In yet another California Environmental Quality Act case involving whether an agreement between a tribe and a city constitutes a "project," the First District Court of Appeal has held that the law did not apply to an agreement requiring a city's formal support of a proposed casino in exchange for the tribe's funding of undefined city services and improvements.

To ensure that an agency does not stray from the California Environmental Quality Act (CEQA), the agency must first ask itself in relation to any action: "Is it a project?" Only "projects" are subject to CEQA; if something is not a project, no environmental review is necessary. In this case, the city determined in 2006 that a municipal services agreement between the Scotts Valley Band of Pomo Indians of California and the East Bay city of San Pablo did not constitute a project and CEQA did not apply. Various neighborhood and environmental groups brought a writ of mandate challenging the city's determination. Case Background The Scotts Valley Band of Pomo Indians is a landless tribe that intends to establish its casino in San Pablo in lieu of building one on territory that it controls directly. The Scotts Valley casino would be located near an existing casino in San Pablo operated by the Lytton Band of Pomo Indians. In this case, the agreement required the Scotts Valley Band to make payments for fire, police and public works services, while the City of San Pablo in turn agreed to support the tribe's fee-to-trust application submitted to the federal government. The agreement specifically stated that it would not result in any physical changes to the environment and that the city would comply with CEQA at a future date for any project requiring environmental review. The petitioners, led by Parchester Village Neighborhood Council, asserted that the following components of the agreement constituted a "project" under CEQA, and, therefore, that the court should void the agreement and require environmental review: 1) the proposed construction of the casino; 2) the city's support of the fee-to-trust application; 3) fire improvements; and 4) transportation improvements. The court, however, held that the agreement did not constitute a project because the city had no authority over the casino and the remainder of the agreement merely involved funding mechanisms and did not involve alternations to the built or natural environments. Court's Decision The court began its discussion by quoting Public Resources Code � 21065, which defines a project: "An activity which may cause either a direct physical change in the environment, and which is any of the following: (a) An activity directly undertaken by any public agency. (b) An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans or other forms of assistance from one or more public agencies. (c) An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies." Agreements between federally recognized tribes and municipalities relating to the acquisition of trust lands for the construction of casinos have a history of CEQA litigation. Although the courts have determined that, because of tribes' semi-autonomy, the acquisition of the lands and the construction of the casinos are not governed by CEQA, the agreement itself may require environmental review if the agreement commits the agency/municipality to a specific action. In County of Amador v. City of Plymouth, (2007) 149 Cal.App.4th 1089, the court ruled an agreement was a project because the city had to vacate a city road and remodel a fire station (see CP&DR Legal Digest, August 2007). In Citizens to Enforce CEQA v. City of Rohnert Park, (2005) 131 Cal.App.4th 1594, the court decided the agreement was not a project because it merely authorized a funding mechanism (see CP&DR Legal Digest, October 2005). In relation to the petitioners' contentions regarding the casino and the city's support of the fee-to-trust application, the court cited previous decisions concerning agreements with tribes and, consistent with those cases, found that the agreement does not constitute a project. The agreement gave the city no authority over the fee-to-trust application or casino construction. And, although the federal government must consult with the city as it considers the tribe's application, this consultation does not give the city any power regarding whether the application is granted, according to the court. Additionally, the court held that the agreement's requirement that the city support the tribe's proposed application and casino did not change the fact that the city had no authority over the tribe's proposed actions. As to the agreement's provisions regarding fire services and transportation, the court determined that those provisions only provided funding mechanisms, which were too speculative to constitute a project. Petitioners specifically asserted that the agreement required the establishment of a fire protection and emergency response agreement (by which the city would respond to emergencies at the casino), which would result in the construction of fire facilities and the addition of turn lanes or other traffic mitigations. According to petitioners, both of these requirements committed the city to specified actions. The court disagreed, finding that the potential construction of fire facilities in the future was too speculative to constitute a project. The court stated: "As a practical matter, we find it difficult to conceive of how an EIR [environmental impact report] could be used to sensibly evaluate a project that has not yet been assigned a physical location." In regards to the traffic improvements, the court noted that most of the mitigation items came out of the federal environmental impact statement process, and none of the traffic improvements would be within the city's boundaries. Therefore, the city had no immediate authority over either the planning or implementation of these improvements. If, as the petitioners asserted, the city becomes the agency to build or accept the improvements, then the improvement may constitute a project. However, according to the court, the possibility that the city would be involved in the improvements was speculative at this time. The court concluded that the city's mere demonstration of support for the tribe's proposed casino, and the tribe's agreement to pay the city for certain future services, did not fit into the definition of a project under Public Resources Code � 21065. The Case:

Parchester Village Neighborhood Council v. City of Richmond, No. A123859, 2010 DJDAR 2830. Filed February 24, 2010.

The Lawyers: For Parchester Village: Stephan Volker, (510) 496-0600. For the city: George Yuhas, Orrick, Herrington & Sutcliffe, (415) 773-5700.