Court Finds Multi-Million Dollar Construction Project in San Diego to be Exempt from the California Environmental Quality Act (CEQA) Under the Existing Facilities Exemption

Thursday, March 21, 2019

The City of San Diego’s approval of a lease at Belmont Park involving the “construction of a new restaurant and bar, new food court venues, and a new arcade” with “construction costs in excess of $25 million” was held to be exempt from CEQA under the Existing Facilities Exemption. (San Diegans for Open Government v. City of San Diego (Dec. 27, 2018, No. D073284) ___Cal.App.5th___, cert. for publication January 15, 2019; CEQA Guidelines Section 15301.)  At first blush it seems difficult to understand how a construction project totaling nearly $25 million could be considered an “existing facility” involving a negligible expansion under CEQA Guidelines Section 15301. But under a more focused lens, the use of the exemption becomes clear.  

Exempt Under CEQA's Existing Facilities Exemption (CEQA Guidelines 15301).

Of the approximately $25 million in alleged construction costs, nearly $18 million dollars had already been expended on improvements and upgrades.  Since the work had already been done, the court correctly found that the $18 million in improvements were clearly “existing facilities” under CEQA, and therefore exempt from environmental review.

The court also found the approximately $5.9 million slotted for refurbishment in the Belmont Park Plunge Pool to fall within the Section 15301 “existing facilities” exception. The refurbishment of the pool did not involve any new construction, but rather was only for the replacement of structural steel, resurfacing of the swimming pool, replacement of the roof, replacement of windows, and installation of a new ventilation system.

The Unusual Circumstances Exception Did not Defeat the Use of the CEQA Categorical Exemption

Finally, the court found there were no exceptions to the categorical CEQA exemption. A common exception relied on by those opposing projects is the “unusual circumstance” exception. (CEQA Guidelines §15300.2(c).) If a there is an unusual circumstance that results in a significant impact to the environment, the project will not be exempt from CEQA, even though it would ordinarily fit within the categorical exemption. But the party challenging the use of an exemption must first present substantial evidence that there is an unusual circumstance. Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1103. “If there is substantial evidence of an unusual circumstance, [the court will] move to the second prong of the test—whether there is a reasonable possibility that the unusual circumstance will produce a significant effect on the environment.” World Business Academy, 24 Cal.App.5th at 499, citing Berkeley Hillside Preservation, 60 Cal.4th at 1103.

In this Belmont Park case, the court found that no such evidence was provided to support a fair argument that an unusual circumstance will have a significant effect on the environment.  While the opponent cited to traffic and noise as impacts, they provided no expert testimony as to why the unusual circumstance would result in these impacts to traffic or noise.  The only unusual circumstance cited by the opponent was Proposition G passed by the electorate to govern the development of Mission Beach Park. Therefore, the court agreed with the City’s determination that the lease and construction and refurbishment associated with the lease was exempt from CEQA.

Takeway: Okay to Use Current Operations or Buildings/Structures for the Baseline in CEQA Exemptions, Even If Prior Review Was Not Done.

This case reminds us that when relying on a categorical exemption to CEQA, like the Existing Facilities (CEQA Guidelines Section 15301), Replacement or Reconstruction (CEQA Guidelines Section 15302) or New Construction or Conversion of Small Structures (CEQA Guidelines Section 15303) exemption, it is important to understand that CEQA looks at the changes that will be made to the present conditions. Therefore, construction of a building or structure years ago should not factor into the decision of whether the new project is exempt from CEQA except for increasing the baseline.  

The court in Bloom v McGurk (1994) 26 CA4th 1307, held that existing facilities are exempt under the existing facilities exemption even though no CEQA review was conducted for prior approvals. In another opinion, the court noted that “[h] ow present conditions come to exist may interest enforcement agencies, but that is irrelevant to CEQA baseline determinations—even if it means preexisting development will escape environmental review under CEQA.” Center for Biological Diversity v. Department of Fish & Wildlife (2015) 234 Cal.App.4th 214, 249-251, citing Riverwatch, 76 Cal.App.4th at 1452–1453.

For parties looking to oppose a project by using CEQA should take this case as a reminder of the importance in having substantial evidence to support a claim that there is an unusual circumstance.  

By Stephanie V.F. Smith, Esq.

Land Use and CEQA Attorney

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