Court Opinion

ID: 9368782
Source: CourtListenerOpinion
Date Created: 2023-02-07 00:02:12.458984+00
Date Added: 2024-06-11T17:16:10.921780
License: Public Domain

Filed 2/6/23

                            CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FOURTH APPELLATE DISTRICT

                                       DIVISION THREE

 IBC BUSINESS OWNERS FOR
 SENSIBLE DEVELOPMENT,
                                                     G060850
      Plaintiff and Respondent,
                                                     (Super. Ct. No. 30-2020-01155214)
          v.
                                                     OPINION
 CITY OF IRVINE,

      Defendant and Appellant;

 GEMDALE 2400 BARRANCA
 HOLDINGS, LLC,

      Real Party in Interest and Appellant.

                 Appeal from a judgment of the Superior Court of Orange County, Kirk H.
Nakamura, Judge. Affirmed.
                 Rutan & Tucker, Jeffrey T. Melching, Peter J. Howell and Travis Van
Ligten for Defendant and Appellant City of Irvine.
                 Cox, Castle & Nicholson, Tim Paone, Andrew B. Sabey and James M.
Purvis for Real Party in Interest and Appellant Gemdale 2400 Barranca Holdings, LLC.
                 Connor, Fletcher & Hedenkamp, Edmond M. Connor, Matthew J. Fletcher
and Douglas A. Hedenkamp for Plaintiff and Respondent.

                                   *          *         *
              The Irvine Business Complex (the IBC) covers roughly 2,800 acres in
defendant City of Irvine (the City). In 2010, the City adopted a plan to guide
development of the IBC. It also prepared and approved a program environmental impact
report (the 2010 PEIR) that studied the effects of the development plan under the
California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.).
                                                                                         1

Several years later, real party in interest and appellant Gemdale 2400 Barranca Holdings,
LLC (Gemdale), submitted a plan to redevelop a 4.95-acre parcel in the IBC. It sought to
replace the existing two story, 69,780-square-foot building with a 275,000-square-foot
office complex, consisting of five- and six-story office buildings and a seven-story
parking structure. The City determined all the environmental effects of the proposed
project had been studied in the 2010 PEIR, and it found the project would have no further
significant environmental effects. It approved the project over the objections of Hale
Holdings, LLC (Hale Holdings), the managing member of plaintiff IBC Business Owners
for Sensible Development (petitioner). Petitioner then filed a petition for writ of
mandate. The trial court granted the writ and entered judgment in favor of petitioner.
              The City and Gemdale appeal the judgment, arguing the City correctly
approved the project. First, they contend the City correctly found all the project’s
environmental effects were within the scope of the 2010 PEIR. Second, they assert the
project was exempt from environmental review. We disagree with both contentions. As
to the first argument, there is insufficient evidence showing the project’s greenhouse gas
emissions are within the scope of the 2010 PEIR. Nor have its emissions been shown to
be less than significant under any other standard. As to the second, no exemption applies
because the project involves unusual circumstances which may cause significant
environmental effects. As such, we affirm the judgment.

  We abbreviate the general phrase “environmental impact report” in this opinion as
1

“EIR,” while we refer to the specific program EIR at issue as the “2010 PEIR.”

                                             2
                                             I
                                          FACTS
A. The IBC
              The IBC is in the western portion of the City. It covers about 2,800 acres
of land, bounded by John Wayne Airport to the northwest, the San Diego Creek to the
southeast, Barranca Parkway to the northeast, and Campus Drive to the southwest. It was
developed in the 1970s as a regional economic and employment base. Currently, most of
the land in the IBC is designated for office uses, with substantial amounts of industrial
and warehouse uses, as well as scattered residential uses (mostly mid-to high-rise
condominiums).
              In 2010, the City adopted the IBC Vision Plan and Mixed Used Overlay
Zoning Code Planning Process (the Vision Plan) as an amendment to the City’s General
Plan. The Vision Plan established a development guide for the IBC, with the overall goal
of creating a mixed-used community with urban neighborhoods. In particular, the Vision
Plan sought to allow for more urban residential development to address increased housing
demand in the IBC.
              The City concurrently prepared the 2010 PEIR to study the Vision Plan’s
environmental effects. The 2010 PEIR sought to “examine[] the total scope of
environmental effects that would occur as a result of buildout of the entire [Vision Plan].”
And this examination was intended to “provide a full disclosure of the environmental
impacts that may occur throughout the [IBC], together with an analysis of the site
specific and cumulative environmental impacts that [would] occur throughout the
buildout of the [Vision Plan].”
              The 2010 PEIR was expressly designed to provide environmental clearance
for future site-specific development projects within the IBC. It detailed how review of
such projects would proceed: “[i]f determined necessary, an initial study [would] be
prepared by the [relevant] agency . . . for each future development application within the

                                             3
IBC to ascertain whether a Subsequent EIR, Supplemental EIR, or other environmental
documentation [was] necessary to comply with the CEQA . . . .” If the responsible
agency found “no new [environmental] effects could occur and no new mitigation
measures would be required for the subsequent [project], it [could] approve the
subsequent [project] without preparing additional environmental documentation.”
              Under the Vision Plan, development in the IBC is limited to 17,038 total
residential units and 48,787,662 square feet of nonresidential development at full
buildout, which was planned to occur post-2030. To stay within this cap, each parcel in
the IBC is assigned a development budget which is referred to as a development intensity
value (DIV). The maximum development intensity allocations for each site are expressed
in AM and PM peak hours and average daily automobile DIV. A database is maintained
to track the DIV allocated to each parcel.
              Within the IBC, a parcel may transfer a portion of its DIV budget to
another parcel, subject to City approval. These transfers of development rights (TDRs)
allow “unused DIV budget allocations . . . [to] be moved from one site to another without
increasing the overall development intensity budget of the IBC.” TDR applications are
only approved by the City if the project will not adversely affect infrastructure and City
services and will not cause “adverse impact on the surrounding [traffic] circulation
system.”
              The 2010 PEIR’s analysis was based on several land use assumptions for
development of the IBC under the Vision Plan. These assumptions were divided into
(1) existing conditions, (2) assumptions for 2015, which consisted of ongoing projects
plus unbuilt approved projects, and (3) assumptions for post-2030, which consisted of
future proposed projects. For the post-2030 assumptions, certain sites were deemed
likely to be redeveloped. Conversely, other sites were identified as unlikely to be
redeveloped and assumed to be “fixed.” The 2010 PEIR also divided the IBC into
roughly 150 Traffic Analysis Zones (zones), numbered as zones 395 to 546. A post-2030

                                             4
land use mix was developed for each zone. And the 2010 PEIR analyzed environmental
impacts based on the anticipated development to occur within each zone. The 2010 PEIR
only assumed TDRs for projects that had applications pending at the time it was
prepared.
              As to these assumptions, though, the 2010 PEIR stated, “[i]t is anticipated
that actual specific future development may occur differently than that anticipated in the
assumptions used for the Vision Plan land use model, which is why a specific land use
plan is not proposed as part of the Vision Plan project. Projects not consistent with the
Vision Plan land use model assumptions will be reviewed in accordance with existing
city polices and traffic study procedures to determine whether additional conditions of
approval or environmental review are necessary.” (Italics added.) It also clarified that
“[w]hile some sites with excess intensity have been classified as ‘fixed’ for purposes of
the land use assumptions, intensity transfers from these sites are not precluded in the
future. Additional traffic analysis would be necessary should such a transfer be
proposed.” (Italics added.)
              As to TDRs, the 2010 PEIR explained, “[t]he City developed a set of
reasonable assumptions concerning future TDRs and applied those assumptions in the
traffic analysis. . . . However, if and to the extent the assumptions utilized by the City . . .
prove incorrect, then an analysis of the impact of the differences between current
assumptions and future realities will have to be conducted in a manner consistent with
CEQA and the CEQA Guidelines [(Cal. Code Regs., tit. 14, §§ 15000-15387)].”
              The 2010 PEIR determined most of the environmental impacts of the
Vision Plan would either be insignificant or could be mitigated to a level below
significance. But it found the “[i]mpacts related to Air Quality, Land Use Planning,
Noise, and Traffic [would] remain significant despite the adoption of all feasible
mitigation measures.” For these significant and unavoidable impacts, the City adopted a

                                               5
Statement of Overriding Considerations, which concluded these unavoidable adverse
impacts were outweighed by the benefits of the Vision Plan.

