Opinion
Cedar Fair, L.P., the owner and operator of the Great America amusement park located in Santa Clara (Cedar Fair), appeals from the judgment of dismissal that followed the court’s order sustaining a demurrer without leave to amend to its petition for writ of mandate. Cedar Fair sought to compel the City of Santa Clara (City) and the City’s redevelopment agency (Redevelopment Agency) to vacate their approvals of the “Stadium Term Sheet,” which “set[] forth basic terms of a proposed transaction to develop a stadium ... located in the City of Santa Clara that would be the home field of the San Francisco 49ers NFL franchise.” According to the petition, “[t]he proposed stadium has a footprint of approximately 14 acres and the 49ers propose to locate the stadium on a 17-acre parcel that is subject to a long-term lease between the [Redevelopment] Agency (as landlord) and Cedar Fair (as tenant). Cedar Fair has three 10-year options remaining on the lease and currently uses this parcel site to provide parking for visitors to
We affirm.
A. Procedural History
On December 7, 2009, Cedar Fair filed a verified petition for writ of mandate seeking, among other things, to compel the City and Redevelopment Agency to set aside their approvals of the Stadium Term Sheet. The petition alleged that the city council, acting for the City and in its capacity as the legislative body of the Redevelopment Agency, approved the term sheet on June 2, 2009, and these approvals became final when the city council declined to reconsider the action at its next regular meeting on June 9, 2009. The petition recites certain statements contained in the May 29, 2009 city council agenda report regarding the background of the proposed stadium project and the purpose of the term sheet. It alleges that subsequent statements by city council members and City officers, representatives or staff, establish that respondents regarded the term sheet, notwithstanding its conditional language, as a binding commitment to the project and their approvals of the term sheet effectively precluded meaningful consideration of the stadium project’s environmental impacts and potential alternatives.
The real party in interest, Forty Niners Stadium, LLC (49ers Stadium Company), demurred to the petition on the grounds that it failed to state a cause of action (Code Civ. Proc., §430.10, subd. (e)) and that it was time-barred (Pub. Resources Code, § 21167, subd. (a)). 49ers Stadium Company requested the court to take judicial notice of the Stadium Term Sheet dated June 2, 2009. The City and Redevelopment Agency also demurred to the petition on the same grounds.
Petitioner initially requested the court to take judicial notice of Santa Clara City Council (City Council) resolutions Nos. 10-7700 and 10-7701, both passed on March 9, 2010, the July 6, 2009 agenda report, policy 042 of the City’s policy and procedure manual, and the City Council’s and the Redevelopment Agency’s
The June 2, 2009 and June 9, 2009 agendas stated in capital letters, before the list of agenda items: “Appeal of hearing decisions of the City Council must be made to the Superior Court within 90 calendar days of final action. Because of the agenda provision for reconsideration, final action is deemed to occur at the end of the next regular meeting pursuant to City Council Policy (P &P 042). (Code of Civil Procedure section 1094.6.)” Policy 042 set forth the applicable procedure to obtain reconsideration of council action.
The June 2, 2009 agenda for a special meeting of the joint City Council and Redevelopment Agency “Committee of the Whole” set forth the “term sheet” item of business and listed the requested actions: “a. Approve the Term Sheet between the City of Santa Clara, the Redevelopment Agency and the 49ers Stadium Company, LLC for the construction and operation of an NFL stadium and authorize the City Manager/Executive Director to execute the Term Sheet, [f] b. Direct the City Manager/Executive Director to return to the June 23, 2009 City Council/Redevelopment Agency meeting with: [][] 1) a report for City Council action to proceed with process of creating a Charter Review Committee; [f] 2) an information report detailing the calendar of events necessary to have a Term Sheet ballot measure ready for a Spring 2010 election; [][] c. Direct the City Manager/Executive Director to return to the July 14, 2009 City Council/Redevelopment Agency meeting with: [ft] 1) a presentation by the San Francisco 49ers on the design of the proposed stadium; [ft] 2) a report for City Council/Redevelopment Agency action to amend the existing Negotiating Agreement between the City of Santa Clara, the Redevelopment Agency and the 49ers Stadium Company, LLC in order to proceed with the next phase of the proposed stadium project, which is negotiation of the Disposition and Development Agreement; and [ft] 3) a proposed consultant budget for continuing staff support for the next phase of the stadium project.” The June 9, 2009 agenda states as unfinished business: “Possible Reconsideration of Actions Taken at Immediately Preceding Meeting.” The draft minutes of City Council’s June 9, 2009 meeting and the summary of its actions at that meeting showed that the City Council took no action on a request that the council reconsider its June 2, 2009 approval of the term sheet.
