Archives: January 2019

The Fourth District Court of Appeal Rejects Challenges to Amended Lease Agreement for San Diego Amusement Park

In San Diegans for Open Government v. City of San Diego (2018) 31 Cal.App.5th 349, the Fourth District Court of Appeal affirmed a judgment rejecting CEQA arguments and other challenges to an amended lease agreement between the City of San Diego and Symphony Asset Pool XVI, LLC for the historic Belmont Park amusement park.

In 1987, the City of San Diego entered into a lease and development plan to revitalize the historic amusement park in the city’s Mission Beach area. Under the agreement, Symphony’s predecessor in interest was authorized to demolish and renovate certain existing facilities, and to construct various new facilities including restaurants, shops, and other visitor-serving commercial uses. The original lease agreement was for a 50-year term, but also included a right of first refusal to enter into a new agreement on terms determined by the city.

In response to the 1987 lease, the city’s electorate passed Proposition G to restrict future commercial development in Mission Beach. Under Prop. G, future development is restricted to park and recreational uses, and the preservation of historical amusement park facilities. Prop. G also includes an exemption for projects that had obtained vested rights as of the effective date of the measure. In 1988, the city council passed an ordinance providing that the 1987 lease and development plan provided a vested right under Prop. G and the use and redevelopment of Belmont Park could continue as planned.

In 2012, Real Party in Interest Symphony took over the 1987 lease. In 2015, the city council authorized the mayor to enter into an amended and restated lease with Symphony for the use and operation of Belmont Park. The basis for the amended lease was in part to support the approximately $18 million Symphony had invested improving the property since taking over. Among other things, the lease required Symphony to pay rent for its use of the property. The lease also gave Symphony the opportunity to extend the lease beyond the original 50-year term. If Symphony completes ongoing improvements and planned improvements, makes additional capital improvements, and pays the city a lump sum payment, the amended lease may be extended up to 50 years.

At the time the amended lease was approved, the city council also adopted a resolution finding that the amended lease agreement was categorically exempt from CEQA under the existing facilities exemption in CEQA Guidelines section 15301.

Following the adoption of the amended lease, San Diegans for Open Government (SDOG) filed a lawsuit challenging the amended lease on three grounds. First, the complaint alleged that the amended lease violated Prop. G by authorizing new uses in excess of the vested rights conferred under the 1987 lease. Second, the complaint alleged that the city violated CEQA because it improperly concluded the amended lease was exempt from environmental review. Third, the complaint alleged that the approval of the amended lease violated a provision of the city charter which required certain agreements lasting more than five years to be adopted by ordinance after a public hearing.

With regard to the first claim, SDOG argued that (1) the amended lease allows new uses that were not authorized under the 1987 lease, and (2) the 1987 lease provided a vested right only for the original 50-year term. The court rejected these arguments, holding that the amended lease did not violate Prop. G., relying primarily on the language of the 1987 lease. First, the court noted that the original lease included a long list of specifically authorized uses. According to the court, all of the uses SDOG argued were not authorized were encompassed within the original permissible uses. Next, the court held that the extension did not violate Prop. G because the 1987 lease contemplated the possibility of extension, and neither Prop. G nor the city’s ordinance finding a vested right contained any time limit on the rights vested.

The second issue was whether the city violated CEQA by incorrectly determining that the amended lease was exempt from environmental review under the existing facilities exemption. CEQA Guidelines section 15301 provides an exemption from environmental review for the “operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination.” SDOG argued that the amended lease contemplates improvements including construction of a new restaurant and bar, food court venues, and a new arcade, and thus did not qualify as involving negligible or no expansion of the existing use.

The court rejected SDOG’s argument and found that the construction activities the appellants referenced, including the new restaurant, food court venues, and arcade, were all projects that had already been completed at the time the amended lease was entered and, accordingly, were existing facilities. The parties acknowledged in the lease that Symphony had already expended $18 million to improve and upgrade the property, and those improvements were listed in an exhibit to the agreement. The court added that while the amended lease did contemplate Symphony would invest an additional $5.9 million in the pool facility in the future, SDOG did not argue those activities were outside the scope of the exemption. Moreover, the court added, those activities involved only refurbishment of existing facilities and not new construction, thus, they fall squarely within the existing facilities exemption.

