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Saltonstall v. City of Sacramento

California Court of Appeals, Third District, Sacramento

February 18, 2015

ADRIANA GIANTURCO SALTONSTALL et al., Plaintiffs and Appellants,
CITY OF SACRAMENTO, Defendant and Respondent SACRAMENTO BASKETBALL HOLDINGS, LLC, Real Party in Interest and Respondent.

APPEAL from a judgment of the Superior Court of Sacramento County, No. 34201480001840CUWMGDS. Timothy M. Frawley, Judge.

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The Smith Firm and Kelly T. Smith for Plaintiffs and Appellants.

MEYERS, NAVE, RIBACK, SILVER & WILSON, Amrit S. Kulkarni, Julia L. Bond and Shaye Diveley for Defendant and Respondent.

PIONEER LAW GROUP, Andrea A. Matarazzo, Jeffrey K. Dorso and Jay M. Harris for Real Party in Interest and Respondent.

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This appeal involves a challenge under the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) to certification of an environmental impact report (EIR) and approval of a project to build a new entertainment and sports center (ESC) in downtown Sacramento.[1] The project represents a partnership between the City of Sacramento (City) and Sacramento Basketball Holdings LLC (Sacramento Basketball Holdings) to build a downtown arena at which the Sacramento Kings, a professional basketball team, will play. Planning, approval, and construction of the arena has proceeded apace because the National Basketball Association (NBA) has expressly reserved the right to acquire the Sacramento Kings and relocate the team to another city if a new arena in Sacramento does not open by 2017. To facilitate the timely opening of a new downtown arena, the Legislature modified several deadlines under CEQA by adding section 21168.6.6 to the Public Resources Code. Section 21168.6.6 also allows the City to exercise limited eminent domain powers to acquire property for the project before completion of its environmental review. Section 21168.6.6, however, does not substantively alter other CEQA requirements for environmental review of the project.

In a prior appeal, Adriana Gianturco Saltonstall and 11 other petitioners argued section 21168.6.6 violates the constitutional separation of powers doctrine because the Legislature restricted the grounds on which the courts may issue a preliminary injunction to stay the downtown arena project.[2] (Saltonstall v. City of Sacramento (2014) 231 Cal.App.4th 837 [180 Cal.Rptr.3d 342] (Saltonstall I).) Saltonstall also argued the trial court erred by refusing to grant a preliminary injunction despite harm to the public and the environment due to demolition of part of the Downtown Plaza shopping mall and construction of the downtown arena in its place. (Id. at p. 857.) We concluded section 21168.6.6 does not violate separation of powers and the trial court properly denied Saltonstall’s request for a preliminary injunction. (231 Cal.App.4th at p. 858.)

In this appeal, Saltonstall contends (1) the City violated CEQA by committing itself to the downtown arena project before completing the EIR process,

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(2) the City’s EIR failed to consider remodeling the current Sleep Train Arena as a feasible alternative to building a new downtown arena, (3) the EIR did not properly study the effects of the project on interstate traffic traveling on the nearby section of Interstate Highway 5 (I-5), (4) the City did not account for large crowds expected to congregate outside the downtown arena during events, (5) the trial court erred in denying her California Public Records Act (Gov. Code, § 6250 et seq.) request to the City to produce 62, 000 e-mail communications with the NBA; and (6) the trial court erred in denying her motion to augment the administrative record with an e-mail between Assistant City Manager John Dangberg and a principal of Sacramento Basketball Holdings, Mark Friedman (the Dangberg-Friedman e-mail) and a 24-page report regarding forgiveness of a $7.5 million loan by the City to the Crocker Art Museum.

We conclude the City did not prematurely commit itself to approving the downtown arena project before completing its environmental review. Under CEQA, the City was allowed to engage in land acquisition for its preferred site before finishing its EIR. Moreover, section 21168.6.6 expressly allowed the City to exercise its eminent domain power to acquire the 600 block of K Street as the site of the arena before finishing its environmental review. The preliminary nonbinding term sheet between the City and Sacramento Basketball Holdings constituted an agreement to negotiate regarding the project and did not foreclose environmental review, mitigation, or even rejection of the project.

