Agreement for City Services to Proposed Tribal Casino is Not a Project under CEQA
The First District Court of Appeal ruled that the City of Richmond did not violate CEQA when it entered into a municipal services agreement (MSA) for a tribal casino proposed on unincorporated lands adjacent to the City. In Parchester Village Neighborhood Council v. City of Richmond, the court reversed a trial court decision and agreed with the City that the MSA was not a project under CEQA.
In 2006, a draft Environmental Impact Statement under NEPA was prepared for the proposed casino. About the same time, the proponent tribe began negotiating with the City to provide municipal services to the project. The negotiations resulted in a Municipal Services Agreement through which the tribe would provide funding for police, fire protection and public works services from the City. The agreement involved no City commitment to physical changes in the environment and included compliance with CEQA in the future, if necessary. The court rejected the trial court’s determinations that the MSA was a project undertaken by the City and that it committed the City to a range of fire, traffic and other improvements.
The court noted first that the City has no regulatory authority over the casino and that no applicable regulations require City approval or support. Thus, the casino development is not an activity undertaken by the City and is not a project under CEQA. Similarly, the City’s support of the casino development did not transform it into a project.
The court then addressed the City’s contention that the MSA is essentially a funding mechanism. Comparing the MSA to other cases which found funding agreements subject to CEQA, the court distinguished the MSA because it did not include any timeline for construction of physical improvements and did not obligate the City to any specified construction projects. Further, the agreement provided that if any improvements were implemented in the future, CEQA compliance would be required at that time. Based on these factors, the agreement did not impermissibly foreclose full and adequate CEQA review of alternatives and mitigation measures if physical improvements were proposed in the future.
Consistent with Save Tara, this case analyzed the various factors surrounding the MSA to determine if it constituted a project approval requiring CEQA review. Local agencies should continue to examine development-related agreements in a larger context to ensure that CEQA review occurs at an appropriate stage of the overall development process and before the agency has committed to activities that could have a physical effect on the environment.