By Katherine J. Hart
In California Clean Energy Committee v. City of Woodland (2014) 225 Cal.App.4th 173, the Court of Appeal, Third District, held the City of Woodland’s (City) programmatic environmental impact report (EIR) was invalid on the following three grounds: (1) it failed to provide sufficient mitigation measures for urban decay impacts; (2) it failed to properly assess the feasibility of the mixed-use alternative and support the City’s rejection of the alternative; and (3) the City did not adequately study and disclose transportation, construction and operational energy impacts in the EIR. The appellate court refused to consider plaintiff’s general plan consistency arguments as they were not properly presented to the court.
Real Party in Interest and Respondent, Petrovich Development, LLC, owns 234 acres of agricultural land in Yolo County, on the border of the City of Woodland. The company also owns, previously entitled and developed the Gateway I project, consisting of roughly 49 acres of former agricultural land just adjacent to the proposed development subject of this CEQA action. The proposed project – Gateway II – was a proposal to annex 154 acres into the City, rezone it from agricultural to general commercial, and develop it into big box retail stores, three 100-room hotels, one sit-down restaurant, three fast food restaurants, an auto mall and office space.
Defendant and Appellant, City of Woodland (City), is a municipal corporation and was the CEQA lead agency which certified an EIR for, and approved the Gateway II project at issue. Notably, the City reduced the project to 61.3 acres and no more than 340,000 square feet of commercial space.
Plaintiff and Appellant, the California Clean Energy Committee (CCEC), is a California non-profit corporation headquartered in Davis which seeks to promote energy conservation, greenhouse gas reduction, and the development of clean-energy resources in California. It actively supports the application of the California Environmental Quality Act (CEQA) to energy conservation and related impacts.
CCEC challenged the City’s certification of the EIR and approval of the project pursuant to a petition for writ of mandate. The trial court denied the petition. As discussed in detail below, CCEC appealed on the following four grounds: (1) the trial court erred in holding the Gateway II project was consistent with the City’s general plan; (2) the mitigation measures in the EIR were insufficient to address the urban decay that would be caused by the Gateway II project; (3) the City failed to properly considered feasible project alternatives like the mixed-use alternative; and (4) the EIR did not properly identify and analyze potentially significant energy impacts of the Gateway II project. The City cross-appealed contending the trial court erroneously granted CCEC’s motion to tax costs, as it should have received its costs for assisting in the preparation of the administrative record. This article does not discuss this latter cost issue as that part of the decision is unpublished.
General Plan Consistency
The petition filed by CCEC did not contain a cause of action under the Planning and Zoning Law. As such, the appellate court held that CCEC failed to preserve the issue of whether the rezoning of the land for Gateway II conflicts with the City’s general plan.
Sufficiency of Mitigation Measures Related to Urban Decay
The draft EIR prepared by the City contained an urban decay impact analysis. It looked at the potential urban decay impacts of the project on Downtown Woodland, East of Downtown, and East of I-5. The draft EIR concluded that Gateway II could impact the economic health (e.g., loss of sales) and physical integrity (e.g., more vacancies) of Downtown Woodland in the near term, but that in the long term, Downtown could benefit from the project. The draft EIR proposed the following five mitigation measures to reduce all but one of the impacts to urban decay to a less than significant level: (a) the project applicant must submit a request for a master conditional use permit, which shall indicate the specific project uses shall primarily consist of regional retail uses that do not include entertainment uses and other uses that would compete with retail in downtown Woodland; (b) project applicant shall submit a market study and urban decay analysis for review and approval of the CDD; (c) prior to issuance of building permits, the project applicant shall contribute funds toward the development of a retail strategic plan, which the City would prepare; (d) prior to issuance of building permits, the project applicant would be required to contribute funds toward the preparation of an implementation strategy for the downtown specific plan. To address urban blight, the City adopted mitigation measure 4.11-3(a) to require that the City coordinate with the current owner of the County Fair Mall “to consider a strategic land use plan for the  Mall to analyze potential viable land uses for the site.” Despite the proposed mitigation measures, Impact 4.11-3 would remain significant and unavoidable according to the draft EIR.
Consideration of Project Alternatives
The draft EIR considered two alternatives: a reduced intensity alternative and a mixed use alternative. The reduced intensity alternative would have limited the project to 295,000 square feet of retail and two auto dealerships on 93 acres or less. This alternative was rejected on the grounds of economic infeasibility as the alternative would not capture leakage sales from uses not already served within the community or develop revenue generating land uses to provide jobs.
The mixed use alternative would also limit the development to 93 acres, but would still include the annexation of the entire 154 acres, however. The alternative would allow for the development of a five-acre site for 100-unit multi-family development (20 units/acre), and would include a local-serving commercial town center with 50 units above the commercial storefronts. The auto mall would be reduced from multiple car dealerships to two. The draft EIR stated that the mixed use alternative would decrease the development of roadways, driveway, and parking areas, as compared to the project, and would reduce the commercial trips generated by the project; however, it would result in increased trips due to the residential component. Thus, the draft EIR assumed the transportation and circulation impacts of the alternative would be similar to the proposed project. In the end, the City rejected the mixed use alternative as infeasible because it would have greater environmental impacts than the proposed project with respect to services and utilities.
