Parchester Village Neighborhood Council v. City of Richmond

Opinion

Defendants the City of Richmond and the City Council of the City of Richmond (City) appeal the judgment granting a peremptory writ of mandate invalidating a municipal services agreement (MSA) entered into by the City and the Scotts Valley Band of Porno Indians of California (Tribe). The trial court concluded the City violated the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (CEQA) when it approved the MSA.^[1] We reverse.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The Tribe is a federally recognized Indian tribe whose status was terminated in 1965 and restored by the Secretary of the Interior (Secretary) in 1992. As a result of the 1965 termination, the Tribe was divested of its tribal lands. In January 2005, the Tribe submitted an application requesting the Secretary acquire 29.87 acres in unincorporated west Contra Costa County in trust for the benefit of the Tribe.^[2] The proposed site is adjacent to the City of Richmond. The Tribe plans to use the site to develop, construct and operate a class III gaming facility, consisting of a 225,000-square-foot structure that would house, among other things, 2,000 gaming machines and 50 gaming tables.^[3]

In February 2006, the Tribe released a draft environmental impact statement (DEIS) prepared pursuant to the federal National Environmental Policy Act of 1969 ( 42 U.S.C. § 4321 et seq.).

On April 17, 2006, representatives from the City met with the Tribe to begin discussions on entering into an agreement regarding the provision of municipal services to the Tribe.

On May 10, 2006, the City and the Tribe formally entered into an agreement to negotiate the MSA.

On September 27, 2006, the Tribe responded to the City’s comments on the DEIS.

On November 14, 2006, City staff submitted a report to the city council outlining key provisions of the proposed MSA. In the report, staff noted that it was unknown whether the federal government would approve the Tribe’s application to acquire the proposed casino site. The impact that a state tribal compact would have on the Tribe’s obligations regarding the casino was also unknown.^[4] If approved, staff predicted the casino would “have a tremendous impact on the surrounding residents and business.” As the City would not have any say over the federal or state decisions concerning the Tribe’s casino, staff recommended that the City proceed with the MSA to secure funding in order to mitigate the casino’s direct impact, as well as to improve services throughout the City to mitigate indirect impacts. Staff cautioned that if an MSA was not approved, the City’s opportunity to influence the casino project and receive mitigation in the future could be “severely limited.”

On November 21, 2006, the city council voted to approve the MSA. The approval resolution includes a statement that the federal, state, and City actions associated with the casino are not “projects” of the City within the meaning of CEQA.

On December 27, 2006, the City and the Tribe executed the MSA. The MSA provides that the City will receive, in exchange for the provision of specified City services: (1) a nonrecurring payment of $8,234,500, $7.1 million of which is earmarked for fire protection and the remainder of which is earmarked for police and public works, (2) an annual contribution of $6 million in years one and two, $8 million in years three and four, $9 million in years five and six, and $9 million adjusted annually by the consumer price index (CPI) in years seven to 20, and (3) an annual payment of $7,459,700,

Under CEQA, local agencies such as the City are required to “prepare . . . an [EIR] on any project that they intend to carry out or approve which may have a significant effect on the environment.”^[5] (§ 21151.) “The Legislature has made clear that an EIR is ‘an informational document’ and that ‘[t]he purpose of an environmental impact report is to provide public agencies and the public in general with detailed information about the effect which a proposed project is likely to have on the environment; to list ways in which the significant effects of such a project might be minimized; and to indicate alternatives to such a project.’ [Citations.]” (Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376 , 391 [ 253 Cal.Rptr. 426 , 764 P.2d 278 ].) “However, an agency has no duty of compliance with CEQA unless its actions will constitute (1) ‘approval’ (2) of a ‘project.’ [Citation.]” (Concerned McCloud Citizens v. McCloud Community Services Dist. (2007) 147 Cal.App.4th 181 , 191 [ 54 Cal.Rptr.3d 1 ] (McCloud).)

CEQA applies only to “discretionary projects proposed to be carried out or approved by public agencies . . . .” (§ 21080, subd. (a).) A “ ‘[p]roject’ ” subject to CEQA is defined as “an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is any of the following: [][] (a) An activity directly undertaken by any public agency. [][] (b) An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies, [f] (c) An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.” (§ 21065.)

The t

rial court found that, for purposes of plaintiffs’ petition, the City’s “endorsement and construction commitments specified in [the] MSA” constituted a “project” within the meaning of section 21065 because they amounted to “an activity directly undertaken” by the City with the “ ‘potential for

The City claims its decision to enter into the MSA was not an “approval” of a “project” under CEQA. It contends the MSA merely concerns the funding of hypothetical improvements that will be carried out only if certain preconditions are satisfied.

We first address plaintiffs’ repeated claims that the Tribe’s casino is itself a “project” that triggers the City’s obligation to comply with CEQA. They contend that “Because the casino is the ‘activity’ for which all these approvals are made, and the casino is clearly a ‘definite course of action’ that will change the physical environment, the MSA triggered CEQA.” They assert the City qualifies as both a “responsible” agency,^[6] and a “lead” agency^[7] with respect to the casino project. The City counters that it had no regulatory authority over the casino and therefore the casino is not a “project” of the City within the meaning of CEQA. We find the City’s position to be persuasive.

