On November 7, 2016, the Third District Court of Appeal filed a published opinion mostly upholding the EIR for a 48.75-acre, 328-unit residential infill project (known as McKinley Village) against various CEQA challenges, and finding the Project to be consistent with the City of Sacramento’s general plan. East Sacramento Partnership for a Livable City v. City of Sacramento (Encore McKinley Village, LLC, Real Party in Interest) (3d Dist. 2016) ___ Cal.App.5th ___, 2016 WL 6581170. In a pointed reminder that a perfectly CEQA-compliant EIR for a large infill project is difficult to prepare, however, the Court found merit in a single argument of the petitioner and appellant neighborhood group, ESPLC – its argument that “the EIR ignored [certain] significant traffic impacts.” Specifically, the EIR failed to adequately support its less-than-significant (LTS) impact conclusion concerning such impacts, in light of a substantial project-caused degradation in level of service (LOS) at affected intersections and streets that was nonetheless compliant with the General Plan’s policy that LOS F was acceptable for the area. Accordingly, the Court of Appeal reversed the trial court’s judgment upholding the EIR, and ordered it to issue a writ directing the City to set aside its certification and correct this lone deficiency prior to considering recertification.

The Court found all other challenges to the EIR to be without merit. In addition to rejecting appellant’s general plan consistency challenges to the project (in a portion of its opinion analyzed in my partner Bryan Wenter’s post here), it considered and rejected numerous other CEQA challenges asserting defective project description, illegal piecemealing, failure to analyze significant health risks, and failure to disclose or mitigate methane migration.

As background, the project site meets the City’s definition of land slated for infill development. Bounded on the north by I-80 (and across that a former landfill now designated Sutter’s Landing Regional Park) and on the south by the Union Pacific Railroad tracks (and across those the Cannery Business Park), the constrained project site would have two points of access: an upgraded A Street bridge connecting it to 28th Street in midtown and a new underpass under the railroad embankment to C Street, both of which would accommodate vehicular, bicycle, and pedestrian traffic. The EIR found no significant and unavoidable project-specific or cumulative impacts in any areas, but the primary issue was traffic impacts. Such impacts are traditionally measured – as was the case here – with the LOS A to F scale, where A is free flowing and F is congested “stop and go” traffic. (The Court noted in a footnote that once OPR’s new CEQA guidelines under Public Resources Code § 21099(b)(1), (2) (SB 743) are certified, this traditional mode of traffic analysis will change and “automobile traffic delays, as described solely by LOS or similar measures, shall not be considered a significant impact on the environment, with some exceptions.”)

Key takeaways from the CEQA portion of the Court of Appeal’s opinion include:

  • Regarding the standard of review: “A court may not set aside an agency’s approval of an EIR on the ground that an opposite conclusion would have been equally or more reasonable. A court’s task is not to weigh conflicting evidence and determine who has the better argument when the dispute is whether adverse effects have been mitigated or could be better mitigated. We have neither the resources nor scientific expertise to engage in such analysis, even if the statutorily prescribed standard of review permitted us to do so. Our limited function is consistent with the principle that ‘The purpose of CEQA is not to generate paper, but to compel government at all levels to make decisions with environmental consequences in mind. CEQA does not, indeed cannot, guarantee that these decisions will always be those which favor environmental considerations.” (Quoting Laurel Heights Improvement Assn v. Regents of University of California (1988) 47 Cal.3d 376, 393, citations and internal quotations omitted.)
  • In rejecting appellant’s inadequate project description arguments, the Court noted that while an “accurate, stable and finite project description is the sine qua non of an informative and legally sufficient EIR[,]” the CEQA “process is not designed to freeze the ultimate proposal in the precise mold of the initial project” and that “new and unforeseen insights may emerge during [the environmental] investigation, evoking revision of the original proposal.” (Quoting County of Inyo v. City of Los Angeles (1977) 71 Cal.App.3d 185, 193, 199.) Further, while CEQA requires an EIR’s project description to include a “list of permits and other approvals required to implement the project” (CEQA Guidelines, § 15124(d)(1)(B)), noncompliance with CEQA’s information disclosure requirements does not constitute reversible error unless prejudice is shown (Pub. Resources Code, § 21005(b)), and such prejudice occurs when “the failure to include relevant information precludes informed decisionmaking and informed public participation[.]” (Quoting Association of Irritated Residents v. County of Madera (2003) 107 Cal.App.4th 1383, 1391.) Here, the Draft EIR’s project description omitted mention of a development agreement, expanded rezoning, and driveway variance needed to implement the project, but these approvals were mentioned in the Final EIR and the Court found no prejudice from their earlier omission. The development agreement was adequately disclosed to the public (and commented on by appellant) through public notices of the planning and design commission and city council meetings on the project; the “slight change” of expanded rezoning to accommodate 8 additional units and a greater diversity of housing types was an iterative change to be expected during the CEQA process that ESPLC failed to show precluded meaningful decisionmaking or public comment; and the variance to accommodate 20-foot rather than 24-foot wide driveways for units near the freeway or railroad tracks was likewise a nonprejudicial omission.
  • The Court rejected appellant’s claim of “piecemealing,” i.e., “attempting to avoid a full environmental review by splitting a project into several smaller projects which appear more innocuous than the total planned project[.]” The City’s approval of a feasibility study for a proposed (but not approved) vehicular tunnel at another location did not require an EIR (Guidelines, § 15262), was not an actual or necessary part of the project approval, and the project was not conditioned on its construction; nor was it reasonably foreseeable, and, in fact, the City “currently deemed [it] infeasible, due to its considerable expense, the need for Union Pacific approvals, and the difficulties and impacts of construction.” City’s approval of a half-street closure that would direct 114 to 124 vehicles from a local road (28th Street) during peak hours to a less congested street (C Street) and then to a major collector road with greater capacity (29th Street) was a “minor” and “modest” change to relieve traffic that did not require a new EIR or constitute illegal piecemealing. Finally, the City’s direction to its City Manager to consider removing the Sutter Landing Connection from its general plan in the future did not constitute piecemealing, and “any [actual future] amendment to the general plan [would] require CEQA review.”
  • As an infill project bounded by a freeway and railroad tracks, and near a former landfill, the project site was subject to potentially hazardous toxic air contaminants (TACs) and possible subsurface methane gas migration. The trial court properly found that “CEQA did not require an EIR to analyze the existing effects of the environment on future residents of the Project.” (Citing California Building Industry Assn. v. Bay Area Air Quality Management Dist. (2015) 62 Cal.4th 369, 377-378, 387.) Appellant’s argument that the site was an unhealthy place to live was off-point; rather, “[w]hat must be analyzed under CEQA is “a project’s potentially significant exacerbating effects on existing environmental hazards[.]”” (Citing at 388.) In this regard, appellant’s vague and factually unsupported contention that “[a]dditional vehicles, residents, visitors, and others coming to the property because of the Project will undeniably contribute to, and exacerbate, the already bad air quality, traffic and other environmental conditions” fell short (except as to traffic impacts, as discussed below). Per the Court, dire predictions by non-experts without a “specific factual foundation in the record” did not constitute the required “substantial evidence” that the “project will produce a particular adverse effect.” (Citing Banker’s Hill, Hillcrest, Park West Community Preservation Group v. City of San Diego (2006) 139 Cal.App.4th 249, 274, emph. in orig.) Giving a further nod to the environmental benefits of infill development generally with regard to claimed air pollution impacts, the Court “note[d] the Project is an infill residential project and without such projects, development would likely occur in more distant suburban areas, resulting in even more pollution from automobile commuter traffic.”
  • In rejecting appellant’s claims that the EIR failed to analyze and propose mitigation for freeway impacts, the Court noted the City properly relied on the “streamlining” for transportation impact analysis allowed under Public Resources Code § 21159.28(a), which provides that “if a project is consistent with the region’s sustainable communities strategy (SCS), the EIR is not required to reference, describe, or discuss project or cumulative effects on the regional transportation network, provided the project incorporates mitigation measures in prior environmental documents.” The project was consistent with SACOG’s SCS and MTP; the EIR nonetheless provided freeway impacts information; and the absence of a regional traffic impact fee and nonconstruction-related transportation mitigation measures from the EIR did not render the SCS streamlining statute inapplicable. Per the Court: “The statute does not require specific mitigation measures, only that if there are such measures, the project incorporate them.”