B. The Proposed Project
              Gemdale submitted an application for the project at issue (the Gemdale
project) in July 2019. The Gemdale project seeks to redevelop a 4.95-acre parcel in the
IBC located at 2400 Barranca Parkway (the project site), which is part of zone 420.
Currently, the project site is occupied by a single two story, 69,780-square-foot office and
warehouse building, and surface parking lots. The Gemdale project would demolish the
existing building and parking lots to construct a 275,000-square-foot office complex,
consisting of a five-story office building, a six-story office building, and a seven-story
parking structure. Below are models of the completed Gemdale project (the white multi-
story buildings) and the neighboring parcels (the grey buildings).

                                              6
7
              The project site was assumed to be fixed in the 2010 PEIR. Its DIV budget
was 72 AM peak-hour, 75 PM peak-hour, and 758 daily DIVs. The scale of the Gemdale
project, however, required a total budget of 358 AM peak-hour, 380 PM peak-hour, and
3,787 daily DIVs. To account for this disparity, Gemdale applied for a TDR in the
amount of 287 AM peak-hour, 305 PM peak-hour, and 3,043 daily DIVs, which is the
equivalent of 221,014 square feet of office space. The requested TDR for the Gemdale
project nearly doubled the largest approved TDR in the history of the Vision Plan, which
was a transfer equivalent to 111,538 square feet of space. The site sending its
development rights, 7040 Scholarship, was located on the other side of the IBC.

              In reviewing the Gemdale project, the City’s staff initially thought it might
be exempt from CEQA. But rather than file an exemption, they decided to prepare an
addendum to the 2010 PEIR (the addendum). The addendum contains an environmental
checklist prepared by the City’s staff to determine whether the potential environmental

                                             8
effects of the Gemdale project had been analyzed in the 2010 PEIR. Based on the
checklist, the addendum concluded no further environmental review was required:
“[A]lthough the [Gemdale] project could have a significant effect on the environment, . . .
all potentially significant effects (a) have been analyzed adequately in [the 2010 PEIR]
pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to [the
2010 PEIR], including revisions or mitigation measures that are imposed upon the
[Gemdale] project.”
              On March 5, 2020, the City’s Planning Commission voted to approve the
Gemdale project. The approval was appealed by Hale Holdings, petitioner’s managing
member, which owns a lot adjacent to the project site. The appeal was set to be heard by
the City Council on May 26, 2020, but it was continued twice and heard on July 14,
2020. Immediately after the hearing, the City denied the appeal and approved the
Gemdale project and the related TDR request. As part of the approval, the City found the
addendum was adequate to serve as the environmental document for the project and
satisfied all CEQA requirements. In making this finding, it determined:
              1. “There [were] no substantial changes to the project that [would] require
       major revisions to the [2010 PEIR] due to new, significant environmental effects
       or a substantial increase in the severity of impacts identified in the [2010 PEIR].”
              2. “Substantial changes [had] not occurred in the circumstances under
       which the project [was] being undertaken that [would] require major revisions of
       the [2010 PEIR] to disclose new, significant environmental effects or a substantial
       increase in the severity of the impacts identified in the [2010 PEIR].”
              3. There was no new material information, that was unknown at the time
the 2010 PEIR was certified, showing (a) new significant effects not discussed in the
2010 PEIR, (b) a substantial increase to significant impacts determined in the 2010 PEIR,
or (c) additional mitigation measures that might reduce any significant effects or impacts

                                             9
identified in the 2010 PEIR. (See Pub. Resources Code, § 21166; Cal. Code Regs., tit.
14, § 15162, subd. (a).)
                           2

              Of relevance here, the City found the Gemdale project would have “no
adverse impact on the surrounding circulation system.” It elaborated, “[t]he Traffic
Impact Analysis prepared for the project by [LSA Associates, Inc. in December 2019]
included an in-depth review of the impacts of the [Gemdale] project across multiple study
years including existing, short-term interim year (defined as traffic forecast three years
out), long-term interim year (defined as traffic forecast 20 years out), and at General Plan
build-out. . . . [It] determined that the project would not significantly impact the study
area intersections or roadways, with the inclusion of project design features” that would
be incorporated around the Gemdale project.
              Petitioner then filed this petition for writ of mandate in the trial court,
arguing the City had not complied with CEQA. The court agreed with petitioner and
entered judgment in its favor. It issued a writ of mandate ordering the City to set aside
approvals of the Gemdale project, the TDR, the addendum, and any finding that the
Gemdale project would qualify for a CEQA exemption. The City and Gemdale appeal.

                                              II
                                       DISCUSSION
              In CEQA suits, an appellate court reviews the agency’s decision, not the
trial court’s ruling. (Vineyard Area Citizens for Responsible Growth, Inc. v. City of
Rancho Cordova (2007) 40 Cal.4th 412, 427.) As such, rather than presuming the lower

  All further undesignated statutory references are to the Public Resources Code. The
2

CEQA Guidelines (Cal. Code Regs., tit. 14, §§ 15000-15387) will be referred to as the
“Guidelines” in this opinion to distinguish between the Public Resources Code and the
Code of Regulations. “Courts ‘should afford great weight to the Guidelines except when
a provision is clearly unauthorized or erroneous under CEQA.’” (Save Our Access etc. v.
Watershed Conservation Authority (2021) 68 Cal.App.5th 8, 23.)

                                              10
court’s judgment is correct, we presume the City’s decision is correct and give substantial
deference to its findings. The burden is on petitioner to show the City erred. (San
Franciscans Upholding the Downtown Plan v. City & County of San Francisco (2002)
102 Cal.App.4th 656, 674; Save Our Peninsula Committee v. Monterey County Bd. of
Supervisors (2001) 87 Cal.App.4th 99, 116-117.)
              Regardless of who has the burden, the outcome of this appeal depends on
the answers to two overarching questions. First, are the Gemdale project’s environmental
effects consistent with the 2010 PEIR, i.e., did the City properly rely on the addendum in
approving the Gemdale project? Second, is the Gemdale project categorically exempt
from CEQA, meaning the City was not obligated to prepare the addendum or perform
any environmental review? We answer “no” to both questions. Accordingly, we
conclude the City erred in approving the addendum, the Gemdale project, and the
requested TDR.

A. Consistency with the 2010 PEIR
              We start by addressing the first primary question raised by this appeal,
which is whether the Gemdale project is consistent with the 2010 PEIR. This question
involves two subissues raised by petitioner. Generally, petitioner asserts there is
insufficient evidence to support the City’s finding that (1) the Gemdale project will not
have significant traffic impacts, and (2) the Gemdale project’s greenhouse gas emissions
are within the scope of the 2010 PEIR. We reject the former argument but agree with the
latter one.

