Court Opinion

ID: 1038808
Source: CourtListenerOpinion
Date Created: 2013-08-28 22:09:47.611319+00
Date Added: 2024-06-11T15:13:52.985647
License: Public Domain

Filed 8/26/13 Neighbors to Preserve the Waterfront v. City and County of San Francisco CA1/3
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                DIVISION THREE

NEIGHBORS TO PRESERVE THE
WATERFRONT et al.,
         Plaintiffs and Appellants,
v.                                                                   A134220
CITY AND COUNTY OF SAN
FRANCISCO et al.,                                                    (City & County of San Francisco
                                                                     Super. Ct. No. CPF10510634)
         Defendants and Respondents;
SAN FRANCISCO WATERFRONT
PARTNERS II, LLC, et al.,
         Real Parties in Interest and
         Respondents.

         Development along San Francisco‟s waterfront has been controversial for decades.
The dispute giving rise to this appeal is the latest chapter in that saga. The subject of the
controversy is the 8 Washington Street project (8 Washington project), which proposes to
develop land along the Embarcadero that is currently used as a surface parking lot and a
private tennis and swim club. The 8 Washington project would transform the site into
condominiums, public open space, and a smaller tennis and swim facility.
         The merits of the 8 Washington project are not before this court. Instead, this
appeal focuses on two preliminary actions related to the 8 Washington project—(1) a
planning study concerning San Francisco‟s northern waterfront (Northeast Embarcadero
Study or Study), and (2) a five-page term sheet intended to set forth general negotiating
principles for the 8 Washington project. The plaintiffs below sued the City and County

                                                             1
of San Francisco (City) contending these actions created bureaucratic and financial
momentum that amounts to an approval of the 8 Washington project in violation of the
California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.).1
Among other complaints about the planning study and term sheet, plaintiffs object to
proposals to increase the allowable building heights at the project site.
       The trial court rejected plaintiffs‟ contentions and ruled in favor of the City.
Because we conclude the challenged actions do not constitute approvals requiring prior
CEQA review, we affirm the judgment.
                       FACTUAL AND PROCEDURAL BACKGROUND
                       Description and Background of Project Site
       The 8 Washington project site is located along the Embarcadero near the ferry
building in San Francisco. The site is in the shape of a right triangle and comprises 3.2
acres of land bounded by the Embarcadero, Washington Street, and Drumm Street. The
site includes three private parcels owned by the Golden Gateway Center and one public
parcel owned by the Port of San Francisco (Port). The parcel owned by the Port is held
in public trust and is referred to as “Seawall Lot 351.”
       Seawall Lot 351 was created by removal of the Embarcadero Freeway after the
1989 earthquake and is currently used as a surface parking lot with 110 parking spaces.
Adjacent to Seawall Lot 351 on the parcels owned by the Golden Gateway Center is the
Golden Gateway Tennis & Swim Club, a private athletic club that includes nine tennis
courts, two swimming pools, a 17-space parking lot, and several buildings.
       In 1990, City voters approved Proposition H, which required the Port to initiate a
public process to prepare a land use plan for Port properties within 100 feet of San
Francisco Bay. This process resulted in the “Port of San Francisco Waterfront Land Use
Plan” (Waterfront Plan), which was adopted by the San Francisco Port Commission (Port
Commission) after the City‟s Planning Commission (Planning Commission) certified a
final environmental impact report (EIR). Consistent with Proposition H, the Waterfront
1
  All further statutory references are to the Public Resources Code unless otherwise
specified.
                                              2
Plan serves as the “official land use planning document” for the Port. The Waterfront
Plan directs the Port to “[e]xplore the possibility of obtaining economic value from
Seawall Lot 351 by combining it with the adjacent Golden Gateway residential site [8
Washington Street] to provide expanded opportunities for mixed residential and
commercial development.”
                                The 8 Washington Project
       The current effort to develop the 8 Washington project is being pursued by San
Francisco Waterfront Partners, LLC, which is a partnership between developer Pacific
Waterfront Partners, LLC and the California State Teachers Retirement System
(collectively, San Francisco Waterfront Partners). San Francisco Waterfront Partners
proposed to combine the Golden Gateway Center parcels with Seawall Lot 351 as one
mixed-use project. As originally proposed, the 8 Washington project would have
involved replacing the existing parking lot and outdoor tennis and swim facility with two
84-foot tall eight-story buildings containing approximately 170 residential units, ground-
floor retail, up to 520 underground parking spaces, an open space corridor accessible to
the public, an indoor fitness center, and a new outdoor health club with six tennis courts
and two swimming pools.
       In December 2006, San Francisco Waterfront Partners submitted a proposal to the
Port to acquire the rights to Seawall Lot 351 for inclusion in the 8 Washington project.
At the request of San Francisco Waterfront Partners, the Port asked the City‟s Planning
Department to undertake environmental review of the 8 Washington project. In
December 2007, the Planning Department issued a notice of preparation of an EIR for the
8 Washington project and released the CEQA initial study to the public for review and
comment.
       As reflected in a February 2008 memorandum from the Port‟s executive director
to the Port Commission, it was anticipated that a draft EIR for the 8 Washington project
would be published in Summer 2008 with hearings before the Planning Commission in
Fall 2008. Notwithstanding the commencement of a CEQA process for the 8 Washington
project—which included Seawall Lot 351 as part of the proposed development—Port

