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Court of Appeal Dismisses CEQA Challenge to Sacramento Kings Arena

California’s Third District Court of Appeal issued a published decision on February 18 in Saltonstall v. City of Sacramento (Case No. C077772), soundly affirming the trial court’s decision to deny the quick, but eventful, challenge to the proposal to build a new home for the Sacramento Kings.

The City Did Not “Pre-Commit” to the Arena through Preliminary Term Sheet Nor Property Acquisitions for the Project

The case involved a group of petitioners suing under the California Environmental Quality Act (CEQA), alleging, among other things, that the City had “pre-committed” to approving the Arena project before completing the CEQA process when it entered into a preliminary nonbinding term sheet with the developer in 2013.  CEQA applies to when a public agency proposes to “approve” a project, which means when a public agency commits to a definite course of action in regard to a project.  As cautioned by the California Supreme Court in its seminal decision, Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, the problem is how to determine when an agency’s favoring of and providing assistance to a project crosses the line into a commitment or approval.

In Saltonstall, the Court of Appeal determined that line was not crossed for the Sacramento Kings Arena project.  In rejecting the claim, the Court concluded that the term sheet provided the City with complete discretion to review the project, mitigate adverse environmental effects, and even to refuse to approve the project.   The Court further rejected the argument that the City’s acquisition of certain property interests in advance of the project approval demonstrated any pre-commitment, noting that CEQA (including the special statute for the project) allows for eminent domain proceedings prior to completing the environmental review.  Likewise, Petitioners’ claims of “public relations coordination” were also not a pre-commitment as they failed to have any support in the record.

No Need to Analyze “Remodel” Alternative

The Court also rejected petitioners’ argument that the City was required to analyze a remodel alternative to the project, which would have involved upgrading the Kings’ existing 25-year-old facility in nearby suburbs.  Noting that the Environmental Impact Report (EIR) analyzed both a “no-project” alternative (keeping the existing facility) and building a new arena at the same site as the old facility, the Court concluded that analyzing a remodel alternative would not have added anything to the analysis and would not achieve the City’s objectives to revitalize the downtown area, and thus was properly rejected.

Riots Are Not a CEQA Impact

The Petitioners argued that the EIR did not analyze impacts of post-game crowds, rioting and violence that they claim will result from the Arena project.  The Court of Appeal concluded petitioners failed to show how the issue of crowd safety at the downtown arena was an environmental impact.  The Court also rejected claims that the City’s traffic analysis was required to specifically consider impacts on Interstate 5 traffic ranging from Canada to Mexico, and that the EIR understated the number of persons who would surround the downtown arena.

What Next?

Save for the unlikely event that the California Supreme Court takes up a petition for review, the Court of Appeal’s decision brings to an end the litigation experiment that was S.B. 743, the special CEQA-streamlining statute adopted in 2013 for the Arena project.

S.B. 743 (codified as Public Resources Code section 21168.6.6) provided, among other things, that any legal challenge be resolved, including appeals, within 270 days after certification of the administrative record, if feasible.  The Court of Appeal’s decision was issued just nine days short of this deadline, making this case one of the fastest CEQA cases on record.

Earlier in the case, the petitoners challenged the constitutionality of this statute, which the Court of Appeal upheld in a published decision in November 2014, as discussed here.  Meyers Nave represented the City throughout the litigation, including both appeals.