In March 2017, the Sixth Appellate District issued its decision in Aptos Council v. County of Santa Cruz, which rejected a two-pronged challenge to the County of Santa Cruz’s adoption of three zoning ordinances revising existing sections of the County zoning code, including an ordinance altering height, density, and parking requirements for hotels.  In affirming denial of the petition for writ of mandate, the appellate court held that (1) the County did not engage in improper “piecemeal” review of the three ordinances under CEQA, and (2) the negative declaration for the hotel ordinance did not need to consider environmental impacts that could result from future hotel development, where those impacts were not reasonably foreseeable. 

As part of an overhaul and update of various sections of the County zoning code, in 2014 the County Board of Supervisors adopted the three ordinances at issue in this case:

• Ordinance No. 5171 amended the County’s standards for hotel development, removing a one room per 1,100 square foot density limit, removing a three-story limit, and reducing parking requirements from 1.1 spaces to 1 space per unit. A negative declaration found that these amendments would not have significant effects on the environment.
• Ordinance No. 5172 streamlined approval of minor exceptions to the County’s sign ordinance by creating an administrative approval process and discontinuing the requirement for a variance. A notice of exemption determined that the ordinance was exempt from CEQA review under various statutory and categorical exemptions.
• Ordinance No. 5181 made applicable to the entire County a prior ordinance (No. 5087) that had allowed certain variances to zoning code standards to be approved administratively for some areas of the County. The ordinance also extended other existing provisions of the zoning code allowing minor exceptions, reduced setback requirements, and increases in lot coverage.  An addendum to the negative declaration prepared for Ordinance No. 5087 found that the new ordinance would not have significant environmental impacts.

Petitioner challenged these approvals in a mandate action filed in Santa Cruz Superior Court, asserting that the County had engaged in unlawful piecemeal review of the environmental impacts of the three ordinances, the negative declaration prepared for the hotel ordinance should have considered future developments, and the sign ordinance was not exempt from CEQA review.  In September 2015, the trial court denied the petition on all grounds.  Petitioner appealed, but ultimately did not challenge the trial court’s ruling on the exemption determination.

The Sixth District first considered the piecemeal review issue.  Although the court agreed with petitioner that the CEQA Guidelines require unitary CEQA review for “a series of actions that are properly characterized as a large project,” it found that the County’s actions at issue—characterized by petitioner as “reform of the zoning code”—did not constitute a single project under CEQA.  Under the test set forth by the California Supreme Court in Laurel Heights Improvement Assn. v. Regents of the University of California (1988) 47 Cal.3d 376 , courts evaluate a piecemealing claim by analyzing whether (1) the environmental impact of a subsequent action is a “reasonably foreseeable consequence of the initial project,” and (2) the subsequent action “will be significant in that it will likely change the scope or nature of the initial project or its environmental effects.”

Here, the key issue was whether changing or reforming certain zoning regulations, such as the density requirement for hotels, was a reasonably foreseeable consequence of the other regulatory reforms challenged by petitioners.  The appellate court found that was not the case and, despite being part of an overall “regulatory reform” effort, each of the ordinances “operate independently of each other and can be implemented separately,” and they each serve separate purposes.  As such, no improper piecemealing occurred, and the petition was properly denied on this ground.

The appellate court then rejected petitioner’s claim that the negative declaration for the hotel ordinance (No. 5171) should have evaluated the impacts of future development.  The negative declaration stated that the amendments at issue would have no physical impacts on the environment because future hotel developments would be subject to further discretionary approval and full CEQA review.  In addition, the administrative record contained County staff’s determination that it was “not possible to know the exact number of rooms that might be allowed as part of any specific development proposal that may be proposed in the future.”  In making this determination, staff contacted the owners of two of the most likely lots for hotel development and found that neither had foreseeable plans to sell or develop those properties.  The County concluded it had no information on which to base an analysis of the impacts resulting from future developments that was not speculative.

The court noted that although CEQA mandates consideration of “reasonably foreseeable indirect physical changes in the environment,” a change that is “speculative or unlikely to occur” is not reasonably foreseeable.  (CEQA Guidelines § 15064.)  Although the court agreed there was evidence in the record to support the argument that the County adopted the ordinance “to possibly stimulate the development of hotels,” the record included unrebutted evidence that the potential for future developments was “too speculative to be reasonably foreseeable.”  As a result, “environmental review of potential future developments would be an impossible task” involving a “wholly speculative” evaluation of impacts.  As such, the trial court did not err in denying the petition on this ground.

[View source.]