Tag: Categorical Exemption

SECOND DISTRICT HOLDS NOISE FROM ROOFTOP DECKS IS NOT A SIGNIFICANT IMPACT PRECLUDING USE OF THE CLASS 32 EXEMPTION FOR MULTIFAMILY RESIDENTIAL PROJECT, BUT CITY ERRED BY FAILING TO EVALUATE THE PROJECT’S CONSISTENCY WITH THE APPLICABLE DEVELOPMENT PLAN

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In West Adams Heritage Association v. City of Los Angeles (2024) __ Cal.App.5th __, the Second District Court of Appeal considered challenges to a determination by the City of Los Angeles that a proposed multifamily residential development was categorically exempt from CEQA under the Class 32 exemption for urban in-fill development projects. In the published portion of its opinion, the court held that (1) rooftop noise generated by the Project was not a significant environmental impact precluding the City from relying on the Class 32 exemption, but (2) the City improperly relied on the Class 32 exemption without first finding that the Project was consistent with the applicable redevelopment plan.

Background

Project approval and administrative appeals

The Project applicants proposed to demolish an existing parking lot and two-story building on a 2.8-acre lot and replace them with a seven-building, 102-unit apartment complex with outdoor amenity spaces on the building rooftops. The Project site is less than a mile from the University of Southern California campus and is surrounded by residential, commercial, and educational buildings.

In May 2019, a City zoning administrator approved a conditional use permit and a density bonus for the Project. The zoning administrator also issued a determination letter finding that the Class 32 exemption applied to the Project and that no exceptions to the exemption applied. At the same time, however, the zoning administrator denied a site plan review, concluding that the original Project proposal was not compatible with the surrounding uses due to its size and potential aesthetic, architectural, and noise issues. The Project applicants submitted a revised Project proposal that resolved the zoning administrator’s concerns, and the City Planning Commission overturned the site plan review denial.

Meanwhile, a Project opponent appealed the zoning administrator’s Project approvals and the determination that the Project was categorically exempt from CEQA to the Planning Commission. The Planning Commission denied the appeal in October 2019, and the Project opponent appealed to the City Council.

In November 2019, while that appeal was pending, the City Council passed an ordinance that, among other things, expressly incorporated the land use and development regulations of the local Exposition/University Park Redevelopment Plan (Redevelopment Plan) into the zoning requirements applicable to the Project site (Ordinance 186325). Ordinance 186325 provides that, to the extent the regulations in the Redevelopment Plan (which was adopted in 1966 and last updated in 1989) conflict with the City’s zoning laws, the Redevelopment Plan generally controls.

In December 2019, the Planning Commission issued a corrected letter of determination imposing new conditions of approval on the Project. Among other things, those conditions effectively required a determination that the Project was consistent with the Redevelopment Plan before the City would issue a building permit for the Project.

The City Council denied the Project opponent’s second administrative appeal in February 2020.

Litigation history

Petitioners West Adams Heritage Association and Adams Severance Coalition filed a petition for writ of mandate alleging that the City improperly found the Project to be categorically exempt from CEQA. The trial court denied the petition and Petitioners appealed. In an unpublished opinion filed in August 2023, the Second District reversed, finding that the Project’s potential noise impacts rendered the Class 32 exemption inapplicable.

In September 2023, the Legislature adopted Assembly Bill (AB) 1307. AB 1307 amended CEQA to provide that, for residential projects, “the effects of noise generated by project occupants and their guests on human beings is not a significant effect on the environment.”

The Supreme Court granted review of the Second District’s original decision in November 2023. In July 2024, shortly after issuing its decision in Make UC a Good Neighbor v. Regents of University of California (2024) 16 Cal.5th 43 (MUCAGN II), the Supreme Court transferred the case back to the Second District with instructions to vacate its August 2023 decision and reconsider the matter in light of AB 1307 and MUCAGN II.

Court of Appeal’s Decision

Noise impacts

The Second District held that its original decision could no longer stand after AB 1307 and MUCAGN II. The court explained that under those authorities, any effects of noise from the Project’s rooftop spaces on neighboring uses could not be significant impacts for purposes of CEQA. Relying on the plain language of AB 1307 and MUCAGN II, as well as the legislative history and intent of AB 1307, the court rejected Petitioners’ arguments that the Project was distinguishable from the project at issue in MUCAGN II due to its proposed “rooftop decks that could have amplified music” and the fact that it was proposed by a private developer instead of a university.

The court also rejected Petitioners’ argument that AB 1307 does not apply to CEQA exemptions. The court pointed out that the statutory language expressly applies to CEQA generally and is not limited to any particular subset of CEQA’s provisions. Additionally, while the court acknowledged that AB 1307 did not amend the Class 32 exemption—which requires that covered projects “would not result in any significant effects relating to … noise”—the court explained that AB 1307 conclusively established that certain types of noise could not “result in any significant effects” that would render a residential project ineligible for the Class 32 exemption. Similarly, the court reasoned that noise generated by Project occupants was not a significant impact for purposes of applying the “unusual circumstances” exception to the Class 32 exemption.

Redevelopment Plan consistency

The court nevertheless held that the City improperly relied on the Class 32 exemption—which also requires covered projects to be consistent with the applicable zoning—without first evaluating the Project’s consistency with the Redevelopment Plan. The court explained that under Ordinance 186325, the Redevelopment Plan was part of the applicable zoning with which the Project was required to be consistent to qualify for the Class 32 exemption.

