                   FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

INTERNATIONAL CHURCH OF THE              
FOURSQUARE GOSPEL,
                  Plaintiff-Appellant,
                  v.
CITY OF SAN LEANDRO; TONY
SANTOS; SURLENE G. GRANT; DIANA                 No. 09-15163
M. SOUZA; JOYCE R. STAROSCIACK;                   D.C. No.
BILL STEPHENS; JIM PROLA, in their
official capacities; JOHN JERMANIS;         3:07-cv-03605-PJH
                                               ORDER AND
DEBBIE POLLART, in their official               AMENDED
and individual capacities,                       OPINION
              Defendants-Appellees,
                  v.
FAITH FELLOWSHIP FOURSQUARE
CHURCH,
   Real-Party-in-Interest-Appellant.
                                         
        Appeal from the United States District Court
           for the Northern District of California
        Phyllis J. Hamilton, District Judge, Presiding

                 Argued and Submitted
       November 3, 2010—San Francisco, California

                   Filed February 15, 2011
                   Amended April 22, 2011




                              5289
5290          INTERNATIONAL CHURCH v. SAN LEANDRO
        Before: John T. Noonan and Richard A. Paez,
 Circuit Judges, and Kevin Thomas Duffy, District Judge.*

                    Opinion by Judge Duffy




   *The Honorable Kevin Thomas Duffy, United States District Judge for
the Southern District of New York, sitting by designation.
5292         INTERNATIONAL CHURCH v. SAN LEANDRO


                          COUNSEL

Kevin T. Snider and Matthew B. McReynolds, Pacific Justice
Institute, Sacramento, California, for plaintiff-appellant Inter-
            INTERNATIONAL CHURCH v. SAN LEANDRO            5293
national Church of the Foursquare Gospel and real party in
interest-appellant Faith Fellowship Foursquare Church.

Jayne W. Williams, Deborah J. Fox, and Philip A. Seymour,
Meyers, Nave, Riback, Silver & Wilson, Los Angeles, Cali-
fornia, for defendant-appellee City of San Leandro.

Daniel P. Dalton, Royal Oak, Michigan, Amicus Counsel for
the Church State Council and Cavalry Chapel in Support of
plaintiff-appellant International Church of the Foursquare
Gospel.

Jennifer McGrath and Scott F. Field, Huntington Beach, Cali-
fornia, Amicus Counsel for the League of California Cities in
Support of defendant-appellee City of San Leandro.


                           ORDER

  The Opinion, filed on February 15, 2011, and reported at
634 F.3d 1037 (9th Cir. 2011), is amended as follows:

   At Slip Op. 2447, 634 F.3d at 1043, the sentence: <There
is no dispute that the City’s treatment of the Church’s applica-
tions constitutes an “individualized assessment.”> is deleted
and replaced with the sentence: <The City’s treatment of the
Church’s applications constitutes an “individualized assess-
ment.” Guru Nanak Sikh Society of Yuba City v. County of
Sutter, 456 F.3d 978, 987 (9th Cir. 2006).>

  In the following sentence at Slip Op. 2447, 634 F.3d at
1043, the words <Nor is there dispute that> are deleted and
replaced with <Further,>.

  At Slip Op. 2247, 634 F.3d at 1044, the full cite to <Guru
Nanak Sikh Society of Yuba City v. County of Sutter, 456 F.3d
978, 985-86 (9th Cir. 2006).> is deleted and replaced with the
short cite: <Guru Nanak, 456 F.3d at 985-86.>.
5294         INTERNATIONAL CHURCH v. SAN LEANDRO
  At Slip Op. 2247, 634 F.3d at 1044, the word <deter-
mined> is deleted and replaced with <determine>.

  An Amended Opinion is filed concurrently with this Order.

  With these amendments, the panel has voted to DENY the
petition for panel rehearing. The full court has been advised
of the petition for rehearing en banc and no judge has
requested a vote on whether to rehear the matter en banc. Fed.
R. App. P. 35. The petition for rehearing en banc is DENIED.

  No further Petitions for Rehearing shall be filed.


                          OPINION

DUFFY, District Judge:

   International Church of the Foursquare Gospel (“ICFG”)
appeals the grant of summary judgment in favor of the City
of San Leandro (the “City”). ICFG alleges violations of the
Religious Land Use and Institutionalized Persons Act, 42
U.S.C. § 2000cc (“RLUIPA”), and asserts claims under 42
U.S.C. § 1983 for First and Fourteenth Amendment viola-
tions. ICFG contends that the City violated its rights by deny-
ing a rezoning application and a conditional use permit
(“CUP”) to its local affiliate, Faith Fellowship Foursquare
Church (“the Church”), to build new church facilities on cer-
tain industrial land in the City, and that such a denial violated
the “substantial burden” and “equal terms” provisions under
RLUIPA.

