Visalia Retail, LP v. City of Visalia ( 2018 )

Filed 1/4/18; Certified for Publication 1/30/18 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
VISALIA RETAIL, LP,
F074118
Plaintiff and Appellant,
(Tulare Super. Ct. No. VCU258614)
v.
CITY OF VISALIA, OPINION
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Tulare County. Bret D.
Hillman, Judge.
Shore McKinley & Conger, Brett S. Jolley and Aaron S. McKinney for Plaintiff
and Appellant.
Herr Pedersen & Berglund, Leonard C. Herr and Ron Statler for Defendant and
Respondent.
-ooOoo-
This appeal involves a challenge to an update of the City of Visalia’s (Visalia)
general plan. Included in the update is a land use policy affecting areas designated
“Neighborhood Commercial.” Under the policy, no tenant in a Neighborhood
Commercial area may be larger than 40,000 square feet in size.
Appellant claims Visalia violated the California Environmental Quality Act (Pub.
Resources Code, § 21000 et seq.; “CEQA”) by failing to analyze the potential for the
land use policy to cause a phenomenon called urban decay. “CEQA does not define
urban decay” but some have defined it as “visible symptoms of physical deterioration that
invite vandalism, loitering, and graffiti that is caused by a downward spiral of business
closures and multiple long term vacancies.” (Joshua Tree Downtown Business Alliance
v. County of San Bernardino (2016) 1 Cal.App.5th 677, 685 (Joshua Tree).)
Appellant, likely prompted by concerns as to how the general plan update would
adversely impact property it owns, challenged the proposed land use policy. Appellant
submitted to Visalia the opinion of an experienced local commercial real estate agent that
the land use policy would cause anchor vacancies and/or lower-traffic anchors, which
would reduce rental income landlords use for maintenance and improvements, which
would “creat[e] a downward spiral of physical deterioration.”
The propriety of the tenant size cap was discussed by city staff and
councilmembers at various points in the process of drafting and approving the general
plan update. However, the environmental impact report (EIR) itself did not analyze the
potential for urban decay. Appellant contends this rendered the EIR fatally flawed. We
disagree.
CEQA is concerned with significant effects on the environment (§ 21100,
subd. (b)), not with purely economic impacts. (see Cal. Code Regs., tit. 14, § 15382)1
The fact that a policy may hurt certain businesses is not an effect covered by CEQA,
unless that impact on business causes a significant effect on the environment. (See
Joshua Tree, supra, 1 Cal.App.5th at p. 685, quoting South Orange County Wastewater
Authority v. City of Dana Point (2011) 196 Cal.App.4th 1604, 1614 (Dana Point).) Here,
1The Guidelines for the Implementation of the California Environmental Quality
Act (Cal. Code Regs., tit. 14, § 15000 et seq.) will hereinafter be referred to as the
“Guidelines.”
2.
appellant failed to produce sufficient evidence from which a fair argument can be made
that the land use policy at issue may cause a significant effect on the environment, rather
than purely economic effects.
As explained below, appellant’s expert supported his opinion largely with
conjecture as to whether the land use policy would cause urban decay. Moreover, even if
the land use policy would undoubtedly cause some adverse economic consequences,
appellant’s expert offered little to show that “the magnitude of this effect” (Joshua Tree,
supra, 1 Cal.App.5th at p. 691, original italics) may lead to a substantial impact on the
environment. That is, “even if a handful of properties were to remain permanently
vacant, the result would not necessarily be the kind of change the physical environment
that implicates CEQA.” (Ibid.)
We also reject appellant’s claims that the amended general plan is internally
inconsistent and that Visalia violated a notice requirement of the Planning and Zoning
Law (Gov. Code, § 65000 et seq.) We affirm the judgment.
FACTS
Every city in California must adopt “a comprehensive, long-term general plan for
the physical development of the … city ….” (Gov. Code, § 65300.) “A general plan
provides a “ ‘charter for future development’ ” and sets forth a city or county’s
fundamental policy decisions about such development. [Citation.]” (San Francisco
Tomorrow v. City and County of San Francisco (2014) 228 Cal.App.4th 1239, 1247.)
The general plan may be amended in the public interest. (Gov. Code, § 65358.)
In April 2010, Visalia filed a “Notice of Preparation” (see Guidelines, § 15082)
indicating it was preparing to update its general plan, and that an EIR was required.
Though specific proposals on how to update the general plan had “not yet been
determined,” the general plan update would “likely address” various topics including land
use and city design.
3.
The notice identified a “next step” in the process, which would involve a group
called the General Plan Update Review Committee (GPURC). The GPURC would
participate in the development of potential “land use and transportation alternatives” and
prepare a “Preferred Plan.” The Preferred Plan would be presented to Visalia’s
“decision-makers,” and the general plan update would be drafted based on the Preferred
Plan.
On January 22, 2013, the Visalia City Council met with the planning commission
to review the progress made by the GPURC. City council members and planning
commissioners “provided preliminary feedback to staff for additional analysis.” Staff
prepared “white papers” addressing various decision points raised by the
councilmembers’ feedback.
