Dolan v. City of Tigard

• Decision Date: 20 May 1992
• Parties: John T. DOLAN and Florence Dolan, Petitioners, v. CITY OF TIGARD, Respondent. LUBA 91-161; CA A73769.
• Court: Oregon Court of Appeals

Page 853

832 P.2d 853

113 Or.App. 162

John T. DOLAN and Florence Dolan, Petitioners, v. CITY OF TIGARD, Respondent.

LUBA 91-161; CA A73769.

Court of Appeals of Oregon.

Argued and Submitted April 13, 1992.

Decided May 20, 1992.

David B. Smith, Tigard, argued the cause and filed the brief for petitioners.

James M. Coleman, Portland, argued the cause for respondent. With him on the brief was O'Donnell, Ramis, Crew & Corrigan, Portland.

Before RICHARDSON, P.J., and DEITS and DURHAM, JJ.

RICHARDSON, Presiding Judge.

Petitioners applied to the City of Tigard for a permit to tear down the existing retail building on their property, to construct a larger one and to intensify the commercial use of the property. The city granted the application, subject to the conditions specified in applicable zoning ordinance provisions that petitioners dedicate part of the property for a pedestrian and bicycle pathway and for greenway and storm water drainage purposes. Subsequently, petitioners sought a variance from the provisions prescribing the conditions, which the city denied. Petitioners appealed to LUBA, contending that the dedication requirements constitute uncompensated takings of the property in violation of Article I, section 18, of the Oregon Constitution and the Fifth Amendment to the federal constitution, made applicable to the city by the Fourteenth Amendment. LUBA rejected the contentions and affirmed the city's decision. Petitioners seek review, and we affirm.

In Nollan v. California Coastal Comm'n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), the Supreme Court developed what appears to be a three-level inquiry for determining when a condition on development constitutes a taking. The first question is whether there is a legitimate governmental interest that the regulation that establishes the conditions is designed to serve. The second is whether the regulation and the condition "substantially advance" that interest. See Agins v. Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980). In Dept. of Trans. v. Lundberg, 312 Or. 568, 576-77, 825 P.2d 641 (1992), the Oregon Supreme Court explained the second part of the Nollan inquiry:

"The Supreme Court of the United States held that this type of condition amounts to an unconstitutional taking unless there is an 'essential nexus' between the land use regulation that the permit condition is intended to implement and the permit condition. The Court described this requirement:

" '[A] permit condition that serves the same legitimate [governmental] purpose as a refusal to issue the permit should not be found to be a taking if the refusal to issue the permit would not constitute a taking.

* * * * * *

" 'The evident constitutional propriety disappears, however, if the condition substituted for the prohibition utterly fails to further the end advanced as the justification for the prohibition. * * * In short, unless the permit condition serves the same governmental purpose as the development ban, the building restriction is not a valid regulation of land use but "an out-and-out plan of extortion." '

"Nollan v. California Coastal Comm'n, supra, 483 US at 836-37 (citing authority). The Court concluded that the permit condition did not serve any of the purposes relied on to justify its imposition. The lack of nexus between the permit condition and the purpose of the building restriction converted that purpose to 'the obtaining of an easement to serve some valid governmental purpose, but without payment of compensation[,]' i.e., to an unconstitutional taking. Id. at 837 ." (Brackets in original.)

The third inquiry is concerned with the application of the conditions to particular developments and poses the question of what relationship must exist between the impacts or public needs that result from a development and the conditions that may be attached to its approval to ameliorate or respond to those impacts and needs. (In land use parlance, this is sometimes called the relationship between "impacts" and "exactions.") The Court said in Nollan:

"The Commission claims * * * that we may sustain the condition at issue here by finding that it is reasonably related to the public need or burden that the Nollans' new house creates or to which it contributes. We can accept, for purposes of discussion, the Commission's proposed test as to how close a 'fit' between the condition and the burden is required, because we find that this case [sic ] does not meet even the most untailored standards." 483 U.S. at 838, 107 S.Ct. at 3149. (Emphasis supplied.)

The Court proceeded to hold that requiring the Nollans to grant a public beach access easement did not have the necessary relationship to the construction of the house for which they sought a permit. Stripped to its essentials, the Court's reasoning is that the house would not interfere with access in the way that the Commission thought and, therefore, the easement could not be required to promote access, at least without payment of compensation to the Nollans.

Although petitioners' brief in this court differs significantly from the argument that they made to LUBA, the principal issues here, as there, are what the proper test is for ascertaining whether a condition survives constitutional scrutiny under the third question in Nollan and whether the conditions here pass that test. The city argues, and LUBA concluded, that the "reasonable relationship" test is the correct one under both constitutions. LUBA explained the substance of that test:

"The 'reasonable relationship' standard is somewhere between the more extreme standards followed by courts in a few jurisdictions which require that the need for a development exaction be 'specifically and uniquely attributable' to the proposed development, or that a development exaction merely have 'some relationship' to the proposed development. Parks v. Watson, [716 F2d 646 (9th Cir 1983) ]."

Petitioners do not appear to dispute that that is the correct conclusion under the Oregon Constitution, and we agree with LUBA's conclusion and its analysis of the Article I, section 18, issue. See Hayes v. City of Albany, 7 Or.App. 277, 490 P.2d 1018 (1971); O'Keefe v. City of West Linn, 14 Or. LUBA 284 (1986). The reasonable relationship test has also been adopted as the correct standard under the Fifth Amendment by most courts that have addressed the question. It was endorsed by the Ninth Circuit in Parks v. Watson, supra, and that court in effect held in Commercial Builders v. Sacramento, 941 F.2d 872 (9th Cir.1991), that Nollan...