COUNTY OF AMADOR v. CITY OF PLYMOUTH

Filed 4/17/07

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Amador)

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Story continued from Part I ..

There is an exception, presumably the exception upon which the Tribe intends to rely, if the Secretary, after consultation with the Indian tribe and appropriate State, and local officials determines that a gaming establishment on newly acquired lands would be in the Tribes best interest and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the Secretarys determination . . . . (25 U.S.C. 2719, subd. (b)(1)(A), italics added.)

The federal statute does not set forth the criteria to be used either by the Secretary or the Governor in determining whether the development would be detrimental to the surrounding community, but if such decisions are based on factual considerations, both environmental impacts and the support of the surrounding community would factor into the determination. In recognition of these concerns the MSA provides that the Tribe agrees to not transfer title to the land to be taken in trust to the United States until the Department of the Interior has concluded any required environmental reviews of the Project under NEPA.

B. Vacation of Loop Road

The MSA contains the following provision:

The Tribe shall acquire the Trust Lands subject to all existing City rights-of-way, easements and other valid existing rights, except that the City shall commence and diligently pursue proceedings in order that the City shall vacate its rights to that portion of the loop road to the hotel that will be included in the Trust Lands simultaneously with the time the land is taken into trust.

The portion of the loop road subject to the MSA apparently provides a vital transportation corridor over the optioned lands from the public highway to the casino hotel. Its vacation as a public right of way by the City is necessary for it to be included within the land to be taken in trust.

For this reason the MSA states that the vacating of the Citys rights in the loop road to the hotel shall occur simultaneously with the time the land is taken into trust. The manifest purpose of this timing is to impress the road with the trust. Otherwise, the trust would incorporate only the property which is optioned for purchase and that does not include the property rights owned by the City.

The Tribe cites Stand Tall on Principles v. Shasta Union High Sch. Dist. (1991) 235 Cal.App.3d 772, 781 (Stand Tall), where this court held that the selection of a site for a new high school was not an approval of a project because the selection was expressly made contingent on CEQA compliance. We said that the site selection phase was not the appropriate time for a CEQA analysis because the purchase of the site was contingent on the preparation of an EIR, which necessarily would assess all reasonable alternative sites. (Ibid.) Thus, the site selection was only tentative and final approval was dependent upon compliance with CEQA.

In this case the vacating of the loop road is not dependent upon compliance with CEQA and the approval is assumed with the loop road provisions of the MSA. The context of the agreement to vacate the loop road is sufficiently different from the site selection in Stand Tall, to distinguish the two cases. In Stand Tall, none of the parties questioned the necessity of preparing a CEQA EIR, only at what point in the site selection process an EIR was required. (Stand Tall, supra, 235 Cal.App.3d at pp. 776, 778, fn. 1.)

In this case there is no express recognition in the MSA that an EIR will be required before the loop road can be vacated. This is not simply a matter of analyzing the desirability of alternate sites. The economic incentives of the MSA are significant enough that delaying environmental review of the road vacation may well result in a justification of a decision already made. The Tribe has agreed to pay the City millions of dollars. Some has already been paid, some will be paid when construction commences, and some will be paid when the Gaming Development opens. By waiting to do environmental review until after the MSA provisions are implemented, the City runs the risk of succumbing to a financial momentum that provides a strong incentive to ignore environmental concerns which could be more easily dealt with at this early stage of the process. (Laurel Heights Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d at p. 395.)

Moreover, the question here is whether the City will endorse the taking of the lands into trust and the Gaming Development after considering and making public the environmental consequences of the vacation of the loop road and the other provisions of the City project. An assumption that the project will go forward notwithstanding its environmental consequences violates the principle that an EIR not be used to justify a decision already made.

The Tribe argues the road vacation provision is not a project for purposes of CEQA because it did not commit the City to a definite course of action, only to a process that may or may not end in the vacation of the road and that the Tribe could initiate the vacation process by requesting a hearing.

The point of the road vacation provision is to require the City not only to begin the process but to complete it in time for its inclusion in the trust on the lands through which the road runs. It provides: the City shall commence and diligently pursue proceedings in order that the City shall vacate its rights to that portion of the loop road to the hotel that will be included in the Trust Lands simultaneously with the time the land is taken into trust. (Italics added.) This is an exception to the provision that excludes from the trust lands existing City rights-of-way.

