Archives: September 2015

First District Rules that State Lands Commission’s Approval of a Land Exchange Agreement Not Exempt from CEQA; Exhaustion Requirement Did Not Apply.

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The First District, in Defend Our Waterfront v. California State Lands Commission (Sept. 17, 2015) ___Cal.App.4th___, Case Nos. A1496 & 141697,  upheld the trial court’s grant of a petition for writ of mandate challenging a land exchange between the City and County of San Francisco and the project applicants for the 8 Washington Street Project.

The 8 Washington Street Project is a plan to develop waterfront land near the San Francisco Ferry Building. The project site includes the “Seawall Lot 351” parcel, which is currently owned by the City and County of San Francisco through its Port Commission (the City), subject to the public trust for uses benefiting the people of California. The public trust restriction on the use of the Seawall Lot 351 is inconsistent with the development proposed by the 8 Washington Project. To remove this inconsistency, the applicants and the City proposed to transfer Seawall Lot 351 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 (SLC). In August 2012, SLC approved the land exchange agreement, finding, among other things, that the agreement is a statutorily exempt activity under CEQA.

Defend Our Waterfront (DOW), argued that SLC abused its discretion in determining that the land exchange agreement was exempt from CEQA. SLC, the City, and the project applicants argued that DOW had not exhausted its administrative remedies on this issue. The trial court held the exhaustion requirement was inapplicable because there was no effective notice of a public hearing on a CEQA matter prior to the SLC ruling. The Court of Appeal affirmed. The appellate court explained that the only notice provided by the agenda for the SLC meeting was that the SLC was considering a land exchange agreement proposed by the City. The agenda made no reference to CEQA.

The applicants argued that although the agenda itself did not specify that staff considered the project exempt from CEQA, the staff report, which was available online through a link provided in the agenda, set forth this information. The Court of Appeal held, however, that the staff report did not provide legally sufficient public notice of SLC’s CEQA decision for two reasons. First, someone would have to take the additional step of clicking on the agenda’s link to the staff report to learn that a CEQA issue would be decided at the SLC meeting. Second, the hyperlink to the staff report was added after the 10-day notice requirement under Government Code section 11125, subdivision (a), so could not provide adequate notice.

The applicants alternatively argued that DOW had actual notice that the SLC was going to consider the CEQA exemption at the meeting. To support this argument, the applicants pointed to an e-mail from a member of DOW that referred to the staff report. The e-mail, however, did not mention CEQA, so the court refused to assume that the e-mail’s author had read the section of the staff report regarding the CEQA exemption. Furthermore, even if the e-mail’s author had read the entire report, the staff report still did not provide adequate notice because it was not provided until after the 10-day notice period, discussed above.

Moving to the CEQA issue, the Court of Appeal agreed with the trial court that the land exchange agreement was not exempt from CEQA review. SLC had found that land exchange agreement was statutorily exempt under Public Resources Code section 21080.11, which states: “This division shall not apply to settlements of title and boundary problems by the State Lands Commission and to exchanges or leases in connections with those or leases in connection with those settlements.” Applying principles of statutory construction, the Court of Appeal held that the statutory exemption for “settlements and title boundary problems” did not apply as a matter of law because there was neither a title or a boundary dispute nor settlement of any such dispute relating to Seawall Lot 351. Instead, the express purpose of the exchange is to further the 8 Washington Street Project. In reaching this conclusion, the Court of Appeal declined to defer to the public agencies’ interpretation of Public Resources Code section 21080.11.

RMM Attorneys Whit Manley, Chip Wilkins, and Chris Stiles represented Real Parties in Interest in the matter.

Fourth District Finds School District’s Determination that Exemption Applied to School Closures was Not Supported by Substantial Evidence

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Save Our Schools v. Barstow Unified School District Board of Education (Sept. 2, 2015) ___ Cal.App.4th ___, Case No. E060759.

Barstow Unified School District approved closing two of its elementary schools and transferring those students to other “receptor” schools in the District, in order to meet its financial obligations in future school years. The Board estimated the closures would save the District $600,000 annually. The District determined the closures and transfers were exempt from CEQA because they fell within the categorical exemption for “minor additions” to schools, pursuant to Public Resources Code section 21080.18 and CEQA Guidelines section 15314. The court found the District could not have properly determined an exemption applied because it did not have the necessary statistics before it when making that decision.

Under Guidelines section 15314, school closures and student transfers resulting in “minor additions to existing schools” are categorically exempt from CEQA review where the transfer of students does not increase “original student capacity” of a receptor school by (1) more than 25% or (2) ten classrooms, whichever is less. The court noted that the record did not contain figures for the “original student capacity” or total enrollment before transfers at any of the receptor schools. Thus, it was impossible to determine whether the transfers would increase that capacity beyond the levels allowed under the exemption.

At the meeting to address the proposed closures and transfers, the District board members and superintendent assumed there would be more than sufficient enrollment capacity at the receptor schools to absorb the transfers, but the board did not indicate that it would limit the number of transfers in order to keep enrollment below levels allowed by the exemption.

The court directed the District to void its determination that the closures and transfers were exempt, and reconsider the applicability of the minor additions exemption or any other exemption. Though the schools had already been closed, the court found the case was not moot, as the District (should it find the exemption did not apply) could either reopen the schools or take steps to mitigate any adverse impacts of the closures and transfers.