San Franciscans Upholding the Downtown Plan v. City & County of San Francisco (102 Cal. App. 4th 656, 2002)

Opinion

McGUINESS, P. J.

In October 2000, the City of San Francisco (City), acting through its board of supervisors (the Board), planning commission, (the Commission), redevelopment agency (the Agency) and mayor, approved the expansion of the Yerba Buena Center Redevelopment Plan to include a massive redevelopment project (the Project) planned for the site of the former Emporium store in downtown San Francisco bounded by Market, Fourth, Mission and Fifth Streets (the Emporium Site Redevelopment Area). This appeal is from a judgment denying a mandamus writ petition filed by appellants San Franciscans Upholding the Downtown Plan, and five individual San Francisco residents, seeking to invalidate the Project on the grounds the City and its pertinent agencies, agents and representatives abused their discretion in certifying the Project environmental impact report (EIR), amending the Yerba Buena Center Redevelopment Plan, and approving the Project, all in alleged violation of the California Environmental Quality Act (CEQA), the San Francisco Planning Code (Planning Code), the San Francisco General Plan, and the California Community Redevelopment Law.

On appeal, appellants argue that the judgment denying their writ and validating the actions of respondents must be reversed because (1) the Project was inconsistent with the San Francisco General Plan, particularly that part of it known as the Downtown Area Plan (the Downtown Plan); (2) the City and its pertinent agencies violated CEQA by certifying an inadequate EIR and approving the Project despite its significant environmental impacts and the existence of feasible alternatives; and (3) there was insufficient evidence to support the finding of “blight” necessary to incorporate the Project site into the preexisting Yerba Buena Center Redevelopment Plan and thereby exempt it from compliance with the Planning Code and General Plan. Appellants’ arguments are contested by respondents—the City, Commission, Board and Agency—as well as by real parties in interest Federated Department Stores, Inc. (Federated), Bloomingdale’s, Inc. (Bloomingdale’s), Emporium Development, L.L.C. (Emporium Development) and Forest City Development, Inc. (Forest City). In addition, a brief has been filed by the National Trust for Historic Preservation, California Preservation Foundation, and San Francisco Tomorrow as amici curiae in support of appellants. Based on our review of the administrative record in accordance with the applicable standard of review, we conclude that the trial court’s judgment must be affirmed.

Factual and Procedural Background

The building housing the former Emporium department store (the Building) is located at 835 Market Street between Fourth and Fifth Streets in San Francisco, with its rear facing Jessie Street, a midblock alley running parallel to and between Market and Mission Streets. Originally built in 1896, the Emporium Building was designed by San Francisco architect Albert Pissis, one of the first Americans to be trained at the École des Beaux Arts in Paris. From the outset, the top five floors of the seven-story front section of the Building, originally known as the Parrott Building, were office space. For the first 10 years of the Building’s existence, this office portion was the official designated seat of the California Supreme Court. The bottom two floors of the office portion on Market Street, together with the entire remainder of the Building, were devoted to the Emporium’s retail space. This portion centered on a large, three-story open rotunda, 51 feet in height, ringed by a two-story pillared gallery and topped with a 102-foot-diameter ornate glass and metal dome.

The Emporium Building structurally withstood the 1906 earthquake. However, all but the sandstone 120-foot-tall Market Street facade of the original structure was thereafter destroyed by the subsequent fire. With the seven-story facade intact, the Building was rebuilt in 1908 in a similar fashion for the sole and express use of the Emporium. The facade and much of the structural steel in the original Building were reused, and all the interior arrangements remained similar. The 1908 Building, like the original one, included the seven-story office tower extending back from Market Street 65 feet, plus a four-story segment at the rear along Jessie Street. The two-story department store section extended between these higher segments. The three-story skylit rotunda surmounted by a glass dome was reconstructed. As completed, the rectangular Building was 275 feet wide and 355 feet deep, with a large central aisle almost 40 feet wide bisecting the space between Market and Jessie Streets through the central skylit rotunda.

The Emporium department store occupied the Building continually from reconstruction in 1908 until 1996. During this period, the Emporium built or purchased several adjoining structures and made numerous changes to the main Building itself. In 1916, the Building was enlarged with a third floor added to the main retail space, opening onto the existing rotunda. In 1917, a nine-story, 200,000-square-foot annex was completed adjacent to the Jessie Street facade. Subsequently, six more buildings on the south side of Jessie Street were acquired by the Emporium. In 1933, an eighth additional building was built across Jessie Street and internally connected to the other, older warehouse buildings which had already been acquired. That same year, two pedestrian bridges across Jessie Street were completed, connecting the warehouse buildings on the Mission Street side with the older original Emporium Building on Market Street. The eight ancillary buildings were used by the Emporium for offices, storage, stocking, loading, receiving, and other activities; and generally were connected with each other and with the main Building by a system of long corridors, tunnels, bridges, stairs and elevators. Escalators were added to the Emporium Building in 1936. Various other changes were made in the 1950’s, including closing off some openings on the second and third floors of the rotunda with blank panels. Between 1969 and 1970, the Emporium basement was connected to the new Bay Area Rapid Transit (BART) station at Powell Street. In 1977, the ground floor arcade windows on Market Street were removed to increase retail selling space. In 1989, the west side of the Emporium Building was opened into the new San Francisco Centre.

In 1979, as part of an survey of architecturally significant buildings, the Foundation for San Francisco’s Architectural Heritage gave the Emporium Building its highest “A” rating, indicating that it was a building of the highest architectural and historical importance, one of the most important buildings in downtown San Francisco, eligible for the National Register, and of highest priority for city landmark status. The Downtown Plan, an official area plan in the larger San Francisco General Plan, rates the Building in category I of architectural significance. Category I buildings are those deemed by the General Plan to be of “highest architectural and environmental importance—buildings whose demolition would constitute an irreplaceable loss to the quality and character of downtown.” The most significant features of the Building identified by the General Plan are the Market Street facade and office structure, the rotunda, and the dome. On the other hand, the Downtown Plan did not identify as significant architectural features the rest of the interior retail section of the Emporium or the Jessie Street facade. None of the eight ancillary buildings attached to the Emporium or the other three buildings and lots included in the Emporium Site Redevelopment Area has ever been designated as an architecturally significant building by the Downtown Plan. As a category I building, the Emporium Building qualifies for special protection under several provisions of the Downtown Plan and articles 10 and 11 of the Planning Code.

