Appellant
The City challenges the trial court's findings that (1) the FEIR did not adequately consider the potential environmental impacts associated with the application of the Surplus Land Act (Gov. Code, § 54220 et seq.) to the City's sale of the Mansion property and (2) the FEIR did not adequately respond to a comment suggesting the alternative of selling the structure with a smaller parcel of land. The City contends that the impact of the Surplus Land Act was too speculative to raise any reasonably foreseeable potential environmental impact and maintains that the FEIR adequately responded to the comment suggesting a reduction in the size of the parcel.
In its cross-appeal, the Foundation contests the trial court's failure to uphold its challenge on the additional grounds that (1) the economic analysis that underlay the City's conclusion that certain alternatives were infeasible was required to be in the EIR (environmental impact report) itself, (2) the economic analysis in the administrative record was inadequate, (3) the City inaccurately concluded that the alternatives were infeasible, and (4) the City's statement of overriding considerations was inadequate.
We conclude that the trial court erred in concluding that the FEIR failed to adequately address the Surplus Land Act issue. However, in all other respects, we reject the contentions of both the City and the Foundation. Accordingly, we modify and affirm the judgment.
The Mansion property is located within, and surrounded on all sides by, the City's 35-acre Mission Trails Nature Preserve (the Preserve). The City purchased the Preserve and the Mansion properties in 1971 and 1972, respectively. The Preserve is an environmentally sensitive habitat area (ESHA). Situated on the Mansion property is a "two-story Tudor Revival
The proposed project is "the sale of the Flanders Mansion property, a 1.252 acre parcel together with all improvements." The City's "primary purpose" for the project is to "divest the City of the Flanders Mansion Property[,] which is in need of significant short-term and long-term repair and rehabilitation." The "secondary objectives" of the project are to (1) preserve the Mansion as a historic resource; (2) put the Mansion property "to productive use"; (3) "ensure that future use" of the Mansion property "will not cause significant traffic, parking or noise impacts on the surrounding neighborhood"; (4) ensure that future use of the Mansion property will not "significantly disrupt the public's enjoyment" of the Preserve; (5) "ensure that environmental resources of the park are protected"; and (6) "ensure that the Flanders Mansion parcel continues to provide the public with as many park benefits as are practical."
After a previous EIR for this project was decertified by court order, the City prepared and circulated a new draft EIR (DEIR) in January 2009.
The DEIR analyzed four project alternatives: (1) the no project alternative; (2) a lease for single-family residential use (residential lease alternative); (3) a lease for public/quasi-public use (public lease alternative); and (4) a sale with conservation easements and mitigations (sale plus alternative). All of these alternatives were found to have fewer environmental impacts than the proposed project. However, the DEIR took the position that only the sale plus alternative would satisfy the primary objective of the project, "divestment." Each of the remaining alternatives would satisfy some of the secondary objectives of the project.
The DEIR designated both lease alternatives and the sale plus alternative as environmentally superior alternatives. The lease alternatives were superior because the City would retain ownership of the property and "preserve flexibility on how the property is used in the future . . . ." If those alternatives were found infeasible, the DEIR concluded that the sale plus alternative would be the environmentally superior alternative.
In March 2009, the City obtained an "economic feasibility analysis" from CBRE. In April 2009, the City circulated the FEIR, which included the City's responses to comments on the DEIR.
In May 2009, the City adopted five resolutions. One was a resolution certifying that the FEIR was adequate and complete and complied with the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.). The City found that the project would have the significant and unavoidable impact of the permanent loss of City ownership of public parkland. A second resolution (1) adopted a mitigation monitoring and reporting program (MMRP), (2) created a requirement that the conditions of sale would "incorporate and impose" the MMRP requirements, and (3) required preparation of conditions, covenants, and restrictions (CC&R's), which would be recorded on the Mansion property and would "run with the land," that imposed the MMRP requirements on any future owners of the property. A third resolution found the lease and no project alternatives to be infeasible and adopted a statement of overriding considerations. A fourth
The Foundation challenged the City's actions by seeking a writ of mandate in the superior court. The court issued an extensive "Intended Decision" (Intended Decision) that "resolves factual and legal disputes, and shall suffice as a statement of decision as to all matters contained herein." The Intended Decision stated: "The Court finds that the City did not comply with CEQA as a matter of law because the City failed to analyze the potential environmental impacts of selling or leasing the Mansion in compliance with the Surplus Lands Act, and in responding to comments. In all other respects, the Court finds that the City complied with CEQA." The court's Intended Decision explicitly rejected the Foundation's challenge to the economic feasibility analysis and found that this analysis was adequate and did not have to be included in the EIR itself. The court also expressly rejected in its Intended Decision both the Foundation's challenge to the City's conclusion that a lease of the Mansion property would be infeasible, and the Foundation's challenge to the City's statement of overriding considerations.
