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Construction: When is a development project a project?

LATEST CEQA RULING CLOUDS PROCESS FOR PUBLIC-PRIVATE EFFORTS

Instead of clarifying a long-running legal question about when a development plan becomes a “project,” triggering environmental-impact analysis, a new state Supreme Court ruling will prompt a review of commonly used public-private agreements, according to Phillip Kalsched, a construction and land-use attorney with Carle Mackie Power & Ross in Santa Rosa.

“In the context of affordable housing, this ruling could have a serious chilling effect because of the need to secure assurances before going for sources of funding,” he said. “It will be a quite difficult balancing act under this decision on what goes too far.”

On Oct. 30, the state’s highest court ruled unanimously in Save Tara v. city of West Hollywood that the city acted as if it had approved a 34-unit affordable housing project before studying its impacts, as required by the California Environmental Quality Act, and officially signing off on the plan. The case is the latest that has reached the state’s top courts in recent years to address the question of when CEQA review is needed during a project.

The city and developers argued that the development agreement eventually stated that the project would be subject to environmental review, a common clause in land-use documents.

Yet the court found that city actions – such as fronting the developers $1 million from a small city budget, stating publicly that project alternatives such as a library wouldn’t be pursued and sending one-year relocation letters to existing tenants of the property – acted as if the project proposal couldn’t be rejected. The city gave the developers a purchase option on the property to show control of the project site as part of a bid for $4.2 million in U.S. Housing and Urban Development Department grant money.

“A public entity that, in theory, retains legal discretion to reject a proposed project may, by executing a detailed and definite agreement with the private developer and by lending its political and financial assistance to the project, have as a practical matter committed itself to the project,” Associate Justice Kathryn Werdegar wrote in the 34-page opinion.

As a “general principle,” rather than a “bright-line rule,” a public agency mustn’t “take any action” to move a project along significantly before CEQA review if such action would not allow for project alternatives or mitigation measures that would be analyzed under CEQA.

Yet the high court overturned part of a state appeals court ruling that would have moved the trigger point for preparation of CEQA documents to the time development agreements are entered and potentially enough project information is available for analysis.

“Whenever courts lay out global tests with detailed analysis of the facts of a case, they are ripe for litigation,” Mr. Kalsched said.

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Canal Alliance has been offering training and professional-advancement courses for low-income residents in the Canal area of San Rafael for 16 years. Now the nonprofit group is customizing English as a Second Language courses for Marin County businesses, starting with San Rafael-based engineering general contractor Ghilotti Bros. and health care provider Kaiser Permanente.

The Marin Workforce Investment Board in its May 2007 report, “Greening the North Bay,” listed more-accessible ESL training as one of the top five concerns among job seekers.

Ghilotti Bros. had nine employees graduate Oct. 30 from a 12-week vocational ESL course at company headquarters. The company plans ESL training in its offices in Rohnert Park and Cordelia, with plans to graduate up to 60 workers next year.

A six-week course also is available. Kaiser has about a half-dozen workers enrolled through early December.

The course cost Ghilotti $5,240 in instructor time, a quarter of which was covered by Workforce Investment Act funds, including paid time to attend the 90-minute Thursday night classes after the workers returned from a job on the Peninsula, according to Canal Alliance spokesman Jeff Troiano.

Ghilotti Bros. President Mike Ghilotti said the motivation for the course was part of training and mentorship of the next generation of workers and to increase job-site safety.

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Submit items for this column to

Jeff Quackenbush at 707-521-4256, jquackenbush@busjrnl.com or fax 707-521-5292.