By: Cori Badgley

In yet another CEQA case involving whether an agreement between a tribe and a city constitutes a project, the court held that CEQA did not apply to an agreement requiring the city’s formal support of a proposed casino and the tribe to pay for future, as of yet undefined, city services and improvements.

In order to ensure that the agency does not stray from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (“CEQA”), the agency must first ask itself in relation to any action: “Is it a project?” Only “projects” are subject to CEQA, and therefore, if it is not a project, no environmental review is necessary. In Parchester Village Neighborhood Council v. City of Richmond (2010) __ Cal.App.4th __, the city determined that a municipal services agreement entered into between the Scotts Valley Band of Pomo Indians of California (“tribe”) and the city did not constitute a project and CEQA did not apply. Various neighborhood and environmental groups brought a writ of mandate challenging the city’s determination.

Agreements between federally recognized tribes and municipalities relating to the acquisition of trust lands for the construction of casinos have a history of litigation in the CEQA arena. Although the courts have determined that the acquisition of the lands and the construction of the casinos do not constitute projects under CEQA, the agreement may require environmental review, if the agreement commits the agency to a specific action. (See County of Amador v. City of Plymouth (2007) 149 Cal.App.4th 1089 [agreement was a project because the city had to vacate a city road and remodel a fire station]; Citizens to Enforce CEQA v. City of Rohnert Park (2005) 131 Cal.App.4th 1594 [agreement not a project because it merely authorized a funding mechanism].)

In this case, the agreement required the tribe to make payments in exchange for fire, police and public works services, and the city had to support the tribe’s fee-to-trust application submitted to the federal government. The agreement specifically stated that it would not result in any physical changes to the environment, and the city would comply with CEQA at a future date for any project requiring environmental review.

The petitioners asserted that the following actions constituted a “project” under CEQA, and therefore, the court should void the agreement and require environmental review: the proposed construction of the casino, the city’s support of the fee-to-trust application, fire improvements, and transportation improvements. The court held that the agreement did not constitute a project because the city had no authority over the casino and the remainder of the agreement merely involved funding mechanisms.

The court began its discussion by quoting Public Resources Code § 21065, which defines a project as:

An activity which may cause either a direct physical change in the environment, and which is any of the following: (a) An activity directly undertaken by any public agency. (b) An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans or other forms of assistance from one or more public agencies. (c) An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.

In relation to petitioners’ first and second contentions regarding the casino and the city’s support of the fee-to-trust application, the court cited to the previous decisions concerning agreements with tribes and found that the same principles applied in this case. The city had no authority over the fee-to-trust application or the construction of the casino. Although the federal government has to consult with the city, this does not amount to any power vested in the city regarding whether the application is granted. Additionally, the court held that the agreement’s requirement that the city support the tribe’s proposed application and casino did not change the fact that the city had no authority over the tribe’s proposed actions.

As to the agreement’s provisions regarding fire services and transportation, the court determined that these provisions merely provided funding mechanisms and were too speculative to constitute a “project.” Petitioners specifically asserted that the agreement requires the establishment of a Fire Protection and Emergency Response Agreement (“FPERA”), which would result in the construction of certain fire facilities, and the addition of certain turn lanes, unless there are other forms of mitigation to mitigate traffic. According to petitioners, both of these requirements commit the city to specified actions. The court disagreed.

The court found that the potential construction of fire facilities in the future was too speculative to constitute a project. The court stated: “As a practical matter, we find it difficult to conceive of how an EIR could be used to sensibly evaluate a project that has not yet been assigned a physical location.” (Id. at 16.)

In relation to the traffic improvements, the court noted that most of the mitigation items came out of the DEIS process and none of the traffic improvements were within the city’s boundaries. Therefore, the city has no authority over these improvements. If, as petitioners assert, the city becomes the agency to build or accept the improvements, then the improvement may constitute a “project.” However, according to the court, the possibility that the city would be involved in the improvements was speculative at this time.

Despite petitioners various challenges, the court held that the agreement did not constitute a project under CEQA. The city’s mere show of support for the tribe’s proposed casino and the tribe’s agreement to pay the city for certain future services did not fit into the definition of a project under Public Resources Code § 21065.

Cori M. Badgley is an 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.