A proposed hotel that is consistent with a redevelopment plan, which itself has been the subject of a program environmental impact report, does not require a new environmental study, the Fourth District Court of Appeal has ruled.

In a decision regarding a hotel proposed for downtown San Diego, the unanimous three-judge appellate panel ruled that the “fair argument” standard did not apply to a redevelopment agency’s determination that a project’s potential impacts were adequately analyzed by an earlier program EIR. Rather, the “substantial evidence” test applied, and the city provided such evidence, the court held. The decision appears to provide a boost to San Diego’s ongoing downtown revitalization efforts — specifically, the Horton Plaza redevelopment project.

In 2002, a group that included Westfield America, Inc., and Horton Land LLC proposed development of a 30-story, 460-room Intercontinental Hotel. The hotel was proposed above a parking garage for Horton Plaza, an open-air mall near the new downtown baseball stadium.

The city prepared a “final environmental secondary study” that concluded the hotel project would have significant environmental impacts, including traffic congestion and air pollution. However, the city determined that those impacts had already been analyzed in a “master” EIR adopted in 1992 for downtown redevelopment, and in a 1999 subsequent EIR that covered the baseball stadium and ancillary projects. In November 2002, the city approved the hotel project without additional environmental review.

A group called Citizens for Responsible Equitable Environmental Development (CREED) sued the city, its redevelopment agency and the Centre City Development Corporation, a city-controlled entity that carries out downtown redevelopment projects. CREED argued that the city violated the California Environmental Quality Act (CEQA) by approving the hotel without a project-specific EIR. San Diego County Superior Court Judge Linda Quinn ruled for the city. CREED appealed but lost again.

The project opponents argued that, under Public Resources Code § 21090 (a section of CEQA), every project undertaken as part of a redevelopment plan must undergo project-level environmental review. The Fourth District, though, read § 21090 differently and ruled that the statute prohibits an agency from requiring project-level environmental review if a project EIR has already been prepared. San Diego’s 1992 EIR, although called a “master” EIR, was actually a program EIR — not a project EIR — and “§ 21090 does not require an agency to prepare an EIR for a project whose environmental impacts have been sufficiently analyzed in a prior program EIR or master EIR,” the court ruled.

CREED contended that a fair argument could be made that the project would have substantial environmental impacts.

“However,” Justice Cynthia Aaron wrote for the court, “the fair argument standard does not apply to judicial review of any agency’s determination that a project is within the scope of a previously completed EIR. Once an agency has prepared an EIR, its decision not to prepare a supplemental or subsequent EIR for a later project is reviewed under the deferential substantial evidence standard.” Justice Aaron cited Santa Teresa Citizen Action Group v. City of San Jose, (2003) 114 Cal.App.4th 689 (see CP&DR Legal Digest, February 2004), in which the court ruled that the more deferential substantial evidence test in these instances “is a reflection of the fact that in-depth review has already occurred.”

The project opponents argued that the hotel project was not proposed until after the earlier EIRs were completed. The opponents pointed to a ruling in Natural Resources Defense Council v. City of Los Angeles, (2002) 103 Cal.App.4th 268 (see CP&DR Legal Digest, December 2002), in which the court ruled that the city could not rely on an earlier program EIR when approving a port expansion project because the program EIR did not address the project’s environmental concerns.

The Fourth District, however, ruled that the San Diego case was different because San Diego performed an initial study that concluded the 1992 and 1999 EIRs had adequately examined all of the hotel project’s potentially significant impacts.

“To hold that a project specific EIR must be prepared for all activities proposed after the certification of the program EIR, even where the subsequent activity is ‘within the scope of the project described in the program EIR,’ would be directly contrary to one of the essential purposes of program EIRs, i.e., to streamline environmental review of projects within the scope of a previously completed program EIR,” Aaron wrote, citing CEQA Guidelines § 15168, subdivision (c)(5).

In fact, the court noted, the earlier EIRs addressed the hotel’s potential impacts, and the redevelopment plan designated the area in question for commercial and office development, with an emphasis on hotels.

The Case:
Citizens for Responsible Equitable Environmental Development v. City of San Diego Redevelopment Agency, No. D045274, 05 C.D.O.S. 10071, 2005 DJDAR 13749. Filed November 30, 2005.

The Lawyers:
For CREED: Cory Briggs, (909) 949-7115.
For the city: Heidi Wierman, city attorney’s office, (619) 533-5800.
For Horton Land LLC, Jenny Goodman, Sullivan, Wertz, McDade & Wallace, (619) 233-1888