The City and the Project applicants (together, Respondents) argued that Ordinance 186325, which was enacted after the City first approved the Class 32 exemption, did not apply to the Project approvals, but the court disagreed. The court explained that the new law applied retroactively to the Project because (1) MUCAGN II instructed courts to apply current laws in mandamus proceedings, (2) the Project approvals were not final when Ordinance 186325 was passed, as an appeal to the City Council was still pending, (3) the Project applicants had not yet obtained a building permit or other entitlement that might confer a vested right to complete the Project, and (4) Respondents did not cite any local law otherwise precluding the application of new zoning laws to the pending Project approvals.

The court also rejected Respondents’ argument that the City adequately addressed Redevelopment Plan consistency by effectively requiring the Project applicant to obtain a consistency determination before the City would issue a building permit. Respondents cited that requirement as substantial evidence supporting the City’s reliance on the Class 32 exemption; however, the court explained that no such evidence could exist absent an actual determination by the City.

Notably, in response to Petitioners’ argument that the Project’s proposed density was already inconsistent with the Redevelopment Plan, the court clarified that the Redevelopment Plan’s density provisions did not apply to the Project. The court explained that, under the current state density bonus law, density bonuses are calculated using the “greatest number of units allowed under the zoning ordinance, specific plan, or land use element of the general plan” at the time the Project application was submitted. But as the court pointed out, regardless of whether or not the Redevelopment Plan’s density provisions applied when the Project application was submitted, the Redevelopment Plan sets a lower maximum density for the Project site than the City’s generally applicable zoning laws; thus, the court concluded that the City properly calculated the density bonus using the latter. Finally, the court noted that, to the extent the Redevelopment Plan imposes conditions on density bonuses beyond those required under the state density bonus law, state law preempts the Redevelopment Plan.

– Louisa I. Rogers

FOURTH DISTRICT HOLDS FAIR ARGUMENT STANDARD IS INAPPLICABLE TO CLAIM THAT HISTORICAL RESOURCE EXCEPTION PRECLUDES HISTORICAL RESOURCE CATEGORICAL CEQA EXEMPTION

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In Historic Architecture Alliance v. City of Laguna Beach (2023) 96 Cal.App.5th 186, the City of Laguna Beach approved a project to renovate and expand a historic single-family home. In doing so, the City determined that the project was categorically exempt from CEQA under the Class 31 historical resource exemption. Petitioners, the Historic Architecture Alliance and the Laguna Beach Historic Preservation Coalition (collectively, “Alliance”), alleged that the City improperly relied on the Class 31 exemption and that the historical resource exception to the categorical CEQA exemptions applied. Affirming the trial court’s denial of the petition, the Fourth District Court of Appeal held that the application of both the Class 31 exemption and the historical resources exception presented the City with the same factual issue, and that the City’s finding on this issue was supported by substantial evidence.

Background

In 2017, the owners of a historic single-family residence submitted their initial application and plans to the City to renovate and add on to the house. The City’s historical resources consultant reviewed the initial plans for compliance with the Secretary of the Interior’s Standards for the Treatment of Historic Properties (“Standards”), which provide guidance for achieving long-term preservation of historical features and materials.

When the consultant concluded that the initial plans did not fully comply with the Standards, the homeowners and their architect revised the plans and worked with the City to incorporate recommendations made by both the consultant and the City’s Heritage Committee and to ensure the project’s conformance to the Standards.

In 2020, the City approved the project. The City determined that the project satisfied the Standards and thus qualified for the Class 31 categorical CEQA exemption, which applies to historical resource renovation projects that are consistent with the Standards.

In 2021, Alliance filed a writ petition. The trial court denied the petition, finding that the City’s decision was supported by substantial evidence and that Alliance had not met its burden of demonstrating that an exception precluded reliance on the Class 31 exemption. Alliance appealed.

Court of Appeal’s Decision

Class 31 exemption

The court upheld the City’s reliance on the Class 31 exemption. The court explained that the determination that a categorical CEQA exemption applies is a factual one that is subject to review under the deferential substantial evidence standard. Pointing to the numerous rounds of review and revisions to bring the plans into compliance with the Standards and the City’s recommendations, the court concluded that the administrative record contained substantial evidence supporting the City’s determination that the project complied with the Standards, and therefore fell within the Class 31 exemption.

The court rejected Alliance’s argument that, by requiring various revisions to the project, the City was imposing mitigation measures to “shoehorn” the project into the Class 31 exemption. While the court acknowledged the general legal principle that mitigation measures may not be used to support categorical exemption, the court concluded that the plan revisions to bring the project into compliance with the Standards were not mitigation measures.

Historical resources exception

The court also rejected Alliance’s argument that the historical resources exception—which precludes reliance on a categorical CEQA exemption for projects “which may cause a substantial adverse change in the significance of a historical resource”—applied to the project. The court held that when applying the historical resource exception to the Class 31 exemption, the fair argument standard does not apply. Citing CEQA Guidelines section 15064.5(b)(3), which provides that projects that comply with the Standards “shall be considered as mitigated to a level of less than significant impact on the historical resources,” the court explained that “the decisive factor for the historical resource exception is the same as that for the [Class 31] exemption—whether the project complies with the [Standards].” Because an agency’s determination that the Class 31 exemption applies is reviewed for substantial evidence, the court reasoned that the exemption would be rendered “meaningless” if its underlying factual determination was then subject to the fair argument standard when applying the historical resources exception.

Thus, because the City’s determination that the Project satisfied the Standards was supported by substantial evidence, so too were the City’s reliance on the Class 31 exemption and the City’s finding that the historical resources exception did not apply.