The authority to vacate a street rests with the city legislative body and may occur only after a hearing is held and evidence presented to the city council and a resolution of vacation adopted. (Sts. & Hy. Code, 8312, 8320-8325; City of Los Angeles v. Fiske (1953) 117 Cal.App.2d 167, 172 [The power to vacate a city street is vested solely in the municipality. The act of vacating can be done only upon a finding that the property in question is unnecessary for present or future uses as a street].)

The Tribes argument is a perversion of the holding in Kaufman & Broad, cited by the Tribe, which held that the creation of a CFD, which had no direct environmental consequences, was not a project where it was not an essential step in a chain of events leading to an ultimate environmental impact. (9 Cal.App.4th at p. 474.)

Here, the vacation of a road to the casino hotel has a direct physical impact on the City in increased traffic and there is no need to question whether the action taken is an essential step in a chain of events. The fact that the action could be initiated in another fashion is of no relevance.

The MSA recognizes there will be traffic impacts caused by the Gaming Development, necessarily including those caused by providing access to the casino hotel by means of the vacated portion of the loop road. Since the vacation of the Citys authority over the loop road will be a cause of the environmental impacts occasioned by its use to carry the substantial traffic to a large casino hotel, such impacts are the proper subject of a CEQA analysis.

C. Fire Station

The MSA outlined the following general parameters regarding fire protection and emergency medical response services for the Gaming Development. The Tribe agreed to pay $770,000 to remodel the existing fire station to address fire and emergency response needs on the trust lands. The City agreed to complete the remodel and have the station fully operational by the time the Gaming Development is open to the public. The Tribe also agreed to pay $230,000 for the purchase of a new pumper truck and $638,000 annually for personnel to staff the fire station around the clock. The Tribe agreed to pay the annual sum of $100,000 for equipment, maintenance and apparatus.

The Tribe asserts three reasons the fire and emergency services provisions of the MSA do not trigger CEQA review. First, the MSA did not cause the need for fire services because the Gaming Development can be developed without the MSA. Second, the MSA provides only general parameters which terms could be changed. Third, the fire station remodel would be exempt from CEQA.

Citing Kaufman & Broad, the Tribe argues the MSA is merely a funding mechanism for services, and does not cause the need for fire services.

It is difficult to see how the MSA could not cause the need for the fire station to be rebuilt, when the MSA specifically obligates the City to remodel its fire station to support a full time staff. Kaufman & Broad is distinguishable because that case involved the formation by the public entity of a CFD, an action that made no direct physical change to the environment, and made no reasonably foreseeable indirect physical changes because the CFD did not create the need for development, and development was not entirely dependent on the creation of the CFD. (9 Cal.App.4th at p. 474.)

Here, by contrast, the MSA obligates the City to remodel its fire station to support an around-the-clock staff of fire and emergency services personnel. This is an activity directly undertaken by the City which has the potential for resulting in direct physical change in the environment. (Pub. Resources Code, 21065, subd. (a); Guidelines 15378, subd. (a).) The Citys decision to undertake such action necessitates environmental review.

The Tribe argues the MSA merely provides the general parameters of an agreement, and does not entail a firm commitment. The implication is that the agreement to rebuild the fire station is not a project if the parties can negotiate different terms. The Tribe claims City of Vernon v. Board of Harbor Comrs. (1998) 63 Cal.App.4th 677 (City of Vernon), held there was no approval of a project where the project could be amended.

Such was not the holding of City of Vernon. The claim in that case was the EIR certified for a marine terminal project was a post hoc rationalization of a prior approval of the project. (63 Cal.App.4th at pp. 681, 688-689.) The argument was that because the military base reuse plan, of which the marine terminal project was a part, could not be changed, the Board of Harbor Commissioners approving the terminal project was legally bound to approve it when the reuse plan was approved by the City Council and the federal Department of Defense. (Id. at p. 683-684, 688-689.) The court stated that no authority had been cited prohibiting changes in the reuse plan if required to mitigate environmental measures. (Id. at p. 689) The court did not hold that approval of the terminal project was not a project for purposes of CEQA because it could be amended. Since an EIR was prepared, there was no question but that the terminal project was a project for CEQA purposes.