Sales at the Emporium declined in the 1990’s. In 1995, Federated and its affiliate Bloomingdale’s became the owners of the Emporium Building and the eight adjoining buildings after Broadway Stores, Inc., the former owner of the Emporium, went bankrupt. The Emporium closed in 1996 due to significant financial losses. Except for a brief period when Macy’s used the ground floor of the Emporium Building for its furniture department, almost all of the building space owned by Federated in the Emporium Site Redevelopment Area has since been vacant. Two other smaller buildings not owned by Federated, located on Mission Street in the Emporium Site Redevelopment Area, are also largely vacant. According to Federated and the Agency, all that remains in these buildings are nonsalvageable fixtures, abandoned and deteriorated equipment, non-saleable inventory, temporary storage, and debris.

With the acquisition of the Emporium and its buildings, Federated and Bloomingdale’s began investigating ways and means of restoring and reusing the existing Building and its eight ancillary buildings. The main Building and all eight of the ancillary structures were built between 1908 and 1955, well before the adoption of modem building codes. All were constructed either in whole or in part with unreinforced masonry walls subject to collapse in the event of a major earthquake; and none had undergone any seismic strengthening, retrofitting, or modem health, safety and accessibility upgrades. The layout of the Emporium’s retail space was essentially unchanged since its construction and enlargement between 1908 and 1917, and reflected the styles and requirements of that bygone era. The Building’s tightly spaced columns, insufficient floor-to-ceiling height, deficient display space, faded amenities, awkward circulation patterns and inadequate off-street loading areas rendered it functionally obsolete for purposes of contemporary department store usage. The eight ancillary buildings were awkwardly configured for convenience or any efficient usage, and even more dilapidated and unserviceable than the main Building.

In view of the prohibitive expense of remedying these structural problems and bringing the Building up to modem codes and standards, Federated concluded after thorough analysis that the financial investment required to rehabilitate the existing Emporium Building and its associated properties for use as a Bloomingdale’s department store could not be economically justified by the anticipated return on such an investment. Federated consequently sought a partner to help it develop a project that could generate sufficient revenues to be financially feasible, and still preserve as much as possible of the architecturally significant features of the Emporium Building. Federated entered into an agreement with Forest City to redevelop the Building and its ancillary structures. Forest City prepared a plan for redevelopment of the Emporium and its auxiliary buildings which it believed was financially viable, but only with public economic assistance. The Project called for the replacement of most of the Emporium Building and all of the ancillary structures with new construction to house a new Bloomingdale’s department store, a cinema, entertainment and restaurant space, other retail space, office space, and a hotel, while preserving some portions of the original Emporium Building.

Federated and Forest City then approached the City with the proposed Project to seek inclusion of the nine buildings in a new or existing redevelopment area in order to obtain Agency redevelopment assistance. Acting through the Agency, the planning department and the Commission, the City commenced a multiyear economic and environmental analysis of the Project in order to determine whether to offer it public redevelopment assistance. In July 1998, the planning department published notice that the Project would require an EIR.

The EIR analyzed the proposed Project and five other alternatives involving reduced demolition of or changes to the existing buildings. These alternative projects included no change at all to the buildings (Alternative A, No Project); a reduced project with no hotel included (Alternative B, Reduced Development); a project designed to preserve as much as possible of the existing historic structures (Alternative C, Conservative Preservation); a project involving somewhat less preservation of existing structures (Alternative D, Modified Preservation); and a project designed in accordance with existing planning controls (Alternative E, Existing Planning Controls). The EIR compared and analyzed in detail the relative environmental impacts and costs of the proposed Project with these various alternatives. It concluded that the Project would have significant adverse environmental impacts on architectural and historical resources due to the demolition and/or alteration of large portions of the Emporium Building, as well as significant environmental impacts on traffic and air quality. To address these impacts the EIR proposed various mitigating measures.

Real Parties contracted with the Sedway Group (Sedway), a San Francisco real estate economics consulting firm, to conduct a series of analyses of the economic impacts and feasibility of the Project as well as the five alternatives addressed by the EIR, including rehabilitation and preservation of the existing Emporium Building. In consultation with the City’s independent expert Keyser Marston Associates, Inc. (KMA), the city architect and the planning department, and using construction cost estimates developed by the construction management firm of Swinerton & Walberg, Sedway concluded that the Emporium Building would cost more to rehabilitate than it would thereafter be worth on the market, and that the Building therefore had a negative market value. In consequence, the Real Parties’ proposed Project would be financially infeasible without public subsidies. However, the subsidies required for the preservation alternatives considered by the EIR would be significantly greater than that required for the proposed Project. The City’s expert KMA independently reviewed Sedway’s analysis and conclusions. Like Sedway, KMA also concluded that in view of its condition and the costs of rehabilitation, the Emporium Building had no substantial remaining market value; all the preservation alternatives would be financially infeasible without public assistance; and the proposed Project would be the least costly solution, minimizing the amount of public subsidies required to render the Building usable and financially viable.

The Commission and the Agency published and circulated the draft EIR for the Project in October 1998. A comment period followed, and a public hearing on the draft EIR was held in December 1998. In response to public comments, Real Parties modified the Project to retain more of the Emporium Building’s historic features than originally proposed. Among other things, the Project was revised to retain virtually the entire historic seven-story office block extending 65 feet in depth back from Market Street; and to reduce the number of feet the restored dome would be raised from 72 feet to 55 feet, thereby preserving the floor-to-dome height and architectural elements, proportions, and dimensions of the 1908 rotunda. In addition, a proposed pedestrian bridge over Mission Street was eliminated, the sidewalk facing Mission Street was widened, the space proposed for cinema and other entertainment usage was reduced, and Real Parties pledged to make a $1.25 million contribution for BART/MUNI Powell Street station improvements plus a $1.5 million contribution to the City for parking solutions in the South of Market Street (SOMA) area.

