First Presbyterian Church of Berkeley v. City of Berkeley

• Decision Date: 10 December 1997
• Docket Number: No. A078481,A078481
• Citation: 59 Cal.App.4th 1241,69 Cal.Rptr.2d 710
• Court: California Court of Appeals Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 9243, 97 Daily Journal D.A.R. 14,925 FIRST PRESBYTERIAN CHURCH OF BERKELEY, Plaintiff and Respondent, v. CITY OF BERKELEY et al., Defendants and Appellants.

Page 710

69 Cal.Rptr.2d 710

59 Cal.App.4th 1241, 97 Cal. Daily Op. Serv. 9243,

97 Daily Journal D.A.R. 14,925

FIRST PRESBYTERIAN CHURCH OF BERKELEY, Plaintiff and Respondent, v. CITY OF BERKELEY et al., Defendants and Appellants.

No. A078481.

Court of Appeal, First District, Division 3, California.

Dec. 10, 1997.

As Modified on Denial of Rehearing Jan. 7, 1998.

Manuela Albuquerque, City Attorney, Zach Cowan, Assistant City Attorney, for Defendants and Appellants.

Thomas E. Ho'okano, San Francisco, for Plaintiff and Respondent.

WALKER, Associate Justice.

In this case we are asked to determine the extent to which the Ellis Act (Gov.Code, § 7060 et seq.) ¹ preempts the power of a municipality to regulate and control a landowner's efforts to demolish or alter the use of property formerly used for residential rental purposes. The City of Berkeley (City), City Council of Berkeley (City Council), Berkeley Landmarks Preservation Commission (Landmarks Commission) and Berkeley Zoning Adjustment Board (Zoning Board) (collectively referred to as appellants) appeal from a judgment granting declaratory and injunctive relief and a peremptory writ of mandate in favor of respondent First Presbyterian Church of Berkeley (the Church), ordering appellants (1) to set aside and vacate their decisions (a) denying the Church's application for a demolition permit under the City's Neighborhood Preservation Ordinance (Berkeley Ordinance No. 4641-N.S.) (NPO) We conclude the NPO is in conflict with the guarantees of the Ellis Act, and thus the trial court was correct in determining the NPO has been preempted by the Ellis Act insofar as it interferes with or restrains the ability of landlords to remove residential rental property from the market or demolish such property in order to preserve the supply of rental housing. We therefore affirm the portions of the trial court's judgment and order barring the application of the NPO to any decisions whether to grant or deny a permit to demolish residential real property, including the Church's property at issue, for the purpose of preserving the supply of rental housing. However, we conclude the preemptive scope of the Ellis Act over local and municipal regulations does not extend to environmental and other land use regulations, procedures and controls which govern the demolition and redevelopment of residential property without limiting the right of landlords to withdraw from the residential real estate business. Because the judgment and order of the trial court erred in so extending the scope of the Ellis Act and its preemptive effect to local discretionary controls over the demolition of property, including the LPO in this case, we must reverse in part.

and (b) requiring the Church to prepare an environmental impact report (EIR) as a prerequisite to issuing a demolition permit under the City's NPO, Landmarks Preservation Ordinance (Berkeley Ordinance No. 4694-N.S., codified as Berkeley Municipal Code [BMC] ch. 3.24) (LPO) and the California Environmental Quality Act (CEQA) (Pub. Resources Code, §§ 21000 et seq., 21080, subd. (c)); and (2) to process the Church's pending application for a demolition permit as a ministerial action. In so ordering, the trial court found the Ellis Act guarantees landlords the right to the ministerial issuance of permits to demolish structures removed from the residential rental market; and both the NPO and the LPO are preempted by the Ellis Act insofar as they interfere with or restrain the ability of landlords to demolish residential rental property.

FACTUAL AND PROCEDURAL BACKGROUND

Respondent Church is the owner of a parcel of real property located at 2419 Haste Street in Berkeley (the Property), presently occupied by a three-story building constructed in 1906 (the Building). The Building was originally an annex to the McKinley School and contained school class rooms. After being used first as a public school building, it became an art center and a dance studio. Later, it was a private school for approximately 20 years. It was then modified for and used as residential housing with 12 apartment units. In 1983, the Church purchased the Building with the intention of using the Property to build facilities to house its administrative offices and for other functions. In January 1987, the Landmarks Commission designated the Building a "structure of merit" under the LPO. (BMC, § 3.24.110-3.24.160.)

