On December 12, 2012, the Fourth District Court of Appeal, in Banning Ranch Conservancy v. City of Newport Beach (2012) ___Cal.App.4th___ (Case No. G045622), affirmed the judgment of the Superior Court of Orange County that the City of Newport Beach complied with CEQA with respect to the City’s review and approval of the Sunset Ridge Park Project.
In 2006, the City of Newport Beach purchased land in the northwest corner of the West Coast Highway and Superior Avenue. The western boundary of the parcel abuts Banning Ranch, a “primarily undeveloped” approximately 400-acre site controlled by Newport Banning Ranch, LLC (NBR LLC). A majority of the Banning Ranch site is located in unincorporated Orange County, but is within the City’s Sphere of Influence (SOI).
In March 2009, the City announced that it was acting as the lead agency to prepare an EIR for the Newport Banning Ranch Project. The City’s Notice of Preparation (NOP) explained that Newport Banning Ranch Project proposes the development of residential, commercial, and overnight resort accommodations on the Banning Ranch site. The NOP also explained that, as part of the project, an access road, “Bluff Road,” would be constructed from a southern terminus at West Coast Highway to a northern terminus at 19th Street and that Bluff Road would serve as the primary roadway through the project site. Further, the NOP stated that the unincorporated areas of the site would be annexed to the City as part of the project. Lastly, the NOP repeatedly referred to the City’s plans to build a park, the Sunset Ridge Park, adjacent to Banning Ranch.
Two months after the City issued the NOP for the Newport Banning Ranch Project, the City issued a notice of preparation for the Sunset Ridge Park Project. The NOP for the park project explained that the City proposed to develop an approximately 18.9-acre site with active and passive recreational uses and an access road to the park through Newport Banning Ranch.
Thereafter, in October 2009, the City issued a draft EIR for the park project. The draft EIR analyzed, among other things, the park’s access road. Petitioner Banning Ranch Conservancy submitted comments contending that the draft EIR had “piecemealed” the project by failing to acknowledge the full extent of the project. In particular, petitioner noted that it appeared that the park access road in the draft EIR for the park and the Bluff Road proposed in the Newport Banning Ranch Project were the same road. Petitioner further asserted that the draft EIR failed to adequately analyze growth-inducing impacts, cumulative impacts, and impacts to the California gnatcatcher.
The City responded to the public comments and prepared a final EIR. The responses acknowledged that the proposed Sunset Ridge Park Project access road and the Bluff Road proposed for the Newport Banning Ranch Project assume generally the same roadway alignment from West Coast Highway, but disagreed with the suggestion that the Newport Banning Ranch Project is part of the Sunset Ridge Park Project and therefore should be analyzed in the same EIR as a single project. The responses to comments explained that the two projects were distinct and also that both the City’s general plan and Orange County’s master plan envision a similar north-south roadway through the Newport Banning Ranch property extending from West Coast Highway to 19th Street.
The City certified the final EIR at its public hearing on March 23, 2010. At the same hearing, the City approved an “access agreement” between it and NBR LLC. In exchange for the Banning Ranch easement, the City agreed to design and construct the access road improvements from the West Coast Highway to the park to match the proposed vertical and horizontal alignment of the east side of the proposed Bluff.
Petitioner thereafter brought suit in the Superior Court of Orange County, alleging that the City had violated CEQA in certifying the EIR for the Sunset Ridge Project. The trial court denied the petition and petitioner appealed.
The Court of Appeal’s Decision
The appellate court first considered petitioner’s claim that the City had impermissibly “piecemealed” the project by not treating the Newport Banning Ranch Project and the Sunset Ridge Park Project as the same project. CEQA generally prohibits an agency from “chopping up” a large project into many little ones, each of which might have individually minimal environmental consequences, but collectively may have significant environmental impacts. This “chopping up” of a large project is known as “piecemealing.”
The court explained that the California Supreme Court set forth a piecemealing test in Laurel Heights Improvement Association v. Regents of University of California (1988) 47 Cal.3d 376, 396. Specifically, the Supreme Court held that an EIR must include an analysis of the environmental effects of future expansion if: (1) it is a reasonably foreseeable consequence of the initial project; and (2) the future expansion or action will be significant in that it will likely change the scope or nature of the initial project or its environmental effects.