In August 1999, a supplement to the draft EIR incorporating and analyzing these revisions was published, with another public comment period and hearing following. The Commission and the Agency published and circulated a summary of comments and responses to the draft EIR and its Supplement on December 28, 1999, including written responses to all the comments received during the 45-day review period for the draft EIR and the subsequent 45-day review period for the supplement to the draft EIR. Following a joint public hearing, the final EIR was certified by the Commission and the Agency on January 13, 2000. In June 2000, the planning department prepared an addendum to the EIR analyzing minor Project revisions, and concluded the revisions would not alter the EIR’s previous conclusions.

On August 15, 2000, the Agency adopted CEQA findings and a statement of overriding considerations, determined the Project site was physically and economically blighted under the Community Redevelopment Law (Health & Saf. Code, § 33000 et seq.), and approved the Yerba Buena Center Redevelopment Plan amendment expanding the redevelopment area to include the Project site. The Agency recommended that the Board approve the Project. Two days later, the Commission similarly adopted CEQA findings and a statement of overriding considerations, based on the final EIR, the addendum thereto, planning department staff reports, public comments, and reports and studies on the Project. In addition, the Commission determined the Project would be consistent with the General Plan and its priority policies, and recommended that the Board approve the Project.

Finally, on September 25, 2000, after considering the entire administrative record including the final EIR, the addendum thereto, the economic analyses, reports and studies of the Project, the Agency and Commission determinations, written comments and letters from the public and hours of testimony for and against the Project, the Board certified the final EIR and adopted CEQA findings and a statement of overriding considerations for the Project. Two weeks later the Board, with only one dissenting vote, approved the Project and adopted the Yerba Buena Center Redevelopment Plan amendment expanding the redevelopment area to include the Project site.

Relying on the evidence and analyses in the administrative record, the Board adopted the findings of the Agency and the Commission rejecting Alternatives A through E as infeasible for financial and other reasons, and concluding that the overriding substantial economic, social, public welfare and safety benefits of the Project outweighed its otherwise significant adverse environmental impacts. Among other things, the benefits of the Project included (1) preserving the Emporium Building’s most significant architectural and historical features; (2) revitalizing the entire Emporium Site Redevelopment Area; (3) providing over $16 million for affordable housing; (4) providing approximately $14 million per year in projected net tax revenues to the City; (5) creating approximately 3,400 new jobs; (6) providing $1.25 million for transit improvement measures, $1.5 million for parking solutions in the SOMA area, $250,000 for improvements to the Hallidie Plaza area and $50,000 in open space fees; and (7) creating a publicly accessible rooftop garden. Finally, the Board concluded that demolition of portions of the Emporium Building, as proposed by the Project, would not be inconsistent with the historic preservation policies of the Downtown Plan because a folly rehabilitated Emporium Building would have a negative market value of between negative $2.3 million and negative $5.5 million after taking into account the high costs of rehabilitation and the difficulty of using the antiquated design for modem department store purposes.

The City filed a notice of determination of project approval on October 23, 2000. Appellants filed a petition for writ of mandate and complaint to invalidate the amendment to the redevelopment plan on November 22, 2000, and an amended petition on December 19, 2000. Following two hearings on the amended petition on May 17 and 31, 2001, the trial court denied the petition in its entirety and granted judgment of validation in favor of the City and the Agency. This appeal timely followed entry of judgment.

Scope and Standard of Review

The petition for writ of administrative mandamus in this case broadly challenged the actions taken by the City, the Board and the responsible City agencies with respect to three distinct issues. First, appellants challenged the Project’s compliance and consistency with the City’s General Plan. Second, appellants challenged the EIR’s compliance with CEQA and the City’s certification of the Project EIR. Third, appellants contended the City’s approval of the amendments to the Yerba Buena Center Redevelopment Plan to include and accommodate the Emporium Site Redevelopment Area was in violation of the Community Redevelopment Law (Health & Saf. Code, § 33000 et seq.). Appellants repeat these arguments on appeal from the trial court’s judgment denying their petition.

The inquiry for the issuance of a writ of administrative mandamus is whether the agency in question prejudicially abused its discretion; that is, whether the agency action was arbitrary, capricious, in excess of its jurisdiction, entirely lacking in evidentiary support, or without reasonable or rational basis as a matter of law. (Code Civ. Proc., § 1094.5, subds. (b), (c); Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 10-12 [78 Cal.Rptr.2d 1, 960 P.2d 1031]; Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 1112, 1132-1133 [26 Cal.Rptr.2d 231, 864 P.2d 502]; Sequoyah Hills Homeowners Assn. v. City of Oakland (1993) 23 Cal.App.4th 704, 712, 111 [29 Cal.Rptr.2d 182] (Sequoyah Hills); Corona-Norco Unified School Dist. v. City of Corona (1993) 17 Cal.App.4th 985, 992 [21 Cal.Rptr.2d 803] (Corona-Norco).) A prejudicial abuse of discretion is established if the agency has not proceeded in a manner required by law, if its decision is not supported by findings, or if its findings are not supported by substantial evidence in the record. We may neither substitute our views for those of the agency whose determination is being reviewed, nor reweigh conflicting evidence presented to that body. (Pub. Resources Code, § 21168.5; Code Civ. Proc., § 1094.5, subd. (b); Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 567-569 [38 Cal.Rptr.2d 139, 888 P.2d 1268] (Western States); Citizens of Goleta Valley v. Board of Supervisors (1990) 52 Cal.3d 553, 564 [276 Cal.Rptr. 410, 801 P.2d 1161] (Goleta Valley II); Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 392, fn. 5 [253 Cal.Rptr. 426, 764 P.2d 278] (Laurel Heights I); Sequoyah Hills, supra, 23 Cal.App.4th at pp. 712, 111; Concerned Citizens of Calaveras County v. Board of Supervisors (1985) 166 Cal.App.3d 90, 95-96 [212 Cal.Rptr. 273].)

