restoring and repairing the original features. Option 2 was established as the City’s preference. Thereafter, the City began applying for (and receiving) various state and federal funds to put toward the Fulton Mall project (Project). In 2013, the City began preparing the environmental impact report (EIR) for the Project in compliance with CEQA. An initial study released with the Notice of Preparation determined that the Project may have significant impacts on aesthetics and historical resources, but would not significantly impact air quality, greenhouse gas emissions, parks, traffic, and utilities.

The City certified the final EIR in early 2014 and selected Option 1 as the preferred alternative due to its “straight street” design and the increased number of on-street parking spaces. The Downtown Fresno Coalition (Coalition) filed a petition for writ of mandate, alleging that the City pre-committed to Option 1 through its federal funding agreements and that the EIR inadequately analyzed certain impacts.  In Downtown Fresno Coalition v. City of Fresno, 2106 Cal. App. Unpub. LEXIS 5212, the Fifth District Court of Appeal rejected these claims and found that the City had complied with CEQA.

The Court first held that the Coalition was not collaterally estopped from bringing the CEQA suit even though it had previously brought a suit under the National Environmental Policy Act (NEPA) in federal court against the City, the Federal Highway Administration, Caltrans, and the federal Department of Transportation regarding federal funding that was given to the project without a NEPA review. The Court found the issues in the two cases to be distinct, despite the City’s arguments about the similarities between CEQA and NEPA.

Next, the Court addressed the Coalition’s argument that the federal funding had effectively precluded consideration of an alternative that featured full or partial restoration of the Mall. The Court noted that the grant funding was conditional on full compliance with CEQA and found that the City had fully complied by with the Supreme Court’s requirements in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 by not precluding consideration of any project alternative or mitigation.

Finally, the Court considered the Coalition’s claim that the EIR did not present a legally adequate analysis of the Project’s effects on certain resources. The City had narrowed the scope of the EIR to focus on the Project’s potentially significant effects on short-term visual character and historical resources. The Court found the analysis sufficient because impacts to air quality, greenhouse gas emissions, parks, traffic and utilities were determined to be less than significant; moreover, the initial study had presented extensive rational for that determination.  The Court concluded that the City had no legal obligation to analyze less than significant impacts in the EIR in the manner urged by Coalition.

COURT OF APPEAL UPHOLDS USE OF CLASS 3 CAT EX FOR CAR WASH/COFFEE SHOP PROJECT IN REDONDO BEACH

Tuesday, August 2nd, 2016

The City of Redondo Beach approved a conditional use permit (“CUP”) for the construction of a 4,080 square foot combination car wash and coffee shop in a commercial zone that borders a residential area (“Project”). The City found the Project exempt from CEQA under the Class 3 categorical exemption for up to four “new, small facilities or structures” that are under 10,000 square feet in an urbanized area. (CEQA Guidelines, § 15303.) Petitioners, who own homes adjacent to the proposed development, filed a petition for writ of mandate challenging the City’s use of a CEQA exemption and issuance of the CUP. In Walters v. City of Redondo Beach, 2016 Cal. App. LEXIS 605, the Court of Appeal upheld the trial court’s denial of Petitioners’ petition for writ of mandate.

Petitioners argued that a car wash did not fit within the definition of commercial buildings because it involved the installation of industrial equipment. The court noted that the definition of commercial buildings is not limited to the listed examples of a store, motel, office, or restaurant because it also includes “similar structures.” The court held that the type of business and the equipment that would be used for the Project was not substantially different from the listed examples.

The court similarly rejected Petitioners argument that the Project’s square footage was too large for the exemption. Citing Fairbank v. City of Mill Valley (1999) 75 Cal.App.4th 1243, the court held that the exemption covers one to four commercial buildings on the parcel as long as the total floor area of the building(s) does not exceed 10,000 square feet.

A Class 3 exemption can only be used if the project does not involve the use of significant amounts of hazardous substances and the surrounding area is not environmentally sensitive. Because Petitioners could not show that the surrounding area was considered environmentally sensitive or that the business used hazardous chemicals, the court determined that the Project fell within the Class 3 categorical exemption.

Next, the court considered whether the unusual circumstance exception precluded the use of a categorical exemption. As stated by the Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, there are two alternative ways to determine whether the unusual circumstances exception to a categorical exemption applies to a project: (1) by proving both unusual circumstances and a reasonable probability of a significant environmental effect that is due to those circumstances; or (2) by proving that the project will have a significant environmental effect.

Applying the first alternative, the court found that there was nothing particularly unusual about the Project and noted the parcel’s past use as a car wash from 1965 until 2001. While Petitioners pointed to the loud air blowers and extensive activities that are conducted outside of the business’ structures, the court held that the general effects of operating a business cannot serve as unusual circumstances. Nor did the court find it unusual that the business was located near a residential neighborhood.

Under the second Berkeley Hillside alternative, the court considered whether Petitioners had put forward sufficient evidence that the project will have a significant environmental effect due to noise and traffic effects. The court concluded that Petitioners had not, pointing to the fact that the City had conditioned the project on compliance with the applicable noise standards  and that the City’s traffic expert had concluded that the nearby intersection currently operates as LOS A and would continue to do so after the Project.  The court noted that Petitioners had erred by focusing on whether the Project may have a significant effect, which was not enough to establish that the Project will have a significant effect. Accordingly, the court concluded that the exception did not apply and that the City properly determined that the Project is categorically exempt.

Key Point: A Class 3 categorical exemption may apply to a commercial project when the commercial business is similar to a store, motel, office, or restaurant.

COURT OF APPEAL EXTENDS CEQA HOLDING ON RECORD PREPARATION LABOR COSTS TO OTHER ADMINISTRATIVE RECORD CASES

Monday, August 1st, 2016

After successfully defending a challenge to a resolution granting nonconforming use status to a mining operation in Santa Clara County, Respondent’s attorney filed a motion to recover costs associated with the preparation of the administrative record. This included the labor costs for the attorneys and paralegals who had assisted with the preparation of the large and complex record. Respondent was not otherwise entitled to recover attorney’s fees, and Petitioner argued that to grant these fees in the context of labor costs would be the equivalent of granting attorney’s fees.

While the trial court found that there was good reason to grant the costs due to the complexity of the record, it ultimately denied the motion because there was no appellate legal authority on point. In No Toxic Air v. Lehigh Southwest Cement Co., 2016 Cal. App. LEXIS 624, the Court of Appeal provided that authority by extending CEQA precedent to other proceedings that involve an administrative record.

In the CEQA context, this issue was definitively decided in Otay Ranch, L.P. v. County of San Diego (2014) 230 Cal.App.4th 60,where the court ruled that the prevailing party could recover the labor costs of attorneys and paralegals in the creation of the administrative record as long as the labor costs were reasonably and necessarily incurred. To hold otherwise, the court stated, would undermine the statutory policy of shifting the costs and expenses of preparing the administrative record.

Here, the Sixth District held that the same reasoning used in Otay Ranch applied in other cases in which an administrative record was prepared. Accordingly, the Court held that labor costs for attorneys and paralegals to prepare the administrative record are recoverable as expenses under Code of Civil Procedure, section 1094.5, subdivision (a).

Key Point: A prevailing party can recover the labor costs of attorneys and paralegals in the creation of the administrative record, even in non-CEQA administrative mandamus cases, as long as the labor costs were reasonably and necessarily incurred.