The July 6, 2009 agenda report from the assistant manager, prepared for a July 14, 2009 meeting, concerned a proposed second amendment to the “Negotiating Agreement” between the City, the Redevelopment Agency, the San Francisco Forty Niners, LLC, and the 49ers Stadium Company. The report indicates that the Negotiating Agreement was approved by respondents
One of the March 9, 2010 resolutions, which included a recital that the City Council had certified the final EIR for the stadium project on December 8, 2009, adopted extensive CEQA findings concerning significant impacts, mitigation measures and alternatives and a statement of overriding considerations for the approval of general plan amendments relating to the stadium project. The other March 9, 2010 resolution approved the adoption of a general plan amendment amending the text of the tourist commercial designation of the land use element of the City’s general plan.
In addition, Cedar Fair requested the court to take judicial notice of its separate writ petition challenging the EIR prepared for the proposed stadium project.
The court heard argument on April 30, 2010, and the matter was submitted for decision. In an order filed May 3, 2010, the court granted all requests for judicial notice. It then sustained the demurrer without leave to amend on the ground the petition failed to state sufficient facts to constitute a cause of action. It explained: “Having examined the judicially noticed ‘Term Sheet’ entered into between Respondents and Real Party the Court concludes that it is not a ‘project’ or a ‘project approval’ for CEQA purposes, and therefore its formation and/or approval by Respondents prior to the preparation of an EIR was not a CEQA violation. As this is the sole basis for the CEQA violation alleged in the Writ Petition ... the claims fail to state sufficient facts.”
A judgment of dismissal was filed May 18, 2010. Cedar Fair appeals.
B. Standard of Review
“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all
“It is not the ordinary function of a demurrer to test the truth of the plaintiff’s allegations or the accuracy with which he describes the defendant’s conduct. A demurrer tests only the legal sufficiency of the pleading. (Whitcombe v. County of Yolo (1977)
“Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment. (Temescal Water Co. v. Department of Public Works (1955)
Appellant Cedar Fair argues that the approvals of the term sheet constituted “approval” of the stadium project within the meaning of CEQA and the implementing CEQA guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.; CEQA Guidelines)
1. Legal Background
CEQA applies to “discretionary projects proposed to be carried out or approved by public agencies . . . .” (§ 21080, subd. (a).) “ ‘Project’ means an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is any of the following: [f] (a) An activity directly undertaken by any public agency, [f] (b) An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies, [f] (c) An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.” (§ 21065; see Cal. Code Regs., tit. 14, §§ 15357 [defining “discretionary project”], 15378 [defining “project”].) The term “project” “means the whole of an action” (Cal. Code Regs., tit. 14, § 15378, subd. (a)) and “refers to the activity which is being approved and which may be subject to several discretionary approvals by governmental agencies” (Cal. Code Regs., tit. 14, § 15378, subd. (c)). It “does not mean each separate governmental approval.” (Ibid.)
Under CEQA, all local agencies must “prepare, or cause to be prepared by contract, and certify the completion of, an environmental impact report on any project that they intend to carry out or approve which may have a significant effect on the environment.” (§ 21151; see § 21080, subd. (d).) “An environmental impact report is an informational document which, when its preparation is required by this division, shall be considered by every public agency prior to its approval or disapproval of a project....” (§ 21061; see Cal. Code Regs., tit. 14, § 15004, subd. (a) [“Before granting any approval of a project subject to CEQA, every lead agency or responsible agency shall consider a final EIR or negative declaration or another document authorized
In Save Tara, supra,
2. Save Tara v. City of West Hollywood
In Save Tara, supra,
After a CEQA action challenging approval of the draft agreement and loan to the developer was filed, the City of West Hollywood and Laurel Place executed a revised development agreement. (Save Tara, supra,
Section 21100, subdivision (a) provides in pertinent part: “All lead agencies shall prepare, or cause to be prepared by contract, and certify the completion of, an environmental impact report on any project which they propose to carry out or approve that may have a significant effect on the environment.”
The CEQA Guidelines define the word “approval”: “(a) ‘Approval’ means the decision by a public agency which commits the agency to a definite course of action in regard to a project intended to be carried out by any person. The exact date of approval of any project is a matter determined by each public agency according to its rules, regulations, and ordinances. Legislative action in regard to a project often constitutes approval. [$] (b) With private projects, approval occurs upon the earliest commitment to issue or the issuance by the public agency of a discretionary contract, grant, subsidy, loan, or other form of financial assistance, lease, permit, license, certificate, or other entitlement for use of the project.” (Cal. Code Regs., tit. 14, § 15352, italics added.)
