Save Our Heritage Organisation v. County of San Diego CA4/1 (2014) · DecisionDepot
Save Our Heritage Organisation v. County of San Diego CA4/1
California Court of Appeal Jul 22, 2014 No. D064006Unpublished
Filed 7/22/14 Save Our heritage Organisation v. County of San Diego CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
SAVE OUR HERITAGE ORGANISATION, D064006
Plaintiff and Respondent,
v. (Super. Ct. No. 37-2012-00100958)
COUNTY OF SAN DIEGO et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of San Diego County, Judith F.
Hayes, Judge. Reversed and remanded with directions.
Thomas E. Montgomery, County Counsel, and C. Ellen Pilsecker, Chief Deputy
County Counsel, for Defendants and Respondents.
Brandt-Hawley Law Group and Susan L. Brandt-Hawley for Plaintiff and
Respondent.
The County of San Diego, the Board of Supervisors of the County of San Diego,
and the County of San Diego Department of General Services (together, the County)
appeal a judgment directing the County to set aside its certification of an environmental
impact report (EIR) for, and approval of, a project to demolish a County-owned historical
building and replace it with commercial and residential buildings. Upon the petition of
Save Our Heritage Organisation (SOHO), the trial court ruled the certification and
approval violated the California Environmental Quality Act (CEQA; Pub. Resources
Code, § 21000 et seq.).1 We reverse.
I.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Project
The EIR analyzes a proposed mixed-use development, referred to as the "Cedar
and Kettner Development Project" (the Project), on County-owned property in downtown
San Diego. The property is bounded on the north by Cedar Street, on the east by Kettner
Boulevard, on the south by Beech Street, and on the west by railroad and trolley rights-
of-way. As of June 2012, the parcel contained a parking lot over the northern two-thirds
of the project site, and the southern one-third contained two structures, the three-story
Star Builders Supply Company office building (Star Building) and a warehouse.
The Star Building is a city-designated historical structure. It was built in 1911 to
serve as a warehouse to store goods delivered via the railroad line at the west edge of the
Project site. An oil company occupied the site from 1948 to 1973, during which time
petroleum hydrocarbons contaminated the site. The greatest concentrations of
1 Subsequent undesignated section references are to the Public Resources Code.
2
contaminants were found in the southwest portion of the Project site, including directly
under the Star Building.
As stated in the EIR, the Project has four goals: (1) to provide adequate parking
close to the County Administration Center (CAC),2 (2) to allow development of part of
the site through a public-private partnership, (3) to "[m]aximize the County's potential
return from development of a portion of the site through a public-private partnership,"
and (4) to obtain LEED3 certification for phases 2a and 2b of the Project by
incorporating "green" energy design features. Development of the Project would occur in
three phases.
Phase 1 includes demolition of the Star Building and the warehouse, site grading,
soil remediation, and construction of a parking garage. According to the EIR,
demolishing the Star Building would constitute a significant adverse impact on the
environment. (See § 21084.1 ["A project that may cause a substantial adverse change in
the significance of an historical resource is a project that may have a significant effect on
the environment."].) That impact cannot be mitigated without altering plans for the
2 The construction of adequate parking close to the CAC is a mitigation measure the County is required to undertake by a separate EIR certified in 2003 for the development of a park at the CAC.
3 LEED is an acronym for Leadership in Energy and Environmental Design, a "set of rating systems for the design, construction, operation, and maintenance of green buildings, homes, and neighborhoods." (<http://en.wikipedia.org/wiki/Leadership_in_ Energy_and_Environmental_Design> [as of July 18, 2014].).
3
parking structure because vehicular access lanes to the structure are located in the
footprint of the Star Building.
Subsequent Project phases, addressed in the EIR as phases 2a and 2b, contemplate
a partnership between the County and a private developer to achieve the second and third
Project goals of maximizing the County's potential return from development through the
partnership. No development partner had agreed to develop phases 2a or 2b as of the
date of Project approval.
In phase 2a, a public-private partnership would develop a five-story office and
retail building on the Project site east of the parking structure along Kettner Boulevard.
In phase 2b, the partnership would build a 19-story residential structure that would
occupy the Star Building footprint. This phase has significant potential to generate
revenue for the County. According to a report prepared by Keyser Marston Associates,
Inc. (KMA), a consulting firm that provides real estate advisory services, the residual
land value of the Project was $4,817,000.4 The residual land value was defined as "the
purchase price a developer can feasibly afford to pay for a property after taking into
consideration all of the development costs (excluding land), economic value (rental and
for-sale revenue), and target profit." In other words, it is the amount a developer would
pay the County for those portions of the site not used for the phase 1 parking structure.
