Abbott & Kindermann Land Use Law Blog

Bay Area Air Quality Management District Defers Adoption of Greenhouse Gas Thresholds

Abbott & Kindermann — Thu, 04 Feb 2010 14:00:52 -0800

By Leslie Z. Walker

The Bay Area Air Quality Management District (“BAAQMD”) was scheduled to be the first air district in the state to adopt quantitative as well as qualitative thresholds of significance for greenhouse gas emissions in January of 2010, but instead has delayed the decision until April of 2010. According to BAAQMD, the delay is to “provide more time for staff to meet with local governments, further develop analysis tools, and conduct trainings on applying the CEQA Guidelines.”

The BAAQMD proposes aggressive quantitative thresholds for plan-level and project-level analysis and stationary sources, in addition to qualitative thresholds for project-level and plan-level analysis. The district emphasizes that the thresholds are intended to serve in the interim until AB 32 regulations, incentives and programs have been implemented and CARB has recommended thresholds under SB 375 (See SB 375: A Subtle Shift in the State-Local Long Range Planning Paradigm). After those events take place, BAAQMD anticipates the need to revisit the thresholds.

The proposed thresholds are as follows:

At the plan level, BAAQMD proposes a quantitative threshold of 6.6 metric tons of carbon dioxide equivalent per person per year, or a qualitative threshold of compliance with a qualified climate action plan or similar criteria in a general plan.
At the project level, BAAQMD proposes two quantitative thresholds: 1,100 metric tons of carbon dioxide equivalent per year or 4.6 metric tons of carbon dioxide equivalent per year per person. The BAAQMD advises using caution with latter threshold, suggesting that the cumulative impact of a large project falling below this threshold may be significant.
For stationary sources, the BAAQMD proposed a threshold level of 10,000 metric tons of carbon dioxide equivalent per year.

For more information, see the California Environmental Quality Act Guidelines Update: Proposed Thresholds of Significance.

Leslie Z. Walker is an associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

Paper or Plastic? Public Right Exception Allows Plastic Bag Producers to Challenge Negative Declaration for Environmental Ordinance

Abbott & Kindermann — Thu, 04 Feb 2010 06:00:00 -0800

By Leslie Z. Walker

The Court of Appeals for the Second Appellate District demonstrated in January, that substantial evidence of a fair argument includes any evidence in the record, even a report from the Scottish Government evaluating a plastic bag tax. In Save the Plastic Bag Coalition v. City of Manhattan Beach (January 21, 2010, B215788) ___ Cal.App.4th___,the appellate court found that substantial evidence supported a fair argument that an ordinance prohibiting the use of plastic bags in the city may require the preparation of an environmental impact report (“EIR”).

The coastal city of Manhattan Beach adopted Ordinance No. 2115 which prohibited certain retailers and establishments from using plastic bags in order to preserve the marine environment by reducing the number of plastic bags making their way into and polluting the ocean.

The City prepared an initial study (“IS”) for the ordinance. Based on the IS, the city determined the ordinance was not a project involving any significant impacts on the environment and prepared a negative declaration. The city acknowledged the ordinance may result in greater paper bag use, which could have negative environmental effects including increased power plant, paper mill and recycling plant emissions; increased traffic involved in shipping the pager bags to retail establishments; and increased emissions from trucks carrying the heavier, bulkier paper bags. The IS found that reducing the use of plastic bags in the city would have a modest positive impact on the migration of plastic refuse into the ocean, and that the impacts of the ordinance with respect to air quality, traffic and landfill capacity due to the increased use of paper bags would be less than significant. The city determined there was no substantial evidenced the project may have a significant effect on the environment, and therefore adopted a negative declaration.

An association of plastic bag manufacturers (“Association”) brought suit, claiming the ordinance may result in the increased use of paper bags, which in turn would result in significant environmental impacts. The Association challenged the use of a negative declaration, pointing to five reports in the record as substantial evidence that the project may have a significant effect on the environment: a 2005 report commissioned by the Scottish Government in response to a bill in Parliament to impose a levy on plastic bags; a 2007 study commissioned by the Progressive Bag Alliance to conduct a life cycle assessment of three types of grocery bags; a 2008 Use Less Stuff Report; the 1990 Report prepared by Franklin Associates, Ltd.; and the 2007 Los Angeles County Report.

The trial court found the association presented substantial evidence of a fair argument that the ordinance may have a significant environmental impact and therefore an EIR had to be prepared. The trial court agreed and the city appealed.

The appellate court first addressed the Association’s standing to assert the claim and found the association had standing under the public right/duty exception which provides that a citizen interested in having a law executed and a duty in question enforced, need not show that he has any legal or special interest in the result. The court stated, “[t]his is not a case in which the plaintiff’s interest is purely commercial and competitive.”

The court proceeded to determine whether the evidence in the record met the low threshold requiring the preparation of an EIR. The court explained that it is the plaintiff who has the burden of demonstrating the existence of substantial evidence of a fair argument that a project may have a significant effect on the environment.

The court found that four of the five reports cited by the Association supported the conclusions that prohibiting plastic bags is likely to lead to increased use of paper and reusable bags; paper bags have a greater negative environmental effect as compared to plastic bags; and these negative environmental effects include greater nonrenewable energy and water consumption, greenhouse gas emissions, solid waste production, and acid rain. This constituted substantial evidence of a fair argument that the plastic bag distribution may have a significant environmental effect, meeting the low threshold for the preparation of an environmental impact report.

Justice Mosk’s dissent presents tempting logic stating,

“requiring the small city of Manhattan Beach . . . to expend public resources to prepare and environmental impact report (EIR) for enacting what the City believes is an environmentally friendly ordinance phasing out the retail distribution (not use) of plastic carryout bags within the City . . . stretches the California Environmental Quality Act . . . and the requirement for an EIR to an absurdity. . . This action to require an EIR was generated by the plastic bag industry for its economic interest.”

Economic interest or not, this case shows us just how low the threshold is for the fair argument standard goes.

The Fight Over Property Taxes Continues: School District Entitled to Larger Share of Property Tax Increment

Abbott & Kindermann — Wed, 03 Feb 2010 09:28:20 -0800

By Cori Badgley

Los Angeles Unified School District v. County of Los Angeles (2010) __ Cal.App.4th __ involved a tug-of-war between a county and a school district over a share of the property tax increment distributed by redevelopment agencies. In the wake of Proposition 13, property tax revenues are limited and their allocation is coveted by local government, special districts and school districts. Under redevelopment law, redevelopment agencies must give a portion of the incremental increase in property tax revenues to local entities, including schools, based on the percentage of property tax revenue received by the entity in that fiscal year. In this case, the Los Angeles Unified School District argued that it was entitled to a larger share of the property tax increment than it had been allocated because defendants, which included multiple redevelopment agencies, the County of Los Angeles and the City of Los Angeles (collectively “county”), failed to take certain property taxes received by the school district into account. The trial court disagreed with the school district, and the appellate court reversed.

The argument in this case centered around the overlap between two statutes: the pass-through legislation under Health & Safety Code section 33607.5 and the Educational Revenue Augmentation Fund (Rev. & Tax Code, §§ 97.2, 97.3) (“ERAF”). The legislature enacted ERAF to require the distribution of a portion of property taxes, along with other funds, to schools, to the detriment of county and city coffers.

Health & Safety Code section 33607.5 deals with the allocation of the property tax increment. The property tax increment is the increase in property tax revenues resulting from the redevelopment of property. In order to ensure that local entities are not financially burdened by the adoption of redevelopment plans, the legislature enacted pass-through legislation (Health & Safety Code, § 33607.5) whereby redevelopment agencies must “share or pass-through a portion of the property tax increment to local taxing entities, including schools.” This portion of the property tax increment is based on the proportion of property taxes allocated to the entity in the same fiscal year that the property tax increment is allocated.

In this case, the county did not take into account the amount of property taxes received by the school district through ERAF when calculating the percentages of property taxes received by each local entity. This meant that the percentage allocated to the school district was smaller because the percentage of property tax revenue received by the school excluded the additional ERAF amount. The school district sued the county on the grounds that the ERAF funds had to be included in the calculation.

On appeal, the Court of Appeal, Second Appellate District held that the county acted unlawfully in excluding the ERAFs. According to the court, subdivision (d)(5) of sections 97.2 and 97.3 of the Tax & Revenue Code clearly and unambiguously includes ERAFs as property tax revenue, and therefore, “any property tax revenue deemed allocated to ERAFs under subdivision (d)(5) necessarily qualifies as property tax revenue to the school that received it.” The court did point out that any money allocated through the ERAF to the school that was not property tax revenue should be excluded from the calculation.

Thus, the court concluded that the county’s calculations were unlawful and remanded the matter to the trial court to determine the right to reimbursement.

Cori M. Badgley is an associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

Too Late! Challenge at the Time of Project Implementation is not Timely

Abbott & Kindermann — Thu, 28 Jan 2010 13:04:29 -0800

By Katherine J. Hart

A state appellate court has upheld the adoption of design guidelines that are intended to implement a City of Los Angeles redevelopment plan.

PR/JSM Rivara LLC v. Community Redevelopment Agency of the City of Los Angeles involves adoption by the Community Redevelopment Agency of the City of Los Angeles, and the city (collectively, the “city”) of design guidelines for the North Hollywood redevelopment project area in September 2007. A developer in the project area, PR/JSM Rivara challenged the guidelines on the grounds the guidelines illegally reduced the maximum allowable densities in the commercial portion of the project area. In other words, the developers claimed their property was down zoned. The developers also argued the city improperly rezoned the properties without complying with the Planning and Zoning Law. Clearly, the developers’ interest in this case was preserving their right to build at densities contained in the city’s zoning ordinance.

The trial court denied the developers relief, finding that the densities within the project area were set years ago when the redevelopment plan was amended in 1997. Thus, the time to challenge those densities had long expired. The lower court also rejected the argument that the design guidelines acted as a de facto amendment to the zoning code.

The Second District Court of Appeal upheld the lower court’s ruling. In doing so, the Second District first gave an overview of redevelopment agency law. It then proceeded to explain why the adopted guidelines are not a zoning ordinance within the Planning and Zoning Law, and emphasized the difference between adopting a redevelopment plan (a legislative act) and implementing one (an administrative act). If the guidelines were found to be a zoning ordinance, then the Planning and Zoning Law requires public notice and a hearing prior to adoption. Redevelopment law also requires certain procedures when adopting or amending a redevelopment plan. The court found that there were no provisions in either the Planning and Zoning Law or the Redevelopment Law that required public notice and a hearing prior to the administrative act of implementing the redevelopment plan. Because the guidelines were merely implementing the plan, public notice and a hearing were not required prior to adoption. The court then determined the developers had not provided any evidence as to how the guidelines were inconsistent with the city’s general plan – despite the court’s admission that developer had demonstrated that provisions of the guidelines and general plan were different with respect to certain land uses.

In rejecting the developer’s contention that guidelines conflicted with the state’s density bonus law, the court paid particular attention to the declaration of the city’s regional administrator. She averred that the discretionary density bonus plan in the guidelines would not interfere with the state law. In addition, the court said that developers could not point to contrary evidence. The court further noted that because the city’s municipal code allows a redevelopment plan to adopt a base density lower than the maximum allowable residential density under the zoning code, the developers failed to prove they were entitled to the density set by the zoning code. Finally, the court hammered the proverbial nail in the coffin on this issue when it found that the decision to impose the density regulations was completed in 1997, when the redevelopment plan was amended. Thus, the statute of limitations to challenge density expired a decade earlier.