The Supreme Court also looked to the CEQA Guidelines concerning the time for CEQA compliance, which provides: “Choosing the precise time for
In Save Tara, supra,
The Supreme Court emphasized that “limiting approval to unconditional agreements that irrevocably vest development rights would ignore what we have previously recognized, that postponing environmental analysis can permit ‘bureaucratic and financial momentum’ to build irresistibly behind a
On the other hand, the Supreme Court recognized that “[ajgencies sometimes provide preliminary assistance to persons proposing a development in order that the proposal may be further explored, developed or evaluated.” (Save Tara, supra,
In Save Tara, supra,
The Supreme Court also relied upon the fact that the City of West Hollywood had agreed “to initially lend the developer nearly half a million dollars” and that loan was “not conditioned on CEQA compliance” and was “to be repaid from project receipts over a period of up to 55 years,” which meant that the city would not be repaid if the city did not finally approve the project. (Save Tara, supra,
The court summarized: “[The] City’s public announcements that it was determined to proceed with the development of low-income senior housing at 1343 Laurel, its actions in accordance with that determination by preparing to relocate tenants from the property, its substantial financial contribution to the project, and its willingness to bind itself, by the May 3 draft agreement, to convey the property if the developer ‘satisfied’ CEQA’s ‘requirements, as reasonably determined by the City Manager,’ all demonstrate that City committed itself to a definite course of action regarding the project before fully evaluating its environmental effects. That is what sections 21100 and 21151 prohibit.” (Save Tara, supra,
Save Tara has been applied in RiverWatch v. Olivenhain Municipal Water Dist. (2009)
The appellate court in Riverwatch concluded that the water district’s “approval and signing of the Agreement constituted approval of part of the Landfill project within the meaning of CEQA and its guidelines, as interpreted by Save Tara” (Riverwatch, supra,
3. Application of Save Tara to the Stadium Term Sheet
In arguing that, as a practical matter, respondents committed themselves to the proposed stadium project by entering the Stadium Term Sheet agreement, appellant Cedar Fair emphasizes the term sheet’s high level of detail, the large amount of money already invested by the Redevelopment Agency in the process of reaching an eventual final agreement, and the fact that the term sheet was put to a public vote by the City Council. Appellant argues that the approval of the very detailed term sheet served no purpose other than to show
Determining on which side of the Save Tara line the term sheet falls is not an easy judgment call. On one hand, the Stadium Term Sheet explicitly states that its purpose is “to memorialize the preliminary terms that have been negotiated among the parties, and to inform the public regarding the goals and principles identified by the City Staff and City Council that will guide the proposal to develop the Stadium throughout the public review process.” (Italics added.) It provides that the “Stadium shall not proceed unless and until the parties have negotiated, executed and delivered mutually acceptable agreements based upon information produced from the CEQA environmental review process and on other public review and hearing processes and subject to all applicable governmental approvals.” The term sheet’s signature page states: “By signing below, the Parties evidence their general agreement with the provisions of this Term Sheet and agree to use this Term Sheet as the framework for the good faith negotiations of binding definitive agreements. Any agreements resulting from negotiations will become effective only if and after such agreement has been considered and approved by the Agency and the City following conduct of all legally required procedures.”
On the other hand, the term sheet’s introduction describes a well-defined proposed project: “The Stadium site is located in the Bayshore North Redevelopment Project Area ... on the south side of Tasman Drive at Centennial Boulevard (the ‘Stadium Site’). The Stadium will have a permanent seating capacity of approximately 68,500 seats with expansion to approximately 75,000 seats for larger events, such as an NFL Super Bowl. [][] The Stadium will be owned by a joint powers authority comprised of the City and the [Redevelopment] Agency (the ‘Stadium Authority’).. . . The City will ground lease the Stadium Site to the Stadium Authority which will, in turn, enter into a lease of the Stadium to the 49ers Stadium Company .... The 49ers Stadium Company will sublease the Stadium to the Team. Each of these leases will have an initial term of 40 years, with extension options that could extend the term up to another 20 years.” The term sheet declares that “[t]he Stadium will further the City Council’s goals of creating an entertainment destination in the Redevelopment Project Area, and will provide significant economic benefits to the City and its residents and businesses.”