       1. Applicable Law
              “‘The foremost principle under CEQA is that the Legislature intended the
act “to be interpreted in such manner as to afford the fullest possible protection to the
environment within the reasonable scope of the statutory language.”’” (Pocket

                                             11
Protectors v. City of Sacramento (2004) 124 Cal.App.4th 903, 926.) “‘[T]he EIR is the
“heart of CEQA.”’” (Ibid.) Its purpose “is ‘to provide public agencies and the public in
general with detailed information about the effect which a proposed project is likely to
have on the environment; to list ways in which the significant effects of such a project
might be minimized; and to indicate alternatives to such a project.’ [Citation.] The EIR
thus works to ‘inform the public and its responsible officials of the environmental
consequences of their decisions before they are made,’ thereby protecting ‘“not only the
environment but also informed self-government.”’” (Friends of College of San Mateo
Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937, 944.)
              This case involves a program EIR, which is “‘an EIR which may be
prepared on a series of actions that can be characterized as one large project’ and are
related in specified ways. [Citation.] An advantage of using a program EIR is that it can
‘[a]llow the lead agency to consider broad policy alternatives and program wide
mitigation measures at an early time when the agency has greater flexibility to deal with
basic problems or cumulative impacts.’ [Citation.] Accordingly, a program EIR is
distinct from a project EIR, which is prepared for a specific project and must examine in
detail site-specific considerations.” (In re Bay-Delta etc. (2008) 43 Cal.4th 1143, 1169.)
              Program EIRs are routinely used “to avoid preparing multiple EIRs for a
series of actions.” (Save Berkeley’s Neighborhoods v. Regents of University of California
(2020) 51 Cal.App.5th 226, 242.) When used for this purpose, “the public agency must
examine [subsequent] site-specific program activities ‘in the light of the program EIR to
determine whether an additional environmental document must be prepared.’ [Citation.]
If the site-specific activity will not create effects or require mitigation measures that were
not discussed in the program EIR, the public agency is not required to prepare any other
site-specific environmental document.” (Center for Biological Diversity v. Department
of Fish & Wildlife (2015) 234 Cal.App.4th 214, 238.) Put differently, preparation of a

                                             12
site-specific environmental document through a public process is only required if the
agency discovers new impacts that were unaddressed in the program EIR. (Ibid.)
              When determining whether later activities are within the scope of a
program EIR, the Guidelines adopt an approach used to determine whether a project EIR
requires a subsequent EIR. Section 15162, subdivision (a), of the Guidelines explains
that once a project EIR has been certified, a subsequent EIR is not required unless there
are substantial changes to the project, substantial changes to the circumstances
surrounding the project, or new material information becomes available. The Guidelines
use the same criteria to determine whether a later site-specific activity is consistent with a
program EIR. Guidelines section 15168, subdivision (c)(2), specifies, “[i]f the agency
finds that pursuant to Section 15162, no subsequent EIR would be required, [it] can
approve the activity as being within the scope of the project covered by the program EIR,
and no new environmental document [is] required.” Guidelines section 15168,
subdivision (c)(4), recommends use of a written checklist “to determine whether the
environmental effects of [site-specific activities are] within the scope of the program
EIR.”
              Agencies are instructed to prepare an addendum for minor technical
changes or additions to a project that “‘do not raise important new issues about the
significant effects on the environment.’” (Ventura Foothill Neighbors v. County of
Ventura (2014) 232 Cal.App.4th 429, 435.) Guidelines section 15164, subdivision (a),
states the “agency shall prepare an addendum to a previously certified EIR if some
changes or additions are necessary but none of the conditions described in [Guidelines]
Section 15162 calling for preparation of a subsequent EIR have occurred.” “An
addendum need not be circulated for public review but can be included in or attached to
the final EIR . . . .” (Guidelines, § 15164, subd. (c).)
              Program EIRs may also utilize a process known as “tiering.” (In re Bay-
Delta etc., supra, 43 Cal.4th at p. 1170.) “‘Tiering’ refers to using the analysis of general

                                              13
matters contained in a broader EIR . . . with later EIRs and negative declarations on
narrower projects; incorporating by reference the general discussions from the broader
EIR; and concentrating the later EIR or negative declaration solely on the issues specific
to the later project.” (Guidelines, § 15152, subd. (a).) A “[n]egative declaration’” is “a
written statement by the lead agency briefly describing the reasons that a proposed
project, not exempt from CEQA, will not have a significant effect on the environment
and therefore does not require the preparation of an EIR.” (Guidelines, § 15371.)
              Within the context of a program EIR, tiered review is only necessary if the
later site-specific activity would have significant environmental effects that were not
examined in the program EIR. (Guidelines, § 15168, subd. (c)(1); Save Berkeley’s
Neighborhoods v. Regents of University of California, supra, 51 Cal.App.5th at p. 236.)
If the activity has such unexamined effects, “a new initial study [needs] to be prepared
leading to either an EIR or a negative declaration. That later analysis may tier from the
program EIR . . . .” (Guidelines, § 15168, subd. (c)(1).) Unlike an addendum, public
review is required for a subsequent EIR or subsequent negative declaration. (Guidelines,
§ 15162, subd. (d).) To reiterate, though, no subsequent EIR or negative declaration is
required if the later activity’s environmental effects are within the scope of the program
EIR. (Guidelines, § 15168, subd. (c)(2); Committee for Green Foothills v. Santa Clara
County Bd. of Supervisors (2010) 48 Cal.4th 32, 44-45.)

       2. Standard of Review
              The parties dispute the applicable standard of review for determining
whether the activity at issue, the Gemdale project, is within the scope of the 2010 PEIR.
The City and Gemdale contend the substantial evidence standard applies, while petitioner
argues for application of the fair argument standard. We agree with the City and
Gemdale.

                                             14
              “Substantial evidence is the proper standard where, as here, an agency
determines that a project consistent with a prior program EIR presents no significant,
unstudied adverse effect.” (Mission Bay Alliance v. Office of Community Investment &
Infrastructure (2016) 6 Cal.App.5th 160, 174; Santa Teresa Citizen Action Group v. City
of San Jose (2003) 114 Cal.App.4th 689, 702 [“When an agency has already prepared an
EIR, its decision not to prepare [a subsequent EIR] for a later project is reviewed under
the deferential substantial evidence standard”]; see Guidelines, § 15168, subd. (c)(2).) In
applying this standard, “we review the administrative record of the public agency’s
decision . . . for substantial evidence to support that decision. [Citations.] Substantial
evidence is evidence of ponderable legal significance that is reasonable in nature,
credible, and of solid value. [Citation.] In applying the substantial evidence standard of
review, all conflicts in the evidence are resolved in favor of the prevailing party and all
legitimate and reasonable inferences are made to support the agency’s decision.
[Citations.] When two or more inferences reasonably can be deduced from the evidence,
we cannot substitute our deductions for those of the agency.” (Holden v. City of San
Diego (2019) 43 Cal.App.5th 404, 410.)
              Petitioner contends that under section 21094 we should apply the fair
argument standard. This “standard of review [asks] whether, after examining the entire
record, there is substantial evidence to support a fair argument that a project may have a
significant effect on the environment.” (Sierra Club v. California Dept. of Forestry &
Fire Protection (2007) 150 Cal.App.4th 370, 381.) “The fair argument standard creates a
low threshold favoring future environmental review and differs markedly from the
deferential substantial evidence standard of review normally enjoyed by agencies.”
(Citizens for a Sustainable Treasure Island v. City and County of San Francisco (2014)
227 Cal.App.4th 1036, 1049 (Citizens for a Sustainable Treasure Island).)
              Section 21094 concerns tiered environmental impact reports. “[W]hen an
agency attempts to tier its environmental review for a materially different project onto a