The revenue from the Project will derive primarily from the sale of 163 residential units
4 The KMA analysis did not consider the costs of remediating the contaminated soil under the Star Building. An analysis by the environmental consulting firm Ninyo & Moore estimated these costs to be $2,108,700.
4
in the 19-story building planned in phase 2b, the net proceeds of which KMA estimated
to be $79,240,000.
B. Alternatives to the Project
The EIR analyzed two alternatives in addition to the "no project," or status quo,
alternative. The "no project" alternative, of course, would retain the site in its current
condition, leaving the surface parking lot, the Star Building, and the warehouse all as
they are.
The first Project alternative, "Build Alternative #1," would incorporate the Star
Building into the development by converting its first floor into a lobby, community room,
and fitness center for the residential units. Build Alternative #1 also would include soil
remediation, construction of a parking garage, construction of a mixed-use office and
retail building, and construction of 65 residential units located on five floors. According
to the EIR, this alternative would accomplish two of the four Project goals: it would
provide a sufficient amount of parking for CAC employees, and it would allow the
County to develop part of the site through a public-private partnership. Build
Alternative #1 would also mitigate adverse environmental impacts to historical resources
by incorporating the Star Building into the design. The EIR notes, however, that this
alternative would not maximize the County's financial return from the Project because it
would have many fewer residential units than the Project due to "structural constraints"
imposed by incorporating the Star Building as part of the overall development. KMA
estimated the net proceeds from the sale of residential units for Build Alternative #1
would be $26,913,000, and the residual land value would be negative $288,000.
5
The second Project alternative, "Build Alternative #2," would allow parking and
residential development onsite, without either removal of the Star Building or integration
of the Star Building into the new development. Under this alternative, the Star Building
would stand alone and be used for office space. The additional development
contemplated by Build Alternative #2 would occur in two stages. First, the County
would build a parking garage on the northern two-thirds of the site. Second, a private
developer would construct a mixed-use building containing 65 residential units on five
floors. The final EIR stated Build Alternative #2 was the environmentally superior
alternative because it retained the Star Building and met most of the project objectives.
Like Build Alternative #1, however, Build Alternative #2 would not achieve the County's
goal of maximizing financial return from the Project because it would include many
fewer residential units than the Project. KMA estimated the net proceeds from the sale of
residential units for Build Alternative #2 would be $29,601,000, and the residual land
value would be $654,000.
C. Public Comments on the Project
During public review of the draft EIR, the County received several comment
letters, three of which are at issue on this appeal. The County's historic site board
commented that "Project alternatives discussed in the [EIR] should include the
preservation of the [Star Building] through [p]hase 1." The environmental review
committee of the County's archaeological society suggested adoption of Build
Alternative #2 "with increases in the number of dwelling units above the garage, to
improve the return to the County." SOHO commented that the County should consider a
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non-demolition alternative that would convert the Star Building into a hotel. The County
prepared written responses to these comments.
In response to the historic site board's one-sentence comment, the County devoted
six paragraphs. The County noted the alternatives analyzed in the EIR (Build
Alternatives #1 & #2) would preserve the Star Building. The County also noted several
factors that made infeasible delaying demolition of the Star Building until after the
parking structure was built. The County referenced the KMA report in stating that
demolition of the Star Building was necessary to obtain maximum economic return from
the Project. The County referenced a geotechnical report in stating it would be more
cost-effective to remediate the contaminated soil on the entire site at one time rather than
remediating a portion of the site in phase 1 and the other portions later. The County also
pointed out that if the Star Building were left in place during phase 1, a private developer
would have to get approval from the City of San Diego to demolish it later, which might
not be granted after a costly process of seeking approval. The County stated the site
would be more marketable once all structures were removed and the contaminated soil
remediated. Finally, the County asserted that retaining the Star Building during phase 1
would physically interfere with construction of the parking structure and increase
construction costs.
In response to the one-paragraph comment of the archaeological society
environmental review committee, the County devoted six paragraphs. The County stated
the comment proposed a variation of Build Alternative #2 and so did not require separate
analysis in the EIR. The County also explained that constructing additional residential
7
units above the garage, as suggested in the comment, was not feasible for several reasons.
