Real Estate and Land Use

Court of Appeal Holds EIR Inadequately Analyzed Energy Impacts

Ukiah Citizens for Safety First v. City of Ukiah et al. (248 Cal.App.4th 256) (partially published)

By David McGrath

Why It Matters: The California Court of Appeal reiterated the holding in California Clean Energy Committee v. City of Woodland (2014) 225 Cal.App.4th 173 (CCEC) regarding energy impacts analysis under CEQA for a large commercial development and addressed the attempted use of an addendum to repair a certified EIR’s insufficient analysis.

Facts: In February 2011, a major retailer applied to the City of Ukiah (the City) for a use permit and related entitlements to construct a warehouse store and gas station on a 15.33-acre site (the Project). On December 18, 2013, the City certified the final EIR, which described the Project as a 148,000-square-foot retail facility with a bakery, pharmacy, optical center, hearing aid testing center, food court, photo center, tire center, and a gas station with 16 pumps, with 608 parking stalls for customer vehicles. On January 15, 2014, the City approved necessary rezoning for the Project and filed the CEQA Notice of Determination on January 16, 2014.

On February 11, 2014, plaintiffs Ukiah Citizens for Safety First (Citizens) filed a petition for writ of mandate challenging the sufficiency of the EIR on various fronts, including the EIR’s analysis of energy impacts. On February 28, 2014, while Citizens’ suit was pending in the trial court, the Court of Appeal for the Third District issued its opinion in CCEC. CCEC held that an EIR’s analysis of energy impacts was inadequate and the reasoning of the court was directly applicable to Citizens’ challenges to the EIR’s energy impacts analysis.

On December 3, 2014, in light of the CCEC holding, the City adopted a 10-page addendum to the EIR to address inadequacies in the EIR’s energy impacts analysis. Over Citizens’ objections, the trial court considered the addendum and concluded that the EIR’s analysis of energy impacts was sufficient. On May 1, 2015, the trial court denied Citizens’ petition entirely. Citizens timely appealed, contending that (1) the EIR did not properly identify and analyze potentially significant energy impacts generated by the Project; (2) the EIR’s analysis of transportation and traffic impacts was inadequate; (3) the EIR’s analysis of noise impacts was inadequate; and (4) the Project was inconsistent with applicable zoning requirements.

The Decision: On June 21, 2016, the Court of Appeal for the First District (the Court) released a partially published decision addressing the EIR’s energy impacts analysis. The Court reversed the trial court’s holding on the EIR’s energy analysis, holding that “the EIR fail[ed] to sufficiently analyze potential energy impacts and that the adoption of an addendum to the EIR subsequent to approval of the EIR and of the [P]roject failed to comply with CEQA requirements.” The Court affirmed the trial court’s other rulings in the unpublished portions of the decision.

On the issue of the EIR’s energy impacts analysis, Citizens asserted that the EIR “fail[ed] to include adequate information regarding the [P]roject’s energy use and [did] not comply with appendix F of the CEQA Guidelines.” Moreover, Citizens argued that the EIR “failed to calculate the energy use attributable to vehicle trips generated by the [P]roject and failed to calculate the operational and construction energy use of the [P]roject.”

The Court, relying on the CCEC decision, held that the EIR failed to meet the standards set forth in CCEC, noting that the inadequate analysis of energy impacts in CCEC “was in all material aspects the same as [the EIR] undertaken by the [C]ity in this case.” The Court noted various deficiencies in the EIR echoing those from CCEC. First, on the issue of energy impacts from transportation, the EIR concluded that the Project would generate 11,204 new vehicle trips per weekday and 8,708 new trips per weekend day, but the EIR failed to calculate the energy impacts from trips generated by the Project. Second, the EIR incorrectly relied on compliance with Title 24 of the California Code of Regulations setting forth energy conservation standards and other green building standards to mitigate operational and construction energy impacts, without further discussion of appendix F of the CEQA Guidelines regarding potential impacts and energy conservation measures. Third, the Court found that it was insufficient for the EIR to rely on mitigation measures designed to reduce greenhouse gas emissions in order to address energy impacts.

