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First District Court Upholds CEQA Categorical Exemptions For Residential Project on San Francisco’s Telegraph Hill

The First District Court of Appeal, in an opinion issued on September 14 and ordered published on October 13, 2017, upheld the City and County of San Francisco’s determination that the rehabilitation of a historic cottage and the development of three residential units on Telegraph Hill was categorically exempt from the California Environmental Quality Act (CEQA). The court held that conditions imposed on the project were not intended to mitigate environmental impacts, and although unique, the location of the project did not constitute “unusual circumstances” precluding application of the exemptions. [Protect Telegraph Hill v. City and County of San Francisco, 16 Cal.App.5th 261 (1st Dist. 2017).]



Factual and Procedural Background

The City and County of San Francisco approved a project involving the construction of a three-unit condominium project on a 7,517 square foot lot on Telegraph Hill. At one time, the property had five buildings on it, but four of them were demolished in 1997. All that remained was a small uninhabitable cottage. The project included restoration of the cottage, in addition to the new three-unit building.

In September 2014, the San Francisco Planning Department (Department) determined the project was categorically exempt from CEQA. The Department determined that the renovation and restoration of the small cottage was within the exemption for restoration or rehabilitation of deteriorated structures (CEQA Guidelines, § 15301, subd. (d)) and that the construction of the new building was exempt as a residential structure totaling no more than four dwelling units. (CEQA Guidelines, § 15303, subd. (b)). The same month, the San Francisco Planning Commission (Commission) approved a conditional use authorization for the project with some conditions designed to address possible disruption caused by construction activities. After a neighborhood group appealed the approvals to the San Francisco Board of Supervisors (Board), the Board upheld the approvals and imposed additional conditions to the conditional use authorization to ameliorate disruptions caused by construction and to preserve existing landscaping.

The neighborhood group, Protect Telegraph Hill, challenged the approvals in a petition for writ of mandamus. The superior court denied the petition. Protect Telegraph Hill appealed.


The Court of Appeal’s Decision

An appeal, Protect Telegraph Hill did not claim that th

e project was not encompassed within the plain language of both of the categorical exemptions used by the city. It argued instead that applying the exemptions was unlawful because the Board of Supervisors imposed conditions on the project approval that were designed to mitigate the effects of the project during construction, and the fact that these measures were imposed demonstrates that the project will harm the environment. It also argued that the exemptions were not proper because the project description was inadequate. Finally, it argued the project could not be exempt due to unusual circumstances. The Court of Appeal rejected each argument in turn.



The Conditions of Approval

Protect Telegraph Hill first argued that the conditions imposed by the city were not conditions of approval suitable for a use permit, but instead were mitigation measures for significant environmental effects under CEQA. The court disagreed. First, the court explained that the petitioner had conflated the city’s consideration of the categorical exemptions with the conditional use authorization. The record reflected that these approvals were considered separately, and the conditions were not adopted out of concern that the project would have a significant environmental effect. The court then observed that conditions on a project endorsed by a governmental agency do not constitute mitigation where the record shows those conditions were not the basis for the agency’s conclusion that the project qualified for a categorical exemption. According to the court, there was simply nothing in the record that demonstrated the Board was imposing the additional conditions in order to mitigate the project’s significant environmental effects as opposed to taking precautions to address the ordinarily anticipated inconvenience and danger that arises when significant construction activity occurs in a congested urban environment like San Francisco’s Telegraph Hill. Accordingly, there is no basis to conclude that the conditions imposed on the conditional use authorization were disguised mitigation measures required by CEQA.



The Project Description Was Adequate

Protect Telegraph Hill next argued that it was important for city officials to consider all components of the proposed project in order to determine whether it qualified for a categorical exemption, and that the project description was insufficient for that purpose because it was lacking in detail. Rejecting this argument, the court explained that CEQA’s requirements for project descriptions in EIRs do not apply to categorical exemptions. The only legal requirement that applied to the project description here was a provision in the city’s administrative code that specifies the project description required to evaluate an application for a CEQA exemption. The court held that the project description satisfied those requirements. Thus, there was no reason or evidence to warrant a conclusion that the project description provided in the application was in any way deficient for its intended purpose.



The Unusual Circumstances Exception Did Not Apply

Turning to the unusual circumstances exception, the court applied the two-part test announced by the California Supreme Court in Berkeley Hillside Preservation v. City of Berkeley, 60 Cal.4th 1086 (2015). As explained by the court, the city’s conclusion that there were no unusual circumstances is reviewed for substantial evidence, but if there are unusual circumstances, the court considers whether there is a fair argument that there is a reasonable possibility that the project may have a significant effect due to that unusual circumstance.

For the first part of the test, Protect Telegraph Hill argued that the location of the project on Telegraph Hill was itself an unusual circumstance. It called the location and site constraints “unequivocally rare,” and argued that the exception applies because it contributes in an extraordinary degree to San Francisco’s visual form and character. The remainder of its argument was devoted to showing possible environmental effects of the project caused by its located at a sensitive intersection, has a significant impact on public views, and its unusual topography presents geotechnical impacts. But the court found that the city’s determination that there were no unusual circumstances was supported by substantial evidence. While Telegraph Hill was described in the design element of the general plan, the project conformed to the zoning requirements for that area and was similar in proportion to the immediately adjacent buildings. Protect Telegraph Hill also argued that the area was heavily traveled because of its proximity to Coit Tower landmark, but the court agreed with the city that large traffic and pedestrian volumes was “more commonplace than unusual” in San Francisco.


Conclusion and Implications

This court’s opinion is a helpful addition to the growing body of case law on the unusual circumstances exemption. The deferential substantial evidence test is a difficult hurdle for project opponents to overcome when attempting to prove the existence of unusual circumstances. Although the court agreed that Telegraph Hill is “outstanding and unique,” it is just one of many outstanding and unique places in the City of San Francisco. The opinion also clarifies that agencies may impose conditions on a project without precluding application of a categorical emption as long as those conditions are not used to fit the project within the exemption or to mitigate significant environmental impacts.

The opinion is available here:

(Chris Stiles)