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Environmental Law: Development Impediment or Protective Measure?

By Stacie Chan | 17 Mar 2010

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California Environmental Quality Act

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The California Legislature created the California Environmental Quality Act (CEQA) in 1970 to protect the increasingly vulnerable environment from potentially damaging development projects. More recently, developers and environmentalists each have conflicting issues with the laws.

California environmentalists have long celebrated the enactment of CEQA as a measure to ensure that developers do their part to minimize any environmental impacts. But developers said the law’s requirement of a comprehensive environmental impact report causes extensive delays in development projects. They attribute the delays to the heightened awareness of climate change issues and the media’s more prevalent coverage of this topic. They said this increase in environmental concern allows others to use this concern to halt development projects and stifle job development. Individual environmentalists believe CEQA allows exemptions for projects that promise economic development. But ultimately, they say CEQA serves as environmental protection that cultivates a mindset that encourages environmental awareness.

While not a perfect law, the legislature amends the law every two years to correct deficiencies. Fourteen states have enacted similar laws based on California’s initiative, but none of them as stringent as CEQA, environmental policy experts said.

“It’s the best environmental law in California,” Assemblymember Jared Huffman (D-CA) said. “It looks at components like greenhouse gas emissions and traffic, which other states do not.”

He said this model provides a constant reminder that climate change is a pressing issue that the government needs to moderate.

In California, all public as well as private projects must draft an environmental impact report. CEQA has successfully required dozens of projects that do not adequately delineate the environmental impact to re-draft their reports.

Last June, a Contra Costa County Superior Court Judge prohibited Chevron from expanding its Richmond refinery because of an “unclear and inconsistent” report. In August 2008, the legislature required biofuels company Cilion to reduce the approximately 180,000 tons of greenhouse gas emissions that its ethanol production plant emitted annually.

“CEQA has been successful in protecting the state and filtering the projects that would have a significant impact on the environment,” Stanford Environmental Law Professor Deborah Sivas said.

“It is in place to ferret out both viewpoints: the environmentalists and the developers,” California State Resources Agency spokesperson Sandy Cooney said. “Both can meet in the middle to ensure that we manage growth and climate change collectively.”

Yet while CEQA has prevented potentially environmentally damaging projects in some cases, many developers said flaws render the law ineffective.

“Our environmental law is a nightmare,” said John Semcken, Vice President of multi-billion dollar development company Majestic Realty.

“It’s impossible to build schools, to build power plants, to build anything in this state because of CEQA. Now, development projects are going to other states because their laws don’t allow special interests to stop projects.”

The federal government enacted the National Environmental Policy Act (NEPA) a year before CEQA in 1969. It requires the same environmental analyses, compensation to neighboring cities and mitigation efforts, but doesn’t allow for multiple resubmissions of comments. Semcken said that this makes it easier for federal projects to see completion.

Sivas said California’s law is more stringent because developers must file a statement of overriding consideration if they do not choose the most environmentally protective alternative. The federal law and other state laws do not require this extra step.

“Business is leaving every day,” Semcken said. “Businesses have left the state to places like Nevada and Texas because it’s just too difficult to build anything here.”

The Menlo Gateway Project

Tim Tosta, a land-use attorney for the Menlo Gateway project in Menlo Park, Calif., said opposition has surfaced recently because of more climate change coverage. The 700,000 square foot project includes a hotel, fitness center, and office buildings.

After two and a half years and hundreds of thousands of dollars spent on the environmental impact report, the city still has not approved Menlo Gateway Project’s environmental impact report.

“But these problems are endemic to all development projects,” Tosta said. “Some developers can spend up to a couple million dollars just to get through the process.”

Sivas agreed that a typical EIR can cost $1 million. “But to the developer, this isn’t much money,” she said. “It’s just a small piece of the process.”

Like most developers, Tosta said he was not against a review of a project’s potential impacts. He objects to the current way CEQA mandates assessment of a project.

“The consequence is that it drags down development,” he said. “The process is heavily conservative in that it predicts a larger environmental burden than the project actually creates.”

But environmentalists said that this cautious approach is necessary.

“It’s a nuisance to the developer, but these impacts affect the community in ways other than job creation,” Huffman said. “What’s the alternative? Let developers build without any analysis?”