  • The Court rejected appellant’s attack on the EIR’s scope and methodology of traffic impact study. While appellant argued the EIR was deficient because it focused on 32 intersections and provided information on almost 20 roadway segments “for information purposes only,” substantial evidence supported the City’s methodology of focusing on intersections. The Traffic Impact Analysis Guidelines provided the decision of whether to study intersections or roadway segments “should be made on an individual project basis” and stated generally that “intersections rather than roadways should be studied when analyzing in-fill areas.” Further, recirculation was not required when the FEIR identified a new roadway segment impact – a drop from LOS D to LOS E with the project and LOS F under cumulative-plus-project conditions – due to the redesignation of the segment from a “major collector” to “local” road. The focus on intersections was proper, and, per the Court, because the disclosed amount of traffic on the segment did not change between the DEIR and FEIR, there was no new impact, only a new designation and LOS classification. Nor did the Court find expert disagreement over the EIR’s “informational” roadway segment analyses’ assumptions, models and conclusions sufficient to show a defect in the EIR. Per the Court: “ESPLC has failed to carry its burden to show the traffic studies are inadequate. ESPLC objects to the omission of certain roadway segments, but fails to explain how the analysis of intersections on these same streets in the draft EIR is inadequate to analyze the traffic impact of the Project.”
  • The Court held the EIR did improperly rely on general plan traffic policies as thresholds of significance to conclude that LOS E and F conditions on city streets resulting from the project are not significant traffic impacts under CEQA. The DEIR’s thresholds of significance for the studied intersections provided that there would be “a significant impact if traffic generated by the project degrades LOS from an acceptable to unacceptable LOS” and, where LOS is already unacceptable, “increases the average vehicle delay by five seconds or more.” Under the relevant General Plan Mobility Element Policy M 1.2.2, “LOS F conditions may be acceptable [in the project area] to achieve other goals, provided there are improvements to the overall system or non-vehicular transportation is promoted.”
  • Applying the general plan policy as the CEQA threshold of significance, the EIR found no significant traffic impacts even though existing-plus-project traffic (1) would take the 28th Street /E Street intersection from LOS A to D in the morning, and the street from LOS C to E; and (2) would take the 29th Street/E Street intersection from LOS C to E in the morning. Further, the cumulative scenario impacts went to LOS F in some cases. The Court observed that while “CEQA grants agencies discretion to develop their own thresholds of significance (CEQA Guidelines, § 15064, subd. (d))” (quoting Save Cuyama Valley v. County of Santa Barbara (2013) 213 Cal.App.4th 1059, 1068), such discretion “is not unbounded” and the no-significant-impact determination requires substantial evidence support. Compliance with a regulatory requirement cannot “foreclose consideration of substantial evidence showing a significant environmental impact from a project.” (Citing Communities for a Better Environment v. California Resources Agency (2002) 103 Cal.App.4th 98, 114.) Rather, courts are required “under the fair argument approach to look at evidence beyond the regulatory standard, or in contravention of the standard, in deciding whether an EIR must be prepared.” (Citing id. at 113.) After citing several additional cases holding that compliance with general plan and land use ordinance noise standards will not necessarily preclude finding a significant effect requiring preparation of an EIR, the Court held – relying on Protect Historic Amador Waterways v. Amador Water Agency (2004) 116 Cal.App.4th 1099 – that the rule is equally applicable “in the context of a completed EIR’s application of significance thresholds.” Thus, for purposes of making a significance determination in preparing an EIR “the fact that a particular environmental effect meets a particular threshold cannot be used as an automatic determinant that the effect is or is not significant.” (Citing at 1109.)
  • The court noted that community values do not necessarily measure environmental effects, and “the significance of an activity may vary with the setting.” (Citing Guidelines, § 15064(b).) It reasoned that project-caused changes at two intersections of LOS C to E and LOS A to D, and cumulative scenario changes at several intersections to LOS F with significant delays, were not treated as significant impacts in the project area while similar changes outside of it were treated as significant impacts requiring mitigation. Under these circumstances, simple reliance on the general plan’s regulatory threshold was insufficient and did not constitute substantial evidence of no significant impact; rather, an explanation and substantial evidence was required to support the finding.
  • Finally, the Court rejected appellant’s challenges to traffic mitigation measures requiring the developer to pay the City to monitor and re-time the traffic signal at one impacted intersection and to pay a fair share contribution to various traffic improvements addressing cumulative impacts. Appellant forfeited the first challenge by failing to address and show City’s Traffic Model Output Data did not constitute substantial evidence supporting the effectiveness of the measure. Regarding the second, it failed to address and show City’s fair share program addressing city traffic was infeasible. (In the general plan consistency portion of its opinion, the Court also addressed and rejected, inter alia, ESPLC’s claim that a mitigation measure that would cause the possible loss of a dedicated bike lane was fatally inconsistent or not in conformity with the general plan and Bikeway Master Plan.)

In sum, the Court’s rather dense 30-page opinion addresses a number of interesting CEQA issues – project description, piecemealing, health risks/exacerbation, and traffic – in the context of a large urban infill project on a physically constrained and somewhat environmentally compromised site. The opinion provides helpful guidance in applying relevant law to these areas and in interpreting the new SCS-consistency CEQA streamlining statute. It also provides a helpful reminder that regulatory standards may, but will not always, serve as appropriate environmental thresholds of significance. Common sense must be exercised when such standards are applied inconsistently by a lead agency in reaching significance conclusions, or are used to classify what will obviously be very substantial adverse changes in existing physical conditions as insignificant, without an adequate explanation and supporting substantial evidence.

It bears noting that OPR’s forthcoming revisions to the CEQA Guidelines – which are expected to be finalized and transmitted to the Natural Resources Agency by late this year or early next to undergo the formal rulemaking process – are expected to address and affect areas addressed by the Court’s opinion in significant respects. These include clarifying the operation of thresholds of significance and (as indicated in the Court’s footnote) eliminating traffic delays as measured by LOS as a CEQA impact.