Lastly, the court held the developer’s California Environmental Quality Act (CEQA) claims were time-barred. In doing so, the court held that, contrary to developers’ contentions, the notice of determination filed by the city on October 26, 2007, was sufficient. The statute of limitations for filing a CEQA claim expired on November 25, 2007. The developers did not file their lawsuit until the following month.

Katherine J. Hart is a senior associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

Prop. 218 Proportionality Rule Relates to Special Benefits, Not Construction Costs

Abbott & Kindermann — Tue, 26 Jan 2010 06:00:00 -0800

By Cori Badgley

Under Proposition 218 (Cal. Const. art. XIII D), special assessments shall not “exceed the reasonable cost of the proportional special benefit conferred on a parcel.” The courts have divided this into two general inquiries: 1) is a special benefit conferred by the improvement to be built through the assessment?; and 2) is the assessment proportional? In Town of Tiburon v. Bonander (2009) ____ Cal.App.4th ____, the court answered yes to the first question, but found that the division of costs was not proportional under Proposition 218.

This case involved the imposition of a supplemental special assessment for the purpose of undergrounding utility lines. The saga began when the original special assessment was imposed, and certain landowners sued. That original case is still pending before the court. The Town of Tiburon (“Town”) discovered that the costs of undergrounding utilities were higher than anticipated and a supplemental special assessment was necessary. The voters within the district approved the supplemental assessment, and the Town brought a validation action, requesting that the court declare the assessment valid. Jimmie Bonander and other landowners within the district (“Appellants”) filed an answer to the validation action, thereby opposing it. The trial court found in favor of the Town and declared the supplement assessment valid. Appellants appealed.

The appellate court addressed three questions: 1) Should the record regarding the original assessment be included in the judicial record before the court on the supplemental assessment?; 2) Did the Town properly identify special benefits that would be conferred by undergrounding the utilities?; and 3) Did the supplemental assessment satisfy the proportionality requirement under Proposition 218? In the end, the court invalidated the supplemental assessment because the costs were not divided proportionally based upon the relative benefit the properties received as required by Proposition 218.

The methodology used to determine the supplemental assessment was the exact methodology used to determine the original assessment. The same calculations and benefit apportionment applied. Therefore, the court held that information regarding the original assessment was properly before the court in evaluating the validity of the supplemental assessment.

The court next addressed the special benefits conferred. The Town identified three special benefits conferred on the properties within the district: improved aesthetics, safety and reliability. Appellants argued that these benefits either had no connection to undergrounding the utilities or these were general and not special benefits because they were conferred on everyone within the district. The court disagreed. The court found that each benefit was “tied to individual properties based on proximity to existing overhead utility lines.” The court also emphasized that the mere fact that the majority of properties within the district received a special benefit did “not compel the conclusion the benefit is not tied to particular properties.” Therefore, the Town properly identified special benefits that would be conferred on the properties within the district.

The Town evaluated each property within the district and assigned points under each special benefit category. If the property would only be benefitted aesthetically, it would receive one point. The points would then determine the assessment amount. In addition to the special benefit points, there was one other factor that determined the assessment amount. The Town divided the district into three “benefit zones” based on the construction costs for undergrounding utilities in each of the zones. For example, a property in the Hacienda Drive Area that received three benefit points would pay $20,331.24, whereas a property in the West Hawthorne Drive Area that received three benefit points would pay $7,740. Appellants argued that this methodology violated the proportionality requirement of Proposition 218. The appellate court agreed.

The court stated: “The benefit zones have nothing to do with differential benefits among the three zones but instead are better characterized as ‘cost zones’…” When evaluating proportionality, an assessment should reflect “costs allocated according to relative benefit received.” It cannot be based strictly on the construction costs associated with undergrounding the utilities on a particular property. The Town had to take the total construction costs across the entire district and apportion them based on the number of benefits assigned. One property that received three benefit points should pay the same as another property receiving the same three benefit points.

The court did point out that, as in Dahms v. Downtown Pomona Property & Business Improvement District (2009) 174 Cal.App.4th 708, the Town could have assigned benefit points based on “building size, street frontage, and lot size.” However, in this case, the Town chose aesthetics, safety and reliability as the three special benefits and did not factor in the size of the lots.

The court also found that the Town excluded certain properties that also received the special benefits, and this was not factored in when the Town divided the costs among the properties. If properties outside the district are also benefitted, this amount cannot be imposed on properties within the district. This violates Proposition 218’s requirement of not exceeding the reasonable cost of the proportional special benefit. Therefore, the Town violated the proportionality requirement by dividing the district into “cost zones” and excluding certain properties that would receive a benefit.

This case clarifies that the construction costs must be viewed as a whole and divided equally by the relative benefit conferred on the properties. This case also illustrates the importance of identifying special benefits. The Town could have avoided this outcome had it determined the amount of special benefits conferred based on lot size or some other relevant factor.

Evaluation of Individual Water Transfer Not Considered Improper Piecemealing Under CEQA

Abbott & Kindermann — Wed, 13 Jan 2010 15:28:23 -0800

By Leslie Z. Walker

In Planning and Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, the Castaic Water Agency (“Castaic”) succeeded in extracting its agreement with Kern County Water Agency (“Kern”), if only for a moment, from the tangles of the Department of Water Resources’ (“DWR”) Monterey Agreement.

I. Background

A. Monterey Agreement

By way of background, the Monterey Agreement was negotiated in December of 1994 between the DWR and five of its 29 water contractors. The Agreement changed the distribution of water in the case of water shortage. The original contracts with DWR identified a maximum amount of water that DWR had agreed to provide the contractor if the water is available (“Table A” water). The original contracts contained Articles 18(a) and 18(b) which provided that in the case of a temporary water shortage, the amount of water delivered for agricultural purposes would be reduced (Article 18(a)), and in the case of a permanent shortage, deliveries to every contractor would be reduced through an amendment of Table A allocations (Article 18(b)). The Monterey Agreement amended the original contracts to eliminate the water reduction provisions in article 18 and to provide instead that each supplier was entitled to a prorated portion of the available water, based on its Table A amount, regardless of whether the water was used for agricultural or urban purposes. Central Coast Water Authority (“Central Coast”) prepared an EIR for the Monterey Agreement. In 2000, the Third Appellate District determined that the Monterey Agreement EIR was defective, ordered it decertified, and held that DWR, not Central Coast had to prepare and certify a new EIR. (Planning & Conservation League v. Department of Water Resources (2000) 83 Cal.App.4th 892.)

B. 1999 EIR

In 1999, Castaic prepared an EIR for the transfer of 41,000 acre-feet of water from Kern to Castaic. The court found the EIR was defective because it tiered off the decertified Monterey Agreement EIR, relying on the decertified Monterey Agreement EIR to establish that the environmental effects of the Monterey Agreement were negligible. (Friends of the Santa Clara River v. Castaic Lake Water Agency (2002) 95 Cal.App.4th 1373.) The court rejected Friends of the Santa Clara River’s (“Friends”) subsequent attempt to enjoin the Kern-Castaic transfer. After Friends appealed this decision, the parties entered into a settlement agreement, permitting compliance with the Monterey Agreement pending DWR’s certification of the new EIR, but obligated DWR to include an analysis of the potential environmental effects of the Kern-Castaic transfer.

C. 2004 EIR

In 2004, Castaic prepared a new EIR for the Kern-Castaic transfer. The 2004 EIR did not tier off of the Monterey Agreement EIR. The Planning and Conservation League (“PCL”) and the California Water Impact Network (“CWIN”) (together, “Appellants”) filed petitions challenging the sufficiency of the 2004 EIR. The trial court found the EIR defective and issued a writ but rejected the key contentions of PCL and CWIN. PCL and CWIN appealed, and Castaic cross appealed. Appellants claimed the 2004 EIR was inadequate because 1) Castaic was not the proper lead agency; 2) the 2004 EIR misrepresented the relevance of the pending Monterey Agreement EIR and 3) the EIR contained errors related to the project and its alternatives. On cross-appeal, Castaic claimed the case was barred by Res Judicata by Friends of Santa Clara River v. Castaic Lake Water Agency, supra, 95 Cal.App.4th 1373, which invalidated the EIR Castaic prepared in 1999 for the Kern-Castaic transfer.

II. Res Judicata Claim

The appellate court found the action was not barred by the doctrine of Res Judicata because the previous action was brought by parties who were not in privity with PCL and CWIN and the prior suit was based on a factually distinct EIR – the 1999 EIR as opposed to the 2004 EIR.

III. EIR Adequacy

A. Lead Agency

1. Relationship of Monterey Agreement to Kern-Castaic Transfer

Appellants claimed DWR, not Castaic, should have been the lead agency for the 2004 EIR because the Kern-Castaic transfer was part of the Monterey Agreement under environmental review by DWR. The appellate court rejected this agreement, first looking at whether the Monterey Agreement contemplated the Kern-Castaic transfer. Quoting Laurel Heights Improvement Association v. Regents of the University of California (1988) 47 Cal.3d 376, 396, the court explained that:

“an EIR must include an analysis of the environmental effects of future expansion or other action if 1) it is a reasonably foreseeable consequence of the initial project and 2) the future expansion or action will be significant in that it will likely change the scope or nature of the initial project or its environmental effects.”

The court explained that since “the Kern-Castaic transfer was only a ‘glean in the planner’s eye’ at the time of the Monterey Agreement, the transfer fell outside the original Monterey Agreement EIR, and was properly considered a separate EIR.”

The Court next considered whether the project should have been reviewed by DWR as part of the Monterey Agreement EIR. In other words, the court considered whether Castaic’s preparation of a separate EIR constituted improper piecemealing. Relying on the analysis in Del Mar Terrace Conservancy, Inc. v. City Council (1992) 10 Cal.App.4th 712, the court found that Castaic properly considered the transfer as a separate project because “the transfer had significant independent or local utility in view of its benefits to Castaic’s service area and the relative autonomy from the Monterey Agreement.” The court based this decision on the fact that substantial evidence showed 1) “the transfer could have been implemented under the pre-Monterey Agreement contractual regime,” and 2) “that the parties intend to continue the transfer, regardless of DWR’s environmental review of the Monterey Agreement.”

Appellants also contended that CEQA compliance mandates that either DWR conduct the environmental review of the transfer or Castaic await the outcome of DWR's review of the Monterey Agreement before approving the transfer. The court found that Castaic could properly certify the 2004 EIR prior to the new Monterey Agreement EIR, provided that the 2004 EIR adequately assessed the environmental impact of the Monterey Agreement, to the extent necessary for a fully informed decision regarding the Kern-Castaic transfer.

2. Castaic as Lead Agency

Appellants contended that DWR, should have been the lead agency for the 2004 EIR because DWR has expertise in both the computer models used to assess the water supply scenarios and the scenarios themselves because they hinge on the implementation of the Monterey Agreement, for which DWR is conducting environmental review.

The appellate court disagreed, explaining the public agency that “shoulders primary responsibility for creating and implementing a project is the lead agency, even though other public agencies have a role in approving or realizing it.” The court explained that Castaic, rather than DWR, has carried out the Kern-Castaic transfer and therefore was the correct lead agency for the project.