   We find that there is a triable issue of material fact regard-
ing whether the City imposed a substantial burden on the
Church’s religious exercise under RLUIPA. We also decide
that the City failed as a matter of law to prove a compelling
interest for its actions. Accordingly, we reverse the judgment
               INTERNATIONAL CHURCH v. SAN LEANDRO                     5295
of the district court and remand for further proceedings con-
sistent with this opinion.1

I.   Background2

   The Church is a congregation affiliated with ICFG and
located in San Leandro. Over the last fifteen years, the
Church’s membership has increased dramatically, and since
2005, the Church’s present location has been too small to sup-
port its large congregation and its many activities.

   In January 2006, the Church began to look for a larger
property. In February 2006, the Church found a site located
on two parcels at 14600 and 14850 Catalina Street in San
Leandro (“the Catalina property”). The Catalina property is
located in San Leandro’s Industrial Park (“IP”) zoning district
and is situated in the “West San Leandro Focus Area.” The
area was set aside in the City’s General Plan3 to preserve an
environment for industrial and technological activity. The
property is adjacent to several manufacturing plants and is
surrounded by numerous other industrial and light-industrial
uses.
   1
     Because we hold that the district court improperly granted summary
judgment as to whether the City’s actions created a substantial burden, we
have no need to address whether the City violated the Equal Terms provi-
sion of RLUIPA or the Church’s First and Fourteenth Amendment rights.
In the event that Appellants do not prevail on remand, they may raise these
remaining challenges in any subsequent appeal.
   2
     This summary draws extensively from the district court opinion, Int’l
Church of the Foursquare Gospel v. City of San Leandro, 632 F. Supp. 2d
925 (N. D. Cal. 2008).
   3
     Under California law, a General Plan is “a statement of development
policies and shall include a diagram . . . and text setting forth objectives,
principles, standards, and plan proposals.” It must also include designated
elements. Cal. Gov’t Code § 65302. In California, zoning laws must con-
form to the General Plan. Neighborhood Action Group v. Cty. of Calav-
eras, 156 Cal. App. 3d 1176, 1183, 203 Cal. Rptr. 401 (1984).
5296        INTERNATIONAL CHURCH v. SAN LEANDRO
   ICFG asserts that moving the Church to the Catalina prop-
erty would allow the congregation to more fully follow their
sincerely held beliefs. In particular, the Catalina property
could accommodate 1,100 people in the sanctuary and an
additional 500 people in other activities (such as Sunday
school) during each service. The Catalina property would also
offer substantial parking space and a much larger kitchen
facility. On March 24, 2006, the Church signed a purchase
and sale agreement for the property.

  At the time that the Church identified the Catalina property
as a potential site for the Church, the San Leandro Zoning
Code (“the Zoning Code”) did not allow “assembly uses” —
churches and private or non-profit clubs, lodges, and organi-
zations — to locate in the IP district or other industrial or
commercial districts of the City, but did allow them to locate
in districts zoned Residential (“R”), provided the assembly
use obtained a conditional use permit.

   In May 2006, representatives of the Church met with City
Planning staff to discuss the acquisition of the Catalina prop-
erty. According to Debbie Pollart, the City’s then Planning
Director, staff advised the Church that religious assembly
uses were conditionally permitted uses in the City’s R zoning
district only, and that the Zoning Code did not permit assem-
bly uses within the IP district. However, “entertainment activ-
ities” and “commercial recreation” were conditionally
permitted within the IP district. The Planning staff further
advised the Church that in order for it to relocate to the Cata-
lina property, two changes to the Zoning Code would be
needed: (1) an amendment of the Zoning Code to make
assembly a conditionally permitted use in the Industrial Lim-
ited (“IL”) zoning district; and (2) an amendment of the zon-
ing map to designate the Catalina property as IL. Following
these instructions, the Church filed an application for a zoning
map amendment, asking for the Catalina property to be
rezoned from IP to IL and asking for assembly use to be per-
mitted on IL properties in the City.
             INTERNATIONAL CHURCH v. SAN LEANDRO            5297
   Although the Planning staff advised the Church to apply for
an amendment to the Zoning Code to make assembly a condi-
tionally permitted use in IL districts, the Planning staff soon
realized that such an amendment would have city-wide rami-
fications. The Planning staff discussed these policy concerns
after the Church applied for rezoning of the Catalina property.
Pollart was particularly concerned about the potential for con-
flict between industrial and assembly uses. She felt there was
a need to protect assembly uses from unacceptable impacts
such as noise, dust, or constant truck traffic. Pollart similarly
wanted to protect industrial uses from complaints by assembly
uses. Pollart was equally concerned that industrial and com-
mercial uses could be displaced by assembly uses, which
could hurt the City’s industrial and economic base.

   On June 8, 2006, the City Council’s Business Development
Subcommittee (comprised of the Mayor of San Leandro plus
two members of the San Leandro City Council) met and dis-
cussed the Church’s application to use the Catalina property.
They expressed concerns over the policy implications of
allowing an assembly use in an industrial zone.

