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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.

The project involves the Judicial Council’s plan to consolidate existing courthouse operations—which are currently conducted in both a historic building in downtown Placerville and the County administrative complex—in a new building to be constructed on undeveloped land located under two miles from downtown.  The EIR, citing Bakersfield Citizens, acknowledged that withdrawal of court activity from the historic courthouse could have an impact on downtown Placerville, but concluded that urban decay was not a reasonably foreseeable significant impact of the project.  The EIR reasoned that blight in the downtown area was unlikely to occur, because (1) the City and County were committed to finding a new use for the historic courthouse that would replace the courthouse’s economic contribution to the downtown area, and (2) there were a number of retail, commercial, and office uses in the area that were not dependent on courthouse operations.

However, no economic study was performed, and a number of public commenters disputed the EIR’s non-significance finding.  One commenter stated that the project would “create an absolutely horrendous blight” and render the historic downtown area a “ghost town,” citing both an “informal poll” of local merchants, indicating that between 5 and 20 percent of their business was related to courthouse activities, and one merchant’s belief that ending judicial activities at the courthouse would “put him out of business.”  Other commenters stated that:

  • 38 businesses had closed in the downtown area within the prior 3 years;
  • between 150 and 200 persons visited the courthouse daily, spending between $1,500 and $3,000 at local businesses; and
  • the courthouse drew County residents to the downtown area who would not otherwise have visited.

The Judicial Council noted these comments, but concluded that any potential urban decay impacts were less than significant.  It certified the EIR on June 10, 2015.

In the trial court, petitioner focused its case on a claim that the EIR failed to identify urban decay as a significant environmental impact of the project.  The trial court rejected the argument and denied the petition in an opinion that the First Appellate District described as a “well-reasoned written decision that hardly needs elaboration.”

The First District then affirmed, finding substantial evidence to support the EIR’s finding concerning urban decay impacts.  The court stated that, initially:

“there is no reason to presume that urban decay would be a consequence of the project.  As defined by CEQA, urban decay is a relatively extreme economic condition.  In a dynamic urban environment, including that of a small city such as Placerville, change is commonplace.  In the absence of larger economic forces, urban decay is not the ordinary result.  On the contrary, businesses and other activities come and go for reasons of their own, without necessarily affecting the overall health of the economy.”

The Court found that the fact that 38 businesses had closed within the past 3 years did not support petitioner’s claim, but instead suggested that “the district possesses the economic vitality to tolerate significant turnover without suffering the type of physical deterioration characteristic of urban decay.”  It then determined that there was no evidence to suggest that the courthouse was critical to the economic health of the downtown area.  Finally, the Court found that the EIR contained evidence that both the City and the County were committed to finding a new use for the courthouse building:  “Given this commitment, there is every reason to believe that, after a period of transition, the building will resume its role as a source of downtown commerce,” and there was no evidence that the project would result in “long-term detriment to downtown Placerville, let alone constitute the type of catastrophe necessary to cause urban decay.”

Petitioner raised a number of arguments in the appellate court:  the EIR’s reliance on reuse of the courthouse was improper because it was not adopted as a mitigation measure; such reuse was an “unenforceable and illusory commitment”; the comments of local residents constituted unrebutted evidence of an urban decay impact; and the EIR’s finding was not supported by substantial evidence because an economic study was not performed.  However, the First District summarily rejected all of these arguments and affirmed the trial court.

This decision will likely become a touchstone for lead agencies and project applicants defending EIRs against urban decay claims.