Ctr. for Cmty. Action & Envtl. Justice v. City of Moreno Valley

• Decision Date: 23 August 2018
• Docket Number: D073451
• Court: California Court of Appeals Court of Appeals
• Parties: CENTER FOR COMMUNITY ACTION AND ENVIRONMENTAL JUSTICE, Petitioner and Appellant, v. CITY OF MORENO VALLEY et al., Defendants and Respondents. HF Properties, et al., Real Parties in Interest and Respondents. Socal Environmental Justice Alliance, Petitioner and Appellant, v. City of Moreno Valley et al., Defendants and Respondents. HF Properties, et al., Real Parties in Interest and Respondents.

26 Cal.App.5th 689

237 Cal.Rptr.3d 296

CENTER FOR COMMUNITY ACTION AND ENVIRONMENTAL JUSTICE, Petitioner and Appellant,

v.CITY OF MORENO VALLEY et al., Defendants and Respondents.

HF Properties, et al., Real Parties in Interest and Respondents.

Socal Environmental Justice Alliance, Petitioner and Appellant,

v.City of Moreno Valley et al., Defendants and Respondents.

HF Properties, et al., Real Parties in Interest and Respondents.

D073451

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

Filed August 23, 2018

Earthjustice, Adriano L. Martinez and Oscar Espino-Padron for Petitioners and Appellants Center for Community Action and Environmental Justice, Center for Biological Diversity, Coalition for Clean Air, and San Bernardino Valley Audubon Society.

Shute, Mihaley & Weinberger, Rachel B. Hooper, Sara A. Clark, Allison A. Johnson ; Earthjustice, Adriano L. Martinez, Oscar Espino-Padron; and Daniel P. Selmi for Petitioner and Appellant Sierra Club.

Blum Collins, Steven A. Blum, Craig M. Collins, and Gary Ho for Petitioner and Appellant SoCal Environmental Justice Alliance.

Martin D. Koczanowicz, City Attorney for Defendants and Respondents the City of Moreno Valley and the City Council of the City of Moreno Valley.

Cox, Castle & Nicholson and Kenneth B. Bley for Real Parties in Interest HF Properties, Sunnymead Properties, Theodore Properties Partners, 13451 Theodore, LLC, and HL Property Partners.

AARON, J.

IINTRODUCTION

In 2015, the City of Moreno Valley (the City) adopted an initiative to approve a development agreement in connection with the World Logistics Center (WLC) project. The WLC developers are known collectively as Highland Fairview (with the City, Respondents).¹ The Center for Community Action and Environmental Justice and other environmental groups (Appellants)² petitioned for a writ of mandate, contending that adoption of a development agreement by initiative violated the development agreement statute ( Gov. Code § 65864, et seq. )³ and article II, section 12 of the California Constitution, which bars an initiative that "names or identifies any private corporation to perform any function or to have any power or duty." The trial court denied Appellants' petitions, and they appealed.

We conclude that the Legislature intended to exclusively delegate approval of development agreements to local legislative bodies and to make such approval subject to referendum, but not to initiative. The development agreement initiative adopted by the City is therefore invalid. Based on the foregoing conclusions, we need not resolve Appellants' constitutional argument. We reverse the judgment and remand with directions.

IIFACTUAL AND PROCEDURAL BACKGROUND

Highland Fairview proposed the development of the WLC project. In May 2015, the City released a final environmental impact report, which found that the WLC could have numerous impacts, including decreased air quality and increased traffic. In August 2015, the Moreno Valley City Council (City Council) adopted ordinances and resolutions approving the project, including ordinance No. 901, which approved a development agreement between the City and Highland Fairview. Appellants and other entities filed lawsuits challenging the project for failure to comply with the California Environmental Quality Act (CEQA).⁴

In November 2015, the Moreno Valley Jobs Coalition filed an initiative petition (the Moreno Valley Workforce Training Initiative), which would repeal ordinance No. 901 and approve the WLC development agreement. Highland Fairview supported and funded the initiative. The development agreement proposed in the initiative petition was substantially similar to the original one that the City Council had approved, but removed the Highland Fairview entities as named parties and replaced references to Highland Fairview with the "Property Owners" (defined as "the property owners as of the Effective Date of this agreement"). The initiative received sufficient signatures to qualify for the ballot. Once the initiative qualified for the ballot, the City Council had the option of adopting the initiative (which it called the "World Logistic[s] Center Development Agreement Initiative"), rather than submitting it to the voters, and voted to do so.

In February 2016, Appellants filed petitions for writ of mandate, challenging the City Council's adoption of the initiative. In September 2016, the trial court denied the petitions. Appellants timely appealed.

IIIDISCUSSION

Appellants contend that the Legislature exclusively delegated the power to enter into development agreements to the local governing body, thus precluding adoption by initiative. We agree.