The court in this case explained that application of the Laurel Heights piecemealing test in the courts of appeal has been fact-specific and the case law is not easily harmonized. Nevertheless, the court found that the leading cases could be grouped into potentially useful categories. For instance, there may be improper piecemealing when the purpose of the reviewed project is to be the first step toward future development. There may also be improper piecemealing when the reviewed project legally compels or practically presumes the completion of another action. On the other hand, two projects may properly undergo separate environmental review (i.e., no piecemealing) when the projects have different proponents, serve different purposes or can be implemented independently.
In this case, petitioner contended the EIR incorrectly defined the project to include only the park and access road. According to petitioner, the “project,” within the meaning of CEQA, included both the Newport Banning Ranch Project and the Sunset Ridge Park Project. Applying the two-part test set forth in Laurel Heights, the court agreed with petitioner that the Newport Banning Ranch Project is “reasonably foreseeable.” Indeed, it appears to be imminent in that the City is already preparing an EIR for that project.
The court disagreed, however, that the Newport Banning Ranch Project “will likely change the scope or nature of the initial project or its environmental effects.” In particular, the court found that the Newport Banning Ranch Project would not be a “consequence” of the City’s park project. For instance, explained the court, the park’s access road is only a “baby step” toward the Newport Banning Ranch Project. Further, the projects have different project proponents, serve different purposes in that one will provide recreational opportunities for existing residents and the other develops a new neighborhood. Moreover, the City’s general plan calls for construction of Bluff Road or its equivalent; the City intends to build the road regardless of whether Newport Banning Ranch is developed. For these reasons, the court rejected petitioner’s claim that the City had impermissibly piecemealed the Sunset Ridge Park Project.
Next, the court addressed petitioner’s claims that the EIR had not adequately addressed the Park Project’s environmental impacts. Petitioner argued that the EIR’s cumulative traffic impact analysis violated CEQA in that it did not list the Newport Banning Ranch Project as one of the projects that could contribute to cumulatively significant impacts. The court found, however, that the EIR accounted for traffic at Banning Ranch because the EIR’s analysis assumed build-out of the City’s general plan, which included a proposed Bluff Road (or equivalent). The court explained that although the EIR could have been clearer on this point, an EIR need not achieve “perfection.”
Second, petitioner argued that the EIR’s conclusion that the Sunset Ridge Park Project would not cause significant growth-inducing impacts lacked substantial evidence because its proposed infrastructure could help serve Newport Banning Ranch. The court explained that an EIR’s growth-inducing impact analysis need not be detailed and the detail required in any particular case depends upon a multitude of facts, including the nature of the project, and the ability to forecast the actual effects the project will have on the environment. Here, the court explained that substantial evidence supported the EIR’s conclusion that the park will not have a growth-inducing impact in regard to the Newport Banning Ranch Project because that project was proposed first. It therefore was not a consequence of the Park Project.
Third, petitioner argued that the EIR’s cumulative biological impacts analysis violated CEQA because it did not mention the Newport Banning Ranch Project. But, as the court explained, the City’s final EIR responses to comments explained that the draft EIR did account for that project in its biological cumulative impacts analysis in that both projects are within the boundaries of the Natural Communities Conservation Plan (NCCP). Compliance with the NCCP will ensure that cumulative impacts are not significant.
Fourth, petitioner argued that the EIR downplayed the Park Project’s significant impact on the habitat of a threatened bird, the California gnatcatcher. Again, the court disagreed. The court explained that substantial evidence in the form of the observation and opinions of the City’s biologist supported the conclusion that the project would only impact 0.68 acres of gnatcatcher habitat. Further, substantial evidence showed the mitigation measures for this impact, which required replacing 0.41 acres of scrub at a two-to-one ratio, was adequate. The court refused to second-guess the expert opinions of the City’s biologists.
Lastly, petitioner argued that the EIR failed to disclose the Park Project’s alleged inconsistency with the California Coastal Act. In particular, petitioner argued that the EIR wrongly concluded that the Park Project was consistent with the Coastal Act’s protection of “environmentally sensitive habitat areas” (ESHAs). The court rejected this claim, finding that the EIR accurately disclosed that no area of the project had been designated an ESHA.