One of the white papers concerned the land use policy applicable to properties
classified as “Neighborhood Commercial.” The white paper referenced a draft land use
policy called LU-P-66,2 which read in pertinent part:
“Shopping centers in Neighborhood Commercial areas should have the
following:
 Anchored by a grocery store or similar business offering fresh
produce, poultry, fish and meat;
 Include smaller in-line stores of less than 10,000 square feet;
 Total size of 5 to 12 acres as shown on the Land Use Diagram; and
 Integrated with surrounding neighborhood uses in terms of design,
with negative impacts minimized.
“Standards for Neighborhood Commercial development also should require
design measures that create a walkable environment and require local street
and pedestrian connections. Alterations and additions in existing
nonconforming centers may be permitted, subject to design review and
conditions of approval to minimize neighborhood impacts.” (Italics
omitted.)”
2 The policy was later renumbered to LU-P-67.
4.
The staff white paper identified concerns raised with respect to the draft of LU-P-
66. Residents of the Stonebridge neighborhood had expressed that there should be “a
size limit for anchor stores (i.e., maximum of 35,000 SF).” The residents argued that
“grocery stores over 50,000 SF are not truly serving just the surrounding neighborhood,
but will target shoppers from outlying areas, thereby creating additional traffic, noise, and
other impacts and inviting persons from outside the immediate neighborhood.”3
The white paper indicates the GPURC “considered” a size limit on grocery stores,
but rejected the idea, concluding “the free market will dictate the size of grocery store
that will work for a given site and neighborhood. Further, placing a limit on building size
could work against continually evolving changes in industry trends and store prototypes.”
Visalia staff also provided their own commentary on the size cap issue. They
observed that maximum size limits for anchor stores “are somewhat arbitrary.” “A
typical Savemart grocery store is about 55,000 square feet,” but a “new Walmart
neighborhood grocery store being constructed at Houston and Demaree is about 38,000
3 Another concern identified in the white paper was raised by Thomason
Development Company (Thomason). Thomason owned a 15.5-acre property located at
Lovers Lane and Walnut. At the time, the property was designated Neighborhood
Commercial, but the proposed general plan update would have redesignated the north 6.2
acres of the property as Medium Density Residential. Thomason testified that a
development project on the site was “still active” and that the entire site should remain
designated as Neighborhood Commercial. But if the north portion of the site was going
to be redesignated, Thomason preferred a Commercial Mixed Use designation over a
Medium Density Residential designation.
The white paper indicated that the GPURC “carefully considered land use
designation options for the 15.5-acre property and ultimately chose to recommend a mix
of Neighborhood Commercial (south 9.3 acres) and Medium Density Residential (north
6.2 acres).” The GPURC reaffirmed its decision at an August 30, 2012, meeting and the
planning commission concurred at a September 24, 2012, work session. The planning
commission “also suggested possibly considering a Neighborhood Commercial/Mixed
Use Commercial split, which some Stonebridge residents expressed opposition to.”
The appellate briefs indicate that appellant Visalia Retail, LP also owns the
property. The precise relationship between Visalia Retail, LP and Thomason is unclear.
5.
square feet.” Visalia staff further observed that store sizes “are dependent on market
dynamics” and setting a limit “may create difficulties for grocery stores to locate in
Visalia or for [Neighborhood Commercial] sites to attract an anchor tenant.”
The white paper recommended that the city council adopt LU-P-66 in its current
form. The white paper offered two alternatives to the current draft, one of which was to
“establish a maximum (and/or minimum) square footage size requirement for anchor
tenants….”
City Council Work Session on February 25, 2013
The City Council held a work session on February 25, 2013. Councilmembers
discussed various issues. It was Visalia’s staff’s “understanding from the discussion
among the Councilmembers” that they wanted to “set a maximum anchor tenant size of
40,000 sq. ft….” Consequently, staff recommended the following pertinent changes to
LU-P-66:
“Shopping centers in Neighborhood Commercial areas should shall have
the following:
 Anchored by a grocery store or similar business offering fresh
produce, poultry, fish and meat;
 Include smaller in-line stores of less than 10,000 square feet;
 Total size of 5 to 12 acres as shown on the Land Use Diagram; and
 Integrated with surrounding neighborhood uses in terms of design,
with negative impacts minimized.
 Located no closer than one mile from other General Plan-designated
Neighborhood Commercial or Community Commercial locations, or
from existing grocery stores.
 No individual tenant shall be larger than 40,000 square feet in size.
“Standards for Neighborhood Commercial development also should shall
require design measures that create a walkable environment and require
local street and pedestrian connections. Alterations and additions in existing
6.
nonconforming centers may be permitted, subject to design review and
conditions of approval to minimize neighborhood impacts.”4
The city council adopted the recommended language on April 1, 2013.
Draft General Plan Update and Draft EIR
Visalia had urban and regional planning consultants prepare a “public review
draft” of the general plan update, and a draft EIR, both dated March 2014. The draft
general plan update referred to the land use policy at issue in this case as “LU-P-67”
rather than LU-P-66. The policy included the 40,000 square-foot cap on tenants.
The draft EIR was circulated for review and comment from March 31 through
May 14, 2014. A “final” EIR was prepared on June 26, 2014.