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staff concluded there were many “potential development options for [Seawall Lot] 351
[either] as a stand-alone development project or as part of a combined site.”
Consequently, Port staff recommended a competitive solicitation process for the Seawall
Lot 351 property. In response to the staff recommendation, in August 2008 the Port
issued a request for proposals (RFP) to develop Seawall Lot 351. As part of the RFP, the
Port set forth design and development criteria for the site, which included preserving the
“iconic vista” from the ferry building to Coit Tower.
       The Port received only one proposal in response to the RFP—from San Francisco
Waterfront Partners. The Port sought additional proposals and issued a new RFP in
November 2008. This time, it received two proposals—one from San Francisco
Waterfront Partners and another from a hospitality partnership. The second group later
withdrew.
       In early 2009, the Port adopted a resolution awarding San Francisco Waterfront
Partners the opportunity to enter into an exclusive negotiation agreement with the Port to
explore including Seawall Lot 351 in a mixed-use development in combination with the
adjacent site.
                              Northeast Embarcadero Study
       The proposal to develop Seawall Lot 351 as part of the 8 Washington project
received significant public attention and comment. The then-President of the City‟s
Board of Supervisors David Chiu sent a letter to the Port Commission in February 2009
recommending that it work with the Planning Department to “lead a focused public
planning process for the Port‟s surface parking lots north of Market Street.” Supervisor
Chiu noted his belief that it was time to consider an update to the Port‟s Waterfront Plan
in light of the “current discourse regarding the development proposal at Seawall Lot
351.” Supervisor Chiu‟s letter stated in part:
              Port development in the northern waterfront is an extremely
       important issue to many of the residents of my district. In recent years,
       several Port-initiated development efforts have failed in the face of
       community opposition. Similar concerns are currently being raised
       regarding the proposed development at [Seawall Lot] 351 and the future

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       development of seawall lots on the northern waterfront, and I share many of
       these concerns.

              To address these concerns, I would strongly urge the Port
       Commission to work with the City‟s Planning Department to lead a focused
       public planning process for the Port‟s surface parking lots north of Market
       Street. This effort could recommend possible amendments to the Port‟s
       Waterfront Land Use Plan and Design and Access Element, and to the San
       Francisco Planning Code. I urge the Port Commission to condition any
       negotiations regarding [Seawall Lot] 351 upon the full participation of both
       the Port and the project proponent in the planning process, and require any
       development proposal to respond to development guidelines established
       through the process. . . . [¶] . . .

              I believe that a focused, six to eight month process managed by the
       Planning Department could foster community consensus for a [Seawall
       Lot] 351 project and design, as well as for future development along the
       northern waterfront. The community and Port have legitimate goals and
       concerns, and I hope that by bringing all stakeholders to the same table, we
       can build consensus for the future of our waterfront.

       In response to Supervisor Chiu‟s recommendation, the Port Commission funded
the Planning Department study referred to as the Northeast Embarcadero Study (Study).
Work on the Study began in May 2009 and was completed by May 2010. As part of the
Study, the Planning Department hosted three community workshops that elicited over
300 public comments.
       On July 8, 2010, the Planning Commission conducted a hearing to consider a
resolution recognizing the Northeast Embarcadero Study and urging the Port to take the
Study‟s principles and recommendations into account when considering development in
the Study area. Public comments reflected a wide variety of viewpoints and concerns.
During the course of the public hearing, the Planning Department director clarified for
the Planning Commission that “[t]he action you‟re taking is not an adoption of a plan.
It‟s a recognition of a study. That‟s a very important distinction. And you are simply
urging the Port Commission to look at that and to consider that in their review of
projects. That type of action does not require an environmental analysis in and of itself.”

                                             5
       At the conclusion of the hearing, the Planning Commission approved a resolution
“acknowledg[ing] the work of staff in completing the Northeast Embarcadero Study and
recogniz[ing] the design principles and recommendations of the Study for public realm
improvements and new development in the area.” As set forth in the resolution, “the
Planning Commission urge[d] the Port of San Francisco to consider the principles and
recommendations proposed in the Northeast Embarcadero Study when considering
proposals for new development in the study area . . . .” The resolution concluded by
stating it “is not a project approval but represents the Commission‟s recommendation that
the Port and other City departments consider the Planning staff‟s work performed to
create the Northeast Embarcadero Study in future deliberations for development of the
area. This Resolution does not commit the Commission to any proposed project or any
project that may be proposed in the future. Consistent with CEQA, the Commission may
decide to approve or disapprove a project after completion of environmental review and
based upon independent review and consideration of any environmental effects caused by
such project.”
       The Northeast Embarcadero Study states that its intent “is to guide the
development of properties along the west side of [t]he Embarcadero, from Washington
Street to North Point Street, in a common direction.” The Study “documents the
Planning Department staff recommendations for consideration by the public, the Planning
Commission, the Port Commission, and the Board of Supervisors.” In addition to a
discussion of the background of the Study area, the Study includes an extensive set of
design principles and recommendations for development in the Study area.
       As relevant here, the Study recommends increasing allowable building heights in
portions of the 8 Washington project site. Whereas the 8 Washington project had
originally proposed eight-story buildings with a height of 84 feet, the Study recommends
a height increase to 130 feet, or the equivalent of a 12-story building, in one-third of the
westerly portion of the site. The heights on the remaining two-thirds of the westerly
portion of the site would be allowed to go up to 90 feet, or the equivalent of an eight-
story building. On the easternmost portion of the site bordering the Embarcadero, the