SECOND DISTRICT UPHOLDS CLASS 1 EXEMPTION FOR PROJECT TO EXPAND SINGLE-FAMILY HOME

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In Arcadians for Environmental Preservation v. City of Arcadia (2023) 88 Cal.App.5th 418, the Second District Court of Appeal upheld a finding by the City of Arcadia that a project to expand and add a second story to a single-family home was categorically exempt from CEQA. In doing so, the court concluded that petitioner failed to exhaust its administrative remedies regarding the scope of the exemption and failed to demonstrate that the city improperly relied on the exemption.

Background

Over a nearly two-year period beginning in June 2018, project applicant submitted, revised, and re-submitted an application to her homeowners’ association (HOA), seeking to expand the first floor of her single-family home and add a second floor. In April 2020, after the HOA’s architectural review board twice rejected her project, the applicant appealed the rejection to the city’s planning commission.

In May 2020, after a noticed hearing, the planning commission voted to conditionally approve the project, so long as various proposed changes were incorporated. The planning commission found that the project qualified for a Class 1 categorical exemption for modifications to existing structures.

The applicant’s neighbor appealed the planning commission’s approval to the city council. The city council upheld the planning commission’s decision.

The neighbor then formed the petitioner organization and filed a petition for writ of mandate challenging the city’s compliance with CEQA. Shortly thereafter, the city filed a Notice of Exemption for the project. The trial court denied the petition. Petitioner appealed.

Court of Appeal’s Decision

The court held that (1) petitioner failed to exhaust its administrative remedies on the issue of whether the project was within the scope of the Class 1 exemption, (2) the city did not abuse its discretion by impliedly determining that no exceptions to the categorical exemption applied, and (3) petitioner failed to demonstrate that the cumulative impacts exception precluded the city’s reliance on the Class 1 exemption.

Failure to Adequately Exhaust

Petitioner argued that the city erred in determining the Class 1 exemption applied and cited the neighbor’s comments during his administrative appeal as support that petitioner had adequately exhausted on this issue. The court disagreed, reasoning that the neighbor (or anyone else) failed to articulate why the Class 1 exemption was inapplicable. Instead, the court noted that the neighbor made only “general references to potential environmental impacts” that did not fairly apprise the city of petitioner’s specific objection that the exemption did not apply.

The court rejected petitioner’s argument that its member had impliedly objected to the city’s exemption finding by requesting an EIR. The court conceded that a request for an EIR suggests a belief that no exemption applies but explained that such a request nevertheless does not adequately notify the agency about the substance of the challenge.

The court acknowledged that CEQA’s exhaustion requirement may be excused if the agency provides no opportunity for public comment or fails to give notice; however, it concluded that petitioner’s failure to exhaust was not excused in this case. Although the city did not consistently identify the specific subdivision of the Class 1 exemption that it relied on, the court concluded that this discrepancy was immaterial.

Exceptions to the Exemption

The court next rejected petitioner’s argument that the city failed to proceed in a manner required by law by failing to expressly consider whether an exception precluded the application of the Class 1 exemption. The court explained that the city’s determination that the Class 1 exemption applied necessarily included an implied finding that no exception precluded its application. The court reasoned that, while the city could not ignore contrary record evidence when making its finding, the finding did not need to be express.

After noting that there was “some question” whether petitioner’s comments during the administrative appeal preserved an argument that the cumulative impacts exception precluded the application of the Class 1 exemption, the court concluded that, regardless, that the argument failed on its merits.

The court concluded that petitioner’s general reference to “cumulative environmental effects caused by multiple large-scale projects,” along with identification of various nearby projects, did not amount to evidence of actual impacts that would result from the project and other nearby projects. The court rejected petitioner’s evidence that the cumulative impacts exception applied as “pure speculation” that could not, without more, preclude application of the Class 1 exemption.

Louisa Rogers

FOURTH DISTRICT HOLDS SUPPLEMENTAL EIR MAY BE REQUIRED FOR PROPOSED OFFICE COMPLEX BECAUSE GHG EMISSIONS WERE NOT WITHIN THE SCOPE OF EARLIER PROGRAM EIR; DUE TO UNUSUAL CIRCUMSTANCES, PROJECT DID NOT QUALIFY FOR INFILL EXEMPTION

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In IBC Business Owners for Sensible Development v. City of Irvine (2023) 88 Cal.App.5th 100, the Fourth District Court of Appeal held that the City of Irvine improperly relied on a CEQA addendum in approving a new office complex – the Gemdale project – on a site that is part of a larger, previously approved business complex. The court found the City’s conclusion that the project would not cause a new or substantially more severe impact related to greenhouse gas emissions than previously identified in a 2010 program EIR (PEIR) prepared for the business complex was not supported by substantial evidence. Additionally, the court held that the unusual circumstances exception precluded the application of the Class 32 Infill Exemption.

Background

The Irvine Business Park was originally developed in the 1970s. It primarily includes office uses, but also includes substantial industrial and warehouse uses and some residential uses. In 2010, the City adopted a Vision Plan for the business park, amending the City’s general plan to establish a development guide for creating a mixed-use community within the park.

The City prepared the 2010 PEIR to assess the environmental effects of the Vision Plan. The 2010 PEIR included an analysis of the buildout of the entire Vision Plan and anticipated that, so long as future site-specific development projects within the business complex would not result in new environmental effects or require additional mitigation measures, the City would approve the future project without additional environmental review. Any future projects not consistent with the assumptions made in the 2010 PEIR’s analysis, however, would potentially require additional environmental review.

