A half-empty Rite-Aid on Castro Valley Boulevard was about to be revitalized into a shopping center featuring a Sprouts grocery store. Now a law originally envisioned to protect California’s environment may scuttle the transformation of the eastern gateway to Castro Valley’s business district.

Enacted in 1970, the California Environmental Quality Act (CEQA) “requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible,” according to the California Natural Resources Agency. While CEQA was meant to ensure that the environmental impact of land-use projects be considered before their development, it is now regularly used to battle non-environmental disagreements.

Sprouts planning timeline

• A Planning Department Staff Report prepared for the Castro Valley Municipal Advisory Council (MAC) in February 2016 found the Sprouts project to be “Categorically Exempt from the requirements of the California Environmental Quality Act; Article 19, Section 15301, Class 1, Existing Facilities.”
• The MAC approved the project at its February 8 meeting.
• Planning Director Albert Lopez approved the site review of the project on February 10.
• In a February 16 letter on behalf of Castro Valley resident Cassandra Hunter to the Alameda County Planning department, Mark R. Wolfe, attorney at M. R. Wolfe & Associates, P.C., that specializes in CEQA litigation, disagreed that the site was exempt from CEQA environmental review requirements writing that “the subdivision of a single pharmacy building to accommodate three retail tenants, including a grocery store, constitutes a substantial intensification of the existing land use that will generate significant new traffic, air quality noise, and/or urban decay impacts as a result. An initial study leading either to a negative declaration or environmental impact report is therefore required under CEQA before the project may lawfully be approved.” Hunter is a member of the Executive Board of United Food and Commercial Workers (UFCW) Local 5, and, according to a December 2015 UFCW Local 5 newsletter, employed by Lucky.
• The Alameda County Planning Commission denied Hunter’s appeal on March 21. On March 28, Wolfe sent another letter on behalf of Hunter “to appeal the March 21, 2016 action by the Alameda County Planning Commission denying an appeal of the February 10, 2016 Planning Director’s approval of the above-referenced Site Development Review Application.”In that letter, Wolfe asserted that a “negative declaration or environmental impact report is therefore required under CEQA before the project may lawfully be approved.” He also stated that neither Hunter or his office received timely notice of the public hearing of the appeal before the Planning Commission.

Sprouts a focus of organized labor

UNCW Local 1000, based in Oklahoma and North Texas, writes on its website:

Sprouts Farmers Market workers deserve better. Sprouts opens new stores and pumps wages up, often luring away unsuspecting workers from union and nonunion competitors. Sprouts then caps wages for these workers or treats them so badly that they quit, never realizing they were tricked into helping Sprouts get off the ground. It’s a vicious cycle.

As far back as 2011, organized labor targeted non-union Sprouts when the rapidly expanding grocer was buying San Diego-based Henry’s Farmers Market.  The UNCW’s Grocery Workers United Wage Recovery Program investigated Henry’s on allegations that it owed back wages to non-union Henry’s employees.

The International Brotherhood of Teamsters organized protests of Sprouts in Bakersfield last year, citing the working conditions of a distributor.

When CEQA isn’t about the environment

“Any party can file a CEQA lawsuit, even for a non-environmental purpose,” writes Jennifer Hernandez in In the Name of the Environment, a 2015 comprehensive study of all lawsuits filed statewide under CEQA over a three-year period.  “For example, a competitor can file a CEQA lawsuit to delay or derail a competing project, and a labor union can file a CEQA lawsuit to secure an agreement that gives the union that filed the lawsuit control over which project jobs will be allocated among which unions.”

Discussing Hernandez’s report last year, Los Angeles Times columnist George Skelton wrote:

Unions historically have expanded the middle class in America by demanding and obtaining better pay and benefits for their members. We’re better off because of them, especially in the private sector.  But in this state we’ve got a widely abused law called the California Environmental Quality Act, or CEQA. And labor is one of its biggest abusers, contributing to California’s reputation as a lousy place to invest and do business.

I spoke with Lee Cherney, Senior Vice President for Kin Properties, Inc., the developer of Rite-Aid site, who said that the possible extended time period to develop the site because of the CEQA challenge prompted a reexamination of the Sprouts in Castro Valley. The longer it takes to develop the site, the longer a retailer is not producing revenue. When it comes to CEQA, the threat of on-going action against a project is generally sufficient to halt progress.

