REPORT TO COUNCIL
SUBJECT
Title
Action on a Letter of Support for AB 2231 (Ahrens): California Environmental Quality Act: Hospital Projects
Report
BACKGROUND
On October 9, 2018, the City Council adopted Resolution No. 18-8611 to approve a Legislative Advocacy Position (LAP) Policy. The LAP Policy establishes clear guidelines for advancing City goals and positions through legislative review and advocacy at the regional, State, and federal levels of government and to provide guidance for City officials who serve on regional, State, and national boards, committees, and commissions when they are asked to review public policy matters and issues.
The LAP Policy provides that, “If a Council policy relative to the legislation does not exist, the issue is politically controversial, or there is significant local interest in the issue, the proposed legislation including a recommendation to support, remain neutral, or not support the legislation is brought to Council for consideration.”
In mid-April, the City received a request from Sutter Health (Sutter) to provide a letter of support for AB 2231 (Ahrens): California Environmental Quality Act: Hospital Projects. The original bill language for AB 2231, which was introduced by Assembly Member Patrick Ahrens, provided California Environmental Quality Act (CEQA) exemptions for two specific hospital projects located in the City of Santa Clara and the City of Emeryville.
AB 2231 was approved on April 20, 2026 by the Assembly Natural Resources Committee with amendments. AB 2231 (Attachment 1), as amended on April 22, 2026, would no longer provide CEQA exemptions, but would instead establish streamlined procedures for the administrative and judicial review of the environmental review and approvals granted for an environmental leadership hospital campus project in the City of Emeryville or in the City of Santa Clara. The measure was referred to the Assembly Appropriations Committee for consideration. On May 11, 2026, the bill passed the Assembly and was ordered to the Senate. AB 2231 has completed its first reading in the Senate and has been sent to the Committee on Rules for assignment.
Staff reviewed the amended bill against the LAP Policy and adopted LAPs and could not determine clear alignment that would allow support outside of full City Council authorization. In accordance with the LAP Policy, the request is presented to the City Council for action.
DISCUSSION
In November 2025, Sutter Health announced plans to build a new hospital on a 13.6-acre site near Levi’s Stadium in Santa Clara and a new parking garage on an adjacent 13.1 acre parcel (collectively, the “Hospital Project”). The Hospital Project proposes to build an eight-story hospital at 2831 and 2841 Mission College Blvd., replacing the two vacant 4-story buildings at that location. A new 8-story parking garage would replace a surface level parking lot at 2811 and 2821 Mission College Blvd. On February 9, 2026, Sutter Health submitted planning applications to allow for the Proposed Hospital Project, which includes a General Plan Amendment, Zoning Amendment, Conditional Use Permit, and Architectural Review Permit. The planning applications are under review by the City.
The Hospital Project proposes to develop an approximately 850,000-square-foot hospital that would feature:
• 302 licensed beds in private patient rooms
• A surgical department with 10 operating rooms
• A full-service emergency department
• A 22-bed intensive care unit
• 16 labor, delivery and recovery suites and 42 perinatal rooms
• 10 advanced operating rooms
• Imaging services would include 2 MRI units, 3 CT scanners, 4 ultrasound rooms, 2 radiography/fluoroscopy rooms, and 2 gastrointestinal endoscopic procedure rooms
• A clinical laboratory, inpatient pharmacy, cafeteria and café, administration, central utility plant, receiving and central supply areas, and a loading dock
• Environmentally responsible building design
• A rooftop helipad for emergency air medical services
• Access for community and community physicians
The location of the proposed Hospital Project is an area that is underserved by health systems. Currently, area residents must travel 20 minutes or more to reach the nearest hospital. As the local population continues to grow and age, the demand for hospital and outpatient services will increase.
The proposed Hospital Project will bridge this gap in care, bringing vital lifesaving services closer to where people in Silicon Valley live and work. The proposed Hospital Project will also create new jobs and boost the local economy, delivering both health and opportunity to the community. Sutter’s new care facilities, including the proposed Hospital Project in the Greater Silicon Valley region are projected to support more than 5,000 jobs once fully open by 2031, including more than 3,000 direct Sutter employee and clinician positions.
AB 2231
AB 2231 aims to expedite the CEQA administrative and judicial review process for the Sutter Health hospital projects in the cities of Santa Clara and Emeryville by requiring courts to resolve lawsuits within 270 days, to the extent feasible.