As noted above, section 21065 defines “project” to include “an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is . ..[!].. . [a]n activity directly undertaken by any public agency.” {Id., subd. (a), italics added.) The CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.)^[8] describe an “activity directly undertaken by any public agency” to include “public works construction and related activities clearing or grading of land, improvements to existing public structures, enactment and amendment of zoning ordinances, and the adoption and amendment of local General Plans or elements thereof . . . ,”^[9] (Guidelines, § 15378, subd. (a).)

In our view, the Tribe’s casino development does not constitute a “project” of the City under CEQA because the City has no legal authority over the property upon which the casino will be situated. While the MSA does indicate that the City agreed to support the Tribe’s efforts to acquire the land and to obtain the requisite approvals from the BIA and the Governor, this expression of support does not transform the casino into a “project” so as to trigger the City’s preparation of an EIR.

First, an agency does not commit itself to a project “simply by being a proponent or advocate of the project . . . .” (City of Vernon v. Board of Harbor Comrs. (1998) 63 Cal.App.4th 677 , 688 [ 74 Cal.Rptr.2d 497 ], disapproved on other grounds in Save Tara, supra, 45 Cal.4th 116 , 131, fn. 10.) “ ‘If having high esteem for a project before preparing an environmental impact report (EIR) nullifies the process, few public projects would withstand judicial scrutiny, since it is inevitable that the agency proposing a project will be favorably disposed to it.’ [Citation.]” (Save Tara, supra, at pp. 136-137.) Second, the proposed casino will be built on a site that is entirely outside the City’s boundaries. Therefore the City has no legal jurisdiction over the property. Should the City change its mind and decide to “disapprove” of the project, its decision would not be binding on the BIA or the Governor.

Plaintiffs claim the City has “substantial influence” over the federal government’s decision to grant the Tribe’s fee-to-trust application because, under the IGRA, title 25 United States Code section 2719(b)(1)(A), the City’s opinion on the matter “must” be considered.^[10] The referenced statute requires

Additionally, the case that plaintiffs rely on, County of Amador v. City of Plymouth (2007) 149 Cal.App.4th 1089 [ 57 Cal.Rptr.3d 704 ] (Amador), actually undermines their position. In Amador, the appellate court found the acquisition of tmst lands for a casino development was not the “project” of the City of Plymouth within the meaning of CEQA precisely because “neither the taking of lands in trust nor the [casino development] requires the formal approval of the City . . . .” (Amador, supra, at p. 1094.) Instead, the municipal services agreement involved in that case was deemed to be subject to CEQA because it unconditionally obligated the city to vacate a portion of a city road and to remodel the city’s existing fire station. The agreement also conditionally obligated the city to construct connections to the casino’s sewer and water systems and to increase system capacity to meet the needs of the casino development. (Amador, supra, at p. 1094.) The appellate court “made clear” that the project for purposes of CEQA consisted “of the things which the MSA commits the City to construct.” (Amador, supra, at p. 1097, fn. 6.) Further, the court affirmed the CEQA “project” was not the casino itself, “for the approval of that project, with the exception of the state’s role in authorizing gambling pursuant to a compact, is confined to the federal government.” (Amador, supra, at p. 1104.) In sum, the casino project is not a “project” of the City within the meaning of CEQA.

V. Is the MSA’s Support of the Tribe’s Fee-to-trust Application a CEQA “Project"?

Plaintiffs claim the MSA’s support of the Tribe’s fee-to-tmst application to the BIA constitutes a project requiring CEQA review. We have already held that the Tribe’s casino is not a “project” of the City for the purposes of CEQA. Accordingly, it follows that the City’s endorsement of the Tribe’s fee-to-trust application is also not the City’s “project.”

Unlike the municipality in Save Tara, it appears to us that the City did not unconditionally commit itself to making any of the physical changes referenced in the MSA. We thus agree with the City’s contention that the MSA is best understood as a mechanism for funding proposed projects that may be modified or not implemented at all depending upon a number of factors, including CEQA environmental review. (Guidelines, § 15378, subd. (b)(4).)^[12]

We addressed a situation similar to the present one in Citizens to Enforce CEQA v. City of Rohnert Park (2005) 131 Cal.App.4th 1594 [ 33 Cal.Rptr.3d 208 ] (Rohnert Park). In that case, a city had entered into a memorandum of understanding (MOU) with an Indian tribe regarding a gambling casino the tribe proposed to construct outside the city limits. (Id. at pp. 1597-1598.) The MOU was “an agreement to establish a source of funds for potential future improvements if the casino project takes place.” (Id. at p. 1601.) The MOU also addressed “the ways in which the Tribe agree[d] to mitigate potential impacts of its casino project.” (Id. at p. 1600.) Noting that the MOU acknowledged CEQA review could be required if the city were to provide infrastructure for the casino, we held the city’s entry into the MOU was not a “project” because the agreement merely authorized a funding mechanism. (Rohnert Park, supra, at p. 1601.)

