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Cleveland National Forest Foundation v. County of San Diego

California Court of Appeals, Fourth District, First Division

July 25, 2019

CLEVELAND NATIONAL FOREST FOUNDATION et al., Plaintiffs and Appellants,
COUNTY OF SAN DIEGO, Defendant and Respondent GENESEE PROPERTIES, INC. Real Party in Interest and Respondent.

          APPEAL from a judgment of the Superior Court of San Diego County No. 37-2016-00041519-CU-TT-CTL, Judith F. Hayes, Judge. Reversed and remanded with directions.

          Shute, Mihaly & Weinberger and Catherine C. Engberg, Gabriel M.B. Ross, Marlene Dehlinger; Coast Law Group and Marco Antonio Gonzalez for Plaintiffs and Appellants.

          Lounsbery Ferguson Altona & Peak and Jacqueline Suzanne S. Vinaccia for Defendant and Respondent.

          Allen Matkins Leck Gamble Mallory & Natsis and Jeffrey A. Chine for Real Party in Interest and Respondent.

          O'ROURKE, J.

         Real party in interest and respondent Genesee Properties, Inc. (Genesee) sought tentative map approval from respondent County of San Diego (the County) for a 24-lot subdivision on 1416.5 acres of land in San Diego County known as the Hoskings Ranch (the property). The property is within a County-designated agricultural preserve and a majority of it is subject to a Williamson Act (also known as the California Land Conservation Act of 1965; Gov. Code,[1] § 51200 et seq.) contract requiring that the land be restricted to agricultural and compatible uses. The County Board of Supervisors (the Board) adopted a resolution conditionally approving the tentative map, finding in part that the subdivision "will not result in residential development not incidental to the commercial agricultural use of the land" pursuant to section 66474.4 of the Subdivision Map Act (§ 66410 et seq.; the Map Act). Plaintiffs and appellants Cleveland National Forest Foundation and others (collectively, Cleveland)[2] unsuccessfully petitioned for a writ of mandate, as well as injunctive and declaratory relief, challenging the legality of the Board's approval. On appeal, Cleveland contends the County's approval of the tentative map violates section 66474.4 and undermines the Williamson Act by permitting a residential, rather than agricultural, subdivision on the property and giving the property developers a valuable residential entitlement while they are still receiving a taxpayer subsidy intended for those who maintain the land in agricultural or compatible nonurban uses.

         The County and Genesee jointly respond first that Cleveland's failure to exhaust administrative remedies effectively negates the appeal, and that Cleveland has improperly raised new arguments that it did not make in the trial court during the administrative process. They argue the subdivision complies with the Map Act, Cleveland has not overcome the legal presumption that the project will sustain agricultural uses, and substantial evidence otherwise supports the Board's findings.

         Construing section 66474.4 in keeping with the land preservation goals and intent of the Williamson Act, whose principles the Legislature incorporated into that section, we conclude the Board's finding is not supported by substantial evidence in light of the whole record. As a result, the County's conditional approval of the proposed tentative map does not comply with the Map Act, and constitutes an abuse of discretion. We reverse the judgment and remand with directions set forth below.


         The property is located on 1416.5 acres of land in an unincorporated area of east-central San Diego County, approximately one mile southwest of the town of Julian.[3] It is within a County-established agricultural preserve (the Pine Hills-Boulder Creek agricultural preserve No. 28). An agricultural preserve is "an area devoted to either agricultural use, ..., recreational use..., or open-space use..., or any combination of those uses." (§ 51201, subd. (d).) The property has undeveloped steep slopes and rolling hills that at previous times had been used for cattle grazing. There is no indication the property has been subjected to agricultural uses such as tilling and plowing.

