By Glen C. Hansen
Due to increasing regulatory complexity, development projects may require multiple approvals, issued over an extended time period. Lead and responsible agencies frequently, but not always, file separate notices of determination (“NOD”) for each approval. When that happens, interested parties are challenged as to the optimal time period to file suit. In a multiple NOD scenario, a later filed petition will be considered under a less favorable standard of judicial review, which could lead to a very different outcome in the litigation. Such a result is illustrated by the recent case of Citizens For A Megaplex-Free Alameda v. City of Alameda (“Megaplex”) (March 29, 2007) 149 Cal.App.4th 91, review denied (Cal., June 27, 2007) 2007 Cal.LEXIS 6959.
In Megaplex, the City of Alameda approved a project involving the rehabilitation of the Alameda Theatre and the construction of an adjacent cineplex and parking structure. In 2000, the City’s Community Improvement Commission (“Commission”) executed an exclusive negotiation agreement with Real Party In Interest Alameda Entertainment Associates (“Associates”) for the purpose of designing the project and drafting a Disposition and Development Agreement (“DDA”) for the project. The City subsequently determined that the modified project did not require preparation of an EIR. On May 3, 2005, the City Council and Commission voted to adopt a mitigated negative declaration (“MND”) for the project and approve the execution of the DDA with Associates. On May 5, 2005, the City filed an NOD
The City issued subsequent approvals and NODs related to the project. On August 16, 2005, the City Council adopted a resolution that upheld the planning board’s approval of the designs for the cineplex and the designs and use permit for the parking garage. On November 1, 2005, the City Council adopted a resolution that upheld the planning board’s approval of the use permit for the cineplex. In both its August 16, 2005 and November 1, 2005 resolutions, the City Council found that since the adoption of the MND on May 3, 2005, there had been no change to the project or substantial changes in circumstances or new information that would warrant subsequent CEQA analysis. The City filed separate NODs for the actions taken on August 16, 2005 and November 1, 2005.
On October 3, 2005, Citizens for a Megaplex-Free Alameda (“Citizens”) filed a petition for writ of mandamus against the City and Associates. Citizens alleged (1) that the City should have prepared an EIR before it approved the project; (2) that the City failed to address significant new information provided in an August 2005 report prepared by a local historian; and (3) that the City’s findings certifying the MND were not supported by substantial evidence in the record. The trial court rejected Citizens’ arguments and denied the petition. The Court of Appeal affirmed.
In its decision, the Court of Appeal examined two key issues:
- Was the City’s authorization of the DDA in May 2005 an “approval” of a “project” that initiated the 30-day statute of limitations in Public Resources Code section 21167, subdivision (b), for the filing a petition for judicial review?
- Was the historian’s report in August 2005 “new information” that warranted the preparation of an EIR after the MND was adopted?
As to the first issue, Citizens argued that the May 2005 resolution to authorize the execution of the DDA was not an “approval” of a “project” under CEQA because the DDA contained a number of contingencies and required further discretionary approvals from the City relating to use and design. The Court of Appeal disagreed. The May 2005 decision constituted an “approval” because it was the earliest commitment by the City to a “definite course of action.” The DDA committed the City to issue grants, loans and other forms of financial assistance. Furthermore, the restoration and construction work agreed to by the parties to the DDA constituted a “project” under CEQA because it was the “underlying activity” that resulted from the agency’s approval in May 2005.
That conclusion by the Court of Appeal was not altered by the fact that further decisions had to be made before the theatre was renovated and the cineplex and parking structure were constructed. The Court of Appeal rejected Citizen’s reliance on the earlier case of El Dorado Union High School Dist. V. City of Placerville (1983) 144 Cal.App.3d 123. In El Dorado, the court held that, even though the City of Placerville had filed one NOD for its approval of the subject property’s rezoning and a second NOD for the approval of the subdivision map, the school district was not precluded from challenging the subdivision map approval if it filed an action within 30 days of the second NOD. The Megaplex court clarified that the El Doradocase does not permit a challenge to a decision that was the subject of the first NOD after the 30-day limitations period on the first NOD had expired. Applying the El Doradodecision to the case at hand, the Megaplex court explained that the City’s filing of the subsequent NODs for the resolutions passed in August and November 2005 did not extend the limitations period for challenging the MND that was the subject of the NOD filed on May 5, 2005.
Because the City’s decisions in May 2005 constituted “approval” of the “project,” the 30-day statute of limitations on Citizen’s challenge to the DDA and to the adequacy of the environmental review under the MND began to run on May 5, 2005. However, Citizens did not file its action until October 2005, well after the statute of limitations had expired. The Court of Appeal therefore held that the proper standard of review was not the “fair argument” standard reserved for timely petitions challenging MNDs. (See Pub. Res. Code §21151, subd. (a) [EIR must be prepared in the first instance “whenever it can be fairly argued on the basis of substantial evidence that the project may have significant environmental impact.”])
Instead, the Court of Appeal held that Citizens’ untimely petition was governed by the more restrictive “substantial evidence” standard of review. Under that standard, an agency cannot require a subsequent EIR after a MND has been adopted unless one or more of the following conditions occurs: (a) substantial changes are proposed in the project; (b) substantial changes occur with respect to the circumstances under which the project is being undertaken; or (c) new information, which was not known and could not have been known at the time the MND was adopted, becomes available. (Pub. Res. Code §21166; CEQA Guidelines, §15162, subd. (a) In applying that standard, the court determines whether substantial evidence exists in the record to support an agency’s determination whether any one of the three conditions are met.
In order to meet its burden under that substantial evidence standard, Citizens argued that a subsequent EIR was required because “new information” in the historian’s August 2005 report and in comments by the historical advisory board in June 2005 was not available at the time the MND was adopted in May 2005. The Court of Appeal disagreed.
The Court of Appeal held that there was substantial evidence in the record to support the City’s determination that there was no new information that would have required preparation of an EIR. Citizens failed to meet its burden of establishing why, with the exercise of reasonable diligence, the purported new information could not have been known prior to the adoption of the MND in May 2005. The record demonstrated that the historical report referred to information that was in existence prior to the adoption of the MND.
Had Citizens filed its action within 30 days after the NOD was filed on May 5, 2005, and had Citizens presented the historical information to the City prior to the May 2005 decision, the outcome in the case could have been much different. Under the “fair argument” standard of review, the burden would have been on the City to demonstrate why the historical information described by Citizens did not warrant the preparation of an EIR.
Megaplex provides the following lessons: First, interested parties need to file a petition for review within 30 days after the filing of the NOD for the decision that the parties seek to challenge under CEQA. Even if a project involves future discretionary approvals by an agency that will clarify the project’s details, challengers should not wait until those subsequent decisions are made before filing an action under CEQA. Second, interested parties need to present all of their information to the relevant agencies before the agency decisions are made. Third, while not focus of the court’s decision, Megaplex reminds us of the importance of filing multiple sequential NODs in order to utilize shorter statutes of limitation.
Glen Hansen is an associate with Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, environmental and 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, nor 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.