The appellate court held that the EIR contained no evidence that the mixed use alternative would have similar or greater environmental impacts than the proposed project. As approved, the project was significantly reduced in size from 154 acres to 61.3 acres, yet the City failed to explain why the mixed use alternative of 93 acres was deemed economically infeasible when the project as approved would develop only 61.3 acres. This was a fatal flaw under CEQA.
Energy Impacts Analysis
The draft EIR stated that the project would produce a demand for approximately 10,504,000 kWh of electricity annually and 29,896,000 cubic feet of natural gas annually. Further, the draft EIR disclosed that the project would generate 40,051 new vehicle trips per day, 40 percent of which would be regional in nature. The draft EIR explained the project would be constructed pursuant to the newest Building Code standards for energy conservation, and concluded on this basis, that the project would have less than significant impacts on energy resources. The EIR never contemplated transportation energy impacts.
During the EIR process CCEC relayed concerns to the City regarding the potential energy impacts of the project. Specifically, CCEC noted that the construction and operation of the project would involve the use of diesel fuel and electricity, but no cumulative evaluation of these energy resources was provided in the draft EIR. Further, as the appellate court felt compelled to highlight, the draft EIR contained less than one page of analysis on energy impacts. While the court noted the high likelihood that a reduction in greenhouse gas emissions would correlate to a reduction in energy impacts, the court also noted that it was not permitted to assume the overlap under CEQA’s study and mitigation requirements. The fact that the EIR failed to consider the energy impacts of the 40,451 new vehicle trips per day, and that compliance with the new Building Code standards would only apply to the new commercial buildings (e.g., not the operational and construction energy impacts) was improper under CEQA. Finally, the City’s EIR did not identify any investigation into renewable energy options that might apply to the proposed project (e.g., solar panels, wind turbine, etc.).
A party cannot maintain an action alleging that the EIR does not comply with the environmental quality division of the Public Resources Code “unless the alleged grounds for noncompliance with this division were presented to the public agency orally or in writing by any person during the public comment period provided by this division or prior to the close of the public hearing on the project before the issuance of the notice of determination.” (Pub. Resources Code, § 21177, subd. (a).) “ ‘[T]he objections must be sufficiently specific so that the agency has the opportunity to evaluate and respond to them.’ [Citation.]” (Tracy First v. City of Tracy (2009) 177 Cal. App. 4th 912, 926 citing to Porterville Citizens for Responsible Hillside Development v. City of Porterville (2007) 157 Cal.App.4th 885, 909 [holding that Tracy First failed to exhaust its administrative remedies with respect to an argument that the alternatives listed in the EIR were flawed despite two comments that the EIR did not provide a reasonable range of alternatives to the proposed project because no reduced-sized alternative was consider].)
The City argued that CCEC failed to challenge one of the urban decay mitigation measures during the EIR process. The appellate court noted that while CCEC did not raise concerns regarding the specific mitigation measure during the administrative process, at least one City resident commented that the mitigation as to urban decay was inadequate. It further noted that the administrative record contained a letter from CCEC stating that the mitigation proposed for urban decay is vague and unenforceable. Based on these facts, the appellate court held that the issue as to whether mitigation measure 4.11-2(a) was sufficient had been properly preserved for review. The court further agreed with CCEC that the mitigation measure requiring a future market study impermissibly ceded responsibility to the developer and was impermissibly deferred without identifying performance criteria or standards of measurement for the City. Similarly, the appellate court agreed that the payment of a fair share fee for a future urban decay study did not obligate the City to undertake any actual mitigation of urban decay. A commitment to pay a fee without any evidence as to what mitigation will actually occur does not suffice for purposes of CEQA. Finally, with respect to mitigation measure 4.11-3(a) and the requirement that the applicant coordinate with the owner of the County Fair Mall to prepare a strategic land use plan, the court agreed with CCEC that like the urban decay study measure, this measure required nothing more than coordination – it didn’t require an actual study, or any action to mitigate urban decay should urban decay of the County Fair Mall result from the project. The City argued that the programmatic nature of the EIR allowed the City to defer studies into the future – when specific subsequent environmental occurs for finite land use proposals. In rejecting this argument, the appellate court noted that “tiering does not excuse a lead agency from adequately analyzing reasonably foreseeable significant environmental effects of the project and does not justify deferring such analysis to a later tier EIR or negative declaration.” [225 Cal. App. 4th 173, 200.]
A lack of any meaningful energy consumption analysis, improperly deferred mitigation for urban decay impacts, and the dearth of an explanation as to why the City was willing to approve a much reduced project but not the mixed-use alternative, were the downfalls in this case. While we’ve seen a number of cases regarding deferred mitigation and alternatives, this case supplements only a handful of other “energy” cases, and highlights the fact that many agencies are overlooking this important impact area. Whether you’re a lead agency or project developer, CEQA (Appendix F), this case and its few predecessors, direct that a thorough discussion of all energy consumption impacts from construction to operation, including transportation energy impacts, be disclosed and discussed in an EIR.
The requests for an order directing depublication of the opinion in the above-entitled appeal were denied on June 25, 2014.
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.