Regulation Finalizes Repeal of Obama-Era Clean Water Rule

A new final regulation issued on September 12, 2019 by the Environmental Protection Agency and the Army Corps of Engineers repealed the Obama administration’s 2015 “Clean Water Rule,” but did little to clear up longstanding confusion over the scope of federal authority and jurisdiction under the Clean Water Act. The current regulation simply repeals the 2015 rule, without any replacement, with the result that the pre-existing Clean Water Act regulations and guidance continue to apply until there is new regulatory guidance in place. For a discussion of the new final rule and the reasons for repeal of the 2015 rule, see our Update by Marc Bruner.

City Not Required to Evaluate Impacts of Loss of Rental Units from Already-Vacant Building

A lead agency was not required to evaluate the housing-related impacts of a proposed hotel in a vacant building that was formerly used for rental housing. Hollywoodians Encouraging Rental Opportunities v. City of Los Angeles, 37 Cal. App. 5th 768 (2019).

In 2009, the owner of an apartment building with 18 rental units filed an application with the City of Los Angeles to demolish the building and replace it with a 39-unit condominium building. The City Council approved a mitigated negative declaration for that project. Four years later, the building owner withdrew the building’s 18 units from rental housing pursuant to the Ellis Act, and the City approved demolition of the building. The developer was unable to obtain financing for the condominium project, however. In 2015, the owner submitted an application to the City to convert the vacant building into a 24-room boutique hotel. The City adopted an MND and approved the hotel project.

At issue in the case was whether the City should have prepared an EIR to evaluate the cumulative effect of the project and similar related projects on the loss of rent-stabilized housing units and the displacement of rent-stabilized tenants.

The court held that the baseline for the project was a vacant building, not a tenant-occupied rental property. Measured against that baseline, there was no fair argument that the project would have an adverse impact on the supply of rent-stabilized housing in the area or on displacement of tenants. The court explained that the baseline is generally the conditions at the time the lead agency commences its environmental analysis. In this case, when the City commenced its environmental analysis for the proposed hotel project in 2015, the property consisted of a vacant building that had been withdrawn from the residential rental market two years earlier independently of the hotel project.

The court further explained that there was no evidence in the record that the hotel project should have been analyzed as part of the 2009 condominium project. “The record reflects that the subject property was removed from the rental market pursuant to the Ellis Act in 2013, to enable the building to be demolished and replaced with a condominium project. After that plan failed for lack of financing, the instant Project was proposed to repurpose the property as a boutique hotel. There is nothing to suggest that the instant Project was ‘a reasonably foreseeable consequence of the initial project’ . . . or that the initial study and 2015 MND were an end run around CEQA.”

Finally, the court held that the City was not required to evaluate the cumulative impacts of the hotel project on housing and displacement, because the project would not have any individual adverse impact on the supply of rent-stabilized or displacement of tenants.

Court Decision Compounds Confusion Over Scope of Clean Water Act Jurisdiction

A decision by the U.S. District Court for the Southern District of Georgia issued on August 21, 2019, highlights the continuing confusion over the definition of “waters of the United States” under the Clean Water Act. The decision declared the Obama administration’s 2015 “Clean Water Rule” to be an impermissible construction of the statutory language and remanded the matter to the Environmental Protection Agency and Army Corps of Engineers for further rulemaking proceedings. The case is one of numerous challenges to the 2015 Rule moving through courts across the country. The result is a muddled patchwork under which the 2015 Rule has been prevented from taking effect in 27 states but applies in 22 other states and the District of Columbia. For detailed background on the current quandary, the importance of the Georgia district court’s decision and the implications for what comes next, please see our Update by Marc R. Bruner, Christian Termyn and Rachael Rutkowski.

Federal Agencies Issue Major Changes to Endangered Species Act Regulations

The U.S. Fish and Wildlife Service and National Marine Fisheries Service has issued a set of three new final rules that substantially revise regulations implementing the Endangered Species Act. The new rules change the criteria and procedures for (1) establishing protections for “threatened” species; (2) the listing and delisting of species and the designation of critical habitat; and (3) the interagency consultation process under Section 7 of the ESA, which is used to determine whether a federal action would jeopardize a listed species’ continued existence or result in an adverse modification of a listed species’ designated critical habitat. As described in our prior update, the FWS and NMFS published proposed rules on these three topics on July 25, 2018. Our complete report on the proposed changes, by Donald Baur, Marc R. Bruner,  Bradley H. Oliphant  and Christian Termyn is available here.



