Memorandum
Allen Matkins Leck Gamble Mallory & Natsis LLP
Attorneys at Law
www.allenmatkins.com
Los Angeles | Orange County | San Diego | Century City | San Francisco | New York Three Embarcadero Center, 12th Floor | San Francisco, CA 94111-4074 | Telephone: 415.837.1515 | Facsimile: 415.837.1516 Allen Matkins
Confidential: Attorney-Client Privileged
Communication and Attorney Work Product
To: Prometheus Real Estate Group From: David H. Blackwell Date October 9, 2025
Telephone: 415.273.7463
E-mail: [email protected]
File Number: 372819.00029/4912-3999-1130.5
Subject: Applicability of AB 130 CEQA Exemption to the Gateway/668 E. 3rd Ave., San Mateo Project
On June 30, 2025, a new statutory CEQA exemption for multifamily housing development projects was enacted as part of Assembly Bill 130 (“AB 130”) and became effective immediately. (See Pub. Res. Code § 21080.66.) The new AB 130 statutory CEQA exemption is similar to the existing categorical Class 32 exemption under the CEQA Guidelines, except that AB 130: 1) accommodates larger residential projects; 2) reduces legal risks by limiting opportunity for third party challenges (no “unusual circumstances” challenges are permitted); and 3) creates a strict project approval timeline starting with application completeness.
This memorandum reviews the application materials for the Gateway Project (“Project”) proposed at 668 E. 3rd Ave., San Mateo, California (“Property”) to determine the applicability of the new AB 130 CEQA exemption to the Project. Additionally, this memorandum briefly outlines how the streamlined approval timeline will impact the Project. We note that unlike the Class 32 Exemption, an analysis of potential impacts related to traffic, noise, air quality, and water quality will not be required to support the exemption. Instead, the project site must meet all of the SB 35 siting criteria (see below). Therefore, qualifying housing development projects should be processed much more quickly since technical studies should not be required, with the possible exception of a desktop biological resources survey.
As we explain below, the Project qualifies for the AB 130 CEQA exemption. We recommend that this memorandum be shared with the City of San Mateo (“City”) before the Project application is deemed complete (or Prometheus notifies the City that it qualifies for AB 130) so that the City will be in a position to timely initiate the mandatory tribal consultation process, discussed in Section II below.
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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I. NEW CEQA EXEMPTION ELIGIBILITY REQUIREMENTS
To qualify for the AB 130 CEQA exemption, the project must satisfy specific site and project requirements. Unlike other housing streamlining laws enacted in recent years, AB 130 does not contain any affordability requirements, and labor requirements are limited to only a narrow class of projects, none of which fit the description for the Project. As described below, the Project fits each of the AB 130 qualifying criteria.
a. Housing project. The project must be a housing development project, which is defined to include: (1) projects consisting of residential uses only; (2) mixed-use projects where at least two-thirds of the new or converted square footage is designated for residential use; (3) mixed-use projects with greater than 500 units where at least half of the new or converted square footage is designated for residential use and other specific requirements are met; (4) transitional housing or supportive housing; and (5) farmworker housing. (Gov. Code §§ 65589.5(h)(2), 65905.5(b); Pub. Res. Code § 21080.66(a).)
The Project meets this requirement because, as described in the Project application, it will be developed with 100% residential uses.
b. Acreage. The project site must be 20 acres or less, except Builder’s Remedy project sites must be 5 acres or less. (Pub. Res. Code § 21080.66(a)(1).) The Project meets this requirement because it is not a Builder’s Remedy project and the Property is 0.64 acres.
c. Urban area. The project site must be within the boundaries of an incorporated municipality or in an urban area, as defined by the U.S. Census Bureau. (Pub. Res.
Code § 21080.66(a)(2).)
The Project meets this requirement because it is within the City of San Mateo, an incorporated municipality.
d. Infill location. The project site must be an urban infill site, meaning that: (i) the site was previously developed with an urban use; (ii) at least 75% of the perimeter of the site adjoins parcels that are developed with urban uses; (iii) at least 75% of the area within a one-quarter mile radius of the site is developed with urban uses; or (iv) for sites with four sides, at least three sides are developed with urban uses and at least
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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two-thirds of the perimeter of the site adjoins parcels that are developed with urban uses. (Pub. Res. Code § 21080.66(a)(3).)
The Project meets this requirement because the Property is currently developed with a retail center, which qualifies as an “urban use.” The Property also qualifies under the other definitions of urban infill site because it is surrounded on at least 75% of the perimeter, or three of four sides, by urban uses.
e. Environmental siting criteria. The project must meet environmental siting criteria set forth in SB 35/423. To qualify, a site must not be located in any of the following:
1) certain areas of the coastal zone; 2) prime farmland, farmland of statewide importance, or land designated for agricultural protection or preservation; 3) wetlands; 4) a very high fire hazard severity zone (unless certain mitigation measures adopted); 5) a hazardous waste site; 6) a delineated earthquake fault zone; 7) a 100-year flood hazard area or regulatory floodway; 8) lands identified for conservation or under a conservation easement; or 9) habitat for protected species. (Pub. Res. Code § 21080.66(a)(6); Gov. Code § 65913.4(a)(6).)
