Digging Into Land Use Law

The California Environmental Quality Act (CEQA) requires state and local government agencies to identify potentially significant environmental impacts of proposed projects and to reduce those impacts wherever feasible. For large public infrastructure projects, the environmental review process can take years. Such projects can also be held up in the courts, even where the public agency has prepared a full Environmental Impact Report. In this episode of Digging Into Land Use Law, Nossaman Environment & Land Use Group Partners Rob Thornton and Liz Klebaner discuss recent legislative and regulatory developments relating to CEQA streamlining specifically as they relate to transportation projects.

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Transcript: CEQA Streamlining for Transportation Projects

_{0:00:00.0 Liz Klebaner: The California Environmental Quality Act–or CEQA–requires state and local government agencies to identify potentially significant environmental impacts of proposed projects, and to reduce those impacts wherever feasible. For a large public infrastructure project the environmental review process can take years. Such projects can also be held up in the court, even where the public agency has prepared a full environmental impact report.}

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_{0:00:29.7 Speaker 2: Welcome to Digging Into Land Use Law, Nossaman's podcast covering the development of all things in, on, or above the ground.}

_{0:00:46.1 LK: Thank you for joining us on this new episode of Digging Into Land Use Law. Today we will be discussing recent legislative and regulatory developments relating to CEQA streamlining and transportation. My name is Liz Klebaner, and I'm a partner in Nossaman's Environment and Land Use Group. With me today is Rob Thornton, who have founded the group and specializes in advising state and regional infrastructure authorities on environmental issues regarding large infrastructure projects.}

_{0:01:14.8 LK: In the course of his career, he has defended somewhere around $12 billion in regional infrastructure improvements against federal and state environmental challenges. In addition to many other honors, Rob has been ranked as one of the nation's top 10 environmental lawyers by US lawyer rankings for the past 15 years. Rob, thank you very much for joining us today.}

_{0:01:35.0 Robert Thornton: Liz, it's great to be here.}

_{0:01:37.2 LK: 2020 has been a year of reckoning on many fronts. In just the first few weeks of the wildfire season, California has borne witness to 24 active wildfires. According to some news outlets, four million acres and burned through the start of the year, that's 4% of the entire state. There recent fires in Northern and in Southern California have caused air pollution in concentrations exceeding regulatory thresholds for hazardous air conditions, turned daytime skies dark and forced people to stay indoors for days or weeks at a time. For many, this wildfire season has made global warming a palpable reality.}

_{0:02:12.4 LK: The transportation sector is the largest contributor to the state's carbon budget. Recent developments have emphasized the need for greater investment in transit infrastructure and additional housing located close to job centers and utility infrastructure. The fires are of course not to be overshadowed by the global COVID-19 pandemic, which has itself had a dramatic impact on transportation this year.}

_{0:02:35.1 LK: The recent economic downturn has reduced highway traffic and transit ridership. It has also reviewed sales and gas tax revenues, two important key sources of transportation funding. While these impacts are likely to be temporary, they remind us that a healthy environment and the economy are connected. Reductions in transit revenues are causing some transit agencies to tighten their belts, which means that certain public infrastructure projects may be delayed.}

_{0:03:00.9 LK: Rob, CEQA reform is a perennial topic. How has the California Legislature responded to the challenges of the pandemic and the related economic impact?}

_{0:03:10.5 RT: Well Liz, this year the legislature of course recessed in August, and this year that the legislature focused primarily on addressing the public health and economic crisis related to the pandemic. But as has been the case for really since enactment of CEQA, but certainly in recent years, there seems to be little evidence of legislative support for any major revisions to CEQA. The few bills that did pass were passed to encourage transit-oriented development and reduce litigation delays.}

_{0:03:42.6 LK: While there has really not been a lot of CEQA legislation for the reason you stated this past year, and also in prior years, what sort of legislation has been put forward in your experience in order to facilitate transit improvement projects and development more generally?}

_{0:03:58.6 RT: In the last decade CEQA reform was generally focused on reducing and eliminating duplicative environmental review, and on measures that could reduce litigation risks and delays. We've also seen a handful of exemptions from CEQA for narrowly defined projects, such as pipelines that are fewer than a mile in length.}

_{0:04:17.5 LK: Regarding eliminating duplicative environmental review, CEQA in the court decision emphasized that the statute was primarily intended to inform the public and the decision maker. It wasn't just intended just to generate paper or duplicative or overly complicated and lengthy environmental documentation. Do you think that CEQA has been reformed to eliminate duplicative environmental review?}

