Belleau Woods II, LLC v. City of Bellingham

• Decision Date: 26 May 2009
• Docket Number: No. 62041-0-I.,62041-0-I.
• Citation: 208 P.3d 5,150 Wn. App. 228
• Court: Washington Court of Appeals
• Parties: BELLEAU WOODS II, LLC, a Washington limited liability company, Respondent, v. CITY OF BELLINGHAM, a municipal corporation, Appellant.

208 P.3d 5

150 Wn. App. 228

BELLEAU WOODS II, LLC, a Washington limited liability company, Respondent, v. CITY OF BELLINGHAM, a municipal corporation, Appellant.

No. 62041-0-I.

Court of Appeals of Washington, Division 1.

May 26, 2009.

Jeff H. Capell, Tacoma, WA, for Appellant.

Gregory Thulin, Bellingham, WA, Margarita Latsinova, Seattle, WA, for Respondent.

BECKER, J.

¶ 1 This appeal by the City of Bellingham requires us to say what "mitigation" means in a new park impact fee ordinance. The city imposed the fee against a landowner who had already contributed land for a neighborhood trail by way of an easement over wetlands. Considering the ordinance as a whole and indicators of legislative intent, we conclude the exemption for past mitigation does not apply. The city is entitled to impose the fee so long as the landowner is given credit for the value of the previous contribution.

¶ 2 Belleau Woods II, LLC is the landowner. Upon granting the company's application for building permits in June 2007, the city imposed a park impact fee of $111,215.13 under a new ordinance that had been enacted the previous year. Belleau Woods paid under protest and appealed to the City of Bellingham Hearing Examiner. The hearing examiner construed the ordinance in favor of the city and upheld the imposition of fees. Belleau Woods appealed to the superior court and obtained an order requiring refund of the fees. The matter comes to this court as an appeal by the city under the Land Use Petition Act, RCW Chapter 36.70C. We stand in the shoes of the superior court and review the hearing examiner's action on the basis of the administrative record. Wells v. Whatcom County Water Dist. No. 10, 105 Wash.App. 143, 150, 19 P.3d 453 (2001).

¶ 3 According to unchallenged findings of fact entered by the hearing examiner, Belleau Woods proposed to enter into a planned development contract with the city to develop 7.39 acres with apartments in Area 16 of the Guide Meridian Neighborhood in north Bellingham. The city code states that Area 16 is zoned for planned residential units and mixed use buildings, provided that the following "prerequisite consideration" is met: "contribution of land or fees for neighborhood park and trail system." Bellingham Municipal Code (BMC) 20.00.08. The city code explains that prerequisite considerations are items that have to be addressed for any development proposal which is discretionary or semi-discretionary in nature. They are recommendations on what should occur or what will need to happen prior to some future level of development in an area. They usually point out necessary capital improvements that will have to be constructed. BMC 20.06.030. The requirement to support neighborhood parks and trails in Area 16 was a condition imposed as a result of a rezone of the area for higher density development. The proposed planned development contract for the Belleau Woods site incorporated the condition into Section 20:

Impact fees for both park and trails, as determined by the Parks and Recreation Department for consistency with the Guide Meridian Neighborhood Plan Prerequisite Condition, shall be paid prior to building permit issuance. The Parks and Recreation Department may accept construction of improvements or land dedication in lieu of fee payment.

¶ 4 The contract also referred in Section 14 to city code requirements for protecting wetlands and streams. It stated that wetland and buffer mitigation "shall be provided in accordance with a City approved wetland/buffer mitigation plan."

¶ 5 The city's open space plan showed a future trail in the Guide Meridian Neighborhood, and the city was already in the process of obtaining easements for it. The city wanted to put the trail through the wetland buffer in the Belleau Woods property. The trail was included in the Parks Capital Facilities plan.

¶ 6 Tim Carey, the manager and sole member of Belleau Woods, proposed to give the city a conservation easement for a public trail and for protection of wetlands to satisfy Section 20 of the contract. Carey corresponded with the parks department in May 2004 to find out if they would accept his proposed land dedication in lieu of payment. The parks department, through Leslie Bryson, responded that the fee for trails would be waived in consideration of land dedicated for a future trail. She informed Carey that the "total park fee" would be $8,912.34. She explained how the fee was calculated. It was based on the acreage of the property and the increased need the development would create for neighborhood parks and trails.

