By Katherine J. Hart
In Masonite Corporation v. County of Mendocino (July 25, 2013) 215 Cal.App.4th 230, the Court of Appeal, First Appellate District, reversed a trial court’s decision denying a petition for writ of mandate, and directed Mendocino County (County) to decertify its EIR, set aside its project approvals (a conditional use permit and reclamation plan), and prepare and circulate a supplemental EIR to address concerns related to an endangered frog, mitigation of impacts to prime agricultural farmland, and mitigation measures related to cumulative traffic impacts, for an aggregate mining project.
Granite Construction Company owns approximately 65 acres of industrial-zoned land just north of Ukiah in Mendocino County. Despite the industrial zoning, more than half of the site, 45 acres, is classified as prime farmland. The site is improved with vineyards, open space and a truck maintenance shop in the northwest corner. The Russian River borders the eastern edge of the site and Ackerman Creek on the north edge. The appellant, Masonite Corporation, owns vacant industrial property to the south of the Granite site. Kunzler Ranch Road is located on the western boundary of the site and there are commercial and industrial properties located further to the west.
In 2008, Granite applied to the County for a conditional use permit and reclamation plan to extract 3.37 million tons of aggregate from 30.3 acres over a period of 25 years. As originally proposed, the mine would operate year round, six days per week, 14 hours per day. In subsequent discussions with the North Coast Regional Water Quality Control Board, Granite agreed to suspend mining between each November and March to avoid water quality impacts. After the site is fully reclaimed, it will be available for industrial uses in the northwestern portion, and open space ponds on the remainder of the site.
The County required that an EIR be prepared, and a draft EIR was circulated for public review in September 2009. The final EIR was issued in May 2010 and identified two significant and unavoidable impacts: (1) permanent loss of prime farmland; and (2) traffic impacts in 2030. The Mendocino County Planning Commission certified the EIR and approved the CUP and reclamation plan on May 20, 2010. Masonite and Russian Riverkeeper appealed the decision to the Board of Supervisors. The Board heard and denied the appeals on July 7, 2010.
Masonite and Russian Riverkeeper timely filed petitions for writs of mandate challenging the County’s certification of the EIR and approval of the project. The trial court denied the writ petitions, and both parties appealed. Russian Riverkeeper dismissed its appeal pursuant to a settlement agreement with Granite Construction and the County.
Masonite first argued that the County should have recirculated the EIR because the project as approved had significantly greater impacts than the project as originally proposed, and because the final EIR disclosed a new significant impact on the Foothill Yellow-Legged Frog that was not sufficiently mitigated. Second, Masonite contended that the County erred in finding that conservation easements and in-lieu fees were not feasible ways to mitigate the loss of prime farmland due to the project. Third, Masonite alleged the EIR did not adequately mitigate cumulative traffic impacts on Kunzler Ranch Road.
The appellate court’s discussions regarding recirculation and mitigation for cumulative traffic impacts were not published, and thus, are not analyzed further in this article.
Conservation Easements as Mitigation for Loss of Prime Farmland
The Department of Conservation Farmland Mapping and Monitoring Program identified 45 of the 65 project acres as prime farmland. The EIR indicated that the loss of the 45 acres would be a significant and unavoidable impact that could not be feasibly mitigated. During the public review process, the Department of Conservation commented that the County could minimize the 45-acre loss by requiring the acquisition of an agricultural conservation easement on comparable land of at least equal size since the loss of prime agricultural land can have at least regional – if not statewide – significance. The County responded by incorporating the draft EIR language into the final EIR. The County made a finding that mitigation of the loss of the 45 acres would be infeasible because “an [agricultural conservation easement] does not replace the on-site resources, but rather, it addresses the indirect and cumulative effects of farmland conversion…. Because the project site is surrounded by existing and vacant industrial uses, with the exception of the west side, it is unlikely that this project would affect neighboring agricultural uses.” In so finding, the County addressed only the indirect cumulative effects of the conversion of 45 acres of prime farmland, and it never addressed the direct effects of such loss. This was a legal error on the part of the County, and as a result, the Court of Appeal applied the less deferential de novo standard of review, instead of the usual substantial evidence standard used to review the County’s finding of infeasibility.