The body of the term sheet reiterates in an “Effect of Term Sheet” provision (art. 1, § 1.3) that the term sheet is not binding: “This Term Sheet is intended to provide a general framework for the subsequent negotiation of definitive agreements regarding the development and operation of the Stadium and is not intended to create any binding contractual obligations on any
As to CEQA, the Stadium Term Sheet generally states that “the Stadium shall not proceed unless and until the parties have negotiated, executed and delivered mutually acceptable agreements based upon information produced from the CEQA environmental review process and on other public review and hearing processes and subject to all applicable governmental approvals.” A provision concerning CEQA compliance (art. 1, § 1.2) states that “the City and the Agency retain the absolute sole discretion to (i) modify the transaction, create and enter into transactional documents, and modify the project as may, in their sole discretion, be necessary to comply with CEQA, (ii) select other feasible alternatives to avoid significant environmental impacts, (iii) balance the benefits of the Stadium project against any significant environmental impacts prior to taking final action if such significant impacts cannot otherwise be avoided, and/or (iv) determine not to proceed with the Stadium project. No legal obligations will exist unless and until the parties have negotiated, executed and delivered mutually acceptable agreements based upon information produced from the CEQA environmental review process and on other public review and hearing processes, subject to all applicable governmental approvals.”
Another provision of the term sheet (art. 1, § 1.1) requires voter approval: “The Stadium will not be constructed unless and until the voters of the City approve a ballot measure endorsing the development of the Stadium consistent with the essential elements set forth in this Term Sheet.”
Extensive details are set forth in the 39-page term sheet. “Article 2” specifies the city’s responsibilities, which include the obligations to (1) jointly with the redevelopment agency, create the stadium authority to build, own, and operate the stadium, (2) enter into a ground lease with the stadium authority, and (3) engage in reasonable good faith efforts to form a Mello-Roos Community Facilities District for special taxation purposes. “Article 3” of the term sheet concerns the DDA. It states that the City and the stadium authority “will enter into a Disposition and Development Agreement (‘DDA’) with [the] 49ers Stadium Company,” which “will set forth the predevelopment activities to be performed, the preconditions to commencement of construction of the Stadium,” and will specify the “funding of construction costs.” “Article 5” concerns the stadium lease and the 49ers NFL franchise sublease. The term sheet specifies the term of the leases (40 years
The remainder of the term sheet is chiefly concerned with financial and other rights and responsibilities involved in the operation of the proposed stadium. “Article 8” sets forth responsibility for management and operation of the Stadium and parking. “Article 10” addresses entitlement to stadium operating revenue, which excludes team revenue. “Article 11” concerns team revenue. “Article 12” defines “reimbursable expenses.” “Article 13” pertains to non-NFL events, including the income, revenue and expenses of such events. “Article 14” specifies the funding and maintenance of a capital reserve by the stadium authority. “Article 15” concerns use of excess revenues. “Article 16” describes the right of the 49ers Stadium Company to sublease to a second NFL team. “Article 17” concerns adjacent property, including the obligations of the Redevelopment Agency with respect to the Great America theme park.
Under Save Tara, the critical question is “whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features, so as to effectively preclude any alternatives or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going forward with the project. (See Cal. Code Regs, tit. 14, § 15126.6, subd. (e).)” (Save Tara, supra,
Thus, although the term sheet is extremely detailed, it expressly binds the parties to only continue negotiating in good faith. (See Copeland v. Baskin Robbins U.S.A. (2002)
The negotiation of a complicated, multiparty development agreement can involve a long process of hammering out a multitude of issues. (See Copeland v. Baskin Robbins U.S.A., supra,
Cedar Fair’s petition did not allege any other agreements that concern the preliminary terms set forth in the term sheet or enlarge respondents’ commitment under the Stadium Term Sheet. The petition contained several allegations seeking to show that respondents’ approvals of the term sheet foreclosed meaningful CEQA review of the proposed stadium project. It alleged: “Statements made by members of the City Council and officers and representatives of the City and the Agency on and after June 2, 2009, show that the City and the Agency, by adopting the Term Sheet, (a) effectively circumscribed and limited their discretion with respect to environmental review and (b) devoted significant public resources to shaping the Project and encouraged bureaucratic and financial momentum to build irresistibly behind it.” It averred: “Public statements by Santa Clara City Council members, Santa Clara City Manager Jennifer Sparacino, attorneys for the City, and other City staff members, as recorded on video and included in the official records of the City Council, demonstrate that the City and the Agency regard the Term Sheet as a
