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

In an opinion published on August 9, 2018, Protect Niles v. City of Fremont, Case No. A151645, the First Appellate District of the California Court of Appeal affirmed the trial court’s issuance of a writ of mandate ordering the City of Fremont (the City) to overturn a Mitigated Negative Declaration (MND) and prepare an Environmental Impact Report (EIR) for an 85-unit residential and retail development in a historical district (the Project).

In summary, the court determined:

• A project’s visual impact on an officially designated historical district is appropriate to review as a potential aesthetic impact under CEQA.
• The City’s Historical Architectural Review Board members’ collective opinions about the compatibility of the Project with the Niles Historical Overlay District are substantial evidence of the Project’s potentially significant aesthetic impacts.
• Residents’ personal observations of traffic conditions where they live and commute may constitute substantial evidence, even if residents’ accounts contradict the conclusions of a professional traffic study.

Protect Niles, an unincorporated community organization, filed a petition for writ of mandate seeking to invalidate the City’s adoption of a MND, and to order the City to prepare an EIR for the Project. The trial court found substantial evidence supporting a fair argument of significant adverse aesthetic and traffic impacts.

Background for Appeal

In June 2014, the project developer, Valley Oak Partners (Valley Oak) submitted a planning application to the City for the Project. Following an initial study, City planning staff prepared a draft MND in lieu of an EIR. The draft MND was referred to the Niles Historical Architectural Advisory Board (HARB) for advisory review. After a January 2015 hearing, HARB voted to recommend denial of the Project as incompatible with the existing Niles Historical Overlay District (Niles HOD). The Project and draft MND were then referred to the City planning commission for approval. The planning commission recommended approval of the Project and adoption of the MND, subject to certain conditions. On March 3, 2015, the City council voted to approve the project and adopt the MND.

On April 3, 2015, Protect Niles filed a petition for writ of mandate in Alameda County Superior Court ordering the City to set aside the Project approvals and prepare an EIR. The petition argued that substantial evidence supported a fair argument of significant aesthetic / land use impacts, traffic impacts, hazardous materials impacts, and impacts on the nearby Alameda Creek Regional Trail. The trial court found substantial evidence supported a fair argument of significant impacts on aesthetics and traffic only, and ordered the City to vacate its Project approvals and refrain from approving the Project absent compliance with CEQA in the preparation of an EIR. Valley Oak file a timely appeal.

Substantial Evidence Supports a Fair Argument for Adverse Aesthetic Impact

Several courts have recognized that a project’s impact on the aesthetic character of a surrounding community is a proper subject of CEQA review. However, the context is crucial in determining the appropriateness of such review. Aesthetic issues are ordinarily the province of local design review boards and not CEQA, but aesthetic impacts may arise in a particularly sensitive context. Here, the Court of Appeal found that the designated Niles HOD was an area the City itself has recognized as a particularly sensitive context. Furthermore, a project’s visual impact on a surrounding officially designated historical district is appropriate for aesthetic impact review under CEQA.

The Court of Appeal also found that substantial evidence in the record supported a fair argument that the Project could result in significant aesthetic impacts to the Niles HOD. The City’s initial study found the Project to be compatible with the Niles HOD because its design reflects the architectural style of the industrial buildings that previously occupied the site, and the HOD Guidelines recognize eclectic architecture. However, HARB opined that the Project was inconsistent with the Niles HOD because of its height, density, and massing, as well as architectural style. Several HARB members and Niles residents echoed similar sentiments about the Project’s incompatibility with the character of the surrounding community. The Court of Appeal noted that the comments about incompatibility were not solely based on vague notions of beauty, but were grounded in inconsistencies with the prevailing building heights and architectural styles in the Niles HOD. Further, HARB — the board specifically charged with assessing compatibility with the Niles HOD — overwhelmingly voted to deem the design incompatible based on the Project’s massing, scale, and size.

Valley Oak argued that the conclusion of an advisory body like HARB should not by itself constitute substantial evidence in support of a fair argument of a significant environmental impact. The court rejected this argument because Protect Niles did not rely solely on HARB’s vote, but also the board members’ underlying aesthetic judgments. The Court found that, collectively, the HARB members’ opinions about the compatibility of the Project with the Niles HOD constituted substantial evidence of the Project’s potentially significant aesthetic impacts.

Substantial Evidence Supports a Fair Argument for Adverse Traffic Impact

Valley Oak also argued that the trial court erred in finding that substantial evidence supported a fair argument that the Project could result in significant traffic impacts. This is because, at trial, Protect Niles’ argument on the traffic issue consisted almost entirely of oral statements made during the administrative proceedings by residents, City officials and staff, and professional consultants expressing concern about the traffic impacts. The Court of Appeal agreed with the trial court’s finding that these fact-based comments constituted substantial evidence supporting a fair argument that the Project will have significant adverse traffic effects.

The initial study for the Project incorporated a traffic study analysis, and concluded that the Project would cause the level of service at the nearby intersection to deteriorate from an already “unacceptable” E level of service to a lower F level of service. However, the amount of deterioration would be less than the City’s threshold of significance for signalized intersections. The traffic study also indicated that a left-hand turn pocket lane would be warranted at the intersection under national guidelines, but the City staff ultimately decided not to require such a pocket lane. The traffic study also assessed visibility at the intersection based on the posted speed limits for Niles Boulevard. Residents’ and City officials’ oral statements contend that the posted speed limit is frequently exceeded on Niles Boulevard, and as a result, there was limited visibility for specific approaches to the intersection and an increased potential for accidents.

In addition, residents and City officials stated that the Project’s proposed parking would require some cars to back into westbound traffic to exit the parking spaces and return to the flow of traffic. The Court found that the fact-based comments by residents based on the residents’ personal observations of traffic conditions where they live and commute may constitute substantial evidence supporting a fair argument of significant adverse impacts, even if they contradict the conclusions of a professional traffic study.

Disposition

Accordingly, the Court of Appeal affirmed the trial court’s judgment granting a writ of mandate ordering the City to overturn the Project’s approvals, and to require the preparation of an EIR for the Project.

• Opinion by Justice Bruiniers, with Acting Presiding Justice Simons, and Justice Needham concurring.
• Trial Court: Alameda County Superior Court, Case No. RG15765052, Judge Frank Roesch.

[i] California court decisions on California Environmental Quality Act (CEQA) related cases can impact business not only in California, but more broadly in other US jurisdictions (e.g., under the US National Environmental Policy Act (NEPA), though statutory provisions may differ). Latham’s case summary series provides a comprehensive archive of both published and unpublished cases, in order to track judicial interpretations of CEQA and new legal developments. Unpublished or “non-citable” opinions are opinions that are not certified for publication in Official Reports and generally may not be cited or relied on by other courts or parties in any filing with California courts in other court proceedings. (see California Rules of Court, rule 8.1115).