                                              6
Study recommends reducing building heights to 70 feet, or the equivalent of a six-story
building. The Study suggests placing buildings of the greatest height of 12 stories at the
southwestern corner of the site, further away from the Embarcadero where Washington
and Drumm Streets meet. It is acknowledged in the Study that “views that currently exist
between the north end of the Ferry Building and Coit Tower would be lost when new
development is built on the proposed 8 Washington site,” although the Planning
Department staff expressed its belief that “this is an appropriate trade-off given the
benefits resulting from the development.”
                                        Term Sheet
       On August 20, 2009, while the Planning Department staff continued its work on
the Northeast Embarcadero Study, the Port and San Francisco Waterfront Partners
entered into an exclusive negotiation agreement, as the Port Commission had previously
authorized. The exclusive negotiation agreement committed the parties to undertake
good faith negotiations to develop a term sheet “intended to set forth general principles
for negotiation . . . .” The term sheet served the purpose of “describ[ing] the basic
elements of the Project, site plan, use program, economic parameters, and fundamental
terms that will serve as the basis for negotiating the Transaction Documents.”
       The exclusive negotiation agreement also provided that, in formulating the
conceptual terms for the 8 Washington project, San Francisco Waterfront Partners had to
ensure that its proposal responded to the recommendations of the Study. A proposed
timeline in the exclusive negotiation agreement anticipated the Port would adopt a term
sheet before completion of CEQA review.
       As contemplated by the exclusive negotiation agreement, San Francisco
Waterfront Partners and the Port negotiated a proposed five-page term sheet (Term Sheet)
for the Port Commission‟s approval. The Term Sheet consists of an agreement (1)
describing the proposed 8 Washington project; (2) establishing financial terms and
anticipated funding mechanisms; (3) describing a management plan for the
condominiums, open space, commercial space, parking, and health club; (4) listing some
of the actions required to approve the 8 Washington project; and (5) requiring that the

                                              7
EIR include an analysis of a hotel alternative, as well as “a full range of appropriate
alternatives and mitigation measures [that] must be analyzed under CEQA . . . .” The
Term Sheet specifies that it is part of the exclusive negotiation agreement, sets forth the
terms that will serve as the basis for negotiating detailed transaction documents, is not
intended to be binding until the parties execute the transaction documents, and is subject
to completion of environmental review under CEQA.
       The Term Sheet proposes constructing two condominium buildings on the 8
Washington project site. The eastern condominium building along the Embarcadero is
proposed to be between 48 and 70 feet high. The Term Sheet proposes that the western
condominium building will vary between 84 and 136 feet in height. Although these
proposed heights are not identical to those recommended in the Northeast Embarcadero
Study, the Port staff concluded that the Term Sheet responded to the Study in adjusting
the height and massing of the buildings.
       On September 28, 2010, the Port Commission adopted a resolution endorsing the
Term Sheet. The resolution provides that the “Port Commission will not take any
discretionary actions committing the Port to implement the Project, and the provisions of
the Term Sheet are not intended and will not become contractually binding on the Port
unless and until the Port Commission has reviewed and considered environmental
documentation prepared in compliance with [CEQA] for the Project and negotiated and
approved final agreements for the Project.”
       As reflected in the parties‟ briefs, the EIR process for the 8 Washington project
was ongoing during the course of this lawsuit.
                                    Procedural History
       The plaintiffs and appellants (plaintiffs) are neighborhood and nonprofit
associations that seek to protect the San Francisco waterfront, preserve the Golden
Gateway Tennis and Swim Club, protect the character of neighborhoods near the
8 Washington project, and address ongoing housing, transportation, and development
issues, among other things. In August 2010, plaintiffs filed a petition for writ of mandate
challenging the Planning Commission‟s resolution recognizing the Northeast

