A recent case involving developer Charles Keenan and the City of Palo Alto highlights the importance of strict compliance with Mitigation Fee Act’s requirement that findings be made every five years concerning unexpended fees. The court held that the City’s failure to make such findings within the statutory deadline mandated refund of all unexpended fees, not merely fees held for more than five years. Hamilton and High, LLC, et al., v. City of Palo Alto, et al., No. H049425 (6th Dist., March 20, 2023).

In 2013, Charles Keenan paid an “in-lieu parking fee” of $972,000 imposed as a condition of approval of a commercial development project on Hamilton Avenue in Palo Alto. The fee was imposed on all new commercial development to fund parking facilities in the downtown area. As of the end of 2019, the City had a balance of over $6 million in unexpended parking fees.

The Mitigation Fee Act requires public agencies to make findings every five years concerning unexpended development impact fees. The City made findings for the parking fees for the 2007-08 and 2012-13 fiscal years but did not make such findings by the statutory deadline for the 2017-18 fiscal year (i.e., within 180 days of June 30th.) Keenan demanded a refund of the fee, claiming the City failed to comply with the Mitigation Fee Act. The appellate court agreed and ordered the City to refund all unexpended parking fees. In reaching that conclusion, the court made several important clarifications to the law governing such refund claims.

In-lieu fees are exactions subject to the Act’s findings requirements.

The City argued that findings were not required for the parking fees because developers had the election either to provide parking or pay an in-lieu fee. The court disagreed, finding that the fee was a “monetary exaction” imposed as a condition of approval of a project to fund facilities related to the project and therefore met all requirements of the Act. Based on an extensive review of the caselaw regarding in-lieu fees and the Mitigation Fee Act, the court found no support for the claim that the “in-lieu” or elective aspect of the imposition changed the nature of the fee for purposes of the Act.

The statute of limitations runs from the date a request for refund is denied.

Keenan requested a refund in January 2020, which the City rejected in February 2020, and Keenan filed suit three months later. The trial court held that Keenan’s action was time-barred because it was not filed within one year of the December 2018 deadline for adoption of the five-year findings. The appellate court concluded that the thrust of Keenan’s lawsuit was enforcement of a refund of the unexpended fees rather than a challenge to the City’s failure to make findings. As such, the limitations period did not begin to run until the City denied Keenan’s refund request.

Belated findings do not satisfy the Act.

After denying Keenan’s refund request, the City adopted five-year findings in May 2020 and contended these findings satisfied the Act’s requirements. The court found that this argument “ignore[d] the language specifying ‘If the findings are not made as required by this subdivision, the local agency shall refund the moneys in the account or fund as provided in subdivision (e).’” Because the May 2020 findings were not made within the statutory deadline, they were not made “as required” by the Act, and a refund was therefore mandated.

Failure to make five-year findings that comply with the Act requires refund of all unexpended fees.

The City maintained that the five-year findings requirement applied only to fees held for more than five years and, because the City had transferred $1.3 million from the parking fund to a capital fund, this had exhausted the balance of fees held in the fund for over five years and excused the findings requirement. The court rejected this argument, ruling that the plain language of the statute required the five-year findings to address all unexpended fees, not merely those held for more than five years. The court noted that its reading was consistent with the five-year reports issued by the City, which did not break out fees by date of deposit. The consequence of failure to make timely findings for the 2107-18 fiscal year was refund of all unexpended fees, regardless of the date of collection.

*  *  *

This decision underscores the importance of meticulous compliance with the requirements and deadlines of the Mitigation Fee Act. Five-year findings must be made for all development fees that fall within the Act’s definition, whether or not paid electively in-lieu of some other condition of approval. The findings must be made within 180 days of the end of the applicable fiscal year and must cover all unexpended fees in the fund, not merely fees held for more than five years. Agencies that fail to adopt findings within the statutory period or adopt findings that do not meet the strictures of the Act are at risk of having to refund the entire balance to then-current owners of the properties subject to such fees.