                                             15
prior program EIR, then the fair argument test is required under section 21094,
subdivision (c).” (Citizens for a Sustainable Treasure Island, supra, 227 Cal.App.4th at
p. 1050, fn. 6.) As explained above, while a program EIR may use tiering for later site-
specific review, it is not required to do so. Tiering is only required if the subsequent
project “would have effects that were not examined in the program EIR.” (Guidelines,
§ 15168, subd. (c)(1).) No tiered review was performed here because the City concluded
the Gemdale project’s environmental effects were consistent with the 2010 PEIR.
Numerous courts have rejected application of the fair argument standard when reviewing
an agency’s determination that an activity’s environmental effects were addressed in a
program EIR. (See, e.g., Mission Bay Alliance v. Office of Community Investment &
Infrastructure, supra, 6 Cal.App.5th at p. 174; Citizens for a Sustainable Treasure Island,
at pp. 1049-1050; Citizens for Responsible Equitable Environmental Development v. City
of San Diego Redevelopment Agency (2005) 134 Cal.App.4th 598, 609-610.)

       3. Traffic Analysis
              Petitioner argues the City’s environmental review of the Gemdale project
was inadequate because it failed to perform a mandatory “vehicle miles traveled” (VMT)
analysis. VMT “refers to the amount and distance of automobile travel attributable to a
project.” (Guidelines, § 15064.3, subd. (a).) Because no VMT analysis was conducted,
petitioner claims there is insufficient evidence to support the City’s finding that the
Gemdale project will not have significant traffic impacts. We disagree. The City was not
obligated to perform a VMT analysis for the addendum. Its traffic study for the Gemdale
project used the same analytical method as the 2010 PEIR, which is sufficient to support
its traffic impacts finding.
              Petitioner’s argument is based on Guidelines section 15064.3 (the VMT
Guideline), which was adopted after the 2010 PEIR. The history of the VMT Guideline
dates back to 2013, when section 21099 was enacted. Section 21099, subdivision (b)(1),

                                             16
required the Office of Planning and Research to draft revisions to the Guidelines
“establishing criteria for determining the significance of transportation impacts of
projects,” including recommended metrics for transportation impacts. “Upon
certification of [these] guidelines . . . automobile delay, as described solely by level of
service or similar measures of vehicular capacity or traffic congestion, shall not be
considered a significant impact on the environment pursuant to this division . . . .”
(§ 21099, subd. (b)(2).) Per section 21099’s mandate, the VMT Guideline was adopted
in December 2018. (Citizens for Positive Growth & Preservation v. City of Sacramento
(2019) 43 Cal.App.5th 609, 625.) The VMT Guideline establishes VMT as “the most
appropriate measure of transportation impacts” (Guidelines, § 15064.3, subd. (a)), and it
provides criteria for conducting VMT analysis (Guidelines, § 15064.3, subd. (b)). It also
specifies that “[b]eginning on July 1, 2020, the provisions of [the VMT Guideline] shall
apply statewide.” (Guidelines, § 15064.3, subd. (c).)
              The City did not perform a VMT analysis in the 2010 PEIR or for the
Gemdale project. Instead, the 2010 PEIR calculated traffic impacts using a level of
service methodology, i.e., peak traffic hours and total traffic volume. The Gemdale
project’s traffic study utilized the same methodology. Prior to the adoption of the VMT
Guideline, the level of service methodology utilized by the City had been a long-
established standard. (Tiburon Open Space Committee v. County of Marin (2022) 78
Cal.App.5th 700, 750-751.) However, petitioner maintains that “[a]s of July 1, 2020, . . .
VMT [became] the proper metric for analyzing transportation impacts, and [level of

                                              17
service]-based traffic studies [could] no longer be used . . . .” Because the addendum’s
                                                               3

final approval occurred on July 14, 2020, after the VMT Guideline became applicable,
petitioner insists the City was required to perform a VMT analysis of the Gemdale
project.
              Petitioner’s argument is based on a section of the Guidelines that states,
“[a]mendments to the guidelines apply prospectively only. New requirements in
amendments will apply to steps in the CEQA process not yet undertaken by the date when
agencies must comply with the amendments.” (Guidelines, § 15007, subd. (b), italics
added.) Because final review of the addendum was “not yet undertaken” by July 1, 2020,
petitioner asserts the City was required to comply with the VMT Guideline and perform a
VMT analysis. Addressing this argument requires us to interpret the language of
Guidelines section 15007, subdivision (b), which we review de novo. (Save Our Carmel
River v. Monterey Peninsula Water Management Dist. (2006) 141 Cal.App.4th 677, 693-
694.) In doing so, we follow the same rules governing statutory interpretation. We give
the regulatory language its plain, commonsense meaning. If the language of the
regulation is clear and unambiguous, we need not perform any further steps. (Berkeley
Hills Watershed Coalition v. City of Berkeley (2019) 31 Cal.App.5th 880, 890-891.)

  Petitioner briefly argues for an earlier compliance date for the VMT Guideline.
3

Guidelines section 15007, subdivision (d), states, “[p]ublic agencies shall comply with
new requirements in amendments to the guidelines beginning with . . . . [¶] . . . [¶] . . .
[t]he 120th day after the effective date of the guideline amendments.” Since the VMT
Guideline was certified on December 28, 2018, petitioner claims the City had to comply
with it by April 27, 2019. But the VMT Guideline expressly states its terms became
effective statewide on July 1, 2020. (Guidelines, § 15064.3, subd. (c).) A specific
provision relating to a particular subject will govern over a general provision that is broad
enough to cover the same subject. (Committee for a Progressive Gilroy v. State Water
Resources Control Bd. (1987) 192 Cal.App.3d 847, 859.) Petitioner does not reconcile
the language of the VMT Guideline with the general language of Guidelines section
15007, subdivision (d). Thus, it has not met its burden on this point. (Center for
Biological Diversity v. Department of Forestry & Fire Protection (2014) 232
Cal.App.4th 931, 942.)

                                             18
              Petitioner’s interpretation of Guidelines section 15007, subdivision (b),
ascribes a narrow meaning to the phrase, “steps in the CEQA process.” Its argument
assumes final approval of the addendum is its own CEQA step, which was undertaken on
July 14, 2020. But a “step” in the CEQA process covers a much broader range of
activities. This is apparent from precedent, which describes CEQA as “a three-step
process. In the first step, the public agency must determine whether the proposed
development is a ‘project,’ that is, ‘an activity which may cause either a direct physical
change in the environment, or a reasonably foreseeable indirect physical change in the
environment’ undertaken, supported, or approved by a public agency.” (Tomlinson v.
County of Alameda (2012) 54 Cal.4th 281, 286.) If so, the agency proceeds to the second
step. This requires the agency to determine whether the project is exempt from CEQA,
and, if not, whether the project will have a significant effect on the environment. (Ibid.)
If the project is not exempt and will have a significant environmental effect, “the agency
must proceed to the third step, which entails preparation of an environmental impact
report before approval of the project.” (Ibid.)
              Our Supreme Court’s description of the steps in the CEQA process does not
state whether an addendum is part of the third step, constitutes its own step, or is part of
another step. But we need not decide this issue. From the above authority, it is enough
to conclude that a “step[] in the CEQA process” is a broad category meant to cover an
entire review procedure, for example, preparation of an EIR. Clearly, final approval of
an addendum itself does not constitute its own CEQA step. At the very least, the CEQA
step at issue here is the entire addendum process from start to finish, meaning we must
evaluate whether that process was “undertaken” before the VMT Guideline became
applicable on July 1, 2020.
              It is undisputed the addendum process was completed on July 14, 2020.
But undertaken and completed are not synonymous. Rather, “undertaken” is a form of
the verb, “undertake,” which means “to do or begin to do something, especially

