How Newhall Ranch Affects Developers Now

LOS ANGELES—The industry has been abuzz about the recent Newhall Ranch California Supreme Court, which set a new evidentiary standard for developers to prove that they met the greenhouse gas emission reduction standards required by the state. The court's decision goes into effect immediately and affects any developers that haven't yet received approval from the local agency. To find out what developers need to know and how the newly required evidentiary support differs from the previous industry standard, we sat down with Fernando Villa, a partner at Allen Matkins, to find out how he is advising his clients.

GlobeSt.com: How does this decision affect developers with projects already underway?

Fernando Villa: I tell clients that these standards are in effect today, and it doesn't matter if you have already started your project. So long as the local agency has not already approved your project and certified your EIR, even if you are in progress, you need to comply with those standards. The second thing I tell my clients is that they have to follow the lead agency's greenhouse gas emission program. Every city will vary in the greenhouse gas emission standards compliance program. Some cities will have adopted a so-called climate action plan by which it will comply with the state's AB32 greenhouse gas emissions law, or the city my not have such a local program and say that it is going to look to a regional water quality and going to adopt those standards. In other words, we tell our clients that they need to look at the lead agency's adopted greenhouse gas emissions standards. Additionally, developers need to have an air quality expert on board that can project what a project's greenhouse gas emissions will be over a period of time. With that data in hand, you can then assure yourself that you will have sufficient evidence showing that you meet or exceed the greenhouse gas emission reduction standards.

GlobeSt.com: Did the court outline the data need to prove compliance?

Villa: I'd have to go back and look at the decision. The court may have mentioned a few options, but generally speaking, in the field of being an air quality assessment specialist, these experts know data to use. For example, there are certain rates for which there are established rates of gas emissions.

GlobeSt.com: Before the Newhall Ranch decision, what data did developers use to prove compliance?

Villa: Before Newhall Ranch there were some questions about the data that could be used to establish significance, and lead agencies struggled with that because the law isn't clear under CEQA. We really didn't have clear guidance, and once we know the threshold standard, we know what data to collect. One thing that needs to be kept in mind is that Newhall Ranch won on a very critical issue, which is that a development as large as theirs could use the AB32 business as usual baseline and have a reduction of 29% from that baseline. The California Supreme Court found that is an acceptable way to determine significance. From that perspective, Newhall Ranch won. Unfortunately, they weren't able to supply substantial evidence, which is the standard of evidence that you have to have to show that you have complied.