CEQA requires that lead agencies undertake environmental review prior to approving a project. (See Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 (Save Tara); CEQA Guidelines, § 15004(a).) The issue addressed by Save Tara and its progeny is at what point a public agency’s support for a project ripens into commitment or approval. The CEQA Guidelines provide some guidance, defining “approval” as “the decision by a public agency which commits the agency to a definite course of action in regard to a project…” and noting that legislative action will often constitute approval. (CEQA Guidelines, § 15352(a).) When an agency effectively commits itself to a project prior to completing CEQA review, it violates CEQA’s procedural requirements. Because it is a procedural violation, it is subject to de novo review by courts. (Save Tara, supra, 45 Cal.4th at p. 131.)
Save Tara declined to offer a bright-line rule as to when an agency’s actions constitute approval, but instead held that a factual, totality of the circumstances analysis is required to determine if the action has “commit[ed] the agency to a definite course of action.” (Id. at p. 132 [agency’s action is to be “viewed in light of all the surrounding circumstances”]; id at p. 139 [quoting CEQA Guidelines, § 15352]; see also City of Irvine v. County of Orange (2013) 221 Cal.App.4th 846, 859 (City of Irvine).) Save Tara established what has been described as a “two-pronged test.” First, a court considers whether the agency has indicated it would perform environmental review before further commitment and, if so, whether it has nevertheless effectively circumscribed its discretion with respect to that environmental review. (See, e.g., Stand Tall on Principles v. Shasta Union High Sch. Dist. (1991) 235 Cal.App.3d 772, 777, 782-784 (STOP) [upholding selection of project site contingent upon completion of the EIR process and final approval]; Save Tara, supra, 45 Cal.4th at p. 134 [approving of the logic of STOP for land acquisition agreements].) Second, the court considers the extent to which the agency or its staff committed significant resources to shaping the project. (Save Tara, supra, 45 Cal.4th at p. 139, quoting Remy et al., Guide to CEQA: Cal. Environmental Quality Act (11th ed. 2006); Saltonstall v. City of Sacramento (2015) 234 Cal.App.4th 549, 567 (Saltonstall).)
Save Tara itself involved a City’s approval of the redevelopment of a historic house. The California Supreme Court held that the City had erroneously approved the project before environmental review because: (1) a clear preference for approval was displayed in a preliminary agreement with the developer; (2) a substantial loan was made to the developer that was not conditioned on subsequent CEQA compliance and did not require repayment if the City did not approve of the project; (3) the agreement implicitly restricted the City’s discretionary authority to reject the project on substantive environmental grounds; and (4) the City had proceeded with tenant relocation on the assumption the property would be redeveloped. (Save Tara, supra, 45 Cal.4th at pp. 140-142.)
Save Tara and its progeny provide some guidance on what facts or circumstances constitute improper commitment to a project prior to environmental review in various situations commonly encountered by public agencies, as described below.
Preliminary agreements, like the one in Save Tara, that condition future actions on subsequent CEQA compliance are sometimes permissible. Save Tara concluded that no “broad rule exists permitting EIR preparation to be postponed in all circumstances by use of a CEQA compliance condition.” (Save Tara, supra, 45 Cal.4th at p. 133.) However, the Court also declined to sanction the opposite view, which would hold any such agreement to be an approval. (Id. at pp. 136-137 [recognizing the practical necessity of tentative agreements prior to environmental review in order to seek financing for studies, grants or permits from other agencies, or test interest from potential tenants].) Absent a firm rule, courts applying Save Tara often point to conditions requiring subsequent CEQA compliance in preliminary agreements as among the reasons why an agency has not committed itself to a project. (See, e.g., Bridges v. Mt. San Jacinto Community College Dist. (2017) 14 Cal.App.5th 104, 121 (Bridges); see also Sustainable Transportation Advocates of Santa Barbara v. Santa Barbara County Assn. of Governments (2009) 179 Cal.App.4th 113, 121-122 (Sustainable Transportation Advocates).) In 2018, the CEQA Guidelines were updated to explicitly state that preliminary agreements should be conditioned on CEQA compliance and should exclude terms that would commit the agency to the project or restrict its discretion. (See CEQA Guidelines, § 15004 (b)(4)(A)-(D).)