“The act of simply filing a CEQA lawsuit can kill the most environmentally benign small project,” according to Hernandez.

CEQA lawsuits are relatively inexpensive to file and the litigation process is strained by budget cuts that extend the time as to resolution, according to Hernandez. Challengers have a good chance of winning if they file a lawsuit. “In the published CEQA appellate court cases that comprise the body of jurisprudence available for determining the probable outcome of a CEQA lawsuit, challengers enjoy nearly 50/50 odd of winning,” according to Hernandez’s report.

A mixed-use development in Albany on University of California, Berkeley land that has been protested since 2012 was to include a Whole Foods until prolonged litigation prompted the grocer to abandon the project. Sprouts was named as a replacement for Whole Foods, and the project is now able to move forward after California Court of Appeals ruled that the project’s EIR was in compliance with CEQA.

California’s business and poilitical have been calling for CEQA reform. In his January 24, 2013 “State of the State” speech, Governor Jerry Brown said that California needs to “rethink and streamline our regulatory procedures, particularly the California Environmental Quality Act. Our approach needs to be based more on consistent standards that provide greater certainty and cut needless delay.”

Reaction to Sprouts project cancellation

The April 27 edition of the Castro Valley Forum reported that the Spouts project for the Castro Valley Rite-Aid site had been cancelled because the developer of  Kin Properties, Inc. had concerns about the CEQA appeals by Hunter.

Supervisor Nate Miley’s office provided this comment:

Supervisor Miley is open and willing to meet with the property owner and the appellant to work out the issues so that the project can continue. He supports Sprouts Farmers Market coming to Castro Valley. The likelihood that another project can happen at this site is high, but he would still like to have Sprouts Farmers Market at the location.

Most comments on our blog and Facebook page were in support of the Sprouts project.

Bill Mulgrew, Executive Director of the Castro Valley/Eden Area of Chamber of Commerce wrote in a comment:

California’s CEQA laws make it very easy and rather inexpensive to challenge development or redevelopment. Great news if environmental factors are your first and largest priority, not so good in cases like this. Our CEQA laws make it somewhat easy for competitors/rivals to derail otherwise desired and beneficial projects.

One commentator suggested a boycott of Safeway, while another questioned the quickness of Sprouts walking away from the project.

Castro Valley resident Julie Greenfield wrote in a comment:

I sympathize with the disappointment of everyone who was looking forward to Sprouts coming to Castro Valley. That property is underused (an eyesore, really) and we all love more choices in where to shop. It also seems (from what I’ve read) that there may have been a misuse of the Environmental Impact liltigating process, in what may actually be more of a labor dispute than anything. If so, that would be unfortunate and not right.

However, I wish that our concerned citizens would look just a little bit at the ethics and values of this company, which they are in such a hurry to bring into our community. Sprouts and its main supplier, UNFI, have both been targets of organizing drives by their employees, which they have resisted by firing workers and other illegal practices.http://www.examiner.com/article/community-protests-opening-of-bakersfield-sprouts-farmers-market

I love fresh vegetables, but I also love being in a community which cares about its people. I am lucky to have worked in a union environment for most of my career, and had certain protections, which fewer and fewer people in our society will have, like a decent salary, due process for discipline, and a pension. Cashiers at Sprouts make about $10/hr. Is that really fair?

A Facebook page called Bring Sprouts to Castro Valley has two petitions in support of Spouts.  One petition directed to the MAC is approaching 600 signatures.

The second petition is directed at UFCW Local 5, stating “Residents of Castro Valley would like to demonstrate to the United Food and Commercial Workers Local 5 Representatives to Alameda County/Hayward that a majority of Castro Valley residents and those in surrounding areas would like the CVMAC to join us in our support to bring Sprouts Farmers Market to 3848 Castro Valley Boulevard, Castro Valley, CA 94546 where Rite-Aid Drugstore currently occupies.” At time of publication, it had 24 signatures.

The MAC will hold a special meeting on Monday, May 9 starting at 6:00 pm about the Sprouts project.
Can’t make it to the MAC meeting? You can listen to it on CVM’s Mixlr feed.