The First Appellate District held that the Regents of the University of California failed to comply with CEQA in certifying the project EIR for its student housing project at People’s Park. Make UC a Good Neighbor v. Regents of University of Cal. (2023 WL 2205638, Feb. 24, 2023). Specifically, the court ruled that the Regents failed to provide a valid reason for deciding not to analyze alternative locations for the proposed housing project and failed to analyze potential noise impacts from loud student parties. The court’s order requires the Regents to fix the errors in the EIR before the project can move forward.  

The Regents certified the EIR and approved the People’s Park student housing project (Housing Project No. 2) in 2021. The petitioner, Make UC a Good Neighbor (“Good Neighbor”), challenged the approvals, alleging multiple CEQA violations and requesting a stay pending resolution of the appeal, which the court granted.    

Alternatives to the Long-Range Development Plan

Good Neighbor argued that the Regents violated CEQA by failing to analyze an alternative to the long-range development plan (“LRDP”) (a high-level planning document that guides each UC campus’s decisions on land and infrastructure development) that would limit student enrollment. The court disagreed, finding that Good Neighbor did not meet its burden of demonstrating that the range of alternatives for the LRDP was manifestly unreasonable. The court reasoned that the Regents analyzed a sufficient range of alternatives that were tailored to the plan’s limited purpose and were not required to consider alternatives that would change the nature of the project.

Alternative Locations to People’s Park

Good Neighbor argued that the EIR failed to analyze locations other than People’s Park for the housing project. The court stated that an analysis of alternative sites is not required in all cases, but the Regents failed to provide a valid reason in the EIR for declining to analyze any alternative locations, as required in CEQA Guidelines, section 15126.6(c) and (f)(2)(B). The court rejected the EIR’s reasons for rejecting an alternative location proposal, which were that the alternative site would result in fewer new beds or require multiple sites and that an alternative site would not avoid adverse historical impacts. These reasons, the court found, were insufficiently vague and not supported by the record.  


Good Neighbor argued that the Regents improperly “piecemealed” the LRDP by limiting the scope geographically to the campus and neighboring properties and excluding several properties further away. The court rejected this argument, holding the Regents’ decision to develop a coherent vision for the campus through the LRDP while developing separate plans for more remote properties was consistent with the CEQA Guidelines, section 15168(a)(1).

Noise Impact Analysis

Good Neighbor argued that the EIR failed to analyze potential noise impacts from loud student parties in residential areas near the campus. The Regents argued that it was not required to analyze noise from student parties because it was “speculative to assume that an addition of students would generate substantial late night noise impacts simply because they are students.” The court rejected this argument, reasoning that the record indicated that noise from student parties in Berkeley’s residential neighborhoods near the campus was a longstanding problem and therefore “foreseeable.” Clarifying that “stereotypes, prejudice, and biased assumptions about people served by a CEQA Project—such as a church, school, gym, or housing project—are not substantial evidence that can support a CEQA claim under the fair argument standard,” the court held that “proper evidence” remained to support that noise from loud student parties was a potential impact and that such noise analysis must be included in the EIR.

Population Growth and Displacement Analysis

Good Neighbor contended that the EIR violated CEQA because it failed to address the impacts of population growth and the consequent displacement of existing residents. The court rejected this argument. It held that the record was insufficient to establish the chain of causation necessary to support Good Neighbor’s displacement theory, which was that population growth would lead to displacement of residents as a result of a housing shortage.  

Notably, the court backtracked from its conclusion in the draft tentative opinion, issued before oral argument took place, that the EIR was required to, and had failed to, consider whether displacement would trigger social or economic consequences that could cause significant environmental impacts.   

Attorneys from Perkins Coie presented the 33rd Annual Land Use and Development Law Briefing on January 31, 2023.

Topics included:

  • Key Developments in Land Use Law
  • Legislative Changes Impacting Housing
  • Real Estate Due Diligence
  • CEQA: Key Cases, Legislation and Trends
  • Climate Change and CEQA / CARB Scoping Plan
  • Wetlands and Endangered Species Update

A full set of the written materials, in pdf form, is available here: 33rd Annual Land Use and Development Law Briefing Materials

If you would like a bound, hard copy of the materials, please click here.

