Source: https://www.thomaslaw.com/blog/2015/05/
Timestamp: 2019-04-23 16:33:46+00:00

Document:
In Banning Ranch Conservancy v. City of Newport Beach 2015 Cal. App. LEXIS 436, the Fourth District Court of Appeal upheld an approval by the City of Newport Beach (City) of a development project on 400 acres of undeveloped coastal property with active oilfield operations (Project). The Project consisted of developing one-fourth of the area for residential and commercial purposes, while preserving the remaining land for open space and parks, as well as removing and remediating the oil production facilities.
Petitioners fought the City’s approval, arguing the City violated its own general plan by not coordinating with the Coastal Commission before approving the Project, and the California Environmental Quality Act (CEQA) by failing to designate “environmentally sensitive habitat areas” (ESHAs).
The trial court agreed in part, finding the City failed to comply with its General Plan, but disagreed in part, holding the City had complied with CEQA. Both parties appealed.
The case in the Court of Appeal turned on two main issues: (1) what actions was the City required to engage in with the Coastal Commission prior to Project approval, and (2) must the City designate ESHAs in its EIR?
Addressing the second issue, the court held the City’s EIR was adequate under CEQA. Petitioners believed the City avoided identifying ESHAs because that would have required a reworking of the Project. However, the City explained that it did not identify ESHAs because that is legal determination that must be left to the Coastal Commission. The EIR noted that the Project was not included in the City’s coastal land use plan, but was rather in a “Deferred Certification Area” over which the Coastal Commission still retained permit jurisdiction. The EIR also explained that the Project cannot move forward without a coastal development permit from the Coastal Commission. The court thus upheld the City’s EIR, finding the EIR contained the necessary information, and stating that CEQA does not require the City to speculate as to the likelihood of the presence of ESHAs or coastal development permit approvals; those are decisions better left to the Coastal Commission.
The court will defer to an agency’s determination of consistency with its own general plan, especially if a policy is vague enough to allow for more than one reasonable interpretation. Additionally, when a project is excluded from the coastal land use plan, as is the case with Banning Ranch, an agency can properly defer identification of ESHAs to the Coastal Commission.
This post is part of a series highlighting the CEQA cases currently pending before the California Supreme Court.
Fully briefed by the parties as of September 18, 2012.
Amicus briefing complete as of December 5, 2012.
Supplemental briefing completed by the parties as of January 29, 2015.
Does a state agency that may have an obligation to make “fair-share” payments for the mitigation of off-site impacts of a proposed project satisfy its duty to mitigate under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) by stating that it has sought funding from the Legislature to pay for such mitigation and that, if the requested funds are not appropriated, it may proceed with the project on the ground that mitigation is infeasible?
At the Supreme Court, CSU argues that City of Marina v. Board of Trustees (2006) 399 Cal.4th 341 (Marina) is clear; CSU has the power to mitigate off-site environmental effects, subject to the Legislature’s appropriations. CSU argues that requiring otherwise under CEQA would invite not only local agencies, but the public to scrutinize its budget and litigate over how its funds are allocated (in this case, balancing expenditures on education versus traffic impacts). CSU argues that the Court should reverse the ruling and hold that CSU complied with its CEQA obligations.
In contrast, City of San Diego, et al. (City) argues that CSU has not shown any grounds for reversal of the Court of Appeal’s decision. City argues that CSU relied on an erroneous interpretation of Marina by failing to consider additional mitigation measures for off-site traffic impacts. Specifically, City argues that CSU should have considered alternative mitigation measures or alternative funding measures where, as here, the agency’s preferred mitigation is uncertain and potentially infeasible.
In 2005, CSU certified an EIR and approved the Project. While litigation challenging the 2005 EIR was pending, the Supreme Court decided against CSU in Marina. Accordingly, the trial court issued an order setting aside the 2005 EIR and Project approval. Following the Court’s decision against CSU in Marina, CSU revised its original Master Plan and released an EIR for the Project, which was certified in November 2007.
The City challenged CSU’s EIR certification and Project approval. The trial court denied the petitions and discharged the writ, holding that CSU complied with CEQA and complied with the off-site mitigation requirements of Marina.
According to the Court of Appeal, CSU failed to consider other funding sources besides legislative appropriations that may be available for mitigation. Moreover, CSU should have evaluated one or more possible project modifications to the Project that would reduce or avoid unmitigated off-site traffic impacts. The Court of Appeal reversed in part, ruling that such deficiencies rendered the EIR inadequate under CEQA.
Amici argue that the State’s economy is dependent on highly educated workers, particularly those in the technology, communications and biotechnology industries. Changes in technology, coupled with the changing demographics widen the gap between the demands of the State’s economy and supply of college-educated workers. The proposed expansion universities in the CSU and University of California system will help close the projected skills gaps of the State’s workers.