Appellant’s Written Objection Letter Dated October 6, 2014
Appellant’s counsel sent a letter dated October 6, 2014,5 to the mayor and city
council. The letter was sent on behalf of his clients, “Thomason Development
Company/Visalia Retail, LP.” The letter expressed objection “to the proposed
certification of the Final Environmental Impact Report (‘FEIR’), the proposed re-
designation of nearly seven acres of Thomason’s property as Medium Density
Residential along with the proposed overly-restrictive Land Use Policy, LU-P-67, found
in the 2030 General Plan Update that will not only limit economic activity in the City of
Visalia, but will lead to the urban decay and other physical effects in Visalia.”
Anderson Report
Enclosed with appellant’s counsel’s October 6, 2014, letter was a report written by
Thomas Anderson, a real estate broker (“the report”). The report first described
Anderson’s experience and qualifications, which included: (1) cofounding a real estate
brokerage firm in 1981; (2) having been “involved in retail shopping center leasing and
4This is how LU-P-67 reads in the final, adopted general plan update, except that
the word “characteristics” was added after “following” in the first sentence.
5 The letter indicated that it would be hand delivered.
7.
development since 1978”; (3) having “been instrumental in the construction of over 65
shopping centers … comprising over 6,000,000 square feet”; (4) having been “involved
in 45 grocery store transactions”; (5) having “completed 25 drug store deals with Payless
Drug, CVS Pharmacy, Thrifty and Save On.”
The report opined that the 40,000 square-foot cap “creates the strong likelihood
that [neighborhood commercial] centers will never develop in Visalia.” It also noted that
even with his extensive experience with grocery store anchors, he is “unaware of any
grocers willing to build new stores under 40,000 sq. ft. in size.” The report asserted that
a “typical Save Mart, Safeway/Vons, Albertsons, or Lucky supermarket demands at least
50,000 square feet for a new store to ‘pencil out’ financially.” (Fn. omitted.)
The report also cited news articles indicating that the 2009 launch of 10,000 to
20,000 square-foot “Fresh & Easy” stores by “UK mega-grocer Tesco[]” failed and left
some landlords “high and dry.”
The report indicated that neighborhood supermarket anchors smaller than 40,000
square feet have been unable to maintain long-term, successful operations in Visalia. It
cited three examples of stores in the area that were no longer in operation. In contrast,
the report identified two Save Marts exceeding 50,000 square feet that “are serving the
neighborhoods with close and convenient shopping as planned.”
The report also cited the Urban Land Institute as saying, “The neighborhood
shopping center provides merchandise for daily living needs – convenience goods like
food, drugs, hardware, and personal services. A supermarket is the principal tenant in
this type of shopping center.” (Emphasis omitted.) The report then opined:
“The reason for the inclusion of supermarkets in these centers is not
difficult to fathom: Supermarkets are the primary draw for the center, and
the visitation that they generate is essential for the success of all the tenants.
If supermarkets are replaced by low volume tenants such as discount
furniture operations that draw few patrons to the center, great harm may
accrue to the other tenants, with downward pressure on sales volumes,
occupancy and tenant quality.”
8.
The report said that the size cap would not encourage grocers to build small stores
but would instead cause them to decline to enter the Visalia market entirely. The report
acknowledged that it was possible to attract one of a limited number of 40,000 square-
foot Walmart neighborhood market anchors, but said that Walmart was unique, and “the
more likely scenario will be the absence of any development of new neighborhood
retail.”
The report said physical effects could result from urban decay.
“In the context of a neighborhood center, there are few acceptable
alternatives to [the] presence of the supermarket anchor. Therefore, even if some
space can be re-tenanted by other (weaker) tenants, the center may be subject to
physical deterioration, urban decay, and blight.
“In addition to physical impacts resulting from failing to provide
neighborhood retail needs, these vacancies also, in several situations, would
lead to or exacerbate physical blight and ‘urban decay’ deterioration of the
centers resulting from anchor vacancies or by backfilling vacant anchor
space with less-utilized commercial uses such as gyms, furniture stores, or
‘99 cent’ stores. Sometimes anchor grocery stores would continue to
operate but would seek rent reductions from their landlords. Such reduced
revenue stream, in turn, reduced the landlords’ available capital [to]
maintain and improve these properties, creating a downward spiral of
physical deterioration.”
The report also briefly opined on the “downzoning” of 6.2 acres of the Thomason
property, leaving only 9.3 acres zoned as Neighborhood Commercial. It said that even
without the tenant size cap, 9.3 acres is too “compact” of a site to attract anchor tenants.
Finally, the report said the tenant type and size requirements were inconsistent
with another part of the proposed general plan update called LU-P-45, which provided:
“Promote development of vacant, underdeveloped, and/or
redevelopable land within the City limits where urban services are available
and adopt a bonus/incentive program to promote and facilitate infill
development in order to reduce the need for annexation and conversion of
primary agricultural land and achieve the objectives of compact
development established in this General Plan.
9.
“Techniques to be used include designation of infill opportunity
zones as part of the implementation process and provision of incentives,
such as reduced parking and streamlined review, and residential density
bonuses, and floor area bonuses for mixed use and/or higher-density
development, subject to design criteria and findings of community benefit.
(italics removed).”
The report asserted the tenant type and size requirements would discourage infill
and were therefore inconsistent with LU-P-45.
Adopted General Plan Update
On October 14, 2014, the city council certified a final EIR for the general plan
update. At the same meeting, the city council adopted the general plan update subject to
a few amendments passed at the meeting. The final, adopted general plan update retained
the 40,000 square-foot cap on tenants.