Regardless whether persons speaking on behalf of respondents indicated that respondents regarded the term sheet as a binding agreement committing them to the proposed stadium project as alleged, the Stadium Term Sheet cannot be reasonably construed as creating any contractual commitment on the part of respondents to conditionally approve or undertake any aspect or feature of the stadium project because the language of the instrument is not reasonably susceptible of such an interpretation. “[T]he intention of the parties as expressed in the contract is the source of contractual rights and duties. A court must ascertain and give effect to this intention by determining what the parties meant by the words they used.” (Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968)
“The test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.” (Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co., supra,
Further, it is not alleged that respondents have made any contractual promises to loan money to a private developer as in Save Tara, let alone a loan that can be recovered only if the project is approved. (See Save Tara, supra,
The modem phenomenon of “public-private partnerships” for development makes the time of “approval” under CEQA more difficult to ascertain since a local agency may be a vocal and vigorous advocate of a proposed project as well as an approving agency. But “an agency does not commit itself to a project ‘simply by being a proponent or advocate of the project. . . .’ (City of Vernon v. Board of Harbor Comrs.[, supra,]
In Save Tara, the Supreme Court eschewed the position that “any agreement, conditional or unconditional, would be an ‘approval’ requiring prior preparation of CEQA documentation if at the time it was made the project was sufficiently well defined to provide ‘ “meaningful information for environmental assessment.” ’ (Citizens for Responsible Government v. City of Albany, supra,
On appeal, Cedar Fair maintains that respondents’ statements and actions subsequent to their approval of the Stadium Term Sheet “demonstrate that the Agencies views [sic] the Term Sheet as binding and that the Agencies will not allow the scope and terms of the Project to deviate from the Term Sheet.” It now points to the City Council’s March 9, 2010 resolution approving a general plan amendment that changed the “tourist commercial” designation of the land use element to allow stadiums, arenas, sport and other cultural facilities and related parking. Appellant argues that, in approving that general plan amendment, “the City did not adopt a single mitigation measure that would require significant design changes to the Project.”
This writ proceeding is not a challenge to the final EIR certified by the City Council on December 8, 2009, or the City Council’s March 9, 2010 resolutions. (See § 21081, subd. (b); Cal. Code Regs., tit. 14, §§ 15064, 15091-15093.) This appeal does not call on us to consider whether those actions complied with CEQA. Moreover, those governmental actions, occurring many months after execution of the term sheet agreement that merely required the parties to continue negotiating in good faith, do not demonstrate that the preliminary agreement to the term sheet effectively ruled out any mitigation measure or alternative to the project.
“CEQA does not, indeed cannot, guarantee that [governmental] decisions will always be those which favor environmental considerations.” (Bozung v. Local Agency Formation Com. (1975)
“A party may seek a writ of mandate ‘to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station . . . .’ (Code Civ. Proc., § 1085, subd. (a).) In order to obtain writ relief, a party must establish ‘ “(1) A clear, present and usually ministerial duty on the part of the respondent . . . ; and (2) a clear, present and beneficial right in the petitioner to the performance of that duty ....”’ (Santa Clara County Counsel Attys. Assn. v. Woodside (1994)
While Code of Civil Procedure section 1085 is available to compel a public agency to set aside a decision for failure to comply with CEQA (Western States Petroleum Assn. v. Superior Court (1995)
Disposition
The judgment is affirmed.
Rushing, P. J., and Premo, J., concurred.
Notes
All further statutory references are to the Public Resources Code unless otherwise specified.
“The CEQA Guidelines, promulgated by the state’s Resources Agency, are authorized by Public Resources Code section 21083. In interpreting CEQA, we accord the Guidelines great weight except where they are clearly unauthorized or erroneous.” (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007)
“ ‘Lead agency’ means the public agency which has the principal responsibility for carrying out or approving a project. The lead agency will decide whether an EIR or negative declaration will be required for the project and will cause the document to be prepared.” (Cal. Code Regs., tit. 14, § 15367; see Cal. Code Regs., tit. 14, § 15050, subd. (a).) The criteria for identifying the lead agency for a project are set forth in the CEQA Guidelines. (Cal. Code Regs., tit. 14, § 15051.)
The CEQA Guidelines define “local agency” to mean “any public agency other than a state agency, board, or commission.” (Cal. Code Regs., tit. 14, § 15368.) The definition of “local agency” “includes but is not limited to cities, counties, charter cities and counties, districts, school districts, special districts, redevelopment agencies, local agency formation commissions, and any board, commission, or organizational subdivision of a local agency when so designated by order or resolution of the governing legislative body of the local agency.” (Ibid.)
The petition does not contain any allegations regarding respondents’ expenditures for consultant support and we address this argument to assess whether additional allegations regarding such expenditures would render the petition legally sufficient.
Given our conclusion, it is unnecessary to resolve the alternative ground for demurrer that this proceeding was time-barred.
