A project that may cause a substantial adverse change in the significance of a “historical resource” may, for that reason, have a significant effect on the environment for purposes of CEQA. (Pub. Resources Code, § 21084.1.) And those familiar with CEQA know that, under its “fair argument” test, where there is any substantial evidence in the record that a project may have a significant effect on the environment, an EIR must be prepared. (§ 21080(d).) But just what is a “historical resource”? How is the determination of its historicity made, by whom, and by applying what standards to the relevant evidence? Those important questions are addressed by the August 12, 2016 published opinion of the Sixth Appellate District Court of Appeal in Friends of the Willow Glen Trestle v. City of San Jose (2016) 2 Cal.App.5th 457.
As might be expected, the decision involved a legal action seeking to prevent the demolition, without prior preparation of an EIR and compliance with all feasible mitigation therein identified, of a structure whose status as a historical resource was in dispute.
In early 2013, defendant City of San Jose proposed and approved a project to demolish the city-owned Willow Glen Railroad Trestle – a wooden railroad bridge originally built in 1922 to provide “rail freight” access to downtown “canning districts” – and replace it with a new steel truss pedestrian bridge as a component of the City’s Three Creek’s Trail system. The City found demolition and replacement would cost about the same as restoration and retrofitting of the trestle, and would result in a lessened fire hazard and lower maintenance costs. In later determining the project would not impact historical resources through a post-approval Mitigated Negative Declaration (MND) – a violation of CEQA noted by the Court but not further analyzed because not raised by plaintiff below or either side on appeal – the City relied on two one-page documents it had obtained in 2004 in connection with a proposed trail project that did not threaten the trestle. A “BRIDGE EVALUATION SHORT FORM” provided by “Consulting Architectural Historian” Ward Hill opined the trestle is of “standard” design, had likely been replaced in the last 30 to 40 years, and “is a typical example of a common type and has no known association with important events or persons in local history.” A State Historic Preservation Officer letter stated the 2004 project would not affect any “historic properties.” The later 2013 initial study leading to the MND emphasized the Trestle was not distinctive or unique, and while acknowledging the Trestle’s “locally important” “role … in the incorporation of Willow Glen and activism regarding roadway-railroad grade separations[,]” “it concluded that this history did not make the Trestle a historical resource.”
The City received competing evidence disputing these conclusions in the form of MND comments. A local historian “submitted extensive comments describing the [Trestle’s] uniqueness and historic importance[.]” A credentialed historical architect agreed the Trestle “is an important historical icon” that “qualifies for listing in the California Register [of Historical Resources.]” An “environmental architect” concurred, noting the City’s 2004 documents were “outdated” and that subsequently uncovered documents demonstrated “the Trestle had long been considered historic.”
The city council ultimately found the Trestle not to be a historical resource because its “design is based on standard plans … and [it] has no known association with important persons; … [its] bridge materials were likely replace[d] during the last 30 or 40 years; [it] is not unique and is unlikely to yield new, historically important information; and [it] did not contribute to broad patterns of California’s history and cultural heritage.” Accordingly, the council concluded the project’s demolition and replacement of the Trestle would not have a significant impact on the environment.
The trial court granted the plaintiff group’s petition for writ of mandate. It found “that the fair argument standard applied and that substantial evidence supported a fair argument that the Trestle was a historical resource[,]” and ordered the City to refrain from further demolition activity pending preparation and certification of a CEQA-compliant EIR, while retaining jurisdiction over the case to determine the adequacy of City’s return to the writ.
The Court of Appeal reversed, holding that the trial court had applied the wrong standard of review to the City’s historicity findings, and remanded to the trial court to determine whether substantial evidence supported the City’s MND adoption. Interestingly, as a threshold issue, the Court of Appeal held the case was not moot due to the City’s intervening certification of an EIR for the project. Noting that the trial court’s order required the City to “vacate its approval of the project, prepare an EIR, and comply with CEQA[,]” and that the City had “not vacated its approval of the project and reconsidered [it] in light of the EIR as would be required by CEQA[,]” the Court of Appeal held the “appeal is not actually moot.” Per the Court: “If the City succeeds in this appeal, it might not be required to vacate its approval of the project or consider the impact of the demolition of the Trestle.”
The Court of Appeal then turned to the merits, i.e., the “key dispute … concern[ing] the identification of the standard for judicial review of a lead agency’s determination that a project will not have an adverse impact on a ‘historical resource’.” It initially rejected the City’s argument that the Supreme Court resolved this issue in its favor in the landmark categorical exemption/unusual circumstances exception case of Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, by citing with approval therein the Fifth District’s decision in Valley Advocates v. City of Fresno (2008) 160 Cal.App.4th 1039. Per the Court: “The California Supreme Court relied on Valley Advocates to support its conclusion that a bifurcated standard of review could apply where one part of the [lead] agency’s decision was subjected to the substantial evidence standard and another part to the fair argument standard. Since the California Supreme Court did not resolve in Hillside the issue of whether the fair argument standard applies to an agency’s decision as to whether a resource is a historical resource, nothing in Hillside requires us to follow the holding in Valley Advocates. We must ourselves resolve the issue raised in this case.”
