San Diego Unified Port Dist. v. Cal. Coastal Comm'n

• Decision Date: 07 September 2018
• Docket Number: D072954
• Citation: 27 Cal.App.5th 1111,238 Cal.Rptr.3d 671
• Court: California Court of Appeals Court of Appeals
• Parties: SAN DIEGO UNIFIED PORT DISTRICT, Plaintiff and Respondent, v. CALIFORNIA COASTAL COMMISSION, Defendant and Appellant, Sunroad Marina Partners, LP, Real Party in Interest and Respondent.

27 Cal.App.5th 1111

238 Cal.Rptr.3d 671

SAN DIEGO UNIFIED PORT DISTRICT, Plaintiff and Respondent,

v.CALIFORNIA COASTAL COMMISSION, Defendant and Appellant,Sunroad Marina Partners, LP, Real Party in Interest and Respondent.

D072954

Court of Appeal, Fourth District, Division 1, California.

Filed September 7, 2018

As Modified on Denial of Rehearing October 1, 2018

Xavier Becerra, Attorney General, Daniel A. Olivas, Assistant Attorney General, Jamee Jordan Patterson and Hayley Elizabeth Peterson, Deputy Attorneys General, for Defendant and Appellant,

Pacific Legal Foundation and Damien M. Schiff as Amici Curiae on behalf of Plaintiff and Respondent.

Thomas A. Russell and Rebecca S. Harrington ; Jenkins & Hogin and Christi Hogin, Gregg W. Kettles for Plaintiff and Respondent,

Nossaman and Steven Harold Kaufmann for Real Party in Interest.

O'ROURKE, Acting P. J. Plaintiff and respondent San Diego Unified Port District (District) unsuccessfully asked defendant and appellant California Coastal Commission (Commission) to certify an amendment of District's port master plan (at times, the amendment) to authorize specified hotel development in the East Harbor Island subarea, including construction of a 175-room hotel by real party in interest Sunroad Marina Partners, LP (Sunroad). District filed a petition for peremptory writ of mandate challenging Commission's denial of certification, and the trial court in January 2017 issued the writ, finding Commission violated provisions of the California Coastal Act of 1976 (sometimes the Act; Pub. Res. Code,¹ § 30000 et seq. ) and "impermissibly set policy" by setting a maximum rental rate or fixing an amount certain for room rental rates. Commission did not appeal that ruling, but reheard District's application and again denied certification, finding the master plan amendment lacked sufficient specificity to adequately protect lower cost visitor and public recreational opportunities, including overnight accommodations. On objections by District and Sunroad, the trial court in August 2017 ruled that Commission had essentially conditioned its certification on the provision of lower cost overnight accommodations, which "infring[ed] on the wide discretion afforded to the District to determine the contents of land use plans and how to implement those plans." The court ruled that Commission had acted in excess of its jurisdiction and did not proceed in the manner required by law.

Commission appeals from the August 2017 postjudgment order. It contends it complied with the writ, but afterwards in the face of Port's and Sunroad's objections the trial court expanded the writ's scope, thereby exceeding its jurisdiction. Commission asks this court to find it complied with the writ as issued, reverse the order sustaining District and Sunroad's objection, and direct the trial court to discharge the writ. Commission further contends it properly denied District's proposed amendment on remand, arguing: (1) substantial evidence supports its finding the proposed amendment does not conform to the Act's policies; (2) Commission, not District, has the ultimate authority to decide whether a proposed amendment is consistent with the Act; and (3) Commission did not set hotel rates in violation of the Act.

In this context, we narrowly review the correctness of the trial court's postjudgment ruling that Commission exceeded its jurisdiction or acted contrary to law in denying certification of District's proposed master plan amendment. Doing so, we hold the court erred by relying in part on provisions of the Act governing a local government's authority and imposing limits on Commission's jurisdiction with respect to local coastal programs, which do not pertain to port master plans or master plan amendments. We further conclude the lower court engaged in an impermissibly broad interpretation of a provision of the Act barring Commission from modifying a master plan amendment as a condition of certification. (§ 30714.) We reverse the order and direct the trial court to discharge the writ of mandate.

