Which California megaprojects get breaks from complying with environmental law? Sometimes, it depends on the project

Newhall Ranch, the site of a proposed 21,500-unit housing development. The project often has been stymied by environmental lawsuits.
(Ricardo DeAratanha / Los Angeles Times)

By Liam Dillon
September 25, 2017
Los Angeles Times

Year after year, owners of professional sports teams and developers of proposed skyscrapers have pleaded with California lawmakers to grant relief for their projects from the state’s environmental regulations. They’ve found a largely receptive audience.
 
“It’s a job creator,” Assemblyman Miguel Santiago (D-Los Angeles) told his colleagues while successfully pressing earlier this month for approval of his bill that could speed up an expansion of Facebook’s headquarters and the construction of twin skyscrapers in Hollywood.
 
The passage of Santiago’s bill highlighted a continually messy debate at the state Capitol concerning which projects deserve breaks from strictly complying with the California Environmental Quality Act, the primary environmental law governing development. The law, known as CEQA, requires developers to disclose and reduce projects’ effects on the environment, often a time-consuming and costly process made longer by lawsuits that can last years.
 
Legislators have long talked about overhauling CEQA — Gov. Jerry Brown has called doing so “the Lord’s work” — but the rare measures that advance often only provide relief for deep-pocketed developers or have the backing of Sacramento’s most powerful interests.
 
Earlier this month, GOP Assemblyman Dante Acosta pushed to ease burdens under CEQA for all housing projects amid the state’s affordability crisis. But his effort was rebuffed in a legislative committee.
 
“A good project is a good project, whether it’s housing for middle-class Californians or a stadium for millionaire athletes and billionaire owners,” said Acosta, who represents Santa Clarita.
 
Since its enactment in 1970, CEQA has become a touchstone for environmentalists who credit it for preserving California’s coastline and natural beauty. Its rules are written so broadly that the law also has become a tool for neighborhood preservationists, business competitors, unions and others to oppose a wide-range of projects including some, like bike lanes, that might otherwise seem environmentally friendly.
 
Housing has become a particular flashpoint. In Acosta’s district, developers have proposed the 21,500-home Newhall Ranch project, which has been stymied by environmental lawsuits during the more than two decades it’s been under consideration. On Monday, some environmental groups reached an agreement to end their lawsuits against the project in exchange for $25 million for conservation efforts and other concessions from the developer.
 
Developers of low-income homes also struggle with litigation filed by neighborhood groups and others that use the law simply to oppose their projects, but not on environmental grounds, said Ray Pearl, executive director of the California Housing Consortium, which represents such developers.
 
“CEQA is used as a weapon and the environment is lost in the shuffle,” Pearl said.
 
This year, bills that passed the Legislature had a common theme: the State Building & Construction Trades Council of California, which represents 400,000 construction workers, supported them.
 
Santiago’s bill updates an existing law allowing any project that costs more than $100 million to build and meets union-level wage and greenhouse gas reduction standards to aim for a final court decision in any CEQA lawsuit within nine months. The Golden State Warriors used this law for the team’s arena now under construction in San Francisco. Facebook has said it plans to use the law to speed up the expansion of its Menlo Park headquarters. So has Millennium Partners, a New York developer that wants to spend $1 billion to build 500 homes and a 200-room hotel and provide office and retail space around the Capitol Records building in Hollywood.
 
The housing legislation approved at the end of the legislative session also allows some developers to sidestep the environmental law in limited situations. One bill says cities must approve projects that comply with existing zoning rules without forcing developers through additional CEQA reviews. Two other bills provide cities financial incentives to complete environmental reviews of entire neighborhoods so developers won’t have to do them later for their projects. In all three cases, developers will only qualify if they reserve parts of their projects for low-income residents and abide by union-level pay and hiring rules.
 
Another bill, authored by Assemblyman Jose Medina (D-Riverside), would block developers from pursuing local ballot initiatives to get their projects approved, a process that allows them to avoid CEQA entirely. That method allowed the Rams to secure approval for their Inglewood football stadium in just six weeks, something unheard of in California development politics.
 
Cesar Diaz, the building trades’ legislative director, said labor’s involvement in CEQA policy ensures that the profits from growth are shared more widely.
 
“When you look at environmental standards and look at creating benefits for the economy, the people who benefit shouldn’t just be the developer,” Diaz said. “It should be those building the project.”
 
How much the environmental law affects housing production is disputed. A recent report from a law firm that promotes overhauling CEQA contended that litigation from 2013 to 2015 challenged more 10,000 homes in Southern California neighborhoods planned for the most growth. A counter report from environmentalists found few projects were sued when compared with the rate of development.
 
Still, it’s clear the environmental law matters. Backers of a proposed Inglewood arena for the Clippers put forward a last-minute bill that would have given them CEQA relief beyond what many prior professional sports stadium and arena developers have received from the Legislature. The Clippers legislation would have shortened court-decision timelines and limited a judge’s ability to halt construction during any environmental lawsuit against the project, while offering a full CEQA exemption for a transit link between a light-rail stop and the arena.
 
The Clippers and opponents of the bill — chiefly the owners of the rival Forum arena in Inglewood — each hired an army of lobbyists. The team argued that if the bill didn’t pass, its competitors could drown the proposed arena in CEQA litigation.
 
The measure stalled in a legislative committee, leaving its author, state Sen. Steven Bradford (D-Gardena), deeply frustrated. In a speech on the final night of the legislative session, Bradford argued that his colleagues have decided to prioritize CEQA relief for projects proposed in wealthier communities, not lower-income neighborhoods with predominantly black and Latino residents.
 
“There is clearly a double standard and this situation is not just wrong, it’s racist,” Bradford said. “The well-to-do areas of this state are given much more help, and economically disadvantaged areas around the state, such as the areas that I represent, do not receive the same support.”

Brown has pledged to sign the three CEQA-related housing bills as part of a larger package of legislation aimed at addressing the state’s housing problems. He has not commented on the Santiago or Medina bills, but has supported prior versions of the Santiago effort. The governor has until Oct. 15 to approve or veto the legislation.