Litigation
On November 14, 2014, appellant filed a petition for writ of mandate in superior
court seeking to invalidate Visalia’s certification of the final EIR and adoption of the
general plan update. The petition asserted that Visalia had failed to comply with CEQA,
that the general plan update was inconsistent, and that Visalia failed to properly notice its
October 14, 2014, meeting. The superior court rejected each claim, and entered judgment
denying appellant’s petition on May 9, 2016.
DISCUSSION
I. APPELLANT FAILED TO PRESENT SUBSTANTIAL EVIDENCE FROM
WHICH A FAIR ARGUMENT COULD BE MADE THAT THERE IS A
REASONABLE POSSIBILITY PHYSICAL URBAN DECAY WILL RESULT
FROM LU-P-67
A. Law
“With certain limited exceptions, a public agency must prepare an EIR whenever
substantial evidence supports a fair argument that a proposed project ‘may have a
significant effect on the environment.’ [Citations.]” (Laurel Heights Improvement Assn.
v. Regents of University of California (1993) 6 Cal.4th 1112, 1123.)
10.
“An [EIR] is an informational document which … shall be considered by every
public agency prior to its approval or disapproval of a project. The 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.” (Pub. Resources Code,
§ 21061.)
“The function CEQA assigns to an EIR, in fact, epitomizes the statute’s focus on
informed decisionmaking and self-government. The statute does not necessarily call for
disapproval of a project having a significant environmental impact, nor does it require
selection of the alternative ‘most protective of the environmental status quo.’ [Citation.]
Instead, when ‘economic, social, or other conditions’ make alternatives and mitigation
measures ‘infeasible,’ a project may be approved despite its significant environmental
effects if the lead agency adopts a statement of overriding considerations and finds the
benefits of the project outweigh the potential environmental damage. [Citations.]”
(California Building Industry Assn. v. Bay Area Air Quality Management Dist. (2015) 62
Cal.4th 369, 383.)
An EIR must set forth in detail “[a]ll significant effects on the environment of the
proposed project.” (Pub. Resources Code, § 21100, subd. (b).) “ ‘Significant effect on
the environment’ means a substantial, or potentially substantial, adverse change in any of
the physical conditions within the area affected by the project ….” (Guidelines, § 15382,
italics added.) Because of the physicality requirement, “[a]n economic or social change
by itself shall not be considered a significant effect on the environment.” (Ibid., italics
added.) As a result, “[e]vidence of economic and social impacts that do not contribute to
… physical changes in the environment is not substantial evidence that the project may
have a significant effect on the environment.” (Guidelines, § 15064, subd. (f)(6).) But
“[w]here a physical change is caused by economic or social effects of a project, the
11.
physical change may be regarded as a significant effect in the same manner as any other
physical change resulting from the project.” (Guidelines, § 15064, subd. (e), italics
added.)
As these aspects of the law demonstrate, “CEQA is not a weapon to be deployed
against all possible development ills.” (Joshua Tree, supra, 1 Cal.App.5th at p. 685.)
The fact that a project “may drive smaller retailers out of business is not an effect covered
by CEQA. [Citation.] Only if the loss of business affects the physical environment – for
example, by causing or increasing urban decay – will CEQA be engaged. [Citations.]”
[Citation.]” (Ibid.)
“[I]n preparing an EIR, the agency must consider and resolve every fair argument
that can be made about the possible significant environmental effects of a project ….”
(Protect the Historic Amador Waterways v. Amador Water Agency (2004) 116
Cal.App.4th 1099, 1109, italics added (Protect the Historic Amador Waterways).) An
EIR is required “ ‘not only when a proposed project will have a significant environmental
effect, but also when it “may”….’ [Citation.]” (Perley v. Board of Supervisors (1982)
137 Cal.App.3d 424, 432.) “The word “may” in this context connotes a reasonable
possibility. [Citations.]” (Citizen Action to Serve All Students v. Thornley (1990) 222
Cal.App.3d 748, 753.)
While appellant need only present a “fair” argument, the argument must
nonetheless be based on substantial evidence. “[S]ubstantial evidence includes fact, a
reasonable assumption predicated upon fact, or expert opinion supported by fact.” (Pub.
Resources Code, § 21080, subd. (e)(1).) Speculation, argument, unsubstantiated opinion
or narrative and evidence of economic impacts are not substantial evidence. (Pub.
Resources Code, § 21080, subd. (e)(2).) “Complaints, fears, and suspicions about a
project’s potential environmental impact likewise do not constitute substantial evidence.
[Citations.]” [Citation.]” (Joshua Tree, supra, 1 Cal.App.5th at p. 690.)
12.
B. Issue on Appeal
Appellant argues that evidence in the administrative record establishes that the
tenant type restriction and size cap will cause significant physical impacts and, therefore,
the EIR was inadequate for failing to address those impacts. Visalia responds that the
Anderson report “fails to show how LU-P-67” will cause urban decay.6
Synthesizing the parties’ contentions and the applicable law summarized above,
we can distill the issue before us to the following: can it be fairly argued from substantial
evidence that there is a reasonable possibility LU-P-67 will cause urban decay in the form
of significant, physical effect(s) on the environment?