On appeal, we are governed by the same abuse of discretion standard in pursuing essentially the same task as that of the trial court. Like the trial court, we review the agency’s actions and decisions to determine whether they were in compliance with the procedures required by law and were supported by findings which themselves were supported by substantial evidence in light of the entire administrative record. In so doing, our review is de novo, and not bound by the trial court’s conclusions. The decisions of the agency are nevertheless given substantial deference and presumed correct. The parties seeking mandamus bear the burden of proving otherwise, and the reviewing court must resolve reasonable doubts in favor of the administrative findings and determination. (Pub. Resources Code, § 21167.3; Laurel Heights I, supra, 47 Cal.3d at p. 393; Save Our Peninsula Committee v. Monterey County Bd. of Supervisors (2001) 87 Cal.App.4th 99, 116-117 [104 Cal.Rptr.2d 326] (Save Our Peninsula); Friends of Mammoth v. Town of Mammoth Lakes Redevelopment Agency (2000) 82 Cal.App.4th 511, 523 [98 Cal.Rptr.2d 334] (Friends of Mammoth); Davidon Homes v. City of San Jose (1997) 54 Cal.App.4th 106, 113-114 [62 Cal.Rptr.2d 612]; Sequoyah Hills, supra, 23 Cal.App.4th at pp. 712, 717; State of California v. Superior Court (1990) 222 Cal.App.3d 1416, 1419 [272 Cal.Rptr. 472]; Concerned Citizens of Calaveras County v. Board of Supervisors, supra, 166 Cal.App.3d at p. 96.)

In the context of an administrative mandamus action challenging an agency’s determination under CEQA or the applicable general plan, “substantial evidence” means “enough relevant information and reasonable inferences from this information that a fair argument can be made to support a conclusion, even though other conclusions might also be reached.” (Cal. Code Regs., tit. 14, § 15384, subd. (a); Laurel Heights I, supra, 47 Cal.3d at p. 393.) Such substantial evidence may include facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts, but not argument, speculation, unsubstantiated opinion, or clearly erroneous evidence. (Pub. Resources Code, §§ 21080, subd. (e), 21082.2, subd. (c).) Similarly, in reviewing an agency’s adoption of a redevelopment plan or amendment under the Community Redevelopment Law, we must determine whether substantial evidence in the administrative record supports the agency’s specific findings of urbanization and blight. (Health & Saf. Code, §§ 33030, 33031, 33320.1; Friends of Mammoth, supra, 82 Cal.App.4th at p. 538; Morgan v. Community Redevelopment Agency (1991) 231 Cal.App.3d 243, 257 [284 Cal.Rptr. 745] (Morgan).)

Consistency with the General Plan

Appellants first contend that the City’s approval of the Project and redevelopment plan amendments was irreconcilably inconsistent with the San Francisco General Plan. At issue are mandatory provisions of the Downtown Plan specifically requiring retention and preservation of the “highest quality buildings,” defined in the Downtown Plan as “Significant Buildings,” or “[t]hose buildings of the highest architectural and environmental importance—buildings whose demolition would constitute an irreplaceable loss to the quality and character of downtown.” These Significant Buildings, which “would be required to be retained,” are in turn divided into two classifications, category I and category II, with somewhat more substantial alteration of the latter permitted than of the former. Demolition of a Significant Building “would be permitted only if public safety requires it or, in taking into account the value of TDR [transferable development rights],[] the Building retains no substantial remaining market value.” Under the Planning Code, the Emporium Building is classified at the highest level as a category I Significant Building. Like the Downtown Plan, the Planning Code provides that a category I building may not be demolished unless it is determined that, taking into account the value of transferable development rights and costs of rehabilitation, “the property retains no substantial remaining market value or reasonable use.” (Planning Code, § 1112.7.)

Although the City adopted many amendments to the General Plan regarding the Emporium Site Redevelopment Area to enable the Project to proceed despite its apparent inconsistency with the General Plan and the Planning Code, it did not amend the Downtown Plan’s requirement that there be no demolition of category I buildings unless required by public safety, or upon a finding of “no substantial remaining market value.” Appellants insist that the Project remains unlawfully inconsistent with the San Francisco General Plan’s protection for downtown historic resources, claiming that respondents failed to provide a sufficient basis for the essential determination that the Emporium Building had no substantial remaining market value.

The standard for judicial review of administrative decisions by local public agencies with respect to consistency with applicable general plans “is whether the local adopting agency has acted arbitrarily, capriciously, or without evidentiary basis.” (Concerned Citizens of Calaveras County v. Board of Supervisors, supra, 166 Cal.App.3d at p. 96.) “A city’s findings that [a] project is consistent with its general plan can be reversed only if [they are] based on evidence from which no reasonable person could have reached the same conclusion. [Citation.]” (A Local & Regional Monitor v. City of Los Angeles (1993) 16 Cal.App.4th 630, 648 [20 Cal.Rptr.2d 228].) Moreover, because the question of substantial compliance with the general plan is one of law, this court need not give deference to the conclusion of the trial court. (Concerned Citizens of Calaveras County v. Board of Supervisors, supra, 166 Cal.App.3d at p. 96; Twain Harte Homeowners Assn. v. County of Tuolumne (1982) 138 Cal.App.3d 664, 671, 674 [188 Cal.Rptr. 233].)

On the other hand, courts accord great deference to a local governmental agency’s determination of consistency with its own general plan, recognizing that “the body which adopted the general plan policies in its legislative capacity has unique competence to interpret those policies when applying them in its adjudicatory capacity. [Citations.] Because policies in a general plan reflect a range of competing interests, the governmental agency must be allowed to weigh and balance the plan’s policies when applying them, and it has broad discretion to construe its policies in light of the plan’s proposes. [Citations.] A reviewing court’s role ‘is simply to decide whether the city officials considered the applicable policies and the extent to which the proposed project conforms with those policies.’ [Citation.]” (Save Our Peninsula, supra, 87 Cal.App.4th at p. 142.)

