United States: CEQA Exemption Can Play Critical Factor In Success Of Sports Stadium Development In California

The LA Rams are about to break ground on a privately financed stadium in Inglewood, California, in which Cal-Berkeley alum and #1 pick Jared Goff will star at quarterback. Up north in San Francisco, meanwhile, the Golden State Warriors are hunkering down to defend environmental lawsuits by opponents to their planned development in Mission Bay. The team just announced they will be delaying the opening of their anticipated project until 2019, at the earliest.

The difference in trajectory of these two projects results largely from the California Environmental Quality Act – CEQA. The Inglewood project took advantage of a CEQA exemption and did not have to circulate an EIR and deal with legal appeals. The Warriors, by contrast, had no such luxury.

CEQA generally requires a public entity, before approving any significant construction project, to take a hard look at the environmental consequences of the project by way of an environmental impact report (EIR). The public entity circulates a draft EIR to concerned groups and citizens, and must assess any arguments that concerned citizens and groups make. If feasible, the public entity must mitigate adverse environmental effects, which can include noise, air quality, water quality, traffic, among other items. If the adverse effects cannot be mitigated, the approving entity must make a finding that the benefits of the project outweigh the environmental consequences.

Sounds great – except CEQA is nightmare for developers. Putting together the studies, data, etc., for the EIR is expensive. But more importantly, it adds many months and often years to the development cycle of the project. The project proponent often must make concessions and revise the project to make it smaller, opposition groups come out of the woodwork to demand changes. And of court there are the legal challenges to EIR after they are approved. There is always a risk that even if the city approves the EIR, the courts can reverse it.

Hence, a CEQA exemption is like manna from heaven for developers. And the developers of the Inglewood project took advantage of the CEQA exemption for voter-sponsored ballot initiatives. It works like this. In California, the right of the "people" to make changes in the law through the initiative process is considered sacrosanct, on par with the legislature. Land use decisions are subject to this initiative process. Because voter initiatives do not require the approval of a public entity, they are not considered to be "projects" for purposes of CEQA even if the initiative affects land use issues. This is true even at the city/county level, where the ballot initiative process involves a procedure where the local public entity can approve the initiative before even submitting it to a vote of the people.

This is what happened in Inglewood. Project sponsors gathered signatures from 15% in order to qualify the approval of the stadium project for a special election. Instead of placing the initiative on the ballot, the Inglewood City Council approved the measure unanimously at a City council meeting that was dominated by Rams fans. No EIR required. No litigation. No mess. Without the City of Inglewood's direct approval of the project before full environmental review, the project might have been in limbo at the time the NFL met to decide where the Rams franchise would move.

Inglewood's "what, me worry?" approach to environmental impacts contrasts starkly to San Francisco. Never in a million years would the San Francisco Board of Supervisors approve of a voter initiative to build a project without CEQA review.

Thus far the Warriors have been successful in the CEQA process. In December, 2015, the Board of Supervisors certified the EIR unanimously. However, the stadium opponents have appealed, and their efforts have delayed the stadium by at least one year. This delay could give opponents more time to develop momentum and spread their arguments regarding the adverse effects of the stadium.

While the LA Rams dig, the Warriors will be fighting legal battles – all because one team was able to utilize a CEQA loophole, while the other must navigate the unavoidable tribulations associated with this controversial law.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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