Cedar Fair, L.P. v. City of Santa Clara (Apr. 6, 2011) 194 Cal. App. 4th 1150 available at CourtWebsite
A Court of Appeal held that the City of Santa Clara’s approval of a “term sheet,” which amounted to nothing more than an agreement to negotiate in good faith, did not constitute a project under CEQA, because it did not create a commitment to a project so as to effectively preclude alternatives or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going forward with the project. Therefore, an EIR was not required prior to approving the term sheet.
In the case, Cedar Fair owned and operated an amusement park in the City of Santa Clara. Part of a property that Cedar Fair used for parking and events was a subject of a “term sheet,” which set forth basic terms for a stadium that would be the home to the NFL’s San Francisco 49ers. The 49ers proposed to locate the stadium on a 17-acre parcel that was alleged to be subject to a long-term lease between the City’s Redevelopment Agency and Cedar Fair.
Cedar Fair challenged the term sheet’s approval alleging that the City had failed to prepare an EIR related to the term sheet's approval pursuant to CEQA. The court determined that the stadium term sheet, however, did not constitute a project or a project approval because the term sheet was not binding. It was merely intended to provide a general framework for subsequent negotiation of a definitive agreement. Additionally, it contained a clause that expressly stated the Stadium could not proceed without negotiation and delivery of “mutually acceptable agreements based upon information from the CEQA environmental review process and on other public review and hearing processes and subject to all applicable governmental approvals” Based on this, the lack of any binding effect of the term sheet, and the precedent established in Save Tara v. City of West Hollywood (2008) 45 Cal. 4th 116, the court concluded that preparation of an EIR was not required.