In Rohnert Park, we cited to Kaufman & Broad-South Bay, Inc. v. Morgan Hill Unified School Dist. (1992) 9 Cal.App.4th 464 [ 11 Cal.Rptr.2d 792 ] (Kaufman & Broad), wherein the appellate court “held that a school district’s resolution to establish a community facilities district (CFD 1) to raise funds,

Here, we cannot conclude that the City, by entering into the MSA, has “contracted away its power to consider the full range of alternatives and mitigation measures required by CEQA” (Albany, supra, 56 Cal.App.4th 1199 , 1221) or that it has precluded consideration of a “no project” option. (Id. at p. 1222.) As we discuss below, to the extent the MSA contemplates future physical changes to the environment, the changes are either not within the City’s jurisdiction or are not ripe for CEQA review.

As the Supreme Court in Save Tara counseled, our task is to “look not only to the terms of the agreement but to the surrounding circumstances to determine whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features, so as to effectively preclude any alternatives or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going forward with the project.” (Save Tara, supra, 45 Cal.4th 116 , 139.) Here, the MSA requires the parties to negotiate a fire protection and emergency response agreement (FPERA) after the Tribe provides the City with its operational plan. As a part of the FPERA, the City is given the discretion to proceed with one of the following improvements: “1) the construction and operation of a fully equipped fire station ... on a parcel of real property selected by the City within a radius of one and one-half miles from the [casino] Project,

Plaintiffs claim the MSA’s commitments governing firehouse improvements are subject to CEQA review because they are reasonably likely to create physical changes to the environment.^[14] They claim the MSA sets a definite course of action because it commits the City to selecting one of the three options mentioned for fire improvements, thereby precluding consideration of the “ ‘no project’ alternative.” Relying on Amador, they claim the MSA does not allow the City to refuse to provide fire protection improvements “to serve the casino project.” Plaintiffs also claim the casino project was “fully formulated” at the time the MSA was drafted and that the City did not lack any information needed to perform a CEQA review. The City claims that the MSA merely requires the City and the Tribe to negotiate firehouse improvements and their funding, without dictating which improvements will be adopted. The City asserts that the parameters of any improvements will remain unknown until the Tribe and the City negotiate that agreement as part of the FPERA, if and after the casino project is approved.

The Supreme Court clarified in Save Tara that “An agency cannot be deemed to have approved a project . . . unless the proposal before it is well enough defined ‘to provide meaningful information for environmental assessment.’ [Citation.]” (Save Tara, supra, 45 Cal.4th 116 , 139.) Here, the MSA merely sets the stage for future negotiations to establish the FPERA. Additionally, the MSA specifically states; “Nothing in this Agreement shall be construed to constitute approval of development plans for a Station design, development, and construction of which shall conform to all applicable laws.” The agreement does not specify a site for any of the proposed physical improvements described therein, beyond that they would occur within a certain radius of the casino. As a practical matter, we find it difficult to conceive of how an EIR could be used to sensibly evaluate a project that has not yet been assigned a physical location. As stated in McCloud: “At the current planning stage of this proposed project, preparation of an EIR would be premature. Any analysis of potential environmental impacts would be wholly speculative and essentially meaningless.” (McCloud, supra, 147 Cal.App.4th 181 , 197.) The three firehouse options at this point are simply too vague to trigger CEQA review.

Section 2.6(b)(1) of the MSA provides: “Unless adequate mitigation can be achieved by the location of driveways or other design features of the Project as reasonably determined by the City, the Tribe shall, at its sole cost, add a left-turn lane on the west-bound Parr Blvd. approach to the Richmond Parkway, provide two west-bound through lanes between the main entrance to the Gaming Facility and Richmond Parkway shall widen Parr Blvd. to three lanes in the west-bound approach to the Richmond Parkway intersection, and make associated modifications to the traffic signal.” The Tribe also agreed to provide shuttle bus service and paint bike path striping on one designated street. The Tribe further agreed to install a bike rack and build a sidewalk on a portion of its property.

Plaintiffs claim the MSA’s commitments governing transportation improvements are subject to CEQA review. The City disagrees, noting that most of these improvements had already been arrived at as part of the federal DEIS process.

We first observe that only a minor portion of the traffic improvements specified in this provision are within the City’s boundaries.^[15] Further, as the City notes, most of these improvements were included in the DEIS that the Tribe prepared for the BIA. Thus, it is unclear to us that the City is the governmental entity that has “agreed” to allow the Tribe to construct these traffic improvements. Plaintiffs speculate that because some of the proposed improvements are adjacent to the City “it [the City] may in fact become the agency that will build or accept these improvements.” Such speculation is insufficient evidence that the City itself is committed to going forward with the proposed traffic improvements or that it is the appropriate agency to conduct CEQA review.

As we have concluded the trial court erred in invalidating the MSA, we need not address the City’s argument that the court should have allowed the City to modify the MSA to address the court’s concerns.