B. Significance of Pending Monterey Agreement

Appellants claimed that the 2004 EIR improperly described the transfer as final, despite its relationship to DWR’s incomplete assessment of the Monterey Agreement. They claim that the 2004 EIR 1) improperly assumes the transfer will occur, regardless of the result of the Monterey Agreement EIR; 2) inadequately discloses the possibility that DWR may reach different conclusions regarding the availability of water for the transfer and 3) fails to discuss the potential impact of implementing the transfer under the pre-Monterey contractual regime. The court rejected all of these arguments, finding that the 2004 EIR adequately described the circumstances surrounding the Kern-Castaic transfer’s relationship to the Monterey Agreement EIR, adequately described data differences between its findings and those of DWR, and adequately discussed the contractual entitlements under the pre-Monterey Agreement scenario.

C. No Project Alternative

Appellants challenged the no project alternative in the 2004 EIR, arguing that the EIR should have analyzed the scenario in which neither the Kern-Castaic transfer, nor the Monterey Agreement were implemented. The no project alternative described in the 2004 EIR is the scenario in which the Kern-Castaic transfer did not occur, but the Monterey Agreement was still in effect. Appellants contended that Castaic was obliged to examine the possibility that the transfer would not occur and the pre-Monterey Agreement contractual regime was restored.

Citing to Planning and Conservation League v. Department of Water Resources, supra, 83 Cal.App.4th 892, 917-918 the court explained the no project alternative, “is a factually based forecast of the environmental impacts of preserving the status quo.” Since the Monterey Agreement was currently in effect, the status quo was the absence of the Kern-Castaic transfer, but the presence of the Monterey Agreement. The court found that CEQA did not require the 2004 EIR to examine the joint impact of the absence of the transfer and the restoration of the pre-Monterey Agreement contractual regime.

III. Failure to Exhaust Administrative Remedies

Castaic challenged the trial court's determination that the 2004 EIR was defective in its failure to explain that the outcome of the Monterey Amendments EIR may have had an impact on the transfer. The appellate court found however that the 2004 EIR was not subject to challenge on those ground because appellants failed to exhaust their administrative remedies on the issue. The court explained that “petitioner bears the burden of demonstrating that the issue raised in the judicial proceeding were first raised at the administrative level. The objections must be sufficiently specific so that the agency has the opportunity to evaluate and respond to them.” The court described a number of objections made by appellants during the public comment period, but concluded that none of the objections “attached the adequacy of the analytic route drawn in the EIR between the pending DWR Monterey Agreement EIR and the proposed transfer.

IV. Conclusion

In sum, the appellate court did not require the impossible: it did not require Castaic await the completion of the EIR for the entire Monterey Agreement, nor did it require that Castaic step back through history to analyze the transfer as if the Monterey Agreement had never occurred. Castaic described in detail the uncertainties that surrounded the agreement, and the appellate court found this was sufficient, even in light of California Oak Foundation v. City of Santa Clarita (2005) 133 Cal.App.4th 1219.

2009's Top 10: Legislation, Regulations, & Cases

Abbott & Kindermann — Wed, 13 Jan 2010 09:08:07 -0800

From the quick fix solutions for the Delta to CEQA analysis on mitigation deferral, impact fees and the feasibility of alternatives, to the scope of the Corps permitting authority, the following legislation, regulations, and cases from 2009 (listed first by type of document, then in chronological order) will have the most impact on water supply, water quality, and land use and entitlement practice (e.g., development) in California in the coming years. And remember, you read it here first!

Subdivision Map Act Extensions under Assembly Bill 333

Effective July 15, 2009, AB 333, sponsored by the Building Industry Association, this bill protects tentative subdivision maps scheduled to expire before January 1, 2012, by statutorily extending them by 24 months. Read more on Assembly Bill 333.

State Water Board’s Issuance of the Revised General Construction NPDES Permit

On September 2, 2009, SWRCB adopted a new NPDES General Permit for storm water discharges associated with construction and land disturbance activities (the “Permit”). The Permit will become effective on July 1, 2010. The adoption of the new Permit is significant because it represents a large shift in storm water management practices – moving from a builder-developed Storm Water Pollution Prevention Plan (“SWPPP”) or Best Management Practices (“BMPs”) to quantitative standards to ensure compliance with CWA – resulting in a higher cost of compliance. Read more on the new NPDES General Permit.

Water Bills Passed by California Legislature and Signed by Governor Schwarzenegger

On November 4, 2009, the California Legislature passed a package of five post-regular session bills (SBX7 1, SBX7 2, SBX7 6, SBX7 7, and SBX7 8) in an extremely controversial effort to address a safe and reliable drinking water supply for Californians living in the central and southern portions of the state, as well as protection of the Sacramento-San Joaquin River Delta ecosystem. These bills are significant because it is the first time the Legislature has attempted to comprehensively address the water supply and water quality issues in the Delta, and because the intent of the bills (especially the peripheral canal proposal) will not likely ever be carried out given the extraordinary costs and litigation that will ensue. Read more about SBX7 1, SBX7 2, SBX7 6, SBX7 7, and SBX7 8.

Greenhouse Gas Guidelines Adopted by Resources Agency

On December 30, 2009, the Natural Resources Agency adopted guidelines on GHG emissions proposed by the Office of Planning & Research in April 2009, and amended by the Resources Agency in July 2009. The new guidelines will become effective 30 days after they are transmitted to the Secretary of State by the Office of Administrative Law, and require CEQA lead agencies to “describe, calculate or estimate the amount of greenhouse gas emissions resulting from a project” (Proposed Guideline § 15064.4(a).), among other things. Read more about the Greenhouse Gas Guidelines.

California Oak Foundation v. County of Tehama, et al. (2009) 174 Cal.App.4th1217

The court held that the disclosure of documents to the real party in interest by agency counsel does not waive the attorney-client privilege when the disclosure of documents is necessary to accomplish the purpose of defending the CEQA lawsuit. Read more on California Oak Foundation v. County of Tehama.

White Tanks v. Strock (9th Cir. 2009) 563 F.3d 1033

The Ninth Circuit held the Army Corps of Engineers (“USACE”) improperly confined the geographic scope of its environmental analysis under the National Environmental Policy Act (42 U.S.C. § 4321 et seq.) (“NEPA”) to the permit it issued under Section 404 of the Clean Water Act (33 U.S.C. § 1251 et seq.) (“CWA”). The court held that because the feasibility of the whole project depends upon the Corps granting a Section 404 permit, the entire project is within the purview of the Corps and thus subject to environmental review under NEPA. Read more on White Tanks v. Strock.

The California Native Plant Society Cases

California Native Plants Society v. County of El Dorado (2009) 170 Cal.App.4th 1026. The court struck down a mitigated negative declaration for a congregate care project with a number of mixed uses in holding that an existing mitigation fee for a sensitive plant species did not provide adequate mitigation.
California Native Plants Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603. The court upheld various performance standards for mitigation measures in the EIR, but held that the City failed to comply with its general plan when it merely “consulted” with the USFWS. The court also barred certain CEQA claims for failure to exhaust administrative remedies.
California Native Plants Society v. City of Santa Cruz (2009) 177 Cal.App.4th 957. The court upheld an EIR for the master plan of a greenbelt project against an attack on the range of alternatives and findings of infeasibility of those alternatives.

Tracy First v. City of Tracy (2009) 177 Cal.App.4th 912

The court held that the EIR for a grocery superstore adequately addressed project alternatives, project segmentation, energy impacts and mitigation for extraterritorial traffic impacts, and that petitioners did not properly exhaust their administrative remedies as to some issues, barring them from pursing selected claims. Read more on Tracy First v. City of Tracy.

Planning and Conservation League v. Castaic Lake Water Agency (2009) ___ Cal.App.4th ___ (Dec. 17, 2009)

The court found that the Kern-Castaic Agreement and the Monterey Agreement were two separate and distinct projects, and Castaic Lake Water Agency complied with CEQA by adequately evaluating the impacts of the Kern-Castaic Agreement and its various alternatives.

Sunset Sky Ranch Pilots Association v. County of Sacramento (2009) ___ Cal.4th ___ (Dec. 28, 2009).

Reversing the appellate court, the California Supreme Court held that the denial of a conditional use permit renewal is not a project under CEQA. Read more on Sunset Sky Ranch Pilots Association v. County of Sacramento.

A Fair Argument and the Need to Prepare an EIR: A Timeless Tale

Abbott & Kindermann — Tue, 12 Jan 2010 08:56:39 -0800

By William W. Abbott

In 2001, the County of Inyo adopted an updated General Plan, which included a definition of “net acreage”. This definition excluded areas devoted to streets, roads and utilities. Over time, staff was concerned with interpretation of this provision as it related to utilities, and in 2005, the Board of Supervisors, based upon a negative declaration, amended the General Plan’s definition of net acreage, deleting the reference to utilities. The Board then acted to approve three parcel maps, each based upon negative declarations.

Petitioners challenged the General Plan Amendment (“GPA”) and map approvals. There was no indication in the record that the negative declaration for the GPA was processed as a tiered document, so the appellate court applied the traditional (and more demanding) “fair argument” test. General testimony offered in opposition to the GPA dealt with the potential for increase in development resulting from the new interpretation, lowering groundwater tables, the potential for contamination of domestic groundwater sources through the addition of septic systems, and potential loss of habitat. The County argued that this amendment simply restated what in fact had been the existing policy of the County, but the evidence in the record was that the 2001 policy could be interpreted a number of different ways, thus the potential change in land use policy was viewed by the court as material in character and was not simply a clerical exercise. This case illustrates once again the relative low threshold for overturning a negative declaration that is invoked by the fair argument test. In practice, the County may have been better served by characterizing the later CEQA document as a form of a supplemental CEQA document to whatever was prepared with the 2001 General Plan adoption. This case underscores why it is essential that the preparer of a later CEQA document documents the relationship of the second CEQA document to an earlier one. In the absence of such documentation, the lead agency exposes itself unnecessarily to more demanding standards of judicial review.

The appellate court then turned to the legal challenges to the tentative parcel maps. With respect to the tentative maps, the appellate court generally concluded that the appellants (the project opponents) failed to present sufficient argument, based upon the evidence in the record, to support their contentions of error under the land use and CEQA laws, and denied relief. This appears to be the rare case where the project opponents won the battle (the general plan amendment) but lost the war (the subdivision approvals). Inyo Citizens for Better Planning v. Inyo County Board of Supervisors (2009) Cal.App.4th.

William W. Abbott is a partner at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship.

Greenhouse Gas Guidelines and Thresholds: Science Required

Abbott & Kindermann — Wed, 06 Jan 2010 09:52:50 -0800

By Leslie Z. Walker

In the last weeks of 2009, the Natural Resources Agency adopted CEQA Guidelines Amendments for the mitigation of greenhouse gas emissions (“Amendments”), while the San Joaquin Valley Air Quality Management District (“SQAQMD”) became the first air district in the state to adopt thresholds of significance, which will likely face challenge from the California Attorney General.

CEQA Guideline Amendments

Just days before the January 1, 2010 deadline, the Natural Resources Agency adopted CEQA Guideline Amendments for the quantification and mitigation greenhouse gas emissions on December 30, 2009. The Amendments will not be effective however, until 30 days after the Office of Administrative Law transmits them to the Secretary of State.

