Planning, Zoning, & Development

Reserve your seat for one of four seminars taking place in early 2019.

In January and February 2019 Abbott & Kindermann, Inc. will present its 18th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry.

A summary of 2018 case law and legislative updates includes the following hot topics for 2019:

  • Air Quality and Climate Change: including CEQA Guidelines and Mandatory Reporting
  • Mining
  • Updating Land Use Entitlements
  • Endangered Species
  • Water Quality and Wetlands
  • Water Rights and Supply
  • Cultural Resources
  • Renewable Energy
  • Environmental Enforcement
  • Hazardous Substance Control and Cleanup
  • Timber Resources
  • CEQA:  Exemptions, Baseline, Greenhouse Gases and Climate Change
  • CEQA Litigation
  • Real Estate Acquisition and Development

Abbott & Kindermann, Inc. will present its annual program at four locations: Redding, Modesto, Sacramento and Napa.  Details for the seminars are below.  We hope you can join us and we look forward to seeing you there.

Redding Conference  (To Register for the Redding Location Click Here)

Date: Wednesday, January 16, 2019

Location: Hilton Garden Inn Redding, 5050 Bechelli Lane, Redding, CA

Registration: 12:30 p.m. – 1:00 p.m.

Program: 1:00 p.m. – 4:00 p.m.

Modesto Conference  (To Register for the Modesto Location Click Here)

Date: Wednesday, January 23, 2019

Location: Double Tree Hotel Modesto, 1150 Ninth Street, Modesto, CA

Registration: 12:30 p.m. – 1:00 p.m.

Program: 1:00 p.m. – 4:00 p.m.

Napa Conference  (To Register for the Napa Location Click Here)

Date: Wednesday, February 6, 2019

Location: Embassy Suites, 1075 California Boulevard, Napa, CA

Registration: 12:30 p.m. – 1:00 p.m.

Program: 1:00 p.m. – 4:00 p.m.

Sacramento Conference  (To Register for the Sacramento Location Click Here)

Date: Friday, February 8, 2019

Location: Sacramento Hilton Arden West, 2200 Harvard Street, Sacramento, CA

Registration: 8:30 a.m. – 9:00 a.m. with continental breakfast

Program: 9:00 a.m. – 12:00 noon

The registration fee for the program is $95.00. Please register early to reserve your seat. Select the links above to see registration details for each location, as they differ. MCLE and AICP CM credits are available (approval pending).

Please call (916) 456-9595 with any questions.

Center for Community Action & Environmental Justice v. City of Moreno Valley (Aug. 23, 2018, case no. D073451) ___ Cal.App.5th ___.

The right of initiative and referendum is embedded in the California Constitution as a result of the nationwide progressive political reform movement that began at the end of the 19th century. In fact, Hiram Johnson rode this political reform issue into the winner’s circle when running for governor in 1910. As a result of its constitutional foundation, the rights of initiative and referendum are closely guarded by the courts. Over time, California courts have generally concluded that citizen voters are co-equal with locally adopted legislative bodies when acting upon legislative matters, including the field of legislative actions involving land use matters. As the most recent case demonstrates, there are state legislative limits on selected land use enactments.

In the City of Moreno Valley, a significant development project was engulfed in litigation challenging the land use approvals, including a development agreement and a CEQA document. The local voters, with the backing of the developer, then qualified an initiative measure repealing the City Council approved development agreement and approving a substantially similar development agreement. Pursuant to the elections code, the City Council faced the option of approving the development agreement as submitted or submitting the measure to the voters for approval. The City Council elected to adopt the measure.

A new round of litigation followed seeking to overturn the re-approved development agreement on several grounds, including the argument that approval of a development agreement was reserved solely to the city council or board of supervisors. This argument was predicated in part on the fact that the development agreement statute expressly allows for referendum of an ordinance approving a development agreement, but is silent with respect to use of the initiative to approve a development agreement and was based on an earlier California Supreme Court decision in Committee of Seven Thousand v. Superior Court (1988) 45 Cal.3d 491, in which the California Supreme Court concluded that implementation of special legislation concerning transportation facility funding in Orange was reserved exclusively to city councils and board of supervisors, not the voters.   