Courts also consider whether the preliminary agreement, or other agency action at issue, determines the specifics of the project. In complex preliminary agreements for large projects like stadiums, nonbinding term sheets have been upheld when they have left open the details of the project to be determined or finalized subsequently. (See Saltonstall, supra, 234 Cal.App.4th at p. 570; Cedar Fair, L.P. v. City of Santa Clara (2011) 194 Cal.App.4th 1150, 1170-1171 (Cedar Fair).) Likewise, when an agency action anticipates future projects that will undergo CEQA review but the specifics of those future projects are not determined by current action, courts may find the agency has not pre-approved them. (See Bridges, supra, 14 Cal.App.5th at p. 122; Sustainable Transportation Advocates, supra, 179 Cal.App.4th 113, 120; City of Santee v. County of San Diego (2010) 186 Cal.App.4th 55, 65-67.) However, when an agreement does solidify details, it may be considered a project approval. (Save Tara, supra, 45 Cal.4th at p. 135; RiverWatch v. Olivenhain Municipal Water Dist. (2009) 170 Cal.App.4th 1186, 1212.)
Land acquisition agreements receive somewhat special treatment in these cases, as the CEQA Guidelines specifically address them. The Guidelines state that an agency “may enter into land acquisition agreements when the agency has conditioned the agency’s future use of the site on CEQA compliance,” despite the fact that a formal decision to proceed with the use of the site would constitute approval. (CEQA Guidelines, § 15004(b)(2)(A).) Accordingly, courts have upheld pre-CEQA review land acquisition agreements, and extended the concept to agencies’ exercise of eminent domain to acquire property, so long as the agency has not committed itself to a definite course of action regarding future use of the property. (See Bridges, supra, 14 Cal.App.5th at p. 119-122 [land acquisition agreement upheld]; Saltonstall, supra, 234 Cal.App.4th at p. 570 [pre-approval exercise of eminent domain for stadium upheld]; see also Golden Gate Land Holdings LLC v. East Bay Regional Park Dist. (2013) 215 Cal.App.4th 353, 379-380 [upholding trial court’s decision to allow City to proceed with eminent domain action despite holding that it had also erroneously pre-approved the project for which the property was to be acquired].)
Public Agency Support or Sponsorship of Project
Courts are often asked to evaluate an agency’s overt signals of support and advocacy for a particular project. Case law emphasizes that mere support for a project does not itself constitute a commitment. (See City of Irvine, supra, 221 Cal.App.4th at p. 859; Cedar Fair, supra, 194 Cal.App.4th at p. 1173.) Even financial support or investment may not be determinative. (See City of Irvine, supra, 221 Cal.App.4th at pp. 864-865; Cedar Fair, supra, 194 Cal.App.4th at pp. 1172-1173; Neighbors for Fair Planning v. City and County of San Francisco (2013) 217 Cal.App.4th 540, 552-554; California Oak Foundation v. Regents of University of California (2010) 188 Cal.App.4th 277, 286-288.) However, Save Tara cautioned that, if an agency “increased the political stakes by publicly defending [a project] over objections, putting its official weight behind it,” then it may have, as a practical matter, committed itself to the project. (Save Tara, supra, 45 Cal.4th at p. 135.)
The Save Tara prohibition also applies to public projects, for which the agency itself is the proponent. Even in such cases, where the agency itself drives the project forward, its support alone does not constitute commitment. (Save Tara, supra, 45 Cal.4th at pp. 136-137; see, e.g., Bridges, supra, 14 Cal.App.5th at pp. 119-122 [a community college’s PowerPoint presentation outlining preliminary plans for the location of a future campus was “too vague and generalized to trigger meaningful environmental review.”].) When the public project is the adoption of regulations, courts look at the rulemaking process to determine “whether the agency has taken any steps foreclosing alternatives, including that of not going forward, or has otherwise created bureaucratic or financial momentum sufficient to incentivize ignoring environmental concerns.” (John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd. (2018) 20 Cal.App.5th 77, 100 (John R. Lawson Rock & Oil).) Both the terms of resolutions adopted and the circumstances surrounding those adoptions are relevant. (POET, LLC v. State Air Resources Bd. (2013) 218 Cal.App.4th 681, 722.) While an agency’s intent and preliminary actions to adopt regulatory modifications may not alone constitute approval, when agency staff issue a public advisory confirming such an intent and suspend enforcement of the currently controlling regulations, this constitutes an approval for purposes of CEQA. (See John R. Lawson Rock & Oil, supra, 20 Cal.App.5th at pp. 98-101.)
In sum, agencies must take care in their conduct toward yet-to-be-approved projects. There is some degree of leeway for an agency to offer support (financial or political) and to enter into preliminary agreements conditioned upon subsequent CEQA compliance. However, agencies may not commit to approval of the project or any particular aspect of the project prior to CEQA compliance. Any action by the lead agency which forecloses potential project alternatives, mitigation measures, or project denial, constitutes project approval for purposes of CEQA.
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