In addition to arguing that the amended lease did not qualify for the existing facilities exemption, SDOG argued that the unusual circumstances exception in CEQA Guidelines section 15003.2, subdivision (c) applied in this case. Under that section, “[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.” Furthermore, the court explained, “it is not alone enough that there is a reasonable possibility the project will have a significant environmental effect, instead . . . there must be a reasonable possibility that the activity will have a significant effect on the environment due to the unusual circumstances.” (Quoting Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1097-98.)

Here, SDOG argued that the existence of the voter-passed Proposition G constituted an unusual circumstance because the voters had used the initiative power to declare a distinct interest in minimizing the environmental impacts of development in Mission Beach. SDOG also argued that there is a fair argument the project will result in severe traffic and noise impacts. SDOG cited a statement by a Symphony representative that the project would generate an additional $100 million in revenue over the term of the lease, which SDOG argued could only occur with significantly more visitors and therefore more traffic and other resulting impacts. The court rejected SDOG arguments, finding its argument that impacts would occur to be based on speculation. Furthermore, SDOG failed to establish how the increased traffic or noise would be due to the unusual circumstances that it cited, i.e., the existence of Proposition G. In sum, the court held that the city properly determined the amended lease was exempt from CEQA review under the existing facilities exemption and that the unusual circumstance exception did not apply.

The final issue in the case was whether the approval of the amended lease violated a provision of the city charter. The provision at issue consisted of two sentences. The first sentence referred to the city incurring “indebtedness or liability.” The second sentence more broadly stated “no contract” lasting for a period of more than five years may be authorized except by ordinance after notice and a public hearing. The issue was whether the first sentence limited the second, or if the second sentence was independent. While the court found the language of the provision was ambiguous, rules of statutory interpretation provide that the city’s interpretation of its own charter is entitled to deference unless shown to be clearly erroneous. The city’s longstanding interpretation of the provision was that it applied solely to agreements requiring the city to expend funds. The court found this interpretation to be reasonable and consistent with the legislative history, and held that the city did not violate the charter by approving the amended lease by resolution.

– Collin McCarthy

The First District Court of Appeal Affirmed a Judgment Holding that CEQA Review Was Not Required for a Multifamily Residential Project Subject Only to Design Review

In a decision published on January 10, 2019, the First District Court of Appeal affirmed a judgment denying two local groups’ petition for writ of mandate seeking to overturn the City of St. Helena’s approval of a multifamily residential project. McCorkle Eastside Neighborhood Group, et al. v. City of St. Helena, et al. (2019) 31 Cal.App.5th 80. In this case, the city’s approval authority for the project was limited to design review under the local zoning ordinance. The court held that because the city lacked any discretion to address the project’s environmental effects, the city properly determined CEQA review was not required.

Between 2015 and 2016, the City of St. Helena amended its general plan and zoning ordinance to eliminate the requirement to obtain a conditional use permit for multifamily projects in High Density Residential (HDR) districts. Since this change, multifamily residential projects are a permitted use in HDR districts and require only design review approval. Real Party in Interest Joe McGrath applied for design review approval to construct an 8-unit residential project within an HDR district. McGrath also applied for a demolition permit to demolish an existing single family home on the site.

In October 2016, the city’s planning staff prepared a report that concluded (1) the project was exempt from CEQA under the Class 32 infill exemption (CEQA Guidelines § 15332); and (2) the project met the design review criteria. At the planning commission hearing for the project, several neighbors and community members opposed the project on various environmental grounds, including that the project site is contaminated, the street has inadequate drainage, the area lacks open space, and the project would cause cumulative impacts with another proposed development. Opponents of the project also contended that the project design was inconsistent with the design of the neighboring historical homes.

During the planning commission hearing, the city attorney advised the members of the commission that, under the city’s zoning ordinance, the commission was required to approve the project if it met the city’s design review criteria. The city attorney added that while he was confident the Class 32 infill exemption applied, CEQA also did not apply because it was a non-discretionary project. The planning commission approved the project, and adopted findings that the project was exempt from CEQA and would not cause any significant environmental effects.

