In a partially published opinion filed January 30, 2019, the First District Court of Appeal (Div. 1) affirmed a judgment denying a writ petition challenging the City of Berkeley’s approval of use permits for three single-family homes on three contiguous hillside parcels.  The Court upheld the City’s use of the CEQA Guidelines § 15303(a) (Class 3) categorical exemption for new construction of small structures, including “up to three single-family residences” in “urbanized areas.”  Berkeley Hills Watershed Coalition v. City of Berkeley (Matthew Wadlund, et al., Real Parties in Interest) (2019) ____ Cal.App.5th _____.

The Court rejected project opponents’ arguments that the exemption was defeated by Guidelines § 15300.2(a)’s “location” exception for projects located “in a particularly sensitive environment” which “may impact on an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies.”  It did so despite undisputed evidence that portions of the project sites were within the State-designated Alquist-Priolo Earthquake Fault Zone (APEFZ) and an earthquake-induced landslide area mapped by the California Geologic Survey on its Seismic Hazard Mapping Act map.  In so holding, it gave effect to the plain meaning of the phrase “environmental resource” as used in the location exception, confirmed applicability of the same bifurcated standard of review that applies to the “unusual circumstances” exception, and reaffirmed the principle that “CEQA does not generally require an agency to analyze how existing hazards or conditions might impact a project’s users or residents.”  The Court further reaffirmed that project design measures developed to meet building code requirements for seismic-zone properties and address pre-existing site conditions are not “mitigation measures” precluding use of a categorical exemption.

The Court rejected Appellants’ non-CEQA arguments that the project approvals violated the City’s “Mini-dorm Ordinance,” which requires a use permit for projects adding a fifth bedroom to parcels where a structure or structures containing four bedrooms already exist.  (The latter portion of the published opinion, which won’t be further discussed in this post, contains an interesting analysis discussing and applying the principles governing construction of local ordinances, and prominently featuring an evidentiary letter by former City Attorney Zach Cowan.  The unpublished portion of the opinion, which also won’t be further discussed here, rejected Appellants’ arguments that the project failed to meet the City Zoning Code’s open space requirements, and that the City’s “nondetriment” findings inadequately addressed alleged emergency vehicle access and related fire hazard concerns.)

Key holdings and “’takeaways” from the published portion of the Court’s opinion addressing CEQA issues include:

• The Class 3 categorical exemption applies to “construction and location of limited numbers of new, small facilities or structures,” including “up to three single-family residences” in “urbanized areas.” (CEQA Guidelines, § 15303.)  Projects coming within an exemption require no environmental review unless an exception applies; where, as here, plaintiffs do not dispute a project meets the exemption’s requirements, they “bear the burden of demonstrating that the projects fall within an exception.”  (Citing Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1105 (“Berkeley Hillside I”).)
• The “location” exception to the Class 3, 4, 5, 6 and 11 categorical exemptions provides they “are qualified by consideration of where the project is to be located – a project that is ordinarily insignificant in its impact on the environment may in a particularly sensitive environment be significant. Therefore, these classes are considered to apply in all instances, except where the project may impact on an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies.”  (CEQA Guidelines, § 15300.2(a), emph. added.)
• “[T]he same bifurcated standard of review [that applies to the unusual circumstances exception] is applicable to the location exception. [Citation.]  As with the unusual circumstances exception, the determination whether a project is located in “a particularly sensitive environment” [citation] is essentially a factual inquiry, subject to the substantial evidence standard of review.  Thus, in evaluating the agency’s determination whether a project is located where there is “an environmental resource of hazardous or critical concern” [citation], the court applies a deferential standard of review, “resolving all evidentiary conflicts in the agency’s favor and indulging in all legitimate and reasonable inferences to uphold the agency’s finding.”  (Quoting from Berkeley Hillside I, supra, 60 Cal.4th at 1114.)  “However, in determining whether the project “may impact on” the environmental resource because of its location, the court applies a fair argument standard of review.”
• Under the plain language of the location exception, the mapped APEFZ and earthquake-induced landslide areas on the projects’ site did not constitute “environmental resource[s] of hazardous or critical concern . . . mapped .. . pursuant to law” so as to trigger it.  While the statutes at issue did map physical locations of potential earthquakes and landslides, and possible earthquake and landslides are, indeed, hazardous geologic events, the zones where they may occur are nonetheless not environmental resources within the plain, common sense meaning of that term.  Rather, a “resource” is a “natural source of wealth or revenue” or a “natural feature or phenomenon that enhances the quality of human life.”  (Citing Merriam-Webster’s Collegiate Dict. (11th ed. 2014), p. 1061.)
• The Court found further support for its construction of the exception in the stated purposes of the hazard mapping and zoning acts (identified in the geotechnical report on the projects’ site), which were to prevent economic loss and protect public health and safety, not to identify the location of sensitive environmental resources. Its construction was also bolstered by “the purposes of CEQA,” the “relevant provisions [of which] are best read to focus almost entirely on how projects affect the environment.”  (Quoting California Building Industry Assn. v. Bay Area Air Quality Management Dist. (2015) 62 Cal.4th 369, 387 (“CBIA”).)  In this vein, the Court also cited Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455, 473, a case with which CBIA noted its holding was “not inconsistent,” and “which was one of several cases that implicitly held CEQA does not generally require an agency to analyze how existing hazards or conditions might impact a project’s users or residents.”  (Citing CBIA, at 392.)
• Accordingly, the Court held “the location exception is not applicable based solely on the “undisputed” fact the project is located in a potential earthquake and landslide zone.” It further held the City’s finding that the site was “not located in an environmentally sensitive area,” was supported by substantial evidence in the record.  While Appellants argued the geotechnical reports showed the project risked activating or exacerbating an existing landslide, they failed to point to any evidence showing that any “environmental resource of hazardous or critical concern” was present on the property – as opposed to future occupants or buildings – which would be harmed as a result.  Appellants failed to exhaust their administrative remedies with respect to their argument, raised for the first time on appeal, that an activated landslide could impact an existing community of coast live oak trees on the projects’ parcels, and they cited no record evidence supporting it in any event.
• The Court rejected Appellants’ argument that the location exception should be interpreted to apply based on Public Resources Code §§ 21159.21(h)(4), (5), which sets forth exceptions to a specific (and highly qualified) statutory exemption for certain housing projects if they are located in seismic and landslide hazard areas. Rather than reflecting any general intent that projects in seismic and landslide hazard areas cannot be exempted from CEQA review, the Court found that the specific statutory exception for housing projects simply underscored that the Legislature did not provide a similar exception for Class 3 projects.  Per the Court:  “[W]e cannot extrapolate from the specific exception in section 21159.21, subdivision (h) an intent to apply the same requirements to a general exception like the location exception that does not include similar language.”  (Citing CBIA, supra, 62 Cal.4th at 392.)
• While the Court found its decision on the first prong of the “location exception inquiry” – i.e., substantial evidence supported the City’s finding the project was not in an environmentally sensitive location – obviated its reaching the second prong, it noted for good measure that plaintiffs also failed to cite any evidence supporting a fair argument “that construction of the three proposed residences would exacerbate existing hazardous conditions or harm the environment.”
• In a footnote addressing Appellants’ argument that projects can’t “mitigate into” a categorical exemption (see Salmon Protection & Watershed Network v. County of Marin (2004) 125 Cal.App.4th 1098, 1104, 1108), the Court noted that while the distinction between project elements and mitigation measures may not always be clear, “measures taken to comply with building codes or to address “‘common and typical concerns’” during construction projects do not preclude Class 3 exemption.” (Citing Berkeley Hillside Preservation v. City of Berkeley (2015) 241 Cal.App.4th 943, 960-961 (Berkeley Hillside II).)  Per the Court:  “Here, the record reflects the “mitigation measures” plaintiffs identify were developed as part of the project design to meet building code requirements for properties located in seismic zones and address preexisting conditions on the site as opposed to being “proposed subsequent actions by the project’s proponent to mitigate or offset the alleged adverse environmental impacts” of the project.”  (Citing, inter alia, Berkeley Hillside II, at 961.)