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Banning Ranch Conservancy v. City of Newport Beach

Supreme Court of California

March 30, 2017

Banning Ranch Conservancy Plaintiff and Appellant,
City of Newport Beach et al., Defendants and Appellants; Newport Banning Ranch LLC et al., Real Parties in Interest and Appellants.

         Superior Court Orange County, Ct.App. 4/3 G049691 No. 30-2012-00593557 Robert Louis Becking, Temporary Judge [*], Nancy Weiben Stock and Kim Garlin Dunning Judge

          Leibold McClendon & Mann, John G. McClendon, Douglas M. Johnson and David H. Mann for Plaintiff and Appellant.

          The Law Office of Julie M. Hamilton, Julie M. Hamilton and Leslie Gaunt for Friends of the Canyon as Amicus Curiae on behalf of Plaintiff and Appellant.

          Law Offices of Stephan C. Volker, Stephan C. Volker, Alexis E. Krieg and Daniel P. Garrett-Steinman for North Coast Rivers Alliance as Amicus Curiae on behalf of Plaintiff and Appellant.

          Lisa T. Belenky; Coast Law Group and Marco Gonzalez for Center for Biological Diversity, California Native Plant Society and Coastal Environmental Rights Foundation as Amici Curiae on behalf of Plaintiff and Appellant.

          Aaron Harp, City Attorney, Leonie Mulvihill, Assistant City Attorney; Remy Moose Manley, Whitman F. Manley and Jennifer S. Holman for Defendants and Appellants.

          Joshua P. Thompson and Christopher M. Kieser for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and Appellants.

          The Sohagi Law Group, Margaret M. Sohagi, Nicole H. Gordon and R. Tyson Sohagi for League of California Cities and California State Association of Counties as Amici Curiae on behalf of Defendants and Appellants.

          Thomas Law Group and Tina Thomas for California Infill Builders Federation as Amicus Curiae on behalf of Defendants and Appellants.

          Kamala D. Harris, Attorney General, John A. Saurenman, Assistant Attorney General, and Jamee Jordan Patterson, Deputy Attorney General, for California Coastal Commission as Amicus Curiae.

          Corrigan, J.

         The City of Newport Beach (the City) approved a project for the development of a parcel known as Banning Ranch. Banning Ranch Conservancy (BRC) opposed the project and sought a writ of mandate to set aside the approval. It alleged two grounds for relief: (1) the environmental impact report (EIR) was inadequate, and (2) the City violated a general plan provision by failing to work with the California Coastal Commission (Coastal Commission) to identify wetlands and habitats. The trial court found the EIR sufficient, but granted BRC relief on the ground that the general plan required the City to cooperate with the Coastal Commission before approving the project.

         The Court of Appeal agreed that the EIR complied with the requirements of the California Environmental Quality Act (CEQA).[1] However, it reversed on the general plan issue, accepting the City's argument that the plan would be satisfied if the City worked with the commission after project approval, during the process for obtaining a coastal development permit.

         In this court, the parties have briefed and argued both the general plan and CEQA questions. The CEQA dispute centers on whether an EIR must identify areas that might qualify as environmentally sensitive habitat areas (ESHA) under the California Coastal Act of 1976 (Coastal Act; § 30000 et seq.), and account for those areas in its analysis of project alternatives and mitigation measures. We hold that CEQA so requires. The City's EIR is inadequate because it omitted any consideration of potential ESHA on the project site, as well as ESHA that were already identified. Because BRC is entitled to relief on its CEQA claims, we need not address the general plan issues.

         I. BACKGROUND

         A. Banning Ranch, the General Plan, the Coastal Land Use Plan, and ESHA

         Banning Ranch is a privately owned 400-acre tract of largely undeveloped property, containing both oilfield facilities and wildlife habitat. Significantly, it lies in the coastal zone that the Legislature has designated for special protection under the Coastal Act. (§ 30001.5.) Most development in the coastal zone requires a coastal development permit. (§ 30600.)

         Although most of Banning Ranch is in unincorporated Orange County, all of it falls within the City's “sphere of influence” for zoning and planning purposes. (See Gov. Code, § 56425 et seq.) The City's general plan sets out two alternative goals for the area. The preferred option is community open space, with development limited to nature education facilities and a park. The second alternative would allow construction of up to 1, 375 residential units, 75, 000 square feet of retail facilities, and 75 hotel rooms. As to both alternatives, the plan calls for consolidating the oil operations and restoring wetlands and wildlife habitats. A general plan “strategy” titled “Coordination with State and Federal Agencies” requires the City to “[w]ork with appropriate state and federal agencies to identify wetlands and habitats to be preserved and/or restored and those on which development will be permitted.” (City of Newport Beach, General Plan (July 2006) ch. 3, Land Use Element, p. 3-76.)

         In addition to having a general plan, every local government in the coastal zone must submit a local coastal program for Coastal Commission approval. The program consists of a coastal land use plan (CLUP) and implementing regulations. The CLUP may be completed first, with regulations developed later. (Yost v. Thomas (1984) 36 Cal.3d 561, 566; § 30500.) The City had yet to enact its regulatory component, or to adopt procedures for issuing coastal development permits, and thus did not have a certified local coastal program. (See § 30600, subd. (b)(1).) Accordingly, the Coastal Commission exercised permitting authority over development on Banning Ranch. (See § 30600, subd. (c).)

