The City of Fresno cut short its inquiry into the historic significance of two apartment buildings, one of which is proposed for demolition, the Fifth District Court of Appeal has ruled.

Based on its decision three months earlier not to include the buildings on the local register of historic resources, the council determined the demolition project was categorically exempt from the California Environmental Quality Act. However, the court ruled the Fresno City Council had discretion to determine whether the buildings were historical resources for purposes of CEQA "notwithstanding previous decisions not to list the object or building in the local register."

However, the court also ruled that the "fair argument" standard does not "apply to the question of historicity during the preliminary review stage of an environmental review." Thus, a decision not to consider a building as an historic resource would stand if there were substantial evidence supporting the decision — even if preservationists presented contrary evidence supporting a fair argument that the building could be an historic resource.

In September 2004, the law firm Perez, Williams & Medina submitted an application to demolish one of two four-unit apartment buildings known locally as the WP Cutting flats — craftsman style structures built in about 1913. The law firm sought to expand its office building and parking lot. In response to the application, Fresno's Historic Preservation Commission nominated the flats for placement on the local register of historic resources. But in February 2005, the Fresno City Council voted 4-3 to deny the listing.

The city then filed a notice of exemption from CEQA based on demolition of a residential structure with fewer than six units and infill development. A resident complained about the use of a categorical exemption, and the city treated the complaint letter as a CEQA appeal. In May 2005, the City Council conducted a public hearing and voted 4-1 to confirm the categorical exemption.

The group Valley Advocates sued, arguing the city had violated CEQA in numerous ways. Fresno County Superior Court Judge Gary Austin ruled for the city. However, a unanimous three-judge panel of the Fifth District overturned the lower court's ruling and the city's approval of the project.

The court explained that there are three types of historical resources under CEQA. Mandatory resources are those listed on, or eligible for, the California Register of Historic Resources. Presumptive resources are those listed on a local register or recognized by local ordinance or resolution. The flats in downtown Fresno are neither mandatory nor presumptive historic resources, the court concluded.

The third type is discretionary historic resources, which are those that a lead agency decides are historically significant. "The exact scope of that discretion is not clear," Justice Betty Dawson wrote for the court, which declined to provide a definition. The flats could fall into this category, but the city did not exercise its discretion, the court determined.

The court focused on written and oral staff reports that erroneously advised the City Council the earlier decision not to list the flats on the local register answered the question of historic resources for purposes of CEQA. "A listing determination and a CEQA determination are not the same thing," the court ruled.

Rather than rely on its earlier listing decision, the city needed to perform a separate analysis, which it did not do, the court determined. Therefore, the city must set aside approval of the project and the findings of categorical exemption, and "conduct a preliminary review that considers the application of the discretionary historical resources category to the flats."

That review, however, need not be subject to the fair argument standard that is favorable to preservationists. On this issue, the court examined the legislative history of one section of CEQA, Public Resources Code § 21084.1, regarding historic resources.

"[T]he only reasonable interpretation of § 21084.1 is that the fair argument standard does not govern a lead agency's application of the definition of an historical resource. Of course, once the resource has been determined to be an historical resource, then the fair argument standard applies to the question of whether the proposed project ‘may cause a significant adverse change in the significance of an historic resource,' and thereby have a significant effect on the environment," Dawson wrote for the court.

The fair argument standard also does not apply to the question of whether the project qualifies for an exception to the CEQA exemptions, the court held.

The Case:
Valley Advocates v. City of Fresno, No. F050952, 08 C.D.O.S. 2003, 2008 DJDAR 2419. Filed February 15, 2008. Modified March 17, 2008 at 08 C.D.O.S. 3027, 2008 DJDAR 3699.
The Lawyers:
For Valley Advocates: Richard Harriman, (559) 226-1818.
For the city: Kathryn Phelan, city attorney's office, (559) 498-1326.
For real party in interest: Robert Gray Williams, Perez, Williams & Medina, (559) 445-0123.