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Home My WebLink AboutAppeal Letter Outlot 1 1211 SW 5th Ave., Suite 1900 | Portland, OR 97204 | M 503-222-9981 | F 503-796-2900 | schwabe.com Maren L. Calvert Admitted in Washington, Oregon, California and Hawaii D: 360-597-0804 mcalvert@schwabe.com April 21, 2023 VIA E-MAIL (CITYCLERK@RENTONWA.GOV) City of Renton City Clerk RE: The Home Depot - Deferral Decision Outlot 1 (C22004541 / DEF23001823 – Notice of Appeal Our File No.: 103058-270011 Dear City Clerk: Please accept this Notice of Appeal of the above-referenced decision entered by Brianne Bannwarth, Development Engineering Director, on April 7, 2023 (the “Decision”), submitted on behalf of the Applicant, The Home Depot. A copy of the Decision is enclosed for reference. The Decision should be reversed because it reflects the City’s gross abuse of power, imposes improvements that are not required by law or allowed under the Constitution, and constitutes an impermissible collateral attack on the Hearing Examiner’s Final Decision, PR 22-000065, dated August 9, 2022 (“Examiner’s Decision”). The Decision also imposes Talbot Road improvement requirements that are arbitrary and capricious, and infeasible. Finally, the Decision should be reversed as a matter of equity. Abuse of Power Just days before the Decision, the City notified The Home Depot that the City would not issue a certificate of occupancy for the site unless The Home Depot installed more than $741,000 in frontage improvements along S. Grady Way and Talbot Road S. See enclosed notice email. The Home Depot objected, stating that it was not responsible for Talbot Road frontage improvements (among other things). See id. The City responded that The Home Depot’s only option was to seek a deferral of the frontage improvement requirement. See id. Maintaining its objection, The Home Depot sought and the City granted the above-referenced deferral Decision, requiring The Home Depot to post a $1,112,004.00 performance bond, or other security device, payable to the City. Decision at p. 1. In doing so, the Decision expressly states: “[t]he security device must be in place with the City prior to issuance of temporary certificate of occupancy.” Under protest and while expressly preserving its appeal rights, The Home Depot established a surety under protest with First American Title Company on April 21, 2023. The Home Depot’s April 21, 2023 City of Renton 1211 SW 5th Ave., Suite 1900 | Portland, OR 97204 | M 503-222-9981 | F 503-796-2900 | schwabe.com Page 2 establishment of the surety shall not be interpreted as acquiescence or agreement. The Home Depot established the surety solely protest, to ensure the City did not have any grounds upon which to deny The Home Depot’s certificate of occupancy which. A delay or denial of the certificate of occupancy, would cost The Home Depot millions of dollars in lost revenue and construction delays. To perfect the surety, The Home Depot attempted to assign the surety to the City, but the City would not accept an assignment that preserved The Home Depot’s appeal rights and required The Home Depot to sign an agreement contractually obligating The Home Depot to construct the disputed improvements. See Brianne Bannwarth April 21 Email. As of the time of this filing, The Home Depot proposed a second round of modified language, expressly stating its objection and preservation of appeal rights. If the City refuses to issue The Home Depot’s rightfully-earned certificate of occupancy unless The Home Depot waives its due process rights, that decision will constitute a gross abuse of power. Undergrounding Requirements are not Required and are not Proportionate As The Home Depot explained to the Hearing Examiner in a letter on July 26, 2022, Renton Municipal Code (RMC) 4-6-090(D)(1) provides two exceptions to the City’s requirement to move power lines underground in subsections (c) and (g). Those subsections exempt power lines of fifty five (55) kv or more and distances of less than five hundred feet (500’) or three (3) or fewer spans (four (4) poles). In addition, RMC 4-6-090(1)(i)(i) exempts undergrounding that are technologically difficult. Here, the power lines the City wants The Home Depot to place underground are large – providing power to more than half the City – and cross Interstate 405, a major, elevated highway. In addition to The Home Depot’s concerns under municipal code, The Home Depot contends the powerlineu ndergrounding directive violates its constitutional rights. To satisfy the Fifth Amendment, the government must establish that a proposed condition