Infill Receives CEQA Exemption: In FIrst Published Ruling, Court Makes Guidelines Retroactive

 

A 5,855-square-foot retail and office building proposed for downtown Mill Valley is exempt from environmental review under revised California Environmental Quality Act Guidelines, the First District Court of Appeals has ruled.

The court ruled that buildings of up to 10,000 square feet proposed for an urban area may be exempt from CEQA review. In the Mill Valley case, the court concluded that the project opponent did not prove the existence of any "unusual circumstances" that would preclude the exemption.

Interestingly, in the unanimous opinion for the three-judge panel, Justice Patricia Sepulveda said that the project probably did not qualify for an exemption when the city processed the application in early 1998. The proposed structure’s occupant load would have been too large to qualify for an exemption. But the new Guidelines for Implementation of CEQA (Cal. Code Regs., tit. 14 §15000 et seq.) adopted by the Secretary of Resources in October 1998 "extended the exemptions to some structures that would not have been covered" by the previous version.

Lawyers on either side said they believe this case is the first court interpretation of the year-old CEQA Guidelines. Craig Labadie, the city’s attorney, called the ruling helpful because it clarifies the square footage limitation for exempt projects.

But the attorney for the project opponent said she would seek a rehearing because the issue of applying the revised Guidelines retroactively was never briefed. Attorney Laurel Stanley also noted that the appellate court upheld her client’s argument regarding occupant load.

"I think we deserve the chance to get back to the trial court, at least on the issue of attorneys fees" because the appellate court agreed with her primary argument, she said.

But Labadie said the project opponent won nothing.

"The court said we did not violate CEQA, we did not violate our general plan, and we did not violate the parking ordinance. I’d say that’s a win for us," Labadie said.

This proposal to construct new commercial buildings in downtown Mill Valley first reached the city in early 1996. The applicants, Jack Lee and Christine Lum, proposed demolishing one building, expanding a parking lot and converting a retail building to office use. The city approved the project, but the applicants never built it. Instead, they returned one year later with more extensive development plans. The Planning Commission recommended approval, but the City Council requested revisions. The applicants on January 9, 1998, submitted plans for one retail/office building of 5,855 square feet on a portion of a parking lot behind an existing commercial building. The Planning Commission again endorsed the idea but sought clarification on some issues, including CEQA review.

On April 6, 1998, the City Council unanimously approved the project with 31 conditions. The next day, the city filed a notice of exemption from CEQA under Guidelines §§15301, 15302(b), 15303(b) and (c), and 15061(b)(3). One month later, project opponent Patricia Ann Fairbank filed a petition for writ of mandate to overrule the exemption. But Marin County Superior Court Judge Vernon Smith ruled for the city. Smith found that the project qualified for an exemption under §15303(c), that Fairbank did not "produce substantial evidence to show a reasonable possibility of adverse environmental impact," and that the city had followed its codes for the grandfathering of nonconforming parking facilities.

The appellate court upheld Judge Smith’s ruling but used different reasoning.

Fairbank argued that for the city to give this project a "Class 3" exemption, the building could not have an "occupant load" of more than 30 people as determined by the Universal Building Code. Fairbank argued that with 3,130 square feet of office space and 2,725 square feet of retail space, the proposed building would have an occupant load of 122 people. The City, however, argued that the Guidelines neither defined "occupant load" nor name the UBC as the authoritative source.

The appellate court sided with Fairbank by concluding that commercial buildings were "required to meet the UBC’s ‘occupant load’ standard in order to enjoy a Class 3 exemption from the requirements of CEQA. If that were the end of our inquiry," Justice Sepulveda wrote, "we would almost certainly have to reverse the trial court’s decision on the Guidelines §15303(c) exemption."

Unfortunately for Fairbank, the court did not stop there. Rather, the court noted that the revised Guidelines eliminated references to "occupant load" and based the exemption solely on square footage. "Thus," Sepulveda wrote, "under Guidelines §15303(c), as amended in 1998, the Class 3 exemption applies to ‘[a] store, motel, office, restaurant or similar structure … not exceeding 2,500 square feet in floor area’ and ‘[i]n urbanized areas … up to four such commercial buildings not exceeding 10,000 square feet on sites zoned for such use.’"

Fairbank argued that the revised Guidelines meant any single structure of more than 2,500 square feet was not exempt. In an interview, Fairbank’s attorney, Stanley, called the wording in the Guidelines confusing. "I do think there is a difference between a single building of 10,000 square feet and four individual buildings of up to 10,000 square feet," Stanley said.

But the court found the wording clear.

"The most plausible reading of current Guidelines §15303(c), as amended in October 1998, is that a commercial project to be built in an ‘urbanized area’ may be found to be exempt if it involves the construction of one, two, three or four commercial buildings on a parcel zoned for such use, so long as the total ‘floor area’ of the building(s) does not exceed 10,000 square feet," Sepulveda wrote.

Fairbank also argued that the project did not qualify for an exemption because it lacked adequate parking and would impact traffic circulation. But the court said Fairbank needed to show that this was an "unusual circumstance" that could significantly affect the environment.

"While the addition of any small building to a fully developed downtown commercial area is likely to cause minor, adverse changes in the amount and flow of traffic and in parking patterns in the area, such effects cannot be deemed ‘significant’ without a showing that some feature of the project distinguishes it from any other small, run-of-the-mill commercial building or use," the court said. "Otherwise, no project that satisfies the criteria set for in Guidelines §15303(c) could ever be found to be exempt."

In an unpublished portion of the opinion, the court shot down Fairbank’s arguments concerning cumulative impacts on parking and impacts to the O’Shaughnessy Building, which Fairbank called historic. The court said Fairbank failed to make a "fair argument" regarding parking and the court found that the city acted consistently with its parking ordinance. The court said that although Fairbank cited comments regarding the O’Shaughnessy’s historic character, the building is neither listed in nor eligible for the California Register of Historic Resources, as is required to receive scrutiny.

The Case:

Patricia Ann Fairbank v. City of Mill Valley, No. A085018, 99 C.D.O.S. 8106, 1999 Daily Journal D.A.R. 10307, filed September 30, 1999.

The Lawyers:

For Fairbank: Laurel Stanley, Stanley & Rose, (510) 663-5171.

For Mill Valley: Craig Labadie, McDonough, Holland & Allen, (510) 273-8780.

For Lee and Lum: Neil Sorensen, (415) 499-8600.