                                             19
something that will take a long time or be difficult.” (Cambridge Dict. Online (2022)
https://perma.cc/R2MG-2DTJ [as of Feb. 6, 2023].) Though the specific start date of the
addendum process is unclear, it began well before July 1, 2020. For example, e-mail
correspondence dated October 1, 2019, discusses the addendum. The City’s nearly 400-
page traffic study was prepared for the addendum in December 2019. Thus, the City did
not have to comply with the VMT Guideline because the addendum process had already
been “undertaken” by the time it became applicable.
              The above interpretation is also more reasonable than petitioner’s reading
of Guidelines section 15007, subdivision (b). This is illustrated by this case’s procedural
history. Hale Holdings’ appeal of the Planning Commission’s approval was placed on
calendar for May 26, 2020, weeks before the VMT Guideline became applicable on July
1. Based on petitioner’s interpretation of the relevant Guideline, had the appeal hearing
and approval occurred on May 26, the City would not have been obligated to perform a
VMT analysis. But since the hearing was continued to a date after July 1, under
petitioner’s interpretation, the City must now perform a VMT analysis. As shown from
this case, petitioner’s interpretation of Guidelines section 15007, subdivision (b), leads to
capricious applications of new requirements. The interpretation above eliminates this
uncertainty and provides agencies with a more concrete understanding of the applicable
requirements before they begin a review process.
              Because the City was not obligated to perform a VMT analysis, we
conclude its traffic findings are supported by substantial evidence. The traffic study
prepared for the addendum found the Gemdale project would not significantly impact
traffic. It concluded that “[b]ased on the results of [its] analysis, the [Gemdale] project
can be implemented without impacting the design or operation of the surrounding
roadway system. An evaluation of intersection LOS [(levels of service)] shows that the
addition of [Gemdale] project traffic to the existing and future Short-Term Interim Year,
Long-Range Interim Year, and Buildout approved and pending traffic volumes would not

                                             20
significantly impact the study area intersections or roadways, according to the [City’s]
performance criteria.” Petitioner has not identified any deficiencies in this study other
than its lack of a VMT analysis, which was not required.
              Petitioner also argues a VMT analysis was required because the 2010 PEIR
assumed there would be no TDRs between zones and the project site was “fixed.” The
Gemdale project violates these assumptions, petitioner asserts, which constitutes a
substantial change to the 2010 PEIR that requires further analysis. (Citing Guidelines,
§ 15162, subd. (a)(1).) This argument is unpersuasive. No substantial change to the
2010 PEIR occurred. The 2010 PEIR specifies that a “fixed” classification does not
preclude a site from receiving TDRs. It allows such transfers subject to a traffic study.
Likewise, the 2010 PEIR recognized development in the IBC could differ from the
assumptions used. To account for this, it explained projects inconsistent with land use
assumptions would “be reviewed in accordance with existing city polices and traffic
study procedures to determine whether additional conditions of approval or
environmental review [were] necessary.” Here, per the 2010 PEIR, a traffic study was
conducted, and it determined no further environmental review was necessary. The City
was not required to perform a VMT analysis for the reasons above.
              Finally, citing raw data numbers from the addendum, petitioner argues
there is substantial evidence the Gemdale project will have a potential VMT impact. But
this is not the question we face. Rather, we ask whether the record contains substantial
evidence to support the City’s finding that the Gemdale project will not cause significant
traffic impacts. It does. So, we need not weigh conflicting evidence. (Vineyard Area
Citizens for Responsible Growth, Inc. v. City of Rancho Cordova, supra, 40 Cal.4th at p.
435.) Further, “‘[i]t is settled that [an agency] is not required to conduct every requested
test in order to satisfactorily analyze a potential impact, and “our courts have repeatedly
emphasized that an EIR must demonstrate a good faith effort at full disclosure; it does not

                                             21
require perfection, nor exhaustive analysis.”’” (Tiburon Open Space Committee v.
County of Marin, supra, 78 Cal.App.5th at p. 754.)

       4. Greenhouse Gas Impacts
              Next, petitioner argues there is insufficient evidence to support the City’s
findings that the Gemdale project’s greenhouse gas emissions are consistent with the
2010 PEIR and will not have a significant environmental impact. We agree.

              a. Background
              CEQA review of a project’s greenhouse gas emissions is relatively new. Its
origin dates back to the California Global Warming Solutions Act of 2006, commonly
known as Assembly Bill No. 32 (2005-2006 Reg. Sess.; Stats. 2006, ch. 488, § 1)
(Assem. Bill 32), which established state policy for reducing greenhouse gas emissions.
                                                                                             4

(Center for Biological Diversity v. Department of Fish & Wildlife (2015) 62 Cal.4th 204,
215-217.) Among other things, Assembly Bill 32 called for “reduction of such emissions
to 1990 levels by the year 2020,” and it tasked the California Air Resources Board (the
Air Board) with regulating emissions. (Center for Biological Diversity, at p. 215.)
              In 2008, the Air Board developed a “Scoping Plan” for reducing
greenhouse gases. The plan “explained that ‘[r]educing greenhouse gas emissions to
1990 levels mean[t] cutting approximately 30 percent from business-as-usual emission
levels projected for 2020, or about 15 percent from [2008’s] levels.’” (Center for
Biological Diversity v. Department of Fish & Wildlife, supra, 62 Cal.4th at p. 216.)
Business-as-usual emission levels “assume[] no conservation or regulatory efforts beyond
what was in place when the forecast was made,” while factoring in projected population

  “‘Greenhouse gas’ or ‘greenhouse gases’ includes but is not limited to: carbon dioxide,
4

methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.”
(Guidelines, § 15364.5.)

                                            22
and economic growth. (Ibid.) They “‘represent[s] the emissions that would be expected
to occur in the absence of any [greenhouse gas] reductions actions.’” (Ibid.)
              The Guidelines pertaining to greenhouse gas emissions were adopted in
2010. (Center for Biological Diversity v. Department of Fish & Wildlife, supra, 62
Cal.4th at pp. 216-217.) They require an agency to determine the significance of
greenhouse gas emissions for a project. (Guidelines, § 15064.4, subd. (a).) In doing so,
the “agency shall 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.” (Guidelines, § 15064.4, subd. (a).)
              However, courts have recognized that greenhouse gas emissions pose a
different type of challenge than most other pollutants. “[B]ecause of the global scale of
climate change, any one project’s contribution is unlikely to be significant by itself. The
challenge for CEQA purposes is to determine whether the impact of the project’s
emissions of greenhouse gases is cumulatively considerable, in the sense that ‘the
incremental effects of [the] individual project are considerable when viewed in
connection with the effects of past projects, the effects of other current projects, and the
effects of probable future projects.’” (Center for Biological Diversity v. Department of
Fish & Wildlife, supra, 62 Cal.4th at p. 219.)
              Due to this challenge, “‘there is no iron-clad definition of “significance”’”
for greenhouse gas emissions. (Center for Biological Diversity v. Department of Fish &
Wildlife, supra, 62 Cal.4th at p. 221.) “[E]ach lead agency [has] broad discretion to
determine significance thresholds,” and the Guidelines do “not mandate any one
particular method to address greenhouse gas emissions.” (McCann v. City of San Diego
(2021) 70 Cal.App.5th 51, 91.) Rather, the Guidelines provide more general direction:
“[i]n determining the significance of a project’s greenhouse gas emissions, the lead
agency should focus its analysis on the reasonably foreseeable incremental contribution
of the project’s emissions to the effects of climate change. A project’s incremental