Anderson’s urban decay argument can be roughly summarized as follows: the
40,000 square-foot cap will cause grocers to refuse to locate in neighborhood commercial
centers, which will cause vacancies, which in turn will result in urban decay. Visalia
counters that Anderson did not offer legally sufficient evidence that LU-P-67 will cause
anchor tenants to refuse to locate in neighborhood commercial centers.
As explained below, we conclude that while the Anderson report presents an
earnest policy case against LU-P-677, it fails to provide substantial evidence from which
6 Visalia also argues that “even if” appellant had successfully raised a fair
argument LU-P-67 would cause urban decay, the city “had substantial evidence upon
which to base its decision.” But that is not the applicable standard. If appellant had raised
a fair argument of urban decay based on substantial evidence, the EIR would have been
required to analyze it. (See Protect the Historic Amador Waterways, supra, 116
Cal.App.4th at p. 1109 [“in preparing an EIR, the agency must consider and resolve every
fair argument that can be made about the possible significant environmental effects of a
project …”].)
7 We note that the report was offered not only to identify purported CEQA issues,
but also to present a broader policy case against the tenant size cap. While we conclude
the report was not sufficient to require CEQA review of urban decay, we express no
opinion on the merits of its policy case against LU-P-67. The issue before us “is not the
wisdom of the policies adopted by the public agencies, but whether they complied with
CEQA ….” (Environmental Council of Sacramento v. City of Sacramento (2006) 142
Cal.App.4th 1018, 1030.)
13.
a fair argument can be made that LU-P-67 may cause significant effects on the
environment.
C. Analysis
The Anderson report offers four bases for the argument that grocers will indeed
refuse to locate in neighborhood commercial centers as a result of LU-P-67: (1)
Anderson is personally unaware of any grocers willing to build new stores under 40,000
square feet; (2) a “typical” SaveMart, Safeway/Vons, Albertsons or Lucky store requires
at least 50,000 square feet to be profitable; (3) Tesco launched multiple 10,000-20,000
square foot grocery stores and they were unsuccessful; and (4) three Visalia grocery
stores under 40,000 square feet are no longer in business.
As explained below, none of these constitute “substantial evidence” (Pub.
Resources Code, § 21080, subd. (e)(2)) on which a fair argument of urban decay can be
predicated.
Anderson’s assertion that he is personally unaware of any grocery stores willing to
build new stores under 40,000 square feet does not support an argument that no grocers
are willing to build such stores. Indeed, it is clear that at least some grocers in some
circumstances are willing to build stores under 40,000 square feet. For one, Anderson
acknowledges that Walmart built a sub-40,000 square-foot supermarket (though he
argues Walmart would likely build larger stores in the future). Additionally, the report
indicates that some community members were advocating the 40,000 square-foot cap in
the hopes of attracting a Trader Joe’s or Whole Foods market.8
The report also identified four grocers whose business model requires their
“typical” stores to be at least 50,000 square feet. But this observation pertains to four
8 As noted in another report offered by appellant in superior court, Trader Joe’s
has smaller stores compared to traditional grocery stores. That report also indicated that
“[a]ccording to the Food Marketing Institute (FMI) the median size of a supermarket in
the U.S. in 2013 was 46,500 sq. ft.”
14.
grocers, which does not suggest that other grocers are similarly unwilling to build stores
under 40,000 square feet. Nor does it establish that even the four identified grocers could
not build “atypical” stores to achieve profitability at smaller sizes.
In sum, the report’s evidence that some grocers would not locate in Visalia, is not
enough to support a fair argument “that urban decay would result.” (Joshua Tree, supra,
1 Cal.App.5th at p. 691.) “[E]ven if a handful of properties were to remain permanently
vacant, the result would not necessarily be the kind of change to the physical
environment that implicates CEQA.” (Ibid.) Inferring that urban decay would result
from the incompatibility between LU-P-67, and the business model of four grocers would
be speculation.
The report also points to one grocer’s failed attempts to build stores 10,000 to
20,000 square feet in size across the United States. But these stores were one-quarter to
one-half the size permitted under LU-P-67. Even if this case study indisputably showed
that grocery stores under 20,000 square feet are not viable, it would not raise a fair
argument that a size cap twice as large would produce similar results.
Finally, the report identifies three “sub-40,000 sq. ft. neighborhood supermarket
anchors” that were “unable to maintain long-term successful operations” in Visalia. But
there was no analysis provided as to why those stores closed. Absent such evidence, it is
speculation to conclude that they closed because of their size.
In sum, the report does not provide the requisite basis for appellant’s challenge
because (1) its analysis of causation was speculative, and (2) the potential economic
consequences it identifies does not “mean that urban decay would result. Common sense
alone tells us nothing about the magnitude of th[e] effect.…” (Joshua Tree, supra, 1
Cal.App.5th at p. 691, original italics.) While the report suggest that some grocers would
refuse to locate in Visalia under LU-P-67, it fails to support the implication that such
vacancies and lower quality tenants would be so rampant as to cause urban decay. That
omission is important, because “even if a handful of properties were to remain
15.
permanently vacant, the result would not necessarily be the kind of change to the physical
environment that implicates CEQA.” (Ibid.)