   Planning staff therefore advised the Church by letter that
the Church’s request would require careful analysis by Staff
and would be considered at public hearings by numerous civic
advisory bodies, the Planning Commission, the Board of Zon-
ing Adjustments, and, ultimately, the City Council to ensure
that any such change was consistent with the City’s General
Plan. The letter further advised that the Planning Staff antici-
pated that these hearings would take place in the Fall of 2006.

   In October 2006, Church representatives addressed the City
Council during the “public comment” portion of the Council
meeting, informing the Council about the proposed purchase
of the Catalina property and the delays that the City had alleg-
edly caused in the review process. At this point, the Planning
staff had developed two legislative options by which the City
could expand the accommodation of assembly uses in non-
5298        INTERNATIONAL CHURCH v. SAN LEANDRO
residential districts. Option 1 would make assembly use a
conditionally permitted use in all areas zoned IL, which
would increase the area in which assemblies were allowed by
about 94 acres. Option 2 would create a new “Assembly Use
Overlay District,” which, when applied to any non-residential
property, would make assemblies an allowable use in addition
to those allowed under the pre-existing zoning. Option 2
would also apply the Assembly Use (“AU”) Overlay designa-
tion to certain non-residential properties identified by Plan-
ning Staff as suitable for assembly use, according to criteria
staff had developed from the City’s General Plan. Option 2
would increase the area in which assemblies are allowed by
over 200 acres.

   On October 12, 2006, the City Council’s Business Devel-
opment Subcommittee met and discussed the Church’s appli-
cation. Church representatives attended the meeting, and the
two options were presented. After the presentation, the mem-
bers of the Subcommittee expressed a strong preference for
the second alternative—the overlay zoning approach—
because it appeared to provide greater opportunities for
expansion of religious and other assembly uses in the City.

  On October 19, 2006, the Board of Zoning Adjustments
and the Planning Commission held a joint session during
which they discussed the Church’s application. Pollart
explained that the two options were designed to lay the
groundwork for accommodating religious and secular assem-
bly uses in non-residential areas, though neither option would
immediately affect the Catalina property. If Option 1 were
approved, the Church would need to obtain rezoning of the
property to IL, an amendment for which the Church had
applied five months earlier. If Option 2 were approved, the
Church would need to obtain rezoning of the property to “AU
Overlay.”

   The Church’s senior pastor, Gary Mortara, urged the City
to act quickly, as the Catalina property had been in escrow
            INTERNATIONAL CHURCH v. SAN LEANDRO            5299
since February and the Church was obliged to complete its
purchase by October 31, 2006. In response, Pollart explained
that under either option, the Church’s use of the Catalina
property could not feasibly be made allowable by October 31.
At the close of the meeting, the City decision makers
expressed a preference for Option 2. After the October 19,
2006 joint work session, the Planning Staff continued to
refine the criteria for selection of properties for inclusion in
the AU Overlay zone and began drafting proposed text for the
actual Zoning Code amendments that would create the AU
Overlay zoning classification and regulations.

   On October 23, 2006, the Church signed an amendment to
the purchase and sale agreement and paid an additional
$50,000 nonrefundable fee to extend the agreement to
December 31, 2006.

   On December 7, 2006, the Board of Zoning Adjustments
reviewed the proposal for the AU Overlay zone. Planning
Staff recommended that the Board review the proposed
amendments and make comments that would be forwarded to
the Planning Commission.

   On December 29, 2006, the Church closed escrow on the
Catalina property with a final down payment of $53,903.39.
According to ICFG, the Church could not obtain any further
extensions. ICFG claims that Church believed there was a
“strong likelihood” that the application would be approved by
the City based on statements by City officials that other
amendments for assembly uses by commercial, recreation,
and entertainment businesses had been previously approved,
and also based on supportive statements by City officials at
public meetings. On January 2, 2007, the deed of trust was
recorded in Alameda County Recorder’s Office in the names
of ICFG and the Church.

  On February 22, 2007, the Planning Commission con-
ducted a public hearing on the proposed AU Overlay zoning
5300           INTERNATIONAL CHURCH v. SAN LEANDRO
amendments. Planning Staff presented the Planning Commis-
sion with the proposed amendments that would replace all ref-
erences to “religious assembly” and “clubs and lodges” with
a religiously neutral category of “assembly use,” and would
also create the new AU Overlay District. Staff further indi-
cated that they had identified nearly 200 properties as suitable
for AU Overlay designation using eight criteria that they
developed after consulting applicable General Plan policies.4
At the close of the public hearing, the Planning Commission
unanimously recommended that the City Council approve the
proposed amendments.

