Fourth District Upholds Specific Plan EIR Against Challenge to EIR’s Water Supply and Agricultural Resources Analyses

Cherry Valley Pass Acres and Neighbors v. City of Beaumont (2010) 190 Cal.App.4th 316. On November 22, 1010, the Fourth District Court of Appeal upheld the City of Beaumont’s environmental impact report (EIR) prepared for the Sunny-Cal Specific Plan, which called for the development of 560 residential units on a 200-acre site long used for agricultural purposes. The court heard and rejected claims that the city relied on an improper baseline in assessing the project’s impacts on water supplies and claims that the EIR’s water supply analysis was deficient due to inconsistencies between the Water Supply Assessment (WSA) prepared for the project and other pertinent water supply planning documents. The court also concluded that substantial evidence supported the city’s conclusion that mitigation measures and alternatives to reduce the project’s significant impact to agricultural resources were economically infeasible.

In August 2007, the City of Beaumont certified an EIR and adopted a statement of overriding considerations for the Sunny-Cal Specific Plan and approved the plan. The Specific Plan encompasses 200 acres in Cherry Valley, an unincorporated area of Riverside County which would be annexed into the city as part of the project. From early 1960 and through late 2005, the project site had housed the real party in interest’s egg farm. The egg farm closed in late 2005 after the landowner determined it was no longer economically feasible. The approved Specific Plan would allow for development of 560 residential units on the project site.

Following the city’s approval of the project, petitioners, Cherry Valley Pass Acres and Neighbors and Cherry Valley Environmental Planning Group, filed a petition for writ of mandate alleging the EIR was insufficient as an informational document because it failed to properly address the project’s significant impacts on area water supplies and agricultural land uses. The trial court denied the petition, and petitioners appealed.

Water Supply Analysis
On appeal, petitioner first argued the EIR failed to properly analyze the Specific Plan’s impacts on water supplies because, according to petitioners, it relied on an improper baseline, the real party’s adjudicated right to draw 1,484 annual acre feet (afa) of groundwater from the underlying Beaumont Basin. (A 2004 court adjudication of the Beaumont Basin awarded real party 1,784 afa in overlying water rights to the groundwater basin, which real party would assign to the Beaumont-Cherry Valley Water District [BCVWD] as part of the project in exchange for BCVWD agreeing to “earmark” that amount for the Specific Plan. This amount was then reduced to 1,484 afa due to a reduction in the project size.)

Petitioners argued the EIR should have analyzed the project’s water supply impacts based on the 50 afa that real party was actually using on the project site after it ceased operating the egg farm in late 2005, and not the 1,484 afa to which real party was entitled. Petitioners argued the use of the 1,484 afa figure caused the EIR to oversimplify and understate the project’s true impacts on area water supplies and resources. The appellate court disagreed. The court explained that the city’s selection of the 1,484 afa figure was “quintessentially a discretionary determination” of how the existing physical conditions without the project could most realistically be measured. The court found that substantial evidence showed that the 1,484 afa figure was a realistic baseline in that the Beaumont Basin adjudication afforded real party the right to use 1,484 afa each year beginning in February 2004. Further, the 1,484 afa figure was not substantially higher than real party’s average annual use of 1,340 afa between 1997 and 2001 during the egg farm’s operation on the project site.

Although, as petitioners pointed out, real party was only using 50 afa on the site after it ceased operating the egg farm in late 2005, its right to use the full 1,484 afa entitlement on the site was not affected by the cessation of the egg farm operations. Instead, the 1,484 afa figure accurately reflected “‘physical environmental conditions in the vicinity of the project, as they exist[ed] at the time the notice of preparation [NOP] [was] published’” in December 2004. (Quoting CEQA Guidelines, § 15125, subd. (a).) Because the 1,484 afa figure closely approximated Sunny-Cal’s historic water usage on the project site, this case was distinguishable from cases in which agencies use a hypothetical or “allowable conditions” as a baseline. Instead, real party’s entitlement to the 1,484 afa of groundwater reflected actual historic conditions that existed well before the project’s NOP was issued. In reaching this conclusion, the Court distinguished Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310, 315 (CBE); Woodward Park Homeowners Assn., Inc. v. City of Fresno (2007) 150 Cal.App.4th 683; Environmental Planning & Information Council v. County of El Dorado (1982) 131 Cal.App.3d 350, which faulted EIRs for applying a “hypothetical or allowable condition” as a baseline. In this case, the EIR properly used water use numbers related to on-the-ground conditions as a baseline.

