In Save the Hill Group v. City of Livermore et al., the First District Court of Appeal (Div. 5) reversed and remanded the superior court’s decision to uphold the reissued final environmental impact report (RFEIR) for a development project with 44 single-family homes located in a residentially-zoned grassland area, called Garavanta Hills, near the Garaventa Wetlands Preserve.  In doing so, the Court held that the analysis for the “no project” alternative was inadequate because it failed to disclose and evaluate the possibility of using existing mitigation funding to make the no-project alternative feasible.  While the superior court agreed that the analysis of the no-project alternative was insufficient, the superior court found that petitioner Save the Hill Group (Petitioner) had failed to exhaust its administrative remedies on this issue, upholding the RFEIR on this jurisdictional prerequisite.  While the Court of Appeal reversed this particular decision, it did rejected the Petitioner’s remaining claims.

As evidenced in the opinion, the project location and history weighed heavily in the Court’s decision.  The project site is on a unique alkaline wetlands area that provides habitat for a variety of special-status wildlife species, including the California red-legged frog, California tiger salamander, California burrowing owl, San Joaquin kit fox, vernal pool fairy shrimp, and others.  The area is also hydrologically connected to the Springtown Alkali Sink.  Importantly, the project site is also one of the last undeveloped areas in the City of Livermore and was identified in 2 mitigation funds (from prior settlement agreements with the City) as potential land acquisition areas for conservation purposes.

Given the sensitive project location, and despite the site being zoned residential, the project faced years of opposition from the public and resistance from the City.  The project application was first filed in 2011. The project was then reduced from 76 to 47 single-family homes, which was rejected by the City in 2015.  After the denial, the applicant revised and resubmitted the project.  The City Council, after hearing testimony from the public, approved a project with 44 single-family homes in 2019.

Regarding the exhaustion doctrine, the Court considered and ultimately reversed the superior court’s decision to reject Petitioner’s challenge to the no-project alternative on procedural grounds for failing to exhaust administrative remedies.  In doing so, the Court provided a reminder of the low bar required to exhaust administrative remedies, finding that the Petitioner met its burden.  Specifically, the Court concluded: “CEQA does not require public interest groups such as Save the Hill, which often are unrepresented by counsel at administrative hearings, to do more than fairly apprise the agency of their complaints in order to preserve them for appeal.”  Interestingly, while Petitioners commented during the administrative process about purchasing the project site and preserving the land as open space, none of these comments were connected to the no-project alternative under CEQA.  The Court recognized that the record was “replete” with examples of the Petitioner encouraging City Councilmembers to consider funding sources to conserve the project site.  Given this, the Court found that even if the Petitioner had framed these comments within the context of the no-project alternative, the City would have made the same decision to reject the proposal and certify the RFEIR.

On the no-project alternative, the Court found that the analysis was inadequate for its failure to assess the feasibility of using available funding sources to set aside the project site for conservation pursuant to the 2 existing settlement agreements to which the City is a party.  The RFEIR neither recognized this fact nor addressed these funding sources at all.

The City ultimately rejected the no-project alternative, in part, because the project site is zoned residential and would not remain undeveloped in the long term.  The City argued that “the conservation of Garaventa Hills would not be a reasonable foreseeable consequence of implementing the no-project alternative because the Project Site is already zoned for residential development and there is no current proposal for the City or other agencies to purchase or otherwise preserve it.”  Given that 2 mitigation funds identify the project site as a potential area for acquisition, the Court was unconvinced by this argument.

Further damning to the Court was the fact that during the administrative stage several City Councilmembers actually asked about the feasibility of funding sources to acquire and conserve the project area, but were provided with “unsupported answers and warnings from the City’s attorneys that any attempt to acquire the Project Site could expose the City to liability under the takings clause.”  The Court ultimately found that the City Council could not make an informed, reasoned decision about the project based on the lack of information in the RFEIR.

In sum, it is clear that a one-size-fits-all approach to CEQA-required no-project alternative analysis cannot be used.  While project applicants, environmental consultants, and public agencies would be best to take note of this decision, it is important to also recognize that the facts of this case were exceptional and unlikely to occur in most development projects, except those in uniquely sensitive locations.

While not discussed here, the Petitioner made other contentions related to the vernal pool fairy shrimp, hydrological impacts to the Springtown Alkali Sink, and compensatory mitigation measures.  The Court addresses these issues briefly and ultimately rejects these arguments.