ABSTRACT: With regard to FLANDERS FOUNDATION, Petitioner and Plaintiff, v. CITY OF CARMEL-BY-THE-SEA, CITY OF CARMEL-BY-THE-SEA CITY COUNCIL, Respondents and Defendants (Case No. M99437), selected excerpts from Petitioner’s Reply Brief are presented; emphasis is placed on the “Analysis of Economic Feasibility,” and it is reproduced in its entirety. The Hearing is scheduled for Wednesday, February 10, 2010, Courtroom 14, Judge Kay T. Kingsley, Monterey Courthouse.
BRANDT-HAWLEY LAW GROUP
Susan Brandt-Hawley, SBN 75907
P.O. Box 1659
Glen Ellen, CA. 95442
Attorney for Petitioner
THE FLANDERS FOUNDATION
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF MONTEREY
THE FLANDERS FOUNDATION,
A California Nonprofit Public Benefit corporation, Petitioner
v.
CITY OF CARMEL-BY-THE-SEA and CITY COUCIL OF THE CITY OF CARMEL-BY-THE-SEA
Case No. M99437
Petitioner’s Reply Brief in Support of Petition for Writ of Mandamus
California Environmental Quality Act [CEQA]
Date: February 10, 2010
Time: 9:00 a.m.
Dept.: 17
Filed January 27, 2010
Introduction
The feasibility of continued public ownership and use of public parkland is not tied to a profit rubric. Public parks are amenities, not commercial properties acquired to generate income. As referenced in Flanders 1, the Carmel Municipal Code explains the purpose of park-zoned land is to “preserve publicly owned park and beachlands for the benefit and enjoyment of present and future generations” and to “provide appropriately located areas for recreation.” There is, understandably, no mention of economic gain in the definition. Yet the City continues to assert that profit-oriented analysis of continued public ownership of Flanders is relevant to the feasibility of leasing the mansion, without any showing that the City needs and cannot generate funds in other ways.
As to the new CBRE economic report, the credentials of the City’s experts are sufficient but the questions addressed are not those required by CEQA and ordered by this Court in Flanders 1. This Court rejected the City’s claims that a sale of Flanders Mansion was necessary to “generate funds for [the City’s] capital improvements.” It held that the City had not shown a need to generate funds from Flanders to fund its other projects and noted that the fact that a lease alternative could be more expensive or less profitable cannot prove financial infeasibility, citing Citizens of Goleta Valley v. Board of Supervisors (1990) 52 Cal.3d 553, 564-565.
The economic analysis prepared in response to the peremptory writ considered Flanders’ potential to independently operate at a profit, rather than any need to sell the mansion in order to finance other City projects. The City contends that its economic health and needs are irrelevant to the question of Flanders profitability. It has missed the point, despite the efforts of Flanders Foundation to explain the error. “This is not a matter of profit...the question is ‘is it practical to proceed with ownership...?’ And there’s nothing in the record that indicates that the City needs revenues, that the City can’t afford to fix Flanders, or, most importantly,... that if the city rehabilitates Flanders, it will be left in an untenable economic position.”] This is not a project to develop private property for profit.
Flanders Mansion is an integral part of Mission Trails Nature Preserve and the City agrees that its sale is a significant unavoidable environmental impact under CEQA because it will result in the “loss of City ownership of locally-significant parkland.” It therefore cannot be approved if there is a feasible alternative to sale. The City did not acquire the mansion to generate income, but as a park. It currently retains its P-2 parkland zoning. The City acknowledges that since the City’s acquisition in 1972, the mansion has been used as an art institute, as offices for the Carmel Heritage Society, as library and offices for the Lester Rowntree Arboretum Committee, and as a residence for various City employees and caretakers.
The California Legislature makes it difficult for public entities to sell parkland for public entities to sell parkland because parks are public amenities rather than profit-generating land uses. While elected decisionmakers have broad discretion to make land use decisions, CEQA imposes constraints to ensure environmental protection and the Government Code adds restrictions to divestment of parkland.
Analysis of Economic Feasibility
a. Feasibility Analysis should be in the EIR. The Flanders Foundation continues to rely on its opening brief’s discussion on this issue. On a minor point, the city’s repeated references to San Franciscans Upholding the Downtown Plan v. City of San Francisco (2002) 102 Cal.App.4th 656 as a Third District case are inaccurate: San Francisco is home to the First District Court of Appeal.