         The City did have a certified CLUP, but chose to exclude Banning Ranch from its scope. The general plan explains that “Banning Ranch is a Deferred Certification Area... due to unresolved issues related to land use, public access, and the protection of coastal resources.” (City of Newport Beach, General Plan, supra, ch. 13, Implementation Program, p. 13-8.) The CLUP defines ESHA in the same terms as section 30107.5 of the Coastal Act: “any area in which plant or animal life or their habitats are either rare or especially valuable because of their special nature or role in an ecosystem... which could be easily disturbed or degraded by human activities and developments” is an environmentally sensitive habitat area. (City of Newport Beach, Local Coastal Program (Dec. 13, 2005) Coastal Land Use Plan, 4.1.1, p. 4-1.) The CLUP sets out criteria for identifying ESHA and establishes a presumption, rebuttable by “site-specific evidence, ” that areas meeting those criteria are ESHA.

         The Coastal Act specifies that “[e]nvironmentally sensitive habitat areas shall be protected against any significant disruption of habitat values, and only uses dependent on those resources shall be allowed within those areas.” (§ 30240, subd. (a).) “Development in areas adjacent to environmentally sensitive habitat areas... shall be sited and designed to prevent impacts which would significantly degrade those areas, and shall be compatible with the continuance of those habitat... areas.” (§ 30240, subd. (b).)

         B. The Proposed Development and the Early Identification of ESHA

         The City was unable to raise the funds to buy Banning Ranch for open space. In August 2008 Newport Banning Ranch LLC (NBR) submitted a proposal for a residential and commercial village reaching the maximum levels of development permitted by the general plan. At the City's request, the proposal included a report on “the extensive field survey work” by NBR's biological consultant “on potential special status habitats (potential ESHA).” The proposal explained that the project was designed to avoid all areas of ESHA as defined by the CLUP, with one exception. A major access road would have unavoidable impacts on 0.06 acre of potential scrub ESHA and 0.02 acre of potential riparian ESHA. These impacts would be fully mitigated. A map included in the biological report showed numerous potential ESHA throughout Banning Ranch.

         The City was not satisfied with NBR's proposed road network. Banning Ranch is bordered by the Santa Ana River and other wetland areas to the west, and by 19th Street to the north. (For a map of the area, with the roadway plan ultimately approved by the City, see appen. A.) West Coast Highway, which runs along the coastline, forms the southern boundary. The eastern boundary is intersected or approached by 15th, 16th, 17th, and 18th Streets. The southeastern corner of the site is bordered by Sunset Ridge Park, a separate City project that was in progress at the time of NBR's proposal. NBR's plans called for a new “Bluff Road, ” running north from the highway and curving east to meet 15th Street, with another segment extending northward. The Orange County master plan of arterial highways (MPAH) envisioned Bluff Road as a six-lane divided road running north and south through the eastern portion of Banning Ranch, connecting 19th Street with the highway. However, NBR proposed to omit the segment between 19th and 17th streets in order to limit ESHA impacts. It contemplated amending the MPAH to reflect this change.

         The mayor and city council wanted Bluff Road to run all the way to 19th Street. NBR submitted a revised plan, saying it would accommodate the “road circulation network requested by the City of Newport Beach as a public benefit.” NBR's biological consultant pointed out that the changes “would significantly impact scrub, wetlands, and riparian habitat that would be considered [ESHA] pursuant to the City's [CLUP] as well as the California Coastal Act.... It is important to note that impacts to ESHA are prohibited [by the] California Coastal Act except for certain allowable uses, and the proposed connectors would be problematic to the California Coastal Commission.”

         Under CEQA, the “lead agency” is “the public agency which has the principal responsibility for carrying out or approving a project.” (§ 21067.) As lead agency for the NBR project, the City was responsible for preparing an EIR. (See § 21100, subd. (a).) The process entails circulation of a notice of preparation, followed by draft and final EIRs. The public may submit comments on the notice of preparation and the draft EIR. (Cal. Code Regs., tit. 14, §§ 15082, 15087, 15089.)[2]

         The City retained its own environmental consultant. In March 2009, it gave notice that it would prepare a draft EIR for the Banning Ranch project. The notice stated that the project “includes areas that may be defined and regulated under the California Coastal Act... as either wetlands or environmentally sensitive habitat areas (ESHAs).” The notice also explained that because the City did not have a certified local coastal program, it could not issue coastal development permits for the project. If the City approved the project plans, NBR would apply for a coastal development permit from the Coastal Commission.

         A number of public comments on the notice mentioned the need to identify ESHA in the EIR. The City of Costa Mesa suggested that “[g]iven the significance of the project site, the EIR should consider the Coastal Commission thresholds for impacts to wild life and endangered species.” A consultant and a board member for BRC, the group that eventually brought this lawsuit, also urged the City to use Coastal Commission standards to assess ESHA on the site. Another BRC member commented that the proposed Bluff Road extension crossed ESHA, and would not be approved by the commission.

         In April 2009, Coastal Commission staff learned that vegetation had been cleared from three areas on Banning Ranch without a coastal development permit. Investigation disclosed that NBR had leased portions of its property to a contractor doing utility work. The contractor cleared the areas and used them for parking and storage. In September and December 2010, the City and NBR representatives visited the sites with a Coastal Commission ecologist to determine the extent of the unpermitted activity and its impacts. The ecologist decided that two cleared areas, one on Banning Ranch and one straddling the boundary between the ranch and City property, met the ...

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