Fifth Appellate District Upholds City of Visalia’s General Plan Update Against Challenge to Square Footage Restrictions in Neighborhood Commercial Zones

On January 30, 2018, the Fifth Appellate District certified for publication its earlier opinion in Visalia Retail, LP v. City of Visalia, upholding the City of Visalia’s (“City”) 2014 General Plan Update.  Plaintiff and Appellant, Visalia Retail, LP (“Plaintiff”), challenged the City’s General Plan land use policy LU-P-67, which set a 40,000-square-foot size limitation in the Neighborhood Commercial zones for grocery stores and similar businesses acting as the “anchor tenant” within a shopping center.  Plaintiff challenged LU-P-67 on two grounds, one under CEQA and one under California Planning and Zoning Law.  The Court of Appeal rejected both arguments.

General Plan Policy LU-P-67

The City’s General Plan Update included new standards for shopping centers located in Neighborhood Commercial zones, including the requirement that the center be “[a]nchored by a grocery store or similar business offering fresh product, poultry, fish, and meat.”  During the public review process, residents pushed for including a size limit of 35,000 square feet.  During a subsequent City Council work session, the Councilmembers recommended a maximum of 40,000 square feet for anchor tenants.  Ultimately, the City Council adopted the 40,000 square-foot limit:

Shopping centers in Neighborhood Commercial areas shall have the following characteristics:

  • Anchored by a grocery store or similar business offering fresh produce, poultry, fish and meat;
  • Include smaller in-line stores of less than 10,000 square feet;
  • Total size of 5 to 12 acres as shown on the Land Use Diagram; and
  • Integrated with surrounding neighborhood uses in terms of design, with negative impacts minimized.
  • Located no closer than one mile from other General Plan-designated
  • Neighborhood Commercial or Community Commercial locations, or from existing grocery stores.
  • No individual tenant shall be larger than 40,000 square feet in size.

During the administrative process before the City, Plaintiff submitted a report written by an experienced local commercial real estate agent with significant experience in leasing and development of shopping centers and involvement with dozens of grocery store transactions (“Report”).  The Report opined that the 40,000 square-foot cap “creates the strong likelihood that [neighborhood commercial] centers will never develop in Visalia,” and the author stated he was “unaware of any grocers willing to build new stores under 40,000 sq. ft. in size.”  The report cited typical square footage demands of more major grocery chains as 50,000 square feet or more, and cited examples of smaller neighborhood supermarket anchors closing down.  The Report also opined that physical effects could result from urban decay, noting that where there is an absence of the supermarket anchor in the shopping center, “the center may be subject to physical deterioration, urban decay, and blight.”

CEQA Claim

“CEQA does not define urban decay” but some have defined it as “visible symptoms of physical deterioration that invite vandalism, loitering, and graffiti that is caused by a downward spiral of business closures and multiple long term vacancies.”  (Joshua Tree Downtown Business Alliance v. County of San Bernardino (“Joshua Tree”) (2016) 1 Cal.App.5th 677, 685 [court upheld county negative declaration against claim that project had potential to cause urban decay].)  Plaintiff argued the City’s EIR for the General Plan Update was fatally flawed because it did not specifically evaluate the potential for the land use policy to cause urban decay.  The City argued that the Plaintiff’s Report did not offer legally sufficient evidence that the new size limit in LU-P-67 would cause anchor tenants to refuse to locate in neighborhood commercial centers.

The Court concluded that the Report’s analysis of causation was speculative, and the potential economic consequences it identified did not directly translate to urban decay impacts.  Quoting the 2016 opinion in Joshua Tree, the Court stated that “even if a handful of properties were to remain permanently vacant, the result would not necessarily be the kind of change to the physical environment that implicates CEQA.”  (Joshua Tree, 1 Cal.App.5th at 691.)  Here, inferring that urban decay would result from the incompatibility between LU-P-67, and the business model of the four grocers identified in the Plaintiff’s Report would be speculation.

In coming to this result, however the Court of Appeal recited the fair argument standard of review, which applies to negative declarations and not EIRs.  (Citing Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 1112, 1123 [portion of opinion cited was describing review of negative declarations]; Joshua Tree, 1 Cal.App.5th 677 [case involved challenge to negative declaration].)

Moreover, despite Plaintiff’s urging, the Court refused to follow the decision in Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal.App.4th 1184, where the Fifth District Court of Appeal applied the less deferential de novo standard of review to an EIR’s analysis of urban decay impacts.  In City of Bakersfield, the Court characterized the issue as a failure “to comply with the information disclosure provisions of CEQA” by omitting “any meaningful consideration of the question whether the shopping centers could, individually or cumulatively, trigger a series of events that ultimately cause urban decay.”  (Id. at 1208; see also Banning Ranch Conservancy v. City of Newport Beach (2017) 2 Cal.5th 918, 935 [where an EIR omits “essential information,” the omission is treated as a “procedural question subject to de novo review.”].)