The City’s claims that Guideline section 15131 has statutory authority are unsupported. Section 15131, a copy of which was attached to the opening brief along with the Office of Planning and Research Official Discussion, references various general sections of the Public Resources Code for the underlying “authority cited” – not including section 21081.5 now relied upon by the City. Guideline section 15131 remains without statutory authority in its statement that economic information relevant to feasibility need not be contained in an EIR. Without such authority, it cannot lawfully be followed.
Public Resources Section 21081.2 requires that an agency’s CEQA findings made under Public Resources Code section 21081 be supported by substantial evidence in the record. Such evidence must first include a lawfully certified EIR; section 21081.5 cannot be reasonably interpreted as allowing findings relative to CEQA compliance to be made without any consideration of the contents of the EIR. That would eviscerate the entire framework of CEQA. Once an EIR is certified as adequate, a lead agency may also consider additional evidence in the record in making its findings, and absent significant new information or changed circumstances no supplementation of the EIR would be triggered. (Public Resources Code 21166.)
Guideline section 15126.6 (d) requires each EIR to “include sufficient information about each alternative to allow meaningful evaluation, analysis, and comparison with the proposed project.” Yet, as the City explains, San Franciscans Upholding indeed ruled not only that an EIR’s analysis of alternatives need not address economic factors – even when economics form the basis for finding alternatives infeasible – but went much further to state that EIRs need not analyze alternatives at all but only identify them. (San Franciscans Upholding, supra, 102 Cal.App.4th 656, 690; City Brief at 25-26.) Since no other CEQA case has so held, before or since, San Franciscans Upholding stands alone in this overly-narrow and incorrect statement of the function of an EIR alternatives section.
Among myriad examples to the contrary, the California Supreme Court referred to the importance of EIR analysis of alternatives 20 years ago in the landmark Citizens of Goleta Valley v. Board of Supervisors (Goleta 2) (1990) 52 Cal.3d 553;
CEQA establishes no categorical legal imperative as to the scope of alternatives to be analyzed in an EIR. Each case must be evaluated on its facts, which in turn must be reviewed in light of the statutory purpose. Informed by that purpose, we here reaffirm the principle that an EIR for any project subject to CEQA review must consider a reasonable range of alternatives to the project, ... which: (1) offer substantial environmental advantages over the project proposal (Pub. Resources Code 21002); and (2) may be ‘feasibly accomplished in a successful manner’ considering the economic, environmental, social and technological factors involved. (Citations)
More recently, the Supreme Court decided In re Bay Delta (2008) 43 Cal.4th 1143, and in holding that an EIR’s consideration of ten project alternatives was sufficient, consistently described CEQA’s legal requirement for alternatives analysis:
The EIR is the heart of CEQA, and the mitigation and alternatives discussion forms the core of the EIR. (Citation.) The basic framework for analyzing the sufficiency of an EIR’s description of alternatives is set forth by the Legislature in CEQA, by the Governor’s Office of Planning and Research in the CEQA Guidelines ... and by this court in [Goleta 2]. CEQA requires that an EIR, in addition to analyzing the environmental effects of a proposed project, also consider and analyze project alternatives that would reduce adverse environmental impacts.
Aside from San Franciscans Upholding, there is no case of which Flanders Foundation’s counsel is aware that holds that an EIR “itself” need not “contain an analysis of the feasibility of the various project alternatives or mitigation measures that it identifies.” (San Franciscans Upholding, supra, 102 Cal.App. 4th 656, 690.) This singular and restrictive interpretation of the Public Resources Code should not be followed by this Court, as it is inconsistent with case law and with the policies and purposes of CEQA.
Further, the City misunderstands the findings referenced in Public Resources Code section 21081 when it argues the Pub. Resources Code section 21081.5 somehow applies to questions of EIR adequacy. Section 21081.5 provides in its entirety that “[i]n making the findings required by paragraph (3) of subdivision (a) of Section 21081, the public agency shall base its findings on substantial evidence in the record.” (Pub. Resources Code 21081.5.) The referenced subsection (3)(a) addresses lead agency approval findings required for any project with a significant impact, but on the sole question of whether or not project mitigation measures and alternatives that were identified in a project EIR are infeasible. (Pub. Resources Code 21081 (a)(3).) It has no application to the question of EIR adequacy, as already explained in the opening brief.