Such construction would delay the implementation of phase 1 of the Project, with which
the County wished to proceed as soon as possible, because major structural elements
needed to support the residential units above the parking garage would have to be
incorporated into the garage and would have to be designed by the then-unidentified
private developer of phase 2. The need to incorporate a structural support system into the
garage would also significantly increase the cost of building the garage. Further, building
additional residential units above the parking garage would produce much less revenue
than the Project because the horizontal dimensions of the garage and local ordinances
regarding sunlight access would reduce the number of units allowed and require a costlier
terraced structure.
In response to SOHO's two-sentence comment, the County devoted four
paragraphs. The County initially pointed out that because the EIR included alternatives
that would preserve the Star Building (Build Alternatives #1 & #2), discussion of another
similar alternative (SOHO's proposed hotel alternative) was not required. In addition, the
County stated that since it does not plan, develop, or operate hotels, a private developer
would have to do so; but a private developer (unlike the County) would be subject to
applicable zoning restrictions, which do not permit a hotel on the site. Finally, the
County noted its market analysis did not consider demand for hotels because they are not
permitted by the zoning at the site, and SOHO had submitted no evidence that there was a
demand for a hotel at the site, that a hotel use would be permitted as an exception to the
8
existing zoning, or that a hotel developer would pay the County more for the site than a
developer of the Project would pay.
D. The County's Approval of the Project
The County, through its Board of Supervisors, certified the Project EIR for
compliance with CEQA; adopted findings concerning mitigation of significant
environmental impacts, including findings that the project alternatives were infeasible;
adopted a statement of overriding considerations for the Project's unmitigable
environmental impacts; and approved the Project.5 The County also authorized a
contract for site preparation and demolition of the Star Building, and a design-build
construction contract for the parking structure planned for the Project's first phase.
E. Trial Court Proceedings
SOHO filed a petition for a writ of mandate in the trial court, seeking to set aside
the County's approval of the Project. SOHO contended the County violated CEQA
because (1) the "Project objectives listed in the EIR were inadequate and unlawful,"
(2) the "EIR failed to consider a reasonable range of alternatives," (3) the "EIR analysis
of alternatives and mitigations is inadequate and incomplete," and (4) the "conclusions of
the EIR are not supported by substantial evidence."
Over the County's opposition, the trial court issued the writ. The court ruled the
County's objective to maximize potential return from development of a portion of the site
5 Because the Statement of Overriding Considerations is not at issue in this appeal, we do not discuss it further.
9
through a public-private partnership was "unduly narrow," "adversely colored" the
County's analysis of Project alternatives, and caused it to "dismiss[] alternatives as
infeasible" because they would be less profitable than the Project. The court also ruled
the County's responses to public comments were insufficient, and the record did not
contain substantial evidence to support the feasibility findings of the EIR.
II.
DISCUSSION
The County contends the trial court erroneously ruled that (1) adoption of a project
objective to maximize financial return from a development through a public-private
partnership constitutes an abuse of discretion because it precludes meaningful
consideration of project alternatives, (2) substantial evidence does not support the
County's findings that the alternatives to demolition discussed in the EIR were infeasible,
and (3) the County's responses to public comments were conclusory and speculative. As
we shall explain, these contentions have merit and require reversal of the judgment.
A. Standard of Review
A court's inquiry in an action to set aside a public agency's decision on the ground
of noncompliance with CEQA "shall extend only to whether there was a prejudicial abuse
of discretion. Abuse of discretion is established if the agency has not proceeded in a
manner required by law or if the determination or decision is not supported by substantial
evidence." (§ 21168.5; see In re Bay-Delta etc. (2008) 43 Cal.4th 1143, 1161.) "Courts
presume that the agency's decisions are correct, and the challenger bears the burden of
proving to the contrary." (San Diego Citizenry Group v. County of San Diego (2013) 219
10
Cal.App.4th 1, 11 (San Diego Citizenry Group).) " ' "The court does not pass upon the
correctness of the EIR's environmental conclusions, but only upon its sufficiency as an
informative document." ' " (In re Bay-Delta etc., supra, p. 1161.) " 'An appellate court's
review of the administrative record for legal error and substantial evidence in a CEQA
case, as in other mandamus cases, is the same as the trial court's: The appellate court
reviews the agency's action, not the trial court's decision; in that sense appellate judicial
review under CEQA is de novo.' " (In re Bay-Delta etc., supra, p. 1162.)
