Judge Mitchell L. Beckloff, Case Number: 23STCP01363, Date: 2024-01-26 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 23STCP01363, Date: 2024-01-26 Tentative Ruling

Respondent, the City of Los Angeles, and Real Parties in Interest, Robert Champion, Champion Real Estate Company, and 806 West Adams Property, LLC, generally demur to the petition for writ of mandate filed by Petitioners, West Adams Heritage Association and Adams Severance Coalition.

Real Parties’ Request for Judicial Notice (RJN) of Exhibits A through J is granted.

As to each RJN, the court judicially notices the existence of the records, but not the truth of any hearsay or factual statements made therein, or the truth of any interpretation of the documents submitted. (See Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374. [“The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.”]; Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879. [“A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.”])

A demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (Code Civil Proc., § 430.30, subd. (a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “We assume the truth of the allegations in the complaint, but do not assume the truth of contentions, deductions, or conclusions of law.” (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.” (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) “[T]he complaint ordinarily is sufficient if it alleges ultimate rather than evidentiary facts.” (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) The allegations in the petition must be liberally construed in favor of Petitioners on demurrer. (See Mobil Oil Corp. v Exxon Corp. (1986) 177 Cal.App.3d 942, 947.) “A demurrer must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)

Petitioners allege the City violated the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq. when it “ministerially approv[ed] a 52-unit student housing development along the historic West Adams Boulevard (‘Project’).” (Pet. ¶ 1.) The Project is a “a new 4-story, Type VA 52-unit apartment building.” (Pet. ¶ 88.) Petitioners allege “City staff improperly issued ministerial building permits for this development without CEQA review despite this Project, like every other project in the City with more than 50 housing units, requiring discretionary Site Plan Review under Los Angeles Municipal Code section 16.05.” (Pet. ¶ 2.) “Petitioners also object to the potential use of this ministerial approval to segment a portion of the previously proposed 102-unit development.” (Pet. ¶ 6.)

The City and Real Parties contend Petitioners have not adequately alleged the Project was subject to discretionary approval. They also assert Petitioners also have not sufficiently alleged improper segmentation of the Project.

Have Petitioners Alleged the Project Required Discretionary Site Plan Review (SPR)?

“Ministerial projects are exempt from the requirements of CEQA.” (Guidelines[1] § 15268; see Pub. Resources Code, § 21080, subd. (b)(1).) No environmental review is required for a proposed project that is exempt from CEQA. (McCorkle Eastside Neighborhood Group v. City of St. Helena (2018) 31 Cal.App.5th 80, 89.)

Petitioners allege a SPR, a discretionary approval by the City, applies to the Project. (Pet.

¶¶ 109-115; see RP Demurrer 9:14-17.) The City and Real Parties, in contrast, contend “Site Review is triggered only where a housing project’s base, ‘by right’ density excluding bonus units exceeds 50 units.” The City and Real Parties report “the base density of the Project is 49 units with three additional ‘bonus’ units” awarded pursuant to the State Density Bonus Law. (Gov. Code, § 65915.)

Under the State Density Bonus Law, housing development projects can earn “bonus” density units in exchange for providing affordable housing units within the development. (Gov. Code,

§ 65915.) As proposed, the Project reserves six of the 52 units for very low-income residents. (RP RJN Exh. C at 27, 30.) When it approved the Project, the City found the Project eligible for a six percent density bonus, or three bonus units, as a result of the six units reserved for very low-income residents. The City also determined the Project has a base density of 49 units (52 units minus three bonus units). (RJP RJN Exh. C at 30-31.) Petitioners have not challenged in this proceeding the City’s determination that the Project is eligible for three bonus units pursuant to the State Density Bonus Law.

Los Angeles Municipal Code (LAMC) section 16.05 requires discretionary SPR prior to the issuance of any grading permit, foundation permit, building permit, or use of land permit for “[a]ny development project which creates, or results in an increase of, 50 or more dwelling units or guest rooms, or combination thereof.” (RP RJN Exh. A, § 16.05.C.1.b) [emphasis added].) Although LAMC section 16.05.D includes various exemptions, Real Parties and the City do not contend those exemptions apply to the Project. Accordingly, because the Project creates 52 dwelling units, the plain language of LAMC section 16.05, when read in isolation, arguably supports Petitioner’s position the City’s municipal code required SPR.