The Court did seem to follow the legal standards in other recent cases treating statements presented about urban decay as speculative and not the sort evidence of physical impacts requiring CEQA review.   

General Plan Inconsistency Claim

Plaintiff argued that LU-P-67 conflicts with at least eight goals and policies in the General Plan related to general concepts around maintaining the City’s role as  a regional commercial and industrial center, enhancing the City’s retail base, striving for a balanced mix of local, regional, and national retailers, attracting new retail projects, and supporting infill development.  Plaintiff argued that LU-P-67 conflicted with these goals and policies because it will prohibit development on properties located in neighborhood commercial zones, some of which are surrounded by urbanized development.  Plaintiff relied on the Report as evidence of the rigidity of LU-P-67’s square footage restriction.

General plans “must be internally consistent.” (Orange Citizens for Parks & Recreation v. Superior Court (2016) 2 Cal.5th 141, 153.)  Similarly, amendments to the general plan must be internally consistent and cannot cause the general plan to become internally inconsistent.  (DeVita v. County of Napa (1995) 9 Cal.4th 763, 796, fn. 12.)  However, a general plan may not be invalidated “based on violation of the internal consistency and correlation requirements unless, based on the evidence before the city council, a reasonable person could not conclude that the plan is internally consistent or correlative.”  (South Orange County Wastewater Authority v. City of Dana Point (2011) 196 Cal.App.4th 1604, 1619, internal quotations omitted.)

The Court swiftly rejected Plaintiff’s argument that LU-P-67 was inconsistent with other provisions of the General Plan, finding that the General Plan seeks to encourage different types of development including the type advanced under LU-P-67, and that the City could have reasonably concluded that the tenant size cap would not impede infill development.  The Court’s decision reflects the high level of deference afforded to local government policy decisions in amending general plans.

Clean Sweep for City of San Diego in Challenge to Approval of Private School

On December 20, 2017, the Fourth District Court of Appeal delivered a solid win for the City of San Diego in a multi-faceted challenge to its approval of a private school pursuant to a Mitigated Negative Declaration (“MND”).  In Clews Land and Livestock LLC et al. v. City of San Diego, Petitioners Clews Land and Livestock, et al. (“CLL”) argued  that an Environmental Impact Report (EIR) was required because of significant impacts in the areas of fire hazards, traffic, noise, recreation, and historic resources, and because the final MND included impacts not disclosed in the draft.  CLL further argued that the City’s approval violated the applicable community land use plan and historic resources provisions of the San Diego Municipal Code (SDMC.). Continue Reading

Second Appellate District Rejects Challenge to EIR Alternatives Analysis for West Hollywood Redevelopment Project

On December 22, the Second Appellate District certified for publication its November 30 opinion in Los Angeles Conservancy v. City of West Hollywood, concerning a proposed mixed-use redevelopment of the “Melrose Triangle” site that would result in demolition of the existing buildings.  In this decision, the Court rejected the Conservancy’s claim that the City gave short-shrift to an alternative that would have preserved one of the buildings, which is located at 9080 Santa Monica Boulevard and may be eligible for listing on the California Register of Historical Resources as an exemplar of “Streamline Moderne Style” (the “9080 Building”).  Notably, the Court’s ruling reaffirmed prior case law holding that a lead agency may find an alternative to be infeasible where it is impractical or undesirable for reasons of public policy. Continue Reading

First Appellate District Rejects Urban Decay Claim, Upholds EIR for New El Dorado County Courthouse

Since the 2004 decision in Bakersfield Citizens for Local Control v. City of Bakersfield, CEQA petitioners challenging development projects often assert that the lead agency has failed to adequately analyze urban decay (“blight”) impacts on historic downtown areas or other existing business districts.  However, such claims have met with limited success.  (See, for example, our blog posts concerning the 2016 decisions in Joshua Tree Downtown Business Alliance v. County of San Bernardino and Naraghi Lakes Neighborhood Preservation Association v. City of Modesto.)  The First Appellate District has just issued another decision addressing—and rejecting—urban decay claims.  In Placerville Historic Preservation League v. Judicial Council of California (filed 9/15/17; certified for publication 10/16/17), the Court upheld the EIR prepared for the new El Dorado County courthouse in the City of Placerville, finding that the EIR’s analysis of potential urban decay impacts was supported by substantial evidence. Continue Reading

Fourth Appellate District Upholds City of San Diego’s Rejection of Subdivision Project and Related MND

CEQA decisions usually arise in the context of a challenge to a lead agency’s approval of a project and a related CEQA document.  However, in a recent decision, Kutzke v. City of San Diego (2017) 11 Cal.App.5th 1034 (certified for publication on May 23, 2017), the Fourth Appellate District resolved a court action arising from a lead agency’s rejection of a project and its MND, and did so in favor of the lead agency. Continue Reading

“Self-Governance,” Not “Regulation”: California Supreme Court Rules No Federal Preemption of CEQA under ICCTA for State-Owned Rail Projects

On July 27, the California Supreme Court released its long-awaited decision in Friends of the Eel River v. North Coast Railroad Authority (S222472), resolving a split among the State’s courts of appeal—but arguably conflicting with federal precedent—with respect to the scope of federal preemption of CEQA with respect to state-owned rail projects.

