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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.).

The Court rejected CLL’s arguments on procedural and substantive grounds, finding that CLL failed to exhaust administrative remedies and that the City’s approval complied with CEQA and applicable land use laws.

First, the Court held that CLL had failed to exhaust administrative remedies, and in making that finding, concluded that the City’s administrative appeals process did not violate CEQA.  CLL failed to properly navigate a convoluted “bifurcated” appeals process that required it to administratively appeal the hearing officer’s approval of the project to the Planning Commission and the City Council simultaneously.  CLL, misunderstanding the process, filed only the planning commission appeal, which was not the proper vehicle for review of the “environmental” determination.  The Court rejected the argument that this procedure violates CEQA and declined to excuse CLL’s lack of compliance.

CLL also argued that its failure to comply should be excused because the City’s own bulletin inaccurately described the two appeals processes.  Despite acknowledging the inaccurate communications from the City, the Court found that CLL had failed to properly frame this argument as a question of equitable estoppel, and thus declined to excuse CLL’s failure to exhaust.

Despite finding that CLL had failed to exhaust, the Court proceeded to uphold the City’s decision to approve the project via an MND, rejecting CLL’s arguments that the project would have significant impacts as to fire hazards, traffic and transportation, noise, recreation, and historic resources.  The Court went on to find that the addition of voluntary measures that are environmentally beneficial did not require recirculation of the MND where they were not added to project “to reduce significant effects on the environment.”

Finally, the court rejected CLL’s arguments that the City had not abused its discretion by finding the project exempt from certain historical resources regulations in the SDMC, or by concluding that the project was consistent with the Neighborhood Precise Plan. The Court found that “the City could reasonably conclude that the project was consistent with the Precise Plan and its open space designation because the proposed school will be built on already developed land, next to a large commercial horse farm, and will be consistent with the historic nature of the site.”

The petitioners clearly stumbled through the administrative proceedings and failed to present sufficient evidence to counter the City’s conclusions in its MND.  Nonetheless, it is heartening to see the Fourth District recognizing that an MND is, in fact, the appropriate vehicle for a project that the Court described as “relatively modest and located on already-developed land,” even if that project is controversial.