On November 29, 2016, the Court of Appeal for the First Appellate District rejected a challenge to the sufficiency of the San Francisco’s environmental analysis and upheld the City’s approval of an arena to house the Golden State Warriors basketball team, as well as other events, and the construction of adjacent facilities, in the Mission Bay South redevelopment plan area of San Francisco. Mission Bay Alliance v. Office of Community Investment and Infrastructure, __ Cal.App.5th __ (2016) (Case No. A148865). My partner, Art Coon, wrote about the CEQA issues in a post here.

The project was proposed on an approximately 11-acre site in the southeastern part of San Francisco. The area was once part of the 1990 Mission Bay plan, which was never implemented. The former San Francisco Redevelopment Agency approved a new project for the area in 1998, consisting of two separate development plans, Mission Bay North and Mission Bay South. The CEQA document for the project described the area at that time as “a primarily industrial area occupied by block-long warehouses, concrete and gravel processing facilities, truck terminals, and surface parking with large tracts of undeveloped land that previously contained rail lines and a rail yard.” In addition, the Giants ballpark was under construction and two years from completion.

Approximately 61 acres of the 238-acre Mission Bay South project area were planned for development by UCSF, with most of the remaining area planned for commercial industrial development. The Mission Bay South redevelopment plan lists seven principal land uses: residential, hotel, commercial industrial, commercial industrial/retail, UCSF, public facility (such as a police station), and open space. Potential secondary use as nighttime entertainment was defined to include “dance halls, discotheques, nightclubs, private clubs, and other similar evening-oriented entertainment activities.”

The Office of Community Investment and Infrastructure (“OCII”), which is the successor to the City’s former Redevelopment Agency, approved the arena and mixed-use project in November of 2015 as a secondary use consistent with the Mission Bay South redevelopment plan. The OCII found the project to be consistent with existing plans and compatible with the adjacent UCSF campus and neighborhood as a whole. The OCII director found that the event center “at the size and intensity contemplated and at the proposed location, will provide a development that is both necessary and desirable for, and compatible with, the neighborhood and the community.” The director also found that “[t]he project, including its retail uses, restaurants, and open space, would contribute vitality to Mission Bay’s street life and activate its pedestrian realms, which . . . would generally benefit the employees, students, and visitors that use the UCSF campus.”

In the trial court, the plaintiffs challenged the City’s approval of the project on the ground that the arena does not qualify as a permissible secondary use under the Mission Bay South redevelopment plan. The trial court rejected that argument and the plaintiffs did not challenge the court’s ruling. On appeal, the plaintiffs appear to have shifted gears, arguing that the project does not conform to the applicable zoning designation in the redevelopment plan because the project exceeds the plan’s allowable square footage for retail establishments.

The Court of Appeal rejected that argument for relying on the “faulty premise” that the entire 488,000 square foot arena is devoted to retail use, when it in fact includes many non-retail components, including spectator seating and suites; restaurants/bars and clubs; meeting rooms; spectator support facilities; Golden State Warriors management offices, practice facility and locker rooms; command center and operations space for police/security, fire protection services and traffic control; media support facilities; and event center operation and maintenance areas. The Court thus held that the “OCII reasonably counted only the square footage of the retail components against the allocation for retail use.”

The Court also rejected the plaintiff’s argument that the City conceded that the entire event center is a retail use because the planning department determined in a different context that the arena meets the definition of “retail use” in the Planning Code. The Court noted that the Planning Code does not govern permissible uses in the project area, that the Mission Bay South redevelopment plan expressly provides that it “shall supersede the San Francisco Planning Code in its entirety, except as otherwise provided herein,” and that the redevelopment plan has a “far more limited” definition of “retail sales and service” than the Planning Code.

In addition, the Court rejected the plaintiff’s challenge regarding the City’s issuance of a “place of entertainment” permit, under the San Francisco Police Code, to allow the project proponents to hold events at the arena. The City will grant such a permit unless it finds that “[t]he premises or the proposed operation of the business lacks adequate safeguards to prevent emissions of noise . . . that would substantially interfere with the public health, safety and welfare or the peaceful enjoyment of neighboring property.”

The plaintiff’s argued that the City was required to reject the place of entertainment permit application because post-event crowds will generate noise in excess of City standards. The Court first noted that the Police Code applies only to fixed noise levels produced on property over which a person has ownership or control, and that it does not apply to mobile noise generated by disbursing crowds. The Court also noted that the threshold of significance in the project’s CEQA document is not the standard governing approval or rejected of a place of entertainment permit; “[a]lthough overlapping, the focus of each is different.” Finally, the Court highlighted the many steps the permit requires be taken to minimize disruption in the neighborhood, determined that it should not second guess the adequacy of those measures, and held that “the record contains substantial evidence,” under Topanga, “supporting the finding that the conditions imposed will prevent these events from substantially interfering with the peaceful enjoyment of the surrounding properties.”

Mission Bay Alliance underscores the importance of well-reasoned and articulated findings to demonstrate how a project complies with applicable land use regulations. It also highlights the supporting evidence needed in the administrative record to allow a court to conclude that an agency’s adjudicatory findings are legally adequate and should not be disturbed.