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Allenmore Medical Investors, LLC v. City of Tacoma

United States District Court, W.D. Washington

April 14, 2017

ALLENMORE MEDICAL INVESTORS, LLC, a Washington limited liability company, Plaintiff,
THE CITY OF TACOMA, WASHINGTON, a municipal corporation; MARILYN STRICKLAND, an individual; LAUREN WALKER, an individual; RYAN MELLO, an individual; JAKE FEY, an individual; VICTORIA WOODARDS, an individual; MARTY CAMPBELL, an individual; DAVID BOE, an individual; and JOHN DOE 1-20, Defendants.


          Ronald B. Leighton United States District Judge

         Hon. Ronald B. Leighton This cause came on for a non-jury trial on March 6, 2017, the Honorable Ronald B. Leighton presiding. The Court has considered all trial testimony and exhibits. The Court has further considered the Pre-Trial Order, together with all relevant attachments, all pleadings and discovery on file, all post-trial submissions, the parties' proposed findings of facts and conclusions of law, and trial briefs. The Court has also considered applicable statutory and case law. On the basis of its own careful observations during trial, its credibility assessments of all witnesses appearing live at trial, or by depositions, and the detailed consideration of all of the above materials, the Court now enters the following Findings of Fact and Conclusions of Law.


         1. Plaintiff Allenmore Medical Investors, LLC (AMI) is a limited liability company formed under the laws of the State of Washington. AMI is, and has been, managed by Jeffrey L. Oliphant. AMI was at all relevant times the developer of the commercial project located at 1965 South Union Avenue, Tacoma, Washington, now known as Allenmore Marketplace.

         2. Defendant City of Tacoma, Washington is a municipal corporation. It has authority and responsibility for issuance of building permits, land use approvals, parcel configuration approvals, including boundary line adjustments, and other approvals for real property developments within the City.

         3. In 2011 and 2012, Defendants Marilyn Strickland, Lauren Walker, Ryan Mello, Jake Fey, Victoria Woodards, Marty Campbell, and David Boe were members of the Tacoma City Council. Marilyn Strickland was the Mayor, and Lauren Walker was the Deputy Mayor (Individual Defendants).

         4. In February 2010, JLO Washington Enterprises, Inc. (JLO) contracted to purchase real property located in Tacoma, Washington, then owned by the Tacoma Lodge No. 174 of the Benevolent & Protective Order of Elks. The Elks Property consisted of 17.7 acres of real property located between Union and Cedar Avenues, north of South 23rd Street, in Tacoma.

         5. JLO is a Washington corporation and an affiliate of AMI. In May 2011, JLO assigned to AMI all of JLO's right, title, powers, and interest in the purchase and sale agreement with the Elks and the Elks Property, and AMI accepted the assignment. An “Assignment of Buyer's Interest in Purchase and Sale Agreement” was recorded on June 14, 2011 in the real property records of Pierce County, Washington under Recording Number 201106140566.

         6. In December 2010, JLO filed a State Environmental Protection Act (“SEPA”) application, together with a grade and fill permit application, with the City of Tacoma, including all required studies and backup to support the applications. The primary development project described in the SEPA application consisted of a medical and related professional office campus, including up to 760, 000 square feet of medical and professional office space, a hospital, and retail space. The SEPA application also included an alternate project consisting of 155, 000 square feet of retail space and 200, 000 square feet of medical and professional office space. On or about March 23, 2011, the City of Tacoma issued a Mitigated Determination of Non-Significance (MDNS). On or about July 27, 2011, the City of Tacoma issued a Final Mitigated Determination of Non-Significance (SEP2010-40000156354) and Building Permit (grade and fill permit) (BLD2010-40000156353).

         7. Beginning in early 2010, JLO began working with a large medical services provider, MultiCare, to be the primary occupant of the commercial project on the Elks Property. MultiCare became indecisive regarding its needs in the spring of 2011, and communicated to JLO its final decision not to proceed with the project in July 2011.

         8. Given MultiCare's indecisiveness and subsequent decision not to participate in the project, JLO reviewed alternative uses and occupants for the Elks Property, and the entitlements and other approvals needed to proceed with an alternative development.