         Approximately 1291.5 acres of the property is subject to a Williamson Act contract (and amendments) requiring that the premises "shall not be used for any purposes other than agricultural uses or compatible uses" and prohibiting subdivision unless it meets specified requirements.[4] The contract requires 40-acre minimum lot sizes on all but 161 acres, and 160-acre minimum lots on the remaining 161 acres. The Williamson Act is intended to conserve agricultural land by having local government establish and regulate agricultural preserves and execute land conservation contracts with landowners restricting the owners' uses. (Sierra Club v. City of Hayward (1981) 28 Cal.3d 840, 851, superseded by statute on other grounds as stated in Friends of East Willits Valley v. County of Mendocino (2002) 101 Cal.App.4th 191, 204-205; County of Humboldt v. McKee (2008) 165 Cal.App.4th 1476, 1481.) "In return for accepting restrictions on the land, the landowner is 'guaranteed a relatively stable tax base, founded on the value of the land for open space use only and unaffected by its development potential.'" (County of Humboldt, at pp. 1481-1482; see Sierra Club, at p. 851.) When land is subject to a Williamson Act contract, a legislative body "shall deny approval of a tentative [subdivision] map... if it finds that either the resulting parcels following a subdivision of that land would be too small to sustain their agricultural use or the subdivision will result in residential development not incidental to the commercial agricultural use of the land...." (§ 66474.4.)

         A. 2003 Tentative Map Application

         Genesee first applied for a tentative map in May 2003, proposing a 33-lot subdivision with lot sizes between 40 and 62 acres. Both the County's Planning Commission (the Commission) and the then Department of Planning and Land Use (the Department; now Planning and Development Services) recommended the application be denied based on section 66474.4. Observing that cattle grazing operations had ceased several years earlier because it was not economically viable, the Commission and Department found no basis to determine the contemplated residential development would be "merely 'incidental to the commercial agriculture....'" The Department had asked the California Department of Conservation to review the project. That agency concluded the proposed subdivision was inconsistent with the Williamson Act contract; it observed the notice of preparation did not ascribe any agriculture purpose but described earthwork for graded pads, access roads, and private drives, as well as extensions for utilities with wells and septic systems. The Department of Conservation specifically addressed and rejected the assertion that the Map Act allowed the subdivision, reasoning residential development was not the purpose of the subdivision nor was it incidental to agriculture use: "The subdivision will presumably allow at least one homesite on each new parcel. The Department cannot envision a scenario wherein such an increase in residential development would be incidental to the commercial agricultural use of the l, 416.5-acre property. In addition, the subdivision will reduce economies of scale and make the commercial viability of livestock use on 40 to 62 acre parcels impractical. Therefore, the Department concludes that the subdivision would result in residential development not incidental to the agricultural use of the land, and the tentative map must be denied pursuant to [section] 66474.4."

         At the September 2006 Board hearing on the matter, Genesee relied on a Williamson Act presumption that minimum 40-acre lots were adequate for agricultural use. It also represented that it had proposed a "no-build" concession to staff, namely, it would agree not to build any houses while the Williamson Act contract was in effect. Its representative pointed to small two-to-20-acre winery and orchard farming operations in the Julian area that were "operationally viable," stating such opportunities existed on the property as well. Genesee asked to continue to work with staff on the matter. Rather than deny the application, the Board voted to continue the item and directed staff to work with Genesee, continue processing the project, and bring it back when they resolved the issues.

         B. The Renewed Tentative Map Application

         Genesee and County staff continued discussions in 2006, 2007 and 2008. In 2008, Genesee submitted an agricultural capacity analysis and proposed a condition for an easement requiring agriculture to be established before issuance of a residential building permit. The Department continued to advise Genesee that the creation of new lots under that proposal would not meet Williamson Act requirements absent any active agricultural operation. It required Genesee to establish active agriculture on the property, and within specified time periods provide evidence that an active, legal primary agricultural use had been established on the land. At some point, Genesee prepared a "screencheck" draft Environmental Impact Report (DEIR) pursuant to the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.).

         In 2009 and 2011, the County continued to identify the Map Act issue as a major project issue, stating based on the DEIR and agricultural analysis that insufficient evidence demonstrated the primary use of the property would be agriculture. It stated there was no current agriculture in existence nor was there any guarantee that agriculture would be established on the project site by future residents, and it was unclear whether adequate groundwater was available to support both agricultural and residential use. The County suggested Genesee had two options: either cancel the Williamson Act contract or file a notice of nonrenewal, after which it would withdraw the project, wait ten years for the nonrenewal, and reapply when the property was no longer subject to that contract. The DEIR was circulated for public comment in 2013. Cleveland did not submit comments.

