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HomeMy WebLinkAboutLetter from HCMP regarding HEX Recomendation 6-7-17H C M P Millis Clark Martin & Peterson P.S. June 7, 2017 Leslie Clark, Deputy City Attorney City of Renton Office of the City Attorney 1055 South Grady Way Renton, WA 98057 Re: Hearing Examiners Recommended Findings of Fact, Conclusions of Law and Recommendation: Quendall Terminals (Master Plan, Binding Site Plan, Shoreline Substantial Development Permit, LUA09-151, ECF, EIS, SAM, SM) Dear Ms. Clark: On May 9, 2017, Renton Hearing Examiner Phil Olbrechts issued the above - referenced recommendation of approval for the Quendall Terminals project applications and proposed Development Agreement (hereafter, the "Recommendation"). In the Recommendation, the Examiner suggested that the City Attorney's Office confirm for the City Council that the Quendall Terminals project enjoys vested rights. Accordingly, we wanted to provide you the Applicant's legal analysis regarding vesting. On behalf of the Applicant, Quendall Terminals, we provide the following vesting analysis, which concludes that the Quendall Terminals project is vested to the land use regulations in place on the date of complete application. We also address the two language changes regarding vesting that the Hearing Examiner offered for Council's consideration. BACKGROUND As we have discussed, the Applicant has shared a common understanding with City Planning Staff and the City Attorney's Office for many years that the Quendall Terminals project is vested to land use regulations in effect on the date the City issued its determination of complete application on February 5, 2010. At that time, the City's land use regulations provided for vesting upon submittal of a complete application for binding site plan approval. RMC 4-7-230(1)(1), adopted by Ord. 4950, 02/11/02. Subsequently, the Applicant spent years, and more than a million dollars, developing its project proposal and taking it through the City's environmental review process under the State Environmental Policy Act. In the Examiner's own words, "[t]be applicant and staff have undergone a monumental effort in assuring that the proposed development is compatible with surrounding uses and sensitive to the environmental constraints of its challenging location. "Recommendation at 1. Numerous City documents have recognized that the Project vested as of the date of complete application, including the Quendall Terminals Mitigation Document, issued in 999 Third Avenue, Suite 4600 1 Seattle, WA 98104 1206.623.1745 1 f: 206.623.7789 1 hcmp.com Iii M E RITAS Leslie Clark, Deputy City Attorney June 7, 2017 Page 2 of 6 August 2015 with publication of the Final Environmental Impact Statement (FEIS) for the Project, see Mit. Doc. at 10 (Exh. 2)' (Project vested to development standards in place at date of complete applications, February 5, 2010); the Staff Report issued in April 2016, see Staff Report, April 19, 2016, at 4 (Exh. 1); and the proposed Development Agreement for Quendall Terminals, see Draft Dev. Agrmt. Section 1, at 4 (Exh. 20) (defining "Vesting Date" as February 10, 2010)2. These documents demonstrate the common view between the City and Quendall Terminals that vesting occurred upon complete application, and that all of the project review has been conducted under the land use regulations in effect on the vesting date. The Applicant has relied upon its vested rights in proceeding through application review and approvals. LEGAL ANALYSIS As described above, the procedural background for Quendall Terminals establishes the factual basis for its vested rights. In addition, the legal doctrine of vesting compels recognition of vested rights under the circumstances here. The Examiner has suggested confirmation from the City Attorney's office regarding vesting. For your consideration, we address the following points in response to the Examiner's vesting discussion in the Recommendation: (1) Quendall Terminals vested under the City of Renton's binding site plan ordinance in 2010, and its vested rights survive the subsequent repeal of the vesting provision in 2012; and (2) Neither the court's holding not its rationale in Graham Nei ghborhoodAss'n v. F.G. Assoc., 162 Wash. App. 98 (2011) provide a basis for overriding Quendall Terminals vested rights. Because Quendall Terminals vested under the City's ordinance, we need not address whether the state subdivision code, ch. 58.17 RCW, provides statutory vesting for binding site plan applications. 1 "Exh." references in this letter are to the Exhibits to the Staff Reports and as entered at the Hearing, as enumerated at p. 8 of the Recommendation. 2 We note that there is a minor discrepancy in the stated vesting date between the original letter of determination of completeness dated February 5, 2010, and later references stating the date as February 10, 2010, which we assume is a typographical error that has been carried forward. For accuracy, the February 5 date should be used, although the applicant is unaware of any land use regulatory changes adopted by ordinance between February 5 and February 10, 2010. Hillis Clark Martin & Peterson P.S. Leslie Clark, Deputy City Attorney June 7, 2017 Page 3 of 6 A. The Quendall Terminals Applications are Vested under the City of Renton Binding Site Plan Ordinance in Effect at Date of Complete Application. Quendall Terminals Vested under City Code. Applicants can vest their project applications by virtue of state vesting statutes or local vesting ordinances. See Erickson &Assoc. Inc. v. McLerran, 123 Wn.2d 864, 873 (1994) ("Within the parameters of the [vested rights] doctrine established by statutory and case law, municipalities are free to develop vesting schemes best suited