As to consideration of feasible alternatives, the City did not err by declining to study the option of remodeling the Sleep Train Arena. The City studied a “no project” alternative involving continued use of the Sleep Train Arena and an alternative that involved building a new arena next to the current arena in Natomas. Both the no project and new Natomas arena alternatives failed to meet most of the City’s objectives for the project to revitalize its downtown area. Regardless of whether the Sleep Train Arena remodel alternative might have been environmentally superior to the project approved, the remodel alternative would have suffered the same problems of location that caused the City to reject the other Natomas-based alternatives.

We reject Saltonstall’s argument that the EIR is defective for failure to study mainline interstate traffic on I-5 even though the City studied the timing and extent of traffic congestion on the freeway that will likely result due to the project. The City was not required to separately consider the effect of the project on motorists subject to the same traffic conditions simply because their trip origins and destinations might have been different than those of local commuters. The EIR and the Sacramento City Council’s statement of overriding considerations demonstrate that the decision-makers were informed of and understood the adverse consequences on I-5 traffic resulting

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from the downtown arena project. The EIR’s traffic study of the project’s effects on I-5 traffic was not deficient.

Saltonstall’s contention regarding failure to study post-event crowd safety and potential for violence does not implicate CEQA. Saltonstall’s argument focuses on a social issue for which no environmental effect is described. Mere speculation about possible crowd violence and its possible effect on the environment does not compel EIR review.

Saltonstall may not raise the issue of the 62, 000 e-mail communications she requested from the City under the California Public Records Act (Public Records Act) (Gov. Code, § 6250 et seq.). Review of trial court orders on Public Records Act motions may be made only by writ petition, not by direct appeal. As to the Dangberg-Friedman e-mail and the loan forgiveness report, we deem Saltonstall’s argument forfeited for lack of any analysis of how these documents might meet the definition of documents to be included in the administrative record under the Public Resources Code.

Accordingly, we affirm (1) the judgment dismissing Saltonstall’s challenge to the sufficiency of the City’s EIR and approval of the downtown arena project, and (2) the trial court’s order denying her motion to augment the administrative record.


The Downtown Arena Project

Since 1988, the Sacramento Kings have been playing at the Sleep Train Arena (formerly named the Arco Arena). At the time of its opening, the Sleep Train Arena was the smallest arena in the NBA by square footage and the second smallest in terms of seating capacity. Studies and proposals to replace the Sleep Train Arena with another location in Sacramento have been ongoing since the late 1990s.

In 2012, the City developed a preliminary term sheet with the previous owners of the Sacramento Kings to build a multi-purpose facility near downtown Sacramento in a section called the “Railyards.” The parties were unable to reach an agreement, and the previous team owners broke off discussions with the City.

In January 2013, the previous owners entered into an agreement to sell the Sacramento Kings to an investor group in Seattle, Washington. The NBA announced it would address the issue of the Sacramento Kings’ proposed sale and relocation at a meeting scheduled for April 2013. When news of the

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proposed sale became public, the City worked with members of the public to find a new, local investor group to acquire the team and ensure the team would remain in Sacramento. In February 2013, the city council authorized the city manager to engage in negotiations with prospective investor groups to prepare preliminary terms for city council consideration of a plan to keep the team in Sacramento.

On March 1, 2013, an investor group that became Sacramento Basketball Holdings presented a plan to the NBA to acquire the Sacramento Kings, construct a new downtown arena in partnership with the City, and keep the team in Sacramento on a long-term basis. On March 26, 2013, the city council approved a preliminary nonbinding term sheet for development of a new ESC in downtown Sacramento at the site of the Downtown Plaza, a shopping mall with declining occupancy rates. The preliminary nonbinding term sheet listed issues for resolution that included the preferred location, financing, ownership, design, construction, operation, and occupancy for a new downtown arena.

The term sheet also included a disclaimer that the City had no obligation to build, finance, or approve the project until it completed its environmental review and secured all necessary permits for the project. The preliminary nonbinding term sheet further stated the City retained sole discretion to weigh the environmental consequences and to reject the project entirely.

In May 2013, the board of governors for the NBA approved the sale of the Sacramento Kings to Sacramento Basketball Holdings. However, the NBA’s board of governors reserved the right to acquire the Sacramento Kings and relocate the team to another city if a new arena in Sacramento does not open by 2017.

Downtown Arena Design

The downtown arena project involves demolition of a portion of the Downtown Plaza, located at the 600 block of K Street in Sacramento and bounded by J Street to the north, L Street to the south, 7th Street to the east, and 4th Street to the west. In place of that portion of the Downtown Plaza, the City and Sacramento Basketball Holdings plan to construct a 17, 500-seat ESC along with approximately 1.5 million square feet of related retail, commercial, office, and residential development. The project will include as many as 250 new hotel rooms and 550 residential units. Also as part of the project, the City will transfer ownership of six off-site municipally owned digital billboards along with certain other City-owned properties to Sacramento Basketball Holdings.

