Entitlement lawyers can toil for months if not years in getting a project lined up, application submitted, and approvals passed by the applicable local agency. All of those efforts can be for naught, however, if the local citizenry is sufficiently organized and motivated in opposing the project to avail itself of the power of referendum. The possibility of such an outcome must be the subject of serious discussion between project applicants and their counsel for any project of significant local controversy.
There are limits on the power of the referendum, however. On September 20, 2017 the First District Court of Appeal handed down the opinion of San Bruno Committee for Economic Justice v. City of San Bruno— a case demonstrating that not every official action by a local agency with respect to a project can be overturned by an outraged electorate. It is a case that should therefore be of some interest to land use practitioners throughout the state. [San Bruno Committee for Economic Justice v. City of San Bruno, 15 Cal.App.5th 524 (1st Dist. 2017).]
Factual and Procedural Background
The San Bruno Committee case concerns the site of a former Navy facility in the City of San Bruno. In 2001 the city approved an Environmental Impact Report (EIR) for a Specific Plan covering the site, including provisions for a hotel with meeting and retail space on 5.5 acres. By 2012 other projects were implemented on the site, shrinking the footprint available for the hotel project to 1.5 acres. That year the city purchased the 1.5 acres for $1.4 million, and issued an RFP to private developers for the hotel project. By 2013 the city had selected a developer and the parties entered into an exclusive negotiating rights agreement. In 2015 the city approved changes to the Specific Plan and a supplemental EIR in support of the revised hotel project.
These efforts culminated in a resolution passed by the city council on March 29, 2016, authorizing the city manager to execute a purchase and sale agreement with the developer. On April 18, 2016 the city and the developer entered into the contract with a sales price of $3.97 million. On April 27, 2016 the plaintiffs filed signatures with the city clerk in support of a referendum challenging the resolution authorizing the sale contract. The clerk rejected the petition on the grounds that the resolution was an administrative rather than legislative act and was thus not subject to the referendum power.
The plaintiffs sued the city, arguing that the resolution was properly subject to referendum. The trial court disagreed, ruling in favor of the city, and the plaintiffs appealed.
The Court of Appeal’s Decision
Distinguishing Legislative from Administrative Powers
After summarizing the procedural background of the case and the applicable standard of review the First District Court turned to the applicable legal principles. Generally speaking, the powers of initiative and referendum are available for the electorate to exercise legislative but not administrative powers. The distinction between the legislative and administrative was therefore at the heart of the case. Explaining this distinction, the court quoted Fishman v. City of Palo Alto, 86 Cal.App.3d 506, 509 (1978) as follows:
Legislative acts generally are those which declare a public purpose and make provisions for the ways and means of its accomplishment. Administrative acts, on the other hand, are those which are necessary to carry out the legislative policies and purposes already declared by the legislative body.
The plaintiffs argued that the sale resolution was legislative insofar as it was establishing a policy for the establishment of the hotel project. They relied on case law to the effect that acquiring land for the construction of municipal buildings and awarding contracts for the provision of municipal services are legislative acts subject to referendum. The court rejected the applicability of these precedents, holding that in effect the resolution approving the sale implemented the city’s prior legislative actions setting forth the policy behind the hotel project. It wrote:
[I]f prior acts establish a legislative policy, acts that implement the policy will be deemed administrative. (San Bruno Committee for Economic Justice v. City of San Bruno, supra, 223 Cal.Rptr.3d at p. 257.)
Because the sale of the property furthered rather than created the previously approved hotel project, it was administrative in nature and thus not subject to referendum. The court also rejected the plaintiffs’ assertion that the decision to proceed with a purchase and sale agreement rather than the originally contemplated disposition and development agreement was at all significant, since the ultimate result was consistent with the prior project approvals. It therefore affirmed the judgment of the trial court.
Conclusion and Implications
The San Bruno Committee case represents a modest bulwark against the use of referenda and initiatives in the land use context. As such, developers and their attorneys will welcome the decision and the additional clarity it adds to this field of land use law. The court’s decision is accessible online at: http://www.courts.ca.gov/opinions/documents/A149409.PDF
(Matthew Henderson)
