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The Fourth District Court of Appeal, in Olen Properties Corp. v. City of Newport Beach (2023) ___Cal.App.5th___, upheld the City of Newport Beach’s approval of a 312-unit apartment complex challenged by a neighboring commercial development owner. To comply with CEQA, the City of Newport Beach prepared an addendum to an existing environmental impact report (EIR) prepared in 2006 as part of its general plan update. Petitioner Olen Properties challenged the addendum and argued that the City was required to prepare a subsequent EIR to analyze alleged “new conditions” not addressed in the 2006 EIR. Petitioner also contended that the project was inconsistent with the City’s land use policies. The Court of Appeal rejected all of the arguments advanced by Olen Properties and upheld the trial court’s decision denying the petition for writ of mandate.

Petitioner alleged five changes or items of new information that it contended required preparation of a subsequent EIR: inconsistency with the City’s land use policies; traffic issues; hazardous materials; the property’s covenants, conditions, and restrictions; and geology/soil issues. The court applied the deferential substantial evidence standard of review and held that none of the issues gave rise to the circumstances requiring subsequent or supplemental review under Public Resources Code section 21166.

The most noteworthy holding from the case arises from the court’s discussion of traffic issues. Petitioner argued that the City erred by using the LOS measure of traffic impacts in the addendum, despite California’s adoption of CEQA Guidelines section 15064.3, which requires use of the VMT method. The City used the LOS method in the addendum because it was the measure used in the 2006 EIR. VMT and LOS measurements are incompatible and it would be difficult to compare “LOS apples with VMT oranges,” as the court states, in the addendums’ analysis. The court held that the City was not required to use the VMT method to measure traffic impacts in the addendum despite the adoption of CEQA Guidelines section 15064.3. The court reiterated the well-settled rule, citing Concerned Dublin Citizens (2013) 214 Cal.App.4th 1301, 1318–1320, that subsequent changes to the guidelines are not “new information” triggering Section 21166, so long as the impacts of the project were considered in the initial EIR. Here, the traffic impacts were analyzed in the 2006 EIR, just utilizing a different, then widely acceptable, methodology. If this rule were different, and each change to the guidelines constituted “new information,” Section 21166 would “require a new EIR nearly every time any change is made to a project, no matter how inconsequential” because of how often the guidelines are updated. Addendums remain the appropriate CEQA document to analyze project changes when none of the Section 21166 conditions exist. The City was not required to prepare a subsequent EIR for the project or undertake a VMT study of the traffic impacts.

The court’s holding on the traffic issues is an important reminder that regulatory changes do not trigger subsequent CEQA review. The case also confirms that when an addendum is prepared, it can utilize the LOS method of measuring traffic impacts if used in the original CEQA document prior to implementation of CEQA Guidelines section 15064.3.