At the city council appeal hearing, the city attorney similarly advised the members of the council that the project was exempt from CEQA under the Class 32 infill exemption, but at any rate their review was limited to the project design. The council voted 3-2 to deny the appeal and uphold the planning commission’s approval. The council adopted a resolution containing numerous detailed findings to support the design review approval. The council also found that the Class 32 infill exemption applied, but, even if some level of CEQA review was required, the city was limited to reviewing design-related issues and not the use-related environmental impacts the project opponents had raised.

The McCorkle Eastside Neighborhood Group and St. Helena Residents for an Equitable General Plan filed a petition for writ of mandate challenging the city council’s approval as a violation of CEQA and local zoning laws. The trial court denied the petition. The groups’ appeal followed.

The primary issue on appeal was whether the city abused its discretion by approving the project without requiring an environmental impact report (EIR). The appellants argued that the Class 32 infill exemption requires the city council to determine that the project would not result in any significant environmental effects relating to traffic, noise, air quality, and water quality. According to the appellants, the city council could not properly have done so because it reviewed only the project design.

The court disagreed and held that, irrespective of the Class 32 exemption, the city council correctly determined that the scope of its discretion was limited to design review and no CEQA review was required. As the court explained, under the city’s design review ordinance, the city council could not disapprove the project for non-design related reasons. In this case, the court found that substantial evidence supported the city council’s findings that the project met the design review criteria and would not result in any design-related impacts.

With regard to the Appellants’ design-related concerns, the court rejected the notion that CEQA review was required for those concerns alone, at least for the project at issue. Quoting from the First District’s decision in Bowman v. City of Berkeley (2004) 122 Cal.App.4th 572, 592 (Bowman), the court stated, “[W]e do not believe that our Legislature in enacting CEQA . . . intended to require an EIR where the sole environmental impact is aesthetic merit of a building in a highly developed area.” Furthermore, the court added, “[w]hile local laws do not preempt CEQA, ‘aesthetic issues like the one raised here are ordinarily the province of local design review, not CEQA.’ ‘Where a project must undergo design review under local law, that process itself can be found to mitigate purely aesthetic impacts to insignificance . . . .’” (Quoting Bowman at p. 594.) While the court recognized that St. Helena is not as urban as Berkeley, the location of the Bowman project, it nonetheless found that “the principles of that case apply to the design review in this case, which cannot be used to impose environmental conditions.”

The court next rejected the appellants’ argument that the mere fact the city had some discretionary authority in the design review process made the project subject to CEQA. According to the court, the rule that a project will be deemed discretionary for purposes of CEQA if it requires both discretionary and ministerial approvals “applies only when the discretionary component of the project gives the agency the authority to mitigate environmental impacts.”
Finally, the court found that it was unnecessary for the city to rely on the Class 32 infill exemption because the city lacked any discretion to address the project’s non-design related environmental effects. The court also found it was unnecessary to address the appellants’ argument that the Class 32 exemption did not apply based on the “unusual circumstances” exception. According to the court, “[b]ecause CEQA was limited in scope to design review whether or not the Class 32 exemption applied, any exception to the exemption was irrelevant.”

-Collin McCarthy

Nathan O. George

Nathan O. George

Associate

Mr. George joined the firm in 2016 as an associate. Mr. George’s practice focuses on land use and environmental law, handling all phases of the land use entitlement and permitting processes, including administrative approvals and litigation. His practice includes the California Environmental Quality Act (CEQA), the National Environmental Policy Act (NEPA), the State Planning and Zoning Law, and the federal Endangered Species Act.

During law school, Mr. George served as a Board Member for the Journal of International Law and Policy, and as a Board Member for the Environmental Council of Sacramento. Prior to joining Remy Moose Manley, LLP, Mr. George worked as an associate at David Allen & Associates, and clerked for the California Environmental Protection Agency, Air Resources Board, the Office of the Attorney General, Public Rights Division, and the Placer County District Attorney’s Office, Public Integrity Unit.