The court of appeal reached a similar conclusion with respect to development agreements. The appellate decision was influenced by the legislative recitals in the development agreement statute as to the need and benefits of stability in the planning and development process evidencing a compelling state interest. The appellate court also recognized as another argument in support of exclusive authority that the development agreement statute contemplates that a development agreement is a negotiated agreement, and that the initiative process is not conducive to negotiation. Because the power of referendum is expressly incorporated into the development agreement statute, the voters still have a protected legislative interest, just one which is less comprehensive in scope when compared to other land use matters.

William Abbott is a shareholder at Abbott & Kindermann, Inc.  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, Inc. 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.

September 19, 2018 – 11am to 1pm

Presenter: Daniel S. Cucchi, Esq., Abbott & Kindermann, Inc.

The pace of new court rulings affecting land use professionals can be difficult to keep up with. But each one could have a significant impact on a land use professional’s day-to-day activities. If you want to catch up on the latest legal news that will help you implement best practices in your office, this session is for you. Dan will review select cases from 2017 & 2018 and facilitate a discussion about their relevance on employing high-quality land use practice techniques in your office.

When: Wednesday, September 19th

Where: AECOM – Coastal Conference Room 2020 L Street Suite 400 Sacramento, CA 95811

Time: 11AM-1PM

Cost: $20 (Lunch will be provided.)

Approved for 1.5 AICP Law Credits

Deadline to register is Tuesday, September 18 at Noon.

Register now!

Questions, please contact Dan Cucchi at 916.456.9595 or dcucchi@aklandlaw.com

Daniel S. Cucchi is an associate at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

 

By Kristen Kortick

AB 734 (Bonta)

Since the 2003 publication of the book, Moneyball: The Art of Winning an Unfair Game, by Michael Lewis, the A’s franchise made a name for itself as a franchise utilizing creative tactics to keep fans in the stands and the players in the dugout. Enter construction of the new A’s stadium and the California Environmental Quality Act (“CEQA”) review process and that creativity is now looking rather pedestrian. When undertaking construction of a new stadium, the A’s have instead looked to other examples of utilizing CEQA exemptions for construction of new stadiums throughout California rather than forge a new path. The Los Angeles Rams (2009 [City of Industry stadium that never materialized]), Sacramento Kings (2013), Golden State Warriors (2015), and Los Angeles Clippers (2017), all received Legislature approved exemptions from the full CEQA process for construction of new stadium or arena projects, and the A’s now hope to receive the same.

In February 2018, the A’s franchise asked lawmakers to pass a similar bill shielding the organization from elongated environmental suits while streamlining the CEQA process to construct their new stadium. Under Assembly Bill 734, the new A’s stadium needs a completed and certified environmental impact report (“EIR”) or a mitigated negative declaration outlining how the finalized project poses the least harmful impacts to the environment.  The bill further outlines administrative and judicial review procedures including limiting appeals of the project to 270 days from the filing of the certified record to completed Court opinion. All contested cases for the project would bypass the superior court and move straight to appellate review. Costs to the court and lead agencies brought into court for litigation would be subsumed by the project applicant. The project requires LEED certification for all new construction and sets out express benchmarks for projects approvals, public comments, and the timeline for judicial review.

The project has yet to finalize a site, but the organization has narrowed the search to the location of the pre-existing stadium or nearby to Jack London Square in Oakland. The Ballpark is earmarked to open in 2023. Opponents to the CEQA legislation have concerns that various CEQA safeguards would be gravely overlooked by fast tracking the project. In response, the President of the A’s has alleged that the bill asks for the same exemption as its predecessors, such as the Warriors’ San Francisco arena and the Kings’ Sacramento arena and entertainment complex.

