This case originates from a long-standing dispute between the County of Orange and the City of Irvine over the County’s plans to substantially increase the capacity of one of its existing prison facilities. The County approved an application for state funding to expand the facility, and the City of Irvine sued, arguing the approval constituted a “project” under CEQA requiring preparation of an EIR. The trial court denied the City’s petition for writ of mandate, and the Fourth Appellate District affirmed in City of Irvine v. County of Orange (2013) __ Cal.App.4th __ (Case No. G047895). The court concluded that a mere funding application was not a sufficient commitment to a proposal to constitute a project under CEQA.

The County has operated the James A. Musick Jail Facility for over 40 years. The facility is located on 100 acres of unincorporated land owned by the County but adjacent to the City of Irvine. The jail facility was originally designed to house about 700 minimum-security inmates, but in recent years had housed more than 1,200 inmates. The controversy began back in 1996, when the County prepared an EIR for the phased expansion of the facility to a maximum capacity of 7,584 inmates ranging from minimum to maximum security.

After some legal wrangling between the City and the County over the 1996 EIR, the County certified a revised EIR and authorized “the pursuit of funding” for the expansion of the Musick Jail Facility in accordance with the revised EIR. For a long time, no expansion took place, as the County lacked funding. But in 2007, the Legislature passed AB 900 to provide funding for local jail construction. The County submitted an application in 2011 seeking funds to expand the Musick Jail Facility by 512 medium-security beds. The County explained that it anticipated circulating an addendum to the 1996 EIR as the CEQA document for this proposed expansion. In 2011, the County Board of Supervisors adopted a resolution approving the application for funding. The application stated that County resolved to comply with CEQA before accepting any state funds.

The City of Irvine sued. In its petition, the City argued that the County’s approval of the application for state funding constituted a project under CEQA requiring preparation of an EIR or other CEQA documents prior to the action. The trial court denied the City’s petition, and the City appealed.

The Fourth Appellate District explained that the narrow issue before it was whether the County should have prepared and certified a CEQA document before approving an application for state funding. For guidance, the Fourth District looked to the California Supreme Court’s decision in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116. In Save Tara, a developer proposed constructing low-income, senior housing on city-owned property. The city entered into a conditional development agreement with the developer and subsequently granted substantial assistance to the developer in its efforts to obtain a federal grant for the project. This assistance included an option to purchase the property from the city “at negligible cost” and a loan of nearly half a million dollars for use in the approval process. The developer was under no obligation to repay this loan if the city did not ultimately approve its project. The Supreme Court determined that under these circumstances, the city had committed itself to a definite course of action that precluded the consideration of alternatives or mitigation measures that CEQA might otherwise require. Therefore, the Supreme Court concluded that the development agreement was an approval under CEQA requiring environmental review.

In this case, the Fourth District ultimately distinguished between “advocating or proposing a project” and “committing to” a project. In the court’s view, the former would not be a project but the latter would.  The court concluded that in this case, the County was advocating for and proposing a project rather than committing to it. For example, under AB 900, agencies are required to use a detailed application prescribed by the bill. Further, the bill made clear that if the applications were approved, the funds would be conditionally awarded. The court emphasized that the conditions to payment were substantial. The applying agencies would have to complete numerous additional steps, including CEQA review, before they could then seek reimbursement for the costs authorized by the amount of the conditional funds. The court found this to be an important distinction from the circumstances in Save Tara.

The court noted additional factors which influenced its analysis: (1) the County had in the past rejected state funding previously approved under an AB 900 request due to conditions imposed by the state; (2) the County had been using the land identified for expansion as a jail for more than 40 years, so resources spent identifying the project site for expansion did not amount to an approval for CEQA purposes; and (3) even the presence of detailed design plans for the proposed facility expansion did not represent commitment to a definite course of action by the County. Since the commitment element was lacking, the Fourth District affirmed the trial court’s judgment dismissing the City of Irvine’s petition.