The City did what it was supposed to do. Designed the project, did the environmental work, held hearings, responded to the hearings with reasonable changes to the project that reduce impacts.

Rail line itself is the County's, and until the County decides to abandon it officially (consequences of that, and why it won't happen anytime soon, have been discussed here at length), it's still there and needs to be worked around. The City did that. The County has plans for it as a rail line. So it stays.

Anybody who is on the record with the City has the right to appeal to the Coastal Commission. The Commission staff apparently feels that the project is consistent with the current Local Coastal Program and that the Commission doesn't need to "take the case." If they have the money and the lawyers (pretty much the same thing), the opposition can (and probably will, to be annoying - have they filed a CEQA lawsuit (clock's a-tickin') against the City yet?) file a lawsuit after the Commission follows its staff recommendation. But they'll have to sue the Commission about Coastal Act interpretation, not the City, and the Commission has plenty of lawyers on staff and on call, so ...

As for the eucalyptus trees, they're an invasive pest. Yes, they are pretty in some settings, and yes, they grow like weeds near the coast (see definition of: invasive pest). Big ones tend to be messy and drop branches and even fall over from time to time (see some of Howard's photo essays of past years). They burn like gasoline-soaked torches. If I were a Coastal Commissioner, I would need a lot of convincing to consider 6 blue gums to be "heritage trees," so ordinary tree replacement guidelines should apply.