The Project meets this requirement because the Property does not fall within any of the prohibited categories. Specifically:
i. The Property is not within the coastal zone;
ii. The Property is not on land used or designated for agriculture; iii. The Property is not on a wetland;
iv. The Property is not within a very high fire hazard severity zone, per our review of the Office of the State Fire Marshal’s Fire Hazard Severity Zone maps; v. The Property is not on a hazardous waste site, per our review of the Cortese List of hazardous waste sites;
vi. The Property is not within a delineated earthquake fault zone, per our review of the California Department of Conservation’s Earthquake Hazards Zone Application;
vii. The Property is not within a 100-year flood hazard area nor a regulatory floodway, per our review of FEMA’s National Flood Hazard Layer Viewer;
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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viii. The Property is not on lands identified for conservation or subject to a conservation easement;
ix. The Property is not habitat for protected species.
f. Land use regulations. The project must be consistent with the applicable general plan and zoning ordinance, as well as any applicable local coastal program. If the general plan and zoning ordinance are inconsistent, the project need only be consistent with one. Use of any State Density Bonus Law density bonus, incentive or concession, waiver, or reduced parking ratio shall not be grounds to determine the project is inconsistent with the zoning, general plan, or local coastal program. The housing development shall be deemed consistent if there is substantial evidence that would allow a reasonable person to conclude as such. (Pub. Res. Code § 21080.66(a)(4).) The Project meets this requirement because it is consistent with the land use designations for the Property. The Property is designated “Mixed Use Medium II” in the City’s 2040 General Plan and is within the Central Business Support (“CBD-S”) zoning district. The Mixed Use Medium II designation permits a mix of uses, including residential, with a maximum density range of 51 - 99 dwelling units per acre. The CBD-S zoning district permits residential uses subject to R3 or R4 district minimum development standards and CBD residential development standards. The CBD-S district permits a maximum of 50 dwelling units per acre. This is inconsistent with the minimum density of the Mixed Use Medium II general plan designation. Under AB 130, if the general plan and zoning are inconsistent, then the project shall be deemed consistent with both if it is consistent with one.
Per the Project application, the residential density will be 99 dwelling units per acre which is within the General Plan range for the Property. Because the Project is consistent with the General Plan, it is deemed consistent with the applicable zoning district. Further, because the Project qualifies for a density bonus, any development standards that would preclude development of the Project as designed, such as the R3, R4, or CBD residential development standards, will be waived or reduced. g. Minimum density. The proposed residential density must be at least 50% of the minimum residential density deemed appropriate to accommodate housing for the jurisdiction. Depending on the type of jurisdiction (nonmetropolitan, suburban, or metropolitan), the minimum density ranges from 5 to 15 units per acre. (Gov. Code § 65583.2(c)(3)(B); Pub. Res. Code § 21080.66(a)(5).)
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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The Project meets this requirement because, with a proposed density of 99 dwelling units per acre, it has a greater density than the highest statutory minimum density of 15 units per acre.
h. Historic structures. The project does not require the demolition of a historic structure that was placed on a national, state, or local historic register before the date a preliminary application (as defined) was submitted. (Pub. Res. Code § 21080.66(a)(7).)
The Project meets this requirement because none of the existing structures to be demolished are on a national, state, or local historic register. i. Freeway proximity. For any housing within 500 feet of a freeway, the building: (i) must have a centralized heating, ventilation, and air-conditioning system and the outdoor intakes for that system cannot face the freeway; (ii) must provide air filtration media for outside and return air that provide a minimum efficiency reporting value of 16, which must be replaced as specified; and (iii) must not have any balconies facing the freeway. (Pub. Res. Code § 21080.66(c)(2).)
The project is not within 500 feet of a freeway.
j. Tribal notice. The City must notify all California Native American tribes that are traditionally and culturally affiliated with the project site, and consult with any tribe that elects to be involved, as specified in the statute. Related conditions of project approval may be imposed. (Pub. Res. Code § 21080.66(b).) During preparation of the EIR for the 2040 General Plan, the City identified the following tribes as potentially having local knowledge: 1) Amah Mutsun Tribal Band of Mission San Juan Bautista; 2) Costanoan Rumsen Carmel Tribe; 3) Indian Canyon Mutsun Band of Costanoan; 4) Muwekma Ohlone Indian Tribe of the SF Bay Area; 5) The Ohlone Indian Tribe; and 6) Wuksache Indian Tribe/Eshom Valley Band. Of these, only the Canyon Mutsun Band of Costanoan Ohlohne People responded.
Therefore, it is possible that this tribe will respond to a consultation request for the Project.
k. Phase I environmental site assessment. A Phase I Environmental Site Assessment (“ESA”) must be performed for the project site, and if a recognized environmental condition is found, certain steps must be taken to ensure there is no threat to human health or safety, as specified in the statute. (Pub. Res. Code § 21080.66(c)(1).)