Many California residents and concerned environmental advocacy organizations throughout the state have expressed concern over CEQA exemptions for these large scale development projects. These CEQA exemptions, initially championed by Governor Schwarzenegger and continued under Governor Brown, have seen no shortage of opposition. A group of California residents have traveled throughout the state to litigate cases utilizing similar exemptions from CEQA for sports arenas. Although the provisions of past CEQA exemptions contain varied mitigation protocols, the procedures and judicial review of each project remain consistent in each of the prior versions of such legislation. For example, the Kings stadium obtained the CEQA exemption in 2013 for the construction of Golden One Center Arena. The legislative approval of the project included mitigation measures for traffic mitigation and air quality impacts differing from the bill proposed for the A’s stadium. Consistent with the A’s stadium, the Kings arena implemented a 270 day judicial appeal timeline, LEED certification, and schedule for completion of the project’s planning and construction. The Los Angeles Clippers arena in Inglewood also included similar CEQA benchmarks. However, the Clippers arena also included language to fast track needed public transportation infrastructure in furtherance of the 2028 Olympic Games set to take place in Los Angeles.

These CEQA exemptions pose a unique set of hurdles and some would argue a weakening of CEQA law. First, although these exemptions have not allowed for bare bones EIRs or CEQA review, they shorten the comment periods and judicial review of large ticket items. Many opponents to these CEQA exemptions allege the approval allows deep pocket projects to pay their way through environmental protections in the state. So far, Courts have held that past projects with these CEQA exemptions consistently met the commitments under CEQA without needing to implement additional mitigation measures. (See our link to the Court’s opinion in Saltonstall v. City of Sacramento.) Second, the CEQA exemption prioritizes challenges to exemption projects in the courts thus pushing other cases on the court’s docket lower. As one of the most litigation heavy states in the United States, California court dockets are already at full capacity averaging one-and-a-half to two years from filing to finalized opinions. While the exemption may speed up the process of judicial review for a stadium, it is at the cost of all other docketed civil cases on the jurisdictional court’s calendar. Though this has not likely had a tangible burden on the court calendar overall so far (this would be only the fifth of these CEQA exemptions in the last ten years), if this approach were to expand to cover other large-scale projects the courts could see more CEQA cases impacting the appellate court’s docket in the future.

Currently, AB 734 sits in the Senate Appropriations Committee. Voting from the Assembly Floor and Committees would suggest the project is likely to pass and proceed to the Governor’s desk for signature by end of August. Time will tell whether Governor Brown is ready to sign it.

Bill Abbott, the firm’s resident curmudgeon noted: “It is reassuring that CEQA reform exists for the financial upper crust. Perhaps the Legislature will throw a few crumbs to us commoners.

Kristen Kortick is a law clerk at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Diane G. Kindermann (2015-2018) and William W. Abbott (2004-2018) were again selected for the Northern California Super Lawyers List in the practice areas of Land Use and Zoning law. More information is available at http://www.superlawyers.com/california-northern/. The firm is pleased to continue to serve private and public clients in Northern California on land use, environmental and real estate matters for more than 20 years.

The City of Visalia amended its general plan pertaining to neighborhood commercial districts, adding a limitation that no tenant could occupy more than 40,000 square feet. A shopping center owner submitted expert testimony regarding the potential for urban decay, but the court held it was insufficient to demonstrate that the limitation may have a significant environmental effect as a result of urban decay.

In 2010, Visalia launched a general plan update. Among other issues under consideration, one of the policy changes under review was a square foot limitation on tenants in neighborhood commercial centers. Staff prepared a white paper on this issue, outlining policy issues with the size, tenant mix, and walkability, along with the pros and cons of store size limitations. Following a city council workshop, staff amended the draft policy to limit store size and to set minimum separation requirements for neighborhood centers. The draft plan also included a map change reducing the acreage of a neighborhood center site by converting some of the property from commercial to medium density residential. The City then prepared and circulated a draft and final EIR (June 26, 2014). In October, the property owner submitted a letter thru legal counsel objecting to the changes, which included a report written by a broker who opined that most grocers would not build less than 40,000 square feet and that smaller stores had gone out of business. The broker also argued that substitution of less successful, lower volume tenants would eventually lead to physical decay in centers as a result of reduced investment. The letter also complained of the reduction in commercial designation for the one commercial center site. The owner filed suit, challenging the EIR and arguing a lack of internal consistency in the general plan. The trial court ruled for the City.