Finally, The Tribe asserts the remodel of the fire station would be exempt from CEQA pursuant to Guidelines section 15301, subdivision (e), which exempts, [a]dditions to existing structures provided that the addition will not result in an increase of more than: [] (1) 50 percent of the floor area of the structures before the addition, or 2,500 square feet, whichever is less; or [] (2) 10,000 square feet if: [] (A) The project is in an area where all public services and facilities are available to allow for maximum development permissible in the General Plan and [] (B) The area in which the project is located is not environmentally sensitive. The Tribe asserts the remodel would be less than 10,000 square feet, and would be within a fully developed area that is not environmentally sensitive. However, the record does not contain a plan for the fire station remodel or a finding that it is not located in an environmentally sensitive area.^[1] Absent evidence in the record that the remodel required by the MSA would be subject to an exemption, we cannot conclude it would be exempt.

The terms of the MSA requiring the City to remodel the fire station committed the City to directly undertake an activity that may cause a physical change in the environment. It therefore qualified as a project for purposes of CEQA.

D. Water and Sewer Services

The City has committed to the provision of water and sewer services to the Gaming Development and to the installation of the necessary infrastructures in several provisions of the MSA.^[2]

Citing Stand Tall, the Tribe argues the water and sewer provisions of the MSA leave the City with complete discretion to refuse to provide services, thus there is no commitment to a definite course of action, and no approval of a project. The Tribe claims the willing and able language makes the agreement contingent on these future conditions, and such contingency prevents the MSA from committing the City to a definite course of action. We disagree.

Contrary to the Tribes claims, the Citys obligations with respect to sewer and water services are a commitment to a definite course of action.

The City agreed to provide sewage disposal for the Gaming Development by connection to the Citys existing sewage collection system, to obtain necessary easements for sewer infrastructure, and to construct the required connections. Paragraph 8 of the MSA provides that [w]hen the Tribe provides the connection fees described in Paragraphs 9 and 10, the City shall be obligated to provide water and sewer disposal service to the Project. Paragraph 9 of the MSA then provides that [a]fter the land is placed into trust, the Tribe will pay the sum of [$1.675 million] as a one-time wastewater capital connection fee. Paragraph 10 of the MSA then provides that subject to paragraph 8 the Tribe and the City agree that the Tribe shall obtain its water supply for the Trust Lands from the City municipal water system subject to the City obtaining an expansion of its water supply sufficient to meet the needs of the Project.

Paragraph 8 provides that the Tribe shall provide the connection fees only if the City is willing and able to provide the municipal water and sewer disposal service sufficient to meet the needs of the Project. An exception clause then follows that the Tribe shall pay the operation and maintenance fees for the systems described in paragraphs 9 and 10 ($500,00 annually for each), implying that these fees are to be paid notwithstanding the willing and able clause, which is limited to the connection fees.

The MSA goes on to provide that after the land is placed in trust and to the extent that the City is willing and able to meet the water needs of the Project and all necessary permits and approvals have been obtained, the Tribe will pay the sum of [$3 million] for a connection fee. With respect to both sewage and water the MSA provides that any approvals by the City required to implement [these provisions] shall not unreasonably be withheld . . . .

The City also agreed to provide the Gaming Development with a water supply sufficient to meet the needs of the Gaming Development subject to the City obtaining an expansion of its water supply. The Tribe agreed to pay $1.675 million as a one-time wastewater connection fee, $3 million as water services connection fee, $500,000 annually for the operation and maintenance of the sewer collection system, and $500,000 annually for the operation and maintenance of the municipal water system. The Tribe agreed that payment of the connection fees, as distinguished from the operation fees, are conditioned on whether the City is willing and able to provide the municipal water and sewage disposal service sufficient to meet the needs of the Project . . . . The City agreed it would not unreasonably withhold the approvals required to implement the sewage disposal and water supply provisions.

Although the MSA states in paragraph 8 that the Tribe need only pay the described connection fees if the City is willing and able to provide the water and sewer services for the Gaming Development, it declares in the next paragraph that the City agrees to connect the Gaming Development to its existing sewage systems, and in the following paragraph that the Tribe shall obtain its water supply from the City municipal water system. Thus, the City has already indicated its willingness to provide the services for the Gaming Development. Moreover, the MSA specifically provides that the City will not unreasonably withhold any approvals required to implement the water and sewer provisions, further indication the MSA represents a commitment by the City to a definite course of action. Finally, commitment to a definite course of action is indicated by the fact that the amounts the Tribe is agreeing to pay for connection fees is based on specific amounts of water and wastewater flow, a further indication of commitment to a definite course of action.

III

A. Exclusion for Government Funding Mechanism

Guidelines section 15378, subdivision (b)(4) excludes from the definition of a project, [t]he creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.