As amended, the bill would require the City Council of the City of Emeryville or of City of Santa Clara, as the lead agency for the environmental leadership hospital campus project, to certify the proposed Hospital Project for the streamlined judicial review, if it finds the project will meet certain conditions, including:
• The project will result in an investment of at least $1 billion in California upon completion of the construction.
• The project will not result in any net additional greenhouse gas emissions, as specified.
• The project applicant will enter into a legally binding and enforceable community benefits agreement with the City that may include, but is not limited to, any of the following mitigation measures:
o All new buildings within the project will use electricity for the buildings’ energy needs.
o The energy demand of the project will be met by carbon-free energy resources.
o The project will provide an amount of zero-emission vehicle charging stations that meets or exceeds the amount required by law and will provide charging for zero-emission vehicles free of charge.
o Improvements to public transportation operations and service, such as the purchase of zero-emission buses or technology investments.
• The project will achieve a reduction in vehicle miles traveled per capita of at least 15% compared to existing development.
• The project will obtain certification as LEED Gold standard, or better for all new construction that is eligible for LEED certification, from the United States Green Building Council.
• The project applicant will, before the completion of the project, certify to the City that the applicant has completed a health impact review by the Attorney General and will comply with any resulting conditions issued by the Attorney General. This requirement does not apply to a contractor or subcontractors performing work that is subject to a project labor agreement.
• The project will generate at least 500 jobs during construction.
• The project creates high-wage, highly skilled jobs that pay prevailing wages and living wages, employs a skilled and trained workforce, provides construction jobs and permanent jobs for Californians, and helps reduce unemployment.
• The project applicant demonstrates compliance with specified recycling requirements.
• The project applicant agrees that all mitigation measures required by CEQA and any other environmental measures required by the bill become binding conditions of approval, will be monitored for the life of the project, and will provide annual reporting.
• The project applicant agrees to pay the costs of the trial court and the court of appeal in hearing on deciding any case subject to this bill.
• The project application agrees to pay the costs of preparing the record of proceedings for the project concurrently with review and consideration of the project.
AB 2231 would also require the Judicial Council, on or before July 1, 2027, to adopt rules of court establishing procedures requiring actions or proceedings seeking judicial review of the certification of an environmental impact report for an environmental leadership hospital campus project or the granting of any project approval, including any appeals to the court of appeal or the Supreme Court, to be resolved, to the extent feasible, within 270 calendar days of the filing of the certified record of proceedings with the court. The bill would require the lead agency to concurrently prepare the record of proceedings with the environmental review.
At the time of the April 20, 2026 Assembly Committee on Natural Resources, supporters of AB 2231 included: Bay Area Council, California Asian Pacific Chamber of Commerce, California Chamber of Commerce, Civil Justice Association of California, Contra Costa County, Oakland Metropolitan Chamber of Commerce, Private Essential Access Community Hospitals, San Francisco Bay Area Planning and Urban Research Association (SPUR), Silicon Valley Leadership Group, and Sutter Health.
Opposition to AB 2231 at the time included: Planning and Conversation League (if amended), and Western Electrical Contractors Association.
CEQA and Streamlining Efforts
CEQA provides a process to consider and disclose the potential environmental consequences of discretionary projects undertaken or approved by public agencies. Its purpose is to inform agency decision-makers and the public, identify feasible ways to avoid or reduce significant impacts, and, where impacts remain significant and unavoidable, disclose the basis for approving the project.
If a project is not exempt from CEQA, an initial study is typically prepared to determine whether the project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, the lead agency must prepare an Environmental Impact Report (EIR).
An EIR must accurately describe the proposed project, identify and analyze each potentially significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. If mitigation measures are required or incorporated into a project, the agency must also adopt a reporting or monitoring program to ensure those measures are implemented.
Generally, CEQA actions taken by public agencies can be challenged in superior court once the agency approves or determines to carry out the project. CEQA lawsuits are subject to unusually short statutes of limitations. Under current law, court challenges of CEQA decisions generally must be filed within 30-35 days, depending on the type of decision and whether the agency files the applicable notice. The courts are required to give CEQA actions preference over all other civil actions. However, the schedules for briefing, hearing, and decision are less definite. The petitioner must request a hearing within 90 days of filing the petition and, generally, briefing must be completed within 90 days of the request for hearing. There is no deadline specified for the court to render a decision.