   On March 19, 2007, the City Council approved the AU
Overlay District and Map amendments, effective on May 1,
2007, passing an ordinance that consolidated and equalized
treatment of secular and religious assembly uses, and estab-
lishing a new AU Overlay District. The City Council applied
the new AU Overlay designation to the 196 properties (over
200 acres total) that Staff had identified as suitable. Based on
the selection criteria that had been utilized to select properties
for inclusion in the AU Overlay District, the City Council
determined that the Catalina property should not be included
in the new zone.
  4
    The eight criteria are as follows: (1) the site is not located along a
major commercial corridor; (1) the site is not located along a major com-
mercial corridor; (2) the site is not located within certain General Plan
Focus Areas (Downtown, Bayfair, Marina Blvd./SOMAR, or West San
Leandro); (3) the site is not located in regional-serving retail area (Green-
house Marketplace, Westgate, Marina Square, or “old” Target site); (4) the
site is not located inside the one-half mile study area identified for Down-
town Transit-Oriented Development Strategy; (5) the site abuts or is
within one-quarter mile of an arterial street; (6) the site is not located in
a Residential zone; (7) the site is not considered public land, and is not
zoned Public Service, Open Space, or Commercial Recreation; is not
owned by an Exempt Public Agency or leased/owned by a public utility;
and (8) the overlay area must allow a contiguous area greater than or equal
to two acres.
            INTERNATIONAL CHURCH v. SAN LEANDRO           5301
   On March 20, 2007, representatives of the Church filed an
application to amend the zoning of the Catalina property from
“IP” to “IP (AU) with Assembly Use Overlay.” On April 12,
2007, the Planning Commission conducted a public hearing
on the rezoning application. After considering the eight
criteria listed above, the Planning Staff recommended that the
Planning Commission deny the Church’s application for the
zoning amendment. The report stated that the Catalina prop-
erty did not meet two of the criteria because the property is
located within one of the General Plan Focus Areas—the
West San Leandro Business District (in violation of criteria
2); and the property does not abut or is not located within 1/4
mile of an arterial street (in violation of criteria 5).

   The report added that the site failed to meet additional
criteria of public health and safety, because the presence and
potential future presence of hazardous materials and activities
in the vicinity of the Church’s proposed assembly use ren-
dered it inappropriate for rezoning within the AU Overlay
District. This last conclusion was based on the fact that there
were eight businesses operating under a Hazardous Materials
Business Plan (“HMBP”) within 500 feet of the Catalina
property and an additional thirteen businesses operating under
a HMBP within 500 feet and one-quarter mile of the site.
However, of the 196 properties included in the AU Overlay
District, all of them are located within 1/4 mile of a business
which has a HMBP. Following the close of the public hearing,
the Planning Commission voted to deny the Church’s applica-
tion.

   The Church appealed this decision to the City Council on
April 16, 2007. On May 7, 2007, the City Council met to con-
sider the appeal and denied it in a unanimous vote. The pri-
mary ground for denying the rezoning application was that it
did not meet two of the eight criteria as noted above.

  Meanwhile, on March 28, 2007, the Church had submitted
an application for a conditional use permit for a proposed
5302          INTERNATIONAL CHURCH v. SAN LEANDRO
assembly use at the Catalina property, under the existing zon-
ing. Pollart reviewed the application and determined that it
could not be processed because it was incomplete. On April
25, 2007, she notified the Church that the application was
missing information relating to proposed use and construction
at the site. Pollart stated that the Church did not respond to the
letter or submit the required information. Thus, she took no
further action regarding the application. She stated that she
understood that a complete application was eventually sub-
mitted to the City and processed at the Church’s request, even
though the rezoning to allow assembly uses on the Catalina
property without a conditional use permit had been denied.
The conditional use permit application was eventually denied
by the Planning Commission, and the City Council on appeal,
because of inconsistency with the zoning and additional fac-
tors such as inadequate parking space. This litigation ensued.

II.    The District Court’s Ruling

   The district court granted summary judgment for the City.
The district court first concluded that the City’s denial of the
Church’s rezoning and CUP applications did not violate the
substantial burden provision of RLUIPA. The court reasoned
that a zoning law, as a neutral law of general applicability,
can impose only an incidental burden, and does not trigger
RLUIPA’s strict scrutiny standard. Int’l Church of the Four-
square Gospel v. City of San Leandro, 632 F. Supp. 2d 925,
937 (N.D. Cal. 2008).

   Consequently, the district court concluded that the City’s
stated interest, to reserve the Catalina property located in the
West San Leandro Business District for industrial use, was
legitimate, and granted summary judgment on this claim in
favor of the City. Id. at 941-42. The district court also rejected
the Church’s contention that the City’s conduct violated the
Equal Terms provision of RLUIPA, as well as its First and
Fourteenth Amendment claims. Id. at 947-55.
              INTERNATIONAL CHURCH v. SAN LEANDRO         5303
III.   Analysis

A.     Standard of Review

   We review a grant of summary judgment de novo. San Jose
Christian College v. City of Morgan Hill, 360 F.3d 1024,
1029 (9th Cir. 2004). This court “must determine, viewing the
evidence in the light most favorable to the nonmoving party,
whether there are any genuine issues of material fact and
whether the district court correctly applied the relevant sub-
stantive law.” Id. at 1029-30 (internal quotations and citation
omitted).

