In a published opinion filed December 17, 2018, the Third District Court of Appeal affirmed a judgment granting a writ setting aside El Dorado County’s approval of, and related Mitigated Negative Declaration (MND) for, construction of a Dollar General Store in the “quaint” downtown area of unincorporated Georgetown, a Gold Rush-era “hamlet” designated as a State Historical Landmark.  Georgetown Preservation Society v. County of El Dorado (Simoncre Abbie, LLC, Real Party in Interest) (2018) _____ Cal.App.5th _____.  The Court held lay public commentary on nontechnical issues concerning the project’s size and general appearance constituted substantial evidence supporting a fair argument that the project may have significant aesthetic impacts, and thus required an EIR, notwithstanding County’s findings that the project complied with its Historic Design Guide.  The Court also held County’s failure to make explicit findings in the record on alleged credibility and foundation issues precluded its “manufacturing after-the-fact findings” to justify its dismissal of the public comments on the ground that they did not constitute “substantial evidence.”

While acknowledging that “[a]esthetics are subjective,” the Court rejected County’s attempts to take refuge in the presumably more objective principles of its Historic Design Guide, holding that its “planning and zoning” determination that the project adhered to those aesthetic and architectural standards did not constitute, nor substitute for, a CEQA determination under the fair argument standard.

Similar to another recent appellate decision holding an EIR was required to analyze a project’s aesthetic impacts on an officially designated historical district (see Protect Niles v. City of Fremont (2018) 25 Cal.App.5th 1129, my August 20, 2018 post on which can be found here), context was obviously important in this case.  Dollar General proposed a 9,100 square foot chain discount store, and 12,400 square foot parking lot, to be constructed on a 1.2-acre site (consisting of three merged lots) on Georgetown’s Main Street, amidst surrounding structures and areas that included a museum, a historic stamp mill, a park, a post office, a local library, a bed and breakfast inn, and a historic residence.  Public criticisms decried the proposed store as a “monstrosity,” a “corporate structure” that would be a “blight on the heart of this town,” and a “giant blemish on the face of historic Main Street” due to its size and “monolithic” appearance, which would not conform to other downtown buildings in the historic gold rush community.  The County, however, found the project and its design substantially conformed to County’s Historic Design Guide and “would not substantially detract from Georgetown’s historic commercial district,” while tiering its CEQA review and MND off its 2004 General Plan EIR’s “visual character” analysis of that plan’s effects.

The trial court saw things differently, and entered judgment in favor of plaintiff and respondent Georgetown Preservation Society on its CEQA claim; it ruled that the public comments provided substantial evidence supporting a fair argument of significant aesthetic impact requiring an EIR, and that since County made no credibility determinations it could not categorically disregard those comments.  It found plaintiff’s evidence of pedestrian safety and traffic impacts insufficient to support a fair argument, and did not reach its general plan inconsistency claim.

Key points and takeaways from the Third District’s published opinion affirming the judgment include:

  • CEQA is interpreted to provide the fullest possible environmental protection within the reasonable scope of its language, and an EIR is required for any proposed project which may have a significant effect on the environment.
  • A MND is appropriate where the initial study identifies potentially significant effects but (1) revisions in project plans avoid or mitigate the effects to a point where clearly no significant effect would occur, and (2) there is no substantial evidence in the record that the revised project may have a significant effect.
  • The “fair argument” standard applicable to review of negative declarations and MNDs sets a “low threshold” for preparing EIRs, and the existence of substantial evidence supporting a fair argument of potential impact presents a legal question upon which the agency’s determination receives no deference; the decision not to prepare an EIR can be upheld only where there is no credible contrary evidence. Per the Court:  “[T]he fair argument standard purposely sets a low threshold of evidence in order to maximize environmental protections and thereby fulfill the purposes inherent in CEQA.”
  • While “design review is an important process,” and “planning or zoning” determinations made within that realm are accorded much greater deference, such that they will be overturned only if no reasonable person could have agreed, they do not control or supplant the CEQA review process for analyzing a project’s potentially significant aesthetic impacts under the fair argument standard. An agency’s thresholds of significance does not relieve it of its duty to consider evidence under the fair argument standard, nor does conformity with a general plan insulate a project from CEQA review.
  • The “narrow” holding in Bowman v. City of Berkeley (2004) 122 Cal.App.4th 572, was “that the difference between a three-story building and a four-story building [on a heavily trafficked thoroughfare] does not amount to a significant environmental impact even under the fair argument standard.” (Citing Pocket Protectors v. City of Sacramento (2004) 124 Cal.App.4th 903, 939.)  While Bowman recognized that an agency’s design review process can in some cases mitigate purely aesthetic impacts to insignificance, even if some people disagree, it does not hold that design review necessarily or always adequately addresses and mitigates aesthetic impacts.  Such an interpretation would conflict with CEQA’s fair argument test, which requires an EIR where any substantial evidence supports a fair argument that the project may have a significant impact, even if other evidence indicates the project will not have a significant effect.  Per the Court:  “[A]pplication of such design guidelines does not insulate the project from CEQA review at the initial study phase under” and “cannot be used to bypass the normal fair argument standard.”
  • While “the mere existence of public controversy does not satisfy the fair argument standard,” lay commentary on nontechnical matters (such as aesthetic impacts from the size and overall appearance of a proposed building) can meet “the low threshold needed to trigger an EIR[.]” (Citing, inter alia, Ocean View Estates Homeowners Assn., Inc. v. Montecito Water District. (2004) 116 Cal.App.4th 396, 402 [“overall aesthetic impact … by its very nature is subjective.  Opinions that [the project] will not be aesthetically pleasing is not the special purview of experts.  Personal observation on these nontechnical issues can constitute substantial evidence.”].”)
  • While acknowledging “a few stray comments may not be enough,” the Court found that in this case “a large number of interested people” had presented comments “that the project is too big and too boxy or monolithic to blend in, such that its presence will damage the look and feel of the historic center of Georgetown” and “[t]hat is enough to trigger an EIR.”
  • Consistent with its analysis, the Court refused to “limit the permissible scope of lay opinion” by requiring it to address “technical architectural standards” in County’s Historic Design Guide; County did not have authority to limit consideration of potential impacts or to force “challengers to abandon claims about other potential impacts” – such as “the size and overall appearance of the project, non-technical matters that do not require special expertise.”
  • In a footnote, the Court distinguished Joshua Tree Downtown Business Alliance v. County of San Bernardino (2016) 1 Cal.App.5th 677 (my July 14, 2016 post on which can be found here), on the ground that it dealt with urban decay (a technical subject requiring expert opinion), rather than aesthetics (a nontechnical subject within the purview of lay opinion). It similarly distinguished the more recent decision in Jensen v. City of Santa Rosa (2018) 23 Cal.App.5th 877 (my June 4, 2018 post on which can be found here), which “found non-expert efforts to recalculate noise impacts did not provide substantial evidence to support a fair argument,” as too factually dissimilar to support County’s position as to aesthetic impacts in the case before it.
  • County never made any explicit findings of any kind in the administrative record on the commenters’ credibility, or regarding any lack of foundation for their comments; accordingly, the Court held such attacks were not preserved for judicial consideration and did not allow County to ignore or discount the evidence in applying the fair argument test. Per the Court:  “To assist courts in distinguishing between after-the-fact justifications and situations where a question of credibility was legitimate and actually addressed by the agency, this court adopted the following principle: ‘[B]efore an agency may rely on its purported rejection of evidence as incredible, it must first identify that evidence with sufficient particularity to allow the reviewing court to determine whether there were legitimate disputed issues of credibility.’”  (Quoting Consolidated Irrigation Dist. v. City of Selma (2012) 204 Cal.App.4th 187, 207-208.)
  • In rejecting appellants’ apparent claim that this rule improperly adds a procedural or substantive requirement not explicitly contained in CEQA (see Resources Code, § 21083.1), the Court added: “We do not view this as layering a court-made procedural rule onto CEQA review procedures.  Instead, it is a basic rule of administrative review that precludes a party from manufacturing after-the-fact findings that an agency never made.”
  • And the Court further noted that even if it “considered the credibility and foundational objections appellants claim the County sustained at least impliedly,” it would find an abuse of discretion because many “commentators were local residents and therefore capable of giving a lay opinion on the nontechnical aesthetic issues of size and general appearance.” Such commenters are not required to provide a foundation (such as an expert witness at trial might be expected to) or offer their opinions under penalty of perjury, and “imposing such requirements would needlessly muffle legitimate commentary on matters of public interest, contrary to the informative purposes of CEQA.”

The lack of definitive, objective and “bright line” standards of significance for evaluating a project’s alleged aesthetic impacts has long been an area of frustration for CEQA practitioners and project proponents – particularly because the finding of just a single potentially significant impact, even as to aesthetics, triggers preparation of a full blown EIR.  As this case and the similar recent opinion in Protect Niles illustrate, context is key, and this concern is heightened and magnified for projects proposed in the setting of a designated historic area.

 

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.