1. Bakersfield Citizens for Local Control v. City of Bakersfield Does not Mandate
a Different Result
Appellant points to our decision in Bakersfield Citizens for Local Control v. City
of Bakersfield (2004) 124 Cal.App.4th 1184 (BCLC). That case involved the
development of two shopping centers totaling 1.1 million square feet of space. The two
centers were 3.6 miles apart and each center was to have “a Wal-Mart Supercenter …
plus a mix of large anchor stores, smaller retailers, and a gas station.” (Id. at p. 1193.) In
contrast, the present case involves a land use policy within an amended general plan.
In BCLC, this court held that the EIR in that case was fatally defective for failing
to analyze “the projects’ individual and cumulative potential to indirectly cause
urban/suburban decay….” (BCLC, supra, 124 Cal.App.4th at p. 1193.) We observed
that case law “has established that in appropriate circumstances CEQA requires urban
decay or deterioration to be considered as an indirect environmental effect of a proposed
project.” (Id. at p. 1205.) We held that while the proposal of a new shopping center does
not trigger “a conclusive presumption of urban decay,” analysis of urban decay is
required “when there is evidence suggesting that the economic and social effects caused
by the proposed shopping center ultimately could result in urban decay or
deterioration ….” (Id. at p. 1207, italics added.) We acknowledged cases like City of
Pasadena v. State of California (1993) 14 Cal.App.4th 810 (City of Pasadena),
disapproved on other grounds in Western States Petroleum Assn. v. Superior Court
(1995) 9 Cal.4th 559, 576, fn. 6, wherein the court “agreed that social and economic
effects must be considered if they will cause physical changes,” but nonetheless rejected
the CEQA challenge presented therein because appellant had not made a sufficient
showing that the project would cause physical deterioration. (BCLC, supra, 124
Cal.App.4th at p. 1206.) For the reasons explained above, we find the present record
16.
closer to City of Pasadena than BCLC because appellant has not made a sufficient
showing LU-P-67 may cause physical deterioration.
In dictum9 in BCLC, we rejected the appellant’s argument that study of urban
decay was “not required because the record does not contain substantial evidence proving
that the shopping centers will cause urban decay.” (BCLC, supra, 124 Cal.App.4th at
p. 1207.) We stated that appellant had articulated the “wrong standard of review” and
that the true issue was “whether the lead agency failed to proceed as required by law.”
(Id. at pp. 1207–1208.)
BCLC was correct that the appellant in that case had identified the wrong standard
of review. It is not a project challenger’s responsibility to adduce substantial evidence
proving that the project will cause urban decay. But it is the project challenger’s
responsibility to adduce substantial evidence supporting a fair argument that the project
may cause urban decay. (E.g., Joshua Tree, supra, 1 Cal.App.5th at pp. 690–692; cf.
Pub. Resources Code, § 21082.2.)
II. THE GENERAL PLAN IS NOT INTERNALLY INCONSISTENT
Appellant contends the general plan is internally inconsistent.
A. Law
General plans “must be internally consistent.” (Orange Citizens for Parks &
Recreation v. Superior Court (2016) 2 Cal.5th 141, 153.) Similarly, amendments to the
general plan must be internally consistent and cannot cause the general plan to become
internally inconsistent. (DeVita v. County of Napa (1995) 9 Cal.4th 763, 796, fn. 12.)
“ ‘The … amendment of a general plan is a legislative act. [Citation.] A
legislative act is presumed valid, and a city need not make explicit findings to support its
action. [Citations.] A court cannot inquire into the wisdom of a legislative act or review
9Though we discussed the standard of review, we ultimately concluded that “[i]n
any event, [appellant’s] position has no substantive merit.” (BCLC, supra, 124
Cal.App.4th at p. 1208.)
17.
the merits of a local government’s policy decisions. [Citation.]’ ” (Dana Point, supra,
196 Cal.App.4th at p. 1619.) “ ‘A court therefore cannot disturb a general plan based on
violation of the internal consistency and correlation requirements unless, based on the
evidence before the city council, a reasonable person could not conclude that the plan is
internally consistent or correlative. [Citation.]’ [Citation.]” (Ibid.) Appellant bears the
burden of proof on this issue. (See ibid.)
B. Issue on Appeal
Appellant points to several policies and goals enunciated in the general plan,
including: 1) maintaining the city’s role as a regional commercial and industrial center
for surrounding counties; 2) enhancing the city’s retail base; 3) preserving and enhancing
qualities that make the city an ideal place to do business; 4) fostering a good working
relationship between the city and business community; 5) striving for a balanced mix of
local, regional, and national retailers; 6) attracting new retail development; 7) supporting
infill development which in turn offers various fiscal, social, economic and
environmental benefits; 8) promoting pedestrian-oriented retail.10 With respect to infill,
the general plan contains policies concerning the minimization of urban sprawl, and the
encouragement of compact, concentric and contiguous development. Appellant argues
LU-P-67 conflicts with these goals and policies because it will prohibit development in
neighborhood commercial sites, some of which are surrounded by urbanized
development. Appellant points to the Anderson report and city staff analysis as evidence
that the rigidity of LU-P-67’s tenant size cap is unwise.
10Appellant also suggests LU-P-67 is inconsistent with the general plan’s stated
“vision” which “reflects a general desire to increase flexibility for developers in new
growth areas.” But increasing flexibility for developers is one of several interests
expressed in the general plan. The general plan is not obligated to pursue that goal to the
exclusion of all others. Otherwise, the general plan could not impose any restrictions on
developers such as basic zoning and land use regulations.