Published Cases:

  • Westsiders Opposed to Overdevelopment v. City of Los Angeles (2018) 27 Cal.App.5th 1079
  • Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569

Education

  • J.D., University of California, Davis, King Hall School of Law, 2014 (Environmental Law and Public Service Certificates)
  • B.S., Graphic Design, California State University, Sacramento, 2006 (with honors)

Professional Affiliations

  • State Bar of California, Environmental Law Section
  • Sacramento County Bar Association
  • Admitted to all California State Courts
  • U.S. District Court, Eastern District of California
  • Selected for inclusion in the Rising Stars sections of the 2020-2021 Northern California Super Lawyers® magazine

California Supreme Court holds that CEQA requires EIRs to show a reasonable effort to substantively connect a project’s air quality impacts to likely health impacts

In a much-anticipated opinion, the California Supreme Court in Sierra Club v. County of Fresno (Dec. 24, 2018) 6 Cal.5th 502 held that portions of the air quality analysis in Fresno County’s EIR for the 942-acre Friant Ranch Specific Plan violated CEQA. In reaching this decision, the Court made four important holdings:  (1) when reviewing whether an EIR’s discussion of environmental effects “is sufficient to satisfy CEQA,” the court must be satisfied that the EIR “includes sufficient detail to enable those who did not participate in its preparation to understand and consider meaningfully the issues the proposed project raises”; (2) an EIR must show a “reasonable effort to substantively connect a project’s air quality impacts to likely health consequences”; (3) “a lead agency may leave open the possibility of employing better mitigation efforts consistent with improvements in technology without being deemed to have impermissibly deferred mitigation measures”; and (4) “[a] lead agency may adopt mitigation measures that do not reduce the project’s adverse impacts to less than significant levels, so long as the agency can demonstrate in good faith that the measures will at least be partially effective at mitigating the Project’s impacts.”

The Friant Ranch project is a Specific Plan calling for approximately 2,500 age-restricted (ages 55+) residential units, and other uses, including a commercial center and a neighborhood electric vehicle network. Fresno County’s EIR for the project generally discussed the health effects of air pollutants such as Reactive Organic Gases (ROG), oxides of nitrogen (NOx), and particulate matter (PM), but without predicting any specific health-related impacts resulting from the project. The EIR found that the project’s long-term operational air quality effects were significant and unavoidable, even with implementation of all feasible mitigation measures. The EIR recommended a mitigation measure that included a “substitution clause,” allowing the County, over the course of project build-out, to allow the use of new control technologies equally or more effective than those listed in the adopted measure.

After the trial court denied Sierra Club’s petition for writ of mandate, the Court of Appeal reversed, holding that the EIR’s air quality analysis and air quality mitigation measures violated CEQA. On October 1, 2014, the Supreme Court granted review of the appellate court’s decision. In a unanimous decision issued December 24, 2018, the Supreme Court reversed in part, and affirmed in part, the Court of Appeal’s decision.

The Court first considered which standard of judicial review applies to claims that an EIR’s discussion of environmental impacts is inadequate or insufficient. The Court explained that an EIR’s discussion of environmental impacts is adequate and sufficient where “the discussion sufficiently performs the function of facilitating ‘informed agency decisionmaking and informed public participation.” To that end, an EIR must “reasonably describe the nature and magnitude of the adverse effect.” The evaluation does not need to be exhaustive, but the courts will review the discussion “in light of what is reasonably feasible.” Claims that an EIR lacks analysis or omits the magnitude of the impact involve mixed questions of law and fact, and thus are generally reviewed de novo. The courts will apply the substantial evidence standard, however, to claims challenging the EIR’s underlying factual determinations, such as which methodologies to employ. “Thus, to the extent a mixed question requires a determination whether statutory criteria were satisfied, de novo review is appropriate; but to the extent factual questions predominate, a more deferential standard is warranted.”

The Court next considered whether the Friant Ranch EIR’s air quality analysis complied with CEQA. The Court held that an EIR must reflect “a reasonable effort to discuss relevant specifics regarding the connection between” and the estimated amount of a given pollutant the project will produce and the health impacts associated with that pollutant. Further, the EIR must show a “reasonable effort to put into a meaningful context” the conclusion that the project will cause a significant air quality impact. Although CEQA does not mandate an in-depth health risk assessment, CEQA does require an EIR to adequately explain either (a) how “bare [emissions] numbers” translate to or create potential adverse health impacts; or (b) what the agency does know, and why, given existing scientific constraints, it cannot translate potential health impacts further.