_{0:04:42.3 RT: Well of course it depends on what you mean by "reform". There's been many modifications to CEQA over the years to respond to various issues, but without really changing the major thrust of the legislation. As I've indicated, the focus in recent years has been to narrow or eliminate project-level environmental documents where a prior planning level environmental document had already been addressing impacts of the specific development project.}

_{0:05:15.8 RT: We have seen this sort of streamlining treatment in the case of transit-oriented and infill development projects, and projects that are consistent with locally adopted land use plans. However, until this year, we have not seen a similar model used for transit and transportation facilities.}

_{0:05:33.3 LK: When it comes to infill and transit-oriented development, do you think that measures that have done away with, or largely done away with project-level environmental review where there's a planning document on point have been successful in reducing cost and delay associated with CEQA compliance?}

_{0:05:54.7 RT: In some respects, yes, the new procedures have reduced the complexity and processing time associated with environmental review. But delays are still a reality for controversial and large projects, but this is more a project of the complexity of the stated federal environmental process, than it is a function of CEQA alone.}

_{0:06:15.3 LK: Alternative projects seem to be favored by most folks, particularly those folks living in metro areas. Do you think that permitting and litigation delays are a concern when it comes to transit and transportation project?}

_{0:06:27.7 RT: Well, of course, permitting and litigation delays are always a concern for large projects. As the saying goes, "time is money". Delays increase construction costs, particularly where the construction cost index is rising. Most large projects these days have limited funding sources. The days are gone in fact, when federal and state gas tax revenue could make up funding shortfalls for large projects.}

_{0:06:52.7 RT: For example, the federal gas tax has not been increased since 1994. Completing projects on time and on budget is more important than ever, and there is intense competition between projects for sales tax revenues in the state, dedicated to transportation.}

_{0:07:09.2 LK: Well, litigation is obviously a huge concern because it can cause a project to linger in the courts for many years, in some cases, even decades, while public funding dries up or priorities shift. What sort of measures have been written into the law to reduce litigation risk and delay?}

_{0:07:29.1 RT: In recent years, the state has pass legislation to speed up CEQA litigation for specific projects including the basketball arena in downtown Sacramento and certain transit projects. The legislation set a goal of completing CEQA litigation through the trial and the Court of Appeal in 270 days. If successful, this would reduce the typical CEQA litigation time by a year or more, but there does not appear to be much legislative appetite to apply these revisions to all projects.}

_{0:08:02.4 RT: And of course, the courts are also suffering from insufficient funding and the impacts of the pandemic. Courts have many other important priorities mandated by state law and by the state and federal constitutions, but the most important recent change to CEQA is the replacement of traffic delay as the measure of transportation impact.}

_{0:08:25.8 RT: With vehicle miles traveled or what's called VMT, the Office of Planning and Research in the governor's office argues that the shift to VMT as a measure of transportation impacts will simplify CEQA evaluations, particularly for infill and transit projects. But the shift to the VMT standard will likely complicate the CEQA process for the majority of land use projects that are not in urban centers, and for any highway project.}

_{0:08:53.0 RT: For projects not subject to the streamlining legislation, experienced CEQA practitioners have developed strategies over the years to reduce CEQA and other litigation delays. These strategies include the highly coordinated state and federal environmental review and real-time preparation of the administrative record, and using these strategies, we've been able to reduce litigation delays quite materially.}

_{0:09:15.6 LK: Well, I think it's worth noting that the few projects that have been identified by the legislature for CEQA streamlining are set out in two bills, as those bills relate to transportation projects specifically. That's AB2731 and as SB288. AB2731 applies that judicial streamlining model that Rob you were referring to, to a particular project, is a new transit station with a potential connection to the San Diego International Airport, where legislation actually defines the site on which the transit station would be built for the provision to apply.}

_{0:09:56.1 LK: The site is currently under federal ownership and it's located in downtown San Diego, so it'll be interesting to see how that legislation is applied in that context. SB288 has broader coverage in some respects. It's not limited to a specific project. It is however limited to a set of transportation improvements that are intended by and large to increase the efficiency of existing assets and to facilitate multi-modal transportation.}

_{0:10:30.6 LK: There's an express exemption in SB288 for new bus rapid transit or a light rail service, including new stations, as long as those stations are located on existing public rights of way. What sort of impact, Rob, do you think SB288 could have on transportation projects?}

_{0:10:49.0 RT: Well, the exemption for new light rail and bus stations could expedite the environmental review and reduce CEQA compliance and litigation costs related to the construction of new stations. However, it should be emphasized that the exemption scope is limited to projects proposed on land already owned by public agency.}