The most important sections of the Amendments are:

Section 15064: The Amendments require a lead agency make a “good-faith effort, based to the extent possible on scientific and factual data, to describe, calculate or estimate the amount of greenhouse gas emissions resulting from a project.” The agency may use a quantitative or qualitative analysis. (§ 15064.4(a).) This represents a change from the originally proposed amendments which omitted the reference to “scientific or factual data.” The guidelines provide a list of factors to be considered in assessing the significance of the impact from GHG emissions including increases or reductions in GHG caused by the project, the applicable thresholds, and the project’s compliance with local, regional, or statewide GHG reduction plans. (§ 15064.4(b).)
Section 15093: The statement of overriding considerations may consider the region-wide or statewide environmental benefits.
Section 15125: An EIR must discuss any inconsistencies between the proposed project and regional blueprint plans and plans for GHG emission reduction.
Section 15126.4: Mitigation measures may include measures in an existing plan or mitigation program; implementation of project features; off-site measures, including offsets; GHG sequestration. Mitigation in a plan may include project-specific mitigation.
Section 15183: Projects may tier from programmatic level GHG emissions analysis and mitigation. Section 15183 details what a GHG Emission Reduction Plan should contain. A later project may use the plan for its cumulative impacts analysis.
Appendix G: GHG added to list of categories. Transporation and Traffic modified to expand congestion analysis beyond level of service and remove reference to parking.

San Joaquin Valley Air Pollution Control District

On December 17, 2009, the SJVAPCD adopted Addressing Greenhouse Gas Emissions Impacts Under the California Environmental Quality Act, which proposes performance based thresholds of significance for stationary sources and development projects. The thresholds will be based on best performance standards or “BPS.” BPS are yet to be determined, but once they are, projects complying with them would be considered to have a less than significant impact.

The California Attorney General has expressed opposition to this strategy claiming it leaves a number of unanswered questions including:

What defined, relevant environmental objective is the threshold designed to meet, and what evidence supports selection of that objective?
How does the threshold take into account the presumptive need for new development to be more GHG-efficient than existing development?
Will the threshold routinely require new projects to consider mitigation beyond what is already required by law?

See November 4, 2009 letter from Attorney General.

The SJVAPCD web site contains links to other air district’s addressing the issue of thresholds, including the Bay Area Air Quality Management District, which is proposing numeric, rather than performance-based thresholds. The Attorney General seems to like this better (December 2, 2009 letter), but its practical utility remains uncertain.

Reminder! Save the Date

Abbott & Kindermann — Tue, 05 Jan 2010 07:00:00 -0800

Abbott & Kindermann’s Annual Land Use, Real Estate, and Environmental Law Update

Reserve your seat for one of three seminars taking place in 2010!

In January and February 2010 Abbott & Kindermann, LLP will present its annual complimentary educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, real estate acquisition, easements, leasing and property acquisition, and mining. In addition, the following hot topics for 2010 will be discussed:

Global Warming: CEQA Guidelines, Mandatory Reporting
Water Supply Legislation
CEQA Litigation: Alternative Analysis & Exhaustion of Administrative Remedies
Subdivision Map Extension
Interpreting Development Agreements
Endangered Species Act

Abbott & Kindermann, LLP will be presenting its annual program at three California locations: Sacramento, Modesto and Redding. Details for the seminars are below. We hope you can join us and look forward to seeing you there.

Modesto Conference

Date: Thursday, January 21, 2010
Location: Double Tree Hotel Modesto, 1150 Ninth Street
Registration: 12:30 p.m. – 1:00 p.m.
Program: 1:00 p.m. – 4:00 p.m.

Redding Conference

Date: Thursday, January 28, 2010
Location: Hilton Garden Inn Redding , 5050 Bechelli Lane
Registration: 12:30 p.m. – 1:00 p.m.
Program: 1:00 p.m. – 4:00 p.m.

Sacramento Conference

Date: Friday, February 12, 2010
Location: Sacramento Hilton Arden West, 2200 Harvard Street
Registration: 8:30 a.m. - 9:00 a.m. with continental breakfast
Program: 9:00 a.m. - 12:00 noon

There is no charge for the programs and MCLE and AICP CM credits are available.

An RSVP will be required as space is limited. To reserve a spot, call our office at (916) 456-9595. When calling, please specify which conference you will be attending.

Project Denial Means Project Denial, Regardless of the Consequences

Abbott & Kindermann — Tue, 29 Dec 2009 13:04:39 -0800

By Cori Badgley

In Sunset Sky Ranch Pilots Association v. County of Sacramento (2009) ___ Cal.4th ___ the California Supreme Court reversed the decision of the appellate court, which held that the denial of a conditional use permit renewal was a project under CEQA. Although project denials are generally exempted from CEQA review, the appellate court reasoned that in this case the result of denying renewal of the permit constituted the whole of the action, and therefore, CEQA applied. (See “Court Holds that County Has Power to Deny Conditional Use Permit Renewal, but CEQA Applies”.) The California Supreme Court disagreed.

Sunset Sky Ranch Pilots Association, petitioner in this action, obtained a CUP in 1999 for airport operations. Although the airport requested that the CUP span ten years before expiration, the County of Sacramento granted only a five year CUP in anticipation of a new East Elk Grove Specific Plan that could change land uses permitted in the area of the airport. Approximately five years later, the airport requested a renewal of its CUP. The County denied the renewal without conducting environmental review under CEQA. The County claimed that the area surrounding the airport was changing, and the airport would no longer be an appropriate use of the property. Although Petitioner sued the County on various grounds, the only issue addressed by the Supreme Court was whether the denial of the CUP renewal constituted a project, and therefore, CEQA applied.

The Supreme Court held that the County’s refusal to issue a renewed CUP fell squarely within the CEQA exemption for a “project which a public agency rejects or disapproves.” (Pub. Resources Code, § 21080(b)(5).) According to the appellate court, the exemption did not apply because the consequence of the permit denial included transferring pilots to different airports and closure of the airport, which may impact the environment. Disagreeing with the appellate court’s analysis, the Supreme Court stated: “The Court of Appeal erred by deeming the consequences of a project denial to be part of the project itself.” The only project at issue here was the denial of a permit. Whether or not the airport already existed had no bearing on the scope of the project. Since the project involved the County’s denial of a permit, the CEQA exemption applied, and no environmental review was required.

It's the Type of Fee that Makes All the Difference: Regulatory Fee Upheld by Court of Appeal

Abbott & Kindermann — Tue, 22 Dec 2009 06:00:00 -0800

By Cori Badgley

There are many different types of fees, taxes and assessments that a local agency may impose. For each type, there are specific procedures and requirements, and if the agency does not use the correct procedure and meet the correct requirements, a court may invalidate the fee. In California Building Industry Association v. San Joaquin Valley Air Pollution Control District (2009) 178 Cal.App.4th 120, the agency got it right, and the court held that the agency’s indirect source review fees were valid regulatory fees.

The San Joaquin Air Pollution Control District (“APCD”) adopted Rules 9510 and 3180 relating to emission reduction requirements for new development. The rules allowed new developments to incorporate onsite measures, pay fees, or any combination of the two in order to reduce their emissions to the required level. After adoption of the rules, the California Building Industry Association (“BIA”) brought suit against the APCD on the grounds that the fees were invalid and adopted in excess of the APCD’s authority. The trial court found in favor of the APCD and the BIA appealed.

The appellate court upheld the trial court’s ruling. In its opinion, the appellate court broke the case down into three parts: 1) whether the fees were regulatory fees or development fees; 2) whether the fees were valid regulatory fees; and 3) whether the APCD had the authority to adopt and impose the fees.

The Fees Were Regulatory Fees

According to the appellate court, a development fee is a fee “exacted in return for building permits or other governmental privileges so long as the amount of the fee bears a reasonable relation to the development’s probable costs to the community and benefits to the developer.” On the other hand, “when a fee is charged for the associated costs of regulatory activities and does not exceed the reasonable cost of carrying out the purposes and provisions of the regulation, it falls within the category of a regulatory fee.” This is an important distinction because development fees must be adopted pursuant to particular provisions of the Mitigation Fee Act (Gov. Code §§ 66000 et seq.).

The court found that the fees were not imposed as a condition of project approval, and that the fees were not taken in return for “permits or other government privileges.” Instead, the APCD adopted the fees in order to achieve federal air quality standards by mitigating the additional air pollution resulting from new development. Therefore, the court held that the indirect source review fees adopted in this case were regulatory and not development fees.

The Fees Were Valid

The BIA asserted that even if the fees were regulatory fees, they were not valid because the APCD used an invalid calculation method, failed to prove “the estimated costs of the regulatory activity,” and failed to prove “that its basis for apportioning the costs of the program bear a reasonable relation to the payer’s burdens on the [APCD].” The court disagreed on all counts.

First, the court found that the calculation method accounted for the existing emissions and ensured that new development was only paying for the increased emissions. Second, URBEMIS, the computer model used to calculate the fee, provided a reasonable method for determining the fee amount. Although there may be another method of calculation preferred by the BIA all which is required under the standard of review is that the APCD act reasonably. Third, the program costs were “the cost per ton of the offsite emission reduction necessitated by the development,” and this provided the cost estimation necessary for adoption of the fees. Therefore, the court held that the fees were valid regulatory fees.

APCD Did Not Exceed its Authority

The court found that the source of the APCD’s authority, as identified in the rules, was Sections 40727, 40716, 42311(g) and 40604 of the Health and Safety Code. These sections require the APCD to “adopt … a schedule of fees to be assessed on area-wide or indirect sources of emissions …” In one last attempt to invalidate the fee, the BIA argued that the definition of “indirect source” adopted by APCD was too broad. Housing developments should not be considered indirect sources. The court reviewed the definitions of indirect source used by the federal government and the California Air Resources Board. Both of these definitions included facilities, building and structures as indirect sources. Therefore, the court found that the APCD’s inclusion of the housing developments as an indirect source was not unreasonable and upheld the APCD’s adoption of the fees.

In this case, the APCD followed the correct procedure and satisfied the correct requirements in adopting its fees. Thus, the fees were valid, and the APCD can continue to extract money from new development in order to achieve its goal of lower emissions.

CEQA: 2009 Year in Review

Abbott & Kindermann — Wed, 16 Dec 2009 08:53:34 -0800

This article highlights the 2009 CEQA court decisions along with the proposed changes to the CEQA guidelines. Many of the highlights are linked to more detailed analyses prepared by the attorneys at Abbott & Kindermann, LLP.

CEQA PROCESSING

Application Processing

Failure to complete the EIR within CEQA’s statutory one year period did not result in project approval. A writ will not lie to compel certification of a DEIR. Schellinger Brothers v. City of Sebastopol (Dec. 2, 2009, No. A122972) __Cal.App.4th__.

Project Denials

The lead agency is not required to complete an EIR in order to deny a project. Las Lomas Land Co., LLC v. City of Los Angeles (2009) 177 Cal.App.4th 837.

IS IT A PROJECT?

Ministerial v. Discretionary Approvals

In Health First v. March Joint Powers Authority (2009) 174 Cal.App.4th 1135, the court addressed whether the approval of a Design Plan Application was ministerial or discretionary. If the agency’s action is ministerial, CEQA does not apply. Because the application had to be approved as long as it conformed to the Design Guidelines, the court held that the action was ministerial and no CEQA review was required. The underlying project for which the application was submitted involved a business center located in the March Business Center Specific Plan Area, which was consistent with the General Plan for the former March Air Force Base. The Base General Plan conformed to the redevelopment plan. The court emphasized that at each step in the planning process, environmental review and receipt of public comment occurred, and if the plaintiffs wanted to challenge the projects on CEQA grounds, they needed to do so at any or all of those stages.

Ballot Measures

Life is largely about timing, and CEQA practice is no exception. Lead agencies have to find the balance of conducting meaningful environmental review such that it is neither too early to be meaningful, nor so late that the project gains momentum to the preclusion of effective consideration of alternatives and mitigation measures. In 2008, the California Supreme Court addressed this issue in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116. The court enunciated the general principle that prior to 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.” Applying this principle to a measure imposing a retail sales and use tax submitted to the voters to fund transportation projects, the court in Sustainable Transportation Advocates of Santa Barbara v. Santa Barbara County Association of Governments (2009) 179 Cal.App.4th 113, held that the measure and its Transportation Investment Plan did not constitute a project under CEQA because there lacked binding commitments to a specific project.