In July 2019, real party in interest, Gemdale 2400 Barranca Holdings, LLC (Gemdale), applied to the City to develop an over-five-story, 275,000-square-foot office complex on a site within the Irvine Business Complex currently developed with a two-story, 70,000 square-foot office complex. Although the 2010 PEIR had assumed the project site would not be developed further, the City determined the project was within the scope of the 2010 PEIR. The City prepared an addendum to the 2010 PEIR, concluding that the potentially significant impacts of the Gemdale project had been adequately analyzed in the 2010 PEIR and that those impacts would be avoided or mitigated pursuant to mitigation measures adopted for the Vision Plan. City staff also opined that the project might be exempt from CEQA, but the City did not expressly determine that the project was exempt and did not file a notice of exemption.

The City approved the project in 2020. Petitioner sued. The trial court found in favor of petitioner and issued a writ of mandate directing the City to set aside the project approvals. The City and Gemdale appealed.

Court of Appeal’s Decision

Consistency with the 2010 PEIR

The court first considered whether the City correctly determined that the Gemdale project was consistent with the scope of the 2010 PEIR’s impact analysis, thereby avoiding the need for further environmental review. The court held that the City correctly determined that the project would not cause any new significant traffic impacts, but lacked substantial evidence to support the conclusion that the Gemdale project’s GHG emissions would not be greater than what was assumed in the 2010 PEIR.

Regarding traffic impacts, the addendum concluded that the project would not cause any new impacts because the project would not significantly increase vehicle delays – as measured by the level of service (LOS) methodology that the 2010 PEIR employed – at any of the intersections or roadway segments analyzed in the addendum traffic study. An analysis of the project’s vehicle miles traveled (VMT) was not conducted.

The petitioner argued that section 15064.3 of the CEQA Guidelines, which was added to the CEQA Guidelines in 2018, required the City to conduct a VMT analysis for the project. That Guideline section provides that VMT is the most appropriate measure of transportation impacts and that LOS impacts shall no longer be considered environmental impacts. The court concluded, however, that CEQA Guidelines section 15064.3 did not apply to the addendum. The Guidelines expressly state that agencies need not comply with section 15064.3 until July 1, 2020. Although the City approved the Gemdale project and the addendum on July 14, 2020, the City began preparing the addendum in 2019, well before the effective date of Guidelines section 15064.3.

Regarding GHG emissions, the addendum explained that the project would incorporate all of the climate change mitigation measures included in the 2010 PEIR, and would thus achieve the 2010 PEIR’s “net zero” emissions goal. Further, according to the addendum, the project would not change the overall development intensity for the Irvine Business Complex anticipated in the 2010 PEIR and would therefore not increase GHG emissions beyond what was assumed in the 2010 PEIR. When the City approved the Vision Plan, it granted each parcel within the Irvine Business Complex a “development intensity budget” and allowed parcels to transfer part of this budget to other parcels. Here, the project obtained the necessary development intensity budget from other parcels within the Irvine Business Complex. The City determined that a mere shift in the development intensity from one site in the complex to another would not result in a substantial increase in GHG emissions.

The court disagreed with the City. It explained that the City’s conclusion assumed, without substantial evidence, that transferring development intensity would merely change the source of GHG emissions without changing the total amount of emissions. But neither the 2010 PEIR nor the addendum analyzed the effect of such a transfer on the 2010 PEIR’s net zero emissions goal.  For this reason, the court concluded that substantial evidence did not support the City’s finding that the project’s emissions would be less than significant.

Additionally, the court observed that the City had prepared a draft GHG emissions analysis that indicated that the project might have significant emissions that could not be mitigated to a less-than-significant level. While the City did not ultimately include the analysis in the addendum, the court concluded that the draft analysis constituted record evidence that contradicted the City’s significance finding.

Categorical Exemption

The court rejected the City’s alternative argument that the project was exempt from CEQA review as an infill development project. Without analyzing the elements of the exemption itself, the court held that the project did not qualify for the exemption because the “unusual circumstances” exception applied to the project.

The court explained that the City’s failure to make an express finding as to whether the unusual circumstance exception applied to the project constrained the court’s ability to affirm the City’s conclusion that the project is exempt. Citing Respect Life South San Francisco v. City of South San Francisco (2017) 15 Cal.App.5th 449, the court explained that, to affirm an implied finding, a court must “assume that the entity found that the project involved unusual circumstances and then conclude that the record contains no substantial evidence to support either (1) a finding that any unusual circumstances exist … or (2) a fair argument of a reasonable possibility that any purported unusual circumstances identified by the petitioner will have a significant effect on the environment.” The court declined to affirm under either option.

First, the court concluded that there was substantial evidence to support a finding of unusual circumstances. The court explained that the project was disproportionately large in comparison to the neighboring buildings, required a massive increase in its development intensity budget, and would more than double the amount of office space originally allocated to its parcel despite occupying only a fifth of the parcel.

Second, the court determined that there was a reasonable possibility that the project would have significant environmental impacts. The court pointed to the evidence in the record that the project might have significant GHG emissions that could not be mitigated to a less-than-significant level. The court determined that this impact might be attributed to the unusual size and density of the project. Thus, according to the court, the project fell into the “unusual circumstances” exception and was not categorically exempt from CEQA review.

