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California Court of Appeal Finds Environmental Impact Report For General Plan Update Was Not Required to Analyze Urban Decay

The Fifth District Court of Appeal upheld the City of Visalia’s certification of an Environmental Impact Report (EIR) for its General Plan update, finding that the record contained no substantial evidence that a land use policy restricting the size of commercial tenants in a neighborhood commercial area would result in urban decay. The court also found that the General Plan was not internally inconsistent and that the city complied with all relevant Planning and Zoning Law notice provisions. [Visalia Retail, LP v. City of Visalia, ___Cal.App.5th___, Case No. F074118 (5th Dist. Jan. 30, 2018).]


 Factual and Procedural Background

In 2014, the city certified an EIR for an update to its General Plan, which included updating the land use policy at issue. Under that policy, commercial tenants in areas zoned neighborhood commercial, including grocery stores, may not be larger than 40,000 square feet. This litigation followed. The petitioners argued: 1) that the EIR was inadequate under the California Environmental Quality Act (CEQA) because it failed to discuss urban decay; 2) that the new land use policy was inconsistent with another General Plan policy that encourages infill development; and 3) that the city’s meetings on the General Plan update were not properly noticed. The trial court rejected each of these claims. The petitioners appealed.


The Court of Appeal’s Decision


 The EIR Was Not Required to Analyze Urban Decay

The petitioners argued that the EIR was inadequate under CEQA because it failed to analyze potential urban decay impacts that could result from the size restrictions under the new policy. While the propriety of the commensal size cap was discussed by city staff in the process of drafting the EIR, the EIR itself did not address the potential for urban decay, which is the visible symptoms of physical deterioration of an area. Petitioners claimed that the EIR was required to analyze urban decay because there was a fair argument that the General Plan update may cause significant environmental impacts in the form of urban decay. To support of their argument, the petitioners relied on a report they the y submitted during to the city, in which a real estate broker opined that the 40,000 square-foot cap would cause grocers to refuse to locate in the neighborhood commercial centers, which would cause vacancies and would then, in turn, result in urban decay.

The Fifth District Court of Appeal disagreed, concluding that the report did not provide sufficient evidence of potential urban decay impacts to warrant analysis in the EIR. The court found that the report’s analysis of causation was speculative and the potential economic consequences identified in the report did not mean that any urban decay would result.

The court distinguished Bakersfield Citizens for Local Control v. City of Bakersfield, 124 Cal.App.4th 1184 (2004), where it had held that the EIR in that case was fatally defective for failing to analyze the potential for urban decay resulting from the development of two shopping centers. But there, the court emphasized, the analysis of urban decay was required because there was sufficient evidence suggesting that the economic and social effects caused by the proposed development could result in urban decay. Here, the court found no such evidence in the record. Therefore, the EIR was not required to address the issue.


 The City Complied with All Other Laws In Adopting the General Plan Update

The court also found that the size restriction was not inconsistent with the General Plan’s stated goal of encouraging infill development, under the “reasonable person” standard of review. The new land use policy did not impede the city from furthering that goal.

Finally, the court held that the city did not violate the ten-day notice requirement set forth in Planning and Zoning Law by failing to re-notice additional meetings on the General Plan amendment. The court found that only the first meeting on the General Plan amendment required such notice, and later meetings that we held after action on the amendment was continued.


Conclusion and Implications

The opinion reiterates the well-established rule that economic and social changes resulting from a project are not, by themselves, considered environmental impacts under CEQA. Instead, economic and social changes are only relevant to the extent that they are related to a physical change in the environment. Further, to require analysis in an EIR, there must be substantial evidence supporting at least a fair argument that urban decay may occur. Speculation and unsupported conclusions regarding potential urb decay impacts will not suffice.

The opinion is available here:

(Christina L. Berglund, Sara F. Dudley, Chris Stiles)