In a lengthy opinion filed February 28, 2014, and ordered partially published on April 1, 2014, the Third District Court of Appeal reversed the Yolo County Superior Court’s judgment denying a CEQA writ petition challenging the City of Woodland’s EIR and related approvals of a 234-acre regional shopping center development – requiring an annexation application, pre-zoning, and a general plan amendment – on undeveloped agricultural land at the City’s periphery.  California Clean Energy Committee v. City of Woodland, 225 Cal.App.4th 173, 2014, Case No. C072033 (3d Dist. 2/28/14; part. pub. order 4/1/14).  In reversing and remanding to the trial court to grant plaintiff California Clean Energy Committee’s requested writ, the opinion didn’t break any significant new legal ground.  However, it did serve up a few reminders to local agencies and project developers of some CEQA basics, and also to be careful in framing your CEQA findings.

• For example, where a City’s resolution approving a large “green fields” commercial development beyond the City’s outskirts expressly states the development “would result in physical deterioration and urban decay of retail centers” in its downtown core, the City should take that finding – and CEQA’s concomitant requirement to mitigate – very seriously and assume that if litigation ensues a court will hold it to its words.
• It is now beyond peradventure under settled law that urban decay is a recognized environmental impact under CEQA.  While “‘[e]conomic and social impacts of a proposed project … are outside CEQA’s purview[,] … evidence [ ] that [such effects] could result in a reasonably foreseeable indirect environmental impact, such as urban decay or deterioration; … [obligates] the CEQA lead agency …. to assess this indirect environmental impact.’” (Quoting Anderson First Coalition v. City of Anderson (2005) 130 Cal.App.4th 1173, 1182.)
• Another important reminder:  where such an urban decay effect is found to be significant, it is also beyond doubt that CEQA requires the agency to adopt fully enforceable mitigation measures, and also a monitoring program to ensure such measures will actually be implemented as a condition of development approval.  (Pub. Resources Code, § 21081.6.)
• The City’s five mitigation measures addressed to urban decay in the instant case were found inadequate under CEQA.  While one of the five measures – a site plan, architectural and design review requirement that would ensure future approved specific project uses were “primarily” regional uses that would not compete with downtown retail – was likely to lessen urban decay impacts, the City expressly recognized it alone was insufficient to mitigate such impacts to insignificance, and the court found the remaining measures were “too speculative, vague, or noncommittal to comply with CEQA.”  Again, the court took the City at its own word – as set forth in its express findings – when it represented it had “merely found that [the relevant] measure would help, albeit not enough to avoid the significant urban decay impact identified by the EIR.”  (Emph. added.)
• The remaining urban decay mitigation measures were found inadequate because they violated CEQA in various respects.  The requirements for a future market study and urban decay analysis improperly ceded responsibility for studying an impact to the project developer and failed to commit the City to any specific mitigation measures to alleviate urban decay, or to impose standards for determining whether it must undertake future measures.  As the court put it, “the questions of whether mitigation measures will be required, of what they might consist, and how effective they will be are left unanswered.”  Again, rubbing the City’s face in its own findings, the court stated:  “Given the City’s recognition that Gateway II will cause urban decay, it was required to do more than agree to a future study of the problem.”
• Likewise, measures merely requiring the developer to pay fees toward development of a Retail Strategic Plan and Implementation Strategy for the Downtown Specific Plan also violated CEQA because they failed to commit the City to any feasible or enforceable measures to ameliorate urban decay impacts; simply, they did not require it to take any action.  Hence, another reminder from the Court of a settled CEQA principle:  “‘A commitment to pay fees without any evidence that mitigation will actually occur is inadequate.’”  (Quoting Save Our Peninsula Committee v. Monterey County Bd. of Supervisors (2001) 87 Cal.App.4th 99, 140.)
• The City’s remaining mitigation measure purporting to alleviate expected urban decay at Woodland’s County Fair Mall was similarly defective as it required no action other than coordinating with the current owner to prepare a plan for viable land uses at the Mall.  The court rejected City’s contentions that because the EIR was Programmatic in nature it allowed tiering of future EIRs to fill in this deficiency; “[h]aving studied and attempted to mitigate the urban decay effects from the project as a whole, the City may not excuse inadequate mitigation by putting off corrective action to a future date.”
• In addition to the issues regarding urban decay mitigation deficiencies, the court found the City improperly analyzed and rejected the feasibility of a mixed-use alternative studied in the EIR because – without any apparent support in the administrative record – it rejected the alternative (which arguably called for a less intensive development than that ultimately approved) as environmentally inferior to the project, rather than economically infeasible as found in the EIR.  Under these circumstances, the court found the City’s adoption of a rationale for rejection that was unsupported by the EIR analysis “conflicts with CEQA’s requirement to “disclose ‘the analytic route the … agency traveled from evidence to action.’” …”  (Citations omitted.)
• The court also rejected the City’s energy impacts analysis for the project, which amounted to less than a page in the DEIR, and relied solely on required compliance with Title 24 guidelines and regulations for energy efficiency to find the project would have no significant impacts on energy consumption requiring mitigation.  Public Resources Code § 21100(b)(3) requires an EIR to “include a detailed statement setting forth … [m]itigation measures proposed to minimize significant effects on the environment, including, but not limited to, measures to reduce the wasteful, inefficient, and unnecessary consumption of energy.”  CEQA Guidelines Appendix F requires assessment of the “project’s projected transportation energy use requirements and its overall use of efficient transportation alternatives.”  Even though the project here was expected to generate up to 40,051 new daily vehicle trips, 40% of which would originate outside the City, the EIR’s energy impacts analysis did not address transportation energy impacts at all.  The EIR also did not properly assess the construction and operational energy impacts of the project, and did not discuss renewable energy options, as the court ruled was required by Appendix F.  Reliance on Title 24 or CALGreen compliance did not cure the deficiencies; as the court noted, the Building Code and CALGreen “do[ ] not address construction and operational impacts for a project intended to transform agricultural land into a regional shopping center.”

While in my view there is nothing groundbreaking in this partially-published opinion (which perhaps explains the court’s initial decision not to publish), it does serve as a cautionary tale to remind lead agencies and their environmental consultants of a number of basic, established principles of CEQA and land use practice.  First, be careful what you find in formal findings required for project approval, because you will have to live with them and their consequences; thus, if you find urban decay will actually be a significant impact of the project,  then, as night follows day, CEQA requires you to adopt binding and effective mitigation for this impact.  Second, if you expressly recognize that certain mitigation will not be sufficient to mitigate the impact to insignificance, CEQA just as clearly requires you to adopt other or further mitigation that is, or barring that, to find such mitigation infeasible and adopt a statement of overriding considerations based on substantial evidence.  (Note: mitigation that doesn’t commit to action or contain standards is insufficient.)  Third, again, be careful what you find if it is at odds with and not supported by the EIR’s analysis; both common sense and the law counsel against rejecting an alternative as environmentally worse than the project without a reasoned basis where the EIR and record indicate otherwise and only support an unmade finding of economic infeasibility.  Finally, don’t completely ignore the transportation and construction-related energy impacts of a large “green fields” project by wholly relying on inapposite building code energy efficiency standards that don’t address those impacts, especially where project opponents have raised these issues.

Questions?  Please contact Arthur F. Coon of Miller Starr Regalia.  Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for over forty-five years.  For nearly all that time, the firm also has written Miller & Starr, California Real Estate 3d, a 12-volume treatise on California real estate law.  “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state.  The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, construction, management, title insurance, environmental law, and redevelopment and land use.  For more information, visit www.msrlegal.com.