Use of Agricultural Conservation Easements Must Be Considered In Mitigating Loss of Prime Farmland To Development

A sand and gravel quarry was proposed for a site containing 45 acres of prime farmland.  The Environmental Impact Report (“EIR”) analyzing the development concluded that obtaining perpetual agricultural conservation easements on off-site farmland would not be a legally feasible means of mitigating the direct impact of farmland loss.  A neighboring landowner challenged the EIR but lost in trial court.  On appeal, the decision was reversed and the appellate court found that agricultural conservation easements should be analyzed as potential mitigation for the loss of agricultural land.  (Masonite Corp. v. County of Mendocino (--- Cal.Rptr.3d ----, Cal.App. 1 Dist., July 25, 2013).

Facts

Granite Construction Company applied to Mendocino County (“County”) to build a sand and gravel quarry (“Project”) on a 65.3-acre parcel north of Ukiah.  The application requested approval of a conditional use permit and reclamation plan.  Most of the site was occupied by a vineyard, with 45 acres of the parcel designated as “prime farmland” under the state Department of Conservation Farmland Mapping and Monitoring Program.  The rest of the property was open space, with a truck maintenance shop on one corner.

The County prepared a draft EIR and received comments on it from the public, including an adjoining landowner, Masonite Corporation (“Masonite”).  The final EIR concluded that the Project would have a significant and unavoidable impact through the permanent loss of prime farmland.  The County Planning Commission approved the conditional use permit and reclamation plan and certified the EIR, finding that the need to establish a reliable supply of construction aggregate was an overriding consideration justifying the Project.  Masonite appealed to the County Board of Supervisors, which rejected its appeal.  Masonite filed a lawsuit in county superior court, petitioning for writ of mandate to reverse the Project approval.  The trial court denied the petition and Masonite appealed.

Decision

The First District Court of Appeal reversed the trial court decision, finding that the EIR incorrectly concluded that mitigation for the loss of prime farmland was infeasible.

The court observed that the EIR determined the use of agricultural conservation easements (“ACEs”) and was legally infeasible for the proposed Project.  Because this was a question of law rather than a finding of fact, the court reviewed the EIR’s finding under a stricter “de novo” independent review rather than the more deferential substantial evidence standard. 

The court noted that ACEs protect farmland in perpetuity by placing a permanent restriction limiting the use of land to agriculture.  The EIR reasoned that ACEs do not replace the direct loss of farmland, but only mitigate indirect and cumulative effects.  The EIR stated that the Project would have no indirect impacts on agriculture because the project site was surrounded by industrial uses, and so the Project would not put development pressures on adjacent lands.  The state Department of Conservation (“Department”) questioned this conclusion in EIR comments, stating that the Project should pay for ACEs on offsite agricultural land of at least equal size to the 45 acres of prime farmland being lost.  The Department also recommended that the farmland loss induced by the Project should be deemed an impact of regional or greater significance and that the search for mitigation lands to be covered by ACEs should be regional or statewide.

The appellate court agreed with the Department, holding that ACEs may mitigate for the direct loss of farmland and that the EIR must analyze the use of off-site ACEs to mitigate the Project.  The court explained that its holding was supported by the CEQA Guidelines, case law, prevailing practice, and public policy stated by the Legislature. 

Examining the CEQA Guidelines, the court observed that section 15370 defines “mitigation” as including compensation “for the impact by replacing or providing substitute resources or environments.”  The court pointed to a friend-of-the-court brief submitted by the California Farm Bureau Federation that stated that ACEs provide substitute resources by preventing the “consumption of a resource to the point that it no longer exists” and that if farmland is permanently protected off-site at a 1:1 ratio, at least half the farmland in an area would be protected after full development of the area.

Looking at case law, the appellate court analogized the use of off-site ACEs for farmland mitigation to off-site preservation of endangered species habitat.  The court also referred to cases involving ACEs directly, such as Citizens for Open Government v. City of Lodi (2012) 205 Cal.App.4th 296, which this firm successfully litigated on behalf of the City of Lodi.  In Lodi, an EIR concluded that the loss of 40 acres of prime farmland was significant and unavoidable, but nonetheless required the developer to mitigate the impact by obtaining an ACE on 40 acres of prime farmland at an off-site location.  The Lodi court found that although off-site mitigation would not avoid the significant impact from the permanent loss of prime agricultural land, it would minimize and substantially lessen the impact.  The Masonite court found the Lodi court’s reasoning refuted respondent’s theory that mitigation through the use of an offset ACE was not legally feasible.

In Cherry Valley Pass Acres & Neighbors v. City of Beaumont (2010) 190 Cal.App.4th 316, an EIR stated that agricultural easements were a feasible means of mitigating agricultural land loss, along with Williamson Act contracts and other preservation plans.  The EIR in Beaumont ultimately concluded that the use of ACEs as mitigation for the development was economically infeasible due to the fact that rapid urban growth in that region had rendered farming financially difficult.  In Beaumont, the court found the EIR’s conclusion to be supported by substantial evidence.  Comparing the situation in Beaumont to the sand and gravel quarry at issue in Mendocino, the appellate court stated that because the quarry Project EIR had found the use of ACEs legally infeasible, the EIR never got to the point of presenting substantial evidence that could support its position in court.

The appellate court also noted that in Building Industry Assn. of Central California v. County of Stanislaus (2010) 190 Cal.App.4th 582, a court upheld a county general plan requiring the development of prime farmland to be mitigated at a 1:1 ratio.  Stanislaus found that the mitigation ratio requirement was a valid exercise of the county’s police power and that ACEs “granted in perpetuity are the primary means of accomplishing . . . permanent protection” for farmland.

Pointing to common practice, the appellate court noted that Lodi described the use of ACEs in a 1:1 ratio for farmland loss mitigation as “standard for California communities” and used in Stockton, Elk Grove, San Joaquin County, Stanislaus County, and the Tri-Valley Conservancy encompassing Livermore and Alameda Counties.

Finally, the court observed that public policy as expressed by the state Legislature also supported the use of ACEs to mitigate farmland loss, pointing to statements in the Government Code and Public Resources Code that emphasized the importance of agricultural land preservation to maintaining the economic, nutritional, historical, and environmental well-being of the state.

The appellate court also found that the EIR did not adequately discuss the use of in-lieu fees to mitigate farmland loss.  In comments on the EIR, the Department of Conservation stated that the donation of fees to an organization that acquires and stewards ACEs should be considered at mitigation.  The County rebuffed this idea, stating that it could not legally accept in-lieu fees because it lacked a farmland mitigation program.  The court pointed out that the County’s lack of a program was “immaterial” and did not preclude the Project from paying in-lieu fees to a third party organization or agency that acquires and oversees ACEs.

It is important to note that although the appellate court found ACEs are feasible means of mitigating for the loss of farmland, it did not conclude that such mitigation is adequate to reduce the impact to less than significant.

Topics:  Conservation Easements, Easements, Environmental Impact Report, Farms, Land Developers

Published In: Agriculture Updates, Civil Procedure Updates, Environmental Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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