B. Propriety of Adoption of Objective to Maximize Return from Development
The parties' primary dispute on appeal concerns the trial court's ruling that the
County failed to proceed in a manner required by law when it adopted as one of the
Project objectives the maximization of financial return from the development through a
public-private partnership. The County contends the court erred in so ruling because
CEQA does not restrict a public agency's choice of project objectives and because the
objective served CEQA's purposes. Defending the trial court's ruling, SOHO asserts:
"Project objectives may not create a minutely-detailed blueprint that only the project can
meet. That sort of tautology would preclude meaningful consideration of alternatives that
can reduce [environmental] impacts." SOHO complains the County's adoption of
maximization of return through a public-private partnership as a Project objective
"essentially poisoned the EIR process" because pursuit of that objective "would trump
[less profitable] alternatives that reduce environmental impacts and would thereby
automatically defeat the salutary objectives of CEQA." To prevent the County from
undermining CEQA in this way, SOHO vigorously urged us at oral argument to hold that
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CEQA prohibits a public agency from adopting maximization of financial return as a
project objective. Indeed, SOHO predicted that if we did not so hold, the County could
use the objective of maximizing return from development to approve projects that would
demolish every historical building in San Diego County.
SOHO's briefing and oral arguments do not persuade us to adopt a categorical
prohibition against using maximization of return from development as a project objective
and affirm the trial court's ruling on that ground. Rather, for the reasons discussed below,
we agree with the County that under CEQA, its associated guidelines, and existing case
law, the court erred. Adoption of maximization of return from development through a
public-private partnership as one of the Project objectives did not by itself constitute a
failure to "proceed[] in a manner required by law." (§ 21168.5.)
First, neither CEQA nor its implementing regulatory guidelines (Guidelines; Cal.
Code Regs., tit. 14, § 15000 et seq.) prohibit a public agency from adopting a project
objective of maximizing return from development through a public-private partnership.
CEQA itself does not require an EIR to include a list of project objectives. (See § 21100
[specifying content of EIR].) The Guidelines require an EIR to contain "[a] statement of
the objectives sought by the proposed project," but they do not impose any substantive
limitations on those objectives. (Guidelines, § 15124, subd. (b).) The courts may not
interpret the statutory or regulatory provisions regarding the required content of an EIR
"in a manner which imposes procedural or substantive requirements beyond those
explicitly stated in [CEQA] or in the [Guidelines]." (§ 21083.1; see Western Placer
Citizens for an Agricultural & Rural Environment v. County of Placer (2006) 144
12
Cal.App.4th 890, 899 ["When interpreting CEQA, courts are not authorized to impose
requirements not present in the statute."].) Hence, "CEQA does not restrict an agency's
discretion to identify and pursue a particular project designed to meet a particular set of
objectives." (California Oak Foundation v. Regents of University of California (2010)
188 Cal.App.4th 227, 276-277; accord San Diego Citizenry Group, supra, 219
Cal.App.4th at p. 14.) In urging us to adopt a categorical rule prohibiting the use of
maximization of return from development as a project objective, SOHO is "asking that
we arrogate to ourselves a policy decision which is properly the mandate of the [County].
We cannot." (Defend the Bay v. City of Irvine (2004) 119 Cal.App.4th 1261, 1269.)
Second, one goal of any project involving private capital is the maximization of
return on investment, whether or not the EIR expressly so states. No developer using
private funds "is likely to proceed with a project that will not be economically
successful." (Maintain Our Desert Environment v. Town of Apple Valley (2004) 124
Cal.App.4th 430, 449 (Maintain Our Desert Environment).) "[I]t is assumed in a
capitalistic society that one is motivated by a desire for economic return on one's labor
and investment." (Association of Irritated Residents v. County of Madera (2003) 107
Cal.App.4th 1383, 1401.) The County's decision to state as an explicit project objective a
goal that is implicit in every privately funded development project did not invalidate the
EIR. (Cf. id. at pp. 1400-1401 [rejecting as "specious" a contention an EIR was invalid
because it did not explicitly state project intended to operate for profit].)
