Court Rejects American Canyon's Description of Project Size, Impacts

The First District Court of Appeal has thrown out the City of American Canyon’s approval of a Wal-Mart supercenter because the city did not comply with the California Environmental Quality Act and violated its own zoning ordinance.

Without conducting additional environmental review, the city permitted the Wal-Mart project as a minor change to an earlier approved mixed-use project. However, the court found that the city incorrectly described the size of the Wal-Mart project in what the court suggests was a deliberate attempt not to trigger environmental review and the zoning ordinance requirement for a “major modification application.”

In 2003, Lake Street Ventures (later succeeded by Napa Junction I, LLC) proposed a 40-acre project on Highway 29 in American Canyon, a 15-year-old city between Napa and Vallejo. The project consisted of a hotel, about 200 apartments, a 3-acre park, and retail space. Phase one would consist of the hotel, housing and approximately 32,000 square feet of retail space. Phase two would add about 165,000 square feet of retail.

In December of 2003, the City Council adopted a mitigated negative declaration for the project, and approved zoning ordinance and map amendments, a general plan amendment and a tentative subdivision map.

Seven months later, Wal-Mart applied for a design permit and sign program. The company proposed building a supercenter of 173,000 square feet, plus a 12,000-square-foot outdoor garden center and 7,600-square-foot seasonal sales area in the parking lot. Various groups quickly formed to fight Wal-Mart, but the Planning Commission approved the design permit and sign program without further environmental review. However, the Commission limited hours of operation to 6 a.m. to midnight. Wal-Mart wanted a 24-hour store, so it appealed to the City Council. Project opponents also appealed, and the City Council gave Wal-Mart what it wanted.

The groups American Canyon Community United for Responsible Growth and Citizens Against Poor Planning sued, alleging the city violated CEQA and the local zoning ordinance. The lawsuits were combined, and a Napa County Superior Court judge ruled for the city. The case then went on appeal to the First District, Division Five.

Wal-Mart opponents argued that the supercenter was a new project that should have triggered a fresh environmental review. The First District rejected that argument, instead ruling that Public Resources Code § 21166 and CEQA Guidelines § 15162 apply because the supercenter was a change to an already approved project.

The court found that the Wal-Mart plan was substantially larger than the originally approved project — despite city staff reports that the Wal-Mart would actually be smaller than the original project. The city had excluded 38,000 square feet of stockroom, employee use area and seasonal sales space and said the Wal-Mart project amounted to only 154,000 square feet. In court, the city and Wal-Mart argued that the 154,000 square feet figure was consistent with the definition of “gross leasable area” in the general plan. Based on this square footage, the city determined the Wal-Mart store was not a substantial change from the original project and would need no supplemental environmental review.

But the court found that there was no reason to redefine the project this way, and that it did not meet the general plan definition anyway, because the general plan speaks to “total gross floor area designed for tenants’ occupancy and exclusive use.”

“By making adjustments in the square footage of the supercenter proposal and then comparing that adjusted square footage to the unadjusted square footage of retail space in the original project, the city makes an inapt comparison,” Justice Linda Gamello wrote for the court. “The city cites no evidence and makes no argument to justify using different methods of calculating the square footage of the supercenter and the other retail spaces. Absent such a foundation, the city’s comparison is distorted and cannot support the conclusion that the square footage of the project’s retail component did not materially change.”

The city did prepare a brief, revised traffic study — based on 154,000 square feet — that concluded the daily peak hour trips generated by Wal-Mart would be 1,207, compared with 1,273 estimated in the original project’s mitigated negative declaration. Again, the court rejected the city’s description of the project size.

“Nothing in the record explains the city’s use of 154,074 for the square footage of the supercenter in the revised trip generation analysis. The analysis itself is a one-page document consisting of two tables and footnotes, none of which explains how the relevant square footage of the supercenter was determined,” Justice Gamello wrote. “The staff report to the City Council makes the naked assertion that 154,074 square feet was used because the storeroom and employee space ‘will not generate vehicle trips.’”

The city’s low calculation “fatally undermines its conclusion that the supercenter proposal would have no significant effects on traffic requiring supplemental environmental review.”

The court also accepted the opponents’ argument that the city failed to consider the Wal-Mart project’s potential to cause urban decay outside the city limits. The city and Wal-Mart countered with a city manager’s cost/benefit analysis that was limited to the city.

“Other evidence in the record strongly suggested the supercenter might have substantial extraterritorial effects,” Gamello wrote. “Appellant’s expert predicted that the supercenter would cause both a Wal-Mart discount store and a Food-4-Less grocery store in Vallejo to close. Because those stores are co-anchors of a shopping center, the expert opined that their closure would likely lead to urban decay.”

The court further advised the city that, when it reconsiders the project, it should take into account the impacts of reasonable foreseeable development, as the supercenter proposal reserved two other areas in phase two for future development.

As for the zoning violation, the court cited the city zoning ordinance, which requires a major modification application for an increase of more than 5% in a project’s square footage. Again rejecting the city’s description of a 154,000-square-foot project, the court determined the Wal-Mart project was an increase of at least 6.5%.

The court directed the city to comply with CEQA and its own zoning code, and asked the Superior Court to consider halting construction or retail activity until the city complies with CEQA. In fact, construction has stopped on the nearly completed supercenter.

The Case:
American Canyon Community United for Responsible Growth v. City of American Canyon, No. A112088, 06 C.D.O.S. 11552. Filed November 13, 2006. Ordered published December 19, 2006.
The Lawyers:
For ACCURG: Steven Herum, Herum, Crabtree & Brown, (209) 472-7700.
For the city: William Ross, (650) 843-8080.
For Citizens Against Poor Planning: Timothy M. Taylor, Somach, Simmons & Dunn, (916) 446-7979.
For Wal-Mart: Judy Davidoff, Steefel, Levitt & Weiss, (415) 788-0900.