CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In an unpublished opinion issued January 4, 2018, Visalia Retail v. City of Visalia, the California Court of Appeal affirmed the trial court’s judgment and upheld the City of Visalia’s (the City) final environmental impact report (EIR) for its 2030 General Plan Update (the General Plan Update). In summary, the court determined:

  • An EIR need not study urban decay unless the record includes substantial evidence from which a fair argument can be made that the potential economic consequences of a project are of such a magnitude so as to cause physical changes in the environment.
  • A court cannot disturb a general plan for internal inconsistency unless a reasonable person could not conclude that the plan is internally consistent.
  • When a local agency holds one properly noticed public hearing for a general plan amendment, additional meetings where public comment is permitted are not subject to the California Planning and Zoning Law’s 10 days’ notice requirement.

The petitioner, a retail property development company (Petitioner) had filed an unsuccessful petition for writ of mandate seeking to invalidate the City’s certification of the final EIR and the City’s adoption of the General Plan Update. Petitioner argued that 1) the City failed to analyze the potential for a land use policy capping the size of tenants in Neighborhood Commercial areas to 40,000 square feet (the Land Use Policy) to lead to urban decay; 2) the General Plan Update was internally inconsistent, and 3) the City failed to issue proper notice of the public hearing at which the final EIR was certified. The court rejected all three arguments.

Background for Appeal

  • On August 27, 2014, the City gave notice that it would hold a public hearing on the final EIR and General Plan Update on September 8, 2014. The City held the public hearing on September 8, as scheduled, but adjourned the meeting to October 6, at which it took additional public comments. On October 14, 2014, the City Council held a special meeting at which it certified the final EIR and adopted the General Plan Update. Petitioner filed a petition for writ of mandate seeking to invalidate the City’s certification of the final EIR and adoption of the General Plan Update. The trial court ruled in favor of the City, and Petitioner appealed.

Insufficient Evidence to Necessitate the Study of Urban Decay

First, Petitioners argued that the City’s failure to analyze the potential for the Land Use Policy to cause a phenomenon called urban decay — often associated with business closures and multiple long-term vacancies — violated the California Environmental Quality Act (CEQA). An EIR is required to evaluate all significant effects on the environment from a proposed project. However, an EIR typically need not evaluate economic or social effects of a project unless they may lead to physical changes to the environment. As such, an EIR is not required to evaluate urban decay unless there is substantial evidence supporting a fair argument that the project may cause physical urban decay.

In this case, Petitioner had relied on an experienced local commercial real estate agent’s report (the Report) opining that the Land Use Policy would cause anchor vacancies and/or lower-traffic anchors, reduce rental income landlords use for maintenance and improvements, and create a downward spiral of physical deterioration. The court determined that support for the Report was largely conjecture and failed to show that the magnitude of any adverse economic effect may lead to a substantial impact on the environment. As a result, Petitioner failed to produce sufficient evidence supporting a fair argument that the Land Use Policy may cause a significant effect on the environment, rather than purely economic effects. Thus, the Court found that the City’s EIR was not required to consider urban decay.

Internal Consistency of the General Plan

Next, Petitioner claimed the Land Use Policy would frustrate another policy from the City’s General Plan that promotes infill development by impeding development in neighborhood commercial sites, some of which are surrounded by urbanized development. The court explained that it cannot disturb a general plan based on internal consistency unless, based on the evidence before the city council, a reasonable person could not conclude that the plan is internally consistent. According to the court, determining the proper means of encouraging infill development or market flexibility is a policy question for political bodies, not a legal question for the courts. The court then stated that a reasonable person could conclude that the Land Use Policy is consistent with the stated goals of the general plan.

General Plan Amendment Notice Requirement Compliance

Finally, Petitioner claimed the City violated the Planning and Zoning Law by failing to provide at least 10 days’ notice for the October 14, 2014 meeting. The court explained that the Planning and Zoning Law requires only one public hearing before a city may amend a general plan. The court held that the duly noticed September 8 and October 6 meetings satisfied this requirement. As such, the October 14 meeting, for which the City did not provide 10 days’ notice, was not subject to the notice requirements of the Planning and Zoning Law, although public comment was permitted..

Disposition

Accordingly, the court affirmed the trial court’s judgment. The City’s General Plan Update, including the Land Use Policy at issue, will stand.

  • Opinion by Poochigian, Acting P.J., with Detjen, J., and Black, J., concurring.
  • Trial Court: Superior Court of Tulare County, Case No. VCU258614, Bret D. Hillman, Judge.