of approval bears a nexus with and is roughly proportional to the impact of the proposed development. Dolan v. City of Tigard, 512 US 374, 391 (1994). This requires that “some sort of individualized determination that the required [condition] is related both in nature and extent to the impact of the proposed development.” Id. at 391. The Hearing Examiner acknowledged The Home Depot’s arguments and directed the City and The Home Depot to continue negotiating. Examiner’s Decision, p. 2 line 5, p. 6-7 para H, p. 21 #34. The Examiner’s Decision is enclosed for reference. Unfortunately, the parties’ negotiations resulted in the Decision, which is the City’s first, specific, written directive to underground the power lines. The Decision does not address or resolve The Home Depot’s municipal code and constitutional objections. It simply imposes an undergrounding requirement without explanation or justification. This appeal seeks the Examiner’s review and April 21, 2023 City of Renton 1211 SW 5th Ave., Suite 1900 | Portland, OR 97204 | M 503-222-9981 | F 503-796-2900 | schwabe.com Page 3 consideration of The Home Depot’s municipal and constitutional objections as applied to the City’s new Decision. The Home Depot might also submit a modification request to the Hearing Examiner, as authorized by the Examiner’s Decision, p. 22 lines 1-3, seeking such a review. Collateral Attack RMC 4-8-100.H.5 provides: “decisions…of the Hearing Examiner are final unless appealed or a reconsideration is requested and granted.” The City and The Home Depot sought (and received) reconsideration of portions of the Examiner’s Decision, unrelated to the issues recited above. To the extent the Decision imposes right of way (ROW), lighting, sidewalk, landscaping and irrigation requirements in excess of the requirements approved in the Examiner’s Decision, they constitute an improper collateral attack on the Examiner’s Decision and should be reversed. Furthermore, to the extent the Decision imposes ROW, lighting, sidewalk, landscaping and irrigation requirements in along Talbot Road specifically, they constitute an improper collateral attack on the Examiner’s Decision and should be reversed. The Examiner’s Decision expressly held: The SEPA review did not impose any off-site traffic mitigation or impose any fees. SEPA mitigation was limited to requiring frontage improvements along Grady Way. King County Metro has a proposed project for their I-Line along the project's Talbot Rd S frontage. The frontage improvements associated with the I-Line proposal have been incorporated into the site plan application proposal. Id. at 5:8-12 (emphasis added). In other words, The Home Depot was only responsible for “frontage improvements along Grady Way.” King County Metro was responsible for all Talbot Road South frontage improvements. Id. See also Ex. 20 (indicating Metro was to perform Talbot Road improvements). Nevertheless, despite this Examiner’s clear finding, the City notified The Home Depot just a few weeks ago, that the City would not issue a certificate of occupancy for the site unless The Home Depot installed frontage improvements along Talbot Road. See enclosed notice email. The Home Depot objected, stating that it was not responsible for Talbot Road frontage improvements. See id. The City responded that The Home Depot’s only option was to seek a deferral of the frontage improvement requirement. See id. Maintaining its objection, The Home Depot sought a deferral, which the City granted, resulting in the Decision on appeal. The Decision requires The Home Depot to post a $1,112,004.00 performance bond, or other security device, payable to the City. Decision at p. 1. In doing so, the City expressly stated: “[t]he security device must be in place with the City prior to issuance of temporary certificate of occupancy.” April 21, 2023 City of Renton 1211 SW 5th Ave., Suite 1900 | Portland, OR 97204 | M 503-222-9981 | F 503-796-2900 | schwabe.com Page 4 The City’s Talbot Road frontage improvement demand – which disregards and contradicts express findings of the Examiner’s Decision – is a blatant violation of the doctrine prohibiting collateral attack on a final land use decision. “[A]n agency cannot even revoke its own final land use decision unless it has appealed in the LUPA allotted time frame.” Twin Bridge Marine Park, LLC v. Dep't of Ecology, 162 Wn.2d 825, 844-845, 175 P.3d 1050 (2008) (citation omitted). “This holding emphasizes the value of finalizing land use decisions.” Id. (affirming “Samuel's Furniture offers protection to private property owners and finality to the