¶ 7 Carey then corresponded with a member of the city planning staff asking to have the amount of $8,912.34 incorporated into Section 20 of the planned development contract. The staff person, after consulting with Bryson, decided not to put the specific amount into the contract because Bryson advised her that the amount might change if there were time delays between contract approval and actual development.

¶ 8 Carey and the city executed the planned development contract, effective in July 2004. Carey provided the city with a conservation easement. The easement included some 167,000 square feet of regulated wetland and buffer area that could not be developed without providing mitigation. About 6,500 square feet was designated within the conservation easement for the public trail that the city planned to construct in the future.

¶ 9 Almost two years passed. In February 2006, the City of Bellingham adopted a new chapter of the Bellingham Municipal Code providing for the collection of park impact fees at the time of building permit issuance for residential development activity.

¶ 10 Impact fee ordinances are authorized by RCW 82.02.050. Bellingham's park impact fee ordinance was adopted "as a means of mitigating residential development's impacts upon the parks and recreational facilities in the City." BMC 19.04.010(E). Its purpose is "to assure that new development bears a proportionate share of the cost of capital expenditures necessary to provide parks, recreation, and open space improvements in Bellingham." BMC 19.04.030(B). The ordinance also states that its provisions are to be liberally construed and interpreted to effectively carry out its purpose. BMC 19.04.040. The fees are calculated based on the density of the development. BMC 19.04.050(M).

¶ 11 Of significance to this case, where a developer has already mitigated park impacts pursuant to an agreement with the city, the ordinance provides an exemption from the new fees:

A. The following development activities shall be exempted from payment of impact fees:

. . .

6. Previous mitigation where:

. . .

b. Any development activity for which park impacts have been mitigated pursuant to an agreement entered into with the City to pay fees, dedicate land or construct or improve park facilities, unless the terms of the agreement provide otherwise; provided that the agreement predates the effective date of fee imposition as provided herein.

BMC 19.04.130(A)(6)(b).

¶ 12 The ordinance goes on to provide for credit against park impact fees for dedications of land that predate the ordinance if they were made pursuant to the capital facilities plan:

Park land and/or park capital improvements may be offered by the developer as total or partial payment of the required impact fee. Development activity for which park impacts were intended to be mitigated pursuant to a condition of plat or PUD approval, dedications of land or construction of, or improvement to park facilities that pre-date this ordinance, unless the condition of the plat or PUD approval provides otherwise, may also be considered for credit hereunder; provided that any such mitigation measure was made pursuant to the capital facilities plan (CFP). Any new offer must specifically request or provide for a park impact fee credit. If the Parks Director accepts such an offer, whether the acceptance is before or after the effective date of this ordinance, the credit shall be determined and provided in the following manner:

A. Credit for the dedication of land shall be valued at fair market value established by private appraisers acceptable to the City. Credit for the dedication of park land shall be provided when the property has been conveyed at no charge to, and accepted by the City.

BMC 19.04.140. This section of the ordinance tracks the authorizing state statute which requires a city to give a developer credit against an impact fee for a previous dedication of property required as a condition of approval. See RCW 82.02.060(3).

¶ 13 In the fall of 2006, Belleau Woods applied for building permits to develop its acreage in accordance with the planned development contract. Some months later, Belleau Woods received notice that the permits were ready. On June 27, 2007, Carey contacted Bryson at the Parks Department to say he was surprised when he received the fee sheet for the building permits to find that it imposed a park impact fee in the amount of $111,215.13. Carey said he thought the total park fee was supposed to be $8,912.34 as they had agreed in their May 2004 correspondence about the Section 20 requirement. Bryson told Carey that he would have to pay a park impact fee as there is no vesting for fees paid toward mitigating park impacts:

In 2006, the City implemented a Park Impact Fee. The fees you were quoted in 2004 were for the West Bakerview Rezone requirement. While you don't have to pay both, you do have to pay the higher amount, as there is no vesting for the Park Impact Fee.

Bryson said she would review the background information on the project "to see if there is any credit available on this project for the park impact fee."

¶ 14 After reviewing the file, Bryson wrote to Carey again. The fee of $8,912.34 quoted to him in 2004, she reiterated, was not a park impact fee; it was a condition of a rezone which increased development potential in the area:

I do have a...