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C. Analysis
Appellant’s argument fails to appreciate the standard of review we must apply,
and, more broadly, our role in this process. Determining the proper means of
encouraging infill development or market flexibility is a policy question for political
bodies, not a legal question for the courts. Our role is to determine whether any
reasonable person could conclude that LU-P-67 is consistent with the stated goals of the
general plan (e.g., infill development, market flexibility). We conclude that a reasonable
person could find the plan internally consistent on several rationales.
First, Visalia could have concluded that the tenant size cap would not impede infill
development. The general plan proposed 14 undeveloped neighborhood commercial
centers. The general plan also utilized a Commercial Mixed Use designation at which
larger tenants are permitted. The general plan observes that the “new Commercial Mixed
Use designation, applied to much of South Mooney Boulevard north of Caldwell, as well
as along other major arterials and community shopping nodes, provides needed flexibility
in retail and service formats and clustering.” Visalia could have reasonably concluded
that LU-P-67 would not likely impede infill development because larger tenants could
utilize areas designated commercial mixed use, while smaller tenants could fill the 14
anticipated neighborhood commercial sites. Because that determination is reasonable, it
is immaterial that the Anderson report supports a different view.
Second, promoting infill development in whatever form it may take is not the
general plan’s goal. The general plan seeks specific kinds of development (e.g.,
pedestrian-friendly retail). Once the general plan declares of goal of encouraging infill
development, it is not prohibited from seeking to restrict the nature of that development,
even if those restrictions may preclude some infill development. Here, LU-P-67 caps
tenants in neighborhood commercial zones at 40,000 square feet. Even assuming for the
sake of argument that appellant is indisputably correct this policy will discourage some
infill development, the city may reasonably decide to accept that consequence as the cost
19.
of pursuing other goals (e.g., helping smaller businesses, promoting pedestrian-oriented
retail, etc.). In sum, just because the general plan declares a goal of promoting infill
development does not mean all of its policies must encourage all types of infill
development. General plans must balance various interests, and the fact that one stated
goal must yield to another does not mean the general plan is fatally inconsistent. Few, if
any, general plans would survive such a standard.
As demonstrated by the two rationales described above, a reasonable person could
conclude LU-P-67 is not inconsistent with the stated goals and policies of the general
plan. As a result, we reject appellant’s internal inconsistency challenge. (See Dana
Point, supra, 196 Cal.App.4th at p. 1619 [“ ‘A court … cannot disturb a general plan
based on … internal consistency … unless, based on the evidence before the city council,
a reasonable person could not conclude that the plan is internally consistent …’ ”].)
III. VISALIA DID NOT VIOLATE THE PLANNING AND ZONING LAW BY
FAILING TO PROVIDE 10 DAYS’ NOTICE OF THE OCTOBER 14
MEETING
A. Background Information
On August 27, 2014, Visalia gave notice in a newspaper of general circulation that
it would hold a public hearing on the certification of the EIR and adoption of the
amended general plan on September 8, 2014. At the end of the September 8 meeting,
Visalia adjourned its meeting to October 6.
On October 6, 2014, the city council of Visalia held a special meeting “to continue
the Public Hearing [from September 8] and take additional public comment.”
Appellant’s counsel offered public comments at the meeting, wherein he expressed
concerns with LU-P-67 (and the rezoning of a portion of the Thomason property).
Councilmember Bob Link was absent from the meeting.
Near the end of the meeting, the following discussion occurred:
20.
“MAYOR NELSON: Anybody else like to address the Council at this time?
Seeing none, I’m going to close the public comment session. And rest assured
again, all of the comments made tonight are public record, Council member Link
will be apprised of all the comments made tonight so he will be informed of this
session. I will –
“MR. PELTZER: Just to clarify, we want to formally close the public hearing and
indicate it won’t be reopened at the next hearing.
“MAYOR NELSON: Right we’re formally closing the public hearing portion, it
will not be reopened at our future meeting ….”
At the close of the meeting, a councilmember made a motion “that we continue
this item sans public comment because that public hearing was closed, and to a future
date to be determined and with notice being more than 24 as is usual with a special
meeting.” The motion passed.11
On October 10, 2014, appellant’s counsel engaged Dr. Phillip G. King, an
economics professor with a Ph.D. from Cornell University to “prepare an expert analysis
of the economic and physical effects likely to result from Visalia’s proposal to regulate
neighborhood retail center development via General Plan policy LU-P-67.” Appellant’s
counsel later informed Dr. King that on October 10, 2014, Visalia had posted notice of
the continued hearing on the general plan for October 14, 2014. Appellant’s counsel said
he believed Visalia had “erred by not providing 10-days’ notice” and would request
Visalia reschedule the hearing to provide 10 days’ notice.
Nonetheless, the city council held its special meeting on October 14, 2014. The
council invited and heard public comment at the October 14, 2014, meeting. Appellant’s
counsel offered comments, and referenced a letter he had previously sent to the council
11 In a footnote in its opening brief, appellant questions the council’s ability to
continue a hearing due to a councilmember’s absence without allowing public comment.
Appellant observes that the absence of a single councilmember deprives attendees the
opportunity to engage with every member of the decision-making body. But appellant
cites to no authority that every member of a city council must be present at the public
hearing mandated by Government Code section 65090.
