In Protect Tustin Ranch v. City of Tustin (2021) 70 Cal.App.5th 951, Division Three of the Fourth District Court of Appeal upheld the City of Tustin’s reliance on CEQAs’ categorical exemption for infill projects, holding that the petitioner failed to show that the project did not meet the requirements for the exemption or that an exception to the exemption applied.
This case involves a proposal by Costco Wholesale Corporation to build a gas station next to an existing Costco warehouse in the Tustin Ranch area of the City of Tustin. The project site is already developed with a shopping center and is surrounded by commercial uses, as well as some residential development.
The project includes two components: (1) a 16-pump gas station with a canopy and landscaping, and (2) the demolition of an existing Goodyear Tire Center and parking lot, which would be replaced with a new 56-stall parking lot.
The planning commission voted to approve the project and adopted a resolution finding that the project is categorically exempt from CEQA under CEQA Guidelines section 15332 (Class 32, Infill Development Projects).
Members of the public appealed the planning commission’s decision to the city council. The staff report for the city council hearing explained why staff believed the project fell within the infill exemption. It also explained that, although Costco’s initial application indicated that the project site is 11.97 acres, the project site (i.e., the portion of the site to be developed) is actually only 2.38 acres.
The city council agreed with the planning commission and staff that the project is exempt under the infill exemption. The city council adopted a resolution finding the project categorically exempt and approved the project. In doing so, the city council expressly found that the project did not present any unusual circumstances as compared to other projects that would qualify for the exemption.
The trial court upheld the city’s determination that the project is categorically exempt from CEQA review. Petitioner appealed.
The Court of Appeal’s Decision
To qualify for the Class 32 infill exemption, a project must meet five criteria: (1) the project must be consistent with the general plan and with the zoning code, including all applicable general plan policies and zoning regulations; (2) the project must be located within city limits on a site that is no larger than five acres and is surrounded by urban uses; (3) the site must have no value as habitat for special-status species; (4) approval of the project must not cause any significant impacts related to air quality, noise, traffic, or water quality, and (5) the site must be adequately served by utilities and public services. (CEQA Guidelines, § 15332.)
Petitioner challenged the city’s reliance on the infill exemption only with respect to the size of the project, arguing that the project does not qualify for the exemption because the project site is larger than five acres. The court explained that the city’s conclusion that the project site is five acres or less is a factual determination to which the court applies the deferential “substantial evidence” standard of review. Under this standard, the court does not weigh conflicting evidence. Rather, the court must uphold the agency’s determination if it is supported by any substantial evidence in the record as a whole. In the case before it, explained the court, multiple documents in the administrative record confirmed that the size of the project site is 2.38 acres. For instance, Costco’s revised development application states that the “area of work” would be 2.38 acres, inclusive of the new gas station and parking at the demolished Goodyear site. A water quality management plan and maps of the project also showed that the site is 2.38 acres. Additionally, at the city council’s hearing on the project, city staff clarified that the total project site was calculated by adding together the acreages of both components of the project—1.74 acres for the gas station and 0.64 acres of new surface parking where the Goodyear center would be demolished. Thus, held the court, substantial evidence supports the city’s determination that the project fits within the requirements of the infill exemption.
The court next considered whether the “unusual circumstances” exception to the categorical exemption applies. CEQA Guidelines section 15300.2, subdivision (c), provides that “[a] categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” If a project meets the requirements of a categorical exemption, the burden is on the party challenging the exemption to produce evidence supporting an exception. The Supreme Court, in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, explained that this showing may be made in two ways. First, the challenger may identify evidence that the project will have a significant environmental impact. Alternatively, the challenger may show that the project is unusual because its features distinguish it from others in the exempt class, and that there is a “reasonable possibility” that the project will result in a significant environmental impact due to that unusual circumstance. The substantial evidence standard applies to an agency’s determination that there are no unusual circumstances. But the less deferential “fair argument” standard applies to the question of whether there is a reasonable possibility that the unusual circumstances may cause a significant effect.
Petitioner argued that the unusual circumstances exception applied for three reasons. First, the project is located on a former Goodyear Tire Center where tires were installed and oil and other fluids were changed. Second, the proposed gasoline fueling station with 16 pumps is unusually large. And third, Costco proposed to re-route traffic during peak hours. The court summarily rejected these arguments, however, because petitioner had failed to explain why these features made the project unusual compared to other projects qualifying for the infill and exemption. In fact, evidence in the record showed that the project is similar to other Costco gas stations in California and is not unusually large—as evidenced by the fact that the project is less than five acres in size. The court went so far as to question whether the size of a project can be a characteristic that makes an otherwise exempt infill project unusual, since the infill exemption is expressly limited to projects less than five acres in size.
Petitioner further argued that the city’s reliance on the exemption was improper because the city should undertake studies to determine whether the project would contaminate soils. The court rejected this argument, however, explaining that unsupported assumptions and speculation are not enough to require the city to conduct CEQA review. By law, a categorically exempt project is deemed not to have potentially significant impacts unless the project’s administrative record shows that an exception to the exemption applies. Here, petitioner failed to show an exception applies. The fact that the project may have a significant environmental impact is not a sufficient basis to require CEQA review for a categorically exempt project.
This case highlights the standard of review that the courts will apply to an agency’s determination that a project is categorically exempt from CEQA. The burden of showing that the “unusual circumstances” exception applies is on the petitioner. In this case, the petitioner did not offer any concrete reasons or evidence showing that the project is distinct from other projects qualifying for the in-fill exemption. Therefore, the court upheld the city’s reliance on the exemption.