The Sacramento City Council was still voting on the development deal for the new Kings arena when a group of arena foes handed out copies of a lawsuit blasting the project as an environmental disaster in the making.
Nine months later, the lawsuit has been dismissed by a state appellate court, removing one of the last remaining legal obstacles to a $477 million project that has already broken ground.
The 3rd District Court of Appeal on Wednesday rejected the suit, filed by a group of citizens led by retired Caltrans director Adriana Saltonstall. The suit said the new arena at Downtown Plaza would snarl traffic, foul the air and even lead to postgame riots by drunken Kings fans, all in violation of the California Environmental Quality Act, or CEQA. The court’s unanimous decision, coming nine days after the three justices heard oral arguments, affirmed an earlier ruling by Sacramento Superior Court Judge Timothy Frawley.
With the city recently settling a lawsuit over the price the Kings will pay for the now-demolished Macy’s men’s store at Downtown Plaza, the appellate court ruling leaves just one piece of litigation remaining. A citizens’ lawsuit challenging the legality of the city’s $255 million subsidy for the arena is set for a climactic hearing June 22.
If that case is resolved in the city’s favor, the city will issue the bonds needed to finance the bulk of the $255 million public subsidy. City Treasurer Russ Fehr, who wants to complete the financing while interest rates are low, has said it would be difficult to market the bonds to investors with litigation hanging over the project. The bonds will represent a mortgage against future parking revenue.
The CEQA case didn’t loom as a major threat to the arena project as a whole. Under SB 743, legislation crafted specifically for the arena, a court would have to find “imminent threat to the public health and safety” in order to halt construction. Frawley already had rejected the Saltonstall group’s attempt to block the project before construction began last October.
Nonetheless, the court could have created major headaches for the project if it had ordered the city to rework major portions of the environmental impact report. It might have created additional complications for the city’s financing even though construction would have continued.
“It’s certainly helpful to have this out of the way,” said Assistant City Manager John Dangberg. “CEQA challenges ... are very common in California and can result in substantial delays to projects and substantial costs to projects.”
Saltonstall said the ruling doesn’t change her mind about the arena project. The new building will lead to “terrible traffic on I-5 ... and various other negative consequences,” she said.
She argued that the city violated CEQA by ignoring alternative uses for the money. “There are a lot of other needs in the city,” she said. “The heart of CEQA is about looking at alternatives.” In court last week, Saltonstall’s lawyer Kelly Smith said the city failed to examine the possibility of remodeling the Kings’ current home, Sleep Train Arena.
But the appellate panel, consisting of Justices Andrea Lynn Hoch, George Nicholson and Louis Mauro, ruled otherwise. The court said the city fulfilled its responsibilities by looking at several alternatives to a downtown location, including the possibility of building a new arena next to Sleep Train. The city wasn’t required to examine every possible alternative.
The court also said the city did a proper job of examining the likely impact on I-5 traffic. Saltonstall’s prediction of postgame rioting was dismissed as an issue not covered by CEQA. “Mere speculation about possible crowd violence and its possible effect on the environment does not compel (environmental) review,” the court wrote.
In addition, the court said the city and the Kings are entitled to be compensated for the money they spent defending against the appeal.
Kelly Smith, the lawyer for the Saltonstall group, wasn’t immediately available for comment.
The Saltonstall lawsuit was brought by some of the same Sacramentans who have been fighting the arena every step of the way. One of the plaintiffs, Delphine Cathcart, is married to James Cathcart, who is pressing the one remaining lawsuit over the public subsidy. James Cathcart handed out copies of the CEQA lawsuit to reporters as the City Council was voting on the arena deal the night of May 20.
Dangberg said the appellate ruling illustrates the wisdom of SB 743, enabling the city to dispose of the environmental litigation in nine months. Ordinarily, CEQA challenges can take years to work their way through the courts.
Kings President Chris Granger, in a prepared statement, said Wednesday’s ruling lets the team focus “on delivering a world class entertainment and sports center.” The arena is on track to open in October 2016.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.