to the needs of a particular locality"). The doctrine places limits on municipal discretion and permits land owners or developers "to plan their conduct with reasonable certainty of the legal consequences." Id., quoting West MainAssocs. v. Bellevue, 106 Wn.2d. 47, 51 (1986). At the time that Quendall Terminals submitted its complete applications, including its application for Binding Site Plan, the subdivision chapter of the Renton Municipal Code included a vesting provision that "[u]pon filing of a complete application for a binding site plan, the application shall be considered under the binding site plan ordinance, the zoning, and other development regulations in effect on the date of application for the land uses and development identified in the binding site plan application..."). RMC 4-7-230(1)(1). That ordinance was in place when Quendall Terminals received its notice of complete application from the City, and it is unequivocal that the project vested under the City Ordinance. The Examiner queries, under the Graham decision, whether the subsequent repeal of the vesting provision may have affected Project vesting. As addressed below, Quendall Terminal's vesting was not disturbed by repeal of RMC 4-7-230(N)(1). 2. The Graham Decision is Inapposite to Quendall Terminals Vesting. The Examiner raises a hypothetical question in his Recommendation, arising from his reading of the Graham decision, regarding whether an application vests to a vesting ordinance. Recommendation at 25. For reasons addressed below, the Examiner's hypothetical is not pertinent here because a plain reading of Renton's vesting ordinance clearly establishes that the Quendall Terminals applications vested to it. Nonetheless, we address Graham to explain why the court's rationale, distinguishing between "procedural" permit processing provisions and "land use control ordinances," is not material here. The Pierce County ordinance at issue in Graham imposed new permit expiration terms, adopted after an applicant had submitted a complete subdivision application. The ordinance set new permit processing requirements that vested applications were required to meet in order to maintain valid permit status.' The applicant for the subdivision claimed that because 3 The Graham court did not conclude whether vesting itself was procedural or substantive in nature. Rather it addressed the question of once vested, what regulations are you vested to. The court determined that Hillis Clark Martin & Peterson P.S. Leslie Clark, Deputy City Attorney June 7, 2017 Page 4of6 its application was vested, the new permit procedures did not apply to it. The court found that the permit expiration procedures at issue were procedural, not "land use control" ordinances subject to vesting, because they did not have a "restraining influence on the development of land." The court reasoned that even a vested application can become subject to new procedural code provisions that do not amount to land use control ordinances. Accordingly, the court found that the new permit expiration provisions did apply to the applicant, and because it had not complied with measures to maintain valid permit status after receiving notice, the subdivision application had expired. It was material to the court's reasoning in Graham that the permit expiration provisions at issue were not found in the County Code chapter relating to land use regulations themselves. Rather, they were in a separate chapter of County Code entitled "vesting," which chapter directly limited a developer's vested rights. 162 Wn. App. at 116. To the contrary here, the vesting provision that governs Quendall Terminals was found within the City's subdivision regulations, chapter 4-7 RMC, and in the section (.230) addressing requirements for Binding Site Plans. Moreover, the Renton vesting provision by its own terms stated what provisions binding site plan applications vest to: "the application shall be considered under the binding site plan ordinance, the zoning, and other development regulations in eect on the date of application..." RMC 4-7-230(1)(1) (emphasis added). So by the very terms of the vesting ordinance, the scope of the regulations to which the application vested included the binding site plan ordinance in effect on the date of complete application, and that is precisely where the vesting provision is found. Thus, the vesting analysis that controls here is distinguishable from that reviewed in Graham, because the language of Renton's vesting provision itself determines the scope of vesting. By its own terms, subsequent repeal of the vesting ordinance could not undo Quendall Terminals' prior vesting. Another important distinction from Graham applies here. In Graham, the permit expiration provision at issue included important due process protections for the applicant. If a permit application was not timely acted upon, the county mailed notice to the applicant that the application would be terminated in one year, which period could be extended only by the County Hearing Examiner. 