EPA Proposes Narrowing of Water Quality Certification Authority Under Clean Water Act

The Environmental Protection Agency has issued a lengthy proposed rule clarifying the substantive and procedural requirements for water quality certifications under Section 401 of the Clean Water Act. EPA Administrator Andrew Wheeler announced that the changes are “intended to increase the predictability and timeliness of Section 401 certification by clarifying timeframes for certification, the scope of certification review and conditions, and related certification requirements and procedures.” The proposed rule would significantly narrow the authority of states and Indian tribes when acting on Section 401 certification requests. Our complete report on the proposed changes, by Jeffrey (Jeff) L. Hunter, Marc R. Bruner and Christian Termyn is available here.

EIR’s Project Description May Present Alternative Development Options and the Agency May Approve A Variant of an Analyzed Alternative

An EIR’s project description may identify alternative development schemes proposed for a single project, and the agency may approve a modified version of the project that incorporates elements of one of the alternatives reviewed in the EIR. South of Market Community Action Network v. City and County of San Francisco (2019) 33 Cal.App.5th 321.

Plaintiffs challenged the City of San Francisco’s approval of a four-acre mixed-use development in downtown San Francisco. The EIR’s project description laid out two options for the project — an “office scheme” and a “residential scheme.” The overall gross square footage was substantially the same in both schemes, with varying mixes of office and residential uses.

While plaintiffs alleged numerous violations of CEQA, the key issue on appeal was the adequacy of the EIR’s project description. Plaintiffs asserted the EIR failed to provide an accurate, stable and finite description of the project claiming the two alternative schemes were “confusing” and hampered the public’s ability to understand what project had actually been proposed and analyzed.

The appellate court disagreed, finding that the EIR described a single project — a mixed-use development involving the retention of two historic buildings, the demolition of other buildings on the site, and the construction of four new buildings — with two options for different allocations of residential and office units. The project description did not fluctuate during the EIR process, nor, contrary to plaintiffs’ arguments, did the description present a “misleadingly small fragment of the ultimately approved project.” The description, the court concluded, was not curtailed, misleading or inconsistent; instead, “it carefully articulated two possible variations and fully disclosed the maximum possible scope of the project” and thereby “enhanced, rather than obscured, the information available to the public.”

Plaintiffs also contended the City violated CEQA because the Final EIR selected a proposed plan based on neither the office scheme nor the residential scheme, but a “revised” project that modify one of those schemes by retaining one of the buildings that would have been demolished. But the court noted that plaintiffs had failed to identify any component of the adopted project that had not been analyzed in the EIR or been subject to public comment. It pointed out that “The CEQA reporting process is not designed to freeze the ultimate proposal in the precise mold of the initial project; indeed, new and unforeseen insights may emerge during investigation, evoking revision of the original proposal.” It added that the point of requiring an EIR to evaluate alternatives was to allow consideration of options that may be less harmful to the environment. The City’s decision to incorporate  elements of one of the proposed alternatives was intended to address environmental concerns, implementing  one of the key purposes of the CEQA process – to reduce or avoid environmental impacts whenever feasible.

Plaintiffs’ numerous other CEQA claims were also rejected. Reviewing for abuse of discretion, the court held the EIR properly analyzed cumulative impacts and impacts related to traffic, wind, shadow and shade, and open space. The EIR also reflected the required “good faith effort” at disclosure in its analysis of the project’s consistency with area plans and policies.

Location Exception to CEQA’s Categorical Exemptions Applies Only to Designated Environmental Resources Affected by The Project

The location exception to CEQA’s categorical exemptions does not apply to earthquake and landslide hazard zones, as they are not “environmental resources” that would be affected by a project. Berkeley Hills Watershed Coalition v. City of Berkeley, 31 Cal.App.5th 880 (1st Dist. 2019).

The City of Berkeley approved construction of three single-family homes in the Berkeley Hills. The city found the projects exempt from CEQA under the Class 3 exemption, which applies to the “construction…of limited numbers of new, small…structures,” including “up to three single-family residences” in “urbanized areas.” (CEQA Guidelines, § 15303).

Plaintiffs Berkeley Hills Watershed Coalition and Center for Environmental Structure sued to challenge the city’s approvals claiming the exemption was barred by the “location” exception to the categorical exemptions. The location exception applies if “the project may impact on an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies.” (Guidelines, § 15300.2(a)) Plaintiffs argued that, because the projects were located in an Alquist-Priolo Earthquake Fault Zone and mapped by the California Geologic Survey as a potential earthquake-induced landslide area, the projects would affect environmental resources of hazardous concern.