In Citizens to Enforce CEQA v. City of Rohnert Park (2005) 131 Cal.App.4th 1594 (Rohnert Park), cited by the Tribe, the court held that Rohnert Parks memorandum of understanding (MOU) with the Graton Rancheria Indian Tribe was a mere funding mechanism that did not require compliance with CEQA. (Id. at p. 1601.) The Tribe argues that, like the MOU in Rohnert Park, the MSA here is not a project because it is a funding mechanism.

However, the MOU in Rohnert Park, differed from the MSA at issue in several important respects. The MOU was a voluntary contractual arrangement by which the Indian tribe agreed to make contributions and community investments to mitigate impacts of the casino project. (Worthington v. City Council of Rohnert Park (2005) 130 Cal.App.4th 1132, 1138.) The City of Rohnert Park agreed for its part not to oppose the acquisition of property for or development of the casino project. (Id. at p. 1139.) The MOU set no time for development and did not obligate the City of Rohnert Park to undertake any specified construction project. (Rohnert Park, supra, 131 Cal.App.4th at p. 1601.) The MOU specifically acknowledged that CEQA review might be required if the City of Rohnert Park provided infrastructure related to the casino project. (Ibid.)

By contrast, the MSA, in addition to requiring the non-opposition of the City to the trust lands and Gaming Development, required the City to remodel its fire station, the remodel to begin upon the commencement of construction of the gaming facility and to be completed by the time the Gaming Development is open to the public. The MSA required the City to construct any required connection to its existing sewer collection system, to install a backflow valve and sampling manhole with meter, and to obtain any required easements for sewer infrastructure. The MSA required the City to vacate a city road. The MSA did not specifically acknowledge that any of these actions, or any other actions taken by the City might require CEQA review. For these reasons, the MSA is unlike the mere funding agreement in Rohnert Park, supra.

IV

Severance

The Tribe argues we are required to sever any provisions of the MSA that violate CEQA, leaving the remainder of the MSA enforceable.

The Tribe relies on section 21168.9, subdivision (b), which provides the court is to limit its CEQA order to those specific project activities in noncompliance with CEQA, but only if there is a finding that: (1) the specific project activity is severable, (2) severance will not prejudice full compliance with CEQA, and (3) no finding has been made that the remainder of the project is noncompliant with CEQA.^[3]

However, the trial court did not find the specific project activity was severable. It found that the difficulties are so pervasive that the Court is unable to make the severable order. We agree with the trial court.

The project activity that did not comply with CEQA was the Citys approval of the MSA without performing an initial study to determine whether to prepare a negative declaration or an EIR. The Citys agreement to support the Tribes trust acquisition request was conditioned on the Tribe[s] ent[ry] into an enforceable MSA to comprehensively mitigate all impacts of the acquisition. (Italics added.) The severance of the municipal services and road vacation from the MSA would violate this central purpose of the agreement and would provide little benefit to the City.

This case is to be distinguished from those cited by the Tribe, where an EIR had been prepared, which failed to adequately address a specific project activity (see Anderson First Coalition v. City of Anderson (2005) 130 Cal.App.4th 1173, 1180 [severance appropriate where only defect of EIR for a shopping center was its inadequate analysis of a gas station proposed to be included in the shopping center]), or where an EIR was inadequate as to its evaluation of future activities, but continuation of present activities was allowed pending a new EIR. (See Laurel Heights Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d at p. 426; City of Santee v. County of San Diego (1989) 214 Cal.App.3d 1438, 1455-1456.) Here, the City has not conducted an environmental review of the MSA at all; thus no issue of a defective EIR is tendered.

We also agree with the County that if we were to rewrite the parties MSA for them to eliminate all of the provisions requiring CEQA compliance, the City would receive very little benefit from the agreement,^[4]but would still be obligated to support the trust acquisition and Gaming Development. We refuse to rewrite the contract in this manner.

We disagree with the Tribes assertion that the severance provisions of the MSA mandate severance in this situation. The MSA states, [i]f for any reason any of the provisions of this MSA are found to be invalid or unenforceable by a court of last resort, then that provision shall be severed from this MSA and the remainder of the MSA shall remain in full force and effect. However, this severance provision is subject to the provisions of the Civil Code.

Civil Code section 1608 provides that [i]f any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void. This means that if the consideration is single . . . its . . . illegality is fatal to the contract. (Keene v. Harling (1964) 61 Cal.2d 318, 324, italics omitted.)