Moreover, state law does not require precise conformity of a proposed project with the land use designation for a site, or an exact match between the project and the applicable general plan. (Sequoyah Hills, supra, 23 Cal.App.4th at p. 717; Greenebaum v. City of Los Angeles (1984) 153 Cal.App.3d 391, 406-407 [200 Cal.Rptr. 237].) Instead, a finding of consistency requires only that the proposed project be “compatible with the objectives, policies, general land uses, and programs specified in” the applicable plan. (Gov. Code, § 66473.5, italics added.) The courts have interpreted this provision as requiring that a project be “ ‘in agreement or harmony with’ ” the terms of the applicable plan, not in rigid conformity with every detail thereof. (Sequoyah Hills, supra, 23 Cal.App.4th at p. 718; Greenebaum v. City of Los Angeles, supra, 153 Cal.App.3d at p. 406; 59 Ops.Cal.Atty.Gen. 129, 131 (1976).)

In this case, the Board expressly determined that the Project was consistent with the General Plan, including the Downtown Plan and its priority policies. These include not only historic preservation, but also “space for commerce”; the maintenance and improvement of the City’s “position as a prime location for financial, administrative, corporate, and professional activity”; the improvement of the City’s “position as the region’s prime location for specialized retail trade”; the provision and support, “within acceptable levels of density,” of expanded downtown commercial space; creation of “an urban form for downtown that enhances San Francisco’s stature as one of the world’s most visually attractive cities”; increased public transit use; and seismic safety. Adopting the conclusions of the Commission and its staff, the Board found the Project consistent with these objectives and policies of the Downtown and General Plans, including specifically the preservation of historic resources. The Board’s reading of its own General Plan “comes to this court with a strong presumption of regularity.” (Sequoyah Hills, supra, 23 Cal.App.4th at p. 717.) In evaluating whether the Board abused its discretion, we are obliged to give its finding of consistency great deference, without substituting our own views for those of the Board, or reweighing conflicting evidence in the record. (Ibid.; Save Our Peninsula, supra, 87 Cal.App.4th at p. 142.)

The administrative record shows that in the process of formulating and amending the Project, great efforts were made to preserve the most significant historical aspects of the Emporium Building. Thus, the historic facade and office portion facing Market Street, as well as the large rotunda and dome are to be preserved and indeed restored. To this extent, therefore, the proposed Project made significant efforts to satisfy the preservation policies of the Downtown Plan as well as the sometimes conflicting policies favoring the development of financially viable commercial and retail space.

Nevertheless, in order to provide a financially viable space for the new Bloomingdale’s store, the Project proposed by the Real Parties envisions demolishing a significant portion of the original Building. As the EIR itself recognizes, this “demolition of most of the building and alteration of other architectural elements would constitute a significant adverse impact” of the Project. Because the Downtown Plan permits demolition of historically significant buildings only if public safety requires it or if the building retains no substantial remaining market value, and because neither respondents nor Real Parties contend that demolition of the present Emporium Building is necessary for public safety, the proposed Project can only be construed as consistent with the General Plan if the Building itself retains no substantial remaining market value. The issue presented here is therefore whether the City’s findings and determination approving the Project were supported by substantial evidence that the Emporium Building in fact has no substantial remaining market value.

In making this determination, the City relied on the expert analyses of Sedway and KMA. Each consultant independently concluded that, even after taking into account all possible monetary incentives for historic preservation, the substantial costs of rehabilitating and preserving the Emporium Building would be millions of dollars more than the value the Building could thereafter generate in its existing configuration, through any plausible revenue-producing usage, whether retail, office or residential. Under these circumstances, the Building has no remaining market value.

In coming to this conclusion, Sedway examined five different development alternatives involving preservation of the historic Emporium Building: (1) the “Mostly Retail Scenario,” in which the Emporium Building would be historically renovated primarily for retail usage and some office space; (2) the “Mostly Office Scenario,” in which the Building would be historically renovated primarily for office space and some retail use on the first two floors; (3) historical renovation of the Building for residential use only; (4) historical renovation of the Building for use as a single large upscale department store; and (5) historical renovation of the Building for use as a single large retail store focusing on household goods, such as Target or Kmart. Sedway performed detailed economic analysis only on the first two of these scenarios after initial consideration led to the conclusion the last three were infeasible from both a financial and a market perspective.

Sedway’s comprehensive analysis of the two remaining alternatives subtracted the estimated development costs from the estimated value of the historically rehabilitated Building under either scenario, taking into account all projected costs of rehabilitation, the probable future revenue stream from the completed development, and the available monetary incentives for historic restoration and preservation, including potential historic tax credits and TDR’s associated with the property in the Emporium Site Redevelopment Area. Under either alternative, Sedway concluded that the developer would incur approximately $130 million in construction costs. Against this, Sedway weighed the value of the rehabilitated Building, based on the capitalized value of future net operating income plus available TDR’s and historic tax credits. Complete rehabilitation of the Emporium Building in accordance with accepted standards of historic preservation and modem seismic safety codes would leave in place all the inefficient and obsolete aspects of the Building’s design and configuration, resulting in serious limitations on feasible space utilization and a consequent reduction in potential rental income. Sedway estimated the value of the future income stream from either potential development alternative at approximately $104.5 million. Even factoring in an additional total of approximately $23 million in the value of TDK’s and historic preservation tax credits, and assuming the land and existing Building were available for free, the costs of rehabilitation, development and operation would therefore exceed any anticipated future revenue stream by $2.3 million to $5.5 million. Thus, under any historic preservation scenario, the Emporium Building would necessarily have a net negative value of several million dollars. Because the cost of rehabilitation would exceed the projected value of the rehabilitated asset, Sedway concluded the existing historic Building had no substantial remaining market value.