decisions of local government”). See also Chelan County v. Nykreim, 146 Wn.2d 904, 939, 52 P.3d 1 (2002) (prohibiting county from reversing, belatedly appealing, or denying permits related to boundary line adjustment erroneously approved by its own planning director). Bad Faith, Intentional Interference The Home Depot and City staff have been communicating weekly – if not daily – since the Examiner’s Decision eight months ago. There is no reason the City could not have raised the frontage improvement requirements earlier in the permitting process, so that The Home Depot would have had a reasonable time to respond. The City’s failure to do so, and decision to spring its “new” Talbot Road frontage requirements just days before The Home Depot was scheduled to receive its certificate of occupancy, placed The Home Depot in an unreasonable bind. The Home Depot has no good options. It can either post an unwarranted and wholly unjustified six-figure “security device” (which it has done under protest) – or face yet another delay in its opening date at the cost of millions of dollars in lost revenue, employee and construction financing costs. The City’s unjustifiable “reversal” of its Examiner’s Decision and conveniently delayed announcement of that reversal is arbitrary and capricious, clearly erroneous, smacks of bad faith, and can only be explained by negligence (at best) or an intentional effort to extort money from The Home Depot (at worst) in exchange for the certificate of occupancy The Home Depot had otherwise faithfully earned. Arbitrary and Capricious and Infeasible Even if The Home Depot were responsible for installing street frontage improvements along Talbot Road (which it is not, for the reasons stated above), City staff’s requirement that those improvements be performed before Metro completes its work in the same area is arbitrary and capricious, wasteful, will unnecessarily cost taxpayers money. The Hearing Examiner and City acknowledge Metro plans to perform additional improvements in precisely the same area as City staff are now requiring the Home Depot to install streetlights and trees. If The Home Depot complies with City staff’s requirement, Metro will have to spend taxpayer dollars to remove the streetlights and trees, in order to perform the work it intends, and then spend additional tax payer dollars to reinstall those (or different) street lights and trees when the work is done. This requirement is wasteful, unnecessary, and in light of the mutual agreement that Metro’s project is ultimately responsible, the requirement for duplicative work is arbitrary and capricious. April 21, 2023 City of Renton 1211 SW 5th Ave., Suite 1900 | Portland, OR 97204 | M 503-222-9981 | F 503-796-2900 | schwabe.com Page 5 Equitable Estoppel Finally, the City should be equitably estopped from imposing Talbot Road frontage improvement requirements at this late date. “It is self-evidently unfair to permit” an agency “to adopt and publicly distribute an interpretive policy memorandum” or land use decision “and later deny the [decision’s] plain reading after contractors have relied upon it to their detriment.” Silverstreak, Inc. v. Dep't of Labor & Indus., 159 Wn.2d 868, 889-90, 154 P.3d 891 (2007). Companies “must be able to rely on the plain meaning of regulations and Department interpretations, without fear that a state agency will later penalize them by adopting a different interpretation after they have” made business decisions in reliance on that decision. Id. See also State ex rel. Shannon v. Sponburgh, 66 Wn.2d 135, 143, 401 P.2d 635 (1965) (equitably estopping liquor license reversal after business had incurred significant expense “in good faith in reliance upon [agency’s] solemn written commitment”). The City sought reconsideration of certain elements in the Decision, and did not seek reconsideration of the frontage improvement portions of the Decisions. See Decision Upon Reconsideration, attached. It should not be afforded a third bite at the apple now. For all of these reasons and such other and further evidence and argument as may be provided at a hearing on this appeal, Home Depot respectfully requests the requirements for the street frontage improvements near Outlet 1, as expressed in the Decision be reversed and the surety released. Best regards, Maren L. Calvert MLCA Enclosures: 1. Deferral Decision Outlot 1 2. Hearing Examiner’s Final Decision 3. April 3 & 7, 2023 Email exchange 4. Brianne Bannwarth April 21 Email. 5. Hearing Exhibit 02_P 6. Hearing Exhibit 20 7. Examiner’s Decision Upon Reconsideration PDX\103058\270011\MLCA\36482539.2