Sivas added, “Development projects have to remember that climate change is irreversible.”

The Los Angeles Football Stadium

To lure a football team to Los Angeles, Semcken said Majestic Realty Co. planned to build an almost three million square foot stadium back in 2007. Eighty-seven of 88 cities in the Greater Los Angeles area approved the stadium, but the City of Walnut sued the developers on the last day of the 30-day window of time that the public was allowed to comment on the environmental impact report. City officials sued due to “significant traffic impacts, noise, air and light pollution, and other impacts that would jeopardize the health, safety and welfare of its residents,” Walnut officials said in a statement reported in the Los Angeles Times.

“The city of Walnut took advantage of CEQA,” Semcken said. “Their argument had nothing to do with the environment. They were trying to raise the profile of elected officials who were taking on the big bad developers.”

Sivas said that exceptions happen and this kind of stalling occurs, but very rarely.

Semcken said that when his company tried meeting with Walnut officials, the officials refused to sit down to discuss the lawsuit. The developers took their case to Sacramento where Governor Schwarzenegger passed a bill to override Walnut’s refusal to meet with the company. Eventually, Majestic Realty and Walnut settled on compensation of tens of millions of dollars. But Semcken said the true “losers” in this situation were the residents.

“Right now 6,735 permanent jobs, 12,000 construction jobs, and 762 million annual economic output are on hold because one city decided the project shouldn’t move forward,” Semcken said. “We can’t get schools built, power plants built, anything built because the process is too difficult to get anything done.”

But Huffman said job creation should not be used to undermine CEQA.

“These are tough economic times, and we all want to see more jobs and prosperity,” he said. “But there’s a very disingenuous attempt to blame CEQA and an insidious agenda to roll back California’s world class environmental law.”

Sivas argued that jobs are created in other ways aside from what the developers could offer.

“If we’re talking about jobs, enforcing CEQA has created a whole industry,” she said. “There are environmental consulting firms and many individuals are responsible for seeing that CEQA is enforced.”

Environmentalists’ Concerns

Environmentalists say they are also dissatisfied with CEQA for loopholes that allow developers to continue their environmentally harmful projects under the guarantee of job creation. Loma Prieta Sierra Club Transportation Committee Chair Gladwyn D’Souza said he was upset with the exemptions that allow certain development projects to pass.

“CEQA allows projects to slide through if there’s ‘economic development,’” D’Souza said. “There may be harmful air quality effects, but there’s nothing we can do about it because the developer has promised economic development.”

D’Souza said that the environmental impact report for the Highway 280 entrance on Page Mill Ave. reconstruction overlooked several key aspects. He said the city did not adequately review the transportation impacts because the bike lane ends right before cars enter the freeway, leaving cyclists to dangerously change lanes across cars driving at 40 mph.

CEQA Amendments?

“The only way change is going to be brought about is through the community,” Tosta said. “It’ll happen when people realize that development isn’t bad. They will have had enough of waiting 20 years for a sidewalk to be built.”

But Huffman said he is wary of any changes made to CEQA, even if to improve some of its deficiencies.

“There are so many people chomping at the bit to blast huge holes in CEQA,” he said. “I want to be very careful in opening up the law to amendments. Each time you do it, ten more try to do the same.”

Yet Sivas said she is not convinced that all development should be quickly pushed through the environmental process. But should a company go to court to dispute report requirements, CEQA cases receive priority over civil cases.

“CEQA can delay projects but not outright stop them, so there isn’t an intentional stalling,” she said. “And slowing down isn’t necessarily a bad thing. It allows for public participation and concerned parties to comment. CEQA was meant to be a disclosure law.”

Many prominent environmental scientists have asserted that climate change is a fairly recent phenomenon, spurred by human action. With this climate impact, it is necessary to ensure that the state monitors development, Sivas said.

“There are around 37 million people in California today,” Cooney said. “In 2050, that number is predicted to reach 50 million people. In a state this big with that kind of growth potential, we must manage natural resources well and CEQA helps us do this.”

Sivas added, “CEQA in itself won’t directly combat climate change, but it compels us to think about environmental issues. There’s no question that this goes a long way in placing the environment at the forefront of issues.”

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