Selected materials from the presentation have also been posted on the California Land Use and Development Law Report website: 

A hotel owner brought a lawsuit against a county transportation authority and a general contractor for nuisance and inverse condemnation alleging that the construction of an underground subway line disrupted the operation of the hotel and caused various problems, such as noise and dust, which interfered with the use and enjoyment of the property and resulted in monetary damages. The Court of Appeal found no liability under either inverse condemnation or nuisance theories.  Today’s IV, Inc. v. Los Angeles County Metropolitan Transportation Authority, 83 Cal.App.5th 1137 (2022).

Today’s IV, Inc. owns and operates the Westin Bonaventure Hotel in Los Angeles. The Los Angeles County Metropolitan Transportation Authority built the Regional Connector Transit Project, which connects three Metro rail lines and runs through the city block where the Bonaventure is located.  Today’s IV alleged that the cut-and-cover construction method (as opposed to tunnel boring), construction work during nights and weekends, violation of noise limits, and interference with access to the Bonaventure caused lost contracts and loss of business.

With respect to impairment of right of access, the court of appeal found that the hotel owner failed to state a claim for inverse condemnation under the theory of intangible intrusion because it did not adequately allege that the traffic detours set up by the transportation authority caused their property to suffer from an intangible intrusion that was direct, substantial, and peculiar to the property itself.  The court similarly found that, with respect to dust and noise, the hotel owner also failed to state a claim under the same theory because it did not allege that the intrusion was unique, special, or peculiar in comparison with other stakeholders in the area.

The hotel owner also alleged that the defendant’s conduct constituted a nuisance. The court acknowledged that the complaint adequately alleged interference with the use and enjoyment of its property that was substantial. However, the court ruled that the complaint failed to allege that the loss of business and prospective contracts claimed by the Bonaventure were harms that outweighed the social utility of the construction project — which included reducing travel times, transfers and traffic congestion and improving air quality — and therefore failed to state a claim for private nuisance.

Finally, the court considered defendants’ argument that they were protected from liability under a state statute that provides that “nothing which is done or maintained under the express authority of a statute can be deemed a nuisance.” The court agreed with this argument and found that the defendants were immune from liability for the hotel owner’s nuisance claim, even if nuisance had been substantiated.


Old East Davis Neighborhood Association v. City of Davis
73 Cal. App. 5th 895 (2022)

The court of appeal upheld the City’s determination that a mixed-use development was consistent with general plan policies requiring new buildings to maintain scale transition and provide an architectural fit with the neighborhood. The court observed that the applicable policies did not provide a formulistic method for determining whether a proposed structure met the transition requirements. Rather, this determination relied on subjective measures and the dispute was over conflicting evidence on matters such as whether step-backs, extra-wide alleys and other factors created a scale that was consistent with the area’s traditional scale and character. Reviewing each of the City’s consistency determinations, the court found that a reasonable person could have reached the same conclusion based on the record, and the City’s decision was therefore supported by substantial evidence.

Bankers Hill 150 v. City of San Diego
74 Cal. App. 5th 755 (2022)

Relying on the Density Bonus Law, a developer proposed a 20-story mixed-use project with affordable units that would exceed the maximum zoned capacity by 57 units. The developer also sought development incentives, including avoiding a setback restriction and eliminating on-site truck loading spaces. The court rejected petitioner’s claim that the project approval conflicted with several General Plan policies. It ruled that the City did not abuse its discretion in finding that several cited policies were inapplicable and that the project did not conflict with the policies that were applicable. It also found that if the City had denied the requested incentives or failed to waive inconsistent design standards, it would have physically precluded construction of the project and the affordable units, which would defeat the goals of the Density Bonus Law.

AIDS Healthcare Foundation v. City of Los Angeles
78 Cal. App. 5th 167 (2022)

The court rejected a claim that the City’s approval of a mixed-use project violated provisions enacted by the former Community Redevelopment Agency requiring 15 percent of units to be reserved for low-income housing. The court held that the 2011 Redevelopment Dissolution Law rendered the 15 percent requirement inoperative.

