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CASE UPDATE: First District Court of Appeal Affirms the Use of Off-Site Conservation Easements to Mitigate the Loss of Prime Farmland Under CEQA

In Masonite Corporation v. County of Mendocino, (1st Dist. 2013) 218 Cal.App.4th 230, the First District Court of Appeal struck down the County of Mendocino’s certification of an environmental impact report (“EIR”) prepared for a use permit for Granite Construction’s Kunzler Terrace Mines project, which will be a sand and gravel quarry on 65 acres of land north of Ukiah near the Russian River (“Project”). Forty-five out of 65 acres of the Project site was vineyard land that the California Department of Conservation had designated as “prime farmland,” which would be lost as a result of the Project.

CEQA provides that “public agencies should not approve projects as proposed if there are … feasible mitigation measures available which would substantially lessen the significant environmental effects of such projects.” Pub. Resources Code § 21002; see also id. at § 21002.1(b) [agencies must mitigate significant effects of projects they approve “whenever it is feasible to do so”].) CEQA defines “feasible” to mean “capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, legal, social, and technological factors.” (CEQA Guidelines, § 15364.)

Typically, agencies will require the mitigation of the loss of prime farmland using off-site mitigation, that is, requiring the acquisition and/or conservation of equivalent prime farmland land at another location, where it is financially feasible to do so, in the form of agricultural conservation easements (“ACEs”) or the payment of in lieu fees. (For example, see Citizens for Open Government v. City of Lodi (2012) 205 Cal.App.4th 296.) Similarly, agencies will require the acquisition or conservation of off-site land as mitigation for the loss of biological resources, such as endangered species, resulting from new development. (See Preserve Wild Santee v. City of Santee (2012) 201 Cal.App.4th 260.)

However, in this case, the Project EIR took the novel position that off-site agricultural mitigation only serves to address the indirect and cumulative effects of farmland conversion, which the EIR described as the domino effect that occurs when farmland is converted to residential use, thereby driving up the speculative value of farmland, increasing economic and/or political pressure to convert neighboring farmland to residential use, and increasing the economic costs of farming due to land use incompatibilities with residential use (e.g., odor, dust, pesticide use, traffic, et cetera). The EIR found that the Project would not affect neighboring agricultural uses because the subject property was surrounded by vacant and industrial uses, and thus, the EIR concluded that it was not required to consider ACEs as a matter of law because the Project would not have any indirect effects of farmland conversion that would be effectively mitigated by off-site mitigation. And because the EIR concluded that ACEs were not legally feasible, the EIR never addressed whether ACEs would be financially feasible.

The court of appeal disagreed with this reasoning and held that the EIR’s determination that ACEs were not legally infeasible was incorrect. It found that off-site ACEs can effectively and appropriately mitigate for the direct effects of farmland conversion (i.e., loss of farmland on the subject property), and that there was no reason to distinguish the use of off-site ACEs to mitigate the loss of agricultural lands from the use of off-site land preservation to mitigate the loss of endangered species habitat. The court ordered the County to explore the economic feasibility of using off-site ACEs to mitigate the Project’s loss of farmland, and to consider the possibility of requiring in lieu fees as an alternative to the acquisition of ACEs, in a revised EIR.

Copyright 2013 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship.

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