The superior court ruled for the city and the appellate court upheld that decision.

The court of appeal held that the location exception does not apply to earthquake or landslide hazard zones because they are not “environmental resources,” relying on the dictionary definition of the term “resource” — a “natural source of wealth or revenue,” or a “natural feature or phenomenon that enhances the quality of human life.” The Seismic Hazards Mapping Act and the Alquist-Priolo Earthquake Fault Zoning Act were not enacted to protect a sensitive environmental resource, but to protect human safety and to prevent economic loss. Further, the court noted that the purpose of CEQA is to analyze a project’s impact on the environment, not the impact of environmental conditions on the project or its residents. While the plaintiffs might have shown the environment might risk harm to the projects, they failed to show that the projects might risk harm to the environment.

Permit Amendment Unlawfully Expanded Nonconforming Use

A municipality’s approval of a permit amendment allowing a quarry to import asphalt for recycling improperly expanded the quarry’s nonconforming use, the First District Court of Appeal ruled in Point San Pedro Road Coalition v. County of Marin, 33 Cal. App. 5th 1074 (2019).

San Rafael Rock Quarry, Inc., operates a quarry in the County of Marin that produces asphaltic concrete. In 1982, the County rezoned the property from “heavy industrial, limited agricultural” to “commercial and residential” use. At that time, the quarry’s asphalt production process involved only material mined from the quarry and imported sand. Upon the rezoning, this process became a legal nonconforming use. In 2010, the County amended SRRQ’s mining permit, granting SRRQ the right to produce asphalt using on-site materials. The amendment prohibited SRRQ from importing certain materials including “property gravel, used asphalt concrete or concrete for recycling, or dredged non-sand material.” In 2013, the County approved a second amendment to the permit, allowing SRRQ to import used asphalt grindings to use in production.

The Point San Pedro Road Coalition challenged the second amendment, arguing the County’s approval constituted an expansion or intensification of a nonconforming use prohibited by the County zoning ordinance. The trial court ruled in favor of the Coalition.

On appeal, the County and SRRQ conceded that 1) the importation of asphalt grindings was not within the scope of the existing nonconforming use in 1982, and 2) the County was required to make findings that “the activity would not result in the use of the property being ‘enlarged, increased, or intensified.’” However, the County and SRRQ contended that the County properly made the required finding because the use of asphaltic grindings did not amount to enlargement, increase, or intensification of the use. SRRQ and the County argued that incorporating recycled asphalt into its process merely allowed SRRQ to maintain sustainable best practices. The appellate court disagreed, reasoning that the new operations did not simply substitute one raw material (sand) for another (asphalt grindings) — it involved new truckloads carrying asphalt grindings to the site, which were unloaded and stockpiled at the site, and screened and crushed, which required SRRQ to purchase additional machinery.

Additionally, the court held the County and SRRQ failed to show the change in use was required for or reasonably related to continuation of the existing nonconforming on-site production. Rather, the change effectively allowed SRRQ to change and expand its nonconforming use in violation of the County zoning ordinance, which prohibited such extension or expansion.

Park and Recreation Fees Violated Mitigation Fee Act

The court of appeal held that the City of Alameda’s development fee for parks and recreation was invalid and unenforceable because there was no reasonable relationship between the fee charged and the burden from new development. Boatworks, LLC v. City of Alameda, 35 Cal. App. 5th 290 (2019). The City improperly inflated mitigation fees by considering the value of procuring parkland the City had acquired at no cost and by including unopened parks as “existing parks” when calculating fees. However, the court also held that the City could treat certain areas originally designated as open space as parkland in the cost analysis because they included park-like improvements.

In 2014, the City of Alameda passed an ordinance under the Mitigation Fee Act (Govt. Code § 66000 et seq.) that imposed fees on developers to account for the increased need for public facilities caused by additional development. The City based the parks and recreation portion of the fee on the amount it would cost to maintain the current ratio of park facilities to residents. This fee included the cost to acquire new parkland, improve existing facilities, and obtain new open space land. Along with the ordinance, the City released information about park facilities that it planned to develop with the proceeds from the fee. This list included facilities sited on land that the City already owned.

The trial court granted the plaintiff’s petition and held that the fees were excessive for three reasons: (1) the fees accounted for the cost of paying for land that the City acquired for free; (2) unopened parks were classified as existing parks when establishing the current parkland-to-development ratio; and (3) areas classified as open space could not be considered parkland for the study. It directed the City Council to rescind the invalid portions of the fee ordinance.