In 2011, the State Legislature passed (AB 900) the first CEQA streamlining certification program with the Jobs and Economic Improvement Through Environmental Leadership Act, which created CEQA streamlining for residential, retail, commercial, sports, and recreational use projects that were certified as Environmental Leadership Development Projects (ELDP) by the Governor. The judicial streamlining program <https://lci.ca.gov/ceqa/judicial-streamlining/> was further extended and modified in 2021 and in 2023 the Legislature expanded these same streamlining provisions for certain energy, transportation, and water infrastructure projects.
A 2019 report by the Senate Office of Research entitled “Review of Environmental Leadership Development Projects” tracked the timeline projects receiving CEQA judicial and administrative streamlining from 2011 to 2018. According to the report, 19 projects were submitted to the Governor to be certified as ELDP projects. Of the ones that were selected for certification and moved forward with the project, the report found that no ELDP project was actually reviewed within 270 days. At the time the report was authored, the subject projects had been completed in timelines ranging from 352-578 days.
However, while ELDP projects were not completed within 270 days, the report also found that projects were reviewed under a faster timeline compared to other similar projects. According to the report, the average time for an ELDP comparable project to wind its way through the judicial review process was 3-5 years, meaning that the 1-2-year timeline for ELDP projects represents significant time savings.
Since 2011, over 25 projects have been certified <https://lci.ca.gov/ceqa/judicial-streamlining/archive.html> through the judicial streamlining program. These projects include mixed-use residential projects, renewable energy projects, solar and battery storage projects, water projects, corporate headquarters, and stadium reconstruction projects.
In addition to establishing the ELDP program, the Legislature has approved project specific legislation for certain projects, consistent with the provisions required of ELDP projects. These bills included expedited judicial review and enhanced environmental mitigation provisions for the proposed Farmers Field stadium project in Los Angeles (the project was later abandoned for a competing stadium project that would become SoFi Stadium in Inglewood) in 2011, expedited judicial review and limits on CEQA challenges for Golden One Center (in Sacramento) in 2013, and expedited judicial review for a proposed waterfront ballpark in Oakland in 2018.
As AB 2231 would require the Judicial Council to adopt rules of court establishing procedures requiring actions or proceedings seeking judicial review of the certification of an environmental impact report for an environmental leadership hospital campus project or the granting of any project approval, including any appeals to the court of appeal or the Supreme Court, to be resolved, to the extent feasible, within 270 calendar days of the filing of the certified record of proceedings with the court, this would streamline the judicial review process for the Sutter Health Hospital Project.
Staff Review and Coordination
Staff has been meeting with Sutter Health on the Hospital Project, which has been submitted to Community Development Department (CDD) as a formal application for review. At this time, CDD is conducting a technical analysis to prepare for the entitlement review through a public hearing process including the environmental review. In addition, staff is also working on the fiscal impacts for the Development Agreement.
While there is no direct LAP alignment, staff recommends providing a letter of support for AB 2231, which will streamline the CEQA judicial review process for the proposed Hospital Project in Santa Clara. The proposed Hospital Project, if approved, will be a significant local and regional asset for the region in terms of both economic development and health care services.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that taking a position on legislation is an administrative activity that does not approve, fund, or otherwise commit the City to any project that may result in direct or reasonably foreseeable indirect physical changes in the environment. The letter would express the City’s legislative position only and the City will still retain full discretion to act on the Hospital Project’s discretionary approvals. Accordingly, a position on legislation is not a project under CEQA.
FISCAL IMPACT
The Sutter Health project in Santa Clara is anticipated to employ approximately 1,752 people onsite and an 151 physicians/providers would provide services at the hospital. Additional information about the project and its fiscal impacts will be provided on future agenda items.
COORDINATION
This report was coordinated with the Community Development Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Approve the request for a letter of support for AB 2231 (Ahrens): California Environmental Quality Act: hospital projects and authorize Mayor Gillmor to sign the letter on behalf of the City of Santa Clara.
Staff
Reviewed by: Christine Jung, Deputy City Manager
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. AB 2231: California Environmental Quality Act: Hospital Projects (As Amended on April 22, 2026)
2. Draft Letter of Support