                                             23
contribution may be cumulatively considerable even if it appears relatively small
compared to statewide, national or global emissions.” (Guidelines, § 15064.4, subd. (b).)
              The Guidelines also allow an agency to “analyze and mitigate the
significant effects of greenhouse gas emissions at a programmatic level,” such as through
a program EIR. (Guidelines, § 15183.5, subd. (a).) Once an agency has adopted such a
plan, it “may fulfill its duty under CEQA to consider the significance of an individual
project’s greenhouse gas emissions by analyzing whether the project is consistent with
the broader plan. If a project is found to be consistent with the broad plan, that finding
provides sufficient evidence for the agency to conclude the project has no significant
impact due to greenhouse gas emissions.” (McCann v. City of San Diego, supra, 70
Cal.App.5th at p. 92.)

              1. The 2010 PEIR’s emissions plan
              The IBC’s 2008 greenhouse gas emissions totaled 909,352 metric tons
(MTons) per year, with 683,499 MTons attributable to transportation sources and
225,853 MTons to nontransportation sectors (residential, nonresidential, hotel,
infrastructure, water, and solid waste). Based on these figures, the 2010 PEIR
                                        5

established a significance threshold of net zero emissions under the Vision Plan. In other
words, to be considered less than significant, the IBC’s greenhouse gas emissions would
remain equal or less than 909,352 MTons per year through full buildout post-2030.
              To achieve this goal, the 2010 PEIR determined, “plans, programs, or
policies (PPP) and project design features (PDF) would need to . . . attain a net zero
increase in [greenhouse gas] emissions.” It identified existing City, State, and Federal

  For comparison, California produced 492 million MTons of greenhouse gas emissions
5

in 2004. At the time of the 2010 PEIR, the state’s business-as-usual projection for 2020
was 596 million MTons. The Air Board’s 2020 emissions limit was 427 million MTons
for the State, which required an emissions reduction of 169 million MTons (roughly 30
percent of the business-as-usual projection).

                                             24
PPPs, PDFs, and other programs (together, the mitigation measures) designed to reduce
greenhouse gas emissions. It concluded the net zero emissions goal would be met if all
the mitigation measures were implemented. Specifically, it found greenhouse gas
emissions for the IBC at full buildout would total 750,522 MTons, which was 17 percent
lower than the 909,352 MTons emitted in 2008. Based on these findings, the 2010 PEIR
concluded the Vision Plan’s impact to global climate change were “less than significant.”

              2. The Addendum’s emissions analysis
              The addendum concluded the Gemdale project’s greenhouse gas emissions
would be less than significant for two separate reasons. First, the Gemdale project’s
emissions would be consistent with the 2010 PEIR. Second, its emissions would comply
with thresholds drafted by the South Coast Air Quality Management District (the
District), which adopts and enforces rules in Orange County pertaining to state and
federal air quality standards. (American Coatings Assn. v. South Coast Air Quality
Management Dist. (2012) 54 Cal.4th 446, 452-453.) There is insufficient evidence to
support the first conclusion, and the second is legally incorrect.
              We begin with the City’s conclusion that the Gemdale project’s emissions
are consistent with the 2010 PEIR. As explained in the addendum, the 2010 PEIR
“determined that through implementation of all feasible [mitigation] measures . . . related
to [greenhouse gas] reduction, the [Gemdale] project would achieve required [greenhouse
gas] emission reductions and its quantitative emissions would be considered less than
significant.” The Gemdale project would implement all relevant measures, “therefore
[its] impact with respect to [greenhouse gas] emissions would be consistent with the
[2010 PEIR] and this impact would be less than significant. No new or more severe
impacts associated with [greenhouse gas] emissions would occur, and the level of impact
would not change from the level identified in the [2010 PEIR]. No new [mitigation
measures] are required.”

                                             25
                The City argues the Gemdale project is consistent with the 2010 PEIR
because it incorporates all the mitigation measures. The mitigation measures are a means
to achieve the 2010 PEIR’s target of net zero emissions (909,352 MTons or less per
year). But the incorporation of the mitigation measures alone does not constitute
substantial evidence that the Gemdale project is consistent with this overall goal. Even
with all applicable mitigation measures in place, the largescale nature of the Gemdale
project could cause it to emit a disproportionate level of greenhouse gases. Combined
with the emissions of current and future projects, particularly those requiring TDRs, the
Gemdale project’s emissions could render the 2010 PEIR’s goal of net zero emissions
unattainable. While the 2010 PEIR found implementation of all the mitigation measures
would allow the IBC to achieve net zero emissions, it did not analyze the effects of TDRs
on greenhouse gas emissions. Nor does the addendum examine whether the Gemdale
project’s emissions will allow the IBC to maintain net zero emissions at full buildout.
Indeed, the addendum does not even state the amount of emissions the Gemdale project
will produce.
                Simply put, there is insufficient evidence in the record to support the City’s
finding that the Gemdale project’s greenhouse gas emissions are consistent with the 2010
PEIR’s target of net zero emissions. Rather, it is unclear what effect the Gemdale project
will have on the IBC’s ability to achieve net zero emissions. To demonstrate the
Gemdale project is within the scope of the 2010 PEIR’s emissions plan, the City must
analyze the Gemdale project’s emissions within the context of present and future
development in the IBC. The analysis must show its emissions will not prevent the IBC
from achieving its goal of net zero emissions at full buildout.
                In response, the City contends the Gemdale project “does not change the
overall development intensity allowed under the Vision Plan and contemplated in the
[2010 EIR]. . . . Merely shifting development intensity between sites within the IBC does
not result in a substantial increase in [greenhouse gas] emissions, given the nature of such

                                              26
emissions.” Two considerations are relevant to this argument: the source of greenhouse
gas emissions and total greenhouse gas emissions. The specific source of emissions
within the IBC is largely irrelevant since released greenhouse gases do not remain in the
local area. (Center for Biological Diversity v. Department of Fish & Wildlife, supra, 62
Cal.4th at pp. 219-220.) However, the total amount of emissions caused by a project or
projects within the IBC is potentially significant.
              To illustrate, there would be no significant environmental effect if the City
chose to build one project in the IBC that emits 2,000 MTons of greenhouse gases instead
of two smaller projects that each would have emitted 1,000 MTons. The single project
would have the same total emissions as the two smaller projects combined. The source of
the 2,000 MTons of emissions would be irrelevant since they would spread beyond the
IBC’s borders regardless of whether they came from one source or two sources. (See
Center for Biological Diversity v. Department of Fish & Wildlife, supra, 62 Cal.4th at pp.
219-220.) But there could be a significant environmental effect if the single project
emitted 5,000 MTons. The total emissions of the single project would be two and a half
times greater than the combined emissions of the two smaller projects. An analysis
would be needed to determine whether the 5,000 MTons of emissions caused by the
single project were still consistent with the 2010 PEIR’s goal of net zero emissions.
              It is unclear from the record whether TDRs simply shift the source of
greenhouse gas emissions or may impact total emissions. If the TDR required for the
Gemdale project merely shifted the source of greenhouse gas emissions, then the City’s
argument would likely be persuasive. But its argument appears to assume the TDR will
not substantially increase total greenhouse gas emissions. That may be true. But we
have not been cited anything in the record to support this assertion, which is beyond
common knowledge. It is unclear what effect the required TDR would have on emissions
for the Gemdale project and, in turn, for the IBC. While the 2010 PEIR allows TDRs, it
did not study what effect they may have on the IBC’s total greenhouse gas emissions and

