California Court of Appeals, First District, Fourth Division
Ordered Date 12/04/2013
Trial Court Alameda County Superior Court No. RG12617535 Trial Judge: Honorable Evelio M. Grillo
Counsel for Appellant Christina M. Caro, Lozeau Drury, Richard Toshiyuki Drury
Counsel for Defendant and Respondent Berkeley City Council Laura Nicole McKinney, Office of City Attorney
Counsel for Real Party in Interest and Respondent City Centric Investments LLC Andrew Biel Sabey, Cox Castle & Nicholson
This action was brought under the California Environmental Quality Act (CEQA) to challenge a proposed mixed-use commercial and residential project approved by the City of Berkeley. Appellants are Parker Shattuck Neighbors and two individuals (collectively Parker Shattuck),  who contend the City violated CEQA by approving the project without an environmental impact report (EIR). Parker Shattuck petitioned for a writ of mandate, maintaining that an EIR was required because pre-existing contamination on the site poses health risks to the project’s construction workers and future residents. We affirm the trial court’s denial of the writ because Parker Shattuck has failed to identify substantial evidence supporting a fair argument that there may be a significant effect on the environment because of these potential health risks.
Factual and Procedural Background
The Parker Place Project is proposed by CityCentric Investments, LLC and Parker Place Group, LLC and was approved by the Berkeley City Council. When finished, it will consist of three buildings on what are currently three different parcels. A five-story mixed-use building with an underground parking garage will be built at 2600 Shattuck Avenue, another five-story mixed-use building will be built at 2598 Shattuck Avenue, and a three-story residential building will be built at 2037 Parker Street. All told, the project will include 155 residential units and over 20, 000 square feet of commercial space.
The three parcels are currently occupied by a car dealership, Berkeley Honda. The showroom, offices, and service garage are located at 2600 Shattuck Avenue, and a sales lot is located at 2598 Shattuck Avenue and 2037 Parker Street. Since 1923, 2600 Shattuck Avenue has been the site of a car dealership and service garage, and from at least 1922 to 1960, 2598 Shattuck Avenue was the site of a service station.
Before buying the properties, the current owner commissioned three environmental site-assessment reports, which were issued in two phases. The Phase I report was issued in December 2005, and it stated that the properties had a history of containing underground storage tanks. Underground storage tanks are used to store hazardous substances, such as gasoline. (See Health & Saf. Code, § 25281, subd. (y)(1).) In 1988, a 1000-gallon underground storage tank was removed from 2598 Shattuck Avenue, and the Berkeley Health and Human Services Department issued a letter confirming there was “no significant soil contamination resulting from a discharge in the area surrounding the underground storage tank.” In 1990, a 500-gallon tank was removed from 2600 Shattuck Avenue. Fire Department records also indicated there were or might once have been several other underground storage tanks. The Phase I report recommended using ground-penetrating radar to clarify whether there were any other underground storage tanks and conducting an investigation to assess ground contamination.
These recommendations were accepted, and the results were described in the Phase II report issued in March 2006. The ground-penetrating-radar study located a suspected underground storage tank under the sidewalk next to 2600 Shattuck Avenue and recommended its removal. It also identified a concrete pad at 2598 Shattuck Avenue that might conceal an underground storage tank. The ground-contamination investigation collected soil samples from twenty borings near areas of potential contamination, and water samples were collected where the borings encountered groundwater. Various volatile organic compounds (VOCs) were detected in two soil samples and a water sample, but they did not “exceed the San Francisco Regional Water Quality Control Board [Regional Board]... Environmental Screening Levels..., or there are no [environmental-screening levels] established for the contaminant.” The report recommended additional soil and water sampling in other areas of concern, including under the concrete pad to determine if there was petroleum in the soil and thus whether an underground storage tank might be there.
This recommendation was accepted, and the results were announced in a supplemental Phase II report. Although petroleum hydrocarbons, arsenic, and cobalt were detected in amounts exceeding Regional Board environmental-screening levels for commercial/industrial land use, the report noted that the hydrocarbon contamination was “not likely” to “require cleanup” and that the arsenic and cobalt were probably “naturally occurring.” No contaminants were detected in amounts exceeding environmental-screening levels for groundwater that was not a potential source of drinking water. The supplemental report also determined that there was no underground storage tank or soil contamination under the concrete pad.
The storage tank under the sidewalk next to 2600 Shattuck Avenue was removed in April 2006. Because hydrocarbon contamination was observed in the soil surrounding the tank, 75 tons of soil were also removed from the site. The site was then placed on a list, known as the “Corteselist, ” that is comprised of potentially contaminated sites and includes sites with “underground storage tanks for which an unauthorized release report is filed.” (Gov. Code, § 65962.5, subd. (c)(1).)
In January 2007, the Regional Board issued a closure letter finding that no further corrective action related to the petroleum contamination was necessary at the project’s site. A printout of a State Water Resources Control Board website identifying sites on the Corteselist showed that the project’s site remained on the list but was given the status of “case closed” the day after the Regional Board’s closure letter was issued.
Almost two years later, in December 2008, CityCentric applied to begin constructing the project. A use permit was finally approved in 2010 after the City determined that CEQA did not apply because the project fell under a regulatory exemption for urban “In-Fill Development Projects.” 
Parker Shattuck brought a writ of mandate to challenge the City’s approval of the project in Parker Shattuck Neighbors v. Berkeley City Council (Super. Ct. Alameda County, 2011, No. RG10544097). Although the trial court rejected Parker Shattuck’s various arguments under CEQA, finding they were not raised at the administrative level, it granted the writ and ordered the City to vacate approval of the project after it found that the City had allowed the project to be modified without first holding a public hearing. The City vacated the project’s approval in October 2011.
In the second round of administrative proceedings, the City assumed the CEQA exemption for urban in-fill projects (Guidelines, § 15332) was inapplicable. On November 1, 2011, the City released for public comment a proposed mitigated ...