                                              8
Embarcadero Study. Plaintiffs alleged the Planning Commission violated CEQA by
adopting the resolution without conducting appropriate environmental review. In a first
amended petition, plaintiffs further alleged the Port Commission violated CEQA by
approving the Term Sheet without prior environmental review. According to plaintiffs,
the actions of the Planning Commission and the Port Commission “effectively conveyed
the City‟s commitment” to adopt the Study‟s recommendations and precluded
“meaningful consideration of project alternatives . . . .”
       The trial court denied the petition in its entirety. The court concluded that the Port
Commission‟s approval of the Term Sheet did not commit the Port as a practical matter
to approve the 8 Washington project. The court also concluded the resolution
recognizing the Northeast Embarcadero Study was not an approval of the 8 Washington
project because it did not, either by itself or in conjunction with the Term Sheet, create
the type of “ „bureaucratic momentum‟ ” for the project that necessitates environmental
review under CEQA. With the court‟s permission, the parties provided further briefing
on the issue of whether the Planning Commission‟s acknowledgment of the Study
constituted a de facto amendment to the Waterfront Plan. The court ultimately concluded
that the Planning Commission‟s resolution was not a de facto amendment to the
Waterfront Plan triggering CEQA review. Plaintiffs filed a timely appeal of the
judgment.
                                        DISCUSSION
       Plaintiffs contend the City violated CEQA by pre-committing to approve the 8
Washington project without certifying an EIR as a result of (1) the Planning Commission
resolution to recognize the Northeast Embarcadero Study, and (2) the Port Commission
endorsement of the Term Sheet for the 8 Washington project. This appeal is all about the
timing of environmental review. The parties agree that the California Supreme Court‟s
decision in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 (Save Tara)
provides the operative test for determining what constitutes “approval” of a “project” for
purposes of triggering CEQA review. As we explain, under Save Tara and its progeny,

                                              9
the actions challenged by plaintiffs do not amount to project approvals requiring prior
CEQA review.
1.     Governing Legal Principles and Standard of Review.
       CEQA applies to “discretionary projects proposed to be carried out or approved by
public agencies . . . .” (§ 21080, subd. (a).) “ „Project‟ means an activity which may
cause either a direct physical change in the environment, or a reasonably foreseeable
indirect physical change in the environment . . . .” (§ 21065.) CEQA‟s implementing
regulations, the CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.)
(Guidelines),2 provide that the term “ „[p]roject‟ means the whole of an action”
(Guidelines, § 15378) and “refers to the activity which is being approved and which may
be subject to several discretionary approvals by governmental agencies.” (Guidelines,
§ 15378, subd. (c).) It “does not mean each separate governmental approval.” (Ibid.)
       Under CEQA, all local agencies must “prepare, or cause to be prepared by
contract, and certify the completion of, an environmental impact report on any project
that they intend to carry out or approve which may have a significant effect on the
environment.” (§ 21151; see § 21080, subd. (d).) “An environmental impact report is an
informational document which, when its preparation is required by this division, shall be
considered by every public agency prior to its approval or disapproval of a project.”
(§ 21061; see Guidelines, § 15004, subd. (a).) “The purpose of an environmental impact
report is to identify the significant effects on the environment of a project, to identify
alternatives to the project, and to indicate the manner in which those significant effects
can be mitigated or avoided.” (§ 21002.1, subd. (a).)
       CEQA applies when a public agency proposes to carry out or approve a project.
(§ 21080, subd. (a).) The term “approval” is defined in the Guidelines as “the decision

2
  “The CEQA Guidelines, promulgated by the state‟s Resources Agency, are authorized
by Public Resources Code section 21083. In interpreting CEQA, we accord the
Guidelines great weight except where they are clearly unauthorized or erroneous.”
(Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007)
40 Cal.4th 412, 428, fn. 5.)
                                              10
by a public agency which commits the agency to a definite course of action in regard to a
project intended to be carried out by any person.” (Guidelines, § 15352, subd. (a).)
       In Save Tara, supra, 45 Cal.4th 116, the California Supreme Court addressed the
question of when a development agreement conditioned upon compliance with CEQA
constitutes an “approval” of a project requiring prior environmental review. The project
proponents in Save Tara maintained that only “unconditional agreements irrevocably
vesting development rights” constitute “commitments” that amount to project approval
within the meaning of CEQA. (Id. at p. 135.) The court rejected that view, reasoning
that “[a] public entity that, in theory, retains legal discretion to reject a proposed project
may, by executing a detailed and definite agreement with the private developer and by
lending its political and financial assistance to the project, have as a practical matter
committed itself to the project.” (Ibid.)
       But the Save Tara court also rejected the view of the project opponents that “any
agreement, conditional or unconditional, would be an „approval‟ requiring prior
preparation of a CEQA documentation if at the time it was made the project was
sufficiently well defined to provide „meaningful information for environmental
assessment.‟ ” (Save Tara, supra, 45 Cal.4th at p. 136.) The court explained: Such a
“rule would be inconsistent with the CEQA Guidelines‟ definition of approval as
involving a „commit[ment]‟ by the agency. [Citation.] Agencies sometimes provide
preliminary assistance to persons proposing a development in order that the proposal may
be further explored, developed or evaluated. Not all such efforts require prior CEQA
review. [Citation.] Moreover, privately conducted projects often need some form of
government consent or assistance to get off the ground, sometimes long before they come
up for formal approval. Approval, within the meaning of [Public Resources Code]
sections 21100 and 21151, cannot be equated with the agency‟s mere interest in, or
inclination to support, a project, no matter how well defined.” (Ibid.)
       The Supreme Court in Save Tara declined to adopt a bright-line test for defining
when an approval takes place. (Save Tara, supra, 45 Cal.4th at p. 138.) Instead, the
court applied and elaborated upon the “general principle that before conducting CEQA

