Botts Marsh LLC v. City of Wheeler

• Docket Number: A180520
• Decision Date: 07 June 2023
• Citation: 326 Or.App. 215
• Parties: BOTTS MARSH LLC, Respondent, v. CITY OF WHEELER, Petitioner.
• Court: Oregon Court of Appeals

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326 Or.App. 215

BOTTS MARSH LLC, Respondent,
v.
CITY OF WHEELER, Petitioner.

A180520

Court of Appeals of Oregon

June 7, 2023

Argued and submitted March 16, 2023

Land Use Board of Appeals 2022079;

William K. Kabeiseman argued the cause for petitioner. Also on the brief was Bateman Seidel Miner Blomgren Chellis & Gram, P.C.

Jennie L. Bricker argued the cause for respondent. Also on the brief were Land Shore Water Legal Services, LLC, and Reilley D. Keating, Sarah Stauffer Curtiss, and Stoel Rives, LLP.

Before Aoyagi, Presiding Judge, and Joyce, Judge, and Jacquot, Judge.

[326 Or.App. 216] Reversed in part and remanded.

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AOYAGI, P. J.

The City of Wheeler denied applicant's application for design review of a proposed development on applicant's property. The Land Use Board of Appeals (LUBA) reversed the denial and remanded for the city to reopen the record to give applicant an opportunity to submit additional materials and respond to the city's newly articulated interpretations of its design-review standards. The city seeks judicial review, raising three assignments of error. As to the first two assignments, we conclude that, in these circumstances, LUBA did not err in remanding for the city to reopen the record. As to the third assignment, we conclude that, with respect to the three design-review standards at issue on judicial review, LUBA did not err in concluding that the city's interpretations of the avoid-monotony and view-impact standards were implausible under Siporen v. City of Medford, 349 Or. 247, 243 P.3d 776 (2010), but did err in rejecting part of the city's interpretation of the primary-entrance standard. Accordingly, we reverse as to the primary-entrance standard and otherwise affirm.

FACTS

We take the facts, which are undisputed, from LUBA's opinion.

"[Applicant's] property is located west of Highway 101 and east of the Nehalem River. Botts Marsh, an intertidal wetland adjacent to Nehalem Bay, is located to the north. To the south is vacant land, and to the north is property located outside of the city limits. The property is comprised of two parcels, with a .45-acre parcel zoned Industrial (I) and a 1.72-acre parcel zoned Water Related Commercial (WRC) Wheeler Zoning Ordinance (WZO) 2.020(7) provides that 'retail/wholesale fish and shellfish sales' is a permitted use in the WRC zone, and WZO 3.020(7) provides that 'seafood processing' is a permitted use in the I zone. However, WZO 11.050(1) provides that "all commercial and industrial development in any zone * * * is subject to design review by the [p]lanning [c]ommission."

(Brackets in original, except first brackets added; footnote omitted.)

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[326 Or.App. 217] In 2021, applicant applied for design review for a building for the processing, storage, and retail sale of fish and shellfish. As LUBA explained,

"The project is in two distinct parts. An 8,780 square foot fish processing and warehousing facility will be located entirely on [the] Industrial zoned portion of the site. * * * Attached to this structure, and located entirely within the WRC zoned portion of the site, will be a 1,500 square foot retail market. This part of the structure includes a second floor to be used as an office and for storage."

(Brackets in original; internal quotation marks omitted.)

"The city manager and city planner prepared a staff report that evaluated the building's compliance with the design review criteria in WZO 11.050, and recommended approval of the application.

"On September 23, 2021, the planning commission held a hearing on the application, and at the conclusion, continued the hearing to October 7, 2021, and kept the record open for new evidence and rebuttal. Prior to the October 7, 2021 hearing, [applicant] submitted additional materials to address comments from the public at the first planning commission hearing. At the conclusion of the continued hearing on October 7, 2021, the planning commission voted three in favor and three opposed, with one planning commissioner abstaining after declaring that they had a conflict of interest. The parties agree that a tie vote is the equivalent of denial by the planning commission. ***.