         9. In May 2011, Kevin Sweet, Walmart's Real Estate Senior Director, and Jeffrey Oliphant reached a handshake agreement to acquire the “Elks Lodge” property for $19.00 per square foot, or just under $11.9 million. Mr. Sweet obtained approval from Walmart's Real Estate Committee on August 15, 2011 at the agreed price, with a closing date of November 1, 2011, and without further entitlements beyond those AMI held at that time: a Final Modified MDNS and the associated grade and fill permit.

         10. In August 2011, AMI proposed a U-Turn for southbound Union Avenue to access the proposed development. The U-Turn was placed on the agenda for the August 24, 2011 meeting of the City's Environmental and Public Works Committee (EPW Committee). Kurtis Kingsolver, the Tacoma City Engineer and City Traffic Engineer, requested that the EPW Committee give the U-Turn a “Do Pass” recommendation.

         11. At the August 24, 2011 meeting, EPW Committee members asked whether the proposed development of the Elks Property included a “big box” retailer. The EPW Committee rejected the U-Turn recommendation and did not make a “Do Pass” recommendation to the City Council. A decision on the U-Turn proposal was scheduled for the next City Council meeting, to be held on August 30, 2011.

         12. While the EPW Committee meeting was still in session, Defendant Mello emailed City Attorney Elizabeth Pauli “RE: Walmarts.” Following the EPW Committee meeting on August 24, 2011, Jeffrey Oliphant informed several Councilmembers the Project would include a Walmart store.

         13. During or shortly after the Committee meeting, Councilmember Mello requested the City Attorney draft a Moratorium to halt development of big-box retail stores.

         14. At the regularly scheduled Tacoma City Council meeting held on August 30, 2011, Defendants Mello, Fey, Campbell, and Walker introduced a proposed ordinance not included on the published Agenda for the meeting: to adopt a city ordinance imposing a six-month Moratorium, due to “public emergency, ” on the filing, acceptance, and processing of applications for land use, building permits, or other development permits associated with the establishment, location, or permitting of retail sales establishments with a floor area greater than 65, 000 square feet in size, unless complete applications were filed with the City prior to the effective date.

         15. The Moratorium was denominated as City of Tacoma Ordinance No. 28014. Defendant City Councilmembers Strickland, Walker, Mello, Fey, Woodards, Campbell, and Boe voted in favor of Ordinance No. 28014. The U-Turn proposal was removed from the agenda of the August 30, 2011 City Council Meeting.

         16. No notice was given to AMI or to the public prior to August 30, 2011, that the U-Turn proposal would be taken off the agenda of that day's City Council Meeting or that the Moratorium would be proposed or adopted.

         17. The Moratorium was proposed and adopted in direct response to the disclosure that Walmart was the intended anchor tenant for the shopping center AMI was developing at the Elks Property.

         18. At the time the Moratorium was enacted, the Tacoma Central Neighborhood Council (CNC) and other constituents had expressed opposition to a Walmart store entering the community.

         19. Pursuant to applicable law, Ordinance No. 28014 could not take effect until publication in the Tacoma Daily Index, the City's designated legal publication. Ordinance No. 28014 was published in the Tacoma Daily Index on September 1, 2011, and took effect upon such publication.

         20. Meanwhile, on August 31, 20111-prior to the effective date of the Moratorium-the developer filed an application for a building permit (No. 40000168923), together with related applications and approvals to construct a new retail store of approximately 155, 000 square feet on the Property (the Building Permit Application), with the City of Tacoma.

         21. The Building Permit Application covered the entire Property, including not only the portion on which the Walmart store was to be constructed, but also portions that AMI intended to retain and upon which AMI would be constructing improvements. It included onsite and offsite improvements for roads, utilities, traffic signals, and access drives. The Walmart parcel is landlocked, with no frontage or access on any public street. Pedestrian and vehicular access was only through the property being retained by AMI. It would not be possible, physically or legally, to build the Walmart building without access through the AMI property.

         22. Jeffrey Oliphant was the developer of the Project and led the team that filed the Building Permit Application. Oliphant wrote and submitted to the City an AMI check for the Building Permit Application's fee of $44, 183.67. The City issued a receipt for the Building Permit Application fee to AMI and entered the application into the City's permit database with AMI listed as the applicant.

         23. At the time they filed the building permit application, the developer delivered a SEPA Addendum Application. The City took the SEPA Addendum Application, but they would not accept the fee, due to confusion caused by the Moratorium. The ...

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