The court reversed the trial court’s decision in part, agreeing with the City of San Diego that substantial evidence supported the finding that denial of the project would preclude “reasonable beneficial use” of the property. The trial court, finding no such evidence, had not reached the question of whether evidence supported the finding that the project would not adversely affect the applicable land use plan. The Court of Appeal agreed with the City’s position and answered that question in the affirmative. Save Our Heritage Organisation v. City of San Diego (May 28, 2015), Case No. D063992.

The project concerned Balboa Park in San Diego, which in the past had hosted various expositions. During those events, a bridge and complex had been constructed that were later declared a national historic landmark and a national historic landmark district, respectively. The project consisted of closing certain parts of the area to vehicular traffic and restricting those spaces to pedestrian uses, and resurfacing and landscaping those areas in a style evocative of the original design. An increase in parking supply was also proposed. The EIR concluded that, though there would be some significant impacts on historical resources, the project as a whole would primarily benefit those resources, outweighing any negative impacts. Save Our Heritage Organisation (SOHO) filed suit, asserting violations of CEQA and the city’s Municipal Code, and contesting the paid parking. The court below rejected the CEQA and parking challenges, but agreed with the Municipal Code challenge.

The case presented a question of first impression: the proper interpretation of San Diego Municipal Code section 126.0504, subdivision (i)(3)’s requirement that the City only approve projects where it finds, for those projects with impacts on historical resources, that there would be no reasonable beneficial use of the property without the project. Pursuant to this ordinance, the city made several findings to satisfy the “no reasonable beneficial use” requirement, namely, that denial of the project would result in traffic congestion and conflicts between pedestrians and vehicles, and would continue to burden the users of the complex. Furthermore, project denial would prevent the city from recapturing those areas currently being claimed and used by vehicles as thoroughfares and parking lots and reclaiming those lands for parklands and pedestrian spaces.

SOHO contended that so long as it introduced evidence the property would be put to some beneficial use by the owner without the proposed project, it would succeed on the Municipal Code claim. The court disagreed. It found the word “reasonable” preceding “beneficial use” vests discretion in the decisionmaker; even if use of the property absent the project were deemed beneficial, the decisionmaker could find that it was not a reasonable use, and thus, still validly approve the project. The issue, in other words, was not whether there was evidence from which a reasonable person could have concluded that the property had some beneficial use in its unmodified condition, but rather whether substantial evidence supported the decisionmaker’s determination that the property’s use in its unmodified condition was not reasonable under all circumstances.

The court held there was substantial evidence supporting the city’s finding that, without the project, current pedestrian and vehicle conflicts, and resultant safety hazards, would continue. The fact that millions of visitors to the complex chose to visit, notwithstanding the hardships to them posed by the continued vehicular use, did not preclude the city from finding the project was appropriate, and that continued automobile use of the complex was not a reasonably beneficial use of the complex.

The court rejected SOHO’s alternative argument that there was no substantial evidence to support the additional finding ordinarily required under the municipal code when a project would make a substantial alteration of a designated historical resource: that denial of the project would make it infeasible to derive a reasonable economic return from the property. That argument was not preserved below.

SOHO also alleged there was no substantial evidence to support the city’s required findings that approval of the project would not adversely affect the city’s applicable land use plans. Essentially, SOHO asserted that, as long as a project opponent can identify a stated goal or policy within an applicable land use plan that would be adversely affected by a project, the decisionmaker is precluded from finding approval of a project would not adversely affect the applicable land use plans even if the decisionmaker found, based on substantial evidence, the proposed project would be consistent with the vast majority of the goals and policies of the applicable land use plans, as was the case here. SOHO cited no authority for that argument, and the court found none. The court noted that a project need not be in “perfect conformity” with every plan policy, but must instead harmonize with those policies on the whole. Inconsistencies will not nullify project approval so long as the project as a whole will not adversely affect the applicable land use plans.

Finally, regarding the paid parking issue, the court held that any purported limitations placed by an 1870 statute on the city’s power to manage its parklands was annulled by later legislative enactments.