The trial court thereafter entered a judgment granting the Foundation's petition. In the judgment, the court found that the FEIR failed to analyze the potential environmental impact associated with the Surplus Land Act and failed to adequately respond to a comment with regard to whether less land could be sold with the residence. The court's judgment also explicitly found "that economic analysis need not be included in the EIR." However, in contrast to the Intended Decision, the court's judgment stated that the "remaining issues" were "moot" and did not address them. The City timely filed a notice of appeal. The Foundation timely filed a notice of cross-appeal.
The City challenges the trial court's finding that the FEIR was inadequate because it failed to analyze (1) "what uses could be made of the Mansion by an agency" purchasing the Mansion property under the Surplus Land Act and the potential environmental impacts of such uses and (2) "the potential environmental consequences if the agency would not be constrained by any conditions that the City seeks to attach to the Mansion parcel."
One of the letters commenting on the DEIR raised the issue of the application of the Surplus Land Act. "As the [D]EIR correctly notes, the Government Code provides that any proposed sale must go through a process which includes offering the property to other agencies before it is offered to the general public (i.e. to open space/park agencies, school districts and affordable housing providers.) No analysis is made in the DEIR of any impacts of these potential uses, which are foreseeable. The EIR must analyze the impacts of all possible alternatives."
The City responded to this comment in the FEIR by acknowledging that the project "will be subject to the requirements of the Surplus Land Act." "A number of public agencies will be offered the opportunity to purchase the Flanders Mansion property in accordance with the Surplus Land Act. Irrespective of who the ultimate purchaser may be, the future use of the property will be subject to the mitigation measures identified in this [DEIR], in addition to specific conditions of sale, which limit the future use of the property to those low-intensity uses that have historically occupied the Flanders Mansion site. . . . [A]ny analysis of the full array of potential uses that might otherwise be sought by agencies listed in the Surplus Land Act would involve a high degree of conjecture and speculation which is inappropriate in an EIR."
The FEIR also added text to the DEIR to address this issue. This text recited the provisions of the Surplus Land Act and then stated: "Whether any such agency will request to negotiate for purchase of the property or be able to purchase the property at fair market value, is unknown and speculative at this time. Likewise, whether any such agency will be able to comply with the mitigation measures, conditions of sale and covenants to be recorded to run with the land, and the use to which any such agency might put the property are also unknown and speculative at this time. [¶] As stated in this EIR, should any future use be proposed which presents potentially-significant environmental impacts which have not been analyzed in this EIR, additional environmental review in accordance with CEQA would be required. This requirement would apply to [these] agencies if any of them were to purchase the property and propose such a use." (Underscoring omitted.)
The FEIR also asserted that the DEIR's consideration of "a range of potential future uses" permitted in a P-2 zone, the current zoning for the Mansion property, was adequate with regard to the potential uses by an agency acquiring the Mansion property under the Surplus Land Act because any use by such an agency would be "similar in character or nature to the uses already specified and analyzed in the 2005 EIR and the 2009 [DEIR]."
The trial court found the FEIR inadequate with respect to the Surplus Land Act issue because the City "did not consider nor analyze the potential environmental impacts that might occur if an agency purchased or leased the Mansion parcel and the potential environmental consequences if the agency would not be constrained by any conditions that the City seeks to attach to the Mansion parcel." In the court's view, the FEIR was inadequate because it lacked "any analysis of what uses could be made of the Mansion by an agency, and `precisely' what amount of water is available for the Mansion." The court found, on the same basis, that the City had failed to adequately respond to the comment letter regarding the Surplus Land Act issue.
