Walnut Creek: Safeway, residents' group settle over The Orchards project:

Opponents of a new Safeway development in eastern Walnut Creek agreed to drop a lawsuit in exchange for $125,000 from the grocery giant.

In July, a group called Friends of Walnut Creek filed a lawsuit in Contra Costa Superior Court against Safeway; its development company, PDC; and the city of Walnut Creek, challenging the environmental impact report and approval of The Orchards.

Already under construction, The Orchards is a 24-acre project at the intersection of Ygnacio Valley and Oak Grove roads set to include a new 55,000-square-foot Safeway store and other shops, plus open space and senior housing. The City council approved the project June 17.

The crux of the group's argument was that the city illegally committed to the project before the public could offer its opinions and that the environmental impact report failed to address serious project impacts such as how the opening of a new Safeway store would affect the nearby Nob Hill supermarket and the effect on the neighborhood if Nob Hill closes. In the end, the group settled for money because it saw the writing on the wall, said Steve Elster, attorney and leader of Friends of Walnut Creek.

Information uncovered during litigation "made it crystal clear to us that the City Council was going to approve a supermarket no matter what, and even if a supplemental EIR disclosed significant impacts from the closure of Nob Hill, the City Council's position was unlikely to budge," Elster said.

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He pointed to internal emails between city staffers, officials and consultants showing a new Safeway store appeared to be a given, even though elected city leaders said the planning for any development on the 24-acre parcel was an open public process and nothing had so far been decided.

"The goal of the litigation was not to obtain money from Safeway," Elster said. "We truly hoped to see the city fully disclose and evaluate these ignored impacts from building a supermarket in the development."

The city attorney and Safeway have said the law was followed and that the suit had no merit.

PDC agreed to the settlement because it was in its best interest, "but most importantly (for) the many residents and community members who are eager to see the project move forward," said Deb Karbo, the company's vice president of development.

To be clear, she said, PDC and Safeway believe all the approvals and the environmental report were thoroughly analyzed and complied with the California Environmental Quality Act.

"The council and commissions' approvals were based on a true, collaborative process between the residents, PDC and the city to create a project that Walnut Creek can be proud of for many years to come," Karbo said.

Elster said the money will go toward local environmental protection and enhancements -- specifically, to put an initiative on a future ballot so Walnut Creek voters can decide on upcoming developments, he said. Elster said the wording of such an initiative would be up to the group, which will meet early next year to discuss it. But it makes sense, he said, that such an initiative may deal with future developments for which environmental impacts are being ignored.

"We ultimately concluded that having the resources to put issues on a citywide ballot is likely to be the only effective way to see that the quality of life in Walnut Creek is not further sacrificed by our City Council," he said. And while such an initiative would not change the outcome of Safeway's development, the ordeal has galvanized a community and made it better prepared for the future, Elster said.

"The response from the community to Safeway's proposal means any future developer should think long and hard about a proposal that will impose environmental impacts on us, even if the City Council is happy to greenlight developments without adequate consideration of all environmental impacts."

Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.