B.     The Religious Land Use and Institutionalized Persons
       Act (RLUIPA)

   [1] RLUIPA provides that a government land-use regula-
tion “that imposes a substantial burden on the religious exer-
cise of a . . . religious assembly or institution” is unlawful
“unless the government demonstrates that imposition of the
burden . . . is in furtherance of a compelling governmental
interest; and is the least restrictive means of furthering that
compelling governmental interest.” 42 U.S.C. § 2000cc(a)(1).
Thus, RLUIPA analysis proceeds in two sequential steps.
First, the plaintiff must demonstrate that a government action
has imposed a substantial burden on the plaintiff’s religious
exercise. Second, once the plaintiff has shown a substantial
burden, the government must show that its action was “the
least restrictive means” of “further[ing] a compelling govern-
mental interest.” Id.

   As a preliminary matter, RLUIPA applies if “. . . [the] bur-
den is imposed in the implementation of a land use regulation
or system of land use regulations, under which a government
makes . . . individualized assessments of the proposed uses for
the property involved.” 42 U.S.C. § 2000cc(a)(2)(C). The
City’s treatment of the Church’s applications constitutes an
“individualized assessment.” Guru Nanak Sikh Society of
5304         INTERNATIONAL CHURCH v. SAN LEANDRO
Yuba City v. County of Sutter, 456 F.3d 978, 987 (9th Cir.
2006). Further, the City’s Zoning Code undeniably is a “sys-
tem of land use regulations” within the meaning of RLUIPA
because it is a system of “zoning [laws] . . . that limits or
restricts a claimant’s use or development of land . . . .” 42
U.S.C. § 2000cc-5(5).

1.   The district court erred in holding that, as a matter of
     law, the City’s actions did not impose a substantial bur-
     den on the Church’s exercise of religion within the mean-
     ing of RLUIPA.

   [2] Congress passed RLUIPA to reinstate the strict scru-
tiny standard that had been applied—prior to Smith— to cer-
tain laws, including generally applicable, facially neutral
zoning laws pursuant to which governments may make “indi-
vidualized assessments” of the property at issue. See Guru
Nanak, 456 F.3d 978, 985-86; 42 U.S.C. § 2000cc(a)(2)(C).

   [3] In this case, while the zoning scheme itself may be
facially neutral and generally applicable, the individualized
assessment that the City made to determine that the Church’s
rezoning and CUP request should be denied is not. We have
never held that a zoning regulation cannot impose a substan-
tial burden under RLUIPA simply by the fact that it is a zon-
ing regulation. See id. at 985-92 (specifically rejecting the
county’s contention that its denial of the CUP at issue in that
case falls outside the scope of RLUIPA because “its use per-
mit process is a neutral law of general applicability,” id. at
986); San Jose Christian College, 360 F.3d at 1033-36.
Rather, our practice is to examine the particular burden
imposed by the implementation of the relevant zoning code
on the claimant’s religious exercise and determine, on the
facts of each case, whether that burden is “substantial.” Guru
Nanak, 456 F.3d at 987.

   [4] The district court, by concluding that the Zoning Code
as a neutral law of general applicability could impose only an
            INTERNATIONAL CHURCH v. SAN LEANDRO             5305
incidental burden on religious exercise, committed reversible
legal error. This conclusion misinterprets our precedent and
effectively writes RLUIPA’s substantial burden provision out
of RLUIPA.

   [5] Therefore, we must first address whether the City’s
denial of the Church’s rezoning application substantially bur-
dened the Church’s religious exercise within the meaning of
RLUIPA. The “substantial burden” provision of RLUIPA,
§ 2000cc(a)(1), provides:

    No government shall impose or implement a land
    use regulation in a manner that imposes a substantial
    burden on the religious exercise of a person, includ-
    ing a religious assembly or institution, unless the
    government demonstrates that imposition of the bur-
    den on that person, assembly, or institution—

    (A) is in furtherance of a compelling interest; and

    (B) is the least restrictive means of furthering that
    compelling governmental interest.

42 U.S.C. § 2000cc(a)(1). ICFG bears the burden to prove
that the City’s land use regulation or denial of conditional use
permit imposed a substantial burden on its religious exercise.
See § 2000cc-2(b); Guru Nanak Sikh Soc’y of Yuba City v.
Cnty. of Sutter, 456 F.3d 978, 988 (9th Cir. 2006). Generally,
the term “substantial burden” in RLUIPA is construed in light
of federal Supreme Court and appellate jurisprudence involv-
ing the Free Exercise Clause of the First Amendment prior to
the Court’s decision in Emp’t Div. Dep’t of Human Res. of
Oregon v. Smith, 494 U.S. 872, 878-82 (1990). Guru Nanak,
456 F.3d at 985-86, 988.