Project Pre-approval Mitigation Agreements

The decision in Riverwatch v. Olivenhain Municipal Water District (2009) 170 Cal.App.4th 1186, applies CEQA’s early timing requirements in a different setting. A developer, having lost one CEQA case on the basis of the water supply analysis, entered into a long term agreement with a district to purchase recycled water, intending to use this agreement to remedy the deficiencies in its water supply analysis. Project opponents then challenged the recycled water agreement on the basis that the district had failed to conduct CEQA review on the agreement before entering into it. The appellate court agreed with the opponents, underscoring the need for agencies to closely consider CEQA ramifications on all agreements, no matter how worthy the purpose. As the saying goes, no good deed goes unpunished.

EXEMPTIONS

Rate Setting

Generally, exemptions from CEQA must be justified and are narrowly construed. In Great Oaks Water Co. v. Santa Clara Valley Water Dist. (2009) 170 Cal.App.4th 956, the court addressed the use of an exemption (Public Resources Code section 21080(b)(8)) for rate setting for groundwater extraction charges. In upholding the use of the exemption, the court first ruled that highly detailed findings justifying the use of the exemption were not mandated, as long as the court could understand the analytic route the “agency travelled from evidence to action.” While more detail is preferable to less detail, the ultimate question is whether the court, from reviewing the record, findings, and decision, can understand the agency’s action. Second, the exemption for rate setting cannot be used for system expansion. On this issue, the record was very clear that the rates were used for delivery reliability improvements and were not for funding system expansion. The key here, as always, is the staff report.

Adoption of Air Emission Regulation

An air district’s adoption of a rule addressing offsets for road paving is not exempt from CEQA. As implementation of the challenged rule would result in paving, leading to potential adverse physical changes in the environment, the appellate court concluded that there was insufficient evidence to support a finding that the rule would “assure the variance, restoration, enhancement or protection of the environment.” Guidelines, § 15308. California Unions for Reliable Energy v. Mojave Desert Air Quality Mgmt. District (Nov. 16, 2009, No. E046687) __ Cal.App.4th___.

Project Denial

The denial of a conditional use permit renewal is exempt from CEQA review. Sunset Sky Ranch Pilots Association v. County of Sacramento (2009) ___ Cal.App.4th ___.

NEGATIVE DECLARATIONS

Fair Argument Test

The fair argument test for EIRs remains alive and well, even for “clarifying” amendments to previously adopted general plan policy. Of course, one person’s clarification is another person’s amendment. Inyo Citizens for Better Planning v. Inyo County Board of Supervisors (Dec. 14, 2009, No. E046646) __Cal.App.4th__.

Impact Fees as Mitigation Measures

The California Native Plant Society filed a CEQA lawsuit against El Dorado County after the County approved a Mitigated Negative Declaration and Congregate Care project. The project consists of two care units, cottages, and a clubhouse on 20 acres, and was part of a larger development area including a local medical center, a senior assisted living facility, medical office buildings and a local retail shopping center. Mitigation for project impacts to sensitive plant species included the payment of a $135,000 mitigation fee established by a County ordinance in 1998. The court held that the ordinance did not presumptively establish full mitigation for any specific project given that the ordinance did not undergo any independent environmental review, and the County violated its own mitigation strategy by failing to conduct annual reviews of the fee amount and efficacy of the fee program. California Native Plant Society v. County of El Dorado (2009) 170 Cal.App.4th 1026.

EIRs

Piecemealing

Castaic Water Agency did not improperly piecemeal by preparing and EIR for transfer of water from Kern County Water Agency to Castaic Water Agency that was separate from the EIR. The Department of Water Resources was preparing for the Monterey Agreement. The preparation of a separate EIR was proper because substantial evidence showed the project had significant independant local utility in view of its benefits to Castaic's service area and the relative from the autonomy Monterey Agreement. Planning and Conservation League v. Castaic Water Agency (2009) 180 Cal.App.4th 210.

Performance Standards as Mitigation Measures

In California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603, the Court reviewed an EIR for a project named The Preserve at Sunridge. The Preserve involved the development of approximately 530 acres in Rancho Cordova, California as single and multi-family housing, commercial and office uses, a neighborhood park, an elementary school, detention basins, an open space and wetland preserve, bikeways and pedestrian and drainage corridors. The Court of Appeal addressed the following issues presented by the plaintiffs: 1) offsite mitigation measures; 2) deferral of mitigation for loss of vernal pools and wetlands; 3) sufficiency of the evidence regarding proposed mitigation for vernal pools and wetlands; 4) the sufficiency of the water supply analysis; 5) a post-project approval amendment of mitigation measures; and 6) general plan consistency. The City prevailed on all issues but the general plan consistency issue pertaining to whether or not the City properly “coordinated” with the United States Fish and Wildlife Service as called for in the planning document. The lesson to be learned is to watch the choice of verbs in planning documents.

Energy Efficiency and Traffic Impacts in Adjacent Jurisdictions

In Tracy First v. City of Tracy (2009) 177 Cal.App.4th 912, an EIR for a grocery superstore was upheld against attacks based upon alleged inadequacy of alternatives, project segmentation, energy impacts, and failure to mitigate traffic impacts in an adjacent jurisdiction. The case includes a number of noteworthy CEQA determinations. First, a lead agency can reasonably conclude that a project which exceeds state energy efficiency standards has a less than significant impact. Second, a city is not required to demand mitigation for extraterritorial traffic impacts where the lead agency lacks control over the intersection and the affected jurisdiction lacks a program for expenditure of traffic impact fees for the necessary improvement.

Alternatives

The no project alternative is only required to analyize the status quo. In Planning and Conservation League v. Castaic Water Agency, the parties were operating under the Monterey Agreement, therefore in preparing the EIR for the transfer of water from Kern Water Agency to Castaic Water Agency, Castaic was only required to analyze a no-project alternative scenario in which the transfer did not take place. Castaic was not required to analyze a scenario in which the Monterey Agreement was not in effect and the transfer did not take place. Planning and Conservation League v. Castaic Water Agency (2009) 180 Cal.App4th 210.

An EIR is not invalid because project alternatives selected to be studied as part of the EIR prove to be infeasible. At the time the DEIR is released, the CEQA documentation focuses on potentially feasible alternatives. This does not preclude the decision makers from adopting appropriate findings, based upon substantial evidence, as to the infeasibility of the studied alternatives. From a practical perspective, good findings are the first line of defense. California Native Plant Society v. City of Santa Cruz (2009)177 Cal.App.4th 957.

If a lead agency considers but rejects various onsite and offsite alternatives, it is essential to include in the record information about the rejected alternatives. The use of a matrix to compare alternatives is an acceptable practice. City of Long Beach v. Los Angeles Unified School District (2009) 176 Cal.App.4th 889.

The lead agency was not required to examine a smaller grocery store as an alternative when the record does not establish that a smaller store would reduce impacts. Tracy First v. City of Tracy (2009) 177 Cal.App.4th 912.

Cumulative Impact Analysis

The geographic scope of a cumulative impact analysis falls to the agency’s discretion. The boundaries may (and in many cases should) vary according to the impact being studied. Absent an arbitrary decision, the agency’s decision should not be set aside. This case reflects a thoughtful, well considered approach to cumulative effects analysis in an urban setting. City of Long Beach v. Los Angeles Unified School District (2009) 176 Cal.App.4th 889.

Air Quality – Cumulative Effects

CEQA requires an assessment of the project on the environment, not of the environment on the project. City of Long Beach v. Los Angeles Unified School District (2009) 176 Cal.App.4th 889.

Analysis of Consistency with the General Plan

As a school district can exempt itself from compliance with local general plans and zoning, a school district EIR on a new high school site is not required to address the issue of conformity with local plans. City of Long Beach v. Los Angeles Unified School District (2009) 176 Cal.App.4th 889.

FEIR Responses to Comments

Lead agencies have to walk a fine line in preparing responses to comments. On one hand, the public cannot be expected to sift through numerous obscure documents (the proverbial “scavenger hunt”) to understand the response to comment. On the other, the use of master responses or referrals to other responses to comments which are on point is an acceptable practice. City of Long Beach v. Los Angeles Unified School District (2009) 176 Cal.App.4th 889.

Statements of Overriding Considerations

Statements of overriding considerations are entitled to substantial deference by a reviewing court. CEQA permits the lead agency extensive discretion in identifying the relevant considerations which enter into the “overriding considerations.” California Native Plant Society v. City of Santa Cruz (2009) 177 Cal.App.4th 957.

LITIGATION ISSUES

Exhaustion of Administrative Remedies

The California Court of Appeal has issued two opinions requiring project opponents to present relatively specific objections to CEQA documents in order to later litigate those issues. California Native Plant Society v. City of Rancho Cordova (2009) 170 Cal.App.4th 1026 and Tracy First v. City of Tracy (2009) 177 Cal.App.4th 912.

Standard of review

The substantial evidence test applies to conclusions, findings and challenges to scope of EIR analyses, the methodology used for studies, and the accuracy of data. City of Long Beach v. Los Angeles Unified School District (2009) 176 Cal.App.4th 889.

In writ proceedings, the use of judicial notice to bring evidence not included within the administrative record before the court is disfavored. California Unions for Reliable Energy v. Mojave Desert Air Quality Mgmt. District (Nov. 16, 2009, No. E046687) __ Cal.App.4th.__.

Statute of Limitations

Strother v. California Coastal Commission (2009) 173 Cal.App.4th 873, involved challenges to the approval of coastal development permits by the California Coastal Commission. The only issue before the court was whether the statute of limitations under the California Coastal Act of 1976 or under CEQA applied. If the Coastal Act statute of limitations applied, plaintiffs would have been barred from bringing suit. The court held that the statute of limitations under CEQA applied to any challenges brought under that act, and the remaining claims were dismissed for failure to bring suit within the statutory period prescribed by the Coastal Act.

Request for Hearing

The 90 day request for hearing provision requires a written submittal to the court along with the others parties. Oral communication with the court clerk is not sufficient. County of Sacramento v. Superior Court (2009) ___ Cal.App.4th ___.

Sharing Documents and Discovery

When defending challenges to projects, lead agencies often coordinate the defense with the applicant. The appellate court made that process a little easier by holding that the disclosure of documents to the real party in interest, when necessary to accomplish the purpose for which the lawyer was hired (defense of the CEQA lawsuit), does not waive the attorney-client privilege. California Oak Foundation v. County of Tehama et al. (2009) 174 Cal.App.4th 1217. The court found that disclosure to a codefendant in a joint endeavor to defend an EIR in litigation can reasonably be said to constitute the involvement of a third person to whom disclosure is reasonably necessary to further the purpose of the original legal consultation and thus the communications remained protected. Additionally, the court rejected petitioner’s contention that Public Resources Code section 21167.6 overrode claims of privilege, holding that a new statute (Section 21167.6) is not an abrogation of an existing statute (e.g. Evidence Code section 954) unless it is clear that the later enactment is intended to supersede the existing law.

Preparing the Administrative Record for Litigation

Effective January 1, 2010, new Rules of Court govern the preparation of the record in CEQA lawsuits. Rules 3.1365-3.1368. The new rules include provisions for preparation of the index, the order of documents, double sided printing, and length of volumes.