Tiburon Open Space Committee v. County of Marin
78 Cal. App. 5th 700 (2022)

Under stipulated judgments in federal court, the County agreed to approve development of a minimum of 43 residential units on 110 acres of land subject to compliance with applicable land use laws, including CEQA. The court dismissed petitioner’s claims that the County had effectively contracted away its police powers in the stipulated judgments and abdicated its duties under CEQA by approving the project. The court observed that the project EIR was over 800 pages and went through extensive redrafts, and that the lengthy administrative approval process provided ample opportunities for public input. The County Board would not have gone through such a “protracted charade” had it intended to bypass CEQA. The court also upheld the County’s determination that a less dense project alternative was legally infeasible under CEQA, stating that “no reason in law or logic prevents a final federal court judgment from having [that] impact.”

Continue Reading 2022 Land Use and Development Law Case Summaries

A court of appeal has denied CEQA challenges to the EIR for an apartment project, holding that analysis of biological impacts need not be based on surveys conducted in the same year the city issued its notice of preparation of the EIR. Save North Petaluma River and Wetlands v. City of Petaluma, 86 Cal.App.5th 207 (2022). The court also upheld the EIR’s analysis of potential impacts to emergency evacuation during flood or wildfire.

The apartment project, first proposed in 2003 at 312 units, underwent numerous revisions before the city approved it at 180 units in 2020. The revisions reduced the project’s footprint, increased its setback from the Petaluma River, and preserved additional wetlands and trees.

Plaintiffs asserted that an EIR must describe site conditions as they existed in the year of the notice of preparation of the EIR. Here, the City issued the NOP in 2007, but the EIR’s analysis cited a 2004 Special Status Species Report that in turn cited a 2001 site survey. Plaintiffs challenged the EIR’s baseline for analysis of impacts to biological resources because no study had been conducted in 2007.

The court rejected this claim, citing case law holding that CEQA does not mandate a uniform, inflexible rule for determination of the existing conditions baseline. Here, the EIR’s description of existing biological conditions was drawn from site visits, studies, and habitat evaluations that took place both before and after 2007. And nothing in either the record or in plaintiffs’ briefs suggested that on-site biological conditions had changed over the years.

Plaintiffs also argued that the project would cause a significant public safety impact by interfering with evacuation during a flood or a wildfire. The court upheld the EIR’s analysis of this issue as based on substantial evidence, which included the project’s siting of both buildings and evacuation routes outside the floodplain, the project’s location outside the city’s high fire hazard severity zone, and the fire department’s confirmation that it did not have significant flood or fire access/egress concerns with development above the 100-year floodplain. The plaintiffs’ late submission of an expert’s one-page memorandum requesting additional study did not entitle the court to reweigh the allegedly conflicting evidence.

It is fairly common for expert surveys and studies of existing environmental conditions to be prepared either before or after the NOP is issued. So long as the EIR’s description is supported by substantial evidence, the Save North Petaluma case confirms that nothing in CEQA requires such surveys and studies to be conducted in the year of the NOP.

The EIR for a residential project has been struck down because its discussion of project alternatives did not analyze the possibility that public funds might be used to acquire the land for open space. Save the Hill Group v. City of Livermore, 76 Cal. App. 5th 1092 (2022).

The project site was zoned residential and was the last remaining undeveloped area in that section of the city. The 32-acre site was environmentally sensitive: it housed numerous special-status plant and animal species; was adjacent to a wetlands preserve; and was hydrologically connected to the unique Springtown Alkali Sink. Project opponents commented that the site should be preserved as open space rather than developed for housing. They filed a CEQA suit after the city approved the project.

The city noted that during its CEQA and project approval process, the plaintiffs had never tied their request for site preservation to the EIR or its alternatives analysis. Accordingly, the city argued that the plaintiffs had not presented to the city the “exact issue” they alleged in court and therefore had failed to exhaust administrative remedies. The court concluded, largely due to exchanges between city council members and city attorneys rather than comments by the public, that it was clear CEQA project alternatives were at issue and equally clear that even had the plaintiffs mentioned the EIR in relation to their open-space advocacy, it would have made no difference to the city’s decision. Therefore, the court found that the plaintiffs had met CEQA’s exhaustion requirement.

