Fresno Costco relocation blocked by court over flawed environmental review

A Fresno judge blocked the city’s plan to relocate Costco from Shaw Avenue to Herndon Avenue last Thursday, ruling that the Dyer administration must comply with state climate change regulations before the project can proceed.

The proposed new Costco, planned as one of the largest in the country, represented a significant development win for city boosters who had celebrated the project’s expected Fall of 2024 opening. 

But Judge Jonathan Skiles found the city’s environmental review relied on a flawed 2021 climate action plan that courts had already invalidated last summer.

“The city’s certification of the [Costco environmental review] inappropriately relies upon the 2021 [Climate Change plan] that has been set aside,” wrote Judge Jonathan Skiles in a July 17 ruling.

The setback highlights Fresno’s ongoing struggles to meet state environmental and housing requirements, with the fall-out now spreading to massive investment decisions. 

Without a valid climate plan in place, the city cannot approve major developments like the Costco relocation. The ruling also raises questions about other pending projects, including the massive 45,000-home SEDA development, which relies on an even older 2014 climate plan that may not withstand legal scrutiny given California’s evolving environmental regulations.

It remained unclear Tuesday how the court’s ruling affects future plans for the Fresno Costco project. Costco representatives did not immediately respond to a request for comment.

The Dyer administration did not respond to requests for comment about how it plans to address the court’s concerns and move the Costco project forward.

Dan Brannick, a lawyer who helped file the lawsuit against the city on behalf of Herndon-Riverside Coalition for Responsible Planning and Development, said that the Costco project is not “killed,” and that the city and the developers simply need to follow the law.

“The city has an opportunity to fix their faulty work now. The project could move forward after the environmental review is revised,” he said.

What state requirements did the city fail to meet?

Developers are required by state law, known as the California Environmental Quality Act (CEQA), to disclose how much new pollution their projects will create in local neighborhoods.

Because CEQA is an offshoot of so-called nuisance law, developers are also required to reduce that pollution by all means possible as part of being a good neighbor.

The Dyer Administration created a good neighbor cookbook for developers in 2021.

But last summer, the courts found that Dyer’s recipe was really fatally flawed: Developers could opt out of all the pollution-reducing options if they wanted to, with no accountability measures put in place by the city to ensure that pollution nuisances were addressed.

As early as summer 2023, one seasoned environmental law veteran told Fresnoland that the cookbook was one of the most blatant violations of state law they had ever seen.

However, the city hasn’t put together a fresh plan to replace the rejected 2021 version.

In the Costco case, the judge also ripped the city for another shortcut they took. 

The city created what amounted to a mother-in-law’s quarters for an industrial warehouse on a side of the new Costco store, not analyzing the pollution and traffic nuisances associated with that.

The judge said the city was unjustified in shoehorning such a huge traffic-generator under the section of the planning code they ended up using.

“Basically, the city failed to follow their own zoning laws. [The mother-in-law warehouse] is not an allowed use. Only something like a mini-storage is allowed,” Brannick said.

The city could move forward if “a solution to the zoning issue is found,” Brannick concluded.

“In any case, we will welcome an informed public debate in front of the city council in the future.”

Fresnoland’s Pablo Orihuela contributed to this report.