Amici argue that the question for the Court is not whether dollars “would be better spent” on education or transportation, as CSU argues, but one of “shared sacrifice.” Thus, Amici allege that CSU abused its discretion by relying on a misinterpretation of Marina to justify its failure to include a reasonable range of mitigation measures in its EIR to address significant off-site traffic impacts. Amici argue that ruling in favor of CSU would allow public institutions to circumvent their duty under CEQA to develop feasible mitigation, thereby granting agencies a “false choice” between CEQA compliance and exercising agency discretion or implementing agency mandates. As a result local agencies would be unduly burdened, being forced to shoulder the burdens of funding mitigation or suffering environmental effects caused by CSU’s projects.
Amici argue that CSU’s position violates Public Resources Code, Section 21002, which provides that public agencies “should not approve projects as proposed if there are feasible alternatives or feasible mitigation measures available.” Moreover, ruling in favor of CSU would create a huge exemption from the mitigation requirement of Public Resources Code, Section 21001.1, which requires that public projects “be subject to the same level of review and consideration . . . as private projects.” Amici argue that although CSU is subject to the funding requirements of legislature, it is not relieved of its duty to mitigate significant effects under CEQA. Ruling in favor of CSU would effectively create an exemption for Public Institutions from properly mitigating project effects, forcing local agencies bear the costs of mitigation for off-campus impacts created by the CSU.
City of San Diego v. Trustees of the California State University is the latest in a line of cases involving the CSU system as it strives to accommodate increasing student populations at its campuses statewide. The Court’s ruling would serve to clarify its earlier ruling in Marina, which previously evaluated CSU’s duty to mitigate off-site environmental effects through payment to a third party. The Court’s ruling would not only affect the CSU system, but all state agencies grappling with projects that potentially create off-site impacts that could burden local agencies.
City of Marina v. Board of Trustees (2006) 399 Cal.4th 341; CSU certified an EIR for the Monterey Bay Campus’ master plan. The EIR noted that campus improvements would create significant off-campus traffic, water, sewage and fire safety impacts; however, such offsite impacts would remain significant and unavoidable because the Trustees did not have the authority to implement offsite mitigation. The Supreme Court held that the Trustees violated CEQA, because the Trustees had a duty to mitigate offsite impacts (e.g., CSU could have feasibly paid a third party to mitigate those impacts).
Fully briefed by the parties as of January 31, 2014.
Amicus briefing complete as of March 27, 2014.
Oral Argument April 8, 2015.
Respondent City of San Jose (City) conversely argues that the more deferential “police power” standard of review applies to the Ordinance. City also argues that the Ordinance cannot be facially unconstitutional because of a provision that gives the City discretion to adjust, reduce, or waive the requirements of the Ordinance on a case by case basis.
Interveners and Appellants challenged Petitioner’s reading of San Remo Hotel as requiring heightened scrutiny, and argued for application of the “police power” standard.
The Ordinance at issue was adopted January 26, 2010, and effective February 26, 2010. Plaintiff and Petitioner California Building Industry Association filed its timely Complaint and Petition for Writ of Mandate as a facial challenge to the constitutionality of the Ordinance on March 24, 2010.
The trial court ruled in favor of Petitioner, and granted injunctive relief on May 25, 2012. The City appealed.
The Court of Appeal, Sixth District, reversed on June 6, 2013, holding that the San Remo Hotel case was not applicable to the Ordinance. Instead, the Court of Appeal held the Ordinance was only reviewable as an exercise of the City’s police power.
California Association of Realtors, in support of Plaintiff and Respondent; Amicus argued a facial challenge to the Ordinance was the only means of meaningful review because an as-applied challenge would have no chance of success due to the wording of the Ordinance. Amicus also argued due process grounds for increased scrutiny of the Ordinance, and argued the Ordinance represents an unlawful exaction.
League of California Cities, California State Association of Counties, in support of Defendant and Appellant; Amici argued separation of powers required deference to the City Council. Amici also argued the San Remo standard does not apply because the Ordinance is a “quintessential” land use or zoning ordinance. Even if San Remo applies, amici argued, the Ordinance satisfies such intermediate scrutiny because the City Council made findings that are entitled to deference. Finally, amici argued the facial challenge to the Ordinance was not ripe because the Ordinance contained an administrative waiver provision.
California Attorney General Kamala D. Harris; in support of Defendant and Appellant; Amicus argues the Ordinance is a land use and planning regulation that falls within the City’s police power, and thus should be given deference. Amicus also argued that the Ordinance should not be subject to a takings analysis because it does not require conveyance of a property interest, but rather is a permissible exercise of the police power in the form of a non-confiscatory price control.