EIR Preparation – Consultant Liability

An EIR consultant to a county who fails to timely complete an EIR on a private project is not liable for damages under theories of third party beneficiary, negligence and negligent interference with prospective economic advantage. Too bad! Lake Almanor Associates, LP v. Huffman-Broadway Group, Inc. (2009) 178 Cal.App.4th 1194.

CLIMATE CHANGE

CEQA Guidelines for the Mitigation of Greenhouse Gases

On December 30, 2009, the Natural Resources Agency adopted CEQA Guideline Amendments for the quantification and mitigation greenhouse gas emmissions. The Amendments require the following:

A lead agency must make a "good-faith effort, based to the extent possible on scientific and factual data, to describe, calculate or estimate the amount of greenhouse gas emmissions resulting from a project." The agency may use a quantitative or qualitiver analysis. (§ 15064.4(a).)
An EIR must discuss any inconsistencies between the proposed project and regional blueprint plans and plans for GHG emission reduction. (§ 15125 (a).)

Senate Bill 97 (Chapter 185, Statutes 2007; Pub. Resources Code, § 21083.05) required that the Resources Agency certify and adopt the revised guidelines by January 1, 2010. The Resources Agency transmitted revised guidelines, to the Office of Administrative Law, which has 30 working days to review the guidelines and transmit them to the Secretary of State. Once transmitted to the Secretary, the guidelines will not become effective for 30 days, and do not become binding on public agencies until the effective date of the agency’s procedures amended to conform to the new guideline amendments or the 120th day after the effective date of the amendment, whichever is earlier. Guidelines, § 15007(d). The amendments will apply prospectively only – only steps not yet taken in the CEQA process will have to comply with them. Guidelines, § 15007(b).

San Joaquin Valley Air Pollution Control District Introduces Thresholds for GHG

On December 17, 2009, the SJVAPCD adopted Addressing Greenhouse Gas Emissions Impacts Under the California Environmental Quality Act, which proposes performance based thresholds of significance for stationary sources and development projects. The thresholds will be based on best performance standards or "BPS." BPS are yet to be determined, but once they are, projects complying with them would be considered to have a less than significant impact.

The California Attorney General has expressed opposition to this strategy claiming it leaves a number of unanswered questions including:

What defined, relevant environmental objective is the threshold designed to meet, and what evidence supports selection of that objective?
How does the threshold take into account the presumptive need for new development to be more GHG-efficient than existing development?
Will the threshold routinuely require new projects to consider mitigation beyond what is already required by law?

MORE INFORMATION

For more information about the 2009 legal landscape, join us for Abbott & Kindermann’s Annual Real Estate, Land Use, and Environmental Law Conference, held this year in Sacramento, Modesto, and Redding California.

Density Bonus Law Update: Statutory Refinements and Recent Cases

Abbott & Kindermann — Tue, 15 Dec 2009 06:00:00 -0800

By Cori M. Badgley and William W. Abbott

In 2004, SB 1818 amended section 65915 of the Government Code, pertaining to the density bonus law. The purpose of SB 1818 was to encourage developers to build affordable housing by requiring local governments to provide meaningful incentives. There was confusion in understanding the new provisions in Government Code section 65915 and the legislature clarified the density bonus law a year later with the enactment of SB 435. The legislature has made minor revisions since SB 435 that further the purpose of the 2004 amendments. (See “Overview of Density Bonus Law” below for an outline of the current requirements.)

In 2007, the First Appellate District Court of Appeal heard the first case interpreting the amendments of SB 1818. In Friends of Lagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807, the court faced two main issues: whether the project was consistent with the general plan, and whether the density increase granted by the city violated section 65915. (For a discussion of the general plan consistency portion of the opinion see “Flexible General Plan Leads to Flexible Consistency”.) The project included both moderate-income and senior housing. Inclusion of these types of housing entitled the project to a density bonus. The city awarded the project a 40 percent density bonus. This meant that the developer could increase the density by an extra 40 percent over the generally permissible number of units pursuant to the city’s zoning and land use code. Under section 65915 subdivision (g), the maximum stated density increase mandated is 35 percent.

In objecting to the granting of a 40 percent density bonus, plaintiffs presented two main arguments: 1) section 65915 does not permit a 40 percent density bonus, and 2) the calculations of the density bonus were incorrect. Although the plaintiffs presented various grounds for their first argument, the main contention involved an interpretation of the provision requiring a maximum density increase of 35 percent. Plaintiffs contended that the 35 percent increase was a legal cap on the density increase permissible under section 65915. The court disagreed. The court found that the purpose of section 65915 and the 2004 amendments was to encourage developers to build affordable housing. In reviewing the legislative history and the language of the statute, the court stated that the 35 percent density increase was meant to ensure that local governments provided at least that amount when a developer chose to provide a certain number of affordable housing units.

The court also found that subdivision (n) of section 65915 clearly stated that the statute did not place any caps on the allowable density bonus. Subdivision (n) states that “[nothing] in this section shall be construed to prohibit a city, county, or city and county from granting a density bonus greater than what is described . . .” In light of the language in subdivision (n) and the overall purpose of section 65915, the court held that the 35 percent density increase reflected “the maximum density increase that would be statutorily imposed upon municipalities,” not the maximum permissible.

The second argument, based on the calculations used to reach the density bonus, was easily dismissed by the court. Plaintiffs contended that the 20 percent density increase mandated for senior housing did not apply to the development as a whole, but rather only to the senior housing development. Under the plaintiffs’ logic, a developer who built a senior housing development would only be entitled to increase the density of the senior housing units, not the other housing units built. According to the court, the argument was procedurally barred because it had not been raised during the administrative process. Even if it was not barred, the court viewed that interpretation as incorrect. Like the previous argument, the court held that plaintiffs’ interpretation of the senior housing development provisions was contrary to the spirit and purpose of the density bonus law. There would be no incentive to build senior housing if the density increase did not apply to the project as a whole. Therefore, the court held that the 40 percent increase was permissible and dismissed plaintiffs’ claims.

In 2009, the Court of Appeal, First Appellate District had a second chance to address the Density Bonus Law in Wollmer v. City of Berkeley (2009) Case No. A122242. In fact, the court was faced with one of the same issues addressed in Friends of Lagoon Valley. Plaintiffs asserted that the number of additional units permitted were not calculated correctly and exceeded the amount allowed by Section 65915.

The appellate court quoted the analysis from Friends of Lagoon Valley, which stated that the percentages provided by Section 65915 were not legal caps, but required minimums. Cities and counties may provide a greater density bonus than the bonus listed. The appellate court also found that cities and counties could approve more bonuses without passing a specific ordinance on the topic.

The other Density Bonus Law issue raised by plaintiffs in Wollmer dealt with specific language relating to waiver of development standards that was eliminated from the statute by AB 2280 passed in 2008. The court sided with the city on this issue as well, and ultimately upheld the city’s approval of the project.

Both Friends of Lagoon Valley and Wollmer interpreted the statute as it read after the 2004 Amendments but did not address any of the revisions that followed in 2008. Although the 2008 Amendments (AB 2280) did not drastically change any of the language in Section 65915, the amendments added a small phrase to subdivision (n), which was relied upon by both courts in determining that the city or county could provide a greater density bonus. Subdivision (n) now reads:

If permitted by local ordinance, nothing in this section shall be construed to prohibit a city, county, or city and county from granting a density bonus greater than what is described in this section … [new language in italics]

This new language requires that an ordinance permit the city or county to grant a density bonus greater than the minimum required. In future cases, unlike Friends of Lagoon Valley and Wollmer, a greater density bonus will likely only be permitted if there is an ordinance on point.

Overview of the Density Bonus Law – Supersize this Project!

Construction of Affordable Units

Land Uses Qualifying for a Density Bonus

The following residential project types qualify for the benefits of the density bonus statute:

10% affordable to lower income households, or
5% affordable to very low income households, or
A qualifying seniors development (Civ. Code, §§ 51.3 and 51.12) or mobilehome park (Civ. Code §§ 798.76 and 799.5), or
10% of units in a condominium or planned development project affordable to moderate income households. (§ 65915(b).)

Table 1 evaluates section 65915 before and after SB 1818.

Table 1

Required Target Percentage of Total Housing Units Required to Receive Density Bonus
Income Level	2004	As Amended By SB 1818
Lower (Health & Saf., Code § 50079.5)	20% tdu	10% tdu
Very Low (Health & Saf., § 50105)	10% tdu	5% tdu
Senior Housing Development	50% tdu	Senior citizen housing as defined by sections 51.3 and 51.12 of the Civil Code or mobilehome park as defined in Civil Code sections 798.76 and 799.5
Moderate (Health & Saf., § 50093)- Condominiums or Planned Development	20% tdu	10% tdu

Note: tdu = total dwelling units, not including the units generated by the density bonus.

Where tax credit financing or similar programs are used for lower and very low income development projects, then the affordable units must be restricted for affordability for 30 years or longer, as specified by the program. (§ 65915(c)(1).) If these programs are used for rental units, the rent must not exceed 30% of 60% of the area median income. For those units that target very low income households, the rent cannot exceed 30% of 50% of the area median income.

When the developer builds a project subject to moderate income household rules (option D above), then a lot/unit purchaser, upon reselling, must share the appreciation on the resale with the city or county. (§ 65915(c)(2).)

The applicant has the option to submit a proposal to the local agency for the incentive or concession. The local agency must grant the request of the applicant, unless it adopts written findings, based upon substantial evidence, that the request is not necessary in order to provide affordable housing, or that there would be a specific adverse impact upon public health and safety, or the physical environment, or on specified historic properties and for which there is no feasible way of mitigating or avoiding the impact without rendering the project unaffordable to low and moderate income households. § 65915(d)(1). Because of CEQA considerations, it is preferable that the applicant makes its election early on in the application process.

Calculating the Bonus

The amount of density bonus varies by affordability target and by percentage of affordable units as a percentage of the overall development. These numbers are set forth in Table 2.

Table 2

Income Level	Minimum Inclusionary	Minimum Bonus	Bonus Increase for Additional 1% (Total Maximum 35%)
Lower	10%	20%	1.5%
Very Low	5%	20%	2.5%
Seniors	All	20%	N/A
Moderate - Condo/Planned Developments	10%	5%	1%

A density bonus means an increase of at least 20% over the maximum allowable residential density under the applicable zoning ordinance and general plan as of the date of application by the applicant. (§ 65915(g).)

A density bonus applies to housing developments with 5 or more dwelling units.

An applicant may opt to accept a lower percentage. (§ 65915(g).)

The density bonus is not included when determining the number of housing units that is equal to 5% or 10% of the total. (§ 65915(g)(1), (2).)

The granting of a bonus by itself, shall not be deemed to require a general plan amendment, LCP amendment, zoning change or discretionary approval. (§ 65915(g)(1), (2).)

The Bonus/Incentive Mix

For qualifying projects, the developer is entitled to a density bonus and an incentive/concession. The number of incentives and concessions increase as the developer increases the percentage of affordable units. (§ 65915(d)(2).)

Table 3

Required Percentage of Total Housing Units for Incentives or Concessions-SB 1818/SB 435
Income Level	% Total Housing Units	Number of Incentive(s) or Concession(s)
Lower	10%	1
Very Low	5%	1
Moderate-Condominium/Planned Development	10%	1

Lower	20%	2
Very Low	10%	2
Moderate - Condo/Planned Development	10%	2

Lower	30%	3
Very Low	15%	3
Moderate - Condo/Planned Development	30%	3

A concession or incentive includes a reduction in site standards such as parking, zoning code, architectural standards, parking requirements, mixed use approvals. (§ 65915(1).)