   [6] Accordingly, we have held that a substantial burden
“must place more than inconvenience on religious exercise.”
Id. at 988 (internal quotations and citation omitted). “[F]or a
5306         INTERNATIONAL CHURCH v. SAN LEANDRO
land use regulation to impose a ‘substantial burden,’ it must
be ‘oppressive’ to a ‘significantly great’ extent. That is, a
‘substantial burden’ on ‘religious exercise’ must impose a sig-
nificantly great restriction or onus upon such exercise.” San
Jose Christian College, 360 F.3d at 1034 (citation omitted);
see also Guru Nanak, 456 F.3d at 988-89. A substantial bur-
den exists where the governmental authority puts “ ‘substan-
tial pressure on an adherent to modify his behavior and to
violate his beliefs.’ ” Guru Nanak, 456 F.3d at 988 (quoting
Thomas v. Review Bd. of the Ind. Emp’t Sec. Div., 450 U.S.
707, 717-18 (1981)). If ICFG establishes a substantial burden,
the burden of proof shifts and the City must then show that
the restrictions are narrowly tailored to accomplish a compel-
ling government interest. See 42 U.S.C. §§ 2000cc(a)(1),
2000cc-2(b); Guru Nanak, 456 F.3d at 992.

   Here, the Church offered evidence from its realtor and a
former City Manager that no other suitable sites exist in the
City to house the Church’s expanded operations. However,
the district court found that this evidence was not sufficient to
create a triable issue of fact on the burden placed on the
Church. The district court instead held that the Church did not
adequately demonstrate that its realtor was qualified to deter-
mine whether suitable sites exist in the City. The district court
simply rejected the realtor’s evaluation, which was based on
the Church’s stated requirements, rather than on a detailed
and objective analysis of all the plots in the AU Overlay Dis-
trict. The district court also noted that it found the realtor’s
comments vague. Int’l Church, 632 F. Supp. 2d at 942-43.
Further, the district court concluded that the former City Man-
ager’s testimony that there were no other buildings in the City
to which the Church could acceptably relocate meant only
that there were no other buildings ready for occupancy that
met the Church’s requirements, not that there were no other
sites that were objectively reasonable alternatives for the
Church in the City.

 [7] As a rule, in order to raise a fact issue for trial, the non-
moving party must present more than a “mere . . . scintilla of
             INTERNATIONAL CHURCH v. SAN LEANDRO            5307
evidence” to defeat a motion for summary judgment. Ander-
son v. Liberty Lobby, 477 U.S. 242, 252 (1986). Here, the dis-
trict court erred by dismissing the Church’s realtor’s
assertions out of hand. The Church’s realtor presented signifi-
cant evidence that no other suitable properties existed: he
examined each of the 196 parcels rezoned for assembly use,
and found them unsuitable for the needs of a large religious
congregation. Of the several properties suggested by the City,
only a lumber yard was even listed for sale and it was under
contract. Other properties—including a Kraft factory, a shop-
ping center, and a mobile home park—were deemed unsuit-
able because of size, configuration, safety issues, and current
uses. We are persuaded by Westchester Day School, in which
the Second Circuit accepted the religious school’s experts’
testimony as conclusive evidence that the specified property
was the only site that would accommodate its new building.
504 F.3d at 352. In this case, even if the Church’s realtor’s
deposition testimony is not of the quality required to support
granting summary judgment in favor of the Church, it is cer-
tainly more than the scintilla of evidence required to defeat
summary judgment. The City Manager’s testimony, along
with the practical considerations of locating sufficient neigh-
boring residential properties to accommodate a facility much
larger than the average neighborhood church, constitutes
some evidence that suitable residential property in the City
was not available for the Church.

   The district court also held that the denial of the Church’s
application to include the Catalina property in the AU zoning
district and the denial of its CUP application to use the Cata-
lina property did not impose a substantial burden, as a matter
of law, even if no other property is available for the Church
to expand in the way it has requested. In support of this con-
clusion, the district court cited to cases that held that the
denial of zoning permits to religious entities did not constitute
substantial burdens when other viable sites in the relevant
jurisdiction ultimately existed, see San Jose Christian Col-
lege, 360 F.3d at 1035; Civil Liberties for Urban Believers v.
5308         INTERNATIONAL CHURCH v. SAN LEANDRO
City of Chicago, 342 F.3d 752, 761-62 (7th Cir. 2003); Petra
Presbyterian Church v. Vill. of Northbrook, 489 F.3d 846,
850-51 (7th Cir. 2007). However, the cited cases do not sup-
port the district court’s determination. In fact, our sister cir-
cuit has held “that a burden need not be found insuperable to
be held substantial.” Westchester Day Sch. v. Vill. of Mamar-
oneck, 504 F.3d 338, 349 (2d Cir. 2007) (citation omitted).
And when the religious institution “has no ready alternatives,
or where the alternatives require substantial ‘delay, uncer-
tainty, and expense,’ a complete denial of the [religious insti-
tution’s] application might be indicative of a substantial
burden.” Id. (citation omitted).

