Opinions on how laws are affecting CRE from SoCal Real Estate’s September 2018 issue:By Sean Matsler, partner, and Kurt Whitman, associate, Cox, Castle & Nicholson
Yes, California Environmental Quality Act (CEQA) compliance is often time-consuming and expensive. Yes, many opponents inappropriately (and sometimes illegally) leverage CEQA challenges in pursuit of non-environmental goals. But don’t despair. CEQA provides multiple tools intended to shorten — if not eliminate — the environmental review process. Three such mechanisms are exemptions, addenda, and tiering.
A project may avoid CEQA review if it meets one of CEQA’s many exemptions. These exemptions fall within three general “buckets”: statutory exemptions, categorical exemptions, and the “common sense” exemptions.
Statutory exemptions — the strongest of the three types — are those expressly provided by statute, either within or beyond CEQA. The CEQA guidelines themselves provide several specific exemptions, including for ongoing projects (§15261), certain mass transit projects (§15275), and state and regional transportation-improvement programs (§15276). Additionally, the Governor’s Office of Planning and Research recently published a technical advisory listing over 50 statutory exemptions found outside of CEQA (e.g., certain residential housing projects under the Government Code) (CEQA Exemptions Outside of the CEQA Statute, Technical Advisory, OPR — June 2018).
Categorical exemptions are classes of projects the secretary of natural resources has determined do not have a significant effect on the environment. The 33 categorical exemptions include replacement or reconstruction of structures (§15302), minor land divisions (§15315), and infill development projects (§15332) (14 Cal. Code Regs., Art. 19). Categorical exemptions come with a big caveat: there are “exceptions” to these exemptions, which can be based on a project’s location, cumulative environmental impact, or significant environmental effect, for example (14 Cal. Code Regs. §15300.2). Lead agencies are not allowed to use a categorical exemption where an exception applies, which is why statutory exemptions are preferable.
CEQA also provides a catch-all “common sense” exemption where “it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment” (14 Cal. Code Regs. §15061(b)(3)). If a project fits this description, an exemption would apply, even if the agency otherwise had discretion to approve or deny the activity.
When a project for which an environmental review document has already been certified or adopted requires an additional discretionary approval, an agency must consider whether a subsequent or supplemental environmental review document is required (Cal. Pub. Res. Code §21166; 14 Cal. Code Regs. §15162). When no conditions are triggered for preparation of a subsequent or supplemental document, but it is nevertheless necessary to make minor, technical changes to a previously certified or adopted document, an addendum may be prepared (14 Cal. Code Regs. §15164(a)).
Addenda are used to evaluate project changes, circumstantial changes, or new information (14 Cal. Code Regs. §15164(b)(e); Fund for Environmental Defense v. County of Orange (1988) 204 Cal.App.3d 1538). For developers and other applicants, the most attractive feature of an addendum is that it does not need to be circulated for public review (14 Cal. Code Regs. §15164(b),(e); Fund for Environmental Defense v. County of Orange (1988) 204 Cal.App.3d 1538).
Tiering and Other Front-Loading Mechanisms
Tiering entails the use of broader EIRs to cover general issues for planning- or policy-level actions and subsequently using more focused and site-specific environmental review documents to cover project-specific issues (14 Cal. Code Regs. §15164(c).) Program EIRs (series of actions characterized as one larger project), master EIRs (including provisions for analysis of follow-up actions), and staged EIRs (useful when a large project requires a series of future approvals) are examples of a tiered approach to CEQA compliance. An applicant may also use an already-existing EIR from an earlier project if it sufficiently addresses the impacts of the applicant’s current project.
Exemptions, addenda, and tiering are some of many examples of methods to streamline the CEQA process and get projects timely approved and completed. Applicants should work closely with their counsel and consultants, as well as agency staff and counsel, to determine which method may be available for a project. Under the right circumstances and with the right strategy, your development project may save months (or years) of time through the use of one of these tools.
Sean Matsler is a partner at Cox, Castle & Nicholson LLP, a full-service law firm focused on real estate. Kurt Whitman is an associate at Cox, Castle & Nicholson LLP based in the firm’s Los Angeles office.