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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A Phase I ESA for the Property was prepared for Prometheus Real Estate Group on June 6, 2025. The report identified three Recognized Environmental Conditions (“RECs”): 1) the presence of fuel-related impacts in sub-surface media due to upgradient gasoline/service stations (one of which received regulatory closure in 2015, the other in 2021); 2) a vapor encroachment condition from offsite sources of TPHg and benzene; and 3) the presence of lead in shallow soil. The Phase I did not identify any Controlled Recognized Environmental Conditions (“CRECs”), Historical Recognized Environmental Conditions (“HRECs”), Business Environmental Risks (“BERs”), de minimis conditions, or significant data gaps.
Significant fuel-related impacts were not identified in shallow soil and were only present in soil collected 20 feet below ground surface or deeper. The Phase I also noted that oxygen levels in the soil have created a bioattenuation zone beneath the property and that vapor mitigation for the current commercial land use is not required. The report stated that the lead levels identified at the site were “commonplace” in the region, were not characterized as a California or Federal Hazardous Waste, and did not extent further down than five feet.
Due to the identified RECs, Prometheus will prepare a Preliminary Endangerment Assessment, as defined in Health & Safety Code Section 78095, to determine if a hazardous substance has been released on the site and what the potential exposure is for future occupants. A Preliminary Endangerment Assessment is currently being prepared by Citadel EHS, and no concerns have been identified to date. Regardless, this document will be reviewed by the San Mateo County Groundwater Protection Program, which will determine whether significant mitigation or ongoing management will be required by the County. Upon receipt of the County’s approval, the City may issue a certificate of occupancy.
Note that the presence of RECs on the Property in no way affects the applicability or timing of the AB 130 CEQA exemption. The only result is an obligation for Prometheus to address the RECs prior to receipt of a certificate of occupancy. l. Transient lodging. For new projects “deemed complete” on or after January 1, 2025, no portion of the project may be designated for use as transient lodging (as defined). “Deemed complete” means that an SB 330 preliminary application or a complete application (pursuant to Gov. Code § 65943) has been submitted for the project. (Pub.
Res. Code § 21080.66(a)(8).)
The Project meets this requirement because none of the proposed components will be used for transient lodging.
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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m. Labor requirements. Any building over 85 feet in height (from grade) is subject to the SB 35 labor standards, including prevailing wage requirements, recordkeeping requirements, additional labor standards for developments over 50 units, and additional skilled and trained workforce requirements. (Pub. Res. Code § 21080.66(d)(2); see Gov. Code § 65913.4(a)(8).) All construction workers employed in the execution of public or private housing development projects where 100% of units will be dedicated to lower income households shall be paid prevailing wages; registered apprentices may be paid the applicable apprentice prevailing rate. (Pub.
Res. Code § 21080.66(d)(1).)
The Project will not be required to comply with the above labor provisions because it will not be over 85 feet in height, nor will 100% of the units be dedicated to lower income households.
II. NEW PROJECT APPROVAL TIMELINE
AB 130 also amended the Permit Streamlining Act (“PSA”) to create a new approval timeline for agencies with approval authority over projects that qualify for the AB 130 CEQA exemption. (Gov. Code § 65950(a)(7).) The amended PSA states that an agency must approve or disapprove the project “[t]hirty days from the conclusion of [the tribal consultation process]” for projects invoking the new CEQA exemption. (Id.)
Additionally, the tribal consultation process itself contains statutory approval timelines that, when combined with the new PSA provisions, establish a single approval timeline for an AB 130 project starting with application completeness, or for applications already deemed complete, when the applicant notifies the City that the project qualifies for AB 130. Because the tribal consultation process can conclude in multiple ways, the exact timing cannot be determined from the outset. At a minimum, if no tribes elect to participate in the consultation, a project must be approved no later than 104 days from the date of application completeness/AB 130 notification. If a tribe elects to participate in the consultation, a project must be approved no later than 178 days from the date of application completeness/AB 130 notification, but may be approved earlier.
At this time, we understand the Project’s application is under review with the City Planning Department. Under AB 130, the approval timeline begins either when the application is deemed complete, or for projects with already completed applications, when the applicant notifies the City that the project qualifies for AB 130. (Gov. Code § 21080.66(b)(1)(A)(i)-(ii); § 65589.5(h)(5).) For the purposes of AB 130, “deemed complete” means the applicant has submitted an SB 330 preliminary application. (Id.) Therefore, if a preliminary application was previously submitted for the Project, Prometheus can start the approval timeline immediately by notifying the City that the Project qualifies for AB 130. Note that the City only has 14 days from the date of application
To: Prometheus Real Estate Group From: David H. Blackwell Date: October 9, 2025
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completeness/AB 130 notification to provide formal notification to tribes. Therefore, we recommend informing the City as soon as possible that the Project will utilize the AB 130 CEQA exemption to ensure that there are no delays once the application is deemed complete or Prometheus makes an AB 130 notification. As stated above, at least one tribe participated in the preparation of the 2024 General Plan, so it is possible that the Project may go through this consultation process.