The appellate court affirmed, finding that none of the evidence offered by the property owner was substantial in character. It reasoned that the fact that some grocery stores would not build at 40,000 square feet or less was not evidence that no grocery store would be constructed. The evidence that Tesco was unsuccessful (building in the 10,000 to 20,000 foot range), did not foreclose that another grocer could build a larger store that meets the 40,000 square-foot requirement (and in fact, the evidence was that Walmart had recently constructed a 38,000 square-foot store in Visalia). Further, there was a lack of evidence that urban decay would occur, just speculation.

Regrettably, the appellate court applies the analytical tools reserved for judicial review of negative declarations, rather than an EIR, focusing instead on substantial evidence of a fair argument. While the decision does not discuss what substantial evidence supported the lead agency’s determination, the decision is useful in its close scrutiny of what constitutes substantial evidence offered by a project opponent.

Visalia Retail, LP v. City of Visalia, (January 24, 2018) 2018 Cal.App. LEXIS 84.

Reserve your seat for one of four annual seminars taking place in early 2018 in Sacramento, Napa, Redding and Modesto.

In January 2018 Abbott & Kindermann, Inc. will present its 17th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry.

A summary of 2017 case law and legislative updates includes the following hot topics for 2018:

  • Air Quality and Climate Change – Including CEQA Guidelines, Cap-And-Trade
  • Updating Land Use Entitlements
  • Endangered Species
  • Water Quality and Wetlands – Including New State Wetlands Programs
  • CEQA:  Exemptions, Baseline, Greenhouse Gases and Climate Change
  • CEQA Litigation
  • Water Rights and Supply
  • Cultural Resources
  • Mining, Oil and Gas
  • Renewable Energy
  • Environmental Enforcement
  • Hazardous Substance Control and Cleanup
  • Timber Resources
  • Real Estate Acquisition and Development
  • Subdivision Map Act

Details for each of the seminars is below.  We hope you can join us and we look forward to seeing you there.


Redding Conference (To Register for the Redding Location Click Here)

Date: Friday, January 19, 2018

Location: Hilton Garden Inn Redding, 5050 Bechelli Lane

Registration: 12:30 p.m. – 1:00 p.m.

Program: 1:00 p.m. – 4:00 p.m.

Sacramento Conference (To Register for the Sacramento Location Click Here)

Date: Friday, January 26, 2018

Location: Sacramento Hilton Arden West, 2200 Harvard Street

Registration: 8:30 a.m. – 9:00 a.m. with continental breakfast

Program: 9:00 a.m. – 12:00 noon

Modesto Conference (To Register for the Modesto Location Click Here)

Date: Friday, February 2, 2018

Location: Double Tree Hotel Modesto, 1150 Ninth Street

Registration: 12:30 p.m. – 1:00 p.m.

Program: 1:00 p.m. – 4:00 p.m.

Napa Conference (To Register for the Napa Location Click Here)

Date: Wednesday, February 7, 2018

Location: Embassy Suites, 1075 California Boulevard

Registration: 12:30 p.m. – 1:00 p.m.

Program: 1:00 p.m. – 4:00 p.m.

The registration fee for the program is $80.00. Please register early to reserve your seat. Select the links above to see registration details for each location, as they differ. MCLE and AICP CM credits are available.

Please call (916) 456-9595 with any questions.


San Bruno Committee for Economic Justice v. City of San Bruno 2017 Cal.App. LEXIS 807

California land use nerds know well the origin of the right of initiative and referendum. A function of the national reform movement at the beginning of the twentieth century, California voters took matters into their own hands and inserted the right of initiative and referendum into the California Constitution.   It has been used for good and bad depending upon one’s perspective. When the Legislature proved inept at addressing Coastal zone planning, the voters stepped in and adopted coastal regulations.  When the Legislature failed to deal with property tax reform, Howard Jarvis and Paul Gann upended property tax law.  Sacramento utility voters closed the local nuclear reactor. Development project approvals have been set aside by the voters or on rare occasion, streamlined. The courts have stayed on the sideline, accepting the responsibility to protect the exercise of these constitutional rights.