Third, maximization of some quality or quantity is inherent in any project
objective. For example, a housing project for the poor would seek to build the maximum
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number of affordable housing units with the available funding and space; a project to
make a community "green" would seek to maximize the use of wind, solar, and other
alternative energy sources while minimizing the use of fossil fuels; and a project to
provide parking would seek to construct the maximum number of parking stalls with the
available funding and space. Further, any given project is likely to have multiple, and
perhaps competing, objectives, and project alternatives will meet different objectives to
different extents. It is a policy decision for the agency to select the alternative that strikes
the best balance. "Ranking the relative importance of the various objectives in the overall
context of the [P]roject was a policy decision entrusted to the [County]. The [County's]
ultimate determination that [maximizing return from the Project through a public-private
partnership] was a key objective of the [P]roject does not undermine the legitimacy of the
EIR's alternatives analysis." (California Native Plant Society v. City of Santa Cruz
Fourth and finally, whether a public agency abused its discretion in adopting a
particular project objective cannot be decided in the abstract. Under CEQA, project
objectives are not ends in themselves; they are means to the end of creating an EIR that
"give[s] the public and government agencies the information needed to make informed
decisions, thus protecting ' "not only the environment but also informed self-
government." ' " (In re Bay-Delta etc., supra, 43 Cal.4th at p. 1162.) Project objectives
facilitate reaching this end by "help[ing] the lead agency develop a reasonable range of
alternatives to evaluate in the EIR" and by "aid[ing] the decision makers in preparing
findings or a statement of overriding considerations, if necessary." (Guidelines, § 15124,
14
subd. (b).) We agree with SOHO that an "agency may not give a project's purpose an
artificially narrow definition" (In re Bay-Delta etc., supra, at p. 1166); rather, it must
state project objectives "broadly enough to leave room for consideration of alternatives
that reduce [environmental] impacts." Thus, whether an agency proceeds as required by
law depends on whether in pursuing its objectives the agency satisfies its obligations
under CEQA and the Guidelines to prepare an EIR that allows for informed
decisionmaking by giving meaningful consideration to project alternatives with reduced
environmental impacts. As we discuss below, in pursuing its objective to maximize
return from development through a public-private partnership, the County prepared an
EIR that analyzed a reasonable range of alternatives as required by CEQA and, based on
that analysis, properly determined the alternatives were not feasible.
C. Adequacy of the Range of Project Alternatives Analyzed in the EIR and Sufficiency of the Evidence to Support the County's Findings the Alternatives Were Infeasible
The County next challenges the trial court's ruling that substantial evidence does
not support the County's feasibility findings regarding the Project alternatives analyzed in
the EIR. The court rejected as "unsupported" the County's contention "that it is
economically more feasible to remove the Star Building prior to securing a private
development partner." The court also ruled the County gave "no meaningful
consideration of project alternatives" because the "unduly narrow project objective to
maximize profits" made the range of alternatives "inadequate" and the alternatives were
15
"similar to one another" but "vastly different from the approved project." In so ruling, the
court erred.6
"CEQA establishes no categorical legal imperative as to the scope of alternatives
to be analyzed in an EIR." (Citizens of Goleta Valley v. Board of Supervisors (1990) 52
Cal.3d 553, 566.) The statute requires an EIR to include a detailed statement describing
alternatives that would substantially lessen the significant environmental impacts of the
proposed project. (§§ 21002, 21100, subd. (b)(4).) The Guidelines are more specific:
"An EIR shall describe a range of reasonable alternatives to the project, or to the location of the project, which would feasibly attain most of the basic objectives of the project but would avoid or substantially lessen any of the significant effects of the project, and evaluate the comparative merits of the alternatives. An EIR need not consider every conceivable alternative to a project. Rather it must consider a reasonable range of potentially feasible alternatives that will foster informed decisionmaking and public participation. An EIR is not required to consider alternatives which are infeasible. The lead agency is responsible for selecting a range of project alternatives for examination and must publicly disclose its reasoning for selecting those alternatives. There is no ironclad rule governing the nature or scope of the alternatives to be discussed other than the rule of reason." (Guidelines, § 15126.6, subd. (a).)
Hence, "an EIR for any project subject to CEQA review must consider a reasonable range
of alternatives to the project . . . which: (1) offer substantial environmental advantages
6 The County contends SOHO "waived" any challenge to the alternatives analyzed in the EIR because it did not challenge them in the trial court. Indeed, in the trial court SOHO asserted "the adequacy of the Star Building's Draft EIR discussion of alternatives is not one of the issues before this Court," and it "has not argued that the Draft EIR's range of alternatives was insufficient." On appeal, SOHO asserts any consideration of the feasibility of Project alternatives is "arguably premature," but urges us to affirm the trial court's ruling on the issue should we reach it. Because the trial court decided the issue, both parties briefed it on appeal, and we "may affirm the trial court's ruling on any ground supported by the record" (Taylor v. Elliott Turbomachinery Co., Inc. (2009) 171 Cal.App.4th 564, 573, fn. 5), we address the issue on the merits.
