WORKBENCH et al. v. COUNTY OF SANTA CRUZ et al.

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

No. 26CV01095

WORKBENCH et al. v. COUNTY OF SANTA CRUZ et al.

PETITION FOR WRIT OF MANDATE

As explained below, the petition is granted.

I. BASIS OF THE WRIT

Petitioners are Workbench and Sweet Developments LLC, land developers. This action relates to a residential development project at 3500 Paul Sweet Road, Santa Cruz (project). The project proposal is a six-story multi-family residential rental building with 105 units, six of which would be affordable to extremely low-income households. The project proposes rental units of 30 studios, 60 one-bedrooms, and 15 two-bedrooms. To the west is the Oakwood Memorial Cemetery, to the north is Chaminade Resort, and to the south is the Dominican Oaks retirement complex. Petitioners contend the project has been deemed approved by operation of law because respondents County of Santa Cruz and its Planning Commission failed to approve the project by applicable deadlines.

Based on the administrative record (AR), the following dates are significant:

March 19, 2024 Preliminary project application, 55 units and 20% set aside as affordable; project acquires builder’s remedy since County did not have certified housing element (AR 736-66)3 April 22, 2024 Second preliminary application, 84 units (AR 769-789) October 2, 2024 Formal application, 84 units (AR 855-857) January 1, 2025 Builder’s remedy amendments effective (Government Code § 65589.5, “builder’s remedy 2.0”) January 30, 2025 Revised project application for 105 units under builder’s remedy 2.0 (AR 858-859) June 13, 2025 Application deemed complete (AR 1786) June 30, 2025 New statutory CEQA exemption goes into effect (Assem. Bill No. 130 (AB 130); Public Resources Code (PRC) § 21080.66) October 30, 2025 Petitioners contend a deadline for approval or disapproval based on tribal notification (PRC § 21080.66)

3 County’s housing element was certified on April 12, 2024. (Resp. RJN Ex. B.)

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

December 16, 2025 County letter advising of “preliminary CEQA determination” that project met statutory guidelines for exemption pursuant to PRC § 21080.66. (AR 1809) January 14, 2026 Agreed upon date for Planning Commission consideration of the project (AR 40, 65); staff report submitted with CEQA Notice of Exemption February 17, 2026 Petitioners contend the last possible date for respondents to approve or disapprove the project based on December 16, 2025 letter

When County staff declared the application complete on June 13, 2025, they advised petitioners that any final CEQA determination could only be made by “the appropriate decisionmaking body.” (AR 1801.) Two weeks later, AB 130 went into effect, significantly impacting the timelines and approval process of the project. The project went through further review of biotic resources and staff’s analysis of whether the new AB 130 deadlines applied. (AR 168-176, 1638- 1642, 1797-1798.)

In its December 16, 2025 letter, staff advised that the project “appears to meet qualifications for a Statutory [CEQA] Exemption” and that planning staff would contact Workbench if additional information was necessary “for the determination.” (AR 1809.)

In a report prepared for the January 14, 2026 Planning Commission meeting, County staff recommended approval of the project and a determination that the project was exempt from CEQA. (AR 40.) County staff operated under the premise that the Planning Commission was the approving body for the project and was the entity with final authority for the CEQA exemption determination. (Santa Cruz County Code (SCCC) § 16.01.050.)4 Following presentations by staff and the applicant, and input from the public, the Commission continued the hearing to an unspecified future date when the County Fire Marshal could be present. The Commission requested more information from staff as to various traffic and health and safety issues. (AR 724- 734.)

By letter dated February 18, 2026 petitioners informed County staff that they believed the project was deemed approved by operation of law because the project was not reconsidered by the Commission and no action had taken place by February 17, 2026. (AR 1810-1816.)

Petitioners filed this writ on March 23, 2026, alleging two causes of action against the County of Santa Cruz and Planning Commission of the County of Santa Cruz (respondents):

4 The court takes judicial notice of the Santa Cruz County Code. (Evid. Code, § 452, subd. (b).)

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

violation of the Permit Streamlining Act (Gov. Code, § 65950)5; and violation of the Housing Accountability Act (§ 65589.5). Petitioners allege that respondents violated the PSA by failing to approve or disapprove the project within 60 days of determining the project’s CEQA exemption (February 17, 2026), rendering the project approved by operation of law. (§§ 65950, subd. (a)(5), (7), 65956.)