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The downtown arena has been designed to meet the requirements of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Gold certification. Among the downtown arena’s environmental design goals are: carbon neutrality, reduction of per-attendee-vehicle miles travelled, and reduced greenhouse gas emissions. Urban design goals include plans to spark redevelopment of the downtown area with an influx of basketball game and concert event attendees to the arena.

The demolition and construction schedule targets the opening date for the downtown arena for October 2016 to meet the NBA’s deadline for keeping the basketball team in Sacramento.

Section 21168.6.6

On September 27, 2013, Governor Brown signed Senate Bill No. 743 (2013-2014 Reg. Sess.), which among other things, added section 21168.6.6 to the Public Resources Code. (Stats. 2013, ch. 386, § 7.) Section 16 of Senate Bill No. 743 “declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique need for the development of an entertainment and sports center project in the City of Sacramento in an expeditious manner.” Section 21168.6.6 modifies several CEQA deadlines specifically for the project to build the downtown arena in Sacramento.

Section 21168.6.6 does not change CEQA’s standards for required content of the EIR or approval for the project. Instead, section 21168.6.6 provides an accelerated timeline of events along with provisions intended to facilitate expedited CEQA review such as: preparation of documents in electronic format, making the administrative record readily accessible to the public online, mediation of issues among the parties, and a series of informational workshops to be held by the City.

In addition to imposing accelerated deadlines on the City as the lead agency for the project, subdivision (d) of section 21168.6.6 required the Judicial Council, by July 1, 2014, to adopt a rule to facilitate the completion of judicial review of the downtown arena project’s compliance with CEQA within 270 days, if feasible.

The City’s Review and Approval of the Downtown Arena Project

Consistent with the deadlines set forth in section 21168.6.6, the City engaged in an expedited environmental review process. The City issued a

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notice of preparation of the EIR on April 12, 2013. The draft EIR was completed and posted on the City’s Web site on December 16, 2013. Two days later, the documents relied upon by the City in preparing the draft EIR were also posted online. The City conducted an informal public workshop regarding the draft EIR on December 18, 2013, and a public hearing on January 23, 2014, before the close of public comments. All documents related to the project prepared by the City or submitted by Sacramento Basketball Holdings after the release of the draft EIR were posted on the City’s Web site within three business days of the document’s preparation or receipt by the City.

As required by section 21168.6.6, the City engaged in mediation with several interested parties (including Saltonstall’s attorney) in February 2014 to address issues regarding the draft EIR. The City completed and posted on its public Web site the final EIR for the project on May 9, 2014. The Sacramento City Council certified the final EIR and approved the project on May 20, 2014. Demolition of the shopping mall began in summer 2014.

Saltonstall’s Motion for Preliminary Injunction

The day after the City certified the final EIR and approved the project, Saltonstall filed a petition for writ of mandate in which she alleged the City violated CEQA by certifying the final EIR and that section 21168.6.6 violates the California Constitution. In the petition, Saltonstall requested a preliminary injunction, declaratory relief, and attorney fees.

The City filed its notice of determination on May 27, 2014, and certified the administrative record on June 2, 2014.

On June 10, 2014, Saltonstall filed a motion for preliminary injunction to stay demolition of the Downtown Plaza, reiterating her contentions that the City violated CEQA by certifying the final EIR and section 21168.6.6 is unconstitutional because it imposes unrealistically short deadlines on the courts to resolve issues related to construction of the downtown arena. The City and Sacramento Basketball Holdings opposed the motion. The trial court denied the motion for preliminary injunction, and Saltonstall appealed. (Saltonstall I, supra, 231 Cal.App.4th 837.)

In Saltonstall I, we concluded section 21168.6.6 does not materially impair a core function of the courts in a manner that violates separation of powers under the California Constitution, and Saltonstall had not demonstrated any error in the trial court’s denial of her request for a preliminary injunction to stop the project. (Saltonstall I, supra, 231 Cal.App.4th at pp. 852, 855, 856.)