A. Overview of applicable law

1. The development agreement statute

In 1976, the California Supreme Court held that a developer that had commenced work and expended large sums on a project did "not acquire[ ] a vested right under the common law to proceed with its development absent a [building] permit." ( Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, 797, 132 Cal.Rptr. 386, 553 P.2d 546 ( Avco ); id . at p. 791, 132 Cal.Rptr. 386, 553 P.2d 546.) The court indicated that any change in this rule "must be provided by the Legislature." ( Id. at p. 796, 132 Cal.Rptr. 386, 553 P.2d 546.) In 1979, the Legislature enacted the development agreement statute to address the uncertainty that resulted from late vesting and its adverse impact on development. (See Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 435, 443, 120 Cal.Rptr.3d 797 ( Mammoth Lakes ); § 65864, subds. (a) - (b) [legislative findings; see further discussion post ].) The statute "provided a way for the municipality and developer to depart from the common law rule of vested rights." ( Mammoth Lakes , at p. 443, 120 Cal.Rptr.3d 797.)

A development agreement "is an enforceable contract between the municipality and the developer." ( Mammoth Lakes, supra , 191 Cal.App.4th at p. 442, 120 Cal.Rptr.3d 797.) "In essence, the statute allows a city or county to freeze zoning and other land use regulation applicable to specified property to guarantee that a developer will not be affected by changes in the standards for government approval during the period of development." ( Santa Margarita Area Residents Together v. San Luis Obispo County Bd. of Supervisors (2000) 84 Cal.App.4th 221, 226-227, 100 Cal.Rptr.2d 740 ( SMART ); § 65866.) It also permits "municipalities to extract promises from the developers concerning financing and construction of necessary infrastructure." ( Mammoth Lakes , at p. 443-444, 120 Cal.Rptr.3d 797.)

Section 65867.5 addresses the approval of development agreements, and states in pertinent part: "(a) A development agreement is a legislative act that shall be approved by ordinance and is subject to referendum. [¶] (b) A development agreement shall not be approved unless the legislative body finds that the provisions of the agreement are consistent with the general plan and any applicable specific plan."

"[N]umerous procedural and substantive limitations attend the making and performance" of a development agreement. ( Trancas Property Owners Assn. v. City of Malibu (2006) 138 Cal.App.4th 172, 182, 41 Cal.Rptr.3d 200.)⁵

2. Initiative and referendum in California

"The Constitution ‘speaks of the initiative and referendum, not as a right granted the people, but as a power reserved by them.’ [Citation.] ... [C]ourts have consistently declared it their duty to ‘ "jealously guard" ’ and liberally construe the right so that it ‘ "be not improperly annulled." ’ [Citations.] Moreover, when weighing the tradeoffs associated with the initiative power, we have acknowledged the obligation to resolve doubts in favor of the exercise of the right whenever possible." ( California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 934, 222 Cal.Rptr.3d 210, 401 P.3d 49 ( Upland ).)

There is a "basic presumption in favor of the electorate's power of initiative and referendum." ( DeVita v. County of Napa (1995) 9 Cal.4th 763, 786, 38 Cal.Rptr.2d 699, 889 P.2d 1019 ( DeVita ); id. at p. 787, fn. 9, 38 Cal.Rptr.2d 699, 889 P.2d 1019 ["any legislative act may be enacted by initiative and may be subject to referendum"].) However, "[t]he presumption in favor of the right of initiative is rebuttable upon a definite indication that the Legislature, as part of the exercise of its power to preempt all local legislation in matters of statewide concern, has intended to restrict that right." ( Id. at p. 775, 38 Cal.Rptr.2d 699, 889 P.2d 1019 ; Upland, supra , 3 Cal.5th at p. 946, 222 Cal.Rptr.3d 210, 401 P.3d 49 ["[T]he best way to implement our oft-repeated references to the importance of the initiative is to avoid presuming that a provision constrains that power without a clear statement or equivalent evidence that such was the provision's intended purpose."].)

In Committee of Seven Thousand v. Superior Court (1988) 45 Cal.3d 491, 247 Cal.Rptr. 362, 754 P.2d 708 ( COST ), the California Supreme Court recognized that "[i]n some cases," the Legislature intended "to delegate the exercise of [legislative] authority exclusively to the governing body, thereby precluding initiative and referendum." ( DeVita, supra , 9 Cal.4th at p. 776, 38 Cal.Rptr.2d 699, 889 P.2d 1019 [describing holding in COST ].) The Court "set forth certain guidelines for determining when the legislative intent to exclusively delegate authority to the local governing bodies is present." ( DeVita , at p. 776, 38 Cal.Rptr.2d 699, 889 P.2d 1019.) It considered the statutory language (focusing there on the identification of the local governmental entity); whether the subject at issue was a matter of "statewide concern" or a "municipal affair"; and other indications of legislative intent, including another statutory provision and the legislative history. ( COST , at pp. 501, 507-509, 247 Cal.Rptr. 362, 754 P.2d 708 ; see DeVita , at p. 776, 38 Cal.Rptr.2d 699, 889 P.2d...