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California Coastal Commission v. United States Department of Navy

United States District Court, S.D. California

May 28, 2014

CALIFORNIA COASTAL COMMISSION, Plaintiff,
v.
UNITED STATES DEPARTMENT OF THE NAVY; SECRETARY OF THE NAVY, RAY MABUS, in his official capacity; and MANCHESTER PACIFIC GATEWAY LLC, Defendants

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For California Coastal Commission, A State Agency, Plaintiff: Baine P. Kerr, LEAD ATTORNEY, California Department of Justice, Los Angeles, CA; David Alderson, Jamee Jordan Patterson, LEAD ATTORNEYS, State of California Office of the Attorney General, San Diego, CA.

For United States Department of the Navy, Ray Mabus, Secretary of the Navy, in his official capacity, Defendants: U S Attorney CV, LEAD ATTORNEY, U S Attorneys Office Southern District of California, Civil Division, San Diego, CA; Anna Kristina Stimmel, Stephen Geoffrey Bartell, LEAD ATTORNEYS, U.S. Department of Justice, Washington, DC.

For Manchester Pacific Gateway LLC, a Delaware Limited Liability Company, Defendant: Steven M Strauss, Summer J Wynn, LEAD ATTORNEYS, Cooley Godward Kronish, San Diego, CA.

OPINION

Hon. Jeffrey T. Miller, United States District Judge.

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ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Plaintiff California Coastal Commission (" CCC" ) moves for summary judgment on its claim that the Federal Defendants' decision not to conduct a supplemental consistency determination under the Coastal Zone Management Act (" CZMA" ), 16 U.S.C. § 1451 et seq., is arbitrary and capricious under the Administrative Procedure Act (" APA" ), 5 U.S.C. § 701 - 706. The United States Department of the Navy (" Navy" ) and Secretary of the Navy Ray Mabus, in his official capacity, (collectively " Federal Defendants" ) oppose the motion as does Defendant Manchester Pacific Gateway LLC (" Manchester" ). All Defendants separately move for summary judgment. Having carefully considered the Administrative Record, pertinent legal authorities, the arguments of counsel and for the reasons below, the court denies CCC's motion for summary judgment on all claims and grants Defendants' motion for summary judgment on all claims. The Clerk of Court is instructed to enter judgment appropriately and to close the file.

A. BACKGROUND

On January 23, 2013, the CCC commenced this action against Defendants to

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enjoin them from proceeding with the redevelopment of the Navy Broadway Complex (" NBC" ) until the Navy prepares a supplemental consistency determination (" CD" ) as allegedly required by the Coastal Zone Management Act (" CZMA" ), 15 C.F.R. § 930.1 et seq. (Ct. Dkt. 1, ¶ 1). As more fully described below, the present action is one of five actions concerning the redevelopment of the NBC.

The following facts are taken from the Administrative Record (" AR" ).

I. Overview

The NBC site, located on federally-owned land in downtown San Diego, presently consists of Navy administrative facilities including the Commander, Navy Region Southwest, and the Fleet Industrial Supply Center San Diego. (AR 4772, 55664). The present Navy facilities, constructed primarily between 1921 and 1944, consist of about 400,000 SF of administrative office space and 500,000 SF of warehouse space. (AR 2431). The remainder of the site consists of asphalt parking lots, and the entire site is fenced and public access restricted. (AR 55682).

In 1982 the Navy considered options for the consolidation of various Navy installations in the San Diego area. In light of budget constraints, the Navy pursued a " co-location" program which allowed the federal government to retain title to real property and to lease portions of the property for private revenue-generating uses that could be used to offset the cost of new administrative facilities. Congress enacted legislation in 1986, Public Law 99-661, § 2732, 100 Stat 3816 (1986), authorizing the Secretary of the Navy to pursue a public-private venture to implement the co-location concept at the NBC site. The legislation mandated that " any real property leased shall be developed in accordance with detailed plans and terms of development which have been duly formulated by the Navy and the San Diego community through the San Diego Association of Government's Broadway Complex Coordination Group." (AR 956).

To obtain the objective of updated Navy administrative facilities, an advisory group, the Broadway Complex Coordinating Group (" BCCG" ), formed in 1985 under the auspices of the San Diego Association of Governments (" SANDAG" ) to serve as community advisors for the planning of the NBC site and to initiate consultation with local governmental authorities. In June 1987, the Navy and the City of San Diego executed a Memorandum of Understanding (" MOU" ) to establish the terms of potential future development on the NBC site. (AR 1100). On September 22, 1989, the BCCG adopted the design principles for the NBC site and established detailed plans and development terms required by the legislation.