By Louisa I. Rogers[/vc_column_text][/vc_column][/vc_row]

Fourth District Upholds City of Tustin’s Reliance on CEQA’s Infill Exemption for a Costco Gas Station and Parking Lot

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In Protect Tustin Ranch v. City of Tustin (2021) 70 Cal.App.5th 951, Division Three of the Fourth District Court of Appeal upheld the City of Tustin’s reliance on CEQAs’ categorical exemption for infill projects, holding that the petitioner failed to show that the project did not meet the requirements for the exemption or that an exception to the exemption applied.

Background

This case involves a proposal by Costco Wholesale Corporation to build a gas station next to an existing Costco warehouse in the Tustin Ranch area of the City of Tustin. The project site is already developed with a shopping center and is surrounded by commercial uses, as well as some residential development.

The project includes two components: (1) a 16-pump gas station with a canopy and landscaping, and (2) the demolition of an existing Goodyear Tire Center and parking lot, which would be replaced with a new 56-stall parking lot.

The planning commission voted to approve the project and adopted a resolution finding that the project is categorically exempt from CEQA under CEQA Guidelines section 15332 (Class 32, Infill Development Projects).

Members of the public appealed the planning commission’s decision to the city council. The staff report for the city council hearing explained why staff believed the project fell within the infill exemption. It also explained that, although Costco’s initial application indicated that the project site is 11.97 acres, the project site (i.e., the portion of the site to be developed) is actually only 2.38 acres.

The city council agreed with the planning commission and staff that the project is exempt under the infill exemption. The city council adopted a resolution finding the project categorically exempt and approved the project. In doing so, the city council expressly found that the project did not present any unusual circumstances as compared to other projects that would qualify for the exemption.

The trial court upheld the city’s determination that the project is categorically exempt from CEQA review. Petitioner appealed.

The Court of Appeal’s Decision

To qualify for the Class 32 infill exemption, a project must meet five criteria: (1) the project must be consistent with the general plan and with the zoning code, including all applicable general plan policies and zoning regulations; (2) the project must be located within city limits on a site that is no larger than five acres and is surrounded by urban uses; (3) the site must have no value as habitat for special-status species; (4) approval of the project must not cause any significant impacts related to air quality, noise, traffic, or water quality, and (5) the site must be adequately served by utilities and public services. (CEQA Guidelines, § 15332.)

Petitioner challenged the city’s reliance on the infill exemption only with respect to the size of the project, arguing that the project does not qualify for the exemption because the project site is larger than five acres. The court explained that the city’s conclusion that the project site is five acres or less is a factual determination to which the court applies the deferential “substantial evidence” standard of review. Under this standard, the court does not weigh conflicting evidence. Rather, the court must uphold the agency’s determination if it is supported by any substantial evidence in the record as a whole. In the case before it, explained the court, multiple documents in the administrative record confirmed that the size of the project site is 2.38 acres. For instance, Costco’s revised development application states that the “area of work” would be 2.38 acres, inclusive of the new gas station and parking at the demolished Goodyear site. A water quality management plan and maps of the project also showed that the site is 2.38 acres.  Additionally, at the city council’s hearing on the project, city staff clarified that the total project site was calculated by adding together the acreages of both components of the project—1.74 acres for the gas station and 0.64 acres of new surface parking where the Goodyear center would be demolished. Thus, held the court, substantial evidence supports the city’s determination that the project fits within the requirements of the infill exemption.

The court next considered whether the “unusual circumstances” exception to the categorical exemption applies. CEQA Guidelines section 15300.2, subdivision (c), provides that “[a] categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” If a project meets the requirements of a categorical exemption, the burden is on the party challenging the exemption to produce evidence supporting an exception. The Supreme Court, in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, explained that this showing may be made in two ways. First, the challenger may identify evidence that the project will have a significant environmental impact. Alternatively, the challenger may show that the project is unusual because its features distinguish it from others in the exempt class, and that there is a “reasonable possibility” that the project will result in a significant environmental impact due to that unusual circumstance. The substantial evidence standard applies to an agency’s determination that there are no unusual circumstances. But the less deferential “fair argument” standard applies to the question of whether there is a reasonable possibility that the unusual circumstances may cause a significant effect.

Petitioner argued that the unusual circumstances exception applied for three reasons. First, the project is located on a former Goodyear Tire Center where tires were installed and oil and other fluids were changed. Second, the proposed gasoline fueling station with 16 pumps is unusually large. And third, Costco proposed to re-route traffic during peak hours. The court summarily rejected these arguments, however, because petitioner had failed to explain why these features made the project unusual compared to other projects qualifying for the infill and exemption. In fact, evidence in the record showed that the project is similar to other Costco gas stations in California and is not unusually large—as evidenced by the fact that the project is less than five acres in size. The court went so far as to question whether the size of a project can be a characteristic that makes an otherwise exempt infill project unusual, since the infill exemption is expressly limited to projects less than five acres in size.

Petitioner further argued that the city’s reliance on the exemption was improper because the city should undertake studies to determine whether the project would contaminate soils. The court rejected this argument, however, explaining that unsupported assumptions and speculation are not enough to require the city to conduct CEQA review. By law, a categorically exempt project is deemed not to have potentially significant impacts unless the project’s administrative record shows that an exception to the exemption applies. Here, petitioner failed to show an exception applies. The fact that the project may have a significant environmental impact is not a sufficient basis to require CEQA review for a categorically exempt project.

Implications

This case highlights the standard of review that the courts will apply to an agency’s determination that a project is categorically exempt from CEQA. The burden of showing that the “unusual circumstances” exception applies is on the petitioner. In this case, the petitioner did not offer any concrete reasons or evidence showing that the project is distinct from other projects qualifying for the in-fill exemption. Therefore, the court upheld the city’s reliance on the exemption.

