CEQA Reform—Relief on Aesthetics? ‘I just don’t see it’

Real Estate and Land Use

Protect Niles v. City of Fremont (July 16, 2018) 25 Cal.App.4th 1129
A.B. 2341 (Mathis) [Approved by Governor Sept. 7, 2018]

Why it matters: Just as the Court of Appeal inked and agreed to publish what many fear is a new and potentially sweeping avenue to challenge and invalidate negative declarations under the guise of “aesthetic” impacts under the California Environmental Quality Act (CEQA), the Governor signed A.B. 2341 (Mathis), promising that “aesthetic effects of projects meeting certain requirements are not significant effects on the environment for purposes of CEQA . . .” However, upon closer read, the “meeting certain requirements” qualifier in A.B. 2341 by and large swallows any actual relief in the law. And the circumstances of the referenced case, Protect Niles v. City of Fremont (2018) 25 Cal.App.4th 1129 (Protect Niles), are specifically and expressly exempted from the bill’s limited relief.

Facts: At issue in Protect Niles was the adoption by the city of Fremont (City) of a mitigated negative declaration (MND) in support of the approval of a mixed-use project on a six-acre vacant lot. The project site was located in what the City had designated the Niles Historic Overlay District (Niles HOD). Specialized design guidelines and regulations for commercial properties applied in the Niles HOD. The City’s Historical Architectural Review Board (HARB) reviews proposed developments within the Niles HOD, advising the City regarding consistency.

City staff recommended approval of the project and MND to the HARB. At a public hearing, all but one HARB member joined a majority crowd opposing the project, stating the project “would be incompatible in terms of siting, massing, scale, size, materials, textures, and colors with existing development in the Niles [HOD].” Accordingly, the HARB recommended denial of the project.

The project and MND were then forwarded to the City Planning Commission. Notwithstanding the HARB recommendation, City staff continued to recommend approval and adoption of the MND. At the hearing, commissioners and commenters raised the density of the project as an issue. With the developer agreeing to minor modifications to the project, the Planning Commission unanimously recommended approval and adoption of the project and MND.

As the project moved to the City Council, opponents continued to object. Nonetheless, the Council voted 3-2 to approve the project. The record showed unequivocally that there were no significant “historic” impacts of the project proposed for this existing vacant lot. The only argument related to “aesthetic” impacts was within the context of the project being located in the Niles HOD.

Decision: Petitioners argued that there was a fair argument of a potentially significant aesthetic impact, notwithstanding the MND. At issue in the court’s analysis was whether what may not raise aesthetic concerns under normal circumstances may nonetheless support a fair argument of a potentially significant impact sufficient to require preparation of an environmental impact report (EIR) under CEQA. Citing cases such as Citizens for Responsible & Open Government v. City of Grand Terrace (2008) 160 Cal.App.4th 1323 and Pocket Protectors v. City of Sacramento (2004) 124 Cal.App.4th 903, the court stated, “Several courts have recognized that a project’s impact on the aesthetic character of a surrounding community is a proper subject of CEQA environmental review.”

The court recognized that in Bowman v. City of Berkeley (2004) 122 Cal.App.4th 572, the court rejected a similar attack arguing that an EIR was required for an urban infill senior housing project based on its aesthetic impacts on a particular neighborhood. Distinguishing this holding, the Protect Niles court noted Bowman’s caveat that “there may be situations where . . . an aesthetic impact like the one alleged here arises in a ‘particularly sensitive’ context [cite] where it could be considered environmentally significant. . . .”

Particularly noteworthy and remarkable was the source of substantial evidence the court found to support the fair argument of a potentially significant impact. Notwithstanding both the Planning Commission’s and Council’s consideration and rejection of the HARB’s recommended denial, the court took individual, subjective observations and opinions of HARB members as substantial evidence to support a fair argument. “We recognize that aesthetic judgments are inherently subjective. [Cite.] But ‘[p]ersonal observations on these nontechnical issues can constitute substantial evidence.’”

Notwithstanding the undisputed lack of any “historic” impact from the project, the court required an EIR: “In sum, we conclude a project’s visual impact on a surrounding officially-designated historic district is appropriate aesthetic impact review under CEQA.”

A.B. 2341 (Mathis): Less than a month after the publication of Protect Niles, many who were concerned with its potentially expansive implications for aesthetics review under CEQA were heartened by the Legislative Counsel’s summary of A.B. 2341:

This bill would, until January 1, 2024, specify that, except as provided, the aesthetic effects of projects meeting certain requirements are not significant effects on the environment for purposes of CEQA and that the lead agency is not required to evaluate the aesthetic effects of those projects. (Emphasis added.)

Unfortunately, as is all too often the case, the “except” and “certain requirements” caveats more than swallow whatever relief the Legislative Counsel summary suggests. To begin with, just some of the mandatory attributes of the project for A.B. 2341 to apply include:

  • The site must include an existing building that has been “abandoned, dilapidated, or vacant” for at least one year;
  • The site must be surrounded by existing urban use development;
  • The new structure may not exceed the height of the prior structure; and
  • The new project “does not create a new source of substantial light or glare.”

As if those qualifiers were not limiting enough, there are also criteria that will disqualify otherwise qualifying projects, including:

  • The project is part of an official state scenic highway; or
  • The project may have impacts on historical or cultural resources (as was alleged in Protect Niles).

Practice Pointers:

  • Potentially significant aesthetic impacts under CEQA truly now are “in the eye of the beholder,” and context is everything. What may not constitute a fair argument in one context absolutely may in another context.
  • Individual, subjective opinions may constitute substantial evidence of a fair argument.
  • CEQA reform efforts remain woefully limited and inconsequential.
  • Relatively dense housing projects in infill sites continue to be a primary and particularly vulnerable target of NIMBY and anti-growth interests.