With respect to the Friant Ranch EIR, the EIR quantified how many tons per year the project will generate of ROG and NOx (both of which are ozone precursors), but did not quantify how much ozone these emissions will create. Although the EIR explained that ozone can cause health impacts at exposures for 0.10 to 0.40 parts per million, this information was meaningless because the EIR did not estimate how much ozone the Project will generate. Nor did the EIR disclose at what levels of exposure PM, carbon monoxide, and sulfur dioxide would trigger adverse health impacts. In short, the EIR made “it impossible for the public to translate the bare numbers provided into adverse health impacts or to understand why such translation is not possible at this time (and what limited translation is, in fact, possible).”

The Court noted that, on remand, one possible topic to address would be the impact the Project would have on the number of days of nonattainment of air quality standards per year, but the Court stopped short of stating such a discussion is required. Instead, the County, as lead agency, has discretion in choosing the type of analysis to supply.

The Court further held that the EIR did not fulfill CEQA’s disclosure requirements in that it stated that the air quality mitigation would “substantially reduce” air quality impacts but failed to “accurately reflect the net health effect of proposed air quality mitigation measures.”

Next, the Court examined whether the air quality mitigation measure impermissibly deferred formulation of mitigation because it allowed the County to substitute equally or more effective measures in the future as the Project builds out. The Court held that this substitution clause did not constitute impermissible deferral of mitigation because it allows for “additional and presumably better mitigation measures when they become available,” consistent with CEQA’s goal of promoting environmental protection. The Court also explained that mitigation measures need not include quantitative performance standards. If the mitigation measures are at least partially effective, they comply with CEQA; this is true even if the measures will not reduce the project’s significant impacts to less-than-significant levels.

RMM attorneys Jim Moose, Tiffany Wright, and Laura Harris represented the Real Party in Interest in the case.

(Laura M. Harris)

First District Court of Appeal Holds Private Sand Mining is Not a Public Trust Use

In a decision issued on remand from San Francisco Baykeeper Inc., v. State Lands Commission (2015) 242 Cal.App.4th 202 (Baykeeper I) the First District Court of Appeal, in San Francisco Baykeeper Inc. v. State Lands Commission (2018) 29 Cal.App.5th 562 (Baykeeper II) upheld the State Lands Commission’s (SLC’s) reapproval of leases authorizing a private company to dredge mine sand from sovereign land under the San Francisco Bay. Although SLC staff had erroneously concluded that sand mining is a public trust use, the appellate court held that substantial evidence in the record supported SLC’s finding that the mining leases would not impair the public trust.

In Baykeeper I, the Court of Appeal held that SLC violated the public trust doctrine by approving a sand mining project without considering whether the 10-year sand mining leases were a proper use of public trust lands. The court also held that SLC had complied with CEQA with respect to the leases. Based on SLC’s failure to consider the public trust, the court in Baykeeper I remanded the matter to the trial court, who issued a peremptory writ of mandate directing SLC to reconsider the sand mining project in light of the common public trust doctrine. In response, SLC staff prepared a report, which concluded that sand mining is a public trust use based upon waterborne commerce and because sand miners engage in navigation. The report also concluded that granting the mining leases would not impair the public right to use the lease parcels for public purposes. Staff reasoned that the mining leases were restricted in terms of duration and location, that the mining would be heavily regulated and supervised, and that previous leases had not caused any substantial impairment to the public trust. Based on the new analysis, the trial court discharged the writ of mandate. Petitioner and Appellant San Francisco Baykeeper, Inc. (Baykeeper) appealed that decision.

