Score One For The Retailers: California Appeals Court Clarifies Standards For Supplemental EIRs Involving Supercenters

Across California, the approvals for developments involving big box stores and so-called “supercenters” are being challenged by labor unions, environmentalists and others. A recent California Court of Appeals case gives a boost to developers and retailers by finding that the mere presence of a so-called supercenter in a revised project does not automatically trigger a requirement for a supplemental environmental impact report (“EIR”) to examine possible urban decay effects.

In Patricia Melom v. City of Madera, Case No. MCV037268 (Cal.App.5th, March 24, 2010), plaintiff Melom claimed that the City of Madera (“City”) violated the California Environmental Quality Act (“CEQA”) and the City’s Municipal Code when it approved a commercial shopping center without first preparing a subsequent or supplemental EIR after the site plan changed to accommodate a SuperTarget.

In November 2006, the City certified an EIR for the proposed retail center. The conceptual site plan in the EIR showed approximately 30 retail spaces, the largest of which was 125,000 square feet. In March 2007, the developer submitted a “refined” site plan with the largest retail space described as approximately 198,500 square feet, plus a 10,900 square foot garden center. The total retail square footage of the project remained relatively unchanged (in fact, it decreased by about 4,000 square feet). In June 2007, the City prepared an addendum to the EIR which concluded that there were no substantial changes proposed to the project and therefore no new impacts that would require major revisions of the previous EIR. The City then approved the EIR addendum and passed an ordinance approving and adopting a development agreement between the City and the developer, thus allowing the project to proceed.

Melom immediately filed suit challenging the City’s approval of the revised site plan with a supercenter without preparation of a subsequent or supplemental EIR. Melom argued that whenever a governmental entity approves a project with a “supercenter”, the approval presumptively requires an EIR that analyzes the potential “urban decay” effects. Since the original EIR did not evaluate urban decay, a subsequent or supplemental EIR, and not an addendum, was required. Melom pointed to Bakersfield Citizens for Local Control v. City of Bakersfield, 124 Cal.App.4th 1184 (2004) (“Bakersfield Citizens”), and American Canyon Community United for Responsible Growth v. City of American Canyon, 145 Cal.App.4th 1062 (2006) (“American Canyon”) (collectively, the “Prior Cases”) as evidence for this presumptive requirement. The trial court disagreed with Melom’s interpretation, and found that no supplemental EIR was required. Melom appealed.

The Appeals Court affirmed the trial court’s ruling, and stated that nothing in the Prior Cases supports - or even implies support for - Melom’s proposed automatic requirement for an EIR urban decay analysis for any project with a supercenter. The Court explained that unlike American Canyon, where the project at issue increased in size, the overall square footage of the Madera project did not increase. And unlike Bakersfield Citizens, where expert testimony was proffered regarding the adverse effects of supercenters, there was no expert evidence presented in the Madera case that suggested that revising the site plan to include a supercenter would cause urban decay. In fact, the Court noted, there was no evidence presented that the addition of a supercenter at the project could cause changes that might eventually lead to urban decay.

The Court went on to expressly limit statements in the Prior Cases that suggested that “supercenters” are a unique use, which would thereby trigger a supplemental EIR to examine whether there are unique impacts. The Court pointed out that there is no definition of the term “supercenter” in the CEQA statutes, CEQA guidelines or in the Prior Cases, implying that an automatic urban decay analysis for any supercenter is untenable given the vague nature of the concept. Furthermore, the Court noted that the Madera supercenter would be limited to the same operating hours as other retail and restaurant uses in the area, and therefore there was no support for Melom’s suggestion that the supercenter would in fact have any unique impacts. The Court stated that when an EIR has already been prepared and certified and there is a subsequent change, the inquiry into whether a supplemental EIR is required turns on the project itself or the change in the project - not whether the project or change in the project is of a certain type (e.g., a supercenter). The Court specifically stated that Bakersfield Citizens should not be interpreted as requiring otherwise, and expressly declined to adopt Melom’s proposed automatic requirement for an EIR urban decay analysis for any project with a supercenter.

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