II. LEGAL STANDARDS

A. 2025 Legislative changes to infill projects

On June 30, 2025, Assembly Bill (AB) 130 and Senate Bill (SB) 131 took effect to make significant changes to infill projects like this one. Several updates to those bills were enacted and became effective on October 11, 2025.

AB 130 included a new exemption from CEQA for certain urban infill housing development projects. The exemption, codified in PRC section 21080.66, provides a complete statutory exemption from CEQA for all aspects of a qualifying housing development project, including any permits and public improvements required for the project.

For purposes of this case, the parties agree that the exemption applies here, but disagree as to who makes a final determination on the exemption. Petitioners contend that County staff can and did make such a determination, so that new, shorter deadlines applied to this case and were missed, resulting in a project approval by operation of law. Respondents argue that the Planning Commission must make a final determination on the exemption, which has yet to occur and therefore no deadlines have expired.

B. Permit Streamlining Act (PSA)

The PSA (§ 65920 et seq.) places specific timelines on submitted development project applications requiring approvals, denials, or completeness so as to expedite permit processing. Developers can secure vested rights – i.e., the right to rely on versions of land use laws applicable at the time of application – by submitting complete information within designated time periods.

One specified deadline is 60 days “from the determination by the lead agency that the project is exempt from CEQA. (Gov. Code, § 65950, subd. (a)(5).) AB 130 amended section 65950 to require that, if a project is exempt from CEQA, “[a] public agency that is the lead agency for a development project” must act to approve or disapprove a qualifying project within 30 days of the completion of the tribal consultation process specified in PRC section 21080.66, subdivision (b). SB 158, effective October 11, 2025, clarified that the approval deadline is 30

5 Further statutory references are to the Government Code unless otherwise stated.

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

days after the later of (1) conclusion of the tribal consultation process or (2) the deadline for conducting a consistency review under section 65589.5, subdivision (j)(2), which in this case would be 30 days of when the application for the project is determined to be complete, since this project contains 150 or fewer units. The AB 130 and SB 158 changes apply to projects already in the pipeline since no statutory language extends their application to future dates or exempts existing projects. (People v. Camba (1996) 50 Cal.App.4th 857, 866 [urgency statutes without an express future operative date are effective immediately].)

If a “lead agency” fails to approve or disapprove a project within the required PSA timelines, the application is automatically “deemed approved.” (§ 65956, subd. (b); Linovitz Capo Shores LLC v. California Coastal Comm. (2021) 65 Cal.App.5th 1106, 1120.)

C. Housing Accountability Act

The Housing Accountability Act (HAA) authorizes local governments to require housing development projects to comply with objective, quantifiable, written development standards, conditions and policies that are appropriate and consistent to meet the jurisdiction’s share of regional housing needs. (§ 65589.5, subd. (f)(1)-(2); California Renters Legal Advocacy & Educ. Fund v. City of San Mateo (2021) 68 Cal.App.5th 820, 844-845 (“CRLA”).)

The HAA includes a declaration that the Legislature’s intent to “significantly increase the approval and construction of new housing for all economic segments of California’s communities by meaningfully and effectively curbing the capability of local governments to deny, reduce the density for, or render infeasible housing development projects and emergency shelters” had “not been fulfilled.” The HAA requires that it “be interpreted and implemented in a manner to afford the fullest possible weight to the interest of, and the approval and provision of, housing.” (§ 65589.5, subd. (a)(2)(K) and (L).)

The statute specifies that “ ‘[d]isapprove the housing development project’ includes any instance in which a local agency” fails to comply with the time periods specified in subdivision (a) of Section 65950, fails to make a determination of whether the project is exempt from CEQA, or commits an abuse of discretion. (§ 65589.5, subd. (h)(6).)

D. Standard of Review

The parties disagree as to the type of writ at issue. Petitioners seek administrative writ review under Code of Civil Procedure section 1094.5, subdivision (b). (Opening Brief (OB), p. 12.)6 Respondents argue that since no final determination of the project resulted from the

6 Petitioners argue the burden shifts to the local agency under the PSA and HAA pursuant to section 65589.6. But that section applies to actions “to challenge the validity of a decision [...] to

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

Planning Commission hearing, this is a traditional writ under Code of Civil Procedure section 1085.