Beginning its task with well-settled principles of statutory construction, the Court examined the relevant statutory language of Public Resources Code § 21084.1, which states in pertinent part:
…. For purposes of this section, an historical resource is a resource listed in, or determined to be eligible for listing in, the California Register of Historical Resources. Historical resources included in a local register of historical resources, as defined in subdivision (k) of Section 5020.1, or deemed significant pursuant to criteria set forth in subdivision (g) of Section 5024.1, are presumed to be historically or culturally significant for purposes of this section, unless the preponderance of the evidence demonstrates that the resource is not historically or culturally significant. The fact that a resource is not listed in, or determined to be eligible for listing in, the California Register of Historical Resources, not included in a local register of historical resources, or not deemed significant pursuant to criteria set forth in subdivision (g) of Section 5024.1 shall not preclude a lead agency from determining whether the resource may be an historical resource for purposes of this section. (Emph. in Court’s quotation of statute.)
There was no factual dispute that the Trestle had not been listed or determined eligible for listing in the California Register, included in any local register, or “deemed significant” under the criteria of § 5024.1(g). The statute’s last sentence, however, expressly permits a lead agency to determine that a resource is a historical resource even when it is neither deemed (as a mandatory matter) nor presumed (subject to rebuttal by a preponderance of the evidence) to be a historical resource under the statute. While it does not explicitly indicate the standard of judicial review that applies to such a determination, the Court found that the statute’s treatment of the standard applicable to “presumed” historical resources pointed to the answer, reasoning: “The fact that a lead agency may find even a presumptively historical resource not to be a historical resource if ‘the preponderance of the evidence’ supports the lead agency’s finding necessarily establishes such a finding would not be reviewed under the fair argument standard. …. [¶…. The Legislature intended for the agency to have more, not less, discretion under [the statute’s] final sentence, and it is inconceivable that the lead agency’s decision under that sentence would be subject to less deferential review than its decision regarding a resource that is presumed to be a historical resource.” (Emph, in orig., fn. omitted.)
The Court found the CEQA Guidelines and relevant case law were consistent with its construction of the statute. (See Guidelines, § 15064.5(a)(3) [“historical resources” include “object, building, structure,” etc., “which a lead agency determined to be historically significant … provided the lead agency’s determination is supported by substantial evidence ….”]; Valley Advocates, supra, 160 Cal.App.4th at 1067-1072 [holding fair argument standard inapplicable to lead agency’s decision on whether resource falls within “discretionary category” of historic resources, but that once resource has been determined to be historical fair argument test applies to question whether proposed project “may cause a substantial adverse change in the significance of [that] historical resource”]; Citizens for Restoration of L Street v. City of Fresno (2014) 229 Cal.App.4th 340, 367-369 [following Valley Advocates].)
The Court did not follow its own earlier decision in Architectural Heritage Assn. v. County of Monterey (2004) 122 Cal.App.4th 1095, which it found “did not accurately state the appropriate standard of judicial review that applies in this case”; it noted that its decision there lacked “any substantive analysis” of the relevant issue and that the parties there failed to “dispute that the fair argument standard applied to the ‘historicity’ issue in that case[.]”
Accordingly, the Court of Appeal held: “The statutory scheme and the legislative history of [Public Resources Code] section 21084.1 require application of a deferential substantive evidence standard of judicial review, rather than a fair argument standard of judicial review, to a lead agency’s decision that a resource is not a discretionary historical resource under the final sentence of section 21084.1.” Because the plaintiff had also contended that no substantial evidence supported the City’s decision that the Trestle was not a historical resource, the Court remanded for the trial court to make that determination under the correct standard.
CEQA’s treatment of the three legal categories of historic resources – i.e., mandatory, presumptive, and discretionary – can be confusing, and the Sixth District’s new decision adds to the growing body of case law clarifying the rules. It should be kept in mind that the latter two categories involve agency discretion as to the distinct issue whether a “historical resource” exists at all for purposes of CEQA analysis – in the case of presumed resources, the presumption can be rebutted by a preponderance of record evidence, and in the case of discretionary resources the agency’s decision as to the “historicity” of the resource is reviewed under the highly deferential “substantial evidence” test and upheld if supported by any substantial evidence in the light of the whole administrative record. Once the historicity issue is determined, however – whether as a mandatory matter (e.g., because the resource is listed or determined eligible for listing in the California Register) or through the exercise of legally permissible agency discretion – the “usual rules” of CEQA apply. This means that where it has been settled that a historical resource is actually involved, in determining whether the proposed project may cause a substantial adverse change in the significance of that historical resource (and, hence, a significant effect on the environment) the “fair argument” test will be applied.
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 more than fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 4th, 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, financing, common interest development, construction, management, eminent domain and inverse condemnation, title insurance, environmental law and land use. For more information, visit www.msrlegal.com.