In October 1995, the Church applied for a permit to demolish the Building in order to make room on the Property for expansion of its facilities. Because the Building had been used as residential rental property, the City submitted its application to the Zoning Board under the NPO. The City declared the Church's application complete on October 12, 1995, triggering the statutory deadline for acting on the application under the timelines established by the Permit Streamlining Act (§ 65920 et seq.) (PSA). Under the PSA, a negative declaration must be completed for any proposed project which will not have a significant adverse impact on the environment within 105 days after the project application is complete. The government agency is then required to take action on the application within 90 days of adoption of the negative declaration, or else it will be deemed approved by operation of law. (§§ 65941, 65943, 65956, subd. (b).) In this case, the effect of the PSA was to require the City to take action on the Church's application within 195 days of its completion, or by April 22, 1996.

On October 23, 1995, the City's environmental review officer determined that even though the Building was at that time designated a structure of merit, the change in its significance as a historic resource could be mitigated to a level of insignificance. The environmental review officer therefore made a preliminary determination it would not be necessary to prepare an EIR for the demolition application, and an initial study and negative declaration would suffice under applicable Following a public hearing on November 6, 1995, the Landmarks Commission voted to suspend consideration of the demolition application for 180 days. This suspension resulted in postponement of the hearing before the Zoning Board. On November 20, 1995, the Church appealed the Landmarks Commission's decision to the City Council. Under the LPO, the Church's appeal of the suspension stayed all proceedings by any party in connection with the matter upon which the appeal was taken, until determination of the appeal. (BMC, § 3.24.300.B.) Nevertheless, on December 4, 1995, while the Church's appeal was still pending, the Landmarks Commission initiated proceedings to designate the Building a "landmark." On January 23, 1996, the City Council reversed the decision of the Landmarks Commission suspending processing of the demolition application. By resolution 58,329-N.S., the City Council stated that the City had granted the Church's demolition application.

                city codes and ordinances and the CEQA (Pub. Resources Code, §§ 21000 et seq., 21080, subd.  (c).) 2  The Zoning Board set the application for hearing on November 13, 1995.  Nevertheless, because the Building had been designated a "structure of merit," the Zoning Board also referred the demolition application to the Landmarks Commission on November 6, 1995, pursuant to the LPO, BMC section 3.24.210
                

On February 5, 1996, following a public hearing, the Landmarks Commission designated the Building a "landmark" pursuant to BMC chapter 3.24. On February 13, 1996, at least in part as a result of this change in the designation of the Building from "structure of merit" to "landmark," the office of the environmental review officer reversed its initial determination that a negative declaration under CEQA would be sufficient for the demolition application, and made a new determination that an EIR would be necessary. Following public hearings between March 11 and 25, 1996, the Zoning Board affirmed the determination that an EIR would be required for the demolition application under Public Resources Code section 21084.1. The Church appealed to the City Council both the decision of the Landmarks Commission designating the Building a landmark and that of the Zoning Board requiring an EIR for the demolition application.

On April 16, 1996, the City Council held a public hearing on the Church's appeals. At the hearing, the City attorney stated that the City Council's previously adopted resolution 58,329-N.S. granting the Church a demolition permit was in error, and the City did not intend for the Church to rely on that resolution. Following the hearing, the City Council affirmed both the designation of the Building as a landmark, and the decision to require an EIR. The decision to require an EIR extended the time for processing the Church's demolition permit application under the PSA from April 22, 1996, to April 7, 1997.

In anticipation of its demolition project, the Church removed the subject Property and Building from the residential rental market by giving notice to the tenants pursuant to the Ellis Act. However, the Church did not initiate the preparation of an EIR. On June 10, 1996, the Church notified the City of its intention to invoke its rights under the PSA, pursuant to which its demolition application would be deemed approved as a matter of law 60 days from the date of public notice to that effect. On June 18, 1996, the Church filed its petition for writ of mandate and complaint for damages, declaratory and injunctive relief in this action. On July 22, 1996, the Zoning Board formally denied the Church's application for a demolition permit, on the grounds the Church had failed to prepare an EIR. On July 31, 1996, the Church appealed this decision to the City Council and published its public notice under the PSA. On September 17, 1996, the City The Church's first amended petition for writ of mandate and complaint alleged 13 causes of action. On February 14, 1997...