In a decision similar to other recent rulings, an appellate court has rejected an environmental impact report for a proposed business park in Santa Clarita because the project EIR’s discussion of water sources was inadequate.
The decision marks the fourth time in less than four years that the Second District Court of Appeal has rejected a Santa Clarita-area EIR based on its consideration of water resources. In fact, the case at hand was decided in large part because of water supply uncertainty that was cast by the court’s earlier invalidation of an EIR for a water transfer from Kern County to the Santa Clarita area. The Second District ruled that the EIR for the business park did not adequately address the uncertainty of that water transfer.
State lawmakers and courts in recent years have become more insistent that developers and local governments prove that water is available for growth. In Santa Clarita, slow-growth advocates have seized on the water-for-growth requirement as a way to fight development. Thus, the Los Angeles suburb is the birthplace for a growing body of case law — most of which is placing a greater burden on developers and local government.
The case at hand involves Gate King Properties’ proposal for a large industrial park off the Antelope Valley Freeway. The City of Santa Clarita approved a 4.2-million-square-foot commercial and industrial development on 161 acres, with another 283 acres either donated to the city or dedicated as open space.
The California Oak Foundation and the Santa Clarita Organization for Planning the Environment (SCOPE) sued the city. The organizations argued that the city was relying on State Water Project (SWP) entitlements that were uncertain, and that the EIR did not quantify the impact of perchlorate contamination on groundwater resources. Los Angeles County Superior Court Judge Dzintra Janavs ruled for the city. The environmental groups appealed, and a unanimous three-judge panel of the Second District, Division Eight, overturned the lower court.
The opinion by Justice Paul Boland lays out the legal background. Five years ago, an appellate court invalidated the environmental impact report for the Monterey Agreement, which was intended to change how SWP water was allocated between agricultural and urban users (Planning & Conservation League v. Department of Water Resources, (2000) 83 Cal.App.4th 892 [PCL]). The Monterey Agreement specifically permitted the transfer of up to 130,000 acre-feet of SWP entitlements from agricultural water contractors to urban users. Under the Monterey Agreement, Castaic Lake Water Agency, which serves the Santa Clarita Valley, purchased the rights to 41,000 acre-feet per year (AFY) of SWP water from the Kern County Water Agency. However, the EIR for the water transfer tiered off the EIR for the Monterey Agreement. In 2002, an appellate court invalidated the environmental study for the water transfer because the Monterey Agreement EIR had been decertified (Friends of the Santa Clara River v. Castaic Lake Water Agency, 95 Cal.App.4th 1373 [Friends I]; see CP&DR Legal Digest, March 2002).
In subsequent years, courts threw out an EIR for the 2,500-unit West Creek residential and commercial project (Santa Clarita Organization for Planning the Environment v. County of Los Angeles, (2003) 106 Cal.App.4th 715 [SCOPE]; see CP&DR Legal Digest, April 2003) and rejected the EIR for the Castaic agency’s urban water management plan (Friends of the Santa Clara River v. Castaic Lake Water Agency, (2004) 123 Cal.App.4th 1 [Friends II]; see CP&DR Legal Digest, December 2004, In Brief, November 2004).
In the SCOPE and Friends II cases, the court found that public agencies were relying on “paper water” — water entitlements from the SWP. Because it was never completed, the SWP typically provides only 50% to 75% of the water to which contractors are entitled. Thus, courts have refused to equate SWP entitlements with deliverable water.
In the case at hand, the industrial park opponents’ primary contention was that the city relied on the 41,000 acre-foot transfer without analysis or discussion, even though the EIR for the transfer had been decertified. Gate King Properties countered that the EIR did indeed discuss the water transfer’s uncertainty and pointed out that the court did not halt the water transfer. Indeed, the Castaic agency has received at least a portion of the water annually for several years.
The court rejected Gate King’s assertion about the EIR. In ruling for the project opponents, the court found the circumstances to be “strikingly similar to those in SCOPE, so far as the 41,000 acre-foot entitlement is concerned. The draft EIR gave ‘no hint’ that State Water Project entitlements cannot be taken at face value. When SCOPE pointed this out in its comments, the city did ‘little more than dismiss project opponents’ concerns about water supply.’”
“The text of the EIR does not mention decertification of the EIR for the Castaic purchase, and does not discuss the fact that entitlements are not really entitlements, but only ‘paper’ water,” Justice Boland wrote. “We can only assume the city ‘concluded that it is likely that the 41,000 AFY will continue to be available,’ because the point is not discussed. Such an assumption, however, is impermissible, as it is antithetical to the purpose of an EIR.”
The fact that Castaic is using the water in question does not matter because the water’s future availability is uncertain, the court ruled.
Gate King argued that sufficient water supplies existed even without the 41,000 acre-feet in question. But the court found this argument flawed because it assumes Castaic will receive its longstanding entitlement to 54,200 acre-feet of SWP water — even though the EIR itself says the SWP can be expected to deliver 50% of entitlements 80% of the time. “In sum, without the 41,000 AFY entitlement, substantial evidence of sufficient water supplies simply does not exist,” Boland concluded.
The court did find that the EIR’s analysis of perchlorate contamination on groundwater, which provides the majority of the area’s water, was adequate. The EIR relied on the perchlorate analysis in the 2000 urban water management plan (UWMP). Perchlorate pollution from a former munitions factory has forced closure of four wells and is an ongoing concern in Santa Clarita.
“Gate King’s victory on the issue of perchlorate contamination, however, is pyrrhic,” Boland wrote. “Our decision to decertify the EIR, based on inadequate consideration of the water supply issues previously discussed, inevitably has the practical effect of requiring the city to come to grips with the perchlorate issue as well, because reliance on groundwater supplies will acquire additional significance if less imported water is available. And, while the city properly relied on UWMP 2000 conclusions on perchlorate contamination in its previous analysis, it will be unable to do so in any new analysis because of the invalidation of UWMP 2000 in Friends II.”
Not surprisingly, the two sides differed on the impact of the ruling and how difficult it will be for Santa Clarita to remedy the EIR’s defects.
Attorney Stephen Onstot, who represented the city, told the Los Angeles Times the ruling amounted to “a fix-it ticket.”
“It’s a whole different than the appellate court saying, ‘Go back to square one.’ The court found only selected water-supply problems and said to have those problems fixed,” Onstot told the Times.
But Roger Moore, of Rossmann & Moore, which filed an amicus brief for the Planning Conservation League supporting the project opponents, said of Onstot’s characterization: “Nothing could be further from the truth.”
The court, Moore said, made clear that “the city needs to do an entire new water supply assessment grounded in reality.” The decision means “the water relied on to support local government decisions must be real, not ‘paper’ or illusory,” he said.
Moore noted that the court, when discussing the issue of perchlorate, seemed to go out of its way to say that the city must re-evaluate all water sources. The ultimate result of the court’s decision, he said, was very close to the remedy that project opponents’ requested.
California Oak Foundation v. City of Santa Clarita, No. B175580, 05 C.D.O.S. 9565, 2005 DJDAR 13039. Filed November 2, 2005.
For California Oak Foundation: Babak Naficy, (805) 593-0926.
For the city: Stephen Onstot, Burke, Williams & Sorensen, (213) 236-0600.
For Gate Kin