21.
raising “noticing issues” with the meeting. Appellant’s counsel also provided the city
council with specific changes it could make to the wording of LU-P-67. After discussion,
the city council voted to retain the existing language of LU-P-67, effectively rejecting
appellant’s counsel’s suggestions.
Despite the adoption of the general plan update at the October 14 meeting, Dr.
King proceeded to prepare a draft of his expert report in November 2014. The draft
report is included in the appellate record.12 Dr. King described the draft report in a
declaration as “essentially the report I would have submitted to the Council had the
Council provided 10-days’ notice of the final hearing.” In the draft report, Dr. King said
it was his “professional opinion that Visalia’s urban decay would increase markedly” as a
result of the general plan update.
B. Discussion
The Planning and Zoning Law (Gov. Code, § 65000 et seq.) governs the adoption
and contents of general and specific plans, among other things. (8 Witkin, Summary of
Cal. Law (10th ed. 2005) Constitutional Law, § 1010.) Among its requirements is
Government Code section 65355’s directive that “[p]rior to adopting or amending a
general plan, the legislative body shall hold at least one public hearing. Notice of the
hearing shall be given pursuant to Section 65090.” (Gov. Code, § 65355.) Government
Code section 65090 requires 10 days’ notice. (Gov. Code, § 65090, subd. (a).)
Appellant argues Visalia violated the Planning and Zoning Law by failing to
provide at least 10 days’ notice for the October 14, 2014, meeting. We disagree.
The Planning and Zoning Law only requires “one public hearing” before
amending a general plan. (Gov. Code, § 65355.) Visalia held a public hearing on
September 8, 2014, with notice given on August 27. The public hearing was continued to
12 Dr. King’s report was not submitted to Visalia before approval of the general
plan update and certification of the EIR. As the trial court observed, the report was “not
part of the administrative record and thus not considered.”
22.
October 6 and then closed at the end of that meeting. Visalia satisfied the Planning and
Zoning Law’s requirement of holding “at least one public hearing” with 10 days’ notice.
(Gov. Code, §§ 65355, 65090, subd. (a).)
It is true that Visalia also held a special meeting on October 14, 2014, and did not
provide 10 days’ notice for that meeting. But Visalia had already satisfied the Planning
and Zoning Law’s requirement of “at least one” public hearing with 10 days’ notice.
That Visalia may have held additional meetings on the general plan amendment is
inapposite.13
Appellant insists that while the city council indicated it was ending the public
hearing on October 6, 2014, it in fact invited and heard public comment at the October 14
meeting. This observation does not alter our conclusion. The Planning and Zoning Law
required Visalia to hold “at least one public hearing” and to notice “the hearing” pursuant
to Government Code section 65090. Visalia complied by holding a public hearing on
September 8, with notice published on August 27. Consequently, even though public
comment was permitted at the October 14 special meeting, nothing in Government Code
section 65355 required 10 days’ notice of that meeting. Importantly, Government Code
section 65355 does not require notice under Government Code section 65090 for “all
hearings” or for “any such hearings.” Instead, it requires notice be given pursuant to
Government Code section 65090 for “the hearing” – meaning the singular “public
hearing” required by the statute. (Gov. Code, § 65355, italics added.) Consequently,
when a local agency holds one public hearing, properly noticed under Government Code
13 Because we conclude Visalia did not violate the Planning and Zoning Law, we
need not address prejudice. However, we do note that appellant’s counsel appeared and
offered substantial comment at both the October 6 and October 14 meetings. Moreover,
while appellant claims that its economist’s report was not prepared in time for the
October 14 meeting because of purportedly insufficient notice, it offers no satisfactory
explanation for why it did not have a report ready in time for the October 6 hearing. We
are satisfied that appellant was not denied an opportunity to be heard.
23.
section 65090, its obligation under Government Code section 65355 is satisfied. When
the local agency holds additional meetings where public comment is permitted, those
meetings are not subject to the notice requirements of Government Code section 65090.14
Appellant has failed to show Visalia violated the Planning and Zoning Law’s
notice requirements.
DISPOSITION
The judgment is affirmed.
______________________
POOCHIGIAN, Acting P.J.
WE CONCUR:
______________________
DETJEN, J.
______________________
BLACK,† J.
14
Of course, other notice requirements apply to such meetings, apart from
Government Code section 65355. (E.g., Gov. Code, § 54956, subd. (a).)
† Judge of the Fresno Superior Court assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
24.
Filed 1/30/18
CERTIFIED FOR PARTIAL PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
VISALIA RETAIL, LP,
F074118
Plaintiff and Appellant,
v. (Tulare Super. Ct. No. VCU258614)
CITY OF VISALIA, ORDER
Defendant and Respondent.
It appearing that part of the nonpublished opinion filed in the above entitled matter
on January 4, 2018, meets the standards for publication specified in California Rules of
Court, rule 8.1105(c), IT IS ORDERED that the opinion be certified for publication in the
Official Reports with the exception of part III of the Discussion.
POOCHIGIAN, Acting P.J.
WE CONCUR:
DETJEN, J.
BLACK,† J.
† Judge of the Fresno Superior Court assigned by the Chief Justice pursuant to article VI,
section 6 of the California Constitution.