In this case the Citys support for the Tribes trust acquisition is the sole consideration for the Tribes entering into the MSA. Since the support constitutes an approval of obligations under the MSA to engage in activities subject to CEQA without the prior consideration of their environmental impacts, the support is illegal and is fatal to the contract. (Keene v. Harling, supra, 61 Cal.2d at p. 324.)

DISPOSITION

The judgment granting the petition for writ of mandate and enjoining the implementation of the MSA is affirmed. The County shall recover its costs on appeal for the Tribe. (Cal. Rules of Court, rule 8.276(a)(1).)

BLEASE , Acting P.J.

We concur:

SIMS , J.

CANTIL-SAKAUYE , J.

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^[1] The administrative record contains a proposal to remodel the fire station, but it appears to have been prepared prior to the spring of 1998. There is no indication in the record why the plan was prepared, or that the plan is the one for remodeling the fire station pursuant to the MSA.

^[2] The MSA states in part:

8. Tribal Water and Sewer Systems. Upon the land going into trust, the Tribe shall provide its own water and sewer collection system to the Gaming Facility except that the City shall provide to the Trust Lands the water and sewer collection services to the extent that the City provides or has committed to provide municipal water and sewer collection to these lands prior to the lands being taken into trust by the Secretary of the Interior. The Tribe shall provide the funds identified in Paragraphs 9 and 10 as connection fees only if the City is willing and able to provide the municipal water and sewer disposal service sufficient to meet the needs of the Project, except that the Tribe shall pay the Five Hundred Thousand Dollars ($500,000) O&M costs described in Paragraphs 9 and 10. When the Tribe provides the connection fees described in Paragraphs 9 and 10, the City shall be obligated to provide water and sewer disposal service to the Project. . . .

9. Sewer Disposal Service. The Tribe and the City agree that the Tribe shall provide for sewage disposal for the Project by connection to the Citys existing sewer collection system. The City agrees to obtain easements, if required, for sewer infrastructure and construct any required connection to the City infrastructure standards. . . . Any approvals by the City required to implement this Section shall not unreasonably be withheld . . . .

10. Potable Water Services. Subject to the provisions of Paragraph 8, the Tribe and the City agree that the Tribe shall obtain its water supply for the Trust Lands from the City municipal water system subject to the City obtaining an expansion of its water supply sufficient to meet the needs of the Project. After the land is placed into trust, to the extent that the City is willing and able to meet the water needs of the Project and all necessary permits and approvals have been obtained, the Tribe shall pay the sum of Three Million Dollars ($3,000,000) for a connection fee. . . . Any approvals by the City required to implement this Section shall not be unreasonably withheld . . . .

^[3] Section 21168.9 provides:

(a) If a court finds, as a result of a trial, hearing, or remand from an appellate court, that any determination, finding, or decision of a public agency has been made without compliance with this division, the court shall enter an order that includes one or more of the following:

(1) A mandate that the determination, finding, or decision be voided by the public agency, in whole or in part.

(2) If the court finds that a specific project activity or activities will prejudice the consideration or implementation of particular mitigation measures or alternatives to the project, a mandate that the public agency and any real parties in interest suspend any or all specific project activity or activities, pursuant to the determination, finding, or decision, that could result in an adverse change or alteration to the physical environment, until the public agency has taken any actions that may be necessary to bring the determination, finding, or decision into compliance with this division.

(3) A mandate that the public agency take specific action as may be necessary to bring the determination, finding, or decision into compliance with this division.

(b) Any order pursuant to subdivision (a) shall include only those mandates which are necessary to achieve compliance with this division and only those specific project activities in noncompliance with this division. The order shall be made by the issuance of a peremptory writ of mandate specifying what action by the public agency is necessary to comply with this division. However, the order shall be limited to that portion of a determination, finding, or decision or the specific project activity or activities found to be in noncompliance only if a court finds that (1) the portion or specific project activity or activities are severable, (2) severance will not prejudice complete and full compliance with this division, and (3) the court has not found the remainder of the project to be in noncompliance with this division. The trial court shall retain jurisdiction over the public agencys proceedings by way of a return to the peremptory writ until the court has determined that the public agency has complied with this division.

(c) Nothing in this section authorizes a court to direct any public agency to exercise its discretion in any particular way. Except as expressly provided in this section, nothing in this section is intended to limit the equitable powers of the court.

^[4] The bulk of the money the Tribe would pay the City pursuant to the MSA is connected with services subject to CEQA.