The Court ruled that the City’s attempt to supplement the certified EIR by an addendum could not be considered in determining whether the City abused its discretion in certifying the EIR because the addendum was not a part of the administrative record that was before the decision-making body when it rendered its decision. Thus, the trial court’s consideration of the addendum was an inappropriate extension of the administrative record. Additionally, the Court found that although the CEQA Guidelines authorize the use of addendums in certain situations, an addendum cannot cure an improperly certified EIR. Therefore, the Court required recirculation of the EIR and further consideration of public comments before the EIR could be recertified.

Practice Pointers:

  • EIRs should include a thorough energy impacts analysis section in accordance with the CEQA Guidelines.
  • Addendums should not be used to cure an approved project’s inadequate certified EIR under CEQA.

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Local Vesting Ordinance Trumps Subsequently Enacted Emergency Ordinance

Stewart Enterprises, Inc. v. City of Oakland (2016) 248 Cal.App.4th 410

By Keli Osaki

Why It Matters: A project applicant has a vested right to construct a project pursuant to a building permit, even though a subsequent emergency ordinance requiring a conditional use permit was passed and the City Council intended it to override a local vesting ordinance that was in effect at the time the building permit was issued.

Facts: In 2011, the plaintiffs/project applicants obtained the required zoning clearance from the City of Oakland to operate a crematorium in the City. Thereafter, the applicants purchased the property and took additional steps to open a crematorium, with a total investment of about $2 million. In May 2012, the developers obtained a building permit to construct the crematorium.

When the permit was issued, the City had a municipal code provision (local vesting ordinance) which at that time provided in part:

Whenever any subsisting building permit . . . has been lawfully issued beforehand, . . . neither the original adoption of the zoning regulations nor the adoption of any subsequent rezoning or other amendment thereto shall prohibit the construction, other development or change, or use authorized by said permit[.]

The applicants’ plan to operate a crematorium raised concerns in the surrounding community, which was brought to the attention of the City Council president. As a result, five days after the City issued the building permit, the City Council passed an emergency ordinance requiring a conditional use permit (CUP) to operate any new crematorium. The ordinance included language that indicated it applied retroactively.

Following the hearing on the emergency ordinance, the City advised the applicants that the ordinance applied to their project, and that they could not proceed with the project without first obtaining a CUP. The applicants appealed that determination, which was denied.

The applicants then filed a petition for writ of mandate, alleging, among other claims, the impairment of vested rights under either the local vesting ordinance or state law. The trial court rejected the applicants’ argument that they had vested rights under state law, but granted the petition based on a vested right under the local vesting ordinance. The City appealed.

Decision: The Court of Appeal affirmed. The issues before the court were (1) whether the applicants had a vested right in the building permit under the local vesting ordinance; (2) if so, whether the emergency ordinance impaired that right; and (3) if there was a vested right that was impaired, whether the impairment was justified because it was sufficiently necessary to the public welfare.

Regarding the first issue, the Court of Appeal rejected the City’s argument that the emergency ordinance “controls” over the local vesting ordinance. The court emphasized that the determination whether the applicants had a vested right in the building permit is not made by looking at the effect of the City’s subsequent enactments but is made as of the time the applicants obtained the permit. The court further stated that, under its plain terms, the local vesting ordinance conveyed a vested right because it shielded the holder of a lawfully issued building permit from having to comply with any subsequently adopted zoning regulations if such regulations would prohibit the construction authorized by said permit.

As to the second issue, the Court of Appeal disagreed with the City’s contention that, even if the applicant had a vested right in the building permit, the application of the emergency ordinance to the project did not impair that right because requiring a CUP did not amount to “prohibiting” the crematorium’s construction. The court stated that the emergency ordinance impaired the applicants’ vested right because to impose a condition on a building permit is to prohibit the project until the property owner satisfies the condition. The court further stated that, if the condition were one that the property owner could unquestionably satisfy by unilateral action, without requiring the public entity’s discretionary approval, the analysis might differ.

Finally, the appellate court rejected the City’s argument that impairing the applicants’ vested right was justified because the impairment was sufficiently necessary to the public welfare. The court explained that vested rights are immune to ordinary police power regulations because they are not directly related to danger or potential danger to the health and safety of the public.

