First District Upholds Categorical Exemption with Conditions of Approval and Conditional Use Authorization for Residential Project on Infill Site in Transit Priority Area

In Protect Telegraph Hill v. City and County of San Francisco (2017) 16 Cal.App.5th 261, the First District Court of Appeal, Division Three, upheld the City and County of San Francisco’s (city) finding that a conditional use authorization for the restoration of a small cottage and construction of a three-unit condominium on Telegraph Hill was categorically exempt from CEQA, and found that the city’s conditions of approval relating to construction were not mitigation for pedestrian and traffic impacts.

The proposed project is a new three-unit condominium fronting on Telegraph Hill Boulevard, the restoration of an existing small cottage at the back of the property, and three off-street parking spaces. The city planning department determined that the renovation of the cottage was categorically exempt from CEQA under the Class 1 exemption (Guidelines, § 15301, subd. (d)), and construction of the new building was exempt under the Class 3 exemption as a residential structure totaling no more than four dwelling units (Guidelines, § 15303, subd. (b)). The planning commission approved a conditional use authorization with some conditions on construction activity. A neighborhood group appealed both decisions to the San Francisco Board of Supervisors. The board approved the exemption and the conditional use authorization, with additional conditions on the construction activity. Protect Telegraph Hill filed a petition for writ of mandate, arguing that the city’s findings relating to the exemptions and approval of the conditional use authorization were unsupported by the evidence, the city failed to consider the entire project, and unusual circumstances and the inclusion of mitigation measures made the reliance on categorical exemptions improper. The trial court denied the petition, and Protect Telegraph Hill appealed.

On appeal, the petitioner argued that granting the exemptions was unlawful because the conditions of approval imposed by the city were intended to mitigate environmental impacts from the project’s construction, indicating that the project would have significant impacts and thus could not be exempt from CEQA. The petitioner also argued that the project description was inadequate to determine whether the project was truly exempt and that the unusual circumstances exception applied.

The court concluded that while some of the conditions of approval addressed traffic and pedestrian safety, they were attached to the approval of the conditional use authorization, and not the exemptions. The exemptions were initially approved by the planning department without qualification, while the conditional use authorization was originally approved by the planning commission with certain conditions. The petitioner had to appeal both decisions separately to the Board of Supervisors, which voted separately on each decision, attaching further conditions to the conditional use authorization only. The court also found that there was no substantial evidence in the record suggesting that the project would have significant effects on traffic and pedestrian safety. The court stated that the appellant’s “expressions of concern” in the record were not substantial evidence. The court also rejected attacks on the project description, finding that the included description complied with the requirements in the San Francisco Administrative Code and there was no evidence in the record suggesting the description was deficient.

Turning to the unusual circumstances exception, the court applied the two-part test announced by the California Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086. The city’s conclusion that the unusual circumstances exception was not met is reviewed for substantial evidence. But, if there are unusual circumstances, the court considers whether there is a fair argument that there is a reasonable possibility that the project will have a significant effect.

Protect Telegraph Hill argued that the location of the project on Telegraph Hill was itself an unusual circumstance. But the court found that the city’s determination that there were no unusual circumstances was supported by substantial evidence. While Telegraph Hill is described in the design element of the general plan, the project conformed to the zoning requirements for that area and was similar in proportion to the immediately adjacent buildings. The petitioner also argued that the area was heavily traveled because of its proximity to Coit Tower landmark, but the court agreed with the city that large traffic and pedestrian volumes was “more commonplace than unusual” in San Francisco.

Next, the petitioner argued that the project would impair views of the downtown skyline from the public stairway. The court rejected this argument in part by applying new Public Resources Code section 21099, subdivision (d), which applies to residential urban infill projects in transit priority areas, and requires that aesthetic impacts “shall not be considered significant impacts on the environment.” Additionally, the city considered the project’s impact on views from Coit Tower and Pioneer Park and concluded it would not have an adverse effect. The petitioner also argued that the 30% slope of the lot was an unusual circumstance. The court again agreed with the city that the slope was not unusual for San Francisco and found that the city’s engineering report provided substantial evidence supporting its decision. The petitioner also submitted an engineering report that provided conflicting evidence, but that report did not negate the substantial evidence supporting the city’s conclusion.

Lastly, the petitioner argued that the conditional use authorization finding was unsupported because of the project’s potential to obscure views of the downtown skyline from the stairway. The court held that even if there were some conflict with one policy in the general plan, the policies were not strictly construed and the project was consistent with other policies and the Urban Design Element for Telegraph Hill. Ultimately, the court found that the record supported the city’s conclusion that the project would not change the character of Telegraph Hill, and denied the petition.