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Schnitzer West, LLC v. City of Puyallup

Supreme Court of Washington, En Banc

May 10, 2018

SCHNITZER WEST, LLC, a Washington limited liability company, Petitioner,
v.
CITY OF PUYALLUP, a Washington municipal corporation, Respondent, and VIKING JV LLC, Additional Party.

          WIGGINS, J.

         This case presents the question whether a city council's restrictive zoning decision is judicially reviewable under chapter 36.70C RCW, the Land Use Petition Act (LUPA), where the ordinance targeted a single property with a sole owner and was not an amendment to the city's comprehensive plan. Because such a land use decision is a site-specific rezone and is therefore reviewable under LUPA, we reverse and remand to the Court of Appeals to proceed on the merits of the city's appeal of the superior court's decision[1] and for other proceedings consistent with this opinion.

         Facts and Procedural History

         In 2009, the city of Puyallup (City) created the "Shaw-East Pioneer Overlay Zone" (SPO zone) as part of an amendment to the City's comprehensive plan. An overlay zone, such as the SPO zone, establishes development criteria and standards to supplement the base zoning standards that already exist. The Shaw Road and East Pioneer area is considered to be a symbolic "gateway" to the City, and in creating the SPO zone, the City intended to establish additional standards to encourage compatible development in that area. When the SPO zone was adopted, the property at issue here was outside the boundaries of the City.

         In 2012, the City annexed the property at issue, which was zoned for industrial and business park use. It also annexed several nearby commercially zoned properties. The City did not extend the SPO zone into the area at the time.

         In 2013, Schnitzer West LLC entered into a contract to purchase the property at issue with plans for development. Schnitzer submitted a comprehensive plan amendment and rezone request to the City to convert a portion of the property from a business/industrial park zone to a light manufacturing/warehouse zone.

         Over the verbal objection of at least one council member, the City approved Schnitzer's comprehensive plan amendment and rezone request (Ordinance 3052) by a vote of four to two, finding that the necessary criteria for redesignation and rezoning was met. The City also found that if the comprehensive plan amendment and rezone request were denied, industrial development on the property would not be economically viable.

         The new zoning designation allowed warehouse construction on the property and brought the property into conformity with the zoning designations of adjacent parcels.

         Soon after Schnitzer received approval of its comprehensive plan amendment and rezone request, two new city council members were elected, each replacing a council member who had voted in favor of granting Schnitzer's comprehensive plan amendment and rezone request. The city council immediately proposed and adopted a 120-day emergency development moratorium on all development in the annexed area, including the Schnitzer property. After the moratorium was proposed but before it was adopted, Schnitzer filed an application to construct a 470, 000 square foot warehouse on the property.

         Without consulting the rest of the council, four council members then drafted and proposed Ordinance 3067. This new ordinance extended the SPO zone to the Schnitzer property. The three council members who had been omitted from the drafting process opposed Ordinance 3067 and the proceedings that surrounded it.

         Mayor John Knutsen voiced his dismay with the ordinance itself, saying, "This is-I can't see this as anything but spot-zoning. If-if it's not, then I can't say where spot-zoning exists." Clerk's Papers (CP) at 647. Council member Tom Swanson shared the concern that the ordinance constituted spot-zoning, saying, "I would prefer looking at doing it citywide, if that's something, which means it would go back to planning commission at this time, versus attaching it to one particular three-parcel zone and one overlay." CP at 643. He continued, "So that's-I mean, I don't like spot-zoning. I don't like targeting one property owner for different zoning than everybody else has. If we're going to do a Shaw Road overlay, you do it to the whole area." CP at 644.

         Council member Steve Vermillion was disconcerted with the way Ordinance 3067 had been drafted and proposed, stating that he was "not impressed with the fact that four people moved this forward and three Council members were left in the dark on it." CP at 642. He continued, suggesting that "the City manager and the City attorney need to put a halt to this four-member control and bringing forward documents without the consent of the whole Council." Id. Mayor Knutsen was similarly concerned with the way the ordinance had been drafted and proposed: "I'm deeply concerned if - if - if, indeed, four Council members instructed you to bring up an ordinance, that's to be done here. It's to be done here and only here." CP at 647. He continued, saying that he was "stunned" when he saw the ordinance and called Vermillion and Swanson: "They were totally unaware of this. So if we're to be a four- member Council, then let's - you know, then let's not expect things to go as smoothly as we would wish." Id.

