In a published decision filed May 28, 2015, the Fourth District Court of Appeal reversed that part of the trial court’s judgment granting a writ of mandate and otherwise affirmed the judgment, thus upholding the City of San Diego’s Balboa Park revitalization project (“Project”) against various land use law and CEQA challenges. Save Our Heritage Organization v. City of San Diego (The Plaza de Panama Committee, Real Party in Interest) (4th Dist.2015) ___ Cal.App.4th ____, 2015 WL 3587805.

The Project seeks to eliminate motor vehicle use from the Balboa Park Complex, a National Historic Landmark District which contains buildings, plazas and related improvements designed for the 1915 Panama-California Exposition and the 1935 California Pacific International Exposition. The Project would do so through construction of a new “Centennial Bridge,” connected to the eastern part of the existing historic Cabrillo Bridge, which would serve as a bypass diverting vehicles entering the park from the west around the Complex’s southwestern portion and to the Park’s southeastern portion, which would also include a new underground pay parking structure with a 2.2-acre rooftop park. The Project’s objectives include restoring the historic pedestrian-only uses of the Complex and eliminating safety hazards from existing vehicle-pedestrian conflicts in the Complex. The Project was approved by the City Council after public and environmental review processes involving hundreds of meetings over several years and a 3,300-plus page EIR.

The trial court ruled against Petitioner SOHO on its CEQA claims, which SOHO abandoned on its cross-appeal by failing to provide supporting argument or authority in its brief. The issues on appeal thus centered on SOHO’s other land use law claims, i.e., that the City lacked substantial evidence to support findings required for Project approval under its own municipal ordinance and that the pay parking structure violated an 1870 Statute allegedly restricting the former pueblo lands comprising Balboa Park to “free and public park” use. Because of the Project’s acknowledged significant impacts on the historic Cabrillo Bridge structure, the City’s Municipal Code section 126.0504(a) required it to find the Project would not adversely affect applicable land use plans, and section 126.0504(i)(3) required it to find there was “no reasonable beneficial use” of the property without the Project. The trial court found the record lacked substantial evidence to support the second required finding, did not rule on the first, and (as noted) rejected SOHO’s CEQA challenge, as well as its arguments under the 1870 Statute.

In reversing the trial court’s one adverse ruling and finding in favor of the City on all other arguments, the Court of Appeal made the following key holdings and observations:

  • The deferential “substantial evidence” standard of review applied to the City’s decision and findings to approve the Project, requiring the court not to substitute its own views or reweigh evidence, but to uphold the City’s determinations if supported by substantial evidence, resolving all reasonable doubts in their favor.
  • Interpretation of Municipal Code section 126.0504(i)(3)’s language — requiring a finding of “no [other] reasonable beneficial use” for approval of projects substantially altering designated historical resources — involved “a question of first impression.” The Court’s task in construing ordinances and statutes is to give a “plain and common sense meaning” to their actual language which “give[s] effect and significance to every word and phrase,” and this task involves a question of law subject to de novo review with no deference to the trial court’s ruling.
  • In upholding the City’s findings on this issue as legally adequate and supported by substantial evidence, the Court deferred to the City’s interpretation of the key word qualifying the phrase “beneficial use” in its ordinance, which is “reasonable.” In essence, “reasonable” does not mean “any,” and the trial court and SOHO erred in taking the position that simply showing “some” beneficial use of the property existed absent the Project was sufficient to preclude the required finding. Rather “an opponent [challenging the City’s finding] must demonstrate, to the satisfaction of the decision-maker, that the property’s current beneficial use without the Project is a reasonable beneficial use.”
  • Per the Court of Appeal: “Under our construction, section 126.0504, subdivision (i)(3), permits the decision-maker to decide whether an existing use of a property is unreasonable, even though that existing use may be beneficial in some manner to someone. The contrary interpretation — that a project must be rejected if there is anyone who could posit a conceivable beneficial use of the property without the project — would set a nearly insurmountable bar to a project that proposes to alter the historic resource, because it is difficult to perceive (except in the most extreme circumstances) how a property could be deemed to have no beneficial use whatsoever. … Under our interpretation, the question for the courts is not whether there was evidence from which a reasonable person could have concluded the property had some beneficial use in its unmodified condition, but instead whether substantial evidence supports the decision-maker’s determination that the property’s uses in its unmodified condition were not reasonable under all of the circumstances. [citation] [¶] We construe section 126.0504 [(i)(3)] as vesting in the decision-maker the discretion to determine two issues: [1] whether the owner’s ability to use the property without the project can be deemed a “beneficial” use, and [2] whether the beneficial uses to which the property can be put without the project can be deemed “reasonable” uses.”
  • Reviewing the record under this construction of the ordinance, the Court held that “there is substantial evidence to support City’s finding that, without the Project, the current use of the Complex is not a reasonable … [The] City clearly concluded that the traffic congestion — and the concomitant endangerment of pedestrians who wished to use the Complex — rendered the existing use of the Complex an unreasonable one, and that without the Project’s proposed reconfiguration of the traffic flow, the reasonable beneficial use of a property would be prevented.” The Court further found that “ample evidence [in the form of existing and projected future traffic problems and safety hazards to Complex users] supported the underlying factual basis for the City’s conclusions.”
  • Ultimately, the determination of whether or not the Complex could “reasonably be beneficially used without the Project … is not a matter of law but instead requires a weighing of the competing interests laying claim on the Complex” — a weighing entrusted to the City’s discretion subject only to deferential judicial review for “substantial evidence” support.
  • SOHO failed to exhaust its administrative remedies as to, and thus failed to preserve, its argument under a separate findings requirement of section 126.0504(i)(3), namely that absent the Project “it is not feasible to derive a reasonable economic return from the property.” Per the Court: “Although SOHO and others did challenge that the evidence could support the finding under [that] section … as to “no reasonable beneficial use,” we are cited to nothing to suggest the feasibility of deriving a reasonable economic return was interposed at the administrative proceedings, and generalized objections will not suffice to preserve the issue.” (Citing City of Walnut Creek v. County of Contra Costa(1980) 101 Cal.App.3d 1012, 1019-1020.) In any event, even if the issue had been preserved, the Court stated it would have rejected SOHO’s claim on its merits; the City determined that the “reasonable economic return” finding requirement did not apply to public projects (like the Project) unrelated to deriving increased profits from a property, and SOHO failed to show that this finding was incorrect or lacked evidentiary support.
  • SOHO’s challenge to the City’s findings that approval of the Project would not adversely affect its applicable land use plans, which the trial court found unnecessary to reach, was also meritless. The Court of Appeal analyzed and rejected this claim using the familiar legal framework applied to typical general plan consistency challenges. In essence, the Project was not inconsistent with and did not adversely affect applicable land use plans merely because it was inconsistent with some policies (albeit consistent with a majority). Rather, local agencies have broad discretion to construe, weigh and apply their general plan policies; precise conformity is neither possible nor required, and compatibility and harmony will suffice; and courts do not “micromanage” these local development decisions. (Citing and quoting liberally from the case law, including Sequoyah Hills Homeowners Assn. v. City of Oakland (1993) 23 Cal.App.4th 704, 718-720.)
  • Finally, the Project’s “pay” public parking structure component did not violate the 1870 Statute under which the City held the former pueblo lands which became Balboa Park. Subsequent legislative enactments giving the City broad powers under its Charter to manage the use of its public parks and grounds annulled any purported limitations under the 1870 Statute, even assuming such limits ever existed.

The Court of Appeal’s decision is obviously important because it allows a significant public project to proceed. It also resolves an important issue of first impression: the proper interpretation of a municipal ordinance requiring, as a condition of project approval for projects significantly altering protected historical resources, that the local agency find an owner has “no reasonable beneficial use” of the property without the project. The Court’s decision invokes well-established principles of statutory interpretation to give robust independent meaning to the ordinance’s key qualifying word “reasonable”; it thus ensures that similar statutes and ordinances will not be construed to hamstring local agency discretion to approve projects altering historic resources by erecting insurmountable hurdles in the form of required findings that are all but impossible to make.