"Judicial review of an agency's decision to certify an EIR and approve a project `shall extend only to whether there was a prejudicial abuse of discretion. Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.' [Citations.] Thus, we consider only whether the City failed to comply with CEQA or made determinations that were not supported by substantial evidence." (Preservation Action Council v. City of San Jose (2006) 141 Cal.App.4th 1336, 1352 [46 Cal.Rptr.3d 902] (PAC); see Pub. Resources Code, § 21168.)
The issue here is whether the FEIR was inadequate in failing to explicitly analyze the potential environmental impacts of the possible uses that a potential purchaser under the Surplus Land Act might make of the Mansion property.
The Foundation's position and the trial court's ruling are based on the premise that a purchaser under the Surplus Land Act need not comply with the City's MMRP requirements or the recorded CC&R's containing the conservation easements. The Foundation contends that this is so because the Surplus Land Act implicitly "disallow[s] the addition of conditions on a proposed purchase" that might "thwart[] the stated goals of providing affordable housing, recreation and park development." This implicit disallowance purportedly follows from the fact that the Surplus Land Act does not contain any provisions that explicitly "provide or imply that a `disposing agency' may set conditions other than market pricing and timing of payments." (Italics omitted.)
The Foundation also argues that the FEIR was inadequate because it failed to consider whether a sale of the Mansion property to another agency or entity under the Surplus Land Act, unlike a sale to a private party, might deprive the City of "control in future decisions" and obviate the City's current zoning for the Mansion property. Assuming arguendo that a sale of the Mansion property under the Surplus Land Act might eliminate the City's future control over the property's zoning and future disposition, there was no need for the FEIR to contain any analysis of this issue because the City's mitigation conditions and conservation easements will necessarily bind any and all future owners of the property and thereby preclude any additional potential environmental impacts regardless of the City's power or lack of power to control the zoning or disposition of the property in the future.
The Foundation maintains that the FEIR is inadequate because it did not consider the potential environmental impacts "from the use of the mansion
Consequently, the FEIR was not inadequate with regard to the Surplus Land Act issue, and the trial court erred in upholding the Foundation's challenge on this basis.
The second basis upon which the trial court upheld the Foundation's challenge was the court's finding that the FEIR had failed to adequately respond to a comment suggesting that the City consider, as an alternative, selling the residence with a smaller parcel of land than the 1.252-acre parcel that the City proposed to sell.
When a comment raises a significant environmental issue, the lead agency must address the comment "in detail giving reasons why" the comment was "not accepted. There must be good faith, reasoned analysis in response. Conclusory statements unsupported by factual information will not suffice." (CEQA Guidelines, § 15088, subd. (c); see Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 1112, 1124 [26 Cal.Rptr.2d 231, 864 P.2d 502] (Laurel II).)
After the DEIR circulated, the City received a comment that stated: "The mitigation possibilities are not analyzed sufficiently. A reduction in the size of the parcel to be sold or a conservation easement on a portion of the property
The City contends that it was not required to respond to this comment because, "[t]hrough the imposition of the conservation easement, the total usable land area would be reduced to 0.752 acres consisting of several lawn areas immediately adjacent to the house and the circular driveway." "The alternative of reducing the parcel size does nothing more than what is already done by virtue of the conservation easement." The City argues that this "mitigation was sufficient," so it was not necessary to address the matter in the FEIR. In its view, "[i]t [was] completely reasonable for the City to have determined, as it did, that a further reduction of the lot size is not viable and would essentially leave the mansion without any land and thus be unmarketable."
The City, citing Code of Civil Procedure section 664, asks us to direct that the trial court's judgment be amended to conform to the court's Intended Decision. That statute states: "If the trial has been had by the court, judgment must be entered by the clerk, in conformity to the decision of the court, immediately upon the filing of such decision." (Code Civ. Proc., § 664.)