                                              11
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.‟ ” (Ibid.) The critical question based upon all the
surrounding circumstances is “whether, as a practical matter, the agency has committed
itself to the project as a whole or to any particular features, so as to effectively preclude
any alternatives or mitigation measures, that CEQA would otherwise require to be
considered, including the alternative of not going forward with the project.” (Id. at p.
139.) The court explained that conditioning “final approval on CEQA compliance is
relevant but not determinative.” (Ibid.)
       We independently review the predominantly legal question of whether the City‟s
actions with respect to the Northeast Embarcadero Study and the Term Sheet constituted
an approval of the 8 Washington project for purposes of CEQA before it conducted the
requisite environmental review. (Save Tara, supra, 45 Cal.4th at pp. 131-132.)
2.     The Planning Commission Did Not Approve a Project Under CEQA When It
       Recognized the Northeast Embarcadero Study and Urged the Port
       Commission to Consider Its Recommendations.
       a.     The Planning Commission did not, as a practical matter, commit to the 8
              Washington project or preclude alternatives.
       Plaintiffs contend that the Planning Commission‟s recognition of the Northeast
Embarcadero Study created “bureaucratic momentum” for the development of the 8
Washington project. Their main complaint is that the Study recommended revised height
limits for the 8 Washington project site.
       The Study‟s recommendations are just that—recommendations. The Planning
Commission‟s resolution encourages the Port and the City to consider the
recommendations but stops far short of committing the City to amend height limitations
in the zoning code or in any other adopted plans. The Study does not commit the Port
Commission to approve a project simply because it is consistent with the staff
recommendations contained in the Study. In an attempt to show the recommendations
are de facto amendments to development guidelines, plaintiffs quote one heading in the

                                              12
Study titled, “Making Sure the Study‟s Recommendations Are Implemented.” However,
they fail to note the heading appears in an appendix to the Study summarizing the public
input process. In any event, the appendix in which the heading is contained does not
describe the recommendations as binding or suggest they will necessarily be
implemented.
       Plaintiffs emphasize the recommended building height increases to suggest the
Study was tailored to accommodate the developer‟s needs, claiming that staff
recommended increasing building heights from eight to twelve stories. The suggestion is
inaccurate. While the Study proposes height increases on some portions of the 8
Washington project site, it also recommends height reductions on portions of the site
bordering the Embarcadero. Thus, rather than suggesting staff accommodated San
Francisco Waterfront Partners in recommending building heights, the record reveals that
the recommendations “reflect the long consideration of the very diverse set of opinion on
height expressed by the community in combination with the department‟s professional
opinion.”
       In an attempt to suggest the Study‟s goal was to approve the 8 Washington project,
plaintiffs cite various interdepartmental emails. Plaintiffs quote an email from the Port‟s
Deputy Director of Waterfront Planning to a Planning Department staff member,
purportedly to show that the staff sought to justify a reduction in open space and increase
building height limits at the 8 Washington project site. Plaintiffs focus on the statement
that, “If the politics of these issues get deferred to the rezoning/[conditional use]
application review process, the process would not increase certainty for this project. This
is a concern for us.”
       The concern about a failure to initiate public dialog on controversial projects early
in the planning process does not constitute an expression of commitment to the
8 Washington project. The email‟s author expressed a concern about “sidestep[ping]
substantive public dialog and debate” over how various height limit and design issues
apply to Seawall Lot 351 and stated it “may be difficult for [San Francisco Waterfront
Partners] to figure out whether/how its project design is refined to respond to the

                                              13
planning process outcomes.” Thus, viewed in context, the email advocated more public
dialog on controversial building height and open space issues and expressed concern that
deferring the issues to a later time would be counterproductive. Failing to tackle such
disputed issues in the Study would create less “certainty” for any proposed use of Seawall
Lot 351 and the adjacent Golden Gateway parcels.
       Plaintiffs also cite several interdepartmental emails to show that staff referenced
both the Study and the 8 Washington project together in the same email. In light of the
fact the 8 Washington project site is within the area evaluated by the Study, and that
Planning Department staff was involved both in developing the Study and preparing the
EIR for the 8 Washington project, it is not particularly surprising that staff would, at
times, discuss the Study and the 8 Washington project.
       Finally, plaintiffs cite an email from a Port staff member to support the proposition
that the Study was directed at facilitating the 8 Washington project. The email reads, in
part: “The idea is that 8 Washington would move forward in tandem with the preparation
of the Northeast Waterfront Study. Thus far, the sponsor has not submitt[ed] any revised
plans or other changes to the project in response to this process. My speculation: They
will probably hold off with any revisions until a draft plan is issued (or close to being
issued) by our Department, so they don‟t appear to be jumping the gun or undermining
the process.” In their appellate brief, plaintiffs conveniently omit the portion of the email
in which the staff member offered “speculation” that San Francisco Waterfront Partners
would “probably hold off with any revisions . . . .” In any event, given that Supervisor
Chiu hoped the Study would forge public consensus and that San Francisco Waterfront
Partners agreed as part of the exclusive negotiation agreement to consider and respond to
the Study once completed, there is nothing unusual about the developer‟s decision to
await the outcome of the Study before revising its development proposal. Use of the
Study to further explore, develop, or evaluate the 8 Washington project hardly constitutes
evidence the City committed to the 8 Washington project as a whole or as to any
particular features so as to effectively preclude any alternatives or mitigation measures.
(See Save Tara, supra, 45 Cal.4th at pp. 136-137.)