However, as argued by the City and Real Parties, LAMC section 16.05 cannot be read in isolation; it must be interpreted in the context of other relevant parts of the LAMC and the State Density Bonus Law. (See Eskeland v. City of Del Mar (2014) 224 Cal.App.4th 936, 947.) “Courts interpret municipal ordinances in the same manner and pursuant to the same rules applicable to the interpretation of statutes. [Citations.] Although statutory interpretation is ultimately a judicial function, ‘the contemporaneous construction of a statute by an administrative agency charged with its administration and interpretation, while not necessarily controlling, is entitled to great weight and should be respected by the courts unless it is clearly erroneous or unauthorized [citations].’ ” (City of Monterey v. Carrnshimba (2013) 215 Cal.App.4th 1068, 1087, 1091.)

“[T]he objective of statutory interpretation is to ascertain and effectuate legislative intent. [Citations.] To determine legislative intent, we turn first to the words of the statute, giving them their usual and ordinary meaning. . . .” (Nolan v. City of Anaheim (2004) 33 Cal.4th 335, 340.) When interpreting a statute, the court must construe the statute, if possible to achieve harmony among its parts. (People v. Hull (1991) 1 Cal. 4th 266, 272.) The court “may neither insert language which has been omitted nor ignore language which has been inserted.” (See People v. National Auto. and Cas. Ins. Co. (2002) 98 Cal.App.4th 277, 282.)

Government Code section 65915, subdivision (f)(5), part of the State Density Bonus Law, provides:

The granting of a density bonus shall not require, or be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval. (Emphasis added.)[2]

The City enacted its Density Bonus Ordinance, LAMC section 12.22.A.25, “to establish procedures for implementing State Density Bonus Law requirements, as set forth in Government Code Sections 65915-65918, and to increase the production of affordable housing, consistent with City policies.” (Pet. RJN, Exh. A at 19 [LAMC, § 12.22.A.25.a].) Consistent with the State Density Bonus Law, the City’s Density Bonus Ordinance states “[a]pproval of Density Bonus units shall not, in and of itself, trigger other discretionary approvals required by the Code.” (Pet. RJN, Exh. A at 24 [LAMC, § 12.22.A.25.c.8].) The Density Bonus Ordinance further states its provisions apply to a density bonus grant for a housing development project “[n]otwithstanding any provision of this Code to the contrary.” (Pet. RJN, Exh. A at 21 [LAMC,

§ 12.22.A.25.c].)[3] Thus, the Density Bonus Ordinance seemingly eliminates Petitioners’ claim based on SPR.

As Petitioners acknowledge, SPR is a type of discretionary approval “required by the Code.” (See Pet. ¶ 112.) Further, the City’s Density Bonus Ordinance indicates the specific provisions of that part of the LAMC should take precedence over generalized provisions in LAMC section 16.05. (See Pet. RJN, Exh. A at 21 [LAMC, § 12.22.A.25.c].) Accordingly, when read together, LAMC section 16.05 and the City’s Density Bonus Ordinance are reasonably interpreted such that the approval of Density Bonus units for a Project does not, in itself, trigger discretionary approvals under the LAMC, including SPR.

Further, it appears the City has consistently interpreted its municipal code in this manner. The City’s Affordable Housing Incentives Guidelines, Implementing the State Density Bonus Law California Government Code 65915 states: “[a]pproval of density bonus units does not, in and of itself, trigger other discretionary approval (sic) such as Site Plan Review.” (RP RJN, Exh. B at 13.) The City’s Affordable Housing Referral Form similarly states only where a housing project’s base, “by right” density excluding bonus units equals 50 or more units is SPR triggered. (RP RJN Exh. C at 29-31.) Further, as noted earlier, the City determined here the addition of the three bonus units to the 49 base units did not trigger other discretionary approvals, including SRP. (See RP RJN Exh. C at 29-32, Exh. E, and Pet.¶¶ 2, 111.) The City’s construction of its own municipal code, including LAMC section 16.05 and the City’s Density Bonus Ordinance, “will be accorded great respect by the courts and will be followed if not clearly erroneous.” (Eskeland v. City of Del Mar (2014) 224 Cal.App.4th 936, 947.)

Petitioners have not demonstrated, in the petition or their opposition, the City’s construction of its own municipal code is “clearly erroneous.”

