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In Banning Ranch Conservancy v. City of Newport Beach (2012) 2012 Cal.App.LEXIS 1259, the Fourth District Court of Appeal issued a decision upholding the trial court’s denial of Banning Ranch Conservancy’s challenge to the City of Newport Beach’s (City) environmental impact report (EIR) for Sunset Ridge Park (Park Project).  Petitioner alleged that the Park EIR failed to comply with the California Environmental Quality Act (CEQA) because, to avoid improper piecemealing, the Park Project should have been evaluated in conjunction with a pending residential and commercial development project proposed on an adjacent property (Housing Project).  Petitioner also alleged the EIR inadequately analyzed five issues relating to the Park Project: (1) the cumulative traffic impact, (2) the growth-inducing impact, (3) the cumulative biological impact, (4) the impact on habitat for the California gnatcatcher, and (5) its consistency with the Coastal Act.  The court rejected each of Petitioner’s arguments.

In reviewing case law concerning piecemealing the court identified three potential categories.  First, there may be improper piecemealing when the purpose of the reviewed project is to be the first step toward future development. Second, there may be improper piecemealing when the reviewed project legally compels or practically presumes completion of another action.  Third, an agency may not be guilty of piecemealing when the projects have different proponents, serve different purposes, or can be implemented independently.

Here, the court concluded the Park Project and the Housing Project most closely fit into the third category.  The court acknowledged that the Housing Project may make reasonably foreseeable changes to the scope and nature of the Park Project due to the fact that the access road to the Park may be designed in a manner that anticipates the potential construction of the Housing Project. However, to constitute piecemealing the court stated that the Housing Project must be a reasonably foreseeable consequence of the Park Project.  While the roadway would ease the way for the Housing Project, the court found that “the park’s access road is only a baby step toward the [Housing] project.”  In light of its relatively small benefit, and the facts that the projects have different proponents, serve different purposes, and may be constructed independently of each other, the court held that the City did not improperly piecemeal the projects by analyzing them separately.

In dicta the court stated further that some tipping point exists at which the Park Project would do so much of the work needed by the Housing Project that the two projects would become one. Their implementation would be sufficiently interdependent in practice, even if theoretically separable, and a piecemealing challenge would be well founded.  But, the court found that the “baby steps taken here fall short of that point.”

Turning to Petitioner’s additional CEQA arguments, the court dismissed each quickly.  First, Petitioner argued that the EIR failed to properly evaluate the cumulative impacts of the Park and Housing Projects.  The court concluded substantial evidence in the record demonstrated these cumulative impacts were considered in the EIR.   The court acknowledged that the impact analysis “could have been set forth more directly.”  However, an EIR need not achieve “perfection” and the analysis was adequate.

Second, Petitioner argued that the EIR improperly concludes the Park Project will have no growth inducing impacts.  The court concluded that the need for additional park facilities is documented in the City’s General Plan.  Moreover, the Housing Project was proposed by the developer before the Park Project was proposed by the City.  The court found that the Park Project could not induce a project that was already being planned.

Third, Petitioner alleged that the draft EIR was inadequate because the cumulative biological impact analysis did not mention the Housing Project.  However, the final EIR clarified the manner in which the draft EIR accounted for the Housing Project and listed five reasons the projects would not cumulatively result in a significant biological impact.  The court held that, with the clarifications in the final EIR, the EIR sufficiently satisfied its dual role as an informational document and a document of accountability.

Fourth, Petitioner asserted the EIR downplayed the Park Project’s impact on California gnatcatcher habitat.  The court found that no case law supports the conclusion that where critical habitat is impacted by a project, the project’s impact is per se significant.  Instead, the court explained that to determine if the impact is significant the question is whether the project as mitigated will have a “potential substantial impact on endangered, rare or threatened species…”  If a potential impact is not found to be substantial, then it is not a significant impact.  The court explained that the determination of substantiality is a question of fact reviewed under the substantial evidence test.  Applying the substantial evidence test, the court held that the “observations and opinions of the City’s biologist” sufficiently supported the determination that the project’s impact to California gnatcatcher habitat was less than significant.  Although Petitioner contended the two to one ratio proposed to mitigate impacts to California gnatcatcher habitat was insufficient, the court stated that “this is the type of second-guessing that [a court] will not do on appeal.”  The court also noted that in developing mitigation a lead agency is not required to “acquiesce to different mitigation measures proposed by the United States Army Corps of Engineers or anyone else.”

Finally, Petitioner argued that the EIR failed to disclose the Project’s inconsistency with the Coastal Act of 1976 (Pub. Resources Code, § 30000 et seq.).  Petitioner’s argument was premised on two theories.  First, Petitioner alleged the Coastal Commission intended to designate the project area as environmentally sensitive habitat areas (ESHAs).  The court rejected that this potential change in designation was relevant.  The court explained that there are no inconsistencies at the moment.  Second, Petitioner alleged that the project area included wetlands.  The biological technical report prepared for the EIR determined that the site did not include wetlands as defined by the Coastal Act.  To contradict the technical report, Petitioner pointed to a comment by a City Planner acknowledging that coastal staff may determine the site contains wetlands.  But the court stated that the question is whether substantial evidence supports the City’s approval of the EIR, not whether “an opposite conclusion would have been equally or more reasonable.”  Because under the substantial evidence standard of review the court was not permitted to “weigh conflicting evidence and determine who has the better argument” the court held that the biological technical report sufficiently supported the conclusion in the EIR.

Key Point:

Projects with different proponents, different purposes, and which can be implemented independently, typically can be analyzed separately for the purposes of CEQA without violating the rule against piecemealed review.

The CEQA Guidelines provide that CEQA “must not be subverted into an instrument for the oppression and delay of social, economic, or recreational development or advancement.” (CEQA Guidelines, § 15003, subd. (j).)  In Banning Ranch, supra, Petitioner’s attempted to derail the Housing Project before it got off the ground by attacking a Park Project that, once developed, would preserve open space and provide recreational activities for the general public.  CEQA reform is necessary to provide consistency and clarity in interpreting the statute and to discourage litigation where the statute has been carefully complied with.

Written By: Tina Thomas and Christopher Butcher
For questions relating to this blog post or any other California land use, environmental and/or planning issues contact Thomas Law Group at (916) 287-9292.

The information presented in this article should not be construed to be formal legal advice by Thomas Law Group, nor the formation of a lawyer/client relationship. Readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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