                                             14
       The sparse email evidence relied upon by plaintiffs does not establish that the City
had committed to the 8 Washington project or ruled out alternatives. In Save Tara, by
contrast, there was substantial evidence of the city‟s commitment to the project, including
public statements by the mayor, the city manager, and the housing manager. (Save Tara,
supra, 45 Cal.4th at pp. 123, 141-142.) The city manager told a federal agency the city
had already approved a sale of the affected property and would commit substantial
financial resources to the project. (Id. at p. 141.) The housing manager reported at a city
council meeting that various uses for the property “had already been ruled out.” (Ibid.,
fn. omitted.) And the mayor announced that the city would use federal grant money to
redevelop the subject property as proposed. (Id. at pp. 123, 141.) The isolated, internal
staff emails cited by plaintiffs in this case simply do not reveal that approval of the 8
Washington project was predetermined or that any alternatives had been ruled out.
       We conclude the Planning Commission‟s resolution recognizing the Northeast
Embarcadero Study and urging consideration of its recommendations did not, as a
practical matter, commit the City to the 8 Washington project or effectively preclude any
alternatives or mitigation measures, including the alternative of not going forward with
the project. (Save Tara, supra, 45 Cal.4th at p. 139.) Therefore, the adoption of the
resolution did not constitute a project approval requiring prior CEQA review.
       b.     The Northeast Embarcadero Study is not a project requiring an EIR.
       As an alternative to the theory that recognition of the Northeast Embarcadero
Study constituted de facto approval of the 8 Washington project, plaintiffs argue that the
Study, standing alone, is a project requiring CEQA review because it constitutes a
discretionary City action with potentially significant environmental impacts. We
disagree.
       The Study falls within an exemption for feasibility and planning studies found in
Guidelines section 15262, which provides: “A project involving only feasibility or
planning studies for possible future actions which the agency, board, or commission has
not approved, adopted, or funded does not require the preparation of an EIR or negative
declaration but does require consideration of environmental factors. This section does

                                              15
not apply to the adoption of a plan that will have a legally binding effect on later
activities.” By its plain terms, Guidelines section 15262 applies to the Northeast
Embarcadero Study, which does not have legally binding effect and simply contains
recommendations for possible future actions that have yet to be approved or funded.
       Plaintiffs argue that Guidelines section 15262 does not apply because the sole
authority for the Guideline “derives from Public Resources Code sections that address
„funding requests‟ for planning studies for state agencies, boards, or commissions.” (See
§§ 21102, 21150.) According to plaintiffs, because CEQA Guidelines may not exceed
their statutory authority, Guideline section 15262 cannot be applied to local agencies
such as the City. We are not persuaded.
       The CEQA Guidelines are authorized by section 21083 and are entitled to “great
weight except where they are clearly unauthorized or erroneous.” (Vineyard Area
Citizens for Responsible Growth, Inc. v. City of Rancho Cordova, supra, 40 Cal.4th at
428, fn. 5, italics added.) Guidelines section 15262 is neither clearly unauthorized nor
erroneous. In Save Tara, our Supreme Court cited Guidelines section 15262 and
explained that some preliminary efforts to further explore, develop, or evaluate proposals
do not require CEQA review. (Save Tara, supra, 45 Cal.4th at p. 136.) The apparent
purpose of the exemption is to avoid costly environmental review under CEQA when a
study does no more than contain preliminary, non-binding recommendations. Although
the statutory provisions cited as authority for Guidelines section 15262 specifically apply
to state agencies (see §§ 21102, 21150), the rationale for the exemption applies equally to
local agencies. Plaintiffs do not suggest otherwise. Thus, we conclude Guidelines
section 15262 is properly applied to local agencies as well as state agencies.3