The City’s colorful suggestion that the Court is being coaxed onto a ledge by the suggestion that an EIR’s alternatives analysis should address economic information in cases in which feasibility hinges on such information is itself extreme. Despite the handful of unsupported cases in the First and Fifth appellate districts, each relying on one another without any statutory underpinnings, there is no authority in the Public Resources Code for a conclusion that economics need not be included in an EIR’s analysis of alternatives even when highly relevant. As the City concedes, many cases in fact do so. The illogical idea that economic information may invariably be excluded is likely related to earlier sections of the CEQA Guidelines that provide that the economic impacts of projects need not be studied, since EIR’s focus on the environment rather than on economics. (E.g., Guideline 15064 (e).)
Before economic considerations are to relied upon to determine that an environmentally superior project alternative is infeasible, decisionmakers and the public should be provided with objective analysis of the alternative within the prescribed EIR process, as laid out in Guideline section 15126.6 (d) and consistent with the policies of CEQA. (E.g., Public Resources Code 21002 [“...it is policy of the state that public agencies should not approve projects if there are feasible alternatives ... which would substantially lessen the significant environmental impacts... and the procedures required ... are intended to assist public agencies in systematically identifying ... feasible alternatives ...”] CEQA compels process. It is a meticulous process designed to ensure that the environment is protected ... the EIR is the heart and soul of CEQA.” (Planning and Conservation League v. Department of Water Resources (2000) 83 Cal.App. 4th 892.) In Save Our Peninsula Committee v. Monterey County Board of Supervisors (2001) 87 Cal.App. 4th 99, the Sixth District consistently underscored that “[t[he integrity of the [CEQA} process is dependent on the adequacy of the EIR.”
Economic feasible is particularly relevant to cases involving historic resource rehabilitation. Without statutory authority, Guideline section 15131 cannot be followed to exclude relevant analysis, and the unsupported line of cases rejecting economic feasibility inquiry has not been and should not be endorsed in the Sixth District. The City should have included the CBRE report’s analysis within the Revised EIR and subjected it to public and agency review, comment, and responses. The City chose to exclude it from the EIR and thereby failed to proceed in the manner required by law. A writ should correct this error.
b. The CBRE Report was Inadequate. As pointed out in the Introduction, the City’s claim that the City’s budget and financial needs are irrelevant to the economic feasibility of a lease of Flanders springs from its misunderstanding of the point of economic feasibility analysis. The proposed demolition of the Jackling House by Steve Jobs in Uphold Our Heritage v. Town of Woodside (2007) 147 Cal.App.4th 587 was a case in which the wealth of the property owner was irrelevant to the question of whether rehabilitation of an historic home was economically feasible. The feasibility of Job’s project related no to his own wealth, but to whether the money spent to rehabilitate the Jackling House residence would be reasonable when compared to the costs of demolition and building a new home.
The economic issue in this case is different, because the Mission Trails Nature Preserve and the Flanders Mansion are parkland never intended to be profitable. Only if the City had significant debts and insufficient capital and provided a well-supported economic report to the effect that selling Flanders Mansion was the only feasible way to obtain funds to run the city might there be an economic basis for a sale of its parkland. Nothing is more relevant to the question at hand than the City’s budget and needs, and the CBRE report does not provide substantial evidence that a lease of Flanders is economically infeasible. To prove infeasibility, the City would require a different report.
C. Lease of Flanders Mansion is Feasible
The only way the Uphold our Heritage scenario would be relevant is if Carmel’s goal was to manage its property in a manner to avoid a loss of net value. But even if so, the facts do not indicate that a lease is infeasible as all indications are that any moneys spent to maintain or rehabilitate Flanders will be directly reflected in increased property value. Conceding that the “practical” pursuit of a project involves a reasonable return, it is reasonable to spend a million dollars on park property that will fully retain (and increase) its value and also serve as a public amenity. Even if it could take up to seventeen years to recoup the moneys invested, no problem is shown because the City does not deny its surplus of $11 million. Further, there is no evidence supporting the City’s assumption that it must fully rehabilitate the mansion before leasing, as the Architectural Resources Group report provided requested information for a full rehabilitation but did not conclude that all possible upgrades were necessary.