Sedway’s report, analysis, and conclusions were independently verified and confirmed by KMA, the City’s independent real estate valuation expert. Specifically, KMA reported that: (1) the “investment methodology fundamental to [Sedway’s analysis] is the method commonly utilized in the industry and well accepted as a way to identify the residual value, if any, for the Emporium Building”; (2) it had consulted with the city architect to validate the cost data utilized in the Sedway report; (3) it had met with representatives of the construction and development industries to discuss the proposed Project; and (4) it had reviewed “independent information available as to key factors of this project” including retail industry trends, development costs, and market changes. After conducting this review, KMA independently concluded that “the analysis, conclusions and underlying assumptions in the Sedway report are reasonable,” and “the Emporium Building property retains no substantial remaining market value.” The City Architect also conducted an independent review of Sedway’s report and analysis, and verified its estimates of construction costs. Finally, the City Planning Commission reviewed the report and also concluded the Project was consistent with the Downtown Plan.

Significantly, appellants are unable to point to any contrary economic evidence in the entire administrative record. Even if they had done so, however, the City’s finding of no substantial remaining market value would still have to be affirmed. The conclusions and opinions of the two real estate valuation experts, Sedway and KMA, constitute substantial evidence in support of the City’s administrative findings and determination that the Emporium Building retains no substantial remaining market value. (Lewis v. Seventeenth Dist. Agricultural Assn. (1985) 165 Cal.App.3d 823, 831 [211 Cal.Rptr. 884] [agency “may use the opinion evidence of experts as substantial evidence on which to base such a decision”]; Coastal Southwest Dev. Corp. v. California Coastal Zone Conservation Com. (1976) 55 Cal.App.3d 525, 532 [127 Cal.Rptr. 775] [“opinion evidence of experts ... is substantial evidence upon which . . . administrative decision may be based”].)

In default of having produced any evidence to contradict the opinions of the experts, appellants instead argue that the expert analyses of Sedway and KMA should be disregarded for a variety of procedural reasons. None of appellants’ proffered arguments withstands analysis.

Appellant’ principal contention is that the economic analysis produced by Sedway and KMA was inadequate, untrustworthy and insufficient to support the City’s Project approval because it allegedly did not contain all the information required by article 11 of the San Francisco Planning Code for a permit application to demolish an historic category I building. Specifically, appellants contend that any analysis of whether a given property retains any substantial remaining market value must take into account the dozen or so prescribed factors enumerated in sections 1112.1 and 1112.7 of the Planning Code. These include among other things the purchase price of the property, the date of purchase, the most recent assessed value, real estate taxes, annual debt service, operating and maintenance expenses, recent appraisals, studies or bids for profitable and adaptive uses of the property, and available TDR’s. The ultimate calculation of market value is then referred for decision to the Commission and the City Landmarks Board. (Planning Code, §§ 1112.1, 1112.5 to 1112.7.) Because neither Sedway nor KMA used or considered all the factors enumerated in the Planning Code, appellants contend the City failed properly to determine the actual market value of the Building, which therefore cannot be exempted from the provisions of the Downtown and General Plans.

Appellants’ argument founders on their own admission that the provisions of the Planning Code do not apply to this redevelopment project. Only if we set aside the City’s finding of blight and determine that the Project was approved in violation of the Community Redevelopment Law would the provisions of the Planning Code become pertinent to this case. Neither does the Downtown Plan incorporate article 11 of the Planning Code. Thus, the provisions of the Planning Code are essentially irrelevant to the validity of the City’s approval of the subject Project.

Even if the Planning Code did apply, its provisions do not set out any method, much less an exclusive method, for evaluating commercial properties proposed for demolition or redevelopment. The relevant provisions of the Planning Code simply require that certain information be provided in any application for a demolition permit; they do not provide any guidance on how the City is to weigh and analyze the information provided. The only requirement stated by the Planning Code with respect to the question of whether to approve demolition of a Significant Building is the same as that set out in the Downtown Plan, namely, whether, “taking into account the value of [TDK’s] and costs of rehabilitation to meet the requirements of the Building Code or other City, State or federal laws, the property retains no substantial remaining market value or reasonable use.” (Planning Code, § 1112.7.) This is, of course, the same question addressed in the analyses prepared by Sedway and KMA, and used by the City in making its ultimate determination to approve the Project. This standard for demolition was satisfied by the findings of both the Sedway and KMA reports.

Appellants nevertheless contend Sedway’s report cannot constitute substantial evidence because, rather than providing objective analysis, Sedway instead was a paid consultant hired by Real Parties to produce a biased, self-serving study aimed at a predetermined result. This assertion is merit-less. The courts have specifically rejected similar assertions that decisions of public agencies are tainted by input from economic analysts and experts retained by the interested parties. (City of Poway v. City of San Diego (1984) 155 Cal.App.3d 1037, 1042 [202 Cal.Rptr. 366] [rejecting CEQA challenge to EIR principally prepared by developer, where record showed the city exercised independent judgment before approving project]; Foundation for San Francisco’s Architectural Heritage v. City and County of San Francisco (1980) 106 Cal.App.3d 893, 908 [165 Cal.Rptr. 401] [EIR not fatally undermined by direct participation of developer and paid experts in underlying studies and analysis].) In this case, KMA and the city architect both provided an independent review and corroboration of Sedway’s analysis. Together, their reports constituted substantial evidence in support of the City’s ultimate decision that the Emporium Building retained no substantial remaining market value and approval of the project was therefore consistent with the General Plan.

Alternatively, appellants assert that Sedway could not accurately estimate the value of the Emporium Building without actually putting it on the market. The approach utilized by Sedway employed established, widely-accepted methodologies for valuation of real estate in compliance with commonly accepted commercial real estate appraisal practice recognized by the American Institute of Real Estate Appraisers and the courts. (De Luz Homes, Inc. v. County of San Diego (1955) 45 Cal.2d 546, 564-568 [290 P.2d 544]; American Inst. Real Estate Appraisers, The Appraisal of Real Estate (11th ed. 1996) 449, 453-454.) The market value of commercial properties that derive their worth from the income they are capable of producing is generally calculated by means of the income capitalization approach, an appraisal technique that recognizes that buyers invest in income-producing properties with the expectation of receiving a return on their investment. The appraisal method by comparable sales, generally used for estimating the market value of single-family residential property, is not often useful in valuing large commercial properties, where the critical issue is the income the property is capable of producing. Such an approach would be particularly useless in a case such as this, in which the building in question has never been sold and is not currently for sale, and there is no evidence in the record of any comparable properties in the City, much less any such properties that are for sale.