         In November 2015, the County circulated a final EIR including the County's responses to comments received on the DEIR. The final EIR identified the project as a proposal for a 24-lot subdivision with minimum 40-acre lot sizes, with each lot including "active agriculture"-managed cattle grazing/breeding-and a residence. The final EIR explained that the property had one cattle loading chute and a related corral near its northeast corner. According to a traffic study, the "rancher lives off site," making "on average two trips per week to the site for agricultural purposes." The final EIR described the Williamson Act and Map Act issues as "areas of controversy" that the County would have to resolve. It left it to the County to decide whether the project was consistent with Williamson Act requirements or to adopt another alternative to the project.

         The final EIR included both an agricultural study as well as a "lot-by-lot" analysis for agricultural capacity. The agricultural study pointed out that while the project did not propose construction "at this time," it did propose preliminary grading for pads and roads. That study assessed the significance of the site's agriculture resources under a standardized model (the Local Agricultural Resource Assessment or LARA model) looking at factors including water, climate, soil quality, and slope. It also discussed the Williamson Act and the project's conformance with agricultural policies including the Board's agricultural preserve policy (Policy I-38) for implementing the Williamson Act.[5] The study determined that while "[t]he project has been designed to encourage agricultural operations on each parcel, thereby preserving the entire site in potential agriculture" the site was "not an important agriculture resource" partly due to the absence of imported water infrastructure connections to the site and the fact it "would likely be reliant on a limited groundwater resource for the foreseeable future." Nevertheless, the study concluded the project "support[ed] existing and continued agricultural operations onsite," and did not conflict with the Williamson Act contract, stating it met the 40-acre minimum parcel size for an agricultural preserve and required agricultural use of each parcel via the continued cattle grazing.

         The lot by lot analysis identified the "agricultural potential" for each parcel by area, soil types, topography, and "suitable types of agriculture." In response to comments on the final EIR, however, the County made clear Genesee was not proposing other types of agricultural activities beyond grazing to support its subdivision: "No agriculture other than cattle grazing/breeding is proposed in the open space areas of the site. Agricultural activities beyond grazing were discussed in the Lot by Lot Analysis as a way to show that lot owners would have realistic options if they chose to initiate agriculture in their development areas. These are not proposed and only cattle grazing/breeding will be allowed in the open space." The County stated that "[v]ineyards and orchards are not used to support the argument that there is a viable agricultural use on the site." The County also responded to criticism that the proposed residences were not for housing cowhands or ranchers, but were "intended for individuals to enjoy 'country' amenities while commuting elsewhere for their livelihoods." It stated: "The Proposed Project anticipates residents who want to be part of an ongoing agricultural activity and who appreciate the rural feel of such a setting. They will be able to participate in the operation without day to day involvement, as might be dictated by a gentleman farmer model. As such they may be retired, may work elsewhere, or may pursue additional agricultural activities within their development area. The important point is to preserve open space and agriculture and the rural feeling of the area, which the Proposed Project accomplishes. Residents will have the option to fence their development area from the grazing area, as needed." The County stated the Williamson Act contract provisions were met because the project had 40-acre lots and continued the required agricultural activity of cattle grazing and breeding.

         The matter came before the Commission in February 2016.[6] The Commission considered the tentative map as well as a request to amend the Williamson Act contract's minimum acreage requirements from 160 to 40 acres for a portion of the property. A County representative stated that based on the proposed agricultural easement, approximately 1200 acres of the property were available for agricultural uses and "204 developable acres would be incidental to agriculture," rectifying any conflict between the Williamson Act and the Map Act. Cleveland's representative expressed his view that the amendment reversed the idea of an agricultural preserve in which the policy was that "housing is incidental to the agricultural open space." Other residents voiced their objections to the subdivision; one complained that the only new agricultural use was the grazing of 40-to-60 head of cattle generating 400 to 600 dollars a month in income to the owner, who obtained a $37, 000 property tax reduction. That resident asserted it was "not incidental to agriculture to build major residences which will go onto this property."

