SAVE TARA, Plaintiffs and Appellants v. CITY OF WEST HOLLYWOOD, Defendant and Respondent and WASET, INC., et al,Real Parties in Interest and Respondents.

The City of West Hollywood and a developer entered into a June, 2003 option agreement which contained a city financing commitment and a May, 2004 “draft” development agreement. In addition, City staff made a number of public comments about the City’s involvement with the development; however, the City did not undertake environmental review. Instead, the documents provided that such review would be done in the future before the project proceeded. Taken all together, the Supreme Court found that the City had committed to a definite course of action. The plaintiffs argued that an environmental impact report should have been completed before the June, 2003 option agreement. After filing of the California Environmental Quality Act CEQA petition by the Save Tara group, the City revised the May agreement (through the executed August, 2004 development agreement) and completed an EIR for the project. Save Tara did not challenge the EIR. The first issue addressed by the Supreme Court was mootness. The Court determined that effective relief still could be granted, i.e. setting aside the May and August agreements. The Court then discussed the standard of review, finding that the issue here was a matter of procedure, and thus of law, and the Court should review the issues using its independent judgment. Finally, the Court discussed what constitutes “approval” of a project under CEQA, based upon the Guidelines and CEQA. The Court rejected Save Tara’s position that any approval requires CEQA review; it also rejected the City’s position that would have deferred CEQA review, and stated: We adopt an intermediate position: A CEQA compliance condition can be a legitimate ingredient in a preliminary public-private agreement for exploration of a proposed project, but if the agreement, viewed in light of all the surrounding circumstances, commits the public agency as a practical matter to the project, the simple insertion of a CEA compliance condition will not save the agreement from being considered an approval requiring prior environmental review . . . Desirable, then, as a bright-line rule . . . might be . . . we apply the general principle that before conducting CEQA review, agencies must not ‘take any action’ that significant furthers a project ‘in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that project . . The Supreme Court voided the May and August, 2004 development agreements and ordered the City to reconsider those decisions in light of the EIR which had been prepared.The Court also suggested that the EIR would have to be updated to current conditions before that could occur.