Waiver of Development Standards

In some circumstances, the granting of the density bonus, incentive or concession may trigger a conflict with other local regulations. In these circumstances, the applicant is authorized to seek a waiver or modification of the standard. § 65915(e). In no case may a local agency apply any development standard which will have the effect of physically precluding the construction of a qualifying development, unless it has a specific, adverse impact, upon health, safety or the physical environment for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. In addition, a local agency is not required to waive or reduce standards which would adversely impact any real property listed in the California Register of Historical Resources or to grant any waiver or reduction that would be contrary to state or federal law. The burden is on the applicant to demonstrate the need for the waiver or modification. (§ 65915(f).)

Local Agency Absolutes

Must adopt an ordinance to implement the new law. (§§ 65915(a), 65915(d)(3).)

Must adopt an ordinance permitting a greater density bonus than required by the statute, if the local agency desires to increase the density even more. (§ 65915(n).)

Must adopt a procedure to waiver or modify development standards which preclude or interfere with the effect of the bonus. (§ 65915(d)(2)(C).)

Must adopt a procedure by which the incentive or concession is granted, including legislative body review. (§ 65915(d)(3).)

Appreciation recapture from sale of moderate income units must be reinvested within three years to promote homeownership. (§ 65915(c)(2).)

In no case may a local agency apply any development standard which will have the effect of precluding the construction of a qualifying development, unless it has specific, adverse impacts upon health, safety or the physical environment for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. (§ 65915.)

Granting of concessions or incentives shall not, by themselves, necessitate a general plan amendment, LCP amendment, zoning change or other discretionary approval. (§ 65915(k).)

Upon request of a developer who has met the minimum standard(s) of § 65915(b), maximum parking standards can be capped as follows:

0-1 bedroom = one onsite
2-3 bedrooms = two onsite
4 and more bedrooms = two and one-half parking spaces

Parking can be tandem or uncovered, but not on-street. (§ 65915(p).)

Got a Beef, Get a Lawyer!

Should the applicant be rejected in his or her efforts to obtain the density bonus incentive or waiver of development standard and there is a successful legal challenge to the local agency’s administration of the density bonus statute, the plaintiff may be entitled to recover his or her attorneys’ fees and costs. (§§ 65915(d)(3), 65915(e).) Interestingly, the statute allows the award of attorneys’ fees to the plaintiff, who may or may not be the applicant.

Land Donation

A developer’s donation of land for affordable housing may also trigger a bonus. There are a number of important tests that must be passed before a project qualifies for a bonus. The amount of land and zoning and other development requirements must permit 10% of the total project units to be developed for units which are affordable for very low income households, all permits must be in place by the time the first parcel map or subdivision map is filed, the site must be one acre or larger or be able to accommodate at least 40 units, and the site is subject to a recorded restriction regarding allowable rents. The affordable site must be within the boundary of the overall development, or within a quarter mile with the approval of the local agency.

Projects meeting these qualifications are entitled to a bonus of 15% above the otherwise maximum allowable density, plus an additional one percent for each percent that the project exceeds the minimum 10%, to a maximum of 35%. This is in addition to any other increase in density mandated by section 65915(b), and up to a maximum density increase of 35% should the applicant seek both. (§ 65915(h).)

Child Care Facilities

If a project otherwise qualifies for bonus (see Construction of Affordable Units - Table 2 above) and the developer agrees to include a child care facility onsite or adjacent thereto, the developer is entitled to either: (a) a bonus of an equal of square footage; or (b) an additional concession or incentive which contribute significantly to the economic feasibility of the construction of the child care facility. (§ 65915(i)(1).) To qualify, the child care facility is subject to operating requirements, including income limits for the users equal to those of the qualifying land use (e.g. 10% lower income). If the city or county determines, based upon substantial evidence, that adequate child care facilities are available, then it is not obligated to grant a density bonus. (§ 65915(i)(3).)

Remaining Issues to be Resolved

If a city or county has an inclusionary requirement, do these units count towards the required inclusionary bonus percentage, or does the statute operate solely on the basis of voluntary developer behavior?

If an applicant seeks an amendment of a land use element to a higher density use, what is the baseline for calculating the bonus amendment?

Can a developer operating under a development agreement executed prior to December 31, 2004, now claim the benefits of SB 1818?

William W. Abbott is a partner at Abbott & Kindermann, LLP and Cori M. Badgley is an associate. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

Measure Including Transportation Investment Plan Held Not to Be a Project Under CEQA

Abbott & Kindermann — Wed, 09 Dec 2009 08:53:19 -0800

By Cori Badgley

The preliminary question in any inquiry under the California Environmental Quality Act is: does the action being approved by the agency constitute a project? While CEQA’s scope touches a significant array of actions, sometimes the answer to the question is “No.” In Sustainable Transportation Advocates of Santa Barbara v. Santa Barbara County Association of Governments (2009) 179 Cal.App.4th 113, the Court of Appeal, Second Appellate District was faced with this preliminary question in relation to a measure imposing a retail sales and use tax and establishing a Transportation Investment Plan. The court held that the measure did not constitute a project, and therefore, the agency did not have to engage in environmental review before approving the measure.

The Santa Barbara County Association of Governments (“SBCAG”) approved Measure A entitled “Santa Barbara County Road Repair, Traffic Relief, and Transportation Measure” in 2008. Measure A had two components: an ordinance that imposed a retail sales and use tax to fund transportation projects within the county, and a Transportation Investment Plan required by Section 180206 of the Public Utilities Code, which showed how the revenues obtained through the tax would be expended. After approval, Petitioner brought this case on the grounds that SBCAG approved Measure A without complying with CEQA.

The trial court determined that Measure A fell within the funding mechanism exclusion of the CEQA Guidelines because it “does not constitute a binding commitment to construct the projects set forth in the investment plan.” On appeal, the appellate court agreed with the trial court.

According to the appellate court, Measure A did not make any commitment to any specific project through the Transportation Investment Plan. The court began by asserting that Measure A’s language requiring subsequent environmental review for any project included in the Transportation Investment Plan was not determinative pursuant to Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116. Instead of relying on that language, the court evaluated whether the agency took action that significantly furthered a project “in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that public project.” (Id. at 138.)

The court found that the Transportation Investment Plan did not provide details or specifications for the transportation projects. This lack of “details and specifications allow flexibility to meet mitigation measures.” Additionally, SBCAG retained the power under Measure A to amend the Transportation Investment Plan, which included the power to delete any projects. The court also focused on the fact that implementation of the transportation projects was dependent on substantial funds from other sources that were not assured. In light of these facts, the court concluded that Measure A did not constitute a “project” under CEQA.

This case reminds us that it is not strictly the language of the agreement or ordinance that matters, but the effect of it. As stated by the court, in order to determine if an agency’s action constitutes a project, you must ask whether the agency significantly furthered the project “in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review.” Finding the answer in this case was no, the court upheld SBCAG’s approval of Measure A.

Petitioners Fail to Demonstrate that the City Failed at the Two-Step

Abbott & Kindermann — Tue, 08 Dec 2009 06:00:00 -0800

By Leslie Z. Walker

In California Native Plant Society v. City of Santa Cruz (2009) 177 Cal.App.4th 957, the Sixth District Court of Appeals upheld an Environmental Impact Report (“EIR”) for the master plan of a greenbelt, against appellant’s attack on the range of alternatives and findings of infeasibility.

I. Background

The City of Santa Cruz (“City”) began the planning process for the greenbelt, the Arana Gulch Master Plan in 2003 (the “Project”). Arana Gulch is a 67.7 acre City-owned property. Key components of the Project, as stated in the draft master plan and the EIR, are resource protection and enhancement, including preservation and restoration of Santa Cruz tarplant populations; and public use, including Americans with Disabilities Act (“ADA”)-compliant trails.

The draft EIR evaluated four project alternatives and concluded that the fourth alternative, an unpaved trail system would be the environmentally superior alternative. However, the alternative would not meet two of the Project objectives: 1) providing ADA-compliant, multi-use trails, and 2) providing a new west entrance to Arana Gulch.

The City Council certified the EIR and adopted the findings of fact and statement of overriding considerations. The findings of fact conclude that each of the alternatives analyzed in the EIR is “infeasible for failure to satisfy the project objectives on policy grounds.” The statement of overriding considerations identified, “economic, social, or other benefits that render acceptable the significant and unavoidable effect on the Santa Cruz tarplant including improved access for people with disabilities and trail connections to coastal resources.”

Petitioners challenged the Project approval in superior court. The Court denied the petition and appellants appealed, claiming the City’s adoption of a statement of overriding considerations “sand-bagged” the public because the City had already told them feasible alternatives existed. Appellants further claimed the City was required to include off-site alternatives for ADA-compliant trails because that was a key component of the Project.

II. Feasibility Analysis

The Court began by clarifying that the feasibility of the alternatives is considered at two different points, with two different standards, in the EIR process. “The issue of feasibility arises at two different junctures,” said the Court, “(1) in the assessment of alternatives in the EIR and (2) during the agency’s later consideration of whether to approve the project.” When the question is whether to include an alternative in the range of alternatives in the EIR, the standard is whether the alternative is potentially feasible.”(Emphasis in original.) Later, at the project approval phase, the question is whether the alternatives are actually feasible. (Emphasis in original.)

When considering the range of alternatives, the EIR does not need to consider every conceivable alternative, “[r]ather, it must consider a reasonable range of potentially feasible alternatives that will foster informed decisionmaking and public participation." (Guidelines, § 15126.6, subd. (a).)

When considering whether to approve the project, the agency may approve the project despite unmitigated significant environmental impacts identified in the EIR, only if it finds that “specific economic, legal, social, technological, or other considerations . . . make infeasible the mitigation measures or alternatives identified in the environmental impact report. (§ 21081, subd. (a)(3); Guidelines, 15091, subd. (a)(3).)” Here, “the rejected alternatives must be ‘truly infeasible,’” and the agency must explain in meaningful detail the reasons and facts supporting the conclusion that the rejected alternative is infeasible.

If a public agency adopts a project despite the significant unavoidable environmental impacts, the public entity must make express written determination the project’s benefits outweigh any potential environmental harm.

II. Range of Alternatives

Appellants claimed the range of alternatives was unreasonable because the alternatives did not all contain ADA-compliant paths and the EIR did not analyze an off-site ADA-compliant trail alternative. With respect to the first claim, the Court explained that the range of alternatives is judged against the rule of reason. Quoting Federation of Hillside and Canyon Associates v. City of Los Angeles (2000) 83 Cal.App.4th 1252, 1265, the Court said “the selection will be upheld unless the challenger demonstrates that the alternatives are manifestly unreasonable and do not contribute to a reasonable range of alternatives.” Because the ADA-compliant path was only one of the ten project objectives, the City was reasonable in looking at alternatives that did not contain it.

With respect to the second claim, the Court stated that “there is no rule requiring an EIR to explore off-site project alternatives in every case.” Quoting Guidelines section 15126.6 subd. (b) and Mira Mar Mobile Community v. City of Oceanside (2004) 119 Cal.App.4th 477, 491, the Court explained:

“An EIR shall describe a range of reasonable alternatives to the project, or to the location of the project, which would feasibly attain most of the basic objectives of the project but would avoid or substantially lessen any of the significant effects to the project, and evaluate the comparative merits of the alternatives. The Guidelines . . . do not require analysis of off-site alternatives in every case.”