Petitioners cite Government Code section 65915, subdivision (j)(2), part of the State Density Bonus Law, which states “the granting of a density bonus shall not require or be interpreted to require the waiver of a local ordinance or provisions of a local ordinance unrelated to development standards.” Because LAMC section 16.05 “does not set or require compliance with any development standards,” Petitioners contend the grant of bonus units could not “waive” the requirements of that ordinance.

Petitioners do not cite any authority supporting their interpretation of Government Code section 65915, subdivision (j)(2). Further, Petitioners fail to squarely address Government Code section 65915, subdivision (f)(5), which, as discussed earlier, is reasonably interpreted to mean the approval of bonus units does not, in and of itself, require discretionary approvals such as SPR. To interpret Government Code section 65915, subdivision (j)(2) to limit such discretionary approvals to only those involving development standards would read Government Code section 65915, subdivision (f)(5) out of existence.

“[I]nterpretations which render any part of a statute superfluous are to be avoided.” (Young v. McCoy (2007) 147 Cal.App.4th 1078, 1083.)[4] Finally, and importantly, Petitioners do not show, with legal analysis, the City’s interpretation of LAMC section 16.05 and its Density Bonus Ordinance actually requires a “waiver” within the meaning of Government Code section 65915, subdivision (j). Rather, the City simply concluded the Project does not meet the threshold requirements for SPR under the municipal code. Based on the foregoing, the court is not persuaded Government Code section 65915, subdivision (j)(2) is relevant to Petitioners’ claim that discretionary approval was required for the Project.

Petitioners argue an earlier draft version of the City’s Density Bonus Ordinance explicitly states “[a]pproval of density bonus units does not, in and of itself, trigger other discretionary approval[s] such as Site Plan Review,” and that “City Council’s explicit removal of reference to approval of density bonus units not triggering Site Plan Review shows a clear intent that the City’s Density Bonus Ordinance not exempt such projects from Site Plan Review.” (Opposition 10:26-27, 11:7-9; Pet. RJN Exh. A and B.) The court is not persuaded.

As noted earlier, LAMC section 12.22.A.25.c.8 now states “[a]pproval of Density Bonus units shall not, in and of itself, trigger other discretionary approvals required by the Code.” (Pet. RJN, Exh. A at 24 [emphasis added].) As Petitioners acknowledge, SPR is a type of discretionary approval “required by the Code.” (See Pet. ¶ 112.) Thus, the operative language of the City’s Density Bonus Ordinance is reasonably interpreted to include SPR within “other discretionary approvals” that cannot be triggered by “approval of Density Bonus units . . ., in and of itself.” That the City Council elected to use broader language in the final version of the Bonus Density Ordinance does not suggest an intent to exclude SPR from “other discretionary approvals.” Indeed, as argued by the City, the “change actually strengthens and broadens the prior draft language,” which suggests “no other discretionary approvals required by the Municipal Code—whether Site Plan Review or another process—can be triggered by the Bonus Density alone.” (City Reply 10:8-11.)

Petitioners contend the City’s interpretation of LAMC section 16.05 and the Density Bonus Ordinance is not entitled to deference because (1) the Affordable Housing Incentives Guidelines were approved by the Planning Commission in 2005, several years before the City adopted the Density Bonus Ordinance in 2008; and (2) such guidelines have not been adopted by the City Council.

Petitioners do not demonstrate the Affordable Housing Incentives Guidelines required City Council approval. Petitioners also cite no evidence the City Council has ever disapproved of the guidelines. The guidelines implement the State Density Bonus Law, first enacted in 1979. Since the City’s Density Bonus Ordinance implements the requirements of the State Density Bonus Law, and includes language similar to Government Code section 65915, subdivision (f)(5), the City’s interpretations of such requirements in the guidelines are relevant and entitled to deference unless clearly erroneous. Notably, the record shows the City has consistently interpreted LAMC section 16.05, the Density Bonus Ordinance, and Government Code section 65915, subdivision (f)(5). That interpretation is consistent with the City’s decision here that the 49-unit Project, with the addition of three bonus units, did not require SPR.