   The City, citing Civil Liberties for Urban Believers v. City
of Chicago, 342 F.3d 752 (7th Cir. 2003), argues that just
because suitable properties are not available for sale on the
market does not mean that the denial of the Church’s desired
site imposes a substantial burden because RLUIPA does not
insulate religious institutions from “the harsh realit[ies] of the
marketplace [that] sometimes dictate that certain facilities are
not available to those who desire them.” Civil Liberties for
Urban Believers, 342 F.3d at 761. We are not persuaded by
this case for several reasons. For one thing, Civil Liberties for
Urban Believers was decided in a circuit that requires a gov-
ernment action to render “religious exercise . . . effectively
impracticable” in order to qualify as a substantial burden
under RLUIPA. Id. at 761. This higher standard has been
rejected in this circuit. See Guru Nanak, 456 F.3d at 989 n.12.
Also, in a later decision, the Seventh Circuit found that the
denial of a church’s rezoning application was a substantial
burden even though the church:

    could have searched around for other parcels of land
    (though a lot more effort would have been involved
    in such a search than, as the City would have it, call-
    ing up some real estate agents), or it could have con-
    tinued filing applications with the City, but in either
             INTERNATIONAL CHURCH v. SAN LEANDRO            5309
    case there would have been delay, uncertainty, and
    expense.

Sts. Constantine and Helen Greek Orthodox Church, Inc. v.
City of New Berlin, 396 F.3d 895, 901 (7th Cir. 2005). The
Seventh Circuit further stated “[t]hat the burden would not be
insuperable would not make it insubstantial.” Id.

   The Church responds that the marketplace in the City wel-
comed them, as evidenced by the fact that they were able to
contract to purchase the Catalina property and that common
sense dictates whether alternate sites are suited and for sale in
the City must be considered in determining whether the City’s
denial of the necessary permits for the desired property con-
stitutes a substantial burden. This argument resonates with the
reality the Church would face in attempting to find alternate
sites in the City and, in effect, whether the denial of its
requested zoning relief would actually result in a substantial
burden to its religious exercise within the meaning of
RLUIPA.

   [8] Further, the district court’s dismissal of the Church’s
assertion that there was no other property suitable to accom-
modate its religious use in the City is based, at least in part,
on its improper scrutiny of the Church’s core religious beliefs.
The district court rejected the Church’s assertion that its
“unique core beliefs” require it to be able to meet in one place
to engage in “joyous corporate worship.” The Church alleges
that one of its core beliefs is that “Sunday morning services
are the local expression of . . . the congregation . . . com[ing]
together to form one body with Jesus Christ as its head.” The
Church’s beliefs also require it to hold Sunday school and
other ministries that take place at the same time as the tradi-
tional Sunday service. In spite of the Church’s allegations
about its core beliefs, the district court accepted the City’s
contention that the Church could continue to conduct three
separate Sunday services or could acquire several smaller
properties throughout the City and relocate some of its opera-
5310         INTERNATIONAL CHURCH v. SAN LEANDRO
tions off site. The district court’s flat rejection of the Church’s
characterization of its core beliefs runs counter to the
Supreme Court’s admonition that while a court can arbiter the
sincerity of an individual’s religious beliefs, courts should not
inquire into the truth or falsity of stated religious beliefs.
United States v. Ballard, 322 U.S. 78, 86-87 (1944).

   [9] District courts in this circuit have recognized that for a
religious institution, having

    a place of worship . . . is at the very core of the free
    exercise of religion . . . [and that] [c]hurches and
    synagogues cannot function without a physical space
    adequate to their needs and consistent with their
    theological requirements. The right to build, buy, or
    rent such a space is an indispensable adjunct of the
    core First Amendment right to assemble for religious
    purposes.

Vietnamese Buddhism Study Temple in Am. v. City of Garden
Grove, 460 F. Supp. 2d 1165, 1171 (C.D. Cal. 2006) (quoting
146 Cong. Rec. S7774-01, Exhibit 1 (daily ed. July 27, 2000)
(joint statement of Senator Hatch and Senator Kennedy on
RLUIPA of 2000)). Similarly, the district court in Cotton-
wood Christian Center, held that the denial of a CUP likely
imposed a substantial burden on the church’s religious beliefs
in communal worship and evangelism when the church was
prohibited from building “a large and multi-faceted church”
sufficient to permit its 4,000 person congregation to meet in
one service and to accommodate its other ministries and com-
munity service programs. These cases persuade us that the
district court in this case erred in determining that the denial
of space adequate to house all of the Church’s operations was
not a substantial burden.

