Uphold Our Heritage v. Town of Woodside  (filed January 10, 2007; certified for publication February 2, 2007, A113376) __ Cal.App.4^th__

By Lori Wider

Introduction

In this case plaintiff Uphold Our Heritage (Heritage) challenged the issuance by the Town of Woodside (Town) of a permit to Steve Jobs (Jobs) to demolish a mansion on his property to enable construction of a new single family residence.  The Court of Appeal held that Town’s findings of infeasibility of certain EIR project alternatives involving rehabilitation of the existing structure rather than demolition were not supported by substantial evidence in the record. While the estimated costs of restoration of the mansion were before the Town Council (Council), the record was devoid of any information regarding the likely cost of a new residence (the proposed project). Without the information necessary to compare the restoration costs against the cost of the project, there was insufficient evidence to support the findings of infeasibility of rehabilitation alternatives.

The EIR included an estimated cost to rehab the mansion ($4.9 million), and Jobs submitted an estimate ($5 to $10 million) as well.  Jobs did not submit any plans for the new residence, nor did he submit any evidence regarding the likely cost to construct a new home on the property.  The court noted that with respect to two alternatives proposing relocation and rehabilitation, there was at least an inference that these costs plus the cost of constructing a new home would render the alternatives infeasible.  However, without evidence regarding new home construction costs, it was impossible to determine if alternatives proposing retention and restoration of the mansion on site were, in fact, economically infeasible.

Background

In 2001, Jobs applied for a permit to demolish an existing 17,250 square foot mansion on his property.  Although he did not submit plans for a new building, he intended to construct a new, smaller residence on the site after demolition of the existing structure.  The mansion, constructed in 1925 for a key figure in the copper industry and designed by a leading U.S. architect in the Spanish Colonial Revival style, was determined by an expert hired by Town to qualify as an "historical resource" under CEQA.  Therefore, an EIR was prepared prior to Town’s actions with respect to the demolition permit.

The EIR concluded that demolition of the mansion would result in a significant environmental impact.  Although mitigation measures were identified (documentation and removal, and storage of significant features in the mansion), the EIR concluded that these measures would not reduce the impact to a less-than-significant level.  In addition to the no project alternative, four alternatives were considered in the EIR: historic rehabilitation of mansion; historic rehabilitation of mansion plus new addition; on-site relocation and historic rehabilitation of mansion; off-site relocation and historic rehabilitation of mansion.

On appeal, after the Planning Commission’s approval of the demolition permit, the Council certified the EIR and authorized the demolition permit subject to certain conditions.  The Council adopted findings of infeasibility for all five project alternatives and adopted a statement of overriding considerations, concluding that the project, as conditioned, would "provide a public benefit in implementing the Town’s General Plan."  Heritage filed its petition for writ of mandate, alleging that there was no substantial evidence to support the Council’s findings of infeasibility of the project alternatives or the Council’s conclusion that the project benefits outweighed the significant effects on the environment occasioned by the demolition of the historic mansion.

Infeasibility of Alternatives

The Council determined that all of the project alternatives (except the no project alternative) were economically infeasible.  The evidence before the Council on this issue included an estimated restoration cost range from $4.9 million, based upon the EIR analysis, to $5 to $10 million, based upon an estimate from Jobs.  One councilmember, a contractor, also inspected the residence and determined that the cost to restore the structure would be "incredible."  The court  found this evidence to be insufficient, stating that what was lacking was any comparison of cost between the alternatives and the proposed project—a new residence.  Since there were no plans submitted for a new residence, or any other economic information submitted regarding the likely cost of a new residence, there was no context from which the economic feasibility of the alternatives could be assessed. Thus, the court found that at least as to the second and third alternatives, which involved rehabilitation without relocation, the Council’s findings were not supported by substantial evidence.  In a footnote, the court noted that with respect to the two alternatives involving relocation, the $5 million cost to relocate and renovate the residence in addition to the cost of constructing a new residence "supports a reasonable inference that these alternatives are not economically infeasible."

The court amplified its analysis: even a restoration cost of between $4.9 and $10 million is not sufficient to support a "reasonable inference" of infeasibility without "some information" regarding the cost of construction of a new residence.  Where the renovation cost exceeds the new construction cost, it is the "magnitude of the difference" that determines feasibility of an alternative.  The project applicant’s "personal wealth or ability to shoulder the costs of the proposed alternatives is irrelevant."  Increased cost or lost profit is not the relevant inquiry; rather, the question is whether the cost of an alternative as compared to the cost of the project is "so great that a reasonably prudent property owner would not proceed with the rehabilitation."

Noting the subjective nature of the feasibility of constructing a single family residence for the applicant’s own use, the court articulated a feasibility test, albeit limited to the context of a single residence for personal use: "It may be sufficient to show that the cost of rehabilitating the existing house would be significantly more that the cost of building a new home of a quality appropriate to the area, or that the cost of the proposed alternative is so great that the property owner could never expect to recover the investment on resale."

Legal Infeasibility of Alternatives

The court rejected an argument by Town and Jobs that substantial evidence in the record supported a finding of legal infeasibility of the alternatives, since the Council’s concern that it could not compel Jobs to restore the mansion implies such a finding.  Finding no legal constraint on the Town’s ability to approve the restoration or to approve the demolition permit, the court determined that the fact that Jobs may not wish to restore the mansion does not render legally infeasible an alternative involving restoration of the structure.

Statement of Overriding Considerations

The court held that since the administrative record did not support the Council’s findings of infeasibility of the project alternatives, the statement of overriding considerations is "necessarily invalid."  The basis for this conclusion is articulated in the court’s citation to City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4^th 341,368, as follows: "A statement of overriding considerations is required, and offers a proper basis for approving a project despite the existence of unmitigated environmental effects, only when the measures necessary to mitigate or avoid those effects have properly been found to be infeasible."  (Emphasis added.)

For more information please contact Lori Wider.  Lori Wider is special counsel in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco Office.