Second District Applies CEQA’s “Subsequent Review” Rules to Uphold EIR Addendum for Revised Target Superstore Project Including “Spot-Zoning” Specific Plan Amendment Authorizing Use

by Miller Starr Regalia

In a lengthy published opinion filed August 23, 2018, the Second District Court of Appeal reversed the trial court’s judgment, and upheld the City of Los Angeles’ addendum to a prior project-level EIR for a Target Superstore as legally sufficient CEQA compliance for a revised plan-level  project which amended a specific plan so as to authorize that same development.  Citizens Coalition Los Angeles v. City of Los Angeles (Target Corporation, Real Party in Interest) (2018) ___ Cal.App.5th ___.  The Court further held the specific plan amendment was not impermissible “spot zoning,” even if approved only to authorize the site-specific Superstore project, because there was a “reasonable basis” for the City to find it was in the public interest.  While these holdings are not surprising, some of the analysis used to reach the Court’s clearly correct CEQA holding – which analogizes subsequent review rules to piecemealing concepts – is novel and potentially confusing, as discussed below.

Prior Litigation Successfully Challenges Originally Approved Superstore Project And City Approves Revised Project

The case’s factual and procedural background included earlier CEQA/land use litigation that resulted in a judgment upholding the EIR, but invalidating (as unsupported by substantial evidence) the numerous variances the City granted for the Target Superstore Project.  That project was a site-specific development project proposing a 3-story, 75-foot structure, with a 163,862 square-foot Superstore occupying the top story, parking on the second story, and various retail stores and public spaces on the ground level.  In a scenario that is every developer’s nightmare, the trial court’s order that all construction cease left a partially completed structure on the site; that, in turn, prompted the City to amend by ordinance its Vermont/Western Transit Oriented District Specific Plan (a “Station Neighborhood Area Plan,” or “SNAP”) to authorize completion of the development.  In relevant part, the amendments created a new “Subarea F” within the SNAP.  Not coincidentally, Subarea F applied to areas with commercial uses of over 100,000 square feet, on sites over 3.5 acres, located within one-quarter mile of both a transit station and freeway on- and off-ramps – features exactly describing the Target Superstore project and site.  Subarea F allows structures up to 75 feet in height that “substantially conform” with building facade requirements, so long as the developments dedicate at least 80% of street frontage to the same types of retail and public uses as the Superstore project.  The Ordinance also designated just a single location within the SNAP as Subarea F – the Target Superstore site.

City Approves EIR Addendum For Revised Project And Concludes
It Will Have No New Significant or More Severe Environmental Impacts

To satisfy its CEQA review obligations, the City approved an Addendum to the previously certified Target Superstore EIR that defined the “Revised Project” as (1) amendment of the SNAP (and portions of other relevant plans), and (2) all construction activities needed to complete the existing Superstore structure and its operation.  The City approved the Addendum, which examined the impacts of the Revised Project as compared to the Original Project, using updated air quality, GHG, noise, and traffic analyses, and concluded the Revised Project did not require major revisions of the prior EIR because it did not involve any new significant environmental effects or a substantial increase in the severity of previously identified effects.

Plaintiffs File New Litigation Challenging Revised Project on CEQA and
“Spot Zoning” Grounds And The Trial Court Finds The SNAP Amendments
Constitute A New Project Requiring New EIR

The same plaintiffs that brought the prior litigation filed new writ petitions challenging the Revised Project approvals on grounds that the Addendum violated CEQA (which they argued required an EIR instead), and that City’s application of Subarea F only to the Superstore constituted impermissible “spot zoning.”  The trial court declined to reach the “spot zoning” issue, but found an EIR was required because the Ordinance enacting the SNAP amendments constituted an “independent project” requiring a wholly independent CEQA analysis that should also analyze the potential environmental impacts of reasonably foreseeable future projects on sites that could be designated as Subarea F.

The Court Of Appeal Reverses The Judgment And
Upholds The Addendum And Revised Project Against All Challenges

In reviewing the City’s actions without deference to the trial court’s decision, the Court of Appeal reversed the judgment and held that (1) City’s reliance on the Addendum did not violate CEQA, and (2) City did not impermissibly “spot zone.”  Notable points and CEQA holdings from the Court’s published opinion (along with my own observations regarding some of them) include:

  • As a general matter, “CEQA operates, not by dictating pro-environmental outcomes, but rather by mandating that “decision-makers and the public” study the likely environmental effects of contemplated government actions and thus make fully informed decisions regarding those actions. [Citations.]  In other words, CEQA does not care what decision is made as long as it is an informed one.”
  • When a public agency considers a project for which there has already been CEQA review, whether that review resulted in an EIR or negative declaration, Public Resources Code § 21166 prohibits preparation of a new or supplemental EIR or negative declaration unless (1) substantial changes are proposed in the project which will require major revisions of the EIR or negative declaration; (2) substantial changes in the surrounding circumstances will require major revisions in the EIR or negative declaration; or (3) new information, which was not known and could not have been known when the EIR or negative declaration was approved, becomes available.
  • The question whether the SNAP amendments constituted a project for which there had been prior CEQA review (to which Section 21166 applies), or an “entirely new project” requiring initiation of CEQA’s familiar 3-step analysis, turns not on any “abstract characterization” of it as “new” or “old”, but on whether the previous CEQA document retains any relevance. (Friends of College of San Mateo Gardens v. San Mateo Community College Dist. (2016) 1 Cal.5th 937, 944.)
  • The question whether the initial CEQA document remains relevant despite changed plans or circumstances, like the question whether major revisions will be required, is a predominantly factual question for the agency to answer, drawing on its particular expertise. The agency’s determination is deferentially reviewed by courts for substantial evidence support.  The greater judicial deference accorded to an agency’s determination whether further CEQA review is required – as opposed to the decision whether initial review is required – is supported by weighty policy considerations.  Specifically because “ “‘In depth review has already occurred’” “‘the interests of finality’” are weightier and “the statutory presumption flips in favor of the developer and against further review.””  (Citing and quoting Melom v. City of Madera (2010) 183 Cal.App.4th 41, 48-49; Moss v. County of Humboldt (2008) 162 Cal.App.4th 1041, 1049-1050.)  In other words:  “The question is no longer whether to conduct the environmental review process in the first place, but rather “‘whether circumstances have changed enough to justify repeating a substantial portion of th[at] process.’””  (Quoting Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 55.)
  • In next addressing the unique factual scenario that likely led it to publish its opinion, the Court observed that a prior environmental document will in most cases remain relevant where the prior and current CEQA analyses pertain to related projects at the same level of generality – i.e., when both deal with a specific development, or both deal with a more generalized “program” (such as a general or specific plan). It then concluded that CEQA’s subsequent review rules under section 21166 are not rendered inapplicable simply because the related projects  — as in the case before it – “operate at different levels of generality.”  Of primary importance is whether the prior CEQA document retains relevance in light of the proposed changes, not the “label” attached to the project.  Here, the Court held, because the environmental impact of the Superstore (as a large commercial development placed in Subarea F) was by definition part of the necessary CEQA analysis for the SNAP amendments, the prior Superstore EIR retained relevance and Section 21166 applied.  The Court thus further held that an “agency must file an addendum” to the prior CEQA document unless substantial changes in the project or surrounding circumstances, or new information that was not known and could not have been known, will require “major revisions” of the prior document due to the involvement of new or substantially more severe significant effects, in which case a subsequent or supplemental EIR is required.
  • At this point, the Court’s analysis becomes novel, and rather esoteric, finding that the required “subsequent review” analysis regarding whether “major revisions” will be required in the prior CEQA document is “functionally indistinguishable from the question whether a current CEQA review of a project is sufficient in scope vis-à-vis possible future actions flowing from that project.” Per the Court:  “In both instances, the fundamental question is the same: Does the existing CEQA document encapsulate all of the environmentally significant effects of the project?”  In making these seemingly categorical pronouncements, the Court relied on extensive citation and analysis of cases dealing with “reasonable foreseeability” and holding that CEQA prohibits a “piecemealing” analysis and requires consideration of the impacts of the “whole of an action” which constitutes the “project” under review.  While such principles are clearly well established, and undoubtedly had relevance to determining the scope and potential impacts of the revised project at issue in this case, it is an overstatement to declare that the required analyses in these two different CEQA contexts are “functionally indistinguishable” as a general matter.  For example, it could be the case that project revisions or changed circumstances will produce consequences – whether “reasonably foreseeable” in hindsight or not – that were not included within the scope of the prior CEQA analysis, yet nonetheless do not require “major revisions” in that analysis because the new consequences do not involve new significant or substantially more severe impacts than were previously analyzed.  Only changes to the project or circumstances that will result in new significant effects or substantially more severe effects not analyzed in the initial CEQA document should be deemed to require “major revisions” (and thus a subsequent or supplemental EIR) under the section 21166 analysis.  (See CEQA Guidelines, § 15162.)  Thus, while the Court’s analysis, as applied here, produced a correct result under CEQA’s subsequent review rules, it is reasonably foreseeable (to me, at least) that it might not do so if applied mechanically and uncritically in different contexts in future cases.
  • Following the Court’s train of reasoning in distilling “piecemealing” principles from CEQA case law, in order for a “consequence” of a project to be deemed “reasonably foreseeable” it must, as a practical matter, be “sufficiently certain” to happen. In extensively analyzing the case law, the Court held this standard has been found to be met in five different situations:  (1) when the agency has committed to the consequence; (2) when the consequence is a necessary and essential component of the project; (3) when the consequence itself is under environmental review; (4) when the agency subjectively intends or anticipates the consequence and that the project is a “first step” toward it; and (5) when the project creates an incentive which is all but certain to cause the consequence.  Conversely, a consequence is not reasonably foreseeable when it is entirely independent of the project, or when the project merely incentivizes or makes it a possibility (or even a probability) – rather, it must be all but certain to occur.
  • Applying these “reasonable foreseeability” principles to the “subsequent review” issue before it, the Court held that substantial evidence supported the City’s “finding that no large-scale commercial developments beyond the Target Superstore are a reasonably foreseeable consequence of the SNAP Amendment’s creation of Subarea F (which, in turn, means that there is no need for major revisions in the previously promulgated environmental impact report for the Superstore, and that the City Council’s use of an addendum complies with CEQA).” Per the Court:  “The evidence in the administrative record indicates that the City Council has not committed itself to any other large-scale commercial development on the two other parcels currently meeting Subarea F’s size and proximity-to-transit requirements; that such further development is neither essential nor necessary to the creation of Subarea F; that no such development is currently under review; that no such development is either “intended” or “anticipated”; and that the creation of Subarea F does not create an incentive that makes further large-scale commercial development all but certain (either on the two potential existing parcels or on other parcels that might be “cobbled together”).”  In sum:  “The City created a new subzone and rezoned only one development into that subzone; updating its prior [EIR] analyzing that development … complies with CEQA.”  While this analysis is undoubtedly correct as to the reasonably foreseeable consequences of the revised project at issue in this case, it seems to implicitly assume as a general matter that any reasonably foreseeable consequences not discussed in an initial CEQA document will have new or more severe significant environmental impacts requiring major revisions; and while that is a reasonable assumption based on the facts of this particular case, due to the large-scale nature of the additional commercial development potentially authorized, it is not necessarily true in all cases.  Rather, the relevant “subsequent review” standard is whether the revised project’s impacts are new significant or substantially more severe impacts as compared to the impacts discussed and analyzed in the original CEQA document.  That a revised project simply has some new or unforeseen consequences does not alone suffice to meet this stringent test, which should be strictly and scrupulously enforced by the courts to effectuate the weighty policies and presumption of finality underlying it.
  • The Court’s “bottom line” holding here was that the trial court erred in finding changed circumstances (i.e., approval of the Superstore by SNAP amendments rather than variances) fell into one of Section 21166’s exceptions. A change in circumstances alone is insufficient; rather, the change must require “major revisions” in the CEQA analysis.  The Court of Appeal also opined that “major revisions are required only when the change creates reasonably foreseeable consequences that are not addressed by prior CEQA review[,]” and held that (contrary to plaintiffs’ arguments) no such consequences were present here; in my view, as explained above, this reasoning is not universally applicable as a general rule, and may create confusion and lead to incorrect results should future courts misapply it in the subsequent review context.

The “Spot Zoning” Issue

  • Turning from CEQA to its analysis of the “spot zoning” issue – a unique land use/police power issue probably warranting publication of the opinion in its own right – the Court noted that “spot zoning” rezones a parcel to give it “fewer or greater rights” than surrounding parcels; while it traditionally refers to creating “islands” with more restrictive zoning, it can also refer to islands with less restrictive Critically, spot zoning “is invalid only when it is not in the public interest – that is, when it is “arbitrary,” “irrational,” and “unreasonable.””  Spot zoning will be upheld as in the public interest if there is a “reasonable basis” to believe it “has substantial relation to the public health, safety, morals or general welfare.”  If part of a specific plan, the spot zone must also be compatible or in “harmony” with the general plan.
  • Plaintiffs here failed to meet their burden to show spot zoning, or that “Subarea F amount[ed] to less restrictive zoning because it imposes many special requirements upon development within its confines” and is thus “somewhat of a mixed bag.” Even assuming that creating Subarea F actually constituted spot zoning, the Court held there is nonetheless a “reasonable basis” for the City’s belief that it “has substantial relation to the public health, safety, morals or general welfare,” as extensively documented by its staff’s findings showing that the Ordinance is in the public interest; the Court refused to “second guess” the City’s determination of the Ordinance’s “wisdom” or whether it was “good policy.”

Final CEQA Takeaways

Like its characterization of the City’s challenged Ordinance in its “spot zoning” analysis, the Second District’s CEQA analysis in this case is “somewhat of a mixed bag.”  Upholding the City’s use of an addendum because the prior EIR retained relevance and the revised project did not present reasonably foreseeable new or more severe significant adverse effects, as compared to those analyzed in the prior EIR, was undoubtedly a correct result.  But the opinion’s gaps in reasoning and unexplained implicit assumptions appear to result in categorical statements improperly conflating CEQA’s “piecemealing” and related “reasonable foreseeability” concepts with its rules governing subsequent review.  As Governor Brown would probably concur, CEQA has become esoteric enough as it is, and is in desperate need of clear, easy-to-apply rules and judicial guidance.  Notwithstanding any potential confusion created by this opinion’s reasoning, a supplemental or subsequent EIR should never be required where a revised project’s new “consequence” does not produce a new significant or substantially more severe environmental impact, as compared to those previously analyzed.  Period.

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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