The Emporium development in San Franciscans Upholding involved a substantial redevelopment project whose commercial success was dependent on balancing costs with projected revenue streams. (San Franciscans Upholding, supra, 102 Cal.App.4th 656, 6930695.) The City points out that in that case the additional costs and lost profitability of project alternatives were “sufficiently severe to render them impractical,” and claims similarity here. Yet, what is “economically feasible” for a property that is not intended to be profitable? The City of Carmel has abandoned the claims it made in Flanders 1 that it needed to sell Flanders Mansion in order to finance other city projects; it now claims that its budget, surplus funds, and needs are irrelevant to its decision to sell the mansion. No economic infeasibility has been shown.
The City’s new argument based on California Native Plant Society v. City of Santa Cruz (CNPS), supra, 177 Cal.App.4th 957, to the effect that “policy” considerations make a lease of Flanders Mansion infeasible, is also insupportable. CNPS upheld the City of Santa Cruz’s approval of a park master plan because the City adequately justified its rejection of project alternatives that failed to meet key objectives. While the Court recognized that the project objectives reflected City policies, it did not make a broad holding that a lead agency could declare any project alternative infeasible as a matter of its undefined policy preference. If the mere invocation of “policy” were to be sufficient basis to find every project alternative infeasible, it is hard to imaging any project approval, whether public or private, that could not be justified by “policy” considerations. What City doesn’t “prefer” its approved project? Cases such as City of Marina v. Board of Trustee (2006) 39 Cal.4th 34, in which an agency’s approval was set aside, would be meaningless under such a standard.
Carmel’s reliance on the CNPS case is rather ironic, as CNPS focused on the fulfillment of long-adopted objectives to further public park amenities, including handicapped access to park trails. (CNPS, supra, 177 Cal.App.4th 957, 971, 1001.) Here, to the contrary, the sale of Flanders Mansion was found by the Revised EIR to have significant environmental impacts due to its inconsistencies with the City’s codified general plan and coastal land use policies applicable to parkland and historic resources: G5-6 [Preserve and acquire open space and parks], O5-21 [Optimize use of City parks], P5-46 [Preserve, protect, and restore areas of historical value] and P5-107 [Provide for public access and passive enjoyment of City parks and open space]. The City Council tenuously disagreed with the EIR’s determination of significant impact on this point.
Agencies appropriately enjoy wide discretion in approval of land use projects. However, when significant environmental impacts are identified that can be feasibly mitigated by a project alternative, CEQA fairly limits agencies’ discretion to ignore or reject them. The only codified policies relating to feasibility in this case are those militating against the sale of Flanders Mansion. There is no City policy supporting the sale of historic parkland, and the feasibility of a lease alternative is not trumped by an assertion of preference under the broad label of “policy.” Here, no codified policy can possibly be interpreted as being furthered by the City’s divestment of a landmark mansion located in public parkland, creating an in-holding with undisputed significant impacts on the park.
The City must “adopt the alternative that provide[s] the greater mitigation of adverse effects...” (Citizens of Goleta Valley v. Board of Supervisors (Goleta 1) 197 Cal.App.3d 1167, 1186. CEQA’a intention that public agencies “should not approve projects as proposed if there are feasible alternatives...” must be interpreted to afford the fullest possible protection to the environment within the reasonable scope of the statutory language. (Pub. Resources Code 21002; Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 259.) No substantial evidence supports the City’s contention that a lease of Flanders Mansion is economically infeasible or against City “policy.” A writ should issue to set aside the approval of sale under CEQA’s substantive mandate, because of needless significant environmental impact when there is a feasible alternative.
Conclusion
The Flanders Foundation appreciates that the Court does not lightly interfere with the public policy decisions of an elected decisionmaking body such as the Carmel City Council. But when a decision has significant environmental impacts, CEQA overrides the Council’s discretion until its mandated procedures and substance are met.
The peremptory writ should issue because the Revised Flanders EIR failed to assess environmental impacts related to compliance with the Surplus Land Act, failed to adequately respond to comments, and failed to analyze the feasibility of a viable alternative. The City’s findings violated the substantive mandate of CEQA because no substantial evidence supports the infeasibility of a lease alternative or the statement of overriding considerations.
The Court’s enforcement of CEQA is respectfully requested to provide great and longstanding public benefit to the citizens of Carmel.
Respectfully submitted,
BRANDT-HAWLEY LAW GROUP
Susan Brandt-Hawley
Attorney for Petitioner
January 25, 2010
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