By Katherine Hart

On August 27, 2009, the Court of Appeal, Third Appellate District in California issued the first ever CEQA decision on what an energy conservation impacts analysis can entail. In Tracy First v. City of Tracy, et al., the City of Tracy (“City”) prepared and certified an EIR and approved a project which included 1) a specific plan amendment to change the designation of property from industrial to commercial, and 2) a conditional use permit (“CUP”) to build a 95,900 square foot WinCo Foods store. Petitioner Tracy First sued to challenge the certification of the EIR and the approval of the project on the grounds the City failed to look at issues of energy conservation, alternatives, and extraterritorial traffic impacts.

Background Facts

The property for which the project was proposed contained two parcels, both of which were to be rezoned. The CUP pertained to the southern parcel where WinCo proposed to build a store. No specific development was proposed for the northern parcel, but the EIR evaluated some of the impacts of a hypothetical commercial development approximately 140,000 square feet in size (e.g., public services, traffic, water service, wildlife). The Draft EIR discussed two unavoidable significant impacts: air quality and traffic, and identified four project alternatives.

After circulating the Draft EIR, responding to comments and holding a public hearing, the Planning Commission approved the CUP and recommended the City Council certify the EIR and approves amendment to the specific plan. A member of Petitioner’s group appealed the grant of the CUP to the City Council.

At the City Council meeting, the Council took testimony on the project and environmental document and voted to continue the consideration of the EIR until a later date. The Council requested that staff provide further information on the project’s potential to cause urban decay, traffic impacts, air quality impacts, energy impacts, and approved funds to prepare an amendment to the EIR.

The amendment to the EIR addressed urban decay, traffic, air quality, and energy conservation and was recirculated for public comment. After recirculation, a hearing at which the City took public comments, the City Council certified the amended EIR and approved the specific plan amendment and CUP.

Energy Impacts

Tracy First argued that the energy analysis in the EIR was inadequate because: 1) it didn’t address the northern parcel in the energy consumption calculations; 2) the analysis relied on state building energy efficiency standards to conclude there would be no significant energy impacts; and 3) the City’s conclusion of no significant impacts was not supported by substantial evidence in the record because the City’s expert’s opinion was not factually supported and the City did not include an analysis as outlined in Appendix F of the Guidelines.

The EIR included eight pages of analysis of energy impacts associated with the project. The analysis focused on the specific impacts of the WinCo parcel. Since no development application had been deemed complete for the northern parcel (although one had been submitted), the EIR contained only a general discussion of energy conservation measures to be considered when the northern parcel was to be built out. The court of appeal found this approach valid under CEQA.

Furthermore, the court of appeal found that the City properly relied upon the California Building Energy Efficiency Standards in determining that the project would not have a significant energy impact.

Finally, the court of appeal dismissed Petitioner’s claims that the City’s expert opinion concluding the project would not result in wasteful, inefficient and unnecessary consumption of energy was incorrect because Petitioner did not show how the City’s expert opinion was incorrect. With respect to the Appendix F argument, the court of appeal noted that the EIR discussed a number of issues listed in the Appendix. Because Petitioner did not point to other issues that should have been discussed, Petitioner failed to bear its burden of proof that the City abused its discretion.

Reasonable Range of Alternatives 

Tracy First argued that the alternatives analysis in the EIR was insufficient because it did not contain a reduced store size alternative. Both the trial and appellate courts dismissed Petitioners’ claim because there was no evidence in the record to indicate that a reduced-size alternative would substantially diminish any of the significant environmental impacts of the project. Petitioners cited to Preservation Action Council v. City of San Jose (2006) 141 Cal.App.4th 1336, which the court of appeal distinguished on the grounds that the reduced-size alternative in Preservation Action Council would have saved an historic building, thus eliminating an adverse environmental impact. Such was not the case before the City of Tracy with respect to the WinCo store since the site was unimproved.

Extraterritorial Intersection Improvements

Tracy First alleged the City’s EIR should have required improvements or funding for two intersections within San Joaquin County’s jurisdiction that would be impacted by the project. Dismissing Petitioner’s allegations, the court of appeal found the City was not required to provide funding for improvements to intersections in San Joaquin County where there was no existing plan for the county to improve the intersections. It distinguished the City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4th 341, 359 case on the grounds that the City of Marina cases focused on existing plans for improvements to the former base and that the agency there had a statutory obligation to make those improvements unlike in the case before it where the City had no plans to insure that mitigation funds would go toward mitigation, and thus, such mitigation was infeasible. The court also rejected the Petitioner’s argument that absent an enforceable plan, WinCo had a duty to mitigate its extraterritorial impacts by paying a mitigation fee to the City, which in turn was required to prepare a sufficient plan to assure mitigation occurred. There is no CEQA statute or case law that requires such action. Further, the City has no jurisdiction over the County and its intersections so without a plan in place; the City could never ensure mitigation would occur.

Katherine J. Hart is a senior associate 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, 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.