         The Commission recommended approval, determining that the proposed tentative map met Williamson Act and Map Act requirements. Its report states: "The applicant established between 40 and 60 cattle for grazing and breeding. Cattle grazing and breeding is considered an agricultural use. The proposed project would preserve this agricultural use on the site so that it remains ongoing and so the use continues subsequent to the proposed construction of single family homes. Future homeowners would also have the opportunity and could elect to conduct additional agricultural uses on the proposed lots as well." The Commission observed the proposal included a grazing management plan in which grazing and breeding would be managed by a qualified rancher and an agricultural easement condition benefitting the County to preserve agricultural uses within the site.[7] Among other things, the easement, which permitted the County to enforce use restrictions against current and future owners, would allow cattle to roam across all lots and portions of the site. The Commission stated that the plan and easement would "ensure compliance" with the Williamson Act and Map Act requirements.

         In October 2016, the Board held a public hearing at which it took written and oral testimony and considered recommendations from public agencies as well as interested parties. Cleveland submitted letters before the hearing in which it argued, among other things, that the project was inconsistent with the Williamson Act and the Map Act. Genesee's counsel stated he felt opponents and some members of the public incorrectly believed that Williamson Act property could not be subdivided. He asserted the subdivision complied with the Williamson Act because the lots were an average of 59 acres in size with 85 percent of the property in permanent open space; Genesee had agreed to the easement mandating agricultural use; and after the Commission hearing, Genesee had agreed to prohibit the construction of residential dwellings during the life of the Williamson Act contract.[8] The Board considered commentary from Cleveland's representative and other Julian residents opposed to the proposal.

         Thereafter, the Board adopted a resolution conditionally approving the tentative map. The tentative map includes a preliminary grading plan showing building pads, leach fields and driveways. Some of the conditions relate to public and private road improvements, homeowner wildlife education, and fire protection measures including requirements for roofs, eaves, balconies, habitable structures and garages. On the Williamson Act and Map Act issues, the Board found (1) the resulting parcels following the proposed subdivision, which ranged from 40.1 to 196 acres, would not be too small to sustain their agricultural use; and (2) the subdivision would not result in a residential development not incidental to the commercial agricultural use of the land. The resolution states: "The current agricultural uses of the property, including cattle grazing and breeding, will continue on all parcels following the subdivision. Moreover, the subdivision will create unique farming opportunities, in addition to the existing cattle grazing and breeding, on each of the resulting parcels.... San Diego County's largest growth in farms since 1982 has been in small farms of nine or fewer acres.... Julian has a vibrant small farming community and is an agritourism destination, famous for apples and apple pies. Small farms such as those proposed by the Project provide opportunities for the production of apples, apple cider, small boutique wineries and 'you pick' operations (particularly apples and berries), among other farming operations, to support the existing agritourism destination of Julian."

         As to whether the subdivision would lead to residential development incidental to commercial agriculture use, the Board stated: "Neither the Williamson Act... nor the County... define the term 'incidental' for purposes of Government Code section 66474.4. The common legal definition of the term is: 'Subordinate to something of greater importance, having a minor role.' (Black's Law [Dict. (7th ed. 1999)] p. 765.) The predominate feature of the Project is the establishment in perpetuity of extensive natural resources in open space, the continuing agricultural grazing and breeding operations facilitated by the Project design, as well as areas established on each parcel (averaging 8.35 acres) intended to support small scale agricultural and farming operations.... Of the 1, 416.5 acres which comprise the Project, 1, 204.1 acres are preserved in perpetuity as open space. Such open space is recognized as an agricultural use by the Williamson Act..., the County Historic General Plan ([Open Space Element]..., and Board Policy 1-38.... A Declaration of Restrictions will be recorded to prohibit the construction of residential dwellings, during the term of the Williamson Act Contract. The Declaration of Restrictions may be enforced by the County under its authority to require the removal of any residential dwellings built in violation of the restriction."