National Housing Law Project, Public Advocates, Western Center on Law and Poverty, Public Counsel, in support of Defendant and Appellant; Amici observed that inclusionary housing policies are used to combat segregation and comply with Federal fair housing obligations. Amici also opined that combating segregation leads to upward mobility, educational achievement, and better health outcomes.
Silicon Valley Leadership Group, Working Partnerships USA, in support of Defendant and Appellant; Interveners and Appellants; Amici opined that the Ordinance meets goals of increasing affordable housing and income integration, to address an “acute scarcity” in the San Jose area. Amici also opined that affordable housing reduces the harms of long-distance commuting, lack of affordable housing hinders employee retention, compliance with the Ordinance is financially feasible for developers, and there are few alternatives to the Ordinance for producing affordable homes.
National Association of Home Builders, in support of neither party; Amicus opined that the Respondent and Interveners have improperly conflated affordable housing with inclusionary housing, observing that inclusionary housing programs actually increase the market price of new homes, thereby increasing the number of people who are priced out of the market. Amicus also opined that mandatory private housing subsidies are detrimental to small business home builders, and that application of the San Remo standard in this case will encourage, rather than constrict, creative affordable housing strategies.
Leo T. McCarthy Center For Public Service and the Common Good, et al., in support of Defendant and Appellant; Amici provide a lengthy brief containing context for the parties’ legal arguments, covering topics such as racial and economic segregation, legal and policy responses to such segregation, land use challenges, and the benefits of inclusionary housing.
A ruling for BIA would affirm that the San Remo Hotel standard of review applies to inclusionary housing ordinances, which would require local agencies to show a reasonable relationship between an ordinance and the impacts of the project that are required to comply with the terms of such an ordinance.
A ruling for the City would likely have to overrule the City of Patterson case, and would allow inclusionary housing ordinances to be reviewed under the more deferential police power standard.
San Remo Hotel L.P. v. City and County of San Francisco (2002) 27 Cal.4th 643; The Court held there must be a reasonable relationship between exactions and the deleterious impact of the projects on which they are imposed.
Building Industry Association of Central California v. City of Patterson (2009) 171 Cal.App.4th 886; The court held that San Remo Hotel applies to inclusionary housing ordinances.
Sterling Park, L.P. v. City of Palo Alto (2013) 57 Cal.4th 1193; The Court held that affordable housing set-asides are exactions under the Mitigation Fee Act.
On April 29, 2015, Governor Jerry Brown signed Executive Order B-30-15, which establishes “[a] new interim greenhouse gas emission reduction target to reduce greenhouse gas emissions to 40 percent below 1990 levels by 2030…” (Executive Order B-30-15, ¶ 1, at http://gov.ca.gov/news.php?id=18938.) The Executive Order requires the California Air Resources Board to express the 2030 target in terms of million metric tons of carbon dioxide equivalent. (Id. at ¶ 3.) The Executive Order also requires state agencies consider “full life-cycle cost accounting” when making future planning and investment decisions. (Id. at ¶ 6.) To help state agencies incorporate climate change impacts into planning and investment decisions, the Executive order requires the Governor’s Office of Planning and Research to establish a technical, advisory group on the issue.
On June 1, 2005, Governor Arnold Schwarzenegger signed Executive Order S-3-05, which among other goals established a target to achieve statewide GHG emissions that are 80 percent below the 1990 levels by 2050. Governor Brown’s Executive Order B-30-15 does not replace Governor Schwarzenegger earlier 2050 target. Rather, as explained in Executive Order B-30-15, this new interim target will “ensure California meets its target of reducing greenhouse gas emissions to 80 percent below 1990 levels by 2050.” (Ibid.) Therefore, Executive Order B-30-15 provides support for the conclusion that a project found consistent with Executive Order B-30-15 is consistent with Executive Order S-3-05.
Several bills are pending this legislative session that relate to future GHG targets for the state. For example, AB 21 would require a statewide greenhouse gas emissions limit for 2030 to be established by 2018. SB 32 would require a statewide GHG emission limit equivalent to Executive Order S-3-05’s goal of 80% below the 1990 level by 2050 and authorizes interim greenhouse gas emissions level targets to be established for 2030 and 2040. AB 33 would establish a Climate Change Advisory Council with the duty to develop and analyze strategies to achieve the statewide GHG emissions limit as defined by AB 32 in 2006. Thomas Law Group will continue to monitor if and how pending legislation is amended to respond to Executive Order B-30-15.

References: v. 
 § 21000
 v. 
 v. 
 v. 
 v. 
 v. 
 v.