Not every governmental action earns a spot before the voters: only legislative decisions.  In the land use world, that means general plans, area plans, specific plans and the like are fair game. Quasi-adjudicatory decisions such as tentative maps and use permits are off limits.  Because agency action takes many forms, there is room to debate the extent to which these constitutional powers apply to other government actions.  As a recent case on point, the City of San Bruno sold property to a developer to develop a hotel project. The city had previously approved a specific plan for the site for the purpose of encouraging redevelopment. Following City Council approval of a resolution approving the sale of the land, local voters with the support of a labor union (the latter perhaps seeking a labor agreement), qualified a referendum measure.  Given the particular history of the project and the prior planning efforts, the trial and appellate court concluded that the property sale was not a legislative act, but was an administrative act in furtherance of the prior legislative actions. The court’s holding is not to suggest that every property sale is immune from a referendum, but when the transaction is in furtherance of documented planning efforts, it may be protected.

Which brings me to the 2017 legislative session.  Apparently offended that the initiative process may be used to facilitate a land use decision, AB 890  forecloses attempts by voters to approve certain general plan amendments and zoning changes (for example, converting discretionary approvals into ministerial approvals or intensifying development intensity) by initiative.   Development agreements could similarly only be approved by the city council or board of supervisors.  There are a number of exceptions but those require the Court to determine what the “primary purpose” is of the initiative effort, which as many attorneys know, is a challenge for a reviewing court to ascertain given the lack of formal legislative history.  Given that the legislature is touting its efforts this year to break the housing backlog, this bill which recognizes that ability of voters to turn projects down or make development more difficult but creates barriers for voters to take the initiative (so to speak) is backwards, plain and simple.  To paraphrase Animal Farm, this legislation embraces the idea that some voter ideas are more equal than others.  If this becomes law, the courts will have to go back to the origins of initiative law in California and ask itself: is this what the voters had mind in 1911? That the legislature has the power to selectively dictate when the voters can act on their own?  Personally, my money is on the voter’s side.

Either way, let the Governor know what you think.

PRIVATE LAND USE SETTLEMENTS: The potential fallout when a private side settlement agreement fails to settle your legal woes.

In 2010, the County of San Benito granted a conditional use permit for a solar project to the Panoche Valley Solar, LLC.  The project was a 3,200 acre, 399-megawatt solar electric generation facility involving up to 4 million solar panels in the Panoche Valley, a semiarid open space and range land west of Interstate 5 in San Benito County.  The approved project would have become one of the largest solar farms in the world and could have powered over 100,000 homes.  The project would have given the County $5.4 million in sales tax from the purchase of the solar panels.  In August 2011, the San Benito County Superior Court denied a legal challenge under the California Environmental Quality Act and the Williamson Act.  The trial court’s judgment was affirmed by the Court of Appeal (Save Panoche Valley v. San Benito County (2013) 217 Cal.App.4th 503.)

In 2014, the project applicant sought to modify the conditional use permit.  The revised project was for a 2,506-acre, 247-megawatt solar generation facility, including an additional 24,176 acres for habitat conservation (which is more than the original project.)  The County expected to receive approximately $2.5 million in sales tax revenue from that revised project.  The County approved a revised use permit and certified the Final Supplemental Environmental Impact Report (SEIR) in 2015.  The SEIR addressed the project’s impact and mitigation measures for the certain animal and plant species, including the San Joaquin kit fox, giant kangaroo rat, and blunt-nosed leopard lizard, and numerous bird species.  However, the Sierra Club and Santa Clara Valley Audubon Society again filed a writ of mandate action and challenged the Final SEIR. The trial court rejected that challenge as well.  This year, in an unpublished opinion, the Court of Appeal for the Sixth District affirmed the trial court’s judgment.  (Sierra Club v. County of San Benito (March 22, 2017, case no. H042915), unreported decision, 2017 Cal.App.Unpub.LEXIS 1987.)

The project construction already began in the Fall of 2016 and is scheduled to be completed in 2018.  But those two fully litigated lawsuits, and that ongoing construction, are not the end of the story.