         The Board also found the proposed subdivision consistent with the applicable County land use plan, including the open space element, which defined agricultural use as" 'use of the land for purpose (sic) of producing agricultural commodities for commercial purposes.'" Its findings on this point provide: "Open space 'means the use of the land to preserve its natural characteristic beauty, or openness for the benefit of the public, if such land is in a scenic highway corridor, [or] a wildlife habitat.' The Project does and will continue to produce agricultural commodities (cattle) for commercial purposes, and will facilitate further agricultural production on individual lots by providing ample development areas on each lot for small scale commercial farming. The Project preserves 1, 204.1 acres in protected resource open space in perpetuity[, ] is in the viewshed of a scenic highway, ... and lies within a range of wildlife habitats of biological value.... The Project therefore meets the definition of an agricultural use and satisfies the requirements of an agricultural preserve by supporting cattle grazing/breeding, preserving in perpetuity 1, 204.1 acres in resource open space, and making available individual farming opportunities on each lot. It is therefore consistent with and will continue to be consistent with the requirements of an agricultural preserve."

         C. Legal Challenge and Court's Ruling

         Cleveland filed a verified petition for writ of mandate and a complaint for injunctive and declaratory relief. In part, it alleged the County's approval of the tentative map for the 24-lot residential subdivision violated the Williamson Act and the Map Act's prohibition on residential subdivision of contracted land, and that the respondents erred by finding the resulting residential development was incidental to the commercial agricultural use of the land. It asked the trial court to take judicial notice of select items of legislative history for 1985 and 1999 amendments to section 66474.4.

         The trial court denied the petition. Assessing the Board's approval for substantial evidence and reviewing the underlying purposes of the Williamson Act, it found substantial evidence in the record supported the Board's finding that the project was "an agricultural subdivis[ion] and not a residential development." Specifically, the court ruled that the project changes after the County's 2006 denial-the introduction of cattle and imposition of a grazing/breeding lease as well as the easement to permit cattle roaming, the increase in lot-size, the fact all of the lots would support grazing and breeding as well as possible vineyards or fruit-picking operations, and the creation of an open-space easement in perpetuity on 85 percent of the property-put the project in compliance with the Map Act. It ruled the declaration of restrictions prohibiting construction of residential dwellings during the Williamson Act contract term "add[ed] an extra layer of protection for agriculture use." It observed the project would continue to be subject to the Williamson Act contract. The court rejected as speculative and unsupported Cleveland's argument that the project would encourage lot owners to abandon agriculture uses. It found "[t]he record indicates the Project area will support small farms in an area known for agritourism," and lot owners would be incentivized by the tax benefits to maintain agricultural use. The court further ruled that as to "the Draft EIR, its supporting appendices, the Lot by Lot Analysis, or the argument that the EIR 'admits' the Project is residential," Cleveland had not demonstrated it "raised the same exact issues" at the administrative level, nor had it demonstrated how the County would have been able to evaluate and respond to those issues. However, the court clarified that Cleveland was "not required to present every detail of the failures in the record that point to the Project violating the Subdivision Map Act and CEQA if the County had the ability to evaluate and respond to the issues."

         The court thereafter entered judgment in favor of the County and Genesee on Cleveland's petition and complaint. Cleveland filed this appeal.


         I. Exhaustion of Administrative Remedies

         We begin with respondents' claim that Cleveland did not exhaust its administrative remedies, and that its failure to do so "effectively negates the appeal." They point out that Cleveland in its opening appellate brief did not respond to the trial court's ruling concerning the exhaustion doctrine, and assert it has waived any argument concerning exhaustion. Respondents characterize all of Cleveland's arguments as seeking to discredit the EIR and technical studies, and as making assertions that the County did not have the opportunity to address during the administrative review process.

         Exercising de novo review over this question (Monterey Coastkeeper v. State Water Resources Control Bd. (2018) 28 Cal.App.5th 342, 359), we reject respondents' waiver and exhaustion arguments. The trial court's exhaustion ruling was specific and narrow: it ruled Cleveland had failed to exhaust its administrative remedies only as to challenges to the DEIR, the DEIR's supporting appendices and the lot by lot analysis, as well as any "argument that the EIR 'admits' the Project is residential." Cleveland's sole argument on appeal is that the Board's approval of the tentative map violates section 66474.4 of the Map Act. The court did not rule that Cleveland failed to exhaust its administrative remedies as to that point. And, it emphasized Cleveland was "not ...

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