3
  The City seeks judicial notice of documents concerning the adoption of Guidelines
section 15262 that purportedly show the state‟s resources agency specifically intended to
include local agencies within the scope of the exemption. As the City acknowledges,
because the language of the Guideline unambiguously applies to all public agencies, both
state and local, it is unnecessary to resort to such materials to interpret and apply the
Guideline. (Cf. Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc.
                                             16
       Plaintiffs claim that advisory planning documents may constitute projects under
CEQA, citing Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41
Cal.4th 372 and Fullerton Joint Union High School Dist. v. State Bd. of Education (1982)
32 Cal.3d 779, disapproved on other grounds in Board of Supervisors v. Local Agency
Formation Com. (1992) 3 Cal.4th 903, 918. Neither case stands for the proposition that
mere recommendations are projects pursuant to CEQA. In Muzzy Ranch, the Supreme
Court rejected the argument that a plan consisted merely of recommendations and instead
concluded the plan carried “significant, binding regulatory consequences . . . .” (Muzzy
Ranch, supra, 41 Cal.4th at p. 384.) Likewise, in Fullerton Joint Union High School
Dist., the court held that the challenged plan as a practical matter precluded alternatives
and was an “essential step leading to ultimate environmental impact . . . .” (Fullerton
Joint Union High School Dist., supra, 32 Cal.3d at p. 797.) Here, unlike in the cases
relied upon by plaintiffs, the Northeast Embarcadero Study simply contains
recommendations and has no binding effect.
3.     The Port Commission Did Not Approve a Project Under CEQA When It
       Endorsed the Term Sheet For the 8 Washington Project.
       Plaintiffs contend the Port Commission‟s approval of the five-page Term Sheet
violated CEQA because it “created momentum that does not reasonably allow
consideration of alternatives.” We reject the contention.
       The plain language of the Term Sheet expressly provides that it is not an approval
and is not intended to be binding until the parties execute the transaction documents and
complete environmental review under CEQA. Likewise, the exclusive negotiation

(2005) 133 Cal.App.4th 26, 30.) Consequently, we deny judicial notice of the documents
concerning the development of the Guidelines.
  The City also seeks judicial notice of the final EIR for the 8 Washington project.
Because the final EIR postdates the judgment on appeal, the City acknowledges the
document is not a proper subject of judicial notice but justifies the request as “protective”
in the event this court were to grant a similar request by plaintiffs. No such request was
filed by plaintiffs, and we would have denied it in any event. Therefore, we deny the
City‟s request for judicial notice of the final EIR.
                                             17
agreement and the Port Commission‟s resolution endorsing the Term Sheet recognize the
preliminary nature of the Term Sheet, which was intended to serve as the basis for
negotiating the transaction documents.
       In Cedar Fair, L.P. v. City of Santa Clara (2011) 194 Cal.App.4th 1150, 1167
(Cedar Fair), the appellate court applied Save Tara in considering whether adoption of a
term sheet constituted an approval of a project. The term sheet in Cedar Fair was a 39-
page document that included extensive details concerning a proposal to develop a football
stadium complex for the San Francisco 49ers in Santa Clara. (Id. at p. 1169.) The
appellate court concluded the city‟s approval of the term sheet did not trigger CEQA,
despite the large amount of money already invested by the redevelopment agency and the
term sheet‟s high level of detail. (Id. at pp. 1167-1173.) As the court explained,
“although the term sheet is extremely detailed, it expressly binds the parties to only
continue negotiating in good faith. [Citation.] A contract to negotiate an agreement is
distinguishable from the ultimate agreement that parties hope to eventually reach.” (Id. at
p. 1171.) The term sheet “merely „memorialize[d] the preliminary terms‟ and only
mandate[d] that the parties use the term sheet as the „general framework‟ for „good faith
negotiations.‟ ” (Id. at p. 1170.) The city and redevelopment agency “ „retain[ed] the
absolute sole discretion‟ ” under CEQA, including deciding “ „not to proceed with the
Stadium project.‟ ” (Ibid.) The term sheet specified that it did not “ „create any binding
contractual obligations‟ with respect to the development of the stadium” and
acknowledged that a “no-project option was still available.” (Id. at pp. 1170-1171.)
       The Term Sheet here is distinguishable from the term sheet in Cedar Fair only
because of its brevity. The Term Sheet for the 8 Washington project is a five-page
outline of terms, as opposed to the lengthy, detailed term sheet at issue in Cedar Fair.
However, the term sheets are identical in legal effect—both documents memorialize
conceptual terms and commit the agency and developer to continue negotiating in good
faith. Neither term sheet obligated the public agency to take any action. From a CEQA
perspective, they are indistinguishable.