“There are two essential requirements to the issuance of a traditional writ of mandate: (1) a clear, present and usually ministerial duty on the part of the respondent, and (2) a clear, present and beneficial right on the part of the petitioner to the performance of that duty.” (California Assn. for Health Services at Home v. Department of Health Services (2007) 148 Cal.App.4th 696, 704.) “Generally, a [1085] writ will lie when there is no plain, speedy, and adequate alternative remedy....” (Pomona Police Officers’ Ass’n v. City of Pomona (1997) 58 Cal.App.4th 578, 583- 84.)

The court finds that administrative mandamus is more appropriate here. The HAA specifies that claims shall be brought pursuant to Code of Civil Procedure section 1094.5. (§ 65589.5, subd. (m)(l).) Under the HAA, the court’s task is “to determine whether the [County] ‘proceeded in the manner required by law,’ with a decision supported by the findings, and findings supported by the evidence; if not, the [County] abused its discretion.” (CRLA, supra, 68 Cal.App.5th at p. 837.) Agencies that disapprove a project bear the burden of proof that their decision conformed to the HAA. (Ibid.)

Since the court’s task here is to determine the application of the PSA and HAA to this project, it will apply an independent judgment standard. A reviewing court exercises independent judgment on pure questions of law, including the interpretation of statutes and judicial precedent, and “may take into account the agency’s interpretation of its own rules in appropriate circumstances.” (Ibid.)

III. DISCUSSION

Petitioners’ case is based on a simple concept – that respondents determined the project was exempt from CEQA on December 16, 2025 and an approval or disapproval of the project was required by January 14, 2026, or alternatively, February 17, 2026 based on the PSA timelines. (OB at p. 10-11, AR 1810.)

Respondents argue that no CEQA exemption has yet been determined because the decision-making authority – the Planning Commission -- did not make it. (Opposition Brief (Opp) at p. 11.)

The parties spend considerable time describing various submittals and changes to the project during 2025, when the infill CEQA changes were occurring. But for purposes of this writ,

disapprove [...] or approve a project upon the condition that it be developed at a lower density....” (§ 65589.6.) This project’s density is not at issue.

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

the parties agreed the project would go before the Planning Commission on January 14, 2026. Notably, petitioners do not identify anywhere in the record where they objected to that action by the Planning Commission. In fact, after their review of the agenda report they submitted clarifications to the project two days before the hearing, but did not object to staff’s submittal of the project – including the Commission’s determination on CEQA – in that communication. (AR 536-546.) It was not until February 18, 2026, that petitioners asserted that the final CEQA determination had been made by staff on December 16, 2026, and that based on the PSA, the project was deemed approved. (AR 1811.)

A. Did petitioners waive provisions of the PSA by submitting the project to the Planning Commission?

An issue not addressed by either party is waiver. The court will have questions on this issue at the hearing and may request supplemental briefing on this issue. Section 65950, subdivision (b) permits the parties to extend any deadline by written agreement, which is what happened here. Part of the parties’ agreement appears to be that the Planning Commission would determine whether there was a CEQA exemption – County staff were explicit that the exemption would be presented to the Commission for approval, the staff report clearly indicated so, and petitioners did not object to that process, even in their correspondence two days before the hearing.

The court is mindful of the significant legislative changes presented during the life of the project, and the burden on County staff to apply them in real time cannot be overstated. Since the parties continued to advance this project to the Planning Commission, as it would have without AB 130, did petitioners’ agreement to extend the PSA deadlines and agreement to have the issue determined by the Commission at the January 14, 2026 hearing result in waiver of those deadlines or inability to object to the Commission being the appropriate body to make the CEQA exemption determination?

B. Staff may make statutory exemption determinations

Assuming there was no waiver, AB 130 created a new statutory exemption from CEQA review. Unlike categorical exemptions, projects that comply with all provisions of statutory exemptions are not subject to any environmental review under CEQA. (See Concerned Dublin Citizens v. City of Dublin (2013) 214 Cal.App.4th 1301, 1309-1310.)

Statutory exemptions can proceed by staff determination; no procedural requirements are mandated under state law. “CEQA does not generally impose procedural requirements, including for a public hearing, on an agency making an exemption determination and most statutory exemptions do not require findings to document the basis for the claimed exemption, [...] [Citations.] Once it has been properly determined that an exemption from CEQA applies, an

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

agency need not conduct further analysis or progress to the second or third tiers of the scheme’s environmental review. [Citations.]” (Great Oaks Water Co. v. Santa Clara Water Dist. (2009) 170 Cal.App.4th 956, 967, fn. omitted.)