FACTUAL AND PROCEDURAL BACKGROUND

In 2015, District submitted to Commission Port Master Plan Amendment No. PMP-6-PSD-14-003-2 (the amendment) for certain development on the East Harbor Island subarea. The amendment proposed to revise District's existing master plan, which had allowed for a single 500-room hotel, to permit development of a 175-room hotel by Sunroad as well as up to two additional hotels with a total of 325 rooms, for a combined total of 500 rooms. About a year earlier, District submitted this proposed amendment but withdrew it after Commission staff recommended Commission deny certification due to "inconsistency with the public access and recreation policies of the Coastal Act that protect and encourage lower-cost visitor and public recreational opportunities." Specifically, Commission staff had observed the proposal did not include any specific requirement for the provision of lower cost accommodations; it did not "include policy language that either reserves a portion of this subarea for lower cost hotel units or identifies an alternative location where such lower cost accommodations will be developed to which ... in-lieu fees may apply."² Commission staff concluded the proposal did not meet the requirements of section 30213, part of the Act, providing in part that lower cost visitor and recreational facilities "shall be protected, encouraged, and, where feasible, provided."

After District resubmitted the amendment in 2015, Commission staff again recommended denial of certification due to inadequacies with the recreation and lower cost overnight accommodation policies. Commission staff had offered language to include in the amendment that would reserve a portion of the subarea's land, as well as a minimum of 25 percent of the 500 hotel rooms, for lower cost overnight accommodations, but District decided there was inadequate direction from its board to incorporate it into the submittal. Instead, District added a paragraph into its final submittal to address the development of the remaining 325 rooms: "If the District issues a Request for Proposals (RFP) to develop the one or two hotels (up to 325 rooms) on the southwesternmost area of Subarea 23 before the District has completed a lower cost visitor accommodations study, the RFP shall specify that no less than 25 [percent] of the hotel rooms will be midscale or economy, as defined by Smith Travel Research. The developer of the midscale or economy hotel rooms shall be required to include amenities that lower the cost of stay. Examples of amenities that could lower the cost of stay may include the provision of kitchenettes, refrigerators and/or microwaves in guest rooms, it could also include provision of complimentary services such as Wi-Fi, continental breakfast and/or parking. If a hotel is developed at a midscale or economy product, it need not pay the in-lieu fee identified earlier in this precise plan."

Commission staff determined the language was inadequate: "[I]t is unlikely that these [midscale or economy] rooms would be what the Commission considers lower cost overnight accommodations. Based on the Commission's past practice, a lower cost overnight accommodation in the San Diego region would be one whose rate is below approximately $106. Based on Commission staff's research of other midscale and economy hotel chains in the vicinity, it is very unlikely that the market rate of new hotel rooms on the waterfront developed as an economy product—let alone a midscale product—would fall into this category. In addition, the deletion of in-lieu fees should not be considered or permitted without detailed criteria and evidence regarding a project's design to ensure a reduction or deletion in the fee is warranted. In this case, the proposed language is too general to determine whether the midscale/economy hotel rooms and amenities would result in accommodations that are truly lower cost, and would allow build-out of the remainder of the room allocation for the subarea. Full-buildout should not occur until it has been determined that this subarea is not required to accommodate a lower-cost hotel and/or a very low cost option, such as a hostel, through use of in-lieu fee payments and to fulfill the results of [District's] study described below."

According to Commission staff, though District's proposed amendment acknowledged that the hotel developers must contribute a " ‘fair share’ " of on-site or off-site lower cost visitor accommodations or pay an in-lieu fee based on a study District was to prepare, that study had not been completed, and the "policy language does not establish or identify the number of lower cost units needed to meet public demand, or the potential location and timeframe for development of lower cost accommodations elsewhere within the Port." Commission adopted its staff's findings in its final report. It denied certification of the amendment.

District petitioned for a writ of mandate (Code Civ. Proc., §§ 1085, 1094.5 ; Pub. Res. Code, § 30801 ) setting out four causes of action, and Sunroad joined in District's supporting arguments. District asked the court to have Commission rescind its decision and remand District's application to Commission to either hold a new hearing or deem the amendment certified by operation of law. It asked the court to exercise continuing jurisdiction over the matter to ensure Commission complied with the writ and the court's judicial declaration.

In January 2017, the trial court granted the writ as to the second cause of action seeking to compel Commission to vacate its denial based on violations of the Act, finding Commission acted " ‘without, or in excess of [its] jurisdiction.’ " In part, the court stated it was "not persuaded by the Commission's argument that the Commission did not modify the [amendment] or require the District to accept any language as a condition of certification. By designating $106 as the...