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over the project proposal [citation]; and (2) may be 'feasibly accomplished in a successful
manner' considering the economic, environmental, social and technological factors
involved." (Citizens of Goleta Valley v. Board of Supervisors, supra, at p. 566.) The
agency's selection of alternatives will be upheld unless the alternatives "are manifestly
unreasonable and . . . do not contribute to a reasonable range of alternatives."
(Federation of Hillside & Canyon Associations v. City of Los Angeles (2000) 83
Cal.App.4th 1252, 1265 (Federation of Hillside & Canyon Associations).)
Here, the EIR analyzed a "no project" alternative, as required by the Guidelines.
(Guidelines, § 15126.6, subd. (e).) That alternative would leave the Star Building as is,
thereby preserving an historical resource, and would avoid all other adverse
environmental impacts of the Project, but it would not accomplish any of the Project
objectives. The EIR also analyzed two other alternatives that would preserve the Star
Building but would allow some development of the Project site. Build Alternative #1
would incorporate the Star Building into a mixed commercial-residential building and
build a parking structure. Build Alternative #2 would leave the Star Building standing
alone and construct a mixed commercial-residential building and a parking structure on
the remainder of the site. These alternatives would reduce the adverse environmental
impacts of the Project by preserving the Star Building and would meet the County's goals
regarding parking. They would also have adverse impacts on air quality, noise,
geology/soils, and hazardous materials and hazards similar to or less than those of the
Project. But neither Build Alternative #1 nor Build Alternative #2 would achieve the
objective of maximizing return through a public-private partnership, because retention of
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the Star Building would limit construction of residential units to only 40 percent of the
number contemplated by the Project.
The range of project alternatives analyzed in the EIR was not "manifestly
unreasonable." (Federation of Hillside & Canyon Associations, supra, 83 Cal.App.4th at
p. 1265.) The range included all of the obvious types of alternatives to the demolition of
the Star Building and development contemplated by the Project — retention of the Star
Building at the site unchanged (the "no project" alternative), retention at the site as a
stand-alone building with development of the rest of the site (Build Alternative #2), and
incorporation into the development at the site (Build Alternative #1) — and the adverse
environmental impacts of each type of alternative compared to those of the Project were
fully evaluated. Although many variations of the alternatives analyzed (such as those
specifying a different use for the Star Building, a different size or location for the parking
structure, or a different number or configuration of commercial and residential units)
undoubtedly existed, "[a]n EIR need not consider every conceivable alternative to a
project." (Guidelines, § 15126.6, subd. (a).) "This EIR should 'not become vulnerable
because it fails to consider in detail each and every conceivable variation of the
alternatives stated.' [Citation.] [¶] 'Absolute perfection is not required; what is required
is the production of information sufficient to permit a reasonable choice of alternatives so
far as environmental aspects are concerned.' " (Village Laguna of Laguna Beach, Inc. v.
Board of Supervisors (1982) 134 Cal.App.3d 1022, 1029.) The alternatives considered
by the County "represent enough of a variation to allow informed decisionmaking."
(Mann v. Community Redevelopment Agency (1991) 233 Cal.App.3d 1143, 1151.)
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Having determined the EIR analyzed a reasonable range of alternatives to the
Project, we must next determine whether substantial evidence supported the County's
findings the alternatives were not feasible. For purposes of CEQA, " 'Feasible' means
capable of being accomplished in a successful manner within a reasonable period of time,
taking into account economic, environmental, social, and technological factors."
(§ 21061.1.) Before a public agency may approve a project for which an EIR identifies a
significant environmental impact, the agency must make a finding that "[s]pecific
economic, legal, social, technological, or other considerations . . . make infeasible the
mitigation measures or alternatives identified in the [EIR]." (§ 21081, subd. (a)(3).)
Such a finding must be based on "substantial evidence in the record." (§ 21081.5.)