Further, the Court explained that the City was not required to look at an off-site alternative for only the ADA-compliant path. The EIR guidelines require an EIR to describe alternatives to the proposed project. “That requirement is applicable only to the project as a whole, not the various facets thereof . . .”Big Rock Mesas Property Owners Assn. v. Board of Supervisors (1977) 73 Cal.App.3d 218, 227.

III. Feasibility

With respect to the City’s conclusion that no feasible alternatives would avoid the environmental impacts to the tarplant, the Court explained that the decision makers may reject as infeasible an alternative that does not satisfy the objectives associated with the project. This decision encompasses the desirability of the project, “to the extent that the desirability is based on a reasonable balancing of relevant economic, environmental, social and technological factors.” The Court explained that the decision-making body can reject the alternatives presented in the EIR without undermining the validity of the EIR’s alternatives analysis. At the final stage of approval, the decision-making body is looking at whether the project is actually feasible “Broader considerations of policy . . . come into play when the decision-making body is considering the actual feasibility than when the EIR preparer is assessing potential feasibility of the alternatives.”

The Court upheld the City’s decision that alternatives were infeasible, based on policy considerations.

IV. Conclusion

In sum, the Court clarified the two-step feasibility analysis, explaining that the first step is the determination by the agency staff of whether an alternative should be included. The second step is the agency’s policy based decision of whether any of the studies alternatives accomplishes the objectives of the project. The Court found that the petitioners failed to put forward sufficient evidence to show that the City had erred in either step of its analysis.

Save the Date!

Abbott & Kindermann — Wed, 02 Dec 2009 06:00:00 -0800

Abbott & Kindermann’s Annual Land Use, Real Estate, and Environmental Law Update

Reserve your seat for one of three seminars taking place in 2010!

Global Warming: CEQA Guidelines, Mandatory Reporting
Water Supply Legislation
CEQA Litigation: Alternative Analysis & Exhaustion of Administrative Remedies
Subdivision Map Extension
Interpreting Development Agreements
Endangered Species Act

Modesto Conference

Date: Thursday, January 21, 2010
Location: Double Tree Hotel Modesto, 1150 Ninth Street
Registration: 12:30 p.m. – 1:00 p.m.
Program: 1:00 p.m. – 4:00 p.m.

Redding Conference

Date: Thursday, January 28, 2010
Location: Hilton Garden Inn Redding , 5050 Bechelli Lane
Registration: 12:30 p.m. – 1:00 p.m.
Program: 1:00 p.m. – 4:00 p.m.

Sacramento Conference

Date: Friday, February 12, 2010
Location: Sacramento Hilton Arden West, 2200 Harvard Street
Registration: 8:30 a.m. - 9:00 a.m. with continental breakfast
Program: 9:00 a.m. - 12:00 noon

There is no charge for the programs and MCLE and AICP CM credits are available.

An RSVP will be required as space is limited. To reserve a spot, call our office at (916) 456-9595. When calling, please specify which conference you will be attending.

If the Responsible Managing Officer Abandons the Licensed Contractor, the Contractor will be Working for Free

Abbott & Kindermann — Wed, 25 Nov 2009 06:00:00 -0800

By Glen C. Hansen

In White v. Cridlebaugh (October 20, 2009) 178 Cal.App.4th 506, the Court of Appeal for the Fifth Appellate District held that homeowners were entitled to recover all compensation paid to a contractor because the responsible managing officer had earlier abandoned the contractor without a replacement, thereby causing the license to be suspended by operation of law. Making matters worse, the unlicensed contractor cannot reduce the homeowners’ recovery by asserting claims of offset arising out of the value of the reasonable materials and services provided by the contractor to the homeowners.

In March 2006, Robert and Carole White entered into a contract to build the White’s retirement home with JC Master Builders, Inc., and Terry E. Harper Cridlebaugh (“Cridlebaugh”). When the project ran over budget, and when concerns arose over the convoluted billing practices and manner of construction, the Whites ordered the construction to stop. JC Master Builders filed a mechanics’ lien and sued the Whites to foreclose that lien. The Whites filed an action against JC Master Builders, Cridlebaugh and his wife, a materials supplier that was owned by Cridlebaugh and his wife, the surety of JC Master Builders, and Robert Paul Diani, who was the responsible managing officer of JC Master Builders listed on the records of the Contractors’ State License Board (“CSLB”). The trial court allowed certain theories of liability pled by the Whites against the JC Master Builders to go to the jury but granted non-suit and directed verdicts on the rest. The jury then found against the Whites and for JC Master Builders. The Whites appealed. The Court of Appeal reversed, in part.

The Court first held that the Whites were entitled under Business and Professions Code section 7031, subdivision (b), to recover all compensation paid to JC Master Builders and Cridlebaugh for two reasons. First, Cridlebaugh never held a California contractor's license. Second, JC Master Builders, Inc.'s contractor's license was suspended by operation of law pursuant to section 7068.2 because Diani was not actively engaged in its construction business after August 2004, and no replacement was ever qualified in Diani's place. Even though CSLB records showed that Diani certified that he owned 10 percent or more of the voting stock of the corporation, Diani testified that he gave the stock to Cridlebaugh. Diani also testified that he did not receive any profits from the company, that Diani had turned over any dealings, management, supervision, daily work and income of JC Master Builders to Cridlebaugh, that Diani was primarily out of the country for several years before the lawsuit, and that Diani had not been aware that Cridlebaugh had used JC Master Builders to sue the Whites and place a mechanic's lien on their property. Cridlebaugh testified that he was the chief financial officer, secretary, and employee of JC Master Builders. For those reasons, the work that was performed for the Whites was unlicensed.

Accordingly, the Whites were entitled under section 7031(b) to recover the monies that they paid to JC Master Builders and Cridlebaugh. The Court recognized that section 7031(b) was designed to treat persons who have utilized unlicensed contractors consistently, regardless of whether they have paid the contractor for the unlicensed work. Those who have not paid are protected from being sued for payment and those who have paid may recover all compensation delivered. Unlicensed contractors are not able to avoid the full measure of those civil penalties by either (1) requiring prepayment before undertaking the next increment of unlicensed work or (2) retaining progress payments relating to completed phases of the construction.

Furthermore, the Court held that the Whites’ recovery of compensation could not be offset for the materials and services that JC Master Builders and Cridlebaugh provided to the Whites. The Court explained: “Section 7031(b)’s reference to the recovery of all compensation paid an unlicensed contractor means the unlicensed contractor cannot reduce the recovery authorized by asserting claims of offset arising out of the unlicensed work.”

Glen C. Hansen is a senior associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

Leaving the Country? You're Still on Notice of the Adverse Possessors on Your Property

Abbott & Kindermann — Tue, 24 Nov 2009 06:00:00 -0800

By Glen Hansen

In Nielsen v. Gibson (October 13, 2009) 178 Cal.App.4th 318, the Court of Appeal for the Third Appellate District held that a couple who bought property from the record owner’s parents while the owner was permanently out of the country was entitled to a judgment for quiet title because the couple improved, maintained, fenced and irrigated the property, and paid the property taxes for almost 10 years.

David Nielsen and his wife Tricia (“Nielsens”) brought this action against Guy Gibson (“Gibson”), in his capacity as executor of the estate of Gayl Bender (Gayl) to quiet title to the subject property adjacent to the Nielsen home. Gayl acquired the subject property by gift deed from her parents, Lyman and Mary Bender. Gayl built a cabin on the subject property before she left permanently for Ireland in the early 1990's. In 1997, Mary Bender went to Ireland to be with Gayl. That same year, the Nielsens wanted to buy from the Benders three lots in Granite Bay, California, which included a residence and the subject property. The Benders also wanted to complete the sale, but the transaction was complicated because the subject property had been gift-deeded to Gayl, who was still in Ireland, and no one had power of attorney to act on her behalf. Lyman Bender was informed that the Irish courts had determined Gayl was incapable of managing her affairs and did not have the capacity to make decisions with legal consequences. Lyman Bender rejected the notion that Gayl was incompetent, but he wanted to sell the subject property to the Nielsens so he could move to Ireland to join his wife and daughter. So in 1998, Lyman Bender executed two deeds in favor of the Nielsen’s: a grant deed for the residence and a quitclaim deed for the subject property. When Lyman Bender executed the deeds, neither the Benders nor their family trust had any interest in the subject property, which was owned by Gayl. The Nielsens moved into the cabin and began improving and maintaining the property. They fenced the property, irrigated it, built a go-cart course on it, and paid the property taxes for almost 10 years before filing their quiet title action.

Following an unreported court trial, the trial court found that the Nielsens had established that they had acquired the subject property through adverse possession and entered judgment quieting title in the Nielsens. Gibson, the executor, appealed. The Court of Appeal affirmed.

The Court held that the trial court did not err in concluding that the Nielsens possession of the property was so open and notorious that the record owner of the property had to be presumed to have notice of their adverse claim. A claimant who hopes to prove adverse possession must show his possession of the property was “by actual occupation under such circumstances as to constitute reasonable notice to the owner,” which some courts describe as requiring that the adverse claimant's possession be “open and notorious,” i.e., visible to the true owner and others. Whether the occupation of an adverse possessor is sufficiently open and notorious to constitute notice to the owner is a question of fact in each case and depends on the particular land and its condition, locality, and appropriate use. Here, those conditions were met. The Court further explained that when an adverse claimant is in open possession and the true owner fails to protect his or her interests and remains in ignorance, it is the owner's fault. Therefore, the fact that Gayl was out of the country and lacked actual notice is immaterial.

Approval of a Sales Tax Measure and an Investment Plan by the Regional Transportation Planning Body, as Part of a Sales Tax Measure to be Submitted to the Voters, Qualifies as Exempt from CEQA

Abbott & Kindermann — Thu, 19 Nov 2009 06:00:00 -0800

By William W. Abbott

The Santa Barbara COG is the local transportation authority for Santa Barbara County. As authorized by statute, the COG approved Measure A, which consisted of a sales tax measure for voter approval for transportation improvements and an investment plan, which served as the statutory Expenditure Plan. The COG then approved a resolution calling for the Board of Supervisors to put Measure A on the ballot. Petitioner challenged the COG approval on the basis that no CEQA review had been completed. The trial court ruled in favor of the COG, concluding that Measure A meets the criteria for an exemption from CEQA as the funding mechanism did not commit the COG to specific projects, notwithstanding the Expenditure Plan. Three months after COG approval of Measure A, but before the election, the COG certified an EIR for the 2008 Regional Transportation Plan.

On appeal, the appellate court first addressed mootness, saying the legal issue was not moot. To the extent that the COG approval of Measure was not exempt, the after-the-fact certification of the EIR would not cure the CEQA defect if one existed.

As to the merits, the appellate court recognized the California Supreme Court’s holding in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 supporting application of CEQA review prior to formal commitment to a project. Notwithstanding Save Tara, the appellate court concluded that in approving Measure A, the COG did not significantly further the Expenditure Plan projects in a way which “forecloses alternatives or mitigation measures”. Additionally, the Expenditure Plan included a provision allowing amendment (including project deletion) by the participating cities and counties, thus signaling to the appellate court, another argument against finding an inappropriate level of commitment. Other agencies looking at voter approved tax measures which are coupled with a wish list of projects would do well to review the tax measure/expenditure plan provisions viewed favorably by the appellate court. Sustainable Transportation Advocates of Santa Barbara v. Santa Barbara County Association of Governments (2009) Cal.App. LEXIS 1807.

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Approval of a Sales Tax Measure and an Investment Plan by the Regional Transportation Planning Body, as Part of a Sales Tax Measure to be Submitted to the Voters, Qualifies as Exempt from CEQA