Petitioners argue the “City has recently proposed revisions to the Site Plan Review Ordinance” and such proposed revisions “demonstrate the Ordinance does not currently exclude this Project from Site Plan Review.” (Opposition 11:28-12:1; see Pet. RJN Exh. C, E, F, G.) Although the recent changes to the SPR ordinance are relevant,[5] Petitioners do not demonstrate the changes were anything other than a clarification of existing law for circumstances like those here (i.e., whether approval of bonus units, alone, triggers SPR). As discussed, the City’s interpretation of LAMC section 16.05 and the Density Bonus Ordinance is reasonable based on the prior language of LAMC section 16.05. The City’s Density Bonus Ordinance and the State Density Bonus Law are intended to facilitate and encourage more housing. In this context, it appears, as relevant here, the City decided to provide clarifying language in LAMC section 16.05 to encouraging more affordable housing. (See, e.g., Pet. RJN, Exh. D at 93.)

Finally, Petitioners contend discretionary redevelopment plan project compliance review is also required, as evidenced by a notation on a form prepared by city staff. (Opposition 13:11-14:6 [citing RP RJN Exh. D].) As Petitioners acknowledge, however, these facts are not alleged in the petition. (See Pet. ¶¶ 28-30.) Thus, the court cannot reach Petitioner’s claim based on any allegedly required redevelopment plan project compliance review.

Based on the foregoing, Petitioners have not alleged sufficient facts to support their claim the Project requires discretionary SPR. Petitioners do not allege in their petition the Project required discretionary approval for any other reason. Accordingly, based on the current allegations, Petitioners have not adequately alleged a claim the Project requires environmental review under CEQA.

In the first cause of action, Petitioners also allege the City improperly “segmented” its review of the Project in violation of CEQA. (Pet. ¶¶ 117-125.) Specifically, Petitioners allege “[a] 102-unit student housing development had previously been approved for this site after discretionary review of the project through the City’s Site Plan Review and Conditional Use requirements. That project had been approved based on a Class 32 categorical exemption to CEQA. . . . Litigation brought by Petitioners West Adams Heritage Association and Adams Severance Coalition is currently pending . . . to address the City’s . . . reliance on a Class 32 exemption for the 102-unit development, and when exceptions to categorical exemptions apply under CEQA.” (Pet. ¶¶ 3-4.)[6] Petitioners allege “[g]iven plans for an additional 50 units were already approved by the City, the expansion of this project is clearly reasonably foreseeable and improperly segmented from the current building permit approvals.” (Pet. ¶ 6.)

Real Parties and the City contend “as a ministerial Project, CEQA does not apply, and thus the argument that CEQA segmentation could have occurred fails at the outset and can be properly disposed of for this reason, alone.” (See RP Demurrer 11:4-6.) Petitioners do not address the issue. (Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc. (2003) 111 Cal.App.4th 1328, 1345, fn. 16 [failure to address point is “equivalent to a concession”].)

The court agrees with Real Parties and the City. Petitioners’ failure to allege the Project required discretionary approval is dispositive. “Ministerial projects are exempt from the requirements of CEQA.” (Guidelines § 15268; see also Pub. Resources Code, § 21080, subd. (b)(1).) The petition challenges the Project—the approval of “a new 4-story, Type VA 52-unit apartment building (Los Angeles City Planning Case No. PAR-2022-4925- AHRF).” (Pet. ¶ 88.) Unless Petitioners can allege the Project required discretionary approvals, the Project is exempt from CEQA review. CEQA’s segmentation rule, related to the scope and timing of environmental review, only applies if the project is discretionary and CEQA environmental review is required. (See generally Banning Ranch Conservancy v. City of Newport Beach (2012) 211 Cal.App.4th 1209, 1220-22.) Petitioners cite no authority to the contrary.

Because Petitioners have not adequately alleged the Project’s approval was discretionary, the demurrer to the first cause of action is sustained. The court need not decide the parties’ contention regarding segmentation.

Here, the 102-unit development and the Project are proposed for the same site. Real Parties cannot build both projects. (See e.g. Pet. ¶¶ 46-102, 122.)

As summarized by Real Parties, “Petitioners’ piecemealing claim is based on the assumption that, if Real Parties previously sought to build the larger 102-Unit Development and are now permitted to build the smaller Project, it is ‘reasonably foreseeable’ that Real Parties will expand the Project in the future.” (RP Reply 10:26-28.) Real Parties’ interpretation of Petitioners’ argument appears accurate.

