How an Environmental Law Is Harming the Environment 

California's signature environmental law needs to be reformed because NIMBYs are using it to block smart growth.

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Last August, Alameda Superior Court Judge Evelio Grillo ruled in favor of Parker Place and dismissed the opponents' suit. But the opponents, who call themselves Parker Shattuck Neighbors and include Berkeley Planning Commissioner Patti Dacey, are not giving up. They have appealed the judge's decision. An appellate court ruling could come this May, but the opponents may then appeal all the way to the state Supreme Court.

Andrew Sabey, a land-use attorney who represents Kashani, said the Parker Place litigation provides a case study in how CEQA could be reformed to help expedite smart growth. He noted that it's not unusual for transit-oriented projects to be built on former urban brownfields. This is yet another advantage of smart-growth development: It can provide the needed incentive to clean up polluted areas with private capital.

In the case of Parker Place, there was an underground storage tank underneath the longtime Honda dealership and repair shop. In 2006, California regulators placed the site on a state register, known as the Cortese List, because the tank had previously released pollution into the nearby soil. Evidence in the case revealed that there are 33 Cortese List sites in downtown Berkeley within one-half-mile of Parker Place.

Under CEQA, the opponents of the project were allowed to hire their own expert hydrologist who then contended that the property was "significantly contaminated" and needed a more thorough environmental study, known as an Environmental Impact Report (EIR). The city had completed a less comprehensive study known as a Mitigated Negative Declaration. Sabey pointed out that the city's own expert had investigated the site in 2006 and determined that it was not significantly contaminated.

Such disagreements among dueling experts are common in lawsuits involving infill projects. They fall under what is known as the "fair argument standard," an aspect of CEQA that gives anti-growth activists a potent weapon with which to challenge smart-growth development. "It creates a very easy opportunity to take a case to court," Sabey explained. "It creates an incredibly low threshold for NIMBYs to find someone with some initials after their name" to contradict a city's expert in court.

Making matters worse is the fact that a site can never get off the Cortese List — even after it's been cleaned up, Sabey noted. In this case, the San Francisco Regional Water Quality Control Board determined in 2011 that the Parker Place location was a "closed" site and thus not a hazard. But the site is still on the Cortese List.

Sabey and East Bay city officials interviewed for this story contend that both the fair argument standard and the Cortese List rules should be reformed for smart-growth projects. "That would be a big step for a lot of urban infill development sites," Sabey said.

But is it enough?

Although CEQA was patterned after the National Environmental Policy Act, it has unique characteristics. Similar environmental laws in other states only allow bona fide environmental groups to sue to block development, said Hernandez of the Holland & Knight law firm. But that's not the case in California. Here, virtually anyone can file a lawsuit under the state's primary environmental law.

California also does not require transparency. Groups who sue to block development do not have to disclose the identities of their members or who funds them, Hernandez noted. As a result, it's possible in California that corporations are financing CEQA lawsuits through front groups in order to block their competitors' development projects.

And sometimes businesses just do it openly. The CEQA Working Group, a coalition of business and labor organizations that wants to broadly reform the law, has been chronicling instances in which CEQA has been misused. One example involves the owner of a San Jose gas station, Andy's BP, who filed a CEQA lawsuit in 2010 against his competitor across the street, Moe's Stop gas station, because the owner of Moe's wanted to add three gas dispensers to his business. The owner of Andy's BP cited "traffic impacts" — and won in court, forcing the owner of Moe's to conduct a full-blown EIR.

Ultimately, the owner of Moe's completed the EIR and installed his gas dispensers. But the whole process cost him $525,000 more than it would have had he not been sued.

"That's not allowed in any other state," Hernandez said of environmental lawsuits filed by one business to block a competitor's project. "In all other states, the only parties that get to sue under environmental law ... are environmental groups."

California legislators, however, are unlikely to change the law to require transparency in CEQA lawsuits or limit the filing of them to environmental organizations. The reason, Hernandez explained, is that unions sometimes file CEQA litigation — or threaten to do so — when a project does not guarantee that it will employ union labor. As a result, there's no appetite in the Democratic-controlled legislature "for even requiring disclosure," Hernandez said.

Before he resigned last month to take a job with Chevron, Michael Rubio, a moderate Democratic state senator from Bakersfield, had been leading the charge for a sweeping overhaul of CEQA. But Rubio's reform proposals were not limited to smart growth in cities, and likely would have paved the way for more suburban and rural projects as well. Understandably, many environmental groups responded with concern.

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