   In addition, the Church raises the issue that one of the
criteria noted in denying its application to include the Catalina
property in the AU Overlay District, that it is within 1/4 mile
             INTERNATIONAL CHURCH v. SAN LEANDRO             5311
of other sites with hazardous materials business plans, would
render all of the 196 properties zoned AU Overlay unavail-
able because they all are within 1/4 mile of one or more sites
with a hazardous materials business plan. The district court
minimized this argument, stating that the main reason the City
denied the Catalina property AU Overlay status was because
it failed to meet two of the eight stated criteria set out by the
City. Int’l Church, 632 F. Supp. 2d at 946-47. However, the
evidence suggests that the presence of hazardous materials
business plan sites was more than a passing consideration for
the City. Further, the possibility of future reliance on this dis-
cretionary consideration could have implications for any
future application the Church might file for a CUP in the AU
Overlay District. See Guru Nanak, 456 F.3d at 989 (finding
a substantial burden when the county’s actions “to a signifi-
cantly great extent lessened the possibility that future CUP
applications would be successful.”).

   [10] Accordingly, we reverse the district court’s grant of
summary judgment. We hold that the Church has raised more
than a “mere . . . scintilla of evidence” that the City imposed
a substantial burden on its religious exercise. Accordingly, we
remand this case to the district court for further proceedings
consistent with this opinion.

2.   The district court erred in holding that the City’s claimed
     need to preserve properties for industrial use qualified as
     a compelling governmental interest as a matter of law.

   Although the district court found that the City’s actions did
not substantially burden the Church’s religious exercise, the
district court also held that the City had “established that it
had a compelling government interest in preserving certain
land for industrial use, because such preservation is required
by the City’s General Plan,” and that the City’s actions were
the “least restrictive means of furthering that interest.” Int’l
Church, 632 F. Supp. 2d at 943. This conclusion was also in
error.
5312        INTERNATIONAL CHURCH v. SAN LEANDRO
   [11] Under RLUIPA, if the Church demonstrates a sub-
stantial burden, the City bears the burden of establishing that
its action “(A) is in furtherance of a compelling governmental
interest; and (B) is the least restrictive means of furthering
that compelling governmental interest.” 42 U.S.C.
§ 2000cc(a)(1); see 42 U.S.C. § 2000cc-2(b). The City sub-
mits that it has a “compelling interest in preserving the Cata-
lina property for industrial use” because it “is located in the
West San Leandro Business District focus area that is specifi-
cally targeted in the City’s General Plan for preservation of
industrial and certain commercial development needed to
maintain the City’s job base and economic welfare.” The City
contends that the “record amply shows that the Catalina prop-
erty is uniquely suited for this purpose by reason of its loca-
tion, design and current accommodations.” The City also
notes that the Catalina property historically provided employ-
ment for 400 persons.

   [12] In Grace Church, 555 F. Supp. 2d 1126 (S.D. Cal.
2008), the district court concluded that “preservation of indus-
trial lands for industrial uses does not by itself constitute a
‘compelling interest’ for purposes of RLUIPA. 42 U.S.C.
§ 2000cc(a)(1).” Grace Church, 555 F. Supp. 2d at 1140. This
is because “[c]ompelling state interests are ‘interests of the
highest order.’ ” Id. (citing Church of the Lukumi Babalu Aye,
Inc. v. City of Hialeah, 508 U.S. 520, 546 (1993)). Similarly,
the district court in Cottonwood Christian Center held that
revenue generation is not a compelling state interest sufficient
to justify denying a religious institution a CUP when such
denial imposes a substantial burden. Cottonwood Christian
Ctr., 218 F. Supp. 2d at 1228. The court there reasoned that
if “revenue generation were a compelling state interest,
municipalities could exclude all religious institutions from
their cities.” Id. This is so because religious and educational
institutions are tax exempt and the land would always gener-
ate more revenue if put to a commercial or industrial use. See
id. Further, the court there went on to support its conclusion
with evidence that the subject property, which the city
            INTERNATIONAL CHURCH v. SAN LEANDRO           5313
decided that it wanted to use for a Costco, had not been put
to a revenue-generating use in twelve years and that the city
had not suffered. Id. at 1228-29. Analogously, here, the Cata-
lina property was on the market because it had been unable
to sustain the use preferred by the City as a technology com-
pany. It had been on the market for seven months when the
Church entered into its contract with the then-property owners
to buy the property for religious purposes.

   Even if we assume without deciding that the City’s interest
is compelling, we believe there is a genuine issue of material
fact as to whether the City used the least restrictive means to
achieve its interest. While the City may prefer to preserve the
Catalina property for industrial use, the City presents no evi-
dence that it could not achieve the same goals by using other
property within its jurisdiction for that purpose.

IV.   Conclusion

  For the foregoing reasons, we REVERSE the district
court’s order granting summary judgment for the City and
REMAND the matter for further proceedings.

  REVERSED.
