The Fourth District Court of Appeal in Historic Architecture Alliance v. City of Laguna Beach (2023) 96 Cal.App.5th 186, found that the City of Laguna Beach’s (“City”) findings for the use of the Class 31 California Environmental Quality Act (CEQA) exemption to approve the renovation and extension of a historic single-family home (“Project”), and the historical resources exception to the exemption, were subject to a single inquiry under the substantial evidence standard, as to whether the Project complied with the federal Secretary of the Interior’s Standards for the Treatment of Historic Properties (“Standards”).
The Project applicant proposed renovation and additions to a historic single-family residence in the City. After a few rounds of review, the City’s historical resources consultant found that the renovation plans for the Project complied with the federal Standards. The City’s Heritage Committee, an advisory body, recommended the City’s Design Review Board approve the Project with two alterations.
After further Project design changes, including reducing the Project size, City staff again concluded that the Project complied with the Standards, and recommended Project approval along with the adoption of Class 31 categorical exemption under CEQA for “projects limited to maintenance, repair, stabilization, rehabilitation, restoration, preservation, conservation or reconstruction of historical resources in a manner consistent with the [Standards].” (CEQA Guidelines, § 15331.) Staff also found that no exception to the exemption applied.
The City’s Design Review Board agreed with the staff recommendation to approve the Project, but a neighbor appealed to the City Council, arguing that there was a fair argument that the Project would result in a substantial adverse change in the significance of a historic resource, and hence the categorical exemption was defeated due to the exception to the CEQA exemption. However, the Council rejected the appeal, finding that the evidence showed that the Project complied with the Standards.
A local historic group, the Historic Architecture Alliance, of which the neighbor was a member, and the Laguna Beach Historic Preservation Coalition jointly challenged the City’s approval of the Project and adoption of the CEQA exemption. The trial court denied the petition, and this appeal ensued.
Appellate Court’s Opinion
The Court first reviewed the standards of review applicable in the case of a categorical exemption under CEQA. Generally, where a public agency makes a factual determination that a project falls within a categorical exemption under CEQA, the court applies the substantial evidence standard in reviewing the agency’s findings. And if the agency’s decision regarding the application of a categorical exemption is supported by substantial evidence, contradicted or uncontradicted, the court would affirm the agency’s finding. But if a project challenger wants to establish that an exception to the categorical exemptions applies under CEQA, whether that exception applies is governed by the “fair argument” standard.
Here, the Alliance argued that because the Project would have an adverse impact on a historic resource—an exception to all categorical exemptions under section 15300.2(f) of CEQA Guidelines—the fair argument standard should apply to the City’s findings. But the Court found that under CEQA Guideline section 15064.5(b)(3), adherence to the Standards for any project “shall be considered as mitigated to a level of less than a significant impact on the historic resource.” And because the City’s finding that the Project was consistent with the federal Standards was part of the determination that the Project comes within the historical resource exemption in the first place, as opposed to an evaluation of the exception to the exemption, such consistency was to be evaluated under the substantial evidence standards. The City’s finding of consistency with the Standards also included the implied finding that the project does not have a significant impact on the environment.
The Court explained that, although there are circumstances where two different standards of review may apply when there are two different determinations to be made, in this circumstance, the single inquiry to be determined was whether the Project complied with the Standards, and that such inquiry was subject to the substantial evidence standard. Because substantial evidence supported the City’s finding that the Project was consistent with the Standards, the Court upheld the CEQA exemption and lack of an exception.
The Court’s ruling here is in line with the previous CEQA case law that the substantial evidence standard applies to an agency’s determination of whether an exemption applies to a project or not. Although there may be circumstances where a second, different standard applies to exceptions to the exemption, in the case of a Class 31 categorical exemption of CEQA and a potential historic resource exception, the single inquiry for the lead agency to consider is whether a project complies with the Standards.