In a special public hearing about the project’s statute before the County Board of Supervisors on April 18, 2017 (less than a month after they prevailed on the second appeal), one Supervisor asked if the rumor that the project was being downsized was true.  An official of ConEdison Development, the company that acquired the project admitted that the office of Governor Brown wanted to reduce the size of the project.  However, the ConEdison official also stated:  “We have all of our permits for the project signed and we are building 100 percent of the Panoche Valley Solar project at this time.”  That led one County resident to exclaim to the Board of Supervisors: “…the rat people went to the governor to cut the project in half. If you guys take that sitting down you’re idiots because it affects every project in this county.”

But the rumor proved true.  In July 2017, ConEdison reached an agreement with Sierra Club, Santa Clara Valley Audubon Society, Defenders of Wildlife and the California State Department of Fish and Wildlife that dramatically reduced the project to 130 megawatts, about 1/3 the size of the original project.  According to a ConEdison official, the company signed the agreement because, even though the environmental groups had repeatedly lost in court, they purportedly still had cases they could appeal that could have slowed or killed the project.  The environmental groups are hailing the agreement as a “win-win.”  A Sierra Club spokesperson stated:  “As we work toward lowering carbon pollution, it’s critical that new clean energy development is not done at the expense of endangered animals and their habitat.”

The agreement essentially shifts 100-117 megawatts of the Panoche Valley project to another ConEdison solar project that is proposed for Imperial County in Southern California.  Not surprisingly, the environmental groups have indicated that they will not oppose that other project.  The Sierra Club announced: “Initially, 247 MW of solar generation was planned for development in the Panoche Valley, but now approximately 100 MW is instead proposed for development at a site in Imperial County, California. Development at the Imperial County site will have less impact on threatened and endangered species and their habitat. The relocation of that portion of the project is subject to approval by Southern California Edison (SCE) and the California Public Utilities Commission (CPUC). The settlement will also resolve several legal challenges commenced against the project by the Environmental Groups.”

The County Board of Supervisors, which approved the original and then the modified project, and which was the prevailing party in both lawsuits, was never included in those settlement talks or made a party to that agreement.  The Supervisors are furious because the County will lose out on millions of dollars in taxes that they were promised by the project developer.  According to the County’s clerk-auditor-recorder, the County will not be receiving any sales tax from the project now because ConEdison had purchased the panels in a way that made San Francisco the recipient of the sales tax rather than San Benito County. One Supervisor said:  “I can barely speak because I’m so angry.  This would have generated much-needed revenue. All you have to do is drive down there and see the conditions of our roads. We have minimal amounts of public safety. This was going to be a big thing, but the rug was pulled out from under us. And it was all done in secret.”  Another Supervisor exclaimed:  “[the developer] basically raped and pillaged us.”

The County is now considering filing a lawsuit against ConEdison, on the grounds that the company violated the project’s original 2010 development agreement with the county.  An official with PV2 Energy, the company that owned the project from 2011 to 2015, and then sold the project to ConEdison, said:  “By diverting half of the project’s value to a different project outside the county, ConEdison is clearly violating their commitments to the county and to PV2 Energy.” As to the sale tax issue, a ConEdison official said:  “We’re looking into that.  We understand we have obligations under the development agreement. We’re going to live up to them.” In short, there are still unresolved legal issues, even as the project is being built.

So here is an interesting legal question:  If the new settlement agreement constitutes a breach of the original development agreement, could the State of California be liable to the County of San Benito for the torts of intentional interference with contractual relations or intentional interference with prospective economic advantage?  The Director of DFW appears to concede such involvement:  “Con Edison Development’s leadership and the environmental groups deserve a lot of credit for opening a dialogue with the Department and asking whether it was better to negotiate and collaborate than litigate.”

This cautionary tale is not over yet.

Glen Hansen is a Senior Counsel at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

By Glen Hansen

The California Supreme Court held in Lynch v. California Coastal Commission (2017) 3 Cal.5th 470, that plaintiff property owners forfeited their challenge to conditions attached to a permit to rebuild a seawall and beach access stairway because the plaintiffs accepted the benefits the permit conferred, even though they simultaneously filed an action challenging the conditions.