The CEQA Guidelines (Cal. Code Regs., Title 14, § 15000 et seq.) plainly allow staff to exempt projects. First, they refer to “lead agency” as the decision maker in exemptions, not “approving body” as respondents urge. (Guidelines, § 15061, subd. (a) [“lead agency shall determine whether the project is exempt....”].) “ ‘Lead agency’ means the public agency which has the principal responsibility for carrying out or approving a project.” (Guidelines, § 15367.) Second, they specifically permit staff to make such findings. (Guidelines, § 15025, subd. (a)(1).) Finally, they provide for appeals when an official, instead of an approving body, makes an exemption decision. (Guidelines, § 15061, subd. (e).) In fact, the County Code contemplates that staff will make CEQA exemption determinations. (SCCC § 18.10.320(A)(2).)

Respondents argue the Planning Commission is the approving body for the CEQA exemption, citing SCCC section 16.01.050. However, that provision applies only where CEQA review is required: “Prior to taking action to approve a discretionary development permit, legislative matter or other project subject to CEQA, the approving body shall either determine the project to be exempt from CEQA, or make required findings and adopt a Negative Declaration, or make required findings and certify an Environmental Impact Report....” (SCCC § 16.01.050.) That provision does not discuss Notices of Exemption, which are used where CEQA review is not necessary due to a statutory or categorical exemption.7 That omission further supports that the County Code section only applies where CEQA review is required.

Respondents also rely on SCCC sections 13.11.037 and 18.10.015. Those sections identify various individuals and entities within the County who can approve land use related actions, including the Planning Director, Zoning Administrator and Planning Commission. Respondents argue the County Code requires Planning Commission approval here based on the size of the residential project. (SCCC § 13.11.037.) However, that provision applies to design guidelines, not CEQA. The court agrees that respondents’ reliance on California Clean Energy Committee v. City of San Jose (2013) 220 Cal.App.4th 1325 is misplaced since it addressed the non-delegable function of certifying an EIR which is not at issue here.

Based on the foregoing, the court finds that staff makes CEQA exemption determinations, and no state law or local code requires Planning Commission approval. The court also finds that staff did in fact make a CEQA exemption determination. The record shows that staff’s preliminary determination was on December 16, 2025, but that by January 14, 2026, the staff report was unequivocal: “As further detailed in the attached Notice of Exemption (Exhibit A),

7 Notices of exemption are optional but are used to shorten the statute of limitations for legal challenges to 35 days. (PRC § 21167, subd. (d).)

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

the project meets the criteria of PRC Section 21080.66, and therefore it is exempt from CEQA and no further environmental analysis is required.” (AR 65, italics added.)

C. Respondents’ deadline to approve or disapprove

Again, the PSA requires approval or disapproval 60 days “from the determination by the lead agency that the project is exempt from CEQA (Gov. Code, § 65950, subd. (a)(5)). The PSA also provides a deadline of 30 days from the conclusion of the tribal consultation process, or 30 days after an agency’s deadline to make a written compliance determination pursuant to the HAA, whichever is later, if the project is exempt from CEQA. (§ 65950, subd. (a)(7).) The court finds that these provisions are somewhat contradictory and under the circumstances here, where the CEQA exemption decision was made on January 14, 2026 – after the 30-day periods of subdivision (a)(7) had expired, it seems most appropriate to apply the deadline specified in subdivision (a)(5).

Respondents acknowledge that even if their deadline to approve or disapprove was October 30, 2025, the parties agreed to extend that deadline to January 14, 2026. (AR 65.)8 Therefore, the court could find the deadline for respondents to approve or disapprove was January 14, 2026. Alternatively, the court could find that the deadline was 60 days after the January 14, 2026 final CEQA exemption determination – i.e., March 14, 2026. Either way, the deadline passed without compliance by respondents.

Because all possible deadlines passed, the court has no choice but to find that the project has been approved by operation of law. (§ 65956, subd. (b).) Public notice of the January 14, 2026 meeting was provided, satisfying any arguable due process element prior to approval by operation of law. (Linovitz Capo Shores LLC v. California Coastal Comm., supra, 65 Cal.App.5th at p. 1111 [public agency’s notice was sufficient for the project to be deemed approved by operation of law and did not require any statement of such approval if no action taken within certain time period].)

