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Big-Box Projects Required to Evaluate Urban Decay and Health Impacts


Even though portions of two proposed shopping centers are already built and open for business, a California Court of Appeal ordered the decertification of Environmental Impact Reports ("EIRs") prepared for the shopping centers and the voiding of all project approvals and associated land use entitlements, putting into question whether the shopping centers could continue to operate. The Court invalidated the EIRs because they did not include analysis of both the potential of "big-box" retailers to cause urban decay and the human health impacts caused by air pollution arising from the projects. The decision creates important new CEQA requirements for retail projects.

The City of Bakersfield approved the construction of two shopping centers within a few miles of each other, each containing a Wal-Mart Supercenter and other big-box retailers. As part of its approval process, the City certified two separate EIRs prepared for the projects pursuant to the California Environmental Quality Act ("CEQA")[1] and granted zoning changes and general plan amendments. In Bakersfield Citizens for Local Control v. City of Bakersfield, 2004 Cal. App. LEXIS 2121 (Cal. Ct. App., 2004), the Court of Appeal decertified the EIR and invalidated the project approvals.

To view a copy of the case, click here.

Key Point 1: An EIR Must Analyze the Effect of Urban Decay Resulting From the Proposed Project

The Court found the EIRs to be inadequate because they failed to include analyses of whether the new shopping centers, with their big-box retail stores, could cause urban decay: closure of smaller retail stores in the area surrounding the big-box stores and subsequent long-term vacancies that destroy neighborhoods. Although CEQA does not generally require analysis of the economic effects of proposed projects, such analysis must be performed when those effects lead to physical changes in the environment. Closure of other retail stores resulting from construction of the new shopping centers is an economic effect of the proposed projects, but because the economic effect may lead to the physical effect of urban decay, the court held that it must be analyzed in the EIRs.

Key Point 2: A Cumulative Impacts Analysis Must Not Be Based on Outdated Planning Documents

The Court criticized the sufficiency of one EIR because it relied on an outdated, inaccurate planning document that did not account for the addition of both projects in its projections. While CEQA does permit reliance on planning documents and the development projected therein as a basis for a cumulative impacts analysis, the Court rejected the City’s reliance upon such a document in this case because it was so outdated.

Key Point 3: An EIR Must Discuss Human Health Impacts Resulting From Air Pollution Caused by the Projects

Finally, the Court held that the EIRs were inadequate because although each concluded that the shopping center would cause significant and unavoidable impacts to air quality, neither correlated these impacts on air quality to resulting adverse human health effects, such as respiratory illnesses. CEQA mandates that health problems resulting from physical changes caused by the project be discussed in an EIR. Because the shopping centers caused physical change to air quality, an analysis of the human health problems resulting from the air quality impacts must be included in the EIR. These health problems were not identified and analyzed; hence, the EIRs were deficient. The implication of this holding is that EIRs are likely to be required to include a more sophisticated analysis of air quality impacts on human health.

Key Point 4: Completion of the Project Is Not Enough to Moot a CEQA Lawsuit

Although the Court made no new law on the availability of remedies, this case is a rare example of the Court allowing a completed project to be enjoined and granting the public agency discretion to change or remove portions of the already-built projects. A factor considered by the Court was that the developers recognized the risk of relying on contested project approvals while litigation was pending, but continued with the projects anyway. The Court stated that it would be inequitable and against public policy for a developer to defeat a CEQA suit by continuing to build a disputed project while litigation over that project is pending. Whether or not the Superior Court decides on remand to halt ongoing construction and operation of existing stores, this case serves as a warning to developers who push ahead with a project while opponents are litigating to halt it.

Key Point 5: The Consent Calendar Should Not Be Used for EIR Certification

In response to the developers’ complaint that the plaintiff’s comments were submitted after the City had certified the EIR, the Court criticized the City for improperly segregating the environmental review process from other project approvals by placing the City’s certification of the EIR on the closed consent calendar. The plaintiff had been unable to comment on the EIR certification because it was not considered at a public hearing.

Key Point 6: Parties Should Not Demonize the Opposition

The Court sharply criticized the parties’ attempts to demonize the other side. It refused to endorse the plaintiff’s position that big-box retailers in general, and Wal-Mart in particular, are undesirable and inferior, and it did not consider a developer’s complaint that the plaintiff organization was a front for disgruntled unionized grocery workers who felt threatened by the entry of Wal-Mart and its non-unionized employees into the market. The severity of the Court’s criticism suggests that tactics like these have an adverse effect on the Court’s perception of the parties, which could in turn undermine the credibility of the parties’ arguments.

Key Point 7: All Relied-Upon Documents Should Be in the Record

In an unpublished portion of the case, the court refused to allow the City to rely on a document to support its position because the document was not in the administrative record. If the EIR references a document in support of a position taken in the EIR, a party relying on that document should ascertain that it is in the administrative record, preferably as an attachment to the EIR.

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