In Saltonstall, et al. v. City of Sacramento, No. C077772 (Cal. Ct. App. 3rd Dist., Feb. 18, 2015), the Third Appellate District affirmed the judgment of the Superior Court in holding that the City of Sacramento did not violate the California Environmental Quality Act (“CEQA”) by beginning construction of the downtown arena. This appeal comes just months after the Third Appellate District rejected the same petitioners’ arguments that expedited CEQA timelines were unconstitutional. (Saltonstall et al., v. City of Sacramento, No. C077031 (Cal. Ct. App. 3rd Dist., Nov. 20, 2014) (Saltonstall I).)

Background

The arena is currently under construction at a cleared section of the Downtown Plaza in Sacramento. The arena will be the future home of the Sacramento Kings, a National Basketball Association (“NBA”) team, which is scheduled to relocate in October 2016 from the Sleep Train Arena in Natomas. Although plans to replace the Sleep Train Arena with another larger arena in Sacramento have been ongoing since the 1990s, the urgency for construction became apparent when the NBA proposed to sell the Kings to an investor group in Seattle, Washington in January 2013. In an effort to keep the Kings in Sacramento, a local investor group, the Sacramento Basketball Holdings, acquired the Kings at a sale approved by the NBA in May 2013. The major condition of the sale, however, is that the NBA reserves the right to acquire and relocate the Kings if the new arena in Sacramento is not open by 2017. In the months since, there has been a push to permit and construct the arena. In September 2013, Governor Brown signed Senate Bill 743 which expedited several CEQA deadlines without altering the substance of the required environmental review. (Pub. Res. Code, § 21168.6.6.)

Issues on Appeal

Saltonstall argued six issues on appeal, four of which focused on environmental review of the downtown arena. First, she argued that the City violated CEQA by committing itself to the downtown arena project before completing an Environmental Impact Report (“EIR”), which is required prior to approval of a project. The court rejected this argument because the preliminary nonbinding term sheet – documenting the terms of the proposed arena project – explicitly states that “no project . . . shall be deemed to be approved, until after . . . the proposed project is reviewed in accordance with the requirements of CEQA.” (Saltonstall, et al. v. City of Sacramento, supra, at p. 18 (internal citations omitted).) Further, “Under CEQA, the city was allowed to engage in land acquisition for its preferred site before finishing its EIR.” (Id. at p. 4.) Next, the court rejected Saltonstall’s contention that the City failed to consider remodeling the current Sleep Train Arena as an alternative project. The City did consider this alternative, but the Natomas location failed to satisfy the City’s project objectives, and renovation was additionally infeasible due to floodplain issues. (Id. at p. 28.)

Next, Saltonstall argued that the City did not adequately study the effects of traffic on Interstate Highway 5 (“I-5”), and did not account for the safety of large crowds expected to congregate outside the arena. The EIR concluded that the traffic impact of the downtown arena project would be “significant and unavoidable,” and the City Council found that “specific economic, legal, social, technological” considerations supported approval of the project notwithstanding these impacts. (Id. at p. 36.) In upholding the City’s decision, the court held that substantial evidence supports these findings and the EIR sufficiently analyzed traffic conditions in accordance with CEQA’s mandates. In regards to crowd safety, the court again sided with the City in finding that the “EIR adequately considered the Project’s impacts on public services,” and found that the impact would be “less than significant.” (Id. at pp. 41-41 (internal citations omitted).)

By Thomas Henry (thomas.henry@stoel.com) and Shannon Morrissey. Ms. Morrissey is a Law Clerk with Stoel Rives LLP and is not currently licensed to practice law in California.