Petitioners next argued the EIR failed to adequately analyze the project’s water supply consistent with the California Supreme Court’s direction in Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412 (Vineyard). According to petitioners, the EIR’s analysis violated the principles set forth in Vineyard because it failed to explain how the BCVWD would have sufficient supplies of water to serve the needs of both the Specific Plan and the BCVWD’s other customers over an approximate 20-year time period. In support of this argument, petitioners pointed to inconsistencies between the assumptions made in BCVWD’s 2005 Urban Water Management Plan Update, which, according to petitioners, revealed uncertainties concerning how much water BCVWD will need to serve all its customers through 2025 or 2030, where that water will come from, and how much will be available.

According to the court, however, even assuming petitioners were correct that the record could not support a finding that BCVWD would have adequate supplies to meet all its customers’ needs over the next 20 years, Vineyard requires no such showing. Instead, the EIR was only required to show “a reasonable likelihood that sufficient supplies of water, from an identified source, would be available to meet the needs of this project, the [Specific Plan], over 20 years.” (Italics original.) The court concluded that the EIR had made this showing. The EIR repeatedly noted that the 200-acre Specific Plan site has its own entitlement: in exchange for the transfer of real party’s entire 1,484 afa entitlement BCVWD, BCVWD will be obliged to earmark up to the same amount of Beaumont Basin water solely and exclusively for the Specific Plan, even though the Specific Plan, at most, will only use 531 afa of water. Thus, the EIR demonstrated a reasonable likelihood that sufficient water supplies would be available for the project, which is all that Vineyard requires.

Agricultural Resources

Petitioners next claimed the city failed to investigate and analyze feasible mitigation measures and alternatives for reducing the Specific Plan’s impacts on agricultural resources. In particular, petitioners claimed there was no evidence to support the EIR’s determination that the project’s impacts on agricultural land uses in the Cherry Valley area could not be feasibly mitigated through the purchase of off-site agricultural land or agricultural easements because such land uses were no longer economically feasible. The court disagreed. It found that mitigation measures requiring the off-site preservation of farmland in the Cherry Valley area were facially infeasible due to the “tremendous” and “continuing” urban and suburban development in the area. Thousands of new homes were being built in the area and substantial evidence showed that increases in agricultural land values created pressure on all types of agricultural lands to sell or convert for urban and suburban development. Based on these facts, the EIR reasonably concluded that any measures to reduce the project’s direct and cumulative adverse impacts on agricultural land uses in Cherry Valley and the north Beaumont areas would not have been economically feasible. Interestingly, the court concluded that the city was not required to find that the purchase of off-site mitigation would render the project infeasible; the court found that such an inquiry may be appropriate in considering an alternative, but for mitigation the question was whether the measures themselves were feasible.

Petitioners further argued there was no evidence to support the city’s conclusion that several onsite project alternatives to the Specific Plan involving various degrees of continued agricultural uses on the site were economically infeasible. Again, the court disagreed. Among the alternatives analyzed in the EIR were a “continued agriculture” alternative under which the entire site would be used for agriculture and two alternatives involving continued agricultural uses on approximately 60 acres of the site. Substantial evidence in the record, however, showed the project would have lost millions (between $5 and $16 million) under the project alternatives and therefore the city properly rejected the alternatives as economically infeasible. Although the court agreed with petitioner that there may be an alternative that included an optimum number of residences that could be profitably built while minimizing agricultural impacts of the project to the fullest extent possible, the range of alternatives discussed in the EIR was sufficient to foster informed decisionmaking. The court therefore upheld the EIR’s alternative analysis.

The City’s Statement of Overriding Considerations

Lastly, petitioners contended the city’s statement of overriding considerations, in which the city determined the project’s benefits outweighed its significant and unavoidable adverse environmental impacts, was not supported by substantial evidence. The court of appeal disagreed. The court explained that overriding considerations are intended to show the “balance” an agency strikes in weighing the benefits of the project over its unavoidable environmental risks. Here, the court concluded substantial evidence supported the conclusion that the project would provide for a high quality land use transition, reduce water demands in the area, provide sewer service and backbone public infrastructure in the area, develop a high quality residential community, include open space in excess of current regulations, and be sensitive to the environment, aesthetically pleasing, and compatible with adjacent land uses. Although, as petitioners suggested, the identified “benefits” of the project largely mirrored the project’s basic characteristics, the city acted well within its discretion to determine these characteristics were sufficiently desirable to overweigh and outweigh the Specific Plan’s adverse environmental impacts.