In any event, there is nothing unusual in Sedway’s analysis or conclusions. As many cases have witnessed, it is well established that impaired property may have little or no market value if the costs of necessary repairs, remediation or rehabilitation would approximate or exceed the value of the property in its repaired or rehabilitated condition. (Mola Development Corp. v. Orange County Assessment Appeals Bd. (2000) 80 Cal.App.4th 309, 318-320 [95 Cal.Rptr.2d 546]; Westling v. County of Mille Lacs (Minn. 1996) 543 N.W.2d 91, 92-93; Commerce Holding Corp. v. Assessors of Babylon (1996) 88 N.Y.2d 724, 728-732 & fn. 5 [649 N.Y.S.2d 932, 673 N.E.2d 127].)

Appellants also suggest that the Sedway report must be rejected as inadequate because it only analyzed two hypothetical commercial project alternatives. This suggestion is baseless. Sedway initially identified five potential uses of the Building in an historically rehabilitated state. Three of these alternatives were then ruled out, on the basis of Sedway’s preliminary analysis finding them entirely infeasible for practical, financial and market reasons. It then concentrated its analysis on the two remaining preservation scenarios that might actually be economically viable. After conducting a comprehensive analysis of these two potentially viable alternatives, Sedway determined that neither resulted in any remaining market value for the Building. KMA validated Sedway’s analysis and conclusions.

Finally, in their briefs on this appeal appellants offer their own attempted analysis of the Emporium Building’s market value in an effort to prove that the Building retains some value after deducting the projected costs of rehabilitation and refurbishment. Their suggested approach is to subtract projected rehabilitation costs from the appraised value of the Emporium Building, and the land on which it stands, at some undisclosed point in time. There are numerous difficulties with this argument.

First, it is substantively faulty. The Downtown Plan asks only whether the Significant Building proposed for demolition, not the building and land together, has any remaining market value.

Second, assessed value is very different from market value. The former is figured as of some base year, and is then arbitrarily augmented each year by a given percentage of the prior year’s assessed value. (Rev. & Tax. Code, § 51.) Over time, assessed value and market value may diverge substantially, depending on market fluctuations and the depreciation of improvements to the property. Moreover, unlike fair market value, assessed value of a commercial building such as the Emporium Building does not have to make any assumptions as to whether the Building will be rehabilitated and preserved as opposed to demolished and replaced. Appellants’ assertion that market value can be obtained simply by subtracting rehabilitation costs from assessed value has no foundation or support in the field of commercial real estate valuation. The relevant questions instead are: (1) what will it cost to turn an unoccupied, run-down commercial property into a revenue-generating income property; and (2) will the revenue projected to be generated from the rehabilitated property justify the required investment? These are the questions addressed by Sedway, KMA, the city architect, the Commission, and the Board in their respective determinations that no historic rehabilitation of the Emporium Building could generate a revenue stream sufficient to cover the cost of such rehabilitation. Because they do not care for this answer, appellants have simply chosen to avoid posing these questions.

Third, appellants give no explanation for their rehabilitation cost estimate of $77 million, which arbitrarily excludes approximately $53 million in various items of expense identified by both Sedway and KMA. These excluded items include such things as design costs, permits, insurance, property taxes, and costs of making tenant improvements. There is no explanation offered for these missing costs, the ignoring of which conveniently permits appellants to posit a rehabilitation expense less than their assumed “appraised value” of the Emporium Building and property.

Finally, and perhaps most importantly, appellants never presented their proposed analysis at any point during the multiyear preapproval administrative process below. They may therefore be said to have waived this argument altogether. Exhaustion of administrative remedies is a jurisdictional prerequisite to a judicial action challenging any planning decision. (Corona-Norco, supra, 17 Cal.App.4th at p. 993.) If a party wishes to make a particular methodological challenge to a given study relied upon in planning decisions, the challenge must be raised in the course of the administrative proceedings. Otherwise, it cannot be raised in any subsequent judicial proceedings. (Park Area Neighbors v. Town of Fairfax (1994) 29 Cal.App.4th 1442, 1447-1449 [35 Cal.Rptr.2d 334] [failure to make timely methodological challenge constitutes waiver, barring such challenge on judicial review].) Having failed to present their proposed methodology to the City during the course of the administrative review process, appellants cannot do so now for the first time on appeal.

We conclude that the administrative record contains substantial evidence supporting the City’s finding that, as required by the Downtown Plan and General Plan, the Emporium Building retains no substantial remaining market value in its present configuration and condition. We consequently find no abuse of discretion in the City’s balancing of the competing policies and objectives set out in the Downtown and General Plans as applied to this Project. The responsible City agencies reasonably determined the Project was consistent with the City’s General and Downtown Plans, and did not abuse their discretion or act arbitrarily, capriciously, or without evidentiary basis in approving the Project. We must therefore affirm the decision of the trial court upholding the agency’s determination in this respect. (Sequoyah Hills, supra, 23 Cal.App.4th at pp. 717-718; A Local & Regional Monitor v. City of Los Angeles, supra, 16 Cal.App.4th at p. 648; Concerned Citizens of Calaveras County v. Board of Supervisors, supra, 166 Cal.App.3d at p. 96.)

Compliance with CEQA

Appellants’ next contention is that the City’s approval of the Project was in violation of CEQA because the EIR itself was inadequate and should not have been certified. Appellants base their assertion on three separate grounds: (1) the EIR’s failure to include an analysis of the economic feasibility of the project alternatives; (2) the alleged existence of feasible alternatives to the Project as approved; and (3) the alleged insufficiency of the EIR’s discussion of traffic and parking impacts and its failure to provide adequate mitigating measures therefor. None of these contentions has merit.