The court then held that the EIR’s analysis of the No Project Alternative was inadequate because it did not explore the possibility of public acquisition – even though the site was eligible for such acquisition through two settlement funds specifically designed to acquire environmentally sensitive lands in the area where the project site was located. In addition, in 2011 the city had acquired another private property to preserve habitat and avoid residential development, using these same funding sources. Under these circumstances, the court concluded that the existence of these funding sources was “just the sort of information CEQA intended to provide those charged with making important, often irreversible, environmental choices on the public’s behalf.”

Finally, although the plaintiffs abandoned their challenges to the EIR’s analyses and mitigation measures for impacts to vernal pool fairy shrimp and the Springtown Alkali Sink, the court addressed and rejected those challenges, concluding that: 1) mitigation requiring future presence/absence surveys for the shrimp was not impermissibly deferred; 2) substantial evidence supported the EIR’s finding that the project would not cause a significant impact to the Springtown Alkali Sink; and 3) mitigation requiring offsite compensatory mitigation for species impacts at the 85-acre “Bluebell” site was adequate even though the city’s general plan already called for preservation of that entire area, because the mitigation measure, unlike the general plan, required a permanent easement with an endowment for restoration and management.

Proposed greenfield development often elicits comments that a project site should be preserved rather than developed. The circumstances of Save the Hill Group are unusual, however, both in the biological quality of the site and, particularly, in the apparent availability of funds to acquire the site for preservation. Although most greenfield development projects will not feature these characteristics, the court’s decision indicates that lead agencies should take special care in their EIRs analyzing developments with potentially significant impacts to biological resources. In such cases, it may be wise to discuss whether legal or other reasons render public acquisition of the project site infeasible.



The courts issued 16 published CEQA decisions in 2022, continuing a trend of fewer published opinions than the pattern established in earlier years. The only California Supreme Court opinion, County of Butte v. Department of Water Resources, addressed federal preemption of CEQA, a rarely litigated issue.

The most important cases of the year centered on the adequacy of EIRs. The court in League to Save Lake Tahoe Mountain Area Preservation Foundation v. County of Placer addressed three hot CEQA topics, finding an EIR’s greenhouse gas mitigation measures and energy analysis inadequate, but upholding the EIR’s wildfire evacuation analysis.

Several important EIR cases focused on project alternatives. A decision that attracted significant notice – Save the Hill Group v. City of Livermore – held that an EIR’s discussion of project alternatives was inadequate because it did not explore the possibility of a public purchase of the project site for open space rather than its development for residential use.

In We Advocate Through Environmental Review v. County of Siskiyou, the court found the EIR’s list of project objectives so closely mirrored the proposed project that it foreclosed identification of a reasonable range of project alternatives. And in Tiburon Open Space Committee v. County of Marin, the county had settled federal litigation over a development site, promising to approve at least 43 residential units. In subsequent CEQA litigation, the court upheld the county’s rejection of an alternative allowing fewer than 43 units, concluding that the stipulated judgment in the federal litigation rendered the reduced alternative legally infeasible. Another EIR case answers the question whether an agency may approve a revised project that is a variation on the proposed project and alternatives considered in the EIR. The court held the city did not have to recirculate the EIR because the revised project was simply another permutation of the options that were fully covered by the EIR. Southwest Regional Council of Carpenters v. City of Los Angeles. .Finally, in an unusual case, a court held that a landowner could pursue a malicious prosecution action against counsel for unsuccessful CEQA plaintiffs. Jenkins v. Brandt-Hawley.

The following summaries identify the key issues in the cases decided in 2022.. Each of these case summaries links to a post on this site the provides a more detailed description of the court’s opinion.

Stephen Kostka and Julie Jones

Continue Reading CEQA YEAR IN REVIEW — 2022

Update: On January 18, 2023, the Third District Court of Appeal issued a revised opinion on rehearing, ordering partial decertification of the EIR and allowing certain construction activities to proceed during remand (see “Partial Decertification & Severance” below.)

In a high-profile CEQA case involving renovation of the State Capitol grounds, the Third District Court of Appeal found the EIR deficient for lack of a stable project description, insufficient analysis of impacts on historic resources and aesthetics, and failure to analyze a reasonable range of alternatives. Save Our Capitol! v. Department of General Services, 85 Cal.App.5th 1101 (2022).

In 2016, the legislature authorized major reconstruction of the primary office space for the Governor, state lawmakers, and staff (the “annex”) attached to the historic State Capitol. The Department of General Services prepared a draft EIR with plans to demolish the existing 325,000 square-foot annex and construct a new one, along with a new visitor center and underground parking garage. Following public comment on the draft EIR, DGS adjusted the design of the visitor center entry and recirculated the affected portions of the draft. Post-recirculation, DGS continued to refine the design, and the additional changes—including moving the parking garage from the south to the east side of the State Capitol—were addressed in the final EIR. DGS concluded that the changes did not constitute “new or significant information” that would require another round of recirculation.

Project Description

The court ruled that the project description was unstable because the new annex design, featuring an all-glass exterior, was not revealed until the final EIR. Previous drafts stated that the annex building materials would be compatible with the historic State Capitol to create a “one-building” feel. However, in the final EIR, the annex design changed so significantly that DGS departed from this vision. Instead, the interior spaces would maintain the “one-building” feel and an all-glass exterior would maximize natural light and occupant health. Because this change was first revealed only in the final EIR, the court held that conflicting earlier project descriptions may have misled the public and foreclosed the opportunity to meaningfully comment on the design’s impact on the State Capitol. The changing project description “prevented the people from commenting on significant environmental effects on what is truly the people’s capitol” and new information this late in the process did not satisfy the demands of CEQA.

Impacts Analysis

Based on the inadequate project description, the court held that DGS’ analysis of the impact of the new annex design on historic resources was deficient. Because the original project description omitted key changes to the annex, the final EIR did not adequately disclose related impacts and the public missed an important opportunity to comment (and DGS to respond) to the project’s impact on the State Capitol—a state and nationally listed historic resource.

DGS’ impacts analysis was also deficient with respect to aesthetics. First, DGS did not provide sufficient information to analyze the impact of the new visitor’s center on the protected scenic vista along Capitol Mall toward the West Lawn. CEQA does not require specific visual schematics, but it does require sufficient information to allow the public to consider the changes at issue. Here, the significance of the State Capitol required depiction of the altered vista. Renderings from different angles, with narrative about the proposed changes, was not enough. Second, DGS’ commitment to meet CalGreen standards for the new, all-glass annex was not sufficient to address light and glare impacts. Commitments to use specific materials or comply with best available standards may serve as mitigation measures, but they do not replace the analysis necessary to inform the public about how the project will alter existing aesthetics.

Alternatives Analysis

Lastly, DGS did not consider a reasonable range of alternatives as required by CEQA. The three alternatives identified in the final EIR overlooked an important option—moving the visitor’s center from the scenic West Lawn to the south side of the State Capitol. This alternative became particularly relevant when DGS modified the visitor’s center design, increasing impacts on the historic West Lawn. While CEQA does not mandate consideration of every alternative, it requires analysis of reasonable alternatives that would satisfy most of the project’s objectives while also reducing environmental impacts. Relocation of the visitor’s center was a logical alternative that met this standard and, by excluding it, DGS prejudicially impacted public participation and informed decision-making during the CEQA process.

Partial Decertification & Severance

On rehearing, DGS asked the court to order only partial decertification of the EIR and to allow some near-term construction activities to continue while DGS addresses the EIR’s deficiencies. The court agreed in part, holding that certain construction activities are severable from the non-complying parts of the project, and that allowing those construction activities to continue would not prejudice DGS’ efforts to comply with CEQA. Specifically, DGS may demolish the existing annex, as the impacts of demolition and renovation were already sufficiently analyzed in the EIR, but all project activities related to the new annex’s exterior design (including excavation of the new annex and parking garage, and beginning work on the concrete foundation for those structures) must be suspended during remand.