II. Initial Environmental Review Proceedings

To comply with its environmental obligations under the National Environmental Policy Act (" NEPA" ), the Navy completed an Environmental Impact Statement (" EIS" ) in 1990 and issued a Record of Decision (" ROD" ) in July 1991. (AR 25795-96). The ROD memorialized the Navy's decision to redevelop the NBC site and identified essential uses for the site. The ROD also identified that the next step in the process was for the Navy and the City to enter into a Development Agreement (" DA" ), as contemplated under the 1987 MOU. Among other things, the MOU provided that the Navy, in consultation with the City, would prepare a development plan and urban design guidelines (i.e. land uses, density, viewscapes, building heights, open space, etc.).

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In August 1990, the Navy released a Coastal Consistency Determination for the project pursuant to the CZMA. (AR 2424-91). The CZMA directs that each federal agency must consider activities affecting the coastal zone " to the maximum extent practicable, consistent with approved state management programs." 16 U.S.C. § 1451 et seq. Following this mandate, the 1990 CD concluded - with the consultation and approval of the CCC - that the NBC project was, to the maximum extent practicable, consistent with the California Coastal Act (" CCA" ). Cal. Public Resources Code Section 30000 et seq. (AR 2427). The CCA, Chapter 3, articulates the state's coastal resources planning and management policies. The NBC project was evaluated and found to be fully consistent with the CCA.

In its determination, the Navy analyzed the impacts of the NBC project on coastal resources and uses in the surrounding coastal zone to ensure that the NBC project was consistent to the maximum extent practicable with the coastal policies of the CCA. (AR 2422, 2427). As a part of the CD, the Navy described the preferred development for the NBC and adopted the Urban Design Guidelines (" Guidelines" ) and the DA. (AR 2481-91). The DA identified a four-block development scheme with commercial offices, Navy offices, hotel, retail, public attractions and parking uses. The proposed action called for the development of up to 3.25 million SF with approximately 1 million SF of Navy administrative space. (AR 2438). Among other things, the Guidelines also specified building setbacks, sidewalk depths, architectural designs, and the existence of a 1.90 acre open space at the foot of Broadway. (AR 2481-85).

After review and consideration of potential adverse environmental impacts, the City completed an Environmental Impact Report in 1991. A mitigation monitoring program (" MMP" ) was prepared as part of the environmental review. The City and the Navy agreed that all required environmental processing had been completed and that no further environmental review would be required. In October 1991, the CCC adopted the findings of the Navy, agreeing that the development of the NBC was consistent to the maximum extent practicable with the state's coastal zone management plans and issued the CD. (AR 3723). The CCC noted that " no further Commission action is required for the redevelopment to proceed as presented in the consistency determination," but any " proposed deviation from the plan and guidelines will require the Navy to submit a new coastal consistency determination or its developer to obtain a coastal development permit." (AR 3746).

Following further public review, on November 2, 1992, the City enacted an ordinance approving the DA for the NBC site. The DA incorporated, among other documents, the MMP and provided a guide for the planning and approval process for the project. The original DA provided for the termination of the DA by January1, 2002, unless a Developer Lessee was selected and recorded. Following public hearings, the original deadline was extended first to January 1, 2003 and later to January 1, 2007. (AR 4830).

III. Subsequent Environmental Review Proceedings

Due to adverse conditions in the San Diego real estate market, implementation of the DA did not commence immediately. By 2004, the real estate market in San Diego improved; and the Navy took steps to implement the DA. Further, in 2005, the Base Realignment and Closure Commission (" BRAC" ) issued a directive to the Secretary of the Navy to either implement

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the DA or close the NBC and relocate the units and functions of the NBC to other Navy-owned sites in San Diego. (AR 30908).

To facilitate implementation of the DA, in 2006, the Navy prepared an Environmental Assessment (" EA" ) analyzing the environmental impacts associated with implementing the 1991 ROD and the 1992 DA. Among other things, the EA examined the environmental impacts of implementing the DA in then-current 2006 conditions. (AR 25772). Concurrently with the preparation of the EA, the Navy, on March 31, 2006, selected Manchester to participate in exclusive negotiations for the NBC project. (AR 26615-16). On November 22, 2006, the Navy signed a lease with Manchester for the redevelopment of the NBC in accord with the DA. With the selection of Manchester, work commenced on the design phase submissions to Centre City Development Corporation (" CCDC" ) for a consistency review and determination of conformity with the DA.

Each design stage of the project had to be approved by CCDC for conformity to the standards and initial consistency determination. Beginning in April 2006, the CCDC held five public workshops to display the plan proposed by the developer. CCDC also conducted public meetings wherein the NBC proposals were considered. At these meetings, the public provided comments to CCDC. Such comments were provided to the Navy for consideration in its NEPA process.

Pursuant to NEPA, on November 22, 2006, the Navy issued a Finding of No Significant Impact (" FONSI" ). In summarizing the environmental effects of the NBC, the FONSI concluded:

The EA demonstrated that implementation of the proposed action, which includes measures to reduce or avoid impacts to the environment as defined in the Development Agreement, will not have a significant effect on the human environment, and therefore an EIS is not required. The EA revealed that with measures in place to reduce project impacts, and associated development-related best management practices, that there would be no significant impacts to environmental quality.

