Fifth District Finds Report Prepared by Real Estate Broker Was Not Substantial Evidence of Urban Decay

In Visalia Retail, LP v. City of Visalia (2018) ­­20 Cal.App.5th­­ 1, the Fifth District upheld the City of Visalia’s certification of an Environmental Impact Report (EIR) for its general plan update. Though the EIR did not analyze the potential for urban decay, the court found that the record contained no substantial evidence that a land use policy restricting the size of commercial tenants in a neighborhood commercial area would result in urban decay. The court also found that the city’s general plan was not internally inconsistent and that the city had not violated relevant Planning and Zoning Law notice provisions.

The city prepared an EIR for an update to its general plan, which included updating the land use policy at issue. Under that policy, commercial tenants in neighborhood commercial areas may not be larger than 40,000 square feet. The petitioner argued that the size restriction would cause significant physical impacts in the form of urban decay, and therefore the EIR was inadequate for failing to address those impacts. In support of this argument, the petitioner submitted a report prepared by a real estate broker, who opined that the 40,000-square-foot cap would cause grocers to refuse to locate in the neighborhood commercial centers, which would cause vacancies and would then, in turn, result in urban decay.

The court rejected this argument finding that the report did not provide the requisite basis for the petitioner’s challenge because its analysis of causation was speculative and the potential economic consequences does not mean that urban decay would result. The court distinguished Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal.App.4th 1184, where it had held that the EIR in that case was fatally defective for failing to analyze the individual and cumulative potential to indirectly cause urban decay resulting from the development of two shopping centers. But there, the court emphasized, the analysis of urban decay is required when there is evidence suggesting that the economic and social effects caused by development could result in urban decay. Here, the court found no such evidence in the record.

The court also found that the size restriction was not inconsistent with the general plan’s stated goal of encouraging infill development. Finally, the court held that the city did not violate the 10-day notice requirement set forth in the Planning and Zoning Law by failing to re-notice additional meetings on the general plan amendment.