We discussed the oral arguments in this case in a prior blog post.  In a 6-1 opinion authored by Chief Justice Cantil-Sakauye (with Justice Corrigan dissenting), the Court has now held that application of CEQA to a railroad project undertaken by a state entity, North Coast Railroad Authority (“NCRA”), was not preempted by the federal Interstate Commerce Commission Termination Act (“ICCTA”).  The Court relied on a distinction between a state’s “regulation” of private railroad operations (which is clearly preempted) and a state’s “self-governance” with respect to a state-owned rail project (which, the Court held, is not preempted).  As a result, the Court reversed the judgment of the First Appellate District and remanded the matter for further proceedings on petitioners’ CEQA claims. Continue Reading

DWR Certifies EIR for WaterFix, Triggering 30-Day Deadline for Opponents to File Suit

On July 21, 2017, the California Department of Water Resources (“DWR”) certified the final environmental document and issued its Notice of Determination for the California WaterFix, a significant new water infrastructure component proposed by DWR and United States Bureau of Reclamation. DWR’s action triggered a 30-day statute of limitations to raise CEQA challenges to the project, which has been the subject of steadily accelerating public discussion and debate over the last two years. Continue Reading

State Legislature Reaches Agreement on Extension of the Greenhouse Gas Cap-and-Trade Program; Stops the Bay Area Air Quality Management District’s Proposed Cap (and-No-Trade)

On July 17, 2017 the California legislature approved an extension of the state’s greenhouse gas cap-and-trade program from 2020 to 2030.  Cap-and-trade is a key program in the state’s efforts to meets its 2030 greenhouse gas reduction goals of 40% below 1990 levels covering emissions from industrial facilities and electricity and natural gas suppliers.

Governor Brown and legislative leaders have worked for several months on a package of bills that could achieve a 2/3 majority in the legislature, insulating the cap-and-trade program from additional challenges under Proposition 13 and providing the state with considerable discretion in spending revenues generated by the program.  This grand bargain includes a cap on the price of emission allowances sold under the program, measures to reduce emissions of non-greenhouse gas pollutants from industrial facilities and refineries, an increase in maximum penalty for violations of state air rules, and tax credits for energy producers.  In extending cap-and-trade, the legislation also blocks an effort by the Bay Area Air Quality Management District (“BAAQMD”) to cap greenhouse gas emissions from Bay Area refineries. Continue Reading

California Supreme Court Again Considers Climate Change in the Context of CEQA, But Fails to Resolve Important Uncertainties for Future Environmental Review

Today, in an opinion authored by Justice Liu, the California Supreme Court ruled that the greenhouse gas analysis in an environmental impact report (“EIR”) prepared for the San Diego Association of Government’s (“SANDAG”) regional transportation plan (“RTP”) did not violate the California Environmental Quality Act (“CEQA”), but did little to resolve uncertainties in addressing climate change issues under CEQA.  As we previewed in our May discussion of the oral argument in this case, Cleveland National Forest Foundation v. San Diego Association of Governments, the majority of the Court found that SANDAG’s discussion of the impacts of greenhouse gas emissions was adequate given the state of science and guidance, at least at the time of the issuance of the RTP in 2011. The Supreme Court cautioned, however, that this EIR should not be considered a template for future projects as developing science and regulations will likely provide further guidance on this issue. Continue Reading

Sixth District Upholds County Zoning Updates Against Piecemealing Claim, Rejects Challenge to Negative Declaration Based on “Wholly Speculative” Impacts

In March 2017, the Sixth Appellate District issued its decision in Aptos Council v. County of Santa Cruz, which rejected a two-pronged challenge to the County of Santa Cruz’s adoption of three zoning ordinances revising existing sections of the County zoning code, including an ordinance altering height, density, and parking requirements for hotels.  In affirming denial of the petition for writ of mandate, the appellate court held that (1) the County did not engage in improper “piecemeal” review of the three ordinances under CEQA, and (2) the negative declaration for the hotel ordinance did not need to consider environmental impacts that could result from future hotel development, where those impacts were not reasonably foreseeable.  Continue Reading