In an opinion filed August 10, and later ordered published on September 7, 2018, the Fourth District Court of Appeal (Div. 2) affirmed a judgment denying Friends of Riverside’s Hills’ (FRH) writ petition challenging a residential development permit and related Negative Declaration issued by the City of Riverside (City) for a six-home, 11-acre subdivision in an environmentally sensitive area. Friends of Riverside’s Hills v. City of Riverside (Carlton R. Lofgren, as Trustee, etc., et al., Real Parties in Interest) (2018) ___ Cal.App.5th ____.

The most interesting CEQA aspect of the decision was FRH’s ultimately unsuccessful attempt – invoking the precedent of Pocket Protectors v. City of Sacramento (2004) 124 Cal.App.4th 903 – to support a “fair argument” of potential environmental effects (which would invalidate the project’s Negative Declaration and require preparation of an EIR) essentially “by proxy,” i.e., by proving the project violated several of the City’s complex land use regulations that were adopted to mitigate environmental impacts.

The regulations at issue applied by virtue of the project’s location in the City’s voter-adopted “Residential Conservation Zone” (RC Zone), which aimed to protect “prominent ridges, hilltops and hillsides, slopes, arroyos, ravines and canyons, and other areas with high visibility or topographic conditions that warrant sensitive development from adverse development practices.” The RC Zone is one of the City’s less dense zones, and it applies different development standards to “conventional” versus “Planned Residential Development” (PRD) in terms of minimum lot size, dwelling density and lot coverage, depending on the natural slope of the land involved. In general, the regulations require larger lots on steeper land, and encourage clustered development on flatter and less environmentally sensitive lands while preserving unique natural features. They do so by allowing modest “density bonuses” subject to adherence to numerous requirements for environmentally “superior design” and preserving and managing undeveloped open space areas. The specifics of the development standards ultimately applied to PRDs (like the challenged project here) are determined by rather complex and technical calculations (based on the natural slopes of the proposed lots) establishing a “benchmark density” under the “conventional” development standards.

The City ultimately determined (after some initial technical measurement errors that were corrected, and in the face of continued project opposition by FRH) that the approximately 11.62-acre project site had a “benchmark density” of 5 lots (of at least two acres each, with permissible natural slopes), and approved clustering and a density bonus allowing development of six total (and much smaller) lots, also with permissible slopes, with a requirement of endowed open space preservation and maintenance by a recognized conservation group.

More important than the specifics of how the City applied its RC Zone regulations to the PRD approved here was its CEQA initial study’s findings that “the project would have no substantial adverse impact on aesthetics or biological resources and would not conflict with any land use or zoning provisions that had been “adopted for the purpose of avoiding or mitigating an environmental effect.”” FRH challenged those findings and the City’s accompanying Negative Declaration; it argued that the project had significant environmental effects due to its violation of land use provisions by (1) failing to cluster lots as required, (2) proposing excessive grading, and (3) failing to require a variance for lots under 2 acres.

In affirming the trial court’s judgment rejecting these arguments and upholding the project approvals and negative declaration on de novo review under CEQA’s applicable non-deferential “fair argument” standard, the Court of Appeal accepted the fundamental premise of FRH’s CEQA litigation challenge, but disagreed it had ultimately proven its conclusion. Thus, the Court acknowledged: “Because the stated purpose of the [RC Zone] standards is to preserve the City’s topographically sensitive areas and protect them from erosion and deterioration, we conclude that a conflict with those standards constitutes an environmental impact under CEQA.” However, it found no substantial evidence that City’s project approval violated its impact-mitigating land use standards, observing that “evidence of environmental impacts must be founded upon facts in the administrative record” rather than “[a]rgument, speculation, unsubstantiated opinion or narrative, [or] evidence which is clearly erroneous or inaccurate.” (Citing CEQA Guidelines, § 15384(a); Pocket Protectors, supra, at 927.) The court concluded “the record contains no evidence of any land use violations,” ultimately distinguishing Pocket Protectors as a case where the record actually contained such evidence (in the form of the Planning Commission’s conclusions of land use provision violations and denial recommendation).

The Court also pointedly rejected FRH’s arguments that the development might violate RC Zone standards in the future if PRD permit conditions were violated as “not a ground for preparing an EIR.” Clustering criteria depended on both steepness and sensitivity, were “built into” the project’s conditions of approval, and would thus have to be satisfied at the final tract map and grading permit stages. In rejecting FRH’s “speculative” contrary arguments, the Court stated: “FRH does not argue these permit conditions are insufficient, rather it complains there is no guarantee the development will ultimately comply with them. This is true of any project with mandatory future conditions and is no reason to require an EIR. So long as the development complies with the conditions, there will be no violation of the land use provisions and thus no ground for environmental review.” While noting FRH would have CEQA recourse in the event of future violations of conditions, on the ground that such would constitute project modifications with new significant impacts not considered in the negative declaration (citing Guidelines, § 15162(a)(1)), the Court stated: “As it stands now, the development is required to comply with the land use provisions and there is no evidence it has violated or will violate them.”

Finally, the Court rejected FRH’s lot-size variance argument as inapplicable to PRD (as opposed to conventional) development projects, and rejected its non-CEQA “abuse of discretion” claims alleging mistakes in City’s technical data calculations (e.g., regarding lot slopes) under a deferential “substantial evidence” standard of review.

The upshot here is that the holding of Pocket Protectors remains viable, but to establish a fair argument of potential environmental effects under it, a plaintiff must point to record evidence that the project as ultimately approved actually violated the environmentally-protective land use regulations at issue. Here, such evidence was lacking and the negative declaration was thus upheld despite the applicable “low threshold” fair argument standard.