_{0:11:07.3 RT: This often proposes practical difficulty. The exemption does not authorize agencies to acquire land for purposes of transit facilities, and CEQA limits the ability of any agency to acquire land for a project prior to CEQA compliance.}

_{0:11:23.4 LK: That's interesting, that's an interesting point about the land acquisition piece. Well, I know that you mentioned that the new VMT guideline poses some specific challenges for transit and transportation agencies, as well as CEQA lead agencies at large. What do you think will be the biggest CEQA compliance challenge for transit and transportation agencies specifically?}

_{0:11:47.6 RT: I think without a doubt that the OP&R, Office of Planning and Research adoption of the new CEQA guideline adopting a new standard for transportation impacts, presents an important new challenge and an important new opportunity that will depend on OP&R's and the court's interpretation of this provision. But the standard is likely to impose additional mitigation burdens for certainly for traffic capacity-enhancing projects, and that will continue to be an important issue.}

_{0:12:21.9 LK: There's been a lot of criticism of the new VMT guideline, so it's interesting to hear you say that it presents both challenges and potential opportunities. One way to look at the new guideline is that it can help facilitate new transit facilities. Under the old method for analyzing traffic impact, new transit facilities, particularly those proposed in already congested and built-up environments such as metro areas in, for instance in San Francisco or Los Angeles, would almost always result in traffic and transportation impact by causing congestion on the streets and intersections and highway on-ramps in the vicinity of the new translation station.}

_{0:13:03.5 LK: Because those types of projects were proposed in an already built environment, transportation was really the only impact in many cases that required a significant mitigation program, other than the routine measures for mitigating short-term construction and air quality impact of such facilities. Do you think that the new guideline can operate as a streamlining measure or an assist for new transit facilities?}

_{0:13:29.4 RT: Well, potentially. While traffic congestion is no longer an impact under the guideline, traffic hazards will still have to be studied as part of CEQA review and require a traditional level of service analysis. We will likely see greater certainty in several areas when the California Appellate Courts have interpreted the new guideline and the presumption that certain infill and transit projects will not have a significant transportation impact.}

_{0:13:56.0 RT: Transit agencies will continue to have to address other impacts as part of the CEQA review, including greenhouse gas emissions associated with construction activities and operations.}

_{0:14:07.5 LK: The new guideline has made single occupancy vehicle use an environmental impact, which was kind of a radical idea for many when the guideline was initially put forward at this point many years ago in its draft form. The Governor's Office of Planning and Research has recommended a handful of mitigation measures for agencies to use to reduce the impact of single occupancy vehicle use, which of course presents an enormous challenge, not just for transportation projects, but for any development project, particularly those proposed away from public transit infrastructure.}

_{0:14:43.4 LK: The recommended measures include such approaches as tolling new lanes to encourage carpooling or funding transit improvements. The Governor's Office of Planning and Research also recommends using in-lieu fees to finance regional transit improvements as a form of VMT mitigation, although to date, I don't know if many mitigation banks have been set up for this purpose. How can transit and transportation agencies benefit from the new VMT regulatory scheme?}

_{0:15:13.5 RT: Well first, development impact fees are already an important source of funding for infrastructure and have been for really for several decades in the state, but increased development impact fees can result in increases in housing costs and exacerbate the deficit of affordable housing. It will certainly be important to develop regional approaches that balance new funding sources against the need for affordable housing.}

_{0:15:38.0 RT: The state's VMT and greenhouse gas goals are unlikely to be achieved unless we can develop efficient programmatic approaches to these challenges. Examples of similar successful regional programs include the Southern California Natural Community Conservation Plans, addressing conservation of land use and transportation impacts on the coastal sage scrub ecosystem.}

_{0:16:00.5 LK: Thank you, Rob. Your insights on CEQA compliance and transit and transportation planning are always really enlightening. This has been a great conversation. And thank you to our listeners for joining us for Digging Into Land Use Law. For additional information on this topic or other environment and land use issues, please visit our website at Nossaman.com.}

_{0:16:23.7 LK: And don't forget to subscribe to Digging Into Land Use Law wherever you listen to podcasts, so that you don't miss any of our upcoming episodes. Until next time.}

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_{0:16:33.5 S2: Digging Into Land Use Law is presented by Nossaman LLP, and cannot be copied or re-broadcast without consent. Content reflects the personal views and opinions of the participants. The information provided in this podcast is for informational purposes only, is not intended as legal advice, and does not create an attorney-client relationship. Listeners should not act solely upon this information without seeking professional legal counsel.}

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