                                             27
whether they might interfere with the IBC’s goal of net zero emissions. Nor does the
addendum contain any project-specific analysis of this issue or of the Gemdale project’s
total emissions.
              Further, the record contains evidence showing the Gemdale project’s
greenhouse gas emissions may have significant environmental effects. While the
approved addendum did not discuss its total emissions, draft documents indicate the City
performed a study that found the Gemdale project would emit 5,563 MTons of
greenhouse gases per year. For context, the District has created a draft guidance
document (the draft guidance) for analyzing greenhouse gas emissions under CEQA.
The draft guidance creates a five-tier approach. A project is analyzed from the first to
fifth tier in ascending order. If it meets the requirements of any tier, its greenhouse gas
impact is considered less than significant and the review process stops. Tier 1 applies if a
project is exempt from CEQA, while Tier 2 applies if the project is consistent with a
qualifying local reduction plan. Tier 3 consists of screening values. For commercial land
uses, Tier 3 establishes a default significance value of 1,400 MTons of greenhouse gas
emissions per year. In other words, projects with emissions of 1,400 MTons or less per
year are deemed to have less than significant environmental effects. The Gemdale
Project’s 5,563 MTons of emissions are four times the Tier 3 screening level.
                                                                                 6

              Indeed, an earlier of the addendum initially examined the Gemdale
project’s greenhouse gas emissions under Tier 3 of the draft guidance. That draft
concluded, “[g]iven a large majority of the [Gemdale] project’s long-term operational
emissions [would be] associated with mobile source emissions that the project [could not]

  We note that a project with emissions greater than 1,400 MTons can be deemed to have
6

less than significant effects under the draft guidance if it meets the Tier 4 or 5 thresholds.
A project may qualify under Tier 4 if it (1) reduces business-as-usual emissions by a
certain percentage; (2) implements Assembly Bill 32 Scoping Plan measures; or (3)
achieves certain targets in 2020 and 2035 for applicable service populations. Tier 5
requires “mitigation offsets to achieve a target significance threshold.” There is no
argument that either Tier 4 or 5 applies here.

                                             28
directly control, it is highly unlikely any level of mitigation measures could reduce the
project’s annual operational emissions to a less-than-significant level.” (Italics added.)
Due to these findings, the City appears to have abandoned the Tier 3 analysis and
replaced it with the emissions analysis described above and below.
                                                                      7

              To clarify, we do not rule that the City must analyze the Gemdale project’s
emissions using the District’s draft guidance. We provide the Tier 3 screening level and
cite the draft addendum analysis only to offer context for the Gemdale project’s potential
emissions. We also do not mean to suggest that the Gemdale project itself must have net
zero emissions or meet a certain emissions standard. As explained above, the City and
Gemdale need only show the Gemdale project is consistent with the 2010 PEIR. Rather,
we cite the above evidence to underscore that it is unclear, given all the development that
has occurred since 2010 and that will occur in the future, whether the IBC will be on
track to attain net zero emissions if the Gemdale project is built.
              We next proceed to the City’s second finding. As an alternative to
consistency with the 2010 PEIR, the addendum also found the Gemdale project’s
greenhouse gas emissions would be less than significant based on Tier 1 of the draft
guidance because the project is exempt from CEQA. This finding overlaps with the
second major issue raised in this appeal, which also focuses on whether the Gemdale
project is exempt from CEQA. As we explain in the next section, the claimed exemption
does not apply as a matter of law.

  Petitioner asserts the City’s decision to remove the Tier 3 analysis from the addendum
7

amounts to fraud. Nothing in the record convincingly shows the City’s decision not to
include this information in the addendum was made in bad faith.

                                             29
B. Class 32 Infill Exemption
              The City argues any deficiencies in the addendum are inconsequential
because the Gemdale project is categorically exempt from CEQA. As such, the City
maintains it was not obligated to perform any environmental review. We disagree.
                                                                         8

              “Categorical exemptions are ‘classes of projects’ that the Secretary of the
Natural Resources Agency, with the authorization of the Legislature, has determined are
exempt because they do not have a significant effect on the environment.” (World
Business Academy v. State Lands Com. (2018) 24 Cal.App.5th 476, 490-491.) But there
are also exceptions to categorical exemptions. A project is not categorically exempt from
CEQA if an exception is found to apply. (Id. at p. 491.)
              Here, the City relies on the Class 32 infill exemption, which typically
applies to projects characterized as in-fill development. (Guidelines, § 15332.) We need
not analyze its elements because we find the Gemdale project qualifies for an exception
to this exemption. Thus, the Class 32 infill exemption would not apply even if all its
elements were met. (World Business Academy v. California State Lands Commission,
supra, 24 Cal.App.5th at pp. 490-491.)
              Under Guidelines section 15300.2, subdivision (c), “[a] categorical
exemption shall not be used for an activity where there is a reasonable possibility that the
activity will have a significant effect on the environment due to unusual circumstances.”
Courts have found the unusual circumstances exception applies if two elements are met:
(1) “‘the project has some feature that distinguishes it from others in the exempt class,
such as its size or location’” and (2) “there is ‘a reasonable possibility of a significant

  The City’s decision to prepare an addendum rather than declaring the Gemdale project
8

exempt does not preclude it from asserting an exemption on appeal. (See, e.g., Del Cerro
Mobile Estates v. City of Placentia (2011) 197 Cal.App.4th 173, 179-180 [agency’s
decision to prepare an EIR did not waive its right to invoke a CEQA exemption on
appeal].)

                                              30
effect [on the environment] due to that unusual circumstance.’” (Respect Life South San
Francisco v. City of South San Francisco (2017) 15 Cal.App.5th 449, 456 (Respect Life).)
              The two elements are reviewed under different standards of review. The
first is reviewed for substantial evidence, while the second is examined under the fair
argument standard. (Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th
1086, 1114.) Under the latter standard, we “review[] the evidence to see if there is a fair
argument of a reasonable possibility the project will have a significant effect on the
environment. [Citation.] If there is substantial evidence of a reasonable possibility the
project will have such an effect, the agency may not rely on the exemption even if there is
evidence to the contrary.” (Protect Tustin Ranch v. City of Tustin (2021) 70 Cal.App.5th
951, 962.) “The fair argument standard creates a low threshold favoring future
environmental review and differs markedly from the deferential substantial evidence
standard of review normally enjoyed by agencies.” (Citizens for a Sustainable Treasure
Island, supra, 227 Cal.App.4th at p. 1049.) The burden is on petitioner to “produc[e]
evidence supporting an exception.” (Berkeley Hillside Preservation, at p. 1105.)
              Here, the City made no express findings regarding the unusual
circumstances exception. But the City’s invocation of the Class 32 infill exemption
constitutes an implied finding that no exceptions exist. (See Madrigal v. City of
Huntington Beach (2007) 147 Cal.App.4th 1375, 1386; San Francisco Beautiful v. City
and County of San Francisco (2014) 226 Cal.App.4th 1012, 1022-1023.) When
reviewing implied findings, “a court’s ability to affirm is constrained.” (Respect Life,
supra, 15 Cal.App.5th at p. 458.) Since findings are implied, “we cannot say with
certainty whether [the City] found against [petitioner] on the first element, the second
element, or both.” (Id. at pp. 457–458.) Due to this uncertainty, “a court cannot affirm
an entity’s implied determination that the unusual-circumstances exception is
inapplicable by simply concluding that the record contains substantial evidence that the
project involves no unusual circumstances.” (Id. at p. 458.) “[S]uch an approach fails to