Failing to comply with the time periods specified in section 65950, subdivision (a) constitutes a disapproval under the HAA. (§ 65589.5, subd. (h)(6)(B).) Since respondents did not make any findings for disapproval by the deadline, the court is also forced to find they violated the HAA. (§ 65589.5, subd. (d)(1)-(5) [findings required for disapproval].)

8 Respondents argue the October 30, 2025, deadline in the staff report was a misunderstanding by staff, but based on the parties’ agreement to extend, this earlier deadline is immaterial.

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

D. Respondents did not engage in bad faith

Petitioners assert bad faith against respondents pursuant to section 65589.5, subd. (l), which specifies that “ ‘bad faith’ includes, but is not limited to, an action or inaction that is frivolous, pretextual, intended to cause unnecessary delay, or entirely without merit.”

Petitioners rely on two comments by a single commissioner at the January 14, 2026 hearing as proof of bad faith. Those comments primarily related to the constraints that the builder’s remedy and the Governor’s housing mandate have on projects. (OB at p. 20.) But those citations do not support petitioners’ argument and are taken out of context. First, Commissioner Nickell’s comment regarding public safety as a “loophole” for the builder’s remedy was a question for County Counsel to explain the builder’s remedy; the commissioner did not make any comment concluding or opining how to use any “loophole” to avoid approving the project. (AR 671-672.) Next, his comment that the County’s “hands were tied” ignores the remainder of his comments acknowledging the importance of housing and understanding the Governor’s housing mandate. (AR 716.)

Petitioners’ evidence based on County supervisors’ comments and actions after January 14, 2026, is extra-record evidence and not a proper basis for determining bad faith. (PAR 15-55.)

Overall, the record shows staff and commissioners grappling with the complex issues presented by heightened state regulation in this land use area. The court reviewed the January 14 hearing transcript (AR 586-735) and found the commission’s concerns to be thoughtful, unbiased, and directly related to the “tensions inherent in the Legislature’s efforts to solve a statewide problem that lies within a realm typically controlled by local authorities.” (Snowball West Investments L.P. v. City of Los Angeles (2023) 96 Cal.App.5th 1054, 1085.)

The record shows significant statutory changes during the life of this project that altered applicable deadlines and County staff’s consistent and diligent efforts to comply with those changes, as well as a project that morphed from 55 units to 105 units based on legislative mandates. Without objective evidence of bad faith, petitioners cannot overcome the presumption that respondents acted appropriately. (CRLA, supra, 68 Cal.App.5th at p. 851 [“we will not presume that municipalities routinely proceed in bad faith when they apply their development laws and standards”].)

VI. OBJECTIONS TO EVIDENCE, REQUESTS FOR JUDICIAL NOTICE

Respondents filed objections to petitioners’ evidence and requests for judicial notice. The court rules as follows:

Objections 1-2: Overruled, not extra-record evidence.

LAW AND MOTION TENTATIVE RULINGS DATE: AUGUST 31, 2026 TIME: 8:30 A.M.

Objections 3-7: Sustained, extra-record evidence. (Code Civ. Proc., § 1094.5, subd. (e); Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 565, 579.) The Board of Supervisors’ March 10, 2026, meeting is outside the confines of the challenged action in this case and will not be considered. Therefore, petitioners’ request to augment the record with its Items 3 through 6 (PAR 15-55) is denied; these records were not considered by County staff or the Planning Commission in reaching their determinations. (See Petitioners’ Lodging of Part of the Administrative Record, June 8, 2026; Cooper v.

Kaiser (1991) 230 Cal.App.3d 1291, 1300; Evans v. City of San Jose (2005) 128 Cal.App.4th 1128, 1144.) Petitioners’ corresponding request for judicial notice of these records is also denied. Petitioners’ ability to lodge portions of the record pursuant to Code of Civil Procedure section 1094.9 does not permit the inclusion of improper extra-record evidence. Finally, the court will not consider the staff report for the continued Planning Commission hearing set for March 25, 2026 to reconsider the project (AR 1- 35); it is immaterial to this ruling and constitutes extra-record evidence.

Objections 8-10: Overruled, not extra-record evidence.

Objection 11: Sustained, extra-record evidence, see above. Respondents’ requests for judicial notice of Exhibits A through E are granted pursuant to Evidence Code section 452, subdivisions (b) and (c). Petitioners raised no objections to these requests.