In Lynch, plaintiffs owned homes that sit on a coastal bluff that cascades steeply down to the beach and Pacific Ocean. Since 1986, the properties have been protected by a shared seawall at the base of the bluff and a mid-bluff erosion control structure. A shared stairway provided the only access from the bluff-top to the beach below. Plaintiffs applied to the City of Encinitas (“City”) for authorization to replace the wooden seawall and mid-bluff structure and rebuild the lower portion of the stairway. The City approved the project, but final approval required a coastal development permit from the California Coastal Commission (“Commission”). A heavy winter storm then caused part of the bluff to collapse and destroyed part of the seawall, the mid-bluff structure, and the stairway. Plaintiffs sought a new permit to rebuild the damaged structures. The Commission approved a permit that allowed seawall reconstruction and mid-bluff protection, but with special conditions, including the following: (1) reconstruction of the lower stairway is prohibited; (2) the seawall permit will expire in 20 years and prohibits future bluff-top redevelopment from relying on the seawall; and (3) before expiration of the 20-year period, plaintiffs must apply for a new permit to remove the seawall, change its size or configuration, or extend the authorization period. Plaintiffs submitted written objections to those conditions during the review process. But, then plaintiffs complied with the permit requirements and recorded deed restrictions stating that the special conditions of the permit were covenants, conditions and restrictions on the use and enjoyment of their properties. Plaintiffs also filed a petition for writ of administrative mandate challenging the 20-year expiration conditions and the condition prohibiting reconstruction of the lower stairway. While the mandate action was pending, however, plaintiffs satisfied all other conditions, obtained the permit, and built the seawall.

The trial court issued a writ directing the Commission to remove the challenged conditions and held that “by proceeding with the repairs,” plaintiffs “have not necessarily accepted the conditions in question. No action has been taken as to the twenty year condition[,] which can be removed after review of the instant petition.” The Court of Appeal reversed in a split decision. The California Supreme Court granted review and affirmed the Court of Appeal’s decision.

The Supreme Court held that “plaintiffs forfeited their right to challenge the permit’s conditions by complying with all pre-issuance requirements, accepting the permit, and building the seawall. The Court relied on the general rule in the land use context that “a landowner may not challenge a permit condition if he has acquiesced to it either by specific agreement, or by failure to challenge the condition while accepting the benefits afforded by the permit. Generally, challenges to allegedly unlawful conditions must be litigated in administrative mandate proceedings.” That general rule stems from the equitable concept that permit holders are obliged to accept the burdens of a permit along with its benefits. The general rule also serves the public purpose of “promptly alerting the [agency] that its decision is being questioned and allows the government to mitigate potential damages.” In this case, plaintiffs obtained all the benefits of their permit when they built the seawall and “[t]hey cannot now be heard to complain of its burdens.” The Court refused to create a new exception to that general forfeiture rule which would allow landowners to accept the benefits of a permit under protest if the challenged restrictions can be severed from the project’s construction.

The Court recognized that there is a “narrow exception” to the general rule for challenges to permit conditions imposing a fee or similar exaction. The Mitigation Fee Act (Govt. Code, §66000 et seq.) (“MFA”) contains a procedure by which developers may proceed with a project and still protest the imposition of “fees, dedications, reservations, or other exactions.” If a developer tenders payment of the disputed fee and gives written notice of the grounds for protest, local agencies cannot withhold project approval during litigation of the dispute, and local agencies must refund the fee if the challenge is successful. But that MFA procedure does not govern the type of land use restrictions that were imposed by the Commission on the project in this case.

Thus, the plaintiffs in Lynch forfeited their objections by constructing the project. The Court concluded:  “Without an express agreement with the agency providing otherwise, landowners who object to permit conditions not covered by the Mitigation Fee Act must litigate their objections in an administrative mandate proceeding before constructing the permitted project. Landowners who proceed with a project before the merits of their claims have been decided risk a finding that their objections were forfeited.”

Glen Hansen is Senior Counsel at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc., at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.