Concluding Observations:

  • A local ordinance may confer vested rights earlier than available under the judicial doctrine.
  • An ordinance may apply retroactively if the ordinance includes language that indicates as such. Retroactive application may be unconstitutional, however, if it deprives a person of a vested right without due process of law.
  • To impose a condition on a building permit is to prohibit the project until the applicant satisfies the condition and thus impairs the applicant’s vested right in the permit.

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“Fundamental, Mandatory and Clear” Policies Invalidate Project Approval

Spring Valley Lake Association v. City of Victorville (2016) 248 Cal.App.4th 91

By Bryan LeRoy

Why It Matters: Despite recognizing that a court must generally defer to an agency’s factual findings, this decision held the city to a higher standard of evidence when it comes to a General Plan policy that is “fundamental, mandatory, and clear.” It serves as a caution to both land use practitioners and agency planners in making General Plan consistency findings as part of project approvals.

Facts: The City of Victorville (City) approved the development of a retail strip mall dominated by a proposed big-box retailer. The project approvals included a General Plan Amendment, zone change, site plan, conditional use permit and a parcel map. As required, the General Plan land use amendment and the parcel map approvals included the required findings that the project was consistent with the General Plan, and the Environmental Impact Report (EIR) purportedly included an analysis of inconsistencies between the proposed project and the General Plan.

The project approval was challenged, and in its decision, the trial court focused on two particular Implementation Measures (IMs) under the City’s General Plan. IM 7.1.1.4 required all new commercial or industrial developments to generate electricity on-site to the maximum extent feasible. IM 7.2.1.5 required all new construction to be 15% more efficient than 2008 Title 24 standards.

With regard to IM 7.1.1.4, the EIR included a discussion that the project would be “solar ready” because the roof of the store would be designed to accommodate photovoltaic panels. The EIR then explained that the retailer’s commitment to the solar panels at the time of project approval would not be economically feasible largely because the future availability of tax credits and other incentives was uncertain and solar providers were unwilling to lock in long-term pricing.

With regard to IM 7.2.1.5, the EIR contained inconsistent statements about the actual percentage of greater efficiency, stating in many places that the project would achieve at minimum 10% more efficiency than required by Title 24.

The Decision: The Court of Appeal specifically acknowledged that it must defer to an agency’s factual finding of consistency unless no reasonable person could have reached the same conclusion on evidence before it. The court further acknowledged that a project does not need to conform perfectly to every policy to be consistent with the General Plan. Rather, the court explained that in determining whether a project conflicts with a General Plan, “the nature of the policy and the nature of the inconsistency are critical factors to consider.”

The court went on to clarify that a project is inconsistent with a General Plan if it conflicts with a General Plan policy that is “fundamental, mandatory, and clear,” and in the opinion of the court, the two IMs at issue were such mandatory requirements. Accordingly, the court dismissed the argument that the project was generally consistent with the General Plan as a whole.

While IM 7.1.1.4 did not absolutely require the project to generate on-site electricity, it did require the generation of on-site electricity to the maximum extent feasible. Thus, the court held that if the City was concluding that the generation of on-site electricity was completely infeasible, then the record needed to include substantial evidence demonstrating that partial solar installation or other potential forms of on-site generation were also infeasible. Additionally, the court found that the scant information in the EIR about the economic infeasibility of solar installation because of the uncertainty of future tax credits and other incentives was insufficient to bridge the analytical gap between the raw evidence and the City’s decision.

Similarly, the court found that the EIR and the administrative record did not include sufficient evidence to conclude that the project would meet the mandatory policy under IM 7.2.1.5 requiring 15% greater efficiency than Title 24 standards. Consequently, the EIR did not adequately analyze the project’s consistency with the General Plan, and the findings in the approval that concluded the project was consistent with the General Plan were not supported by substantial evidence.

Practice Pointers:

  • CEQA preparers and land use professionals should pay particular attention to General Plan policies that are “fundamental, mandatory and clear.” According to this opinion, findings of consistency cannot skirt these mandatory policies by declaring that the project is generally consistent with other policies.
  • While an EIR may resort to a statement of overriding considerations for significant inconsistencies, pursuant to the Subdivision Map Act, an agency cannot approve a parcel map if it is not consistent with the General Plan.

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