Real Parties’ pursuit of both projects simultaneously may suggest the possibility Real Parties might ultimately elect to abandon the 102-unit development, pursue the Project, and then propose a third project on the portion of the site not used by the 52-unit Project. As Petitioners allege, “There would be space remaining for construction on the west side of the site. Thus, it is possible the Project proponents could move forward with the remaining 50 units.” (Pet. ¶ 122.)

Nonetheless, the petition itself does not include sufficient discussion of the technical attributes of the Project and the 102-unit development, or other relevant facts, to support a claim that any future expansion “(1) . . . is a reasonably foreseeable consequence of the initial project; and (2) th[at] future expansion or action will be significant in that it will likely change the scope or nature of the initial project or its environmental effects.” (Lucas Valley Homeowners Assn. v. County of Marin (1991) 233 Cal.App.3d 130, 161.) Stated another way, the petition’s allegations are speculative concerning what future expansion, if any, would occur if Real Parties elect to pursue the Project.

Relying on judicially noticeable records, Petitioners provide a discussion of the technical attributes of the Project and the 102-unit development to support their segmentation claim. Those facts and materials, however, are not alleged in or attached to the petition. “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.” (Hahn v. Mirda, supra, 147 Cal.App.4th at 747.)

In the second cause of action, Petitioners allege “building permits for the Project were improperly ministerially approved without site plan review” pursuant to LAMC section 16.05. (Pet. ¶ 127.) For the reasons discussed, Petitioners have not sufficiently alleged the LAMC required SPR. Accordingly, the demurrer to the second cause of action is SUSTAINED.

A demurrer may be sustained without leave to amend when there is no reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan, supra, 39 Cal.3d 311, 318.) Courts generally allow at least one time to amend a complaint after sustaining a demurrer. (McDonald v. Superior Court (1986) 180 Cal.App.3d 297, 303.) In assessing whether leave to amend should be granted, the burden is on the complainant to show a reasonable likelihood the petition can be amended to state a cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348-349.)

Given Petitioners’ argument concerning discretionary redevelopment plan project compliance review, the court is inclined to grant leave to amend. Any amendment may also address deficiencies with the issue of segmentation.

Petitioners shall address how they could amend to state a cause of action based on their claim related to SPR. From the court’s perspective and based on the court’s earlier discussion, the ability to amend to state a cause of action based on LAMC section 16.05 appears unlikely.

City’s and Real Parties’ demurrers to the first and second causes of action are SUSTAINED WITH LEAVE TO AMEND.

[1] “Guidelines” refers to the regulations for the implementation of CEQA authorized by the Legislature (Pub. Resources Code, § 21083) and codified in title 14, section 15000 et seq. of the California Code of Regulations (14 Cal. Code Regs., § 15000 et seq.).

[2] “Total units” or “total dwelling units,” for purposes the State Density Bonus Law, is defined to “exclude[] a unit added by a density bonus awarded pursuant to this section or any local law granting a greater density bonus.” (Gov. Code, § 65915, subd. (o)(8)(A)(i).)

[3] Real Parties and the City did not rely upon or submit a copy of the City’s Density Bonus Ordinance with their moving papers. However, Petitioners submitted the Density Bonus Ordinance with their opposition and discussed its provisions at length. (See Opposition 10-11.) Also, language from the City’s Density Bonus Ordinance is similar to language in Government Code section 65915 and the City’s administrative guidance, discussed in the moving papers. (See RP RJN Exh. B, C.) Under these circumstances, the court exercises its discretion to consider the City’s reply arguments concerning the Density Bonus Ordinance.

[4] Further, Petitioners’ restrictive interpretation of Government Code section 65915 seems contrary to the statute’s stated legislative purpose to promote the development of affordable housing. (Friends of Lagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807, 825. [“The entire aim of Section 65915 is to provide incentives to developers to construct housing for seniors and low income families.”])

[5] In reply, the City reports the “City’s Site Plan Review Ordinance was recently amended to make express provisions that the Bonus Density units are not to be counted in determining when Site Plan Review is required, . . . .” (City Reply 8:26-28.)

[6] Petitioner’s lawsuit challenging approval of the 102-unit development is now pending before the California Supreme Court pursuant to Real Parties’ petition for review. (RP RJN Exh. J.)