Denial of a conditional use permit renewal is a "project" requiring review under the California Environmental Quality Act, the Third District Court of Appeal has ruled.

The court ruled for the owner of an airport in Sacramento County whose application for a conditional use permit (CUP) renewal was denied by the county Board of Supervisors without any environmental review.

While the CEQA portion of the ruling is important for practitioners, the court also ruled that the State Aeronautics Act did not preclude the Board of Supervisors from closing the airport — a ruling that was a big victory for the county and local governments in general, and a potentially lethal blow to the airport.

Operation of Sunset Skyranch Airport near Elk Grove has been the subject of extensive litigation since the early 1990s. Sacramento County first issued a two-year CUP for the airport in 1971, when the facility was little more than a dirt landing strip for a handful of crop dusters. Owner Daniel Lang never renewed the use permit, but he did dramatically improve and expand the facility. By the late 1980s, it was home to two paved runways, about 20 hangars, at least 60 airplanes, and an estimated 30,000 annual takeoffs and landings.

In 1989, the county denied Lang a business license because he was out of compliance with the zoning ordinance, which required airports to have a CUP. In 1990, the county declined to issue a certificate of nonconforming use, resulting in an airport owner's lawsuit. In an unpublished 1993 decision, Lang v. Board of Zoning Appeals, No. C013642, the Third District ruled that the airport's expansion had ended its status as a conforming use and that Lang needed a CUP.

Lang and Sunset Skyranch Pilots Association finally applied for a CUP in 1997, and in October 1999 the county approved a five-year CUP. A neighboring property owner sued over the negative declaration the county adopted for the CUP, but the Third District upheld the county's environmental review in Fat v. County of Sacramento, (2002) 97 Cal.App.4th 1270 (see CP&DR Legal Digest, June 2002).

Days before the 1999 CUP was scheduled to expire, the pilots association applied for a renewal. The Planning Commission approved the renewal for two years with the understanding that no further extensions would be granted because urban development was encroaching on the airport. Representing area property owners, development consultants Taylor & Wiley appealed to the Board of Supervisors, which voted 4-1 to deny the CUP renewal. The board found continued use of the airport incompatible with new homes in the area and a proposed school, and determined other air facilities were available in the region.

This time, Lang and the pilots association sued the county, arguing that the State Aeronautics Act (SAA) pre-empted the county's decision, and that the decision violated CEQA because the county conducted no environmental review before rejecting the application. Lang and the pilots also argued the county's decision was not supported by substantial evidence and that it was an unconstitutional taking of property. Sacramento County Superior Court Judge Jack Sapunor ruled for the county. A unanimous three-judge panel of the Third District Court of Appeal upheld all of the lower court's ruling except for the portion regarding CEQA.

The county argued that no environmental review was required because CEQA Guidelines § 15270 states: "CEQA does not apply to projects which a public agency rejects or disapproves."

But the court said the project here involved more than mere denial of an application. The project involved closure of an airport — something the county had vowed to enforce within 180 days, the court noted. The project had implications for the airport facilities and the pilots who use them.

"We conclude the county's plan to enforce its zoning code, by ensuring the airport closure and transfer of pilots to other airports, are part of ‘the whole of the action' of the CUP denial, and the whole of the action has the potential for physical change in the environment," Justice Richard Sims wrote for the court. "Accordingly, the county's action constitutes a CEQA ‘project' requiring preparation of an initial study."

Sims quickly pointed out that the court was not determining whether the project would have significant environmental effects or need a environmental impact report. "We merely hold the county has skipped an essential step," Sims wrote.

The court rejected the arguments of the airport owner and pilots that the aeronautics act was contrary to and superceded the county's decision. They said the basis for the act was to protect the orderly expansion of airports and, therefore, required the county to permit continued operation of the facility. But the court said the SAA did not abridge the local police power.

"The airport says we must look at the SAA as a whole," Sims wrote. "However, looking at the SAA as a whole, we do not see protection for airports against closure resulting from local land use zoning decisions."

"[T]he airport cites no specific SAA provision which is ‘contrary to' the county's denial," Sims added. "[T]he SAA, as it stands, does not prevent the county from denying CUP renewal, even if it results in closure of the airport."

In an unpublished portion of its opinion, the Third District rejected arguments that the county lacked substantial evidence for its decision, and the court ruled that the takings claim was not ripe for judicial review.

The Case:
Sunset Skyranch Pilots Associates v. County of Sacramento, No. C055224, 08 C.D.O.S. 8471, 2008 DJDAR 10193. Filed July 2, 2008.
The Lawyers:
For the pilots association: Lanny Winberry, (916) 386-4423.
For the county: Krista Whitman, county counsel's office, (916) 874-5544.
For real party in interest Taylor & Wiley, John Taylor, (916) 929-5545.