North County Advocates v. City of Carlsbad (2015)—Cal.App.4th—Case No. D066488

Why It Matters: This case addresses an important issue under CEQA relating to the development of the existing conditions baseline against which project impacts are measured. This decision holds that an EIR prepared for the renovation of a vacant department store could include the store’s historical operational information in establishing the environmental baseline for the project’s traffic impact analysis under CEQA.

Facts: In 1969 a Westfield shopping center was constructed in Carlsbad, California (City). It featured retail shops and five main anchor department store buildings, one of which was a Robinsons-May store. Under a “Precise Plan” approved by the City in 1977, Westfield was entitled to renovate the interior of the Robinsons-May store and fully occupy it without obtaining further approvals. In 2006 the Robinsons-May store became vacant, although smaller retailers such as Halloween stores occupied the space intermittently from time to time thereafter. In August 2012 the City released a draft EIR for a project to demolish and reconstruct the former Robinsons-May store, approximately six years after it had become vacant. The project would result in a net loss of 636 square feet of total gross leasable area.

In preparing the EIR’s traffic analysis for the project, the City applied an existing conditions environmental baseline that was premised on a fully occupied Robinsons-May building, even though the space had been vacant since 2006. The trips attributable to a fully occupied space were added to the existing traffic counts using trip generation rates and estimates identified in a 2002 San Diego Association of Government (SANDAG) vehicular traffic generation rates guide that assumed full occupancy of all entitled and constructed square footage. This added 5,186 daily trips to the existing traffic counts, and together the existing traffic counts and the added trips attributable to the Robinsons-May building constituted the existing conditions environmental baseline for purposes of the traffic analysis. In support of this baseline methodology, the EIR traffic study noted that the “nature of a shopping center is that tenants change and the amount of occupied space constantly fluctuates” and that the space could be occupied at any time without any discretionary action. The City approved the EIR in 2013.

CEQA requires that when evaluating the potential impacts of a project, the EIR must examine those impacts against the physical environmental conditions existing at the time the environmental analysis commences, or what is referred to as the environmental baseline. “This environmental setting will normally constitute the baseline physical conditions by which a lead agency determines whether an impact is significant.” (14 Cal. Code of Regs. § 15125(a).)

North County Advocates (Advocates) challenged the EIR, arguing that the City (1) used an improper baseline in the EIR’s traffic analysis, (2) failed to consider proper mitigation measures, and (3) failed to respond adequately to public comments. The trial court rejected each of these arguments, and Advocates appealed. The published portion of the North County Advocates decision solely addressed the challenge relating to development of the traffic baseline and is therefore the only aspect of the case having precedential value.

The Decision: The Court of Appeal affirmed the trial court’s ruling, finding that substantial evidence supported the City’s existing environmental conditions baseline because it was based on recent historical use and was consistent with Westfield’s right to fully occupy the Robinsons-May space without further discretionary approvals.

Advocates contended that the EIR’s traffic baseline was incorrect and misleading because it did not follow the normally applicable rule of measuring conditions as they actually exist when environmental review begins. Advocates claimed the City falsely inflated the existing traffic conditions by imputing over 5,000 daily trips to the baseline premised on a fully occupied Robinsons-May store that was vacated in 2006, which understated the project’s true impact on the environment. Advocates argued that the California Supreme Court had rejected the practice of imputing use levels in Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310 (CBE Decision).

In dismissing the Advocates’ arguments, the court distinguished these facts from those in the CBE Decision. In the CBE Decision the Supreme Court held that an air district’s selected air emissions baseline was impermissibly “hypothetical” because it was based on maximum permitted operating conditions that “were not the norm” and that had never been reached. The court in North County Advocates stated that while the CBE Decision recognized that public agencies should normally use existing conditions as the baseline, the Supreme Court also acknowledged that “neither CEQA nor the CEQA Guidelines mandates a uniform, inflexible rule.” The North County Advocates court explained that agencies may exercise discretion to create a baseline that accounts for a “temporary lull or spike in operations that happens to occur at the time of environmental review,” so long as that exercise of discretion is supported by substantial evidence.

In reviewing the applicable case law, the North County Advocates court found the decision in Cherry Valley Pass Acres & Neighbors v. City of Beaumont (2010) 190 Cal.App.4th 316 (Cherry Valley) to be “on point and persuasive.” In Cherry Valley a farmer had used substantial amounts of water (1,384 acre-feet annually) from the 1960s to 2001, but reduced water use greatly (50 acre-feet annually) after switching uses in 2005. The EIR for its 2006 project used a baseline water level of 1,484 acre-feet annually, which was the amount the farmer was entitled to under a 2004 water-rights adjudication. Cherry Valley petitioners contended the baseline should have been the then existing 50 acre-feet-annually level. The Cherry Valley court upheld the city’s baseline determination for the project’s water use levels, concluding that substantial evidence showed the baseline was not hypothetical because it was based not only on the developer’s entitlement to extract water, but also on “recent history of actually extracting substantially the same amount.”

The North County Advocates court explained that Cherry Valley had also distinguished the CBE Decision and other cases cited by Advocates “on the ground that the baseline in each of those cases was hypothetical because it was based on conditions that were permissible pursuant to an existing plan or regulation but that were not being employed or that did not exist on the ground at the time environmental review commenced.”

The court found that the City’s selection of a traffic baseline that assumed full occupancy of the Robinsons-May store was not merely hypothetical because it was based on the historical operation of the space at full occupancy for more than 30 years up until 2006. The court noted that the building’s fluctuating occupancy after 2006 is the nature of a shopping center, and was akin to the situation addressed in the CBE Decision “that led the Supreme Court to recognize that agencies have discretion to consider conditions over a range of time periods to account for a temporary lull or spike in operations.” The North County Advocates court also found that the City’s decision to base the traffic baseline on historical occupancy rates was further supported by substantial evidence consisting of SANDAG data on such use levels.

Practice Pointers: Historical operational levels can be used to establish the existing environmental conditions baseline, but only if they are supported with substantial evidence, such as actual entitlements for those historic levels, and demonstration that the use at those levels had previously occurred.