KS Tacoma Holdings, LLC v. Shorelines Hearings Bd.

• Decision Date: 24 January 2012
• Docket Number: No. 41361–2–II.,41361–2–II.
• Citation: 272 P.3d 876,166 Wash.App. 117
• Court: Washington Court of Appeals
• Parties: KS TACOMA HOLDINGS, LLC, Appellant. v. SHORELINES HEARINGS BOARD; David Murphy; Murphy Varey, P.S.; Site–4 Foss Waterway, LLC; Hollander Investments, INC.; and City of Tacoma, Respondents.

166 Wash.App. 117

272 P.3d 876

KS TACOMA HOLDINGS, LLC, Appellant.

v.SHORELINES HEARINGS BOARD; David Murphy; Murphy Varey, P.S.; Site–4 Foss Waterway, LLC; Hollander Investments, INC.; and City of Tacoma, Respondents.

No. 41361–2–II.

Court of Appeals of Washington, Division 2.

Jan. 24, 2012.

David Alan Bricklin, Claudia Macintosh Newman, Bricklin & Newman, LLP, Seattle, WA, for Appellant.

Molly Anne Lawrence, Duncan McGehee Greene, GordonDerr LLP, Seattle, WA, Jeff H. Capell, City of Tacoma Atty Office, Tacoma, WA, for Respondents.

VAN DEREN, J.

[166 Wash.App. 121] ¶ 1 KS Tacoma Holdings appeals the Shorelines Hearings Board's summary judgment order in favor of Hollander Investments and the city of Tacoma (City). The Board's summary judgment order found KS Tacoma did not have standing to appeal a permit revision granted to Hollander for development on the Thea Foss Waterway in Tacoma, Washington. Because KS Tacoma did not raise any genuine issue of material fact precluding summary judgment on the issue of its standing, we affirm.

FACTS

¶ 2 This appeal concerns proposed development on the Thea Foss Waterway in Tacoma, Washington. The Thea Foss Waterway consists of approximately 3.5 miles of shoreline adjacent to downtown Tacoma. The Thea Foss Waterway is an important development area for the City because of its proximity to the central business district, Union Station, the Tacoma Dome, and the port industrial area. AR 398. The record in this case indicates:

The [Thea Foss] Waterway visually and physically connects surrounding districts. The Waterway's historic past and working waterfront, combined with new cultural, recreational, residential, office and retail uses, will create a lively, urban environment. A linear waterfront park will link together a variety of attractive, ground level public activities and uses accessible to all of Tacoma's citizens and to the region.

Administrative Record (AR) at 396. At one time, Thea Foss Waterway was a federally designated Superfund ¹ site but the City's comprehensive design and development plan has envisioned “turn[ing] Thea Foss Waterway into a showcase for Tacoma” through coordinated environmental clean-up efforts and mixed-use public and private development. AR at 396. Toward that goal, the City has constructed a 120–foot wide public esplanade adjoining the waterway and has facilitated the development of the Museum of Glass and residential buildings such as Albers Mill Lofts, the Esplanade, and Thea's Landing.

¶ 3 On February 9, 2007, the City approved a shoreline substantial development permit (2007 SSDP) authorizing the construction of a 120,000 square foot mixed-use building that included 100 hotel rooms, 22 residential units, and retail/commercial uses on vacant property at “Foss Site–4.” AR at 573. Foss Site–4 is located between the Esplanade building, which contains 176 condominium units and a restaurant, and the Thea's Landing building, which contains 236 residential units and retail space.

¶ 4 KS Tacoma owns the Hotel Murano, which is located approximately five city blocks from Foss Site–4. KS Tacoma did not appeal the 2007 SSDP. On March 27, 2008, the City approved a permit revision that decreased the number of residential units to 16 and increased the number of hotel rooms to 160. KS Tacoma did not appeal the 2008 permit revision.

¶ 5 Sometime after the City approved the first permit revision, Hollander purchased Foss Site–4. Hollander applied for a second permit revision (2009 revision), which the City approved on December 17, 2009. The 2009 revision eliminated the 16 remaining residential units and increased the number of hotel rooms to 256. The 2009 revision also changed the configuration of the building, replacing the single tower in the original design with two towers connected on the first floor by a single story structure. Additionally, the 2009 revision increased the first floor space by five percent,² and increased the total floor space from 180,000 square feet to 213,000 square feet.

¶ 6 On January 8, 2010, KS Tacoma filed a petition for review of the City's approval of the 2009 revision, asserting that it was inconsistent with the Shorelines Management Act (SMA) ³ and the City's Shoreline Master Program.⁴ AR 1–8. On March 11, 2010, Hollander and the City brought summary judgment motions to dismiss KS Tacoma's petition for review, asserting that KS Tacoma lacked standing to challenge the 2009 revision. Hollander and the City also argued that several of KS Tacoma's contentions were not properly before the Board because they sought to challenge the 2007 SSDP, which KS Tacoma did not appeal.

¶ 7 On June 10, 2010, the Board issued an order dismissing KS Tacoma's petition for lack of standing. In reaching its decision, the Board stated that it considered only alleged injuries stemming from the 2009 revision because KS Tacoma did not appeal the original 2007 SSDP or the 2008 revision. The Board found that KS Tacoma's asserted injuries to its recreation, view, and aesthetic interests were experienced by third parties and that the general standing doctrine did not allow KS Tacoma “to establish standing by asserting other's legal rights.” AR at 561.

¶ 8 Alternatively, the Board found that, even if it were to consider the alleged injuries to third parties, KS Tacoma failed to establish that the 2009 revision would cause any cognizable harm to those interests. The Board further ruled that “[t]he only injury specific to KS Tacoma is the impact the corporation claims to