         The city council voted four to three to hold a special meeting at which council members would vote on Ordinance 3067. CP at 656. Mayor Knutsen and council members Vermillion and Swanson voted against the special meeting. Id.

         At the special meeting, against the recommendation of the planning commission, without public comment or hearing, and with only four out of seven council members present, [2] the city council approved Ordinance 3067.

         Ordinance 3067 applied solely to the Schnitzer property. The city council did not extend the ordinance to the surrounding properties to which the moratorium had applied, despite similar characteristics, location, and zoning. Through Ordinance 3067, the City imposed major restrictions on the Schnitzer property: the Ordinance created and applied a new overlay zone for "limited manufacturing" (ML-SPO) uses to the Schnitzer property and added a building size limitation of 125, 000 square feet. It also imposed regulations pertaining to outdoor storage uses; standards governing the design, size, setback, and orientation of buildings; requirements dictating landscaping, open space usage, and pedestrian infrastructure; provisions constraining signage; and rules for storm water management.

         Schnitzer filed a land use petition in Pierce County, challenging the ordinance as an unlawful site-specific rezone.[3] The City filed a motion to dismiss. The trial court ruled in favor of Schnitzer, denied the motion to dismiss, and held Ordinance 3067 invalid. On appeal, a majority of the Court of Appeals reversed the trial court and dismissed the action, holding that Ordinance 3067 was not a "land use decision" reviewable by the superior court under LUPA. Chief Judge Bjorgen penned a persuasive dissent, concluding that Ordinance 3067 was reviewable under LUPA. Schnitzer W., LLC v. City of Puyallup, 196 Wn.App. 434, 444-50, 382 P.3d 744 (2016) (Bjorgen, C.J., dissenting). Chief Judge Bjorgen analyzed the content, context, purpose, and effect of Ordinance 3067 and determined that it "was not an adoption of legislative or area-wide policy, but rather a rezone of a specific, relatively small property in the context of a development proposal on that property, " id. at 447, and that "[w]hether a rezone is proposed by a property owner, a neighbor, or the local government has little to do with the[ ] distinctions [between legislative and site-specific actions], " id. at 449-50.

         Schnitzer appealed the dismissal of its land use petition, and we granted review.

         Standard of Review

         Whether a city council's decision regarding the use of land is reviewable by the superior court under LUPA is a question of law that this court reviews de novo. See Durland v. San Juan County, 182 Wn.2d 55, 64, 340 P.3d 191 (2014).

         Analysis

         Ordinance 3067 was approved by the Puyallup City Council against the recommendation of the Planning Commission, without public comment or hearing, and with only four council members present. It applies solely to the Schnitzer property and imposes major restrictions. The City argues that Ordinance 3067 is not reviewable under LUPA because it was proposed by the city council and was not a ruling in response to an application by a third party. The City also argues that Ordinance 3067 is a legislative action expressly excluded from review under LUPA. We disagree.

         I. Ordinance 3067 is a site-specific rezone and can be challenged only in superior court under LUPA

         The City argues that regardless of its content, the ordinance cannot be subject to LUPA review because it was proposed by the city council and was not an application by an outside party. We disagree. Ordinance 3067 is a site-specific rezone that must be challenged in superior court under LUPA.

         A. LUPA grants superior courts exclusive jurisdiction to review challenges to site-specific rezones

         There are two primary mechanisms by which to challenge local jurisdictions' land use decisions: review by the Growth Management Hearing Board (GMHB) under the Growth Management Act (GMA), chapter 36.70A RCW, or review by a superior court under LUPA. See Woods v. Kittitas County, 162 Wn.2d 597, 608-10, 174 P.3d 25 (2007) (explaining the statutory framework for review of local jurisidictions' land use decisions). And, "[i]f a GMHB does not have jurisdiction to consider a petition, it must be filed in superior court under LUPA." Wenatchee Sportsmen Ass'n v. Chelan County, 141 Wn.2d 169, 178, 4 P.3d 123 (2000).

         GMHBs have limited jurisdiction and may decide only challenges to or amendments of comprehensive plans or development regulations. Woods, 162 Wn.2d at 609. GMHBs do not have jurisdiction over "challenges to site-specific land use decisions because site-specific land use decisions do not qualify as comprehensive plans or development regulations." Id. at 610. LUPA, however, grants superior courts exclusive jurisdiction to review land use decisions unless the decision is made by a body outside a local jurisdiction or is subject to review by a quasi-judicial body such as the GMHB. RCW 36.70C.030; Woods, 162 Wn.2d at 610 ("LUPA grants the superior court exclusive ...


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