Fifth District Court of Appeal Excuses Petitioner’s Failure to Exhaust Administrative Remedies, Holds that Unlined Landfills are Not “Facilities” for Purposes of the Class 1 Categorical Exemption

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In the published portions of Los Angeles Department of Water and Power v. County of Inyo (2021) 67 Cal.App.5th 1018, the Fifth District Court of Appeal held that the issue exhaustion requirement in Public Resources Code section 21177, subdivision (a) did not apply where the County of Inyo did not provide adequate public notice prior to adopting a Notice of Exemption (NOE) and that the County abused its discretion in finding that condemning three landfill sites was categorically exempt from CEQA under the “existing facilities” exemption in CEQA Guidelines section 15301 (the “Class 1” categorical exemption).

FACTUAL AND PROCEDURAL BACKGROUND

Beginning in the 1950s, the County began leasing land within the County owned by the Los Angeles Department of Water and Power (LADWP) for waste management purposes. At issue in this case were three sites leased by the County for use as unlined landfills. The County’s operation of the landfills is subject to permitting by the California Department of Resources Recycling and Recovery (CalRecycle). Beginning in 2012, the County sought to amend the permits for two of the three landfill sites to increase the permissible daily usage, overall capacity, and to accelerate the closure dates, effectively shortening the useful life of the landfills.

After negotiating with LADWP to extend the lease agreement for one of the sites, the County determined that acquiring all three landfill sites through condemnation was necessary. In a letter to the Board of Supervisors, LADWP objected to the County’s decision, in part, arguing that that the County was required to comply with CEQA before taking any action on the proposed condemnation. At the Board hearing on the condemnation proposal, County staff suggested that the Board’s actions would be exempt from CEQA review for several reasons, including the “existing facilities” categorical exemption under CEQA Guidelines section 15301. The Board approved the condemnation proceedings, but its written decision made no mention of CEQA.

LADWP filed suit. The Kern County Superior Court ruled that the County violated CEQA and issued a writ of mandate directing the County to rescind its resolutions relating to the condemnation proceedings, pending compliance with CEQA. The County appealed.

THE COURT OF APPEAL’S DECISION

Before turning to the merits of LADWP’s CEQA claims, the Court of Appeal addressed the “threshold procedural issue” of whether LADWP’s CEQA claims were barred because it failed to exhaust its administrative remedies with respect to the issues that it raised in court. After discussing the statute and relevant case law, the court acknowledged that because CEQA did not require a comment period prior to determining that a project is exempt from CEQA, the relevant question was whether the agency provided adequate notice to the public prior to considering an exemption. Specifically, the court explained, an agency’s notice must inform the public that the agency will consider a CEQA exemption; otherwise, the issue exhaustion requirement in Public Resources Code section 21177, subdivision (a), does not apply. Here, the court found that the first mention of CEQA and the Board’s consideration of an exemption was made by staff during the hearing, and the hearing notice was silent on CEQA. The court concluded that the public was not provided with adequate notice regarding the exemption, and therefore, LADWP was not required to exhaust on its CEQA challenges to the County’s exemption determination.

Turning to the exemptions relied on by the County, the court found that because the issues before it involved the scope of the “existing facilities” categorical exemption and statutory construction, review of the County’s actions was de novo. After reviewing the language of CEQA Guidelines section 15301, the court concluded that the term “facilities” is ambiguous, agreeing with the Second District Court of Appeal in Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 (Azusa). Further agreeing with Azusa, the court reasoned that, because an unlined landfill was “excavated” rather than “built,” an unlined landfill was more akin to an alteration in the condition of land rather than a facility. The court reasoned that because section 15301 was revised following the Azusa decision but did not expressly mention landfills, the court concluded that the Secretary of Resources who issued the revised Guideline must have agreed with Azusa that unlined landfills are not a class of projects that do not have a significant effect on the environment. Thus, the court concluded that the County abused its discretion in finding the condemnation proceedings categorically exempt under the Class 1 categorical exemptions.

– Nathan O. George

First District Court of Appeal Holds That a Necessary and Indispensable Party is Not Bound to a Tolling Agreement That It Did Not Sign

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In Save Lafayette Trees v. East Bay Regional Park District (2021) 66 Cal.App.5th 21, the First District Court of Appeal held that PG&E, a necessary and indispensable party in the case, was not bound to an agreement to toll the CEQA statute of limitations executed by only the petitioners and the respondent public agency.

FACTUAL AND PROCEDURAL BACKGROUND

On March 21, 2017, the East Bay Regional Park District’s (District) Board of Directors issued a resolution accepting funding from PG&E as compensation for the removal of 245 trees on District property near PG&E’s natural gas transmission pipelines. PG&E issued this funding as a part of its “Community Pipeline Safety Initiative.” The District and PG&E later signed an MOU for the implementation PG&E’s initiative and ongoing maintenance and monitoring of the area near the natural gas pipeline. On June 27, 2017, the District filed a Notice of Exemption after finding the MOU and related activity categorically from CEQA.

On July 31, 2017, Save Lafayette Trees, Michael Dawson and David Kosters (Appellants), and the District entered into a tolling agreement to toll all applicable statutes of limitations for 60 days. PG&E did not consent to this agreement. On September 29, within the 60-day tolling period, Appellants filed a petition for writ of mandate challenging the District’s approval of the MOU under CEQA, as well as for violations of local ordinances and state constitutional due process rights. The action named PG&E as a real party in interest. PG&E demurred to the CEQA cause of action as time-bared by both the 35-day and 180-day statute of limitations periods under Public Resources Code section 21167. The trial court sustained the demurrer.