On appeal, Baykeeper and an amicus curiae group of law professors argued that SLC’s “overbroad” definition of a public trust use was inconsistent with Baykeeper I and case law interpreting the public trust doctrine. The Court of Appeal agreed, holding sand mining does not qualify as a public trust use of submerged lands. The court reasoned that if it were to agree with SLC, any private commercial use of trust property that involves a boat would constitute a trust use (and thus SLC could automatically authorize it pursuant to its authority to prefer one public trust use over another). This conception of what constitutes a public use is impermissibly overbroad because it would give the state too much discretion to allocate trust property without fulfilling its duty to preserve trust resources for public use and enjoyment.

Although the court held SLC staff was mistaken in concluding that sand mining qualifies as a public trust use, the court held that the record supported SLC’s conclusion that the mining leases in question would not interfere with the public trust. Baykeeper argued that the leases would impair the public trust by causing erosion at Ocean Beach and San Francisco Bar, both of which are public trust resources. Citing SLC’s CEQA findings on this issue, which the court upheld in Baykeeper I, the court held that substantial evidence supported SCL’s finding that the project would not have a significant impact related to coastal morphology.  In doing so, the court affirmed that SLC was entitled to incorporate its CEQA data into its subsequent public trust analysis. Baykeeper also argued that new scientific evidence shows a “definitive causal link” between sand mining and erosion, but the court held that the scientific disagreement between Baykeeper and SLC on the issue was not a ground for overturning a finding by SLC that is supported by substantial evidence. The court therefore upheld the trial court’s decision to discharge the writ of mandate.

(Laura M. Harris)

Third District Holds EIR Is Required When Lay Opinion Supports Fair Argument of Aesthetic Impacts

In Georgetown Preservation Society v. County of El Dorado (2018) 30 Cal.App.5th 358, the Third District Court of Appeal held that the county is required to prepare an EIR when the lay opinions of local community members create a fair argument of potentially significant aesthetic impacts.

The project at issue was a proposed Dollar General store in a designated rural commercial zone in downtown Georgetown, an unincorporated community in El Dorado County. Although the community is not a designated historic resource, it has a historical design overlay zone, and new construction is required to “generally conform” to the county’s Historic Design Guidelines. The county prepared a mitigated negative declaration. The county also determined, through an extensive design review process in which the proposed design was revised and refined to more fully express the “Gold Rush Era” aesthetic, that the project was consistent with the design guidelines, relying in part on peer review by experts in historic architecture. Over the course of the design and environmental review processes, local residents expressed their opinions that the project was visually incompatible with the existing aesthetic character of the community. Nonetheless, the county adopted the MND, and the Georgetown Preservation Society sued. The Society prevailed in the trial court, asserting that local residents’ lay opinions on the compatibility of the proposed store design with the existing aesthetic character of the town provided substantial evidence in support of a fair argument and that an EIR was required. The applicant and the county appealed.

First, the court held that the county’s finding that the project complied with applicable planning and zoning rules via the historic design review process is not entitled to deference in the context of the county’s compliance with CEQA, and the fair argument standard still applies. Although an agency’s planning and design review forms part of the entire body of evidence to consider when determining whether the fair argument standard has been met, application of such design guidelines does not insulate the project from CEQA review at the initial study phase under the fair argument standard.

Second, the court stated that lay commentary can establish a fair argument that the project may cause substantial environmental impacts. The court rejected the appellants’ arguments that here, the county’s design review criteria recommending specific architectural styles and features constituted a technical subject. Therefore the court held that lay commentary on nontechnical matters is admissible and probative. Here, the court cited the large number of local residents who submitted comments on this issue, including some claiming backgrounds in design and planning.

Relatedly, the court held that the county’s position that cited evidence from lay persons was not credible, the county’s decision-makers were first obligated to state, in the record and with particularity, which evidence lacked credibility and why. The appellants asserted that much of the cited testimony lacked basis in facts, but the court held that the county could not discount such evidence in litigation after failing to do so in the administrative record. The court further stated that even if the county had made such determinations here, doing so would have been an abuse of discretion because the court found the testimony constituted substantial evidence supporting a fair argument.

The court noted that it was not offering an opinion as to whether the project would have a substantial impact on aesthetics, but only that an EIR was required in order to fully examine the issue.

Real parties in interest were presented by Sabrina V. Teller, L. Elizabeth Sarine, and Sara F. Dudley.