"[Applicant] appealed the planning commission decision to the city council, which held a de novo hearing on the application on November 16, 2021. The city planner provided a staff report that recommended approval of the application. Some members of the public testified that they believed the uses proposed for the building should not be allowed because they are not 'water-related.' Two members of the planning commission testified in opposition to the application. One member of the public testified that the design of the parking lot created a safety hazard. During deliberations on the application, two city council members also expressed concern that the proposed use of the building was not 'water-related.' [326 Or.App. 218]

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"At the conclusion of the hearing, the city council voted three to two to deny the application. After the vote, the city's planner advised the city council that the city was required to supply reasons for its denial, and recommended that the city planner draft proposed findings in support of the decision to deny the application based on their review of the meeting recording, for the city council to review at its next meeting.

"At its December 15, 2021 meeting, the city council adopted a written decision, including findings that the city planner prepared after the November 16, 2021 hearing. The decision concluded that [applicant's] application failed to satisfy five of the design review criteria, WZO 11.050 (4)(a)(6), 11.050(4)(b)(1), (2), (3) and (5)."

(Internal citations omitted.) Thus, after a city council meeting at which there was no discussion of how to interpret the design-review standards, the city issued a final written order denying the application based on newly announced interpretations of the city's design-review standards that differed from those implicit in the city staffs draft findings.

Applicant appealed to LUBA. LUBA ruled that the city was required, and had failed, to adopt findings "sufficient to inform [applicant] of the nature and types of changes in the proposal that will be necessary to obtain approval, that is, sufficient to avoid [applicant] 'having [its] success or failure determined by guessing under which shell lies the pea.'" Botts Marsh, LLC v. City of Wheeler, __ Or LUBA __ (LUBA No 2022-002, May 11, 2022) (slip op at 39) (Botts Marsh I) (quoting Commonwealth Properties, Inc. v. Washington County, 35 Or.App. 387, 399, 582 P.2d 1384 (1978) (Commonwealth) (first brackets added)). LUBA also noted its assumption that, on remand, the city would communicate with applicant about the necessary changes to the application and reopen the record: "We also assume, as the court assumed in Commonwealth, that 'in many instances planning authorities will communicate, at least preliminarily, much of this information to [applicants] on an informal basis prior to the hearing.'" Id. at (slip op at 30 n 8) (quoting Commonwealth, 35 Or.App. at 400).

On remand, the city denied applicant's requests to reopen the record to provide evidence or argument, further

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[326 Or.App. 219] interpreted its design-review standards, and again denied the application for failure to demonstrate compliance with the design-review standards. Applicant again appealed to LUBA.

On the second appeal, LUBA concluded that five of the city's new interpretations of its standards were implausible and did not comply with the standard set out in Commonwealth. It also concluded that the city's failure to provide applicant with any opportunity to submit evidence or argument to respond to the city's evolving interpretations of its design-review standards was procedurally unfair, and it remanded with express instructions for the city to reopen the record in the proceedings on remand.

The city seeks judicial review, asserting that LUBA erred by (1) addressing a procedural-fairness argument that, in the city's view, applicant did not make to LUBA, (2) remanding for a new evidentiary hearing, and (3) rejecting as implausible the city's current interpretations of its design-review standards on primary entrance, avoiding monotony, and view impact.^[1]

FIRST ASSIGNMENT OF ERROR

In its first assignment of error, the city contends that applicant never argued to LUBA that procedural unfairness required the city to reopen the record on remand and that, consequently, LUBA lacked authority to order that. The city frames the issue as one of preservation: that applicant did not expressly argue that the city's failure to reopen the record on remand was a procedural error that affected applicant's substantial rights; that the issue is therefore unpre-served; and that LUBA addressing an unpreserved issue violates ORS 197.805, which requires LUBA decisions to "be made consistently with sound principles governing judicial review," such that LUBA's order is "unlawful in substance," ORS 197.850(9)(a).

In our view, the city's argument is best understood as raising a question regarding LUBA's authority to

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[326 Or.App. 220] address arguments that are underdeveloped or not clearly articulated. That is so because preservation principles relate to a party's arguments to a lower tribunal or decisionmaker, whereas the issue that the city raises here pertains to the quality of applicant's arguments to LUBA itself. Conceptually, we agree with the city that rejecting undeveloped arguments helps achieve the same goals as preservation requirements, particularly "procedural fairness to the parties." State v. Haynes, 352 Or. 321, 335, 284 P.3d 473 (2012) (internal quotation marks omitted). At the same time, we recognize that it is not uncommon for tribunals to be faced with arguments that could be better...