THE COURT OF APPEAL’S DECISION

Upholding the trial court’s decision, the Court of Appeal determined that PG&E was not bound to the tolling agreement between Appellants and the District. The court concluded that PG&E was both a necessary and indispensable party in the litigation, and therefore, was entitled to assert or waive the statute of limitations defense. The court noted that CEQA does not statutorily authorize tolling agreements, which means that they are not a statutory right. Rather, tolling agreements are private agreements between parties that have no effect on parties not in privity. Citing Salmon Protection & Watershed Network v. County of Marin (2012) 205 Cal.App.4th 195 (“Salmon Protection”), the court explained that CEQA does not prohibit tolling agreements to extend the limitations period, but to be effective they must include the recipient of an approval (the project proponent), the public agency, and the would-be petitioner. Because PG&E was a necessary and indispensable party, it was not bound to the tolling agreement to which it was not a signatory.

The court further reasoned that binding an indispensable party like PG&E to a tolling agreement to which it did not consent would defeat the purpose of the limitations period in Public Resources Code section 21167 to “protect project proponents from extended delay, uncertainty and potential disruption of a project caused by a belated challenge to the validity of the project’s authorization.”

The court also rejected Appellants’ argument that the 180-day limitations period had not run because they did not have constructive notice of the project. Appellants claimed there was no constructive notice because the removal of the trees was not included in the Board’s agenda for the project nor the accompanying description of the Board’s resolution. Public Resources Code section 21167 provides that the 180-day period begins after the agency’s decision or commencement of a project. The court noted that the Supreme Court has held that a public agency’s formal decision to carry out or approve a project is deemed constructive notice for potential CEQA claims. In this case, the court determined that the MOU for funding the tree replacement was consistent with the Board’s resolution and the project as outlined in the staff report, and did not, as Appellants asserted, constitute a “substantial difference” that would not provide constructive notice. The court explained that any flaws in the project approval process do not delay the applicable limitations period where, as here, the public agency gave notice of the very approval Appellants challenged.

The court concluded that the 180-day limitations period thus began to run on March 21, 2017, when the Board made its final decision and expired on September 18, 2017, eleven days before Appellants commenced their action. Therefore, the court held that the CEQA cause of action was properly dismissed as untimely.

– Veronika S. Morrison

First District Holds that Deficiencies in Notice Did Not Excuse CEQA Litigants from Exhausting Available Administrative Remedies

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The First District Court of Appeal in Schmid v. City and County of San Francisco (Feb. 1, 2021) 60 Cal.App.5th 470, held that Appellants’ CEQA claims were barred by their failure to exhaust available administrative remedies, even where deficiencies in the notice excused the litigants from satisfying the exhaustion requirements under Public Resources Code section 21177.

BACKGROUND

The “Early Days” statue, located in San Francisco’s Civic Center, is part of the “Pioneer Monument”—a series of five bronze sculptures memorializing the pioneer era when California was founded. The statue depicts three figures, including a reclining Native American over whom bends a Catholic priest. Public criticism has surrounded the statue since its installation in 1894.  

In 2018, after charges of the statue’s racial insensitivity resurfaced, the San Francisco Arts Commission and the San Francisco Historic Preservation Commission (HPC) granted a Certificate of Appropriateness (COA) to remove the statue and place it in storage. In granting that approval, the HPC determined the removal of the statue was categorically exempt from CEQA. There were no issues raised at the HPC hearing about a perceived need for environmental review. Nor were there any appeals of HPC’s CEQA determination to the San Francisco Board of Supervisors. 

Appellants, two opponents of the statue’s removal, appealed the HPC’s adoption of the COA to the San Francisco Board of Appeals. The Board of Appeals initially voted to overturn the COA, but later had it reinstated. After the Board of Appeals approved the COA, the City immediately removed the statue the following morning. 

Appellants filed suit seeking to overturn the Board of Appeals’ order authorizing removal of the statue. They alleged violations of constitutional and statutory law, including CEQA. The trial court sustained a demurrer without leave to amend. On the CEQA claims, the trial court found Appellants failed to exhaust available administrative remedies. Appellants appealed.

COURT OF APPEAL’S DECISION

Exhaustion of Administrative Remedies
The Court of Appeal explained that CEQA litigants must comply with two exhaustion requirements. First, Public Resources Code section 21177 requires that a would-be CEQA petitioner must object during the administrative process and that all allegations raised in the litigation must have been presented to the agency before the challenged decision is made. Second, a would-be CEQA petitioner must exhaust all remedies that are available at the administrative level, including any available administrative appeals. Under Public Resources Code section 21151, a CEQA determination made by a nonelected decision-making body of a local agency may be appealed to the agency’s elected decision-making body, if any. The CEQA Guidelines encourage local agencies to establish procedures for such appeals. As relevant here, the San Francisco Administrative Code requires that appeals of CEQA determinations must be made to the Board of Supervisors, as the body of elected officials responsible for making final CEQA determinations.

The Court of Appeal found Appellants failed to comply with both exhaustion requirements. They did not object to the HCP’s determination that the project was categorically exempt from CEQA during the administrative process and they did exhaust administrative appeals available under the San Francisco Administrative Code. Specifically, on the second point, although Appellants appealed the HPC’s decision to the Board of Appeals, they failed to exhaust available remedies because they did not separately appeal the HPC’s CEQA determination to the Board of Supervisors, as required under the City’s Code.

