In a published opinion filed July 21, 2016, the Second District Court of Appeal affirmed the trial court’s judgment rejecting plaintiffs/residential neighbors’ (“Appellants”) CEQA challenge to the City of Redondo Beach’s (“City”) approval of 4,080 square foot car wash/coffee shop (on a 25,000 square-foot urban lot) based on CEQA Guidelines § 15303’s “Class 3” categorical exemption for development of “new, small facilities or structures [and] installation of small new equipment and facilities in small structures.” Steven Walters, et al. v. City of Redondo Beach (Redondo Auto Spa, et al., Real Parties in Interest) (2d Dist., Div. 6, 2016) ___ Cal.App.4th ___, 2016 WL______, Case No. B258638.

In upholding the applicability of the Class 3 exemption to the project – which proposed a “full-service” 90-foot car wash tunnel and attached coffee shop, 17 parking spaces, a car-drying area, water feature, and landscaping on a commercially zoned (C-3) lot at the corner of Torrance Boulevard and South Irena Avenue in Redondo Beach – the Court rejected all of plaintiffs’ legal and factual arguments that the categorical exemption did not apply and that the unusual circumstances exception to exemptions did apply.

Takeaways from the Court of Appeal’s 18-page opinion include:

  • Where a challenge to the applicability of a categorical exemption “turns only on an interpretation of the language of the Guidelines or the scope of a particular CEQA exemption,” it presents a question of law subject to de novo review. Where the record contains evidence bearing on the issue and the agency makes relevant factual determinations, they are subject to review for substantial evidence support. (Citing Save Our Carmel River v. Monterey Peninsula Water Management Dist. (2006) 141 Cal.App.4th 677, 693-694.)
  • The Class 3 “exemption typically applies ‘when the project consists of a small construction project and the utility and electrical work necessary to service that project’” (citing Voices for Rural Living v. El Dorado Irrigation Dist. (2012) 209 Cal.App.4th 1096, 1109), and the expressly nonexclusive examples listed in Guidelines § 15303(c) include “[a] store, motel, office, restaurant or similar structure not involving the use of significant amounts of hazardous substances, and not exceeding 2,500 square feet in floor area. In urbanized areas, the exemption also applies to up to four such commercial buildings not exceeding 10,000 square feet in floor area on sites zoned for such use if not involving the use of significant amounts of hazardous substances where all public services and facilities are available and the surrounding area is not environmentally sensitive.”
  • There was no dispute regarding the facts that the project is located in an urbanized area; that it is a commercial structure of less than 10,000 total square feet; that all needed public services and facilities are available; and that the surrounding area is not environmentally sensitive.
  • Based on their physical characteristics, the Court held that a combination car wash/coffee shop was similar to the types of projects set forth in § 15303(c)’s nonexclusive list; it also held that the Guideline’s 10,000 total square-foot limit applies to anywhere from one to four buildings in an urbanized area. (Citing and quoting Fairbank v. City of Mill Valley (1999) 75 Cal.App.4th 1243, 1258 [“[I]t does not make sense to interpret the exemption as applicable to the construction of four 2,500-square-foot buildings on a given parcel, but not to one building of 10,000 square feet or less on the same parcel.”].)
  • Appellants offered no evidence that the car wash would use any hazardous substances (much less significant amounts of them), only that it would use biodegradable and nonhazardous
  • After reciting the two alternative approaches to proving the “unusual circumstances” exception to categorical exemptions delineated in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1105 and applied in Citizens for Environmental Responsibility v. State ex rel. 14th Dist. Ag. Assn. (2015) 242 Cal.App.4th 555, 574, the Court held Appellants failed to establish the exemption under either analysis. First, there was nothing unusual about the car wash/coffee shop since there were many nearby car washes and the site itself had been occupied by a car wash/snack bar for nearly 40 years (from 1965 to 2002); moreover, neither the type of equipment used, nor the days/hours of operation, were “unusual” when compared to those of Guidelines § 15303’s typical, non-exclusive examples. Per the Court: “We conclude appellants have not identified substantial evidence supporting a finding of unusual circumstances based on the features of the car wash and coffee shop project. To the contrary, we conclude the City’s findings on this issue are supported by substantial evidence.” Having reached this conclusion, the Court did “not [need to] address whether there is a reasonable possibility of a significant environmental impact as a result of unusual circumstances.” (Second emph. added.)
  • Appellants’ argument to the City and trial court focused on establishing a “fair argument” of a possible environmental impact, and did not seek to prove the project will actually have a significant environmental impact; moreover, the evidence they cited fell well short of surmounting that hurdle.
  • With respect to claimed potentially significant project noise impacts, the City considered the parties’ expert evidence and found the noise from the car wash blowers and vacuum drops would not exceed its noise ordinance’s permitted interior or exterior limits or have any significant environmental effect; notwithstanding this conclusion, it properly took a “belt and suspenders” approach by also conditioning the project on testing and proving compliance with these limits – i.e., no noise exceeding maximum 60 dBA at the north property line for more than 30 minutes per hour – before commencing operation. Given the City’s finding “that the project will operate within the noise limitations” and the conditions “ensur[ing] that any violation of the noise ordinance will be corrected [through modifications if necessary] before the car wash and coffee shop are permitted to operate[,]” Appellants failed to meet their burden of proving the project would actually have a significant noise impact.
  • Similarly, Appellants failed to show the project would have a significant traffic impact, since the expert evidence showed the project would maintain LOS A at the affected intersection whereas the City’s threshold of significance is LOS C or worse. Alleged inefficiencies in the flow of cars on the project property itself – as opposed to the flow on public streets or other public spaces – are not cognizable traffic impacts for CEQA purposes. (Citing Parker Shattuck Neighbors v. Berkeley City Council (2013) 222 Cal.App.4th 768, 782 [“In general, CEQA does not regulate environmental changes that do not affect the public at large.”].) At best, Appellants’ evidence suggested “the project possibly could have a periodic negative effect on traffic” and this was “insufficient to meet their burden of identifying evidence that the project actually will have a significant impact ….”

The CEQA aspects and holdings of this case are not surprising or particularly groundbreaking, especially given the court’s characterization of the relevant evidence, undisputed facts, and concessions of Appellants. However, the case’s explanation of the contours of the Class 3 exemption and its application to a concrete small urban development in the face of various challenges render it a useful contribution to the ever-growing body of CEQA jurisprudence.