Court of Appeals Holds State Commission Cannot Escape CEQA Review, Stifling San Francisco Project

October 22, 2015

Even when a project benefits the public, there are interest groups that will work tirelessly to stifle progress and business development. Unfortunately, the California Court of Appeal for the First District sided with such an interest group when the court held that an exchange agreement initiated by the California State Lands Commission regarding the 8 Washington Street development project in San Francisco was not statutorily exempt from the California Environmental Quality Act (“CEQA”).

Background on the Decision

The case, Defend Our Waterfront v. California State Lands Commission (Sept. 17, 2015) Cal.App.4th, Case Nos. A141696 & A141697, involves the 8 Washington Street project, which is a proposed mixed use development along the San Francisco waterfront near the San Francisco Ferry Building, according to JD Supra. The proposed development site includes a parcel known as Seawall Lot 351 consisting of filled tidelands managed by the City of San Francisco through the Port of San Francisco.

Some of the proposed uses in the 8 Washington Street project were inconsistent with public trust restrictions on Seawall Lot 351. Project developers and the City proposed a land exchange agreement with the State Lands Commission. The Commission approved the exchange agreement and independently determined that this exchange was exempt from CEQA review. The aforementioned lawsuit was filed by Defend Our Waterfront. This organization filed a petition for writ of mandate challenging the approval of the exchange agreement without CEQA review, according to the JD Supra article.

The Court determined that the exemption did not apply to this land exchange agreement. The Court stated that the exemption is limited to situations where the State Land Commission is asked to resolve a dispute about the title or boundaries of land. The 8 Washington Street project was not actually a dispute. In fact, the stated purpose of the land exchange agreement was to merely remove an impediment to developing the project rather than a legitimate title or boundary dispute.

Why This Decision Matters

Land exchange agreements have been used by the State Lands Commission in California to reconfigure tidelands and to resolve title and boundary disputes. Many of the modern projects along the San Francisco waterfront have required a land exchange agreement. The Court’s decision in this case is an indicator that the Commission does not have carte blanche to enter into these agreements and there has to be a genuine title or boundary dispute being resolved for the agreement to hold up, even if the reconfiguration provides a public benefit. Without a genuine boundary dispute, the statutory exemption from CEQA will not be available, according to the JD Supra article.

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