"[S]ubstantial evidence includes fact, a reasonable assumption predicated upon fact, or
expert opinion supported by fact." (§ 21080, subd. (e)(1).) According to the Guidelines,
substantial evidence "means enough relevant information and reasonable inferences from
this information that a fair argument can be made to support a conclusion, even though
other conclusions might also be reached." (Guidelines, § 15384, subd. (a).) In reviewing
the record for substantial evidence, we presume the agency's findings are correct and
resolve all conflicts and reasonable doubts in favor of the findings. (Center for
Biological Diversity v. County of San Bernardino (2010) 185 Cal.App.4th 866, 881-882;
California Native Plant Society, supra, 177 Cal.App.4th at p. 997.)
Applying this deferential standard of review, we conclude the County did not
prejudicially abuse its discretion in finding the project alternatives were infeasible. The
County properly rejected the "no project" alternative as infeasible because it would
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achieve none of the objectives stated in the EIR. (See San Diego Citizenry Group, supra,
219 Cal.App.4th at pp. 17-18 [alternative is infeasible when it would defeat project
objectives].) The County also properly rejected Build Alternatives #1 and #2 as
infeasible. An environmentally superior alternative may be deemed infeasible if "the
additional costs or lost profits are so severe the project would become impractical."
(Kings County Farm Bureau v. City of Hanford (1990) 221 Cal.App.3d 692, 736, italics
added.) The question is " 'whether the marginal costs of the alternative as compared to
the cost of the proposed project are so great that a reasonably prudent property owner
would not proceed with the [alternative].' " (The Flanders Foundation v. City of Carmel-
by-the-Sea (2012) 202 Cal.App.4th 603, 622.) In answering that question, the County
considered the analysis prepared by KMA, which calculated the residual land value (i.e.,
the amount a developer would pay the County for the portions of the site not used for the
parking structure), as $4,817,000 for the Project, negative $288,000 for Build
Alternative #1, and $654,000 for Build Alternative #2. Such expert analysis constitutes
substantial evidence upon which a public agency may rely in making CEQA findings.
(§ 21080, subd. (e)(1); San Franciscans Upholding the Downtown Plan v. City and
County of San Francisco (2002) 102 Cal.App.4th 656, 681-682.) Therefore, given the
large disparity between the revenue to the County that would be generated by the Project
and the revenue that would be generated by either alternative, the County reasonably
found the lost profitability of both alternatives made them economically infeasible. (See,
e.g., The Flanders Foundation, at p. 622 [upholding infeasibility finding when expert
20
report estimated sale of historic resource would net city $2.6 million, but lease
alternatives would not generate any net revenue for a decade or more].)7
SOHO urges us to affirm the trial court's ruling that substantial evidence does not
support the County's findings the alternatives were infeasible. In doing so, SOHO does
not contest the methodology used in the KMA report on which the County relied, but
instead contends, without citing any authority, that the County's findings "are
insupportable because they rely on an economic report assuming the viability of the
wildly speculative high-rise." More specifically, SOHO complains the KMA report
"does not provide real numbers" because the report is based on the assumption "that if
[the County] could attract a private developer in the future and create a partnership for a
high-rise project, it would likely make more money than if it did something else." At oral
argument, SOHO added that the figures in the KMA report should be disregarded
7 The County's express reliance on the comparative economic analysis done by KMA in specifically finding the project alternatives infeasible distinguishes this case from those on which SOHO relies. In the cases cited by SOHO, the agency made no specific finding of economic infeasibility or the record did not contain substantial evidence that reduced profitability of project alternatives made them impractical. (See Save Round Valley Alliance v. County of Inyo (2007) 157 Cal.App.4th 1437, 1462 [the record contained "no evidence or analysis whatsoever of the comparative costs or profitability of developing the two parcels"]; Preservation Action Council v. City of San Jose (2006) 141 Cal.App.4th 1336, 1355-1356, 1357 (Preservation Action Council) [the agency "failed to make a specific finding regarding the infeasibility of the reduced-size alternative," and the "administrative record does not contain any evidence that the reduced-size alternative would be so much less profitable and produce so many fewer tax dollars that the project would be impractical"]; Citizens of Goleta Valley v. Board of Supervisors (1988) 197 Cal.App.3d 1167, 1181 [the "scant figures contained in the administrative record [were] not sufficient to support" the conclusion that "additional costs or lost profitability [were] sufficiently severe as to render it impractical to proceed with the project"].) 21
because the County could make more money by keeping the Star Building in place and
simply reconfiguring phase 2 of the development to increase the number of residential
units above those considered in Build Alternatives #1 and #2. We reject these
contentions.