The City challenged all three grounds on appeal. As to the first, the City argued that it was justified in collecting fees based on the existing ratio of asset value of recreational facilities to population under the holding in Home Builders Association of Tulare/Kings Counties, Inc. v. City of Lemoore, 185 Cal. App. 4th 554, 561 (2010). The court rejected this argument because a substantial portion of the fee was based on the value of land that the City had received at no cost from the Navy and therefore could not be related to the increased cost of public facilities caused by new development. By contrast, the fee in Lemoore was based on the amount the city had invested in existing recreational facilities. The court therefore concluded that the fee was not justified by the burden posed by new development. The court also rejected the City’s argument that unopened parks should be included in the inventory of current parks because it was unreasonable to include them as existing assets while planning to use the fee for construction of improvements to this land.

The appellate court reversed the trial court’s holding that the City erroneously counted areas classified as open space as parkland during the study. When calculating the current ratio, the City classified four areas originally classified as open space as parkland because the City had constructed facilities on these areas similar to those on improved parkland. The court held that this was not an arbitrary and capricious action and that those areas had a higher value than typical open space land.

The court also held, however, that the trial court’s remedy was inappropriate because it lacked the authority to require the City to perform the legislative act of rescinding portions of an ordinance. Instead, the court ordered the trial court on remand to declare the ordinance void to the extent it set the parks and recreation portion of the development impact fee.

Possibility of Further Applications for New Charter Schools Did Not Constitute “Current and Immediate Threat” Warranting Adoption of Urgency Ordinance Imposing Moratorium on Processing Such Applications.

The court of appeal held that an urgency ordinance enacted to impose a temporary moratorium on the establishment and operation of new charter schools in Huntington Park was invalid. California Charter Schools Association v. City of Huntington Park, et al., 35 Cal. App. 5th 362 (2019). The court reasoned that “numerous inquiries and requests for the establishment and operation of charter schools” did not amount to a “current and immediate threat to the public health, safety or welfare” as required by Government Code section 65858(c).

Section 65858 allows a city to adopt an interim ordinance that prohibits any uses that may conflict with a general plan the city is considering, studying, or intends to study within a reasonable time. Gov’t Code § 65858. Subdivision (c) attaches conditions to that power by providing that “[t]he legislative body shall not adopt or extend any interim ordinance pursuant to this section unless the ordinance contains legislative findings that there is a current and immediate threat to the public health, safety, or welfare.” (Emphasis added.)

Huntington Park is a general law city in southeastern Los Angeles County. Of the twenty schools in the city, six are charter schools. In September 2016, the Huntington Park City Council enacted a forty-five-day urgency ordinance (later extended by an additional ten months and fifteen days) that imposed a temporary moratorium on the establishment and operation of new charter schools in the city in response to concerns about traffic and congestion. The City Council found that many of the students attending the charter schools were not residents of Huntington Park and were contributing to traffic, parking, and noise problems in the city’s neighborhoods. The assistant city attorney described the congestion as a public safety issue and police and representatives from the school district formed a “traffic task force” to address the congestion problems.

The proposed interim ordinance was intended to give staff time to assess whether the Huntington Park Municipal Code (“HPMC”) was adequate to ensure that future charter schools were developed in a manner that protected the public and satisfied the goals and objectives of Huntington Park’s general plan. The ordinance contained findings that a current and immediate threat to public health existed because, among other reasons, Huntington Park had received “numerous inquiries and requests for the establishment and operation of charter schools,” “the HPMC did not have development standards specifically for charter schools,” and “certain locations in Huntington Park had already experienced adverse impacts from charter schools.”

The court of appeal found that the facts presented did not meet the urgency standard under section 65858, relying heavily on Building Industry Legal Defense Foundation v. Superior Court, 72 Cal. App. 4th 1410 (1999). In that case, the city adopted an urgency ordinance after a developer sought approval of a residential subdivision. In rejecting the urgency ordinance, the Building Industry court held that processing a development application did not constitute a current and immediate threat because:

Formal submission of the application to the city’s planning department merely starts the wheels rolling and allows the city, the developer, and public to begin the environmental review process. It does not guarantee the landowner any right to an approval of the proposed project. As always, the city retains the power to deny it.

The California Charter court found that “[i]f processing a filed application as in Building Industry does not pose a current and immediate threat to the public health, safety, or welfare because no rights will vest imminently,” then mere inquiries and meetings prior to submitting an application could not possibly present a current and immediate threat to public health, safety, or welfare under Section 65858 to justify an urgency ordinance.