Judicial Review Of EIR Certification

Through the enactment of CEQA, the Legislature sought to protect the environment with the establishment of administrative procedures drafted, among other things, to “[ejnsure that the long-term protection of the environment, consistent with the provision of a decent home and suitable living environment for every Californian, shall be the guiding criterion in public decisions.” (Pub. Resources Code, § 21001, subd. (d); No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 74 [118 Cal.Rptr. 34, 529 P.2d 66].) The “heart of CEQA” is the EIR, whose purpose is to inform the public and government officials of the environmental consequences of decisions before they are made. (Goleta Valley II, supra, 52 Cal.3d at p. 564; Laurel Heights I, supra, 47 Cal.3d at p. 392; Sierra Club v. County of Sonoma (1992) 6 Cal.App.4th 1307, 1315 [8 Cal.Rptr.2d 473].) In general, an EIR must be prepared on any “project” a public agency intends to approve or carry out which “may have a significant effect on the environment.” (§§ 21082.2, subd. (a), 21100, 21151; Guidelines, § 15002, subd. (f); Sierra Club v. County of Sonoma, supra, 6 Cal.App.4th at p. 1315.)

CEQA defines the quantum of evidence constituting substantial evidence as follows: “Argument, speculation, unsubstantiated opinion or narrative, evidence which is clearly inaccurate or erroneous, or evidence of social or economic impacts which do not contribute to, or are not caused by, physical impacts on the environment, is not substantial evidence. Substantial evidence shall include facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts.” (§ 21082.2, subd. (c).) In turn, the CEQA Guidelines set out in the California Code of Regulations define “substantial evidence” as “enough relevant information and reasonable inferences from this information that a fair argument can be made to support a conclusion, even though other conclusions might also be reached.” (Guidelines, § 15384, subd. (a).)

Judicial review under CEQA is generally limited to the question whether the public agency has abused its discretion by not proceeding as required by law, or by making a determination not supported by substantial evidence. (§§21168, 21168.5; Sierra Club v. County of Sonoma, supra, 6 Cal.App.4th at p. 1317.) In our review, we must be careful not to interpret the provisions of either CEQA or the Guidelines “in a manner which imposes procedural or substantive requirements beyond those explicitly stated” in CEQA and its Guidelines. (§ 21083.1) Our role in applying this test is identical to that of the trial court. We must independently review the administrative record to determine whether it is free from legal error. Thus, the conclusions of the trial court, and its disposition of the issues in this case, are not conclusive on appeal. (Quail Botanical Gardens Foundation, Inc. v. City of Encinitas (1994) 29 Cal.App.4th 1597, 1602-1604 & fn. 3 [35 Cal.Rptr.2d 470]; Sierra Club v. County of Sonoma, supra, 6 Cal.App.4th at p. 1321; Bowman v. City of Petaluma (1986) 185 Cal.App.3d 1065, 1071, 1076 [230 Cal.Rptr. 413]; Orinda Assn. v. Board of Supervisors (1986) 182 Cal.App.3d 1145, 1160 [227 Cal.Rptr. 688].)

Failure To Include Economic Feasibility Analysis

The EIR identified five hypothetical alternatives to the proposed Project, all of which to a greater or lesser degree involved fewer changes to the Emporium Site Redevelopment Area: Alternative A, no project; Alternative B, Reduced Development, the proposed Project minus any hotel tower; Alternative C, Conservative Preservation, preserving and rehabilitating the Emporium Building with new construction allowing for appropriate use of the historic building, and leaving Jessie Street intact; Alternative D, Modified Preservation, preserving more of the historic exterior and interior features of the Emporium Building than the proposed Project, but with more new construction and alterations to the Building than under the more conservative preservation alternative; and Alternative E, Existing Planning Controls, essentially another preservation alternative differing in certain details from the other two, and in full compliance with the City Planning Code and the General Plan. At some length, the EIR then discussed the different environmental impacts associated with these alternatives. Appellants’ principal contention is that the EIR was defective because it failed to address the economic feasibility of the five alternatives as well.

Appellants’ contention is without merit. As is self-evident from its name, an EIR is an environmental impact report. As such, it is an informational document, not one that must include ultimate determinations of economic feasibility. CEQA explicitly states that the purpose of an EIR is simply “to identify the significant effects on the environment of a project, to identify alternatives to the project, and to indicate the manner in which those significant effects can be mitigated or avoided.” (§ 21002.1, subd. (a), italics added.) Thus, a listing of potential “[alternatives to the proposed project” is one of the mandatory elements to be included in an EIR. (§ 21100, subd. (b)(4).) CEQA also provides that the significant adverse effects on the environment identified in the EIR must be mitigated or avoided “whenever it is feasible to do so.” (§ 21002.1, subd. (b).) However, nowhere does the statute mandate that the EIR itself also contain an analysis of the feasibility of the various project alternatives or mitigation measures that it identifies.

To the contrary, CEQA specifically provides that it is the public agency, not the EIR, that bears responsibility for making “findings” as to whether “[sjpecific economic, legal, social, technological, or other considerations . . . make infeasible the mitigation measures or alternatives identified in the [EIR],” or whether there are “specific overriding economic, legal, social, technological, or other benefits of the project” that “outweigh the significant effects on the environment.” (§§ 21002.1, subds. (b), (c), 21081.) Section 21081.5 in turn specifically provides that in making these determinations, “the public agency shall base its findings on substantial evidence in the record.” (§ 21081.5, italics added.) Thus, although CEQA plainly provides that a reasonable range of alternatives must be included in the EIR, the statute does not require the EIR itself to provide any evidence of the feasibility of those alternatives, much less an economic or cost analysis of the various project alternatives and mitigating measures identified by the EIR. Instead, it does require the public agency to make findings and determinations as to the feasibility of such alternatives or mitigation measures with respect to each significant environmental impact which the EIR identifies, based on substantial evidence set forth anywhere “in the record.” In short, there is no statutory basis in the language of CEQA for appellants’ contention that the EIR in this case was inadequate and defective because it failed to assess the economic feasibility of the five alternatives which it identified and discussed. We decline appellants’ invitation to interpret the explicit statutory language in the manner which they urge on this court, and thereby impose a new procedural and