Under CEQA, "the feasibility of the alternatives must be evaluated within the
context of the proposed project." (Uphold Our Heritage v. Town of Woodside (2007) 147
Cal.App.4th 587, 599, italics added.) The proposed project here included construction of
a parking garage (phase 1) followed by construction of a five-story commercial building
(phase 2a) and a 19-story residential building (phase 2b). Thus, to determine whether the
alternatives were economically feasible, the County had to compare the revenue expected
from the alternatives to the revenue expected from construction of the proposed 19-story
building. The fact the County approved the Project before it formed a partnership with a
private developer to construct the 19-story building is of no consequence to the CEQA
analysis. To avoid minimizing environmental impacts by dividing a large project into
several small ones, CEQA requires all reasonably foreseeable phases of a project to be
analyzed together, whether or not such phases are ultimately completed. (Laurel Heights
Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 396;
Sierra Club v. City of Orange (2008) 163 Cal.App.4th 523, 533; Dusek v. Redevelopment
Finally, SOHO complains the response to its comment letter was "inadequate"
because its suggested alternative of "a hotel may provide a way to save the historic Star
Building for the long-term benefit of San Diego." We disagree. "An agency need not
devote itself to an extended discussion of the environmental impact of alternatives remote
from reality such as those which are of speculative feasibility or could only be
implemented after significant changes in governmental policy or legislation." (Residents
Ad Hoc Stadium Com. v. Board of Trustees (1979) 89 Cal.App.3d 274, 287.) SOHO's
hotel proposal was remote and speculative by its own terms: "SOHO believes that a hotel
may potentially generate more income for the County than would the currently-proposed
buildings in the EIR's two non-demolition alternatives." (Italics added.) SOHO cites
nothing in the record indicating there was a demand for a hotel in the area, any private
entity was interested in operating a hotel on the Project site, or such operation would be
profitable. An agency is not required to respond in detail to a proposed alternative in a
comment unsupported by any "analysis or evidence demonstrating the feasibility of such
a proposal." (City of Maywood, supra, 208 Cal.App.4th at p. 422.) Furthermore, as the
County stated in its response, the existing zoning would not allow a hotel at the site.
Although applicable zoning restrictions are not necessarily dispositive, they may be
considered in evaluating the feasibility of a project alternative. (Guidelines, § 15126.6,
subd. (f)(1); Citizens of Goleta Valley v. Board of Supervisors, supra, 52 Cal.3d at
p. 573.) Finally, SOHO's suggested incorporation of the Star Building into a hotel is
27
similar to Build Alternative #1, which incorporated the Star Building into a residential
low-rise, and would present the same structural and economic constraints that made Build
Alternative #1 infeasible. Just as the County was not required to analyze separately and
in detail the comment proposing a variation of Build Alternative #2, the County did not
have to do so in response to SOHO's proposed variation of Build Alternative #1. (Cherry
Valley Pass Acres & Neighbors, supra, 190 Cal.App.4th at p. 356; Preservation Action
Council, supra, 141 Cal.App.4th at p. 1359; Marin Mun. Water Dist., supra, 235
Cal.App.3d at p. 1664.) We thus reject SOHO's contention the County's response to the
hotel proposal was inadequate under CEQA.
DISPOSITION
The judgment is reversed, and the matter is remanded to the trial court with
directions to enter a new judgment denying SOHO's petition for writ of mandate. The
parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
IRION, J.
WE CONCUR:
MCDONALD, Acting P. J.
O'ROURKE, J.
28
AI Brief
AI-generated · verify before citing
Holding. The court held that the County did not violate the California Environmental Quality Act (CEQA) by adopting a project objective to maximize financial return, and that the Environmental Impact Report (EIR) provided a reasonable range of alternatives supported by substantial evidence.
Issues
Whether an agency may adopt a project objective to maximize financial return through a public-private partnership under CEQA.
Whether the EIR analyzed a reasonable range of project alternatives.
Whether substantial evidence supports the County's findings that project alternatives were infeasible.
Disposition. Reversed and remanded
Quotations verified verbatim against the opinion
“CEQA does not restrict an agency's discretion to identify and pursue a particular project designed to meet a particular set of objectives.”
“The County's decision to state as an explicit project objective a goal that is implicit in every privately funded development project did not invalidate the EIR.”
“An EIR need not consider every conceivable alternative to a project. Rather it must consider a reasonable range of potentially feasible alternatives that will foster informed decisionmaking and public participation.”