Appellants argued they were excused from both exhaustion requirements because the City failed to provide adequate notice. The court agreed with Appellants in part, finding that Appellants were not required to comply with the statutory exhaustion requirements in section 21177 because there was no notice in advance of the HPC meeting that a categorical exemption might be on the agenda. But, the court explained, the inadequate CEQA notice did not excuse Appellants from complying with the requirement in the City’s Code that CEQA determinations must be appealed to the Board of Supervisors. The court also noted that Appellants had notice of the HPC’s CEQA determination because they appealed it, improperly, to the Board of Appeals. Because Appellants failed to appeal the CEQA determination to the appropriate body, they forfeited their right to bring a CEQA action.

Futility Argument
Appellants also argued they should be excused from exhausting their administrative remedies because doing so would have been futile. Citing a Board of Supervisors resolution that was not in the record, Appellants argued that an appeal to the proper board would have been futile because the Board of Supervisors already adopted a definitive position that the statue should be taken down. The court rejected this argument, stating that even if the Board of Supervisors held this view as a policy matter, it still could have disagreed with the process of removal and opted for an EIR. In addition, the Court concluded that the Board of Supervisors was never presented with any arguments concerning the appropriateness of a categorical exemption, and thus any argument regarding how the Board of Supervisors would have responded was pure speculation.

– Veronika Morrison 

City of San Diego Appropriately Relied on CEQA’s In-Fill Exemption in Approving Residential Development, Although Project Less Dense than Typically Required by the general plan, Fourth District Holds

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In Holden v. City of San Diego (2019) 43 Cal.App.5th 404, the Fourth District Court of Appeal upheld the City of San Diego’s reliance on CEQA’s in-fill exemption for a seven unit residential project on environmentally sensitive land in the city’s North Park community. The court rejected plaintiff’s claim that the city erred in relying on the in-fill exemption because the project was less dense than the standards established in the city’s general plan. The court held that substantial evidence supported the city’s reliance on the exemption because the general plan, together with an applicable community plan, allowed the city to deviate from the density standards for projects in environmentally sensitive areas.

Background

In 2014, the developer applied to the city to demolish two houses and to construct seven new residential condos on a 0.517-acre site located on a canyon hillside. City staff initially informed the developer that the project did not comply with the minimum density standards for the site under the general plan and an applicable community plan. Specifically, staff determined Policy LU-C.4 of the general plan and the housing element of the community plan required a minimum of 16 dwelling units on the site. Later, however, city staff concluded that a reduced density of seven units was appropriate because the site is considered environmentally sensitive.

The city determined that the project was categorically exempt from CEQA under the infill exemption set forth in CEQA Guidelines section 15332. To qualify for this exemption, a project must be consistent with the general plan’s designations and policies. On April 18, 2017, at the planning commission’s recommendation, the city council unanimously voted to approve the project.

The petitioner filed a petition for writ of mandate challenging the city’s determination that the project is exempt from CEQA and the city’s approval of the project. The trial court denied the petition. The petitioner appealed.

The Court of Appeal’s Opinion

On appeal, petitioner contended that the city erred in finding the project is exempt from CEQA under the infill exemption because the project provides less residential density than is required by the general plan. In so arguing, petitioner relied primarily on a policy of the general plan to “‘[e]nsure efficient use of remaining land available for residential development … by requiring that new development meet the density minimums of appliable plan designations.’” The general plan recommended that residential areas designated “Medium High”—including the project site—provide multi-family housing with a density range of 30- to 44-dwelling units per acre. Because the project did not meet this standard, petitioner argued the project was inconsistent with the general plan, and, therefore, the city abused its discretion in relying on CEQA’s in-fill exemption.

The court rejected the petitioner’s argument as too rigid of an interpretation of the general plan. The court explained that the city’s determination that the project is consistent with the general plan is entitled to great weight because the city is in the best position to interpret it. The general plan consistency requirement does not require rigid conformity to the general plan. A project is consistent with the general plan if it will further the plan’s objectives and policies, and not obstruct their attainment.

Although the general plan’s density standards would ordinarily require 16 or more units on the site, the city council adopted extensive findings explaining why the project was consistent with the general plan, despite its lower density. In support of its findings, the city council cited a note in the community plan, which states that the residential density recommendations “‘may be subject to modification.’” Further, the community plan provided that modifications could be made to the recommended densities. The general plan provides that the community plans are integral components of the general plan; thus, the court held, the city appropriately considered these statements in the community plan as part of the general plan. The city council found that the project, at seven units, struck a reasonable balance of meeting the city’s housing goals, while also respecting the environmentally sensitive canyons. The city’s code limits development on steep hillsides, and the project proposed design was consistent with the city’s hillside development standards. Further, the project would provide infill residential housing, consistent with the city’s housing policies. As stated by the city council, the project’s “‘creation of seven new dwellings, where there existed two units, would assist the housing needs of the North Park area community.’”

The Court of Appeal concluded that the city’s extensive general plan consistency findings demonstrated that the city considered the general plan, the community plan, and the city’s steep hillside development regulations in approving the project and balanced the competing interest of those plans and regulations. Based on its review of the record, the court concluded that the city acted reasonably and did not abuse its discretion by balancing those competing policies and regulations to determine the project is consistent with the general plan. Accordingly, the court held that substantial evidence supported the city’s reliance on the in-fill exemption.

 

Laura Harris

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