Let’s Get Regional: Third District Holds Olympic Valley Resort Project EIR’s Environmental Setting Description and Analysis Violated CEQA’s Requirement To Place Special Emphasis On Unique Regional Environmental Resources By Failing To Sufficiently Consider Lake Tahoe

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In an opinion filed on August 24, and certified for partial publication on September 22, 2021, the Third District Court of Appeal reversed a judgment upholding Placer County’s EIR for a 94-acre resort development project in the Olympic (formerly Squaw) Valley area – site of the 1960 Winter Olympics near the iconic Lake Tahoe.  Sierra Watch v. County of Placer (Squaw Valley Real Estate, LLC, Real Party in Interest) (2021) ___ Cal.App.5th ___.  The published portions of the 51-page opinion found faults in the EIR’s description of the environmental setting and related water and air quality impact analyses, and errors in its analysis and mitigation of construction noise impacts.  Nearly half of the opinion remained unpublished; those portions of it (1) upheld the EIR’s climate change analysis (rejecting appellant Sierra Watch’s arguments challenging it as meritless, moot, or forfeited), (2) upheld most of the EIR’s wildfire impacts analysis (finding merit in one of appellant’s eight arguments, relating to underestimation of evacuation times), and (3) held the EIR’s traffic impacts analysis improperly relied on deferred mitigation.  (The unpublished portions of the opinion will not be discussed further in this post.)

The EIR’s “Environmental Setting” Discussion and
Analysis of Water and Air Quality Impacts

Notwithstanding the premise of David Letterman’s popular streaming show, “My Next Guest Needs No Introduction,” the Court in this case interpreted CEQA’s environmental setting requirement more along lines that Captain Obvious might embrace, i.e., everyone – no matter how famous or well-known – deserves to have a thorough and proper introduction, and this CEQA principle applies with even greater force as the “guest’s” stature increases.  Thus, an EIR’s required “description of the physical environmental conditions in the vicinity of the project,” known as the project’s “environmental setting” (CEQA Guidelines, § 15125(a)), while often focusing on a project’s immediate vicinity, must not neglect to meaningfully address unique regional environmental resources that would be affected by the project.

As pointed out by the Court, “because ‘[k]nowledge of the regional setting is critical to the assessment of environmental impacts,’ this description should also place ‘[s]pecial emphasis … on environmental resources that are rare or unique to that region and would be affected by the project.’”  (Citing CEQA Guidelines, § 15125(c).)  In turn, the environmental setting normally serves the critical role of the “baseline” against which predicted project impacts are described and measured so as to determine their significance.  (Citing Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439, 447; CEQA Guidelines, § 15125(a).)

Per the Court, the project EIR in this case ran afoul of these legal principles by giving short shrift in its environmental setting description and impact analysis to Lake Tahoe, which all parties “appear[ed] to accept … is a unique and significant [regional] environmental resource that would be affected by the project.”  (Citing Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002) 535 U.S. 302, 307 [noting lake is “‘uniquely beautiful’ and a “‘national treasure’” famous for its water’s “exceptional clarity”].)

The resort project site at issue is within the 4,700-acre Olympic Valley area, located “a few miles northwest of Lake Tahoe in the Sierra Nevada.”  The project would include an 85-acre resort parcel, with up to 850 lodging units, 300,000 square feet of commercial space, and over 3,000 parking spaces, and an 8.8-acre parcel housing 300 resort employees, to be constructed over 25 years.  Yet the draft EIR’s environmental setting description contained only one parenthetical reference to Lake Tahoe, and nowhere in the DEIR was there discussion of its importance, characteristics, or current condition.  While a Master Response to Comments later discussed the Tahoe Regional Planning Agency’s (TRPA) VMT thresholds, and disclosed the project would bring the region to near TRPA’s VMT threshold of 2,067,000 for the Tahoe basin, the FEIR “still never discussed the importance of Lake Tahoe or its current condition.  It instead largely appeared to presume that Lake Tahoe needed no introduction, and so little needed to be said about it.  And although the [F]EIR at least offered some figures about current and anticipated VMT around Lake Tahoe, it never clearly explained how all of these figures related to the Lake.  The County instead only acknowledged the connection between VMT and Lake Tahoe’s clarity after the [F]EIR was prepared, revealing six days before the board of supervisors approved the project that increased “VMT and its related effects – tailpipe emissions and crushed abrasives – have a direct role in lake clarity.””

But since none of this was disclosed in the EIR, the Court found “the public had little if any ability to evaluate the relevance of [the significant increase in VMT caused by the project] to Lake Tahoe[,]” which rendered the EIR inadequate.  Respondents’ contrary position ignored the critical importance of the regional setting, the fact that the project’s increased VMT would result in additional pollutants – e.g., abrasives applied to roads around Lake Tahoe – draining into the lake and affecting its clarity, and the fact that the EIR’s discussions of VMT failed to connect those project impacts to Lake Tahoe’s clarity and water quality.

The EIR’s air quality analysis suffered from similar fatal defects in failing to connect the CEQA dots.  Some of appellant Sierra Watch’s arguments about the EIR’s discussion of the environmental setting of the Lake Tahoe Basin and related project air quality impacts lacked merit and were sufficiently resolved in responses to comments contained in the FEIR; others were forfeited by failure to timely raise or fully develop them.  But the Court still found the FEIR failed to meaningfully assess the project’s traffic impacts on the basin’s air quality.  The EIR sent “mixed messages” by discussing two VMT thresholds of TRPA that the project far exceeded, then stating these thresholds were inapplicable because the project is located outside the basin, and never answering the question about what thresholds of significance did apply, and never reaching any clear conclusion about whether the project’s addition of 23,842 VMT daily would significantly impact the basin’s air quality (or, for that matter, Lake Tahoe’s water quality).  Per the Court:  “The EIR needed to determine whether the project’s impacts on Lake Tahoe and the basin were potentially significant – not simply summarize, and then declare inapplicable, another agency’s framework for evaluating these types of issues.”  And even supposing the EIR had reached a significance conclusion with regard to the project’s impacts in these areas, the Court stated it would still have found the document defective for failing to adequately disclose its analytic route to that conclusion.  Yet another defect was the FEIR’s underestimating  cumulative VMT from other projects in the region.  While this last defect was the subject of the post-FEIR information disclosed just 6 days before the hearing, these belated disclosures “came far too late in the CEQA process.”  Per the Court, County’s “post-EIR responses, [which] acknowledged and analyzed, apparently for the first time, the potential impacts from the project’s generation of an additional 23,842 VMT per day in the Lake Tahoe Basin[,]” “did not merely elaborate on and confirm the EIR’s conclusions[, but] instead supplied critical analysis and conclusions that were initially absent from the EIR.”

The EIR’s Analysis of Construction Noise Impacts

While rejecting most of appellant Sierra  Watch’s noise impact arguments, the Court of Appeal ultimately agreed that one of the EIR’s mitigation measures for construction noise was impermissibly vague and deferred.

The Court did not find the noise analysis inadequate for failing to estimate construction duration for the Village component of the project which would be built out sporadically, based on market-drive factors, over a 25-year period.  The EIR was not required to provide what would have been speculative estimates of construction duration and related impacts of noise on nearby sensitive receptors.  Further, just because the EIR provided duration estimates for the East (employee housing) Parcel’s construction, it did not need to do so for the Village component.  As the EIR made clear, these two project components were not comparable, and the East Parcel’s much smaller size and more fixed location made its construction duration and noise impacts more predictable than those of the Village.

The Court did find fault with what it found to be the EIR’s arbitrary choice to limit its analysis of construction noise impacts to sensitive receptors to those lying within 50 feet of expected construction activity, while ignoring impacts to sensitive receptors located beyond that distance.  The EIR never explained its reason for this “arbitrary line drawing,” and “itself acknowledged that sound impacts may be significant even beyond 50 feet.”  In fact, in the one exception to its 50-foot limitation, the EIR acknowledged that a boarding school 250 feet distant from construction activity would experience 85-decibel noise levels that would cause a significant impact, thus underscoring the impropriety of its arbitrary refusal to consider potential noise impacts to other receptors at a similar distance.  Respondents’ claim that the 50-foot distance was “standard” could not, even if true, justify ignoring evidence of noise disturbance outside that radius, nor could the County rely on its noise ordinance to foreclose consideration of such evidence under CEQA.

Turning to the EIR’s noise mitigation measures, the Court held appellant Sierra Watch failed to demonstrate the County violated CEQA by including additional protections (e.g., replacing windows and increasing insulation) for the nearby school – a particularly sensitive receptor when it comes to daytime noise – that it did not provide to other receptors.

The Court rejected one and accepted one of Sierra Watch’s challenges to two construction noise mitigation measures as unduly vague.  It never explained why a measure requiring that construction equipment be “properly maintained and equipped with noise-reduction intake and exhaust mufflers and engine shrouds, in accordance with manufacturers’ recommendations[,]” was too vague, so the Court rejected that argument.  But the Court agreed with appellant’s challenge to a measure requiring “operations and techniques” to “be replaced with quieter procedures (e.g., using welding instead of riveting, mixing concrete off-site instead of on-site) where feasible and consistent with building codes and other applicable laws and regulations.”  While its examples were specific, the Court held the measure was “otherwise entirely vague” and insufficient as a mitigation measure because it “defers until later the determination of which construction procedures can feasibly be changed and how these procedures can be modified to be quieter” and “offers no instruction on how either of these determination are to be made.”

Conclusion and Implications

A major theme of the opinion’s published discussion of the EIR deficiencies found by the Court of Appeal in this case seems to be the improper cabining of project impacts analyses within arbitrary physical boundaries, even though those impacts demonstrably extended beyond such boundaries.  Failing to properly acknowledge and recognize the project’s impacts on rare and unique regional  resources – i.e., Lake Tahoe – within the vicinity affected by it, as well as drawing an arbitrary 50-foot line beyond which significant construction noise impacts would not be recognized, both exemplified this theme and violated CEQA.  The case also serves as a reminder that vague mitigation measures, which defer the formulation of mitigation to a later date, without sufficient commitment, guidance or enforceable performance standards, are improper.

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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