162 Wn. App. at 117. The notice period is critical to protect due process rights of developers, who can then act to complete their permitting process or seek extension. At the same time, the ability to terminate inactive applications enables the County to assure that vesting benefits those who are sufficiently invested in their projects to merit it. In contrast to the bare bones application reviewed in Graham, the Examiner for Quendall Terminals found that `[tJhe applicant and staff have undergone a monumental effort in assuring that the proposed development is compatible avith surrounding uses and sensitive to the environmental constraints of its challenging location. "Recommendation at 1. Moreover, there was never any notice provided that the set of "land use control ordinances" to which the applicant vested did not include the permit expiration criteria set forth in the permit processing section of the Pierce County Code. That is a different set of facts and law than is presented here. Hillis Clark Martin & Peterson P.S. Leslie Clark, Deputy City Attorney June 7, 2017 Page 5 of 6 Quendall Terminals was at risk of losing its vested rights. To the contrary, numerous City documents affirmed Project vesting subsequent to the repeal of the vesting provision.' A reversal of the vesting determination now would violate Quendall Terminals' due process rights and result in significant damages. We have no reason to believe the City would seek do that, but given the Examiner's question, we feel compelled to identify that concern. Finally, to the Examiner's hypothetical question, principles of fairness support a conclusion that applicants do vest to vesting provisions of an ordinance. A vesting provision itself is a land use control regulation, because it fixes in place all of the other land use control regulations that apply to the application. If the rule were otherwise, then cities could do away with a project's vested rights by passing a "procedural rule" to undo vesting. The conclusion that an applicant vests to a vesting provision can reside in harmony with the court's ruling in Graham, because the ordinance provision in question there did not repeal vesting, rather it added procedural requirements that the court found did not constitute land use control regulations. The applicant remained vested to land use control regulations, although it was required to comply with the new procedural requirements to keep valid application status. B. Hearing Examiner's Proposed Revisions to Development Agreement Vesting Language. The City Attorney incorporated language in Section 5.2 of the proposed Development Agreement to ensure that its vesting provisions reserved to the City the authority to enforce possible new stormwater compliance measures imposed upon the City under its NPDES permit.' The provision creates an exception for new federal or state statutes, rules, court decisions, etc. that add regulatory requirements on the City that it must enforce that are not subject to a grandfather clause that would provide safe harbor for the Project. At the time that Section 5.2 was proposed, state vesting doctrine as applied to NPDES requirements was under review by the State Supreme Court, but Quendall Terminals nonetheless agreed to the provision. The recent decision in Snohomish County v. Pollution Control Hearings Board, 187 Wn.2d 346 (2016), held that the vested rights doctrine does not apply to stormwater regulations that the State Department of Ecology requires permittees (such as the City) to adopt and apply to completed development applications under the NPDES permitting program. This is consistent 4 Vesting is particularly important here, because Renton's COR zone mandates a master plan approval to guide phased planning of development projects with multiple buildings on a single large site. See RMC 4-9-200(A)(1), (13)(1)(b). Site Plans applications and building permit applications must be consistent with the Master Plan approval, and a building permit cannot be issued until site planning is complete. RMC 4-9-200(B)(2). 5 Section 5.2 as drafted by the City Attorney reads: "Vesting Exceptions. During the term of this Agreement, the City shall not impose on the Project any modified or new or additional Development Regulations, except any new federal or state statutes, rules, regulations, administrative interpretations or court decisions that add regulatory requirements on the City that it must enforce that are not subject to a "grandfather" or "safe harbor" clause that would delay the City's enforcement responsibility beyond the life of this Agreement." Hillis Clark Martin & Peterson P.S. Leslie Clark, Deputy City Attorney June 7, 2017 Page 6 of 6 with the intent of the provision drafted by the City Attorney. Since the decision has issued and is no longer "new" under the exception, we would not object to adding the new sentence proposed by the Examiner, which clarifies that the City's legal obligations under its NPDES permit are exempt from vesting. We are concerned, however, with the Hearing Examiner's second proposed revision to Section 5.2. He suggests striking the word "new" from the provision as drafted by the City Attorney. With the express exemption from vesting for NPDES permit requirements, that change is not necessary to address the concern raised by the City Attorney. Moreover, it would create uncertainty regarding the single value the Applicant gains under the Development Agreement: an extended permit duration vested to the land use control ordinances in place at the time of complete application. The Project applications have undergone an intensive review process with no other regulatory mandates having been raised as warranting an exception from vesting, and the City's authority is well protected by the exception as drafted. Use of the term "new" to qualify the exception helps assure a level playing field for evaluating any future vesting limitation claims that might arise in a context similar to the NPDES permit analysis. We ask that apart from adding the sentence regarding NPDES requirements, Section 5.2 remain as drafted by the City Attorney. On behalf of Quendall Terminals, we appreciate the opportunity to provide our analysis of the Examiner's vesting discussion. AMG:kah E -Mail: ann.gygi@hcmp.com Direct Dial- (206) 470-7638 Fax: (206) 623-7789 cc: Campbell Mathewson ND: 19958.002 4827-4459-7577vl Very truly yours, ASL A 14,-I� Ann M. Gygi Hillis Clark Martin & Peterson P.S.