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The Trial Court’s Rejection of CEQA Challenges

On October 10, 2014, the trial court held a hearing on the merits of Saltonstall’s CEQA challenge as well as another CEQA challenge brought in a related action by the Sacramento Coalition for Shared Prosperity.[3] On October 17, 2014, the trial court issued a decision denying the CEQA challenges. As pertinent to this appeal, the trial court made the following determinations:

Premature commitment.

The trial court found the City did not approve the project before concluding its EIR review. The preliminary nonbinding term sheet entered into by the City and Sacramento Basketball Holdings did not create an enforceable contract between the parties. Although the City acquired property at its preferred site for the downtown arena, the property acquisition did not foreclose any mitigation measures or alternatives required by CEQA. As the trial court found, “Prior to completing its environmental review of the Project, the City took steps to acquire possession of the Macy’s East and Crocker Museum properties.” As to the Crocker Museum property, the trial court noted that “[a]s a technical matter, the Crocker Museum transaction involved the City’s forgiveness of a $7.5 million loan to the Crocker Art Museum in exchange for the Museum’s relinquishment of any and all claims related to City Parking Lots X and Y.” The trial court concluded Saltonstall “failed to show that the City’s acquisitions of the Macy’s East and Crocker Museum properties precluded consideration of any mitigation measures or alternatives that CEQA otherwise required to be considered.”

Failure to consider remodeling the current Sleep Train Arena.

The trial court rejected Saltonstall’s contention that the City violated CEQA by failing to study the alternative of remodeling the current Sleep Train Arena. As the trial court noted, the City studied a no project option in which the current arena would continue to operate as presently configured and an option that involved building a new arena near the existing Sleep Train Arena in Natomas. The trial court recounted that Saltonstall asserted it was “‘absurd’ for the City to claim the impacts of remodeling the existing arena would be similar to the impacts of building a new arena in the same location.” As the trial court summarized, Saltonstall sought “to have the City analyze the impacts of making minor, cosmetic upgrades to the existing arena, which they claim, is ‘perfectly fine’ and ‘continues to function perfectly.’ ” The trial court rejected the claim because, “from the City’s perspective, [Saltonstall’s] proposal is not an alternative to the Project, it is a different project and would defeat the City’s core project objectives.” The trial court also noted it was not

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“absurd for the City to conclude that the impacts of a major overhaul for the existing arena would be similar to the impacts of building a new arena.” The trial court agreed with the City that anything less than a new arena would not satisfy the City’s objectives of “developing a ‘state-of the art’ and ‘world class’ entertainment and sports center that is ‘the country’s most technologically innovative and advanced entertainment venue.” That was because the existing arena is “‘an old and outmoded facility.’”

Failure to properly analyze the project’s traffic impact on I-5.

The trial court rejected an argument that the City conducted a faulty traffic analysis by underestimating the number of attendees for the downtown arena. The EIR’s traffic analysis was based on the arena’s 17, 500 maximum capacity. Although 1, 000 to 2, 000 additional ticketed attendees might be accommodated in standing-room-only spaces, the record demonstrates such super-capacity crowds occur only 0.3 percent of the time among events sampled throughout the country. Thus, the arena’s maximum seated capacity served as a reasonable number for studying the traffic impact of the project. The trial court deemed an inadvertently omitted traffic mitigation measure to be part of the City’s adopted mitigation measures.

The trial court rejected Saltonstall’s contention that the City failed to properly assess the impact of the project on nearby I-5. On this point, the trial court found the administrative record supported the conclusion that “[t]he EIR adequately addresses the Project’s freeway impacts. The EIR acknowledges that the Project will cause significant impacts on the freeways and that, although payment of a fair share contribution would assist in mitigating the Project’s impacts, payment of the fee does not ensure that the Project’s impacts will be fully mitigated. The City, having determined that the Project’s freeway impacts are significant and unavoidable, adopted a Statement of Overriding Considerations.”

The City’s response to EIR comments acknowledged the traffic impact will be significant and unavoidable even with the payment of a fair share of mitigation measures by the project applicant. Nonetheless, the City noted Caltrans's (Department of Transportation) comment on the proposed traffic mitigation measures expressed Caltrans’s support for the proposed traffic management plan.

Failure to properly analyze crowd safety.

The trial court rejected Saltonstall’s argument that the City failed to properly analyze impacts to public safety from post-event crowds. The trial court concluded that “[s]peculation about potential crowd violence is not an impact that was required to be analyzed or mitigated as part of the EIR. (See [Guidelines], § 15064(d)(3).)” Moreover, the trial court ...

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