When developers Craig Rowell and Rick Moe bought 2.7 acres of land in Santa Cruz in April 2007, they werenâ€™t expecting it to look the same more than 11 years later.
Today, the site at 1930 Ocean Street Extension is much the same mix of open grassy area and a few treesâ€”not a development of 32 housing units, let alone the original proposal of 40. That doesnâ€™t look likely to change anytime soon, either, as the site is now the subject of a lawsuit brought under the California Environmental Quality Act, known as CEQA (pronouncedÂ SEE-quah).
The Ocean Street Extension Neighborhood Association filed the suit in late October against Rowell and Moe, as well as the city of Santa Cruz and the City Council. The suit alleges â€”among other issuesâ€”that the environmental impact report (EIR), a document required under CEQA for some projects, doesnâ€™t adequately analyze the cumulative impacts of the proposed development and fails to respond to many of the comments put forth by neighbors in the report drafting process.
Rowell and Moe say they werenâ€™t surprised by the lawsuit. They feel neighbors have been opposed to the project, which would include at least a few affordable units, from the beginning. In their eyes, the CEQA suit is just another tool to try to stop it entirely.
â€śCEQA was certainly written and enacted with all the best of intentions,â€ť Moe says. â€śAnd it has done a lot of good, there is no question. But it has some holes in it, and it is getting used to try to stop projects.â€ť
Legal analyses of CEQA, which was signed into law in 1970 by then-Gov. Ronald Reagan, show divisions over its ripple effects on development and the stateâ€™s housing supply. Over the past three years, Californiaâ€™s nonpartisan Legislative Analystâ€™s Office, which blames lousy housing affordability on a lack of housing construction, has argued thatÂ CEQA inhibits housing constructionÂ statewide. This past winter, a study by San Francisco law firm Holland & Knight, published in theÂ Hastings Environmental Law Journal, concluded CEQA has mostly been used in recent years â€śto block infill housing and transit-oriented land-use plans, as well as public service and infrastructure projects.â€ť
Another recent report, however, published by the UC Berkeley School of Law, â€śGetting It Right,â€ť contends that claims of CEQAâ€™s slowing effects are overstated, and that the real drivers of struggles to add more housing are local agencies such as zoning boards and planning commissions that must sign off on any proposed development.
In extreme instances, outside groups have used CEQA as a way to extract last-minute payments out of developers and local governments, as one Irvine resident named Michael Goolsby did this past spring when he issued a couple challenges to a 125-unit Redwood City development shortly before the project set a date to break ground. The developer contributed $50,000 toward a settlement agreement with Goolsby, who is barred from practicing law.
No developers have stories of incidents quite so extreme happening on Santa Cruz side of the hill. Over there, Santa Cruz, Bill Parkin, a partner at the Wittwer Parkin LLP law firm, is representing Ocean Street Extension neighbors in their case against Rowell and Moe, and heâ€™s well aware that CEQA sometimes gets painted as a law that slows down development or is used by â€śnot in my backyardâ€ť (NIMBY) groups. CEQA, he says â€śis just not the problem.â€ť
â€śAt the end of the day, this notion that the environment is mutually exclusive from people having homes and from economic growth is simply silly,â€ť he says. He adds that the environmental law is used as a â€śscapegoat,â€ť and says developers really donâ€™t want the potential impacts of their projects disclosed.
The Ocean Street Extension Neighborhood Association has spent much of the past decade entrenched in the proceedings around the development at 1930 Ocean Street Extension. Community members filed more than 100 comments during the drafting of the projectâ€™s EIR, and â€śmany of them were not addressed at allâ€ť in the final report as required by CEQA, says Ellen Aldridge, a member of the groupâ€™s steering committee.
â€śOur neighborhood association has been concerned about this development since itâ€™s been proposed,â€ť Aldridge says. Their concerns include the potential for increased traffic on the narrow road and how that might affect bicycle and pedestrian safety as well as residentsâ€™ ability to evacuate in an emergency, especially if Highway 9, the other route in and out of the neighborhood, is closed.
