First District Court of Appeal affirms trial court judgment upholding San Francisco’s certification of a mixed-use project EIR.

In a CEQA case originating in San Francisco, the First District Court of Appeal affirmed a trial court judgment denying a petition for writ of mandate and upholding an EIR certified by the city. The decision, Neighbors for Fair Planning v. City and County of San Francisco (2013) __Cal.App.4th__ (Case No. A135745), was filed on May 31, 2013 and recently ordered published.

Facts and Procedural Background

The real party in interest in this case, the Booker T. Washington Community Service Center (the Center), proposed demolition of the Center’s existing facility, which would be replaced by a mixed-use facility. This new facility would include 48 affordable housing units and an expanded and updated community center. The existing facility is a one-story building, while the proposed project would reach five stories.

The city planning department circulated a DEIR for the proposed project in June 2010. The project received both positive and negative comments. Numerous individuals and community groups objected to the project’s size, scope, and density, as well as the project’s visual impacts and effects on traffic and parking. To address concerns regarding the project’s visual character, the Center modified the project to break up its bulk into smaller components, reduce massing on the fifth story, and incorporate setbacks on the upper floors. The city certified the EIR and granted the Center a conditional use permit in April 2011.

The city upheld the EIR certification and use permit approval on plaintiff’s appeal. The city also approved an ordinance creating a special use district to increase allowable building height in the project area to 55 feet and density to 54 units.

The City did not violate CEQA by “preapproving” the project.

In the subsequent lawsuit, the petitioner (“Neighbors”) cited Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 in support of their argument that the city impermissibly “preapproved” the project in violation of CEQA. Specifically, the Neighbors asserted the city committed to approving the project prior to certification of the EIR. The appellate court noted that determining the appropriate timing for preparation of an EIR requires a balancing of competing factors. The CEQA Guidelines express these competing policies by recognizing legislative policy that: (1) CEQA should not be interpreted to require an EIR before a project is defined enough to facilitate meaningful review; and (2) CEQA should not be interpreted as allowing delay of EIR preparation beyond the point which it can serve its intended purposes—to inform and guide decision makers.

The general principle for balancing these two policies is described in the CEQA Guidelines: before conducting CEQA review, agencies must not “‘take any action’ that significantly furthers a project ‘in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that public project.’” Courts have approached this principle by asking “whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features” in a way that precludes consideration of alternatives or mitigation measures that CEQA would otherwise require to be considered.

In this case, the Neighbors argued the city preapproved the project by improperly committing itself to the project and foreclosing consideration of all alternatives in 2010, when the Mayor’s Office of Housing “provided substantial funding for the project, signed commitments for millions of dollars, assigned numerous senior staff to the project, and coordinated and designed the project long before CEQA review was conducted.” Specifically, the Neighbors cited a pre-development loan agreement between the city and the Center that covered about 4% of the estimated project costs. A maximum disbursement of $550,000 was authorized prior to the completing of CEQA review. These funds were to cover predevelopment activities, such as survey and appraisal preparation, preparation of environmental studies, CEQA and NEPA review, and other expenses. The loan also described terms of repayment. It even explicitly stated that the city was not committing itself to the project.

The appellate court was not convinced by the Neighbors’ argument. Under the loan agreement, the project remained subject to review by the city, and the city’s financial support of the project extended only to exploratory and development costs recognized in Sava Tara not to require CEQA review. Further, the Center was required to repay the loan whether or not the project was approved. Finally, the city’s support of the low-income aspect of the project was only a single factor to be considered under Sava Tara and not tantamount to project approval.

The Neighbors also argued that the city preapproved the project based on adoption of the special use district ordinance allowing increased height and density. The court rejected this argument. Essentially, the Neighbors argued that the introduction of the ordinance constituted legislative action and therefore project approval under CEQA. But approval of the ordinance occurred two months after the EIR for the project was certified.

Finally, the Neighbors argued the city preapproved the project based on commitment of city staff resources and public comments by the Mayor’s Office of Housing. The appellate court was not persuaded by this evidence, stating that a supervisor’s advocacy for a project, an email from a non-profit soliciting support for the project, and a publication by the Center were insufficient to indicate the City improperly committed to the project prior to CEQA review.

The EIR prepared for the project was sufficient.

Challenging the substance of the EIR itself, the Neighbors first argued the EIR was inadequate because it relied on an improper baseline. The Neighbors pointed to one figure in the draft EIR that incorrectly identified all two-story buildings in the immediate project vicinity as three-story buildings. But the court found the DEIR as a whole adequately described the surrounding vicinity and, specifically, the heights of adjacent buildings. Further, a corrected version of the figure was included in the Final EIR certified by the Board of Supervisors, so informed decision making was not thwarted.

The Neighbors also argued the EIR was deficient for failing to evaluate relocating the Center’s existing facility to a new site as project alternative. But the court noted that the CEQA Guidelines do not require analysis of an off-site alternative in every case. The court held that the city reasonably determined, with analysis supported by substantial evidence, that it would not be feasible to relocate the Center away from the community it had historically served to an unidentified location, especially in light of the Center’s non-profit status and limited means for acquiring alternate property.

The City properly rejected a code-compliant alternative and properly issued the conditional use permit.

The Neighbors further argued the City’s rejection of a “code compliant” alternative was unsupported by substantial evidence. This alternative would reduce the number of affordable housing units from 48 to 30. The city determined this would cause the project to run an annual deficit that would need to be subsidized by the city. The Mayor’s Office of Housing testified that sound public policy supported construction of financially self-sustaining developments that would create more affordable housing units without additional public funds. Further, if the city were required to subsidize this project, it would have less funding available for other affordable housing projects. The court found these and other points to be well-established in the administrative record. Substantial evidence supported the city’s decision to reject the code-compliant alternative.

The Neighbors also argued the city’s findings that the project was necessary and desirable for, and consistent with, the neighborhood was unsupported by substantial evidence under section 303 of the San Francisco Planning Code. The record demonstrated that the city considered both the immediate neighborhood and its broader vicinity and found that the project would not be detrimental to the public health, safety, and welfare or adversely affect the General Plan. The city further found that the project was necessary or desirable because it would continue and expand upon services provided by the Center, particularly for at-risk emancipated foster youth. The findings were supported by substantial evidence, and the court found no merit in the Neighbors’ argument.

The project was consistent with the General Plan.

Lastly, the Neighbors argued that the project is inconsistent with the San Francisco General Plan because “it is incompatible with, and fails to preserve, the existing neighborhood character.” The standard of review for consistency findings is an arbitrary and capricious standard of review. Further, policies in general plans often reflect a range of competing interests that the governmental agency must weigh and balance when applying to legislative actions. Precise conformity is not required, just compatibility. The city made explicit findings that the project was consistent with various objectives and policies, including findings regarding the project’s scale and design—the Neighbors’ primary concern.  These findings were sufficient, and the court declined the invitation to second-guess the city’s determination.