[author: Arthur F. Coon]

The First Appellate District recently ordered partially published its opinion in City of Hayward v. Board of Trustees of the California State University (2012) __ Cal.App.4th __, 2012 WL 2832858 (cert. for pub. 6/28/12), which applied some CEQA basics in clarifying what “impacts” of a project must be analyzed and mitigated under CEQA. In so doing, it helpfully sharpened the sometimes fuzzy boundaries of the statute’s outer reach as it is all too commonly applied.

City of Hayward’s facts are simple. Cal State East Bay in Hayward approved a “master plan” for expansion of its campus to accommodate forecasted increases in its enrollment (from approximately 12,500 to 18,000 full-time students) during the next 20-30 years. Its plan included in-fill development within its existing land use configuration by constructing more than 1 million square feet of new/replaced academic, administrative and support space, more than  3,700 new student beds, and up to 220 faculty/staff housing units. Cal State East Bay certified an EIR analyzing the master plan’s potentially significant environmental impacts, adopted a statement of overriding considerations as to unmitigated aesthetics, air quality, cultural resources, and traffic impacts, and approved the plan. The City of Hayward and local community groups sued it, and the trial court granted their writ petitions on multiple grounds, setting aside the project approval and EIR certification.

The First District reversed on all grounds except for the trial court’s finding that the EIR inadequately analyzed the plan adoption’s potential effects on two regional parks adjacent to the campus, which it upheld. In the most significant part of its published opinion, the Court reversed the trial court’s findings that the EIR’s analysis of adverse impacts associated with expanded fire and emergency medical services required by the project was inadequate. The EIR recognized that daily population increases from the campus expansion would cause the need for 11 additional firefighters, and for expansion of existing fire facilities or construction of an additional fire station. The EIR acknowledged such future expansion/construction would be subject to CEQA review, but concluded its impact would be less than significant “due to the limited area that is typically required to build a fire station (between 0.5 and 1 acre) and its urban location.” The city – which obviously wanted Cal State East Bay to pay for the additional firefighters and facilities, and saw CEQA as an appropriate vehicle to make it do so – argued the EIR’s analysis was insufficient in this respect, and the trial court agreed.

The Court of Appeal disagreed, rejecting the City of Hayward’s and the trial court’s position that the EIR was deficient, either for lack of substantial evidence to support its conclusions or for failing to analyze increased fire and emergency response times resulting from a presumed unmet need for additional firefighters. The trial court had reasoned that “increased demand for fire protection services [need not] per se be evaluated as an environmental impact[,]” but that the project would cause existing fire protection services “to change from adequate to inadequate” which would in turn “cause[ ] an adverse effect on people and property, i.e., both people and property will not be safe in the event of a fire. It follows directly that the lack of adequate fire protection service [is] a significant effect … [which] must be mitigated, if feasible.” In other words, the trial court appeared to believe that CEQA requires any project’s need for fire and emergency services beyond those currently existing in its service jurisdiction to be analyzed as an “environmental impact,” thus requiring mitigation (i.e., the project proponent’s payment for all costs of the increased services) where feasible.

The Court of Appeal saw things quite differently, beginning with the applicable “standard of significance” set forth in Appendix G of the CEQA Guidelines, which prompts the following inquiry: “Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities … the construction of which would cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives ….?”

Applying this standard, the Court of Appeal first dispensed with the argument that no substantial evidence supported the EIR’s conclusion that construction of a new fire station would not have significant environmental impacts, finding the Final EIR’s treatment of the issue “reasonable and sufficient. Given the unknown size and precise location of the future facilities and the absence of control by the Trustees over the future decision-making process, no more detailed analysis is possible at this time. But in view of the known size requirements of a fire station and the general area within which the additional facilities necessarily will be placed, the determination that the new facilities will not result in a significant environmental impact is supported by substantial evidence.”

Moving to the “big ticket” issue, the Court reaffirmed CEQA’s proper concern is analyzing and mitigating for physical environmental impacts, not economic “impacts” concerning who picks up the tab for governmental services. It held:

  • “The need for additional fire protection services is not an environmental impact that CEQA requires a project proponent to mitigate.”
  • While it may be true that delayed response times result in real health, safety and physical impacts, “the obligation to provide adequate fire and emergency medical services is the responsibility of the city." (CitingCal.Const., art. XIII, § 35(a)(2) [“The protection of the public safety is the first responsibility of local government and local officials have an obligation to give priority to the provision of adequate public safety services.”].)
  • “Although there is undoubtedly a cost involved in the provision of additional emergency services, there is no authority upholding the city’s view that CEQA shifts financial responsibility for the provision of adequate fire and emergency response services to the project sponsor.”
  • “The city has a constitutional obligation to provide adequate fire protection services. Assuming the city continues to perform its obligations, there is no basis to conclude that the project will cause a substantial adverse effect on human beings.”

In reaching these conclusions, logically based on CEQA “first principles” limiting its reach to significant adverse effects on (i.e., changes to) the physical environment, the Court cited Guidelines section 15382’s definition of “significant effect on the environment.” It also relied on analogous case law rejecting the argument that increased school enrollment is, in itself, a significant physical impact on the environment. (Goleta Union School Dist. v. Regents of Univ. of Cal. (1995) 37 Cal.App.4th 1023, 1032-1033.) Finally, it rejected the argument that a contrary result was supported by either the Supreme Court’s decision in City of Marina v. Board of Trustees of Cal. State Univ. (2006) 39 Cal.4th 341 (“City of Marina”) or the appellate decision in Bakersfield Citizens for Local Control v. City of Bakersfield (2004) Cal.App.4th 1184 (“Bakersfield Citizens”). City of Marina did not discuss the standard of significance applied by the Trustees there to reach the conclusion in their EIR that their master plan would cause substantial environmental impacts in the area of public services; rather, the Supreme Court accepted the EIR’s uncontested finding in that regard and addressed “only whether there is a legal prohibition on the Trustees’ ability to make a voluntary payment in satisfaction of its [resultant] mitigation obligations.” The Court of Appeal held “City of Marina provides no authority for the contention that the Trustees [in the City of Hayward case] must fund the expansion of fire department services that the campus expansion will require[,]” noting that the case before it involved an EIR which “determine[d], based on substantial evidence, that implementation of the master plan will not result in a significant [environmental] impact[.]” Further, “[n]othing in Bakersfield Citizens … implies that the delayed response times are an impact that must be mitigated by the project sponsor, here the Trustees.”

While the Court’s opinion did not have occasion to discuss other potential avenues for a local government’s recovery of fees or charges to cover a development project’s fiscal “impacts” on the cost of providing public facilities (see, e.g., Gov. Code, § 66000 et seq. [the Mitigation Fee Act]), it does a good job of clarifying and respecting the limits of CEQA’s scope, underscoring that it does not provide a “cure all” remedy for all that ails governmental entities or other plaintiffs dissatisfied with a project.

Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for over forty-five years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 3d, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, construction, management, title insurance, environmental law, and redevelopment and land use.  For more information, visit www.msrlegal.com.