e-Bulletin: In the Aftermath of the Bakersfield Decision, Appellate Court Provides Guidance for Analyzing Potential Urban Decay and Blight Impacts

The Court of Appeal, Third Appellate District recently held that the City of Anderson (the “City”) properly considered and analyzed the potential for urban decay and blight impacts under the California Environmental Quality Act (“CEQA”) by preparing an economic analysis as part of its preparation of an Environmental Impact Report (“EIR”) for a “big box” retail project anchored by a Wal-Mart Supercenter store.  This decision clarifies the Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal.App.4th 1184, case by holding that a public agency’s decision regarding potential blight and urban decay impacts may be supported when a public agency prepares an economic analysis as part of an EIR.  In addition, the case shows that a court may limit a writ of mandate to the portion of a project that does not comply with CEQA.

Petitioner, Anderson First Coalition (the “Coalition”), alleged that the City failed to adequately analyze the potential for urban decay and blight impacts and thus a writ of mandate was required under the Bakersfield decision.  The Court rejected this challenge along with the Coalition’s claims that the City’s EIR failed to adequately analyze potential hydrology impacts and that the trial court impermissibly segmented the gas station associated with the Project from the remainder of the Project.

In the first published decision to analyze Bakersfield, the Court rejected the Coalition’s blight and urban decay challenges, finding Bakersfield inapplicable because, unlike the public agency in Bakersfield, the City considered the potential for urban decay and blight in its EIR and concluded that neither would result from the Project.  Although the Coalition submitted several studies supporting their position, these studies did not persuade the City that the economic effects of the Project would foreseeably result in significant environmental effects.   The Court found substantial evidence in the record supporting the City’s blight and urban decay conclusions, including an economic study which showed that the Project would not cause a ripple of store closures and long-term vacancies that could potentially result in "urban decay." Instead, the record demonstrated that the Project was designed to serve a regional market and compete against other big-box retailers in neighboring communities.   Further the City’s analysis demonstrated that the Project would help the City recapture lost sales tax revenues. 

In addition, the Court held that Public Resources Code section 21168.9 allows courts to issue writs of mandate as to portions of a project that do not comply with CEQA.  Thus, the trial court did not err when it forbade further action on the gas station but permitted the remainder of the Project to proceed. The Court further concluded that the traffic impact mitigation fees paid by the Project Applicant were inadequate to cover the costs of traffic mitigation improvements, thus the Court ordered the Applicant to pay a proportionate share.

Finally, the Court addressed the Coalition’s arguments that potential hydrology impacts were not adequately considered.  The Court rejected this argument, finding substantial evidence in the record that the City had considered, analyzed and mitigated any impacts on hydrology.