In a Sept. 25 Santa Cruz City Council meeting, council members voted 5-2 to advance the project at 32 units instead of the proposed 40, in what appeared to be a form of concession to neighborhood concerns. At least five of the units would be affordable. The affordable housing component seemed to be a selling point for some council members on the project at a time when the pace of affordable housing construction locallyâ€”as throughout much of the stateâ€”hasÂ failed to meet mandated goals.
Even with the change to the number of units, the neighborhood group says no one has responded its concerns in any substantive way. The goal of its lawsuit is to have the city reissue the EIR, Aldridge says, â€śand substantively address the questions we raised and consider mitigations and alternatives,â€ť which she says â€śwere given short shrift.â€ť
â€śEveryone acknowledges there needs to be additional housing, that thereâ€™s a housing crisis,â€ť Aldridge says. â€śThat doesnâ€™t mean you put projects that arenâ€™t suitable for the site or the surrounding infrastructure in to just say you built more housing. You have to do a critical analysis of both the legal requirements and the environmental concerns, and make sure youâ€™ve got the right project in the right place.â€ť
Thatâ€™s the key part of this lawsuit, Parkin says. The Ocean Street Extension project, he says, didnâ€™t consider all feasible mitigations and alternatives that might reduce environmental impacts.
â€śWhat is very interesting about the Ocean Street case is the whole affordable housing crisis we have is driving this almost like a collective insanity,â€ť Parkin says. â€śWe just throw the baby out with the bathwater when it comes to good planning.â€ť
Santa Cruz Principal Planner Eric Marlatt canâ€™t comment on the Ocean Street Extension case, but says that the city does occasionally receive letters from attorneys about CEQA documents before a project gets a hearing. Often, those letters are from attorneys representing neighbors who are opposed to a project. They donâ€™t always progress to litigation like this one did.
Marlatt routinely goes to conferences to learn about the latest in environmental requirements. Generally, he says that most CEQA litigation has less to do with content of the actual environmental analysis than it does the procedural steps that a given agency follows. And, procedurally speaking, CEQA is doing what it was supposed to do, Marlatt saysâ€”local governments are looking at potential impacts to a project, disclosing them and mitigating or offsetting them.
Over Marlattâ€™s nearlyÂ 30-year career, CEQA has become more complex, he says, due in part to litigation thatâ€™s shaped the body of law around it.
When he first started interacting with CEQA in the early 1990s, an initial study for a project was a two-page checklist. Now, an initial study â€śmany times can be 80 to 100 pages of analysis,â€ť he says.
Rowell and Moe, the Ocean Street Extension developers, say theyâ€™ve spent some $713,000 to date in the effort to see their vision of housing on the property turn into a reality (not counting the $1.65 million they paid to purchase the site). The consultant fees and city review of the EIR alone cost nearly $100,000 combined, and took around two years. That was due, in part, to the â€śextensiveâ€ť comments from neighbors, they say.
Other developers have shared similar concerns about CEQA gumming up housing construction that they see as essential, and which many advocates are clamoring for. Jesse Nickell, senior vice president of construction and development at Swenson, says the bottom line is that â€śpeople are really afraid of change.â€ť While CEQA is generally a really good thing, he says, â€śit becomes a tool sometimes for anti-development.â€ť From there, the effects are a simple matter of supply and demand on Santa Cruzâ€™s housing market, he says. â€śIf nobody can get the product out, then everything goes up in value,â€ť Nickell says.
Ocean Street Extension residents insist, though, that the project proposed in their neighborhood simply isnâ€™t the right product for Santa Cruz. Aldridge says she and her neighbors arenâ€™t against development, and she knows the lot wonâ€™t be vacant forever. â€śBut the laws are there for a reason,â€ť she says.
Rowell and Moe believe that the case against them doesnâ€™t have anything to do with considering alternatives for environmental purposes. They say it appears more focused on stopping their whole project.
â€śI think what they really want,â€ť Rowell says, â€śis they want us not to be there.â€ť
Additional reporting by Jennifer Wadsworth. This article was originally published in San Jose Inside/Metro Silicon Valleyâ€™s sister paper, the Santa Cruz Good Times.