                                             31
address the possibility that the entity thought there were unusual circumstances but
concluded, under the second element, that these circumstances did not support a fair
argument of a reasonable possibility of a significant environmental effect.” (Ibid.)
              “Instead, to affirm [the agency’s] implied determination, the court must
assume that the entity found that the project involved unusual circumstances and then
conclude that the record contains no substantial evidence to support either (1) a finding
that any unusual circumstances exist (for purposes of the first element) or (2) a fair
argument of a reasonable possibility that any purported unusual circumstances identified
by the petitioner will have a significant effect on the environment (for purposes of the
second element).” (Respect Life, supra, 15 Cal.App.5th at p. 458.) We cannot affirm
under either of these routes.
              First, there is substantial evidence to support a finding that unusual
circumstances exist. To begin, the Gemdale project is not a standalone project. It is part
of the Vision Plan, which guides development in the IBC. We must evaluate the
Gemdale project within this context. The project site is currently occupied by a two
story, 69,780-square-foot building and surface parking lots. The Gemdale project would
demolish the existing building and construct a 275,000-square-foot office complex,
consisting of a five- and a six-story office building and a seven-story parking structure.
As seen in the pictures above, the Gemdale project would tower over the neighboring
buildings.
              Further, the project site is in zone 420. Under the Vision Plan, zone 420
was only allocated 130,222 square feet of office space upon full buildout. As seen in the
map below, the project site (No. 65) occupies only about a fifth of zone 420. Yet, the
Gemdale project would more than double the amount of office space originally allocated
to all of zone 420.

                                             32
              While the Vision Plan and 2010 PEIR allow TDRs, the TDR required for
the Gemdale project would be the largest of the 29 approved TDRs in the history of the
Vision Plan. The Gemdale project required a TDR equivalent to 221,014 square feet of
development intensity, nearly doubling the second largest transfer of 111,538 square feet.
It also required the largest TDR by floor area ratio (FAR) in the history of the Vision
Plan. The existing building on the project site has a 0.25 FAR. The Gemdale project
     9

required a TDR of 1.03 FAR (the project site is 4.95 acres, i.e., 215,622 square feet, and
the Gemdale project required a transfer of 221,014 square feet). The second largest
transfer in the Vision Plan’s history was 0.85 FAR, and the third largest transfer was only
0.51 FAR. Only three of the 29 approved TDRs in the Vision Plan’s history were above
0.50 FAR, and most approved TDRs were below 0.20 FAR. Given the size of the
Gemdale project, the scale of the TDR that was required to make it possible, and the
resulting density, there is sufficient evidence in the record to support a finding of unusual
circumstances. (See Respect Life, supra, 15 Cal.App.5th at p. 458.)

 FAR measures the ratio between the gross floor area of a project to the lot size. (San
9

Francisco Tomorrow v. City and County of San Francisco (2014) 229 Cal.App.4th 498,
510.)

                                             33
              Next, we conclude there is a reasonable possibility the Gemdale project
may have a significant impact on the environment. “A project may have a significant
effect on the environment if it ‘has the potential to degrade the quality of the
environment, . . . or to achieve short-term, to the disadvantage of long-term,
environmental goals’; is ‘cumulatively considerable,’ such that its incremental effects
‘are considerable when viewed in connection with the effects of past projects, the effects
of other current projects, and the effects of probable future projects’; or ‘will cause
substantial adverse effects on human beings, either directly or indirectly.’” (World
Business Academy v. California State Lands Commission, supra, 24 Cal.App.5th at p.
498.) “Any significant effect must be attributable to unusual circumstances.” (Ibid.)
              As explained above, the District’s draft guidance contains thresholds for
analyzing greenhouse gas emissions under CEQA. While the draft guidance had not been
finally approved when the addendum was drafted, the addendum acknowledges its
validity: “the [draft guidance] provides substantial evidence supporting the approaches to
significance of [greenhouse gas] emissions that can be considered by the lead agency in
adopting its own threshold.” As discussed, under Tier 3 of the draft guidance,
commercial projects that emit 1,400 MTons of greenhouse gases or less per year are
deemed to have less than significant effects. As the addendum explains, Tier 3 “is
expected to be the primary tier by which the [District] will determine significance for
projects where it is the lead agency.” Under the draft guidance, projects with emissions
above 1,400 MTons may only be found to have less than significant environmental
effects if they meet the requirements of Tier 4 or 5.
              Due to its size and density, the Gemdale project’s estimated greenhouse gas
emissions appear to greatly exceed the Tier 3 threshold. There is evidence showing the
Gemdale project’s annual emissions would total 5,563 MTons per year, nearly four times
the level of significance under Tier 3. And we have not been cited anything in the record
showing Tier 4 or Tier 5 might apply here.

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              Indeed, the City’s consultants admitted in internal correspondence, “using
the most current and acceptable methods and [the District’s] thresholds (1,400 MT
CO2e/yr for commercial projects), the [Gemdale] project would be considered SU
[(significant unavoidable environmental impacts)] because the sheer contribution from
mobile sources (which are not in the project’s feasible mitigation range) would cause the
exceedance.” Likewise, a draft addendum contained an analysis of the Gemdale project
under Tier 3. It found, “[g]iven a large majority of the project’s long-term operational
emissions are associated with mobile source emissions that the project cannot directly
control, it is highly unlikely any level of mitigation measures could reduce the project’s
annual operational emissions to a less-than-significant level.” Further, as set forth above,
it is unclear whether the Gemdale project is consistent with the IBC’s goal of net zero
emissions.
              Based on the above evidence, there is reasonable possibility the project will
have a significant effect on the environment.

                                             III
                                      DISPOSITION
              We affirm the judgment granting the petitioner’s request for a writ of
mandate. The City’s approvals of the addendum, the Gemdale project, and the
accompanying TDR are void. (§ 21168.9, subd. (a)(1).)
              To be clear, we do not hold that the City must perform additional
environmental review or prepare a new EIR or a negative declaration. Nor does our
ruling require the City to evaluate the Gemdale project’s greenhouse gas emissions under
any specific approach. Our ruling is limited: the City erred in approving the addendum,
the Gemdale project, and the required TDR because it incorrectly determined the
Gemdale project’s greenhouse gas emissions would have less than significant
environmental effects. First, there is insufficient evidence to support the City’s finding

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that the Gemdale project’s greenhouse gas emissions are consistent with the 2010 PEIR.
It is unclear whether the IBC will be able to meet its goal of net zero emissions if the
Gemdale project is built. This issue has not been examined in sufficient detail in either
the 2010 PEIR, which did not analyze the effects of TDRs, or the addendum. Second, the
City’s determination that the Gemdale project meets the draft guidance’s Tier 1 threshold
is incorrect as a matter of law because the Class 32 infill exemption does not apply.
               Finally, we express no opinion on the specific method the City should use
to evaluate the significance of the Gemdale project’s greenhouse gas emissions (e.g.,
consistency with the 2010 PEIR, the District’s draft guidance, or some other metric). We
leave it in City’s discretion to choose an allowable method of analysis under CEQA.
Petitioner is entitled to its costs on this appeal.

                                                      MOORE, ACTING P. J.

WE CONCUR:

GOETHALS, J.

DELANEY, J.

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