The appellate court held as follows: “We conclude that [agricultural conservation easements] may appropriately mitigate for the direct loss of farmland when a project converts agricultural land to a nonagricultural use, even though an ACE does not replace the onsite resources. Our conclusion is reinforced by the CEQA Guidelines, case law on offsite mitigation for loss of biological resources, case law on ACEs, prevailing practice, and the public policy of this state.”
The Court of Appeal ordered the County to explore the economic feasibility of off-site agricultural conservation easements to mitigate the project’s impact on the loss of 45 acres of prime farmland.
In-Lieu Fees as Mitigation for Loss of Prime Farmland
The County did not respond to the Department’s suggestion during the public comment on the draft EIR that as an alternative to the purchase of an agricultural conservation easement, the County could mitigate the impact via in lieu fees, which could be used to purchase one or more conservation easements. In court, the County argued that it could not accept in-lieu fees because it did not have a comprehensive farmland mitigation program; thus, mitigation requiring the payment of an in-lieu fee was infeasible.
The appellate court agreed with Masonite that under CEQA Guidelines section 15088, the County was required to provide a response with a reasoned analysis. The Court of Appeal further explained that the County’s arguments regarding infeasibility were unpersuasive because the Department’s suggestion had not advocated payment of in-lieu fees to a County program, but rather through third parties that would acquire and manage the conservation easements.
The Court ordered the County to analyze the use of in-lieu fees to mitigate the loss of prime farm land.
The Masonite decision confirms previous court of appeals decisions out of the Third, Fourth and Fifth Appellate Districts on the feasibility of conservation easements in mitigating the loss of prime agricultural land. See Citizens for Open Government v. City of Lodi (2012) 205 Cal.App.4th 296; Cherry Valley Pass Acres and Neighbors v. City of Beaumont (2010) 190 Cal.App.4th 316; and Building Industry Association of Central California v. County of Stanislaus, et al. (2010) 190 Cal.App.4th 582. However, there are two additional points of interest to this case: first, the standard of review used by the Court of Appeal to review the County’s finding of infeasibility regarding agricultural conservation easements to mitigate the permanent loss of farmland; and second, the Court’s analogy between the loss of prime land and the loss of habitat.
With respect to the standard of review, as noted above, the Court of Appeal employed the de novo standard which applies to questions of law (versus the substantial evidence standard, which applies to the review of questions of fact, like infeasibility findings). It appears the Court used the de novo standard because the County made a legal determination that conservation easements were not feasible means by which to mitigate the loss of farmland, and thus, the administrative record contained no factual evidence for the Court to review regarding economic or any other infeasibility argument.
The second point of interest is a more esoteric one. Initially, I preface my comment with the fact that as I understand the Masonite decision, the Court of Appeal simply held that conservation easements can serve as feasible mitigation for the loss of prime farmland. But, the Court did not say conservation easements mitigate the loss of prime farmland to a less than significant impact. And, in fact, the Masonite case, as the cases cited within it, all conclude that the loss of prime farmland is significant and unavoidable because it is irreplaceable. With that backdrop, the Masonite court’s analogy between the loss of prime land and the loss of habitat was interesting and the first such analogy I’ve seen in a published court decision. I myself have thought of that analogy a number of times, but have always hesitated to use it. To me, the analogy begs the following question: how does the mitigation of loss of habit through conservation easements reduce the impact to less than significant, but the mitigation of loss of agricultural land through conservation easements does not? There seems to be a fundamental disconnect there. (Presumably the rationale is that one can recreate a wetland where one never existed, but cannot similarly recreate prime farmland.) Whatever the reason, the Masonite court does not answer the question.
Katherine J. Hart is senior counsel at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.