                                             18
       Plaintiffs attempt to distinguish Cedar Fair by pointing out that, here, the City was
already preparing an EIR for the 8 Washington project when the Port endorsed the Term
Sheet. Even if this is a basis for distinguishing Cedar Fair, in which it is unclear whether
CEQA review was underway at the time the term sheet was approved (see Cedar Fair,
supra, 194 Cal.App.4th at pp. 1156-1158), it is a distinction without a difference.
Regardless of the commencement or status of the 8 Washington project EIR, the fact
remains that the Term Sheet approved by the Port Commission was not an approval of a
project.
       Plaintiffs also argue Cedar Fair is distinguishable because the project opponent in
that case was a “huge corporation” “with no pretense of environmental concern” pursuing
its “admitted financial interest,” in contrast to plaintiffs‟ self-professed civic motives.
Again, the claimed distinction is irrelevant to the CEQA analysis. A party‟s underlying
motives and economic resources are immaterial. (Cf. Maintain Our Desert Environment
v. Town of Apple Valley (2004) 124 Cal.App.4th 430, 448-449 [CEQA analysis does not
turn on party‟s financial status]; see also Uphold Our Heritage v. Town of Woodside
(2007) 147 Cal.App.4th 587, 599-600.) We fail to see how the motives of a party
challenging a public agency‟s action bear upon the legal question of whether the action
constitutes a project approval. That inquiry necessarily focuses on the substance of the
public agency‟s action and the circumstances surrounding the action rather than the
nature of any challenge to the action.
       We conclude that the adoption of the Term Sheet did not commit the City as a
practical matter to the 8 Washington project or preclude any alternatives or mitigation
measures. Together, the Study and the Term Sheet commit the City to do nothing more
than to continue to negotiate in good faith, with the benefit of the Study‟s
recommendations. The record is devoid of any evidence that the City or Port has made
the kind of financial commitment to the 8 Washington project that would compromise the
decision making process. (See Save Tara, supra, 45 Cal.4th at p. 142 [city contributed
substantial financial assistance to project].) Consequently, plaintiffs failed to establish
that the Port Commission‟s endorsement of the Term Sheet, either alone or in

                                              19
combination with the Planning Commission‟s recognition of the Study, constituted an
approval of a project under CEQA. In reaching this conclusion, we stress that our task in
this appeal was limited to assessing the procedural question of whether adoption of the
Study and/or Term Sheet constituted an approval of a project under CEQA requiring
prior environmental review. We express no view as to the merits of the 8 Washington
project.
                                      DISPOSITION
       The judgment is affirmed. Respondents shall recover their costs on appeal.

                                                _________________________
                                                McGuiness, P.J.

I concur:

_________________________
Jenkins, J.

                                           20
POLLAK, J., Concurring. — I believe the analysis of the issues in the majority opinion
is correct. However, I reach this conclusion with some misgivings. We cannot be blind
to reality. There can be little doubt but that the preparation and implicit approval by San
Francisco‟s Planning Commission of the Northeast Embarcadero Study (the study), to
“guide the development of properties” where the 8 Washington Street project is to be
located, was a significant step creating “bureaucratic momentum” towards ultimate
approval of the project. Those commissioners who voted to “recognize the design
principles and recommendations of the study for public realm improvements and new
developments in the area” undoubtedly are less likely to disapprove a project
incorporating those very principles and recommendations, regardless of what might be
disclosed by a subsequently prepared environmental impact report.
       Nonetheless, through carefully drawn documentation, the municipal agencies here
made unmistakably clear that neither the planning commission‟s approval of the study
nor the San Francisco Port Commission‟s approval of the term sheet constituted binding
commitments. In determining whether a commitment has been made, “courts should
look not only to the terms of the agreement but to the surrounding circumstances to
determine whether, as a practical matter, the agency has committed itself to the project as
a whole or to any particular features, so as to effectively preclude any alternatives or
mitigation measures that [the California Environmental Quality Act] would otherwise
require to be considered, including the alternative of not going forward with the project.”
(Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, 139.) The surrounding
circumstances here simply are not sufficient to overcome the import of the
documentation. Whatever psychological predisposition to approve a project may result
from the endorsement of steps preliminary to final approval, such as the approval of the
study‟s recommendations or of the term sheet incorporating those recommendations,
commitment cannot be judged by attempting to read the subjective thoughts of agency
officials. Whether an agency realistically has committed itself to proceed with a project
must be evaluated by the actions the agency has taken. In Save Tara, city officials not
only advised the federal government and made public statements indicating the project

                                              1
had been approved, as the majority opinion indicates, but the city had also agreed to lend
the developer “nearly half a million dollars” that would not have been repaid if the
project was not finally approved (id. at p. 140) and the city “proceeded with tenant
relocation on the assumption the property would be redeveloped as in the proposed
project” (id. at p. 142).
       Nothing comparable is shown to have occurred here. Other than the costs incurred
in preparing the study and negotiating the term sheet, the record reflects no other
expenses incurred by the city and no significant action premised on project approval such
as was taken in Save Tara. This is not enough to justify the supposition that the officials
who subsequently will be called upon to exercise their judgment in approving an
environmental impact report and the project itself will not fairly consider the impacts
disclosed by the report in deciding whether to require mitigation measures to the project
and whether to go forward with the project at all.
       Moreover, although perhaps not relevant to the analysis of the issue before us, it is
worth noting that the extended process by which the planning commission prepared the
study renders it highly unlikely that the environmental impact report would bring to light
any environmental impacts not disclosed by the study. Whatever one‟s views on the
advisability of raising the height limits for the 8 Washington Street project, it can hardly
be suggested that the pros, cons, and alternatives were not aired and considered in the
preparation of the study.

                                                  _________________________
                                                  Pollak, J.

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