The court's Intended Decision explicitly rejected the Foundation's challenge to (1) the City's failure to include the economic feasibility analysis in the FEIR, (2) the adequacy of the economic feasibility analysis, (3) the City's conclusion that a lease of the Mansion property would be infeasible, and (4) the adequacy of the City's statement of overriding considerations. In contrast, the trial court's judgment explicitly rejected only the first of these challenges, stated that the "remaining issues" were "moot," and did not address them.
The trial court's judgment was not technically incorrect. Once the court invalidated the City's certification of the FEIR, the City's other resolutions necessarily became invalid. Therefore, the trial court was technically correct in characterizing the remaining issues as "moot." The Foundation reasserts each of these moot issues in its cross-appeal, and we address them, despite their technical mootness, in the interests of efficiency and justice.
The Foundation renews in its cross-appeal its challenges to (1) the City's failure to include the economic feasibility analysis in the FEIR, (2) the adequacy of the economic feasibility analysis to support the City's conclusion that the alternatives were infeasible, and (3) the adequacy of the City's statement of overriding considerations.
The DEIR mentioned that an "economic analysis" was being prepared to "evaluat[e] the financial feasibility of the various project alternatives," but this analysis was not included in the DEIR. In response to comments regarding the absence of an economic feasibility analysis in the DEIR, the
The Foundation contends that the City was required to place the economic feasibility analysis in the DEIR, rather than elsewhere in the administrative record. It asserts: "When the feasibility of an alternative depends largely on economic factors, analysis should be in the EIR in order for the City Council to have adequate information on which to make its decision." The Foundation concedes that there are numerous cases holding that such economic analysis need not be in the EIR and may be elsewhere in the administrative record, but it argues that these decisions are incorrect.
The Foundation relies on the Fourth District Court of Appeal's decisions in Center for Biological Diversity v. County of San Bernardino (2010) 185 Cal.App.4th 866 [111 Cal.Rptr.3d 374] (Center for Biological Diversity) and Save Round Valley Alliance v. County of Inyo (2007) 157 Cal.App.4th 1437 [70 Cal.Rptr.3d 59] (Round Valley), but neither of these cases is on point. In both cases, the Fourth District did not consider whether the economic feasibility analysis must be in the EIR rather than elsewhere in the administrative record. Instead, the Fourth District simply concluded that the records in these cases contained no adequate economic feasibility analysis at all. (Center for Biological Diversity, at pp. 884-885; Round Valley, at pp. 1461-1462.)
As the CBRE report did not address any environmental issues, the City was not required to include the report's economic feasibility analysis in the FEIR so long as it was included in the administrative record.
The CBRE economical feasibility report addressed the economic feasibility of the alternatives. First, it concluded that the cost to restore the Mansion property for lease or sale would be $1,157,000.
After certifying the FEIR, the City made a finding "that the Lease alternatives and the No Project alternative . . . are infeasible and do not achieve the primary project purpose." Based on the CBRE report, the City found that "leasing the Flanders Mansion property for either single-family residential use or public or quasi-public use" was "not feasible" for "economic reasons" because the market for such rentals was "exceedingly thin" or "non-existent," and it would take nine to 17 years to recover the City's cost of restoration. The City decided that it had "priorities" for its funds that were more important and "of greater value to the public" than rehabilitating and maintaining the Mansion property.
The Foundation contends that the CBRE report did not contain substantial evidence that the environmentally superior alternatives were economically infeasible.
In the case before us, the feasibility of the environmentally superior alternatives is at issue because, after certification of the FEIR, the City decided to approve a project that will have a significant environmental impact. Before a legislative body may approve a project with a significant environmental impact, it is "required to make findings identifying . . . the
The Foundation contends that the City's infeasibility findings are not supported by substantial evidence in the record.
The Foundation nevertheless asserts that the CBRE report does not provide substantial evidence to support the City's findings because the CBRE report "does not look at comparable park/mansion properties, City maintenance expenses, City budget and funding capabilities, nor the financial feasibility of any of the myriad potential quasi-public uses suggested by the Flanders Foundation and others."
The CBRE report cannot be faulted for having failed to find "comparable park/mansion properties," as the lengthy CBRE report reflects that CBRE looked for, but could not find, any such comparable properties. While information about the City's maintenance expenses might have been relevant to the economic feasibility of the no project alternative, it was not relevant to the two lease alternatives, as the CBRE report determined that the City would be required to restore the Mansion property, at a cost exceeding $1 million,
The CBRE report supported the City's finding that the marginal costs of the lease alternatives so greatly exceeded the cost of the project that no reasonable property owner would proceed with either of the lease alternatives. The CBRE report projected that the City could reasonably expect to sell the property for $4 million if it invested $1.4 million in restoring it. In contrast, the lease alternatives would require the City to invest the same amount of money to prepare the property for lease in an exceedingly thin to nonexistent rental market where, even if the property could be leased, it would take nearly a decade or more to recover that investment. A reasonable property owner would not select either of the lease alternatives due to the unlikelihood of a successful lease and the prospect that the investment would be for naught.
The CBRE report also supported the City's finding that the marginal cost of the no project alternative significantly exceeded the marginal cost of the project. If the City retained the property (no project), the City would be burdened with maintenance costs without any corresponding value, as the property was too dilapidated to be used without restoration. In contrast, the City was likely to reap millions of dollars from the restoration and sale of the property. A reasonable property owner would not choose to forgo such a significant financial benefit in favor of retaining ownership of a property that required the regular investment of maintenance costs but could not be used.
The City could properly rely on the CBRE report's conclusion that there was not a viable lease market for any "quasi-public" use that would justify the City's investment of such a significant amount of City funds on the mere hope that the property might someday generate recompense.
The Foundation also challenges the City's statement of overriding considerations.
When a project will have a significant environmental impact and the alternatives have been properly found to be infeasible, the project may be approved only if "the public agency finds that specific overriding economic, legal, social, technological, or other benefits of the project outweigh the significant effects on the environment." (Pub. Resources Code, § 21081, subd. (b).) "[A]n agency's decision that the specific benefits a project offers outweigh any environmental effects that cannot feasibly be mitigated, while subject to review for abuse of discretion (Pub. Resources Code, § 21168.5), lies at the core of the lead agency's discretionary responsibility under CEQA and is, for that reason, not lightly to be overturned." (City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4th 341, 368 [46 Cal.Rptr.3d 355, 138 P.3d 692].)
The City's statement of overriding considerations found that the benefits of the sale plus alternative outweighed the unavoidable environmental impact of the project. The City identified these benefits as: (a) "ensure that the Flanders Mansion property is put to an appropriate use, consistent with its historic importance and use, while protecting the nearby residential neighborhoods from significant increases in traffic, parking and noise"; (b) "ensure, in particular, the restoration, rehabilitation and long-term maintenance of the Flanders Mansion historic resource"; (c) "ensure that: (1) the Flanders
The Foundation assaults each of the benefits identified in the City's statement, but we need not consider all of them as the City's statement clearly expressed its finding that "each" of the identified benefits was individually sufficient to outweigh the environmental impact of the project. The key benefit identified by the City was that the Mansion property would be restored and maintained in the most environmentally sensitive manner feasible without the City bearing the expense of restoration and maintenance. The Foundation insists that this is not a benefit of the project because restoration and maintenance of the Mansion property "can be achieved" without selling the Mansion property. This argument ignores the fact that, as we have already discussed, substantial evidence supports the City's finding that it would be economically infeasible for the City to retain ownership of the Mansion property and restore and maintain the property using City funds. The infeasibility of that option means that the City's only remaining option to ensure the restoration and maintenance of the Mansion property is to sell the property with appropriate mitigation measures designed to ensure that the
The trial court's judgment is hereby modified to delete the court's finding that the FEIR failed to adequately address the Surplus Land Act issue. As so modified, the judgment is affirmed. The parties shall bear their own costs on appeal.
Duffy, J.,
Provisions regarding offers to sell surplus land suitable for a school facility (Gov. Code, § 54222, subd. (c)), in an enterprise zone (Gov. Code, § 54222, subd. (d)), or in an infill opportunity zone (Gov. Code, § 54222, subd. (e)) are inapplicable here due to the nature of the property.
The City argues: "In the current political and economic climate, the idea that a Public Agency would undertake a project in excess of $2,000,000 to buy and prepare a single building to provide affordable housing in Carmel is absurd on its face."