(AR 31101). Shortly thereafter, the lease with Manchester was executed. (AR 41786).

IV. CCC's Requests for a Supplemental Consistency Determination

Shortly before the issuance of the FONSI and execution of the ground lease with Manchester, on October 25, 2006, CCC informed the Navy of its belief that the NBC project underwent project modifications between 1991 and October 2006 and that new development patterns and uses had occurred in downtown San Diego since 1991. (AR 30181). The CCC articulated three reasons for its view that a supplemental CD was required:

(1) changes in development patterns and intensification of uses and traffic in the downtown shoreline area have occurred since 1991 which may adversely affect the scenic amenities of the waterfront and coastal access opportunities; (2) a significant change to the project consisting of replacing traditional hotel(s) with condominium ownership hotel(s); and (3) modifications to the physical development as shown on the attachment.

(AR 30181).[1]

In February 2007, the Navy responded to the CCC letter seeking to clarify perceived

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misconceptions about the project. (AR 32503-06). The Navy respectfully disagreed with the three reasons articulated by the CCC. First, the Navy noted that the NBC project complied with the patterns and intensification of uses and traffic in the downtown shoreline area that have occurred since 1991. The letter also noted that the growth in the area " has had the effect of increasing the scale and bulk of the existing visual character of the waterfront area, making the Broadway project more consistent with the visual policies of the" CCA noting, for instance, that the adjacent Hyatt Regency hotel is over 440 feet tall, almost twice the height of any of the planned NBC buildings. (AR 32503-04). With respect to parking, the Navy's letter noted that the number of trips associated with the project would be 30% less than what was originally assumed because of a reduction in density (less office space). While acknowledging that certain traffic impacts are significant and unmitigable (this is the same situation as existed in 1990), the Navy noted that the most impacted areas were to intersections and interstate ramps outside the coastal zone and that the majority of waterfront travel would occur on the weekends, which would not be impacted by weekday peak-hour traffic related to the project. With respect to parking, the Navy explained that more parking would be provided than that anticipated in the January 2006 Centre City Draft Planning Development Overlay and that the opening of roads that were currently closed would create increased traffic flow and public parking access to the waterfront. (AR 332504).

With respect to the different ownership structure of the hotel(s), the Navy noted that construction and operation of condominium ownership would not result in a use significantly different from the construction and operation of traditional hotels. Whether a condominium or traditional ownership of hotels, the Navy noted that the use will " substantially improve recreational uses and opportunities on the waterfront over existing conditions." Id.

Finally, the Navy explained that the modifications identified in the CCC's attachment were " unfounded" because the attachment compared the developer's March 2006 submittal to the developer's June 2006 submittal to the CCDC. (AR 32505). The Navy explained that the attachment did not reflect either the plan approved by the CCC or the current plan. Further, the Navy explained that the current plan did not propose any substantial changes to the project as proposed in the 1990 CD and that " the minor changes that have been made to the project will not result in substantially different effects to coastal uses or resources." (AR 32506).

On August 25, 2011, the CCC again notified the Navy that it intended to reconsider its prior CD on essentially the same grounds identified in its October 2006 letter and that the matter would be placed on the CCC's November public meeting agenda. (AR 52166). In response, the Navy requested that the public meeting be postponed pending the Navy's litigation in San Diego Navy Broadway Complex Coal. v. U.S. Dep't of Def., No. 3:11-cv-0154 JM (" Navy Broadway II" ). The Navy explained that significant overlap existed between the issues in Navy Broadway II and the CCC letter. The letter further explained that the Navy could not comment on pending litigation. On September 26, 2011, the CCC denied the Navy's request for a postponement. On October 17, 2011,

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the Navy sent another letter to CCC requesting a postponement of the meeting. The letter also explained its reasons in support of its position that no supplemental CD was required.

In late October 2011, the CCC issued a lengthy staff report prior to its November meeting concerning the NBC. (AR 52301-40). On October 31, 2011, the Navy responded again by letter to inform the CCC of its position and the reasons for its position that no supplemental CD was required for the project because there had been no substantial changes to the activity relevant to management program policies and there were no significant new circumstances or information relevant to the activity and the activity's effect on any coastal use or resource. (AR 52287-300).

Following the public meeting, the CCC reiterated its belief that a supplemental CD was required and indicated that the CCC would hold a hearing on December 9, 2011, to formally adopt the findings. (AR 52403-42). On December 8, 2011, the Navy once again, by letter to the CCC, incorporated its earlier analysis for its position that a supplemental CD was not required for the NBC. (AR 52483).

On December 12, 2011, the CCC informed the Navy that it had adopted the proposed findings that the NBC project was no longer consistent to the maximum extent practicable with the CCA. (AR 52527-28). The Navy, by letter dated January 12, 2012, voiced its opposition to the CCC's findings and again reiterated its position. (AR 52574-75). One year later, on January 23, 2013, the CCC commenced the present action.

V. Prior Litigation Concerning the NBC ...


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