The City of Alameda's approval of a development and disposition agreement (DDA) with a developer for restoration of an historic theater and construction of a new theater and parking structure was a "project" under the California Environmental Quality Act, the First District Court of Appeal has ruled. The ruling was a loss for historic preservation advocates who did not challenge the City of Alameda's environmental review of the DDA when the city approved the study.

Opponents of the Alameda project argued that the city should have conducted new environmental reviews when it approved the project design and use permits after signing the DDA. The opponents argued that a fair argument could be made that those subsequent actions may have a significant impact on the environment.

But the court ruled that, because the mitigated negative declaration for the DDA was in place and unchallenged, the fair argument standard did not apply. Rather, the opponents had to show that the project or circumstances had changed, or that new information had become available. The opponents failed that test, the court ruled.

The historic Alameda Theatre, a 1932 art deco structure designed by the firm Miller & Pflueger, is what has stirred preservationists. The theater is on the National Register of Historic Places and is important for Alameda's Park Street historic district. However, the building has sat mostly vacant since 1979.

In 2000, the city began exploring options for rehabilitating the theater. After finding no interest in reopening the building as a single-screen cinema, the city pursued a larger project that involved restoration of the historic theater, and construction of a multi-screen cineplex and 350-space, six-story parking structure next to the existing theater.

After a series of public meetings, the City Council, also acting as the Community Improvement Commission (Alameda's redevelopment agency board), approved a DDA with Alameda Entertainment Associates in early May 2005. Under the DDA, the city would acquire, assemble and prepare all of the necessary real estate, renovate the theater, build the parking garage and provide grants and loans totaling $2.9 million to the developer, which would build and run the new cineplex.

In June, the Alameda Planning Board approved the designs of the cineplex and parking structure, and a use permit for the parking structure. Preservationists, calling themselves Citizens for a Megaplex-Free Alameda, appealed the decision to the City Council and urged preparation of an environmental impact report. On August 16, 2005, the City Council upheld the Planning Board and declined to do additional environmental review. On September 29, 2005, the Planning Board approved a use permit for the cineplex. Again, preservationists appealed and, again, the City Council on November 1, 2005, upheld the Planning Board and found no reason for further study.

On October 3, 2005, the citizens group sued the city for allegedly violating the California Environmental Quality Act (CEQA). They argued that, under the fair argument standard, the mitigated negative declaration was inadequate. They also argued that, under the substantial evidence standard, the city had failed to address new information made available at the time of subsequent decisions.

Alameda County Superior Court Judge Bonnie Sabraw ruled that the lawsuit was filed too late to challenge the mitigated negative declaration. Sabraw found that the group could challenge the subsequent August and November decisions — but not under the fair argument standard. The judge found that the substantial evidence standard applied, and ruled that substantial evidence supported the city's decision that the project had not changed and no new information warranting further study was available. A unanimous three-judge panel of the First District, Division Five, upheld Sabraw.

On appeal, the citizens group argued that approval of the DDA did not amount to approval of a project under CEQA because other land use approvals were necessary. Thus, they argued, they should be allowed to challenge the mitigated negative declaration on which the subsequent decisions relied. The court disagreed.

"Citizens' argument misapprehends the definition of ‘project,'" wrote San Francisco Superior Court Judge Maria Miller, sitting by assignment to the First District. "Under CEQA, ‘project' refers to the underlying activity which may be subject to approval by one or more governmental agencies; it does not refer to the each of the several approvals sequentially issued by different agencies. Here, the underlying activity is quite plainly the work agreed to by the parties to the DDA — the restoration of the Alameda Theatre and the construction of the cineplex and parking structure. This constitutes the ‘project' within the meaning of CEQA."

Under the CEQA Guidelines, "approval" occurs upon the earliest commitment for funding or land use approvals, Miller continued. The DDA committed the city to acquire and assemble parcels, grant and loan specific amounts of money, perform demolition, grading and remediation work, renovate the theater and build the parking structure. "Our examination of these provisions leaves us with no doubt that the city's execution of the DDA constituted an ‘approval' as that term is defined in the Guidelines," the court ruled.

Thus, preservationists had 30 days from the May 3 DDA approval to contest the mitigated negative declaration — a deadline the group missed by four months.

Challenges to subsequent determinations by the city are subject to the more stringent substantial evidence standard. The citizens group argued that a report it commissioned by a local historian and testimony at an August historical advisory board hearing amounted to new information that should trigger preparation of an EIR. The court, however, determined that this information could have been known when the city adopted the mitigated negative and, therefore, did not require preparation of a new environmental document.

The Case:
Citizens for a Megaplex-Free Alameda  v. City of Alameda, No. A114941, 07 C.D.O.S. 3376, 2007 DJDAR 4231. Filed March 29, 2007. Modified April 24, 2007 at 2007 DJDAR 5688.
The Lawyer:
For Citizens: Susan Brandt-Hawley, (707) 938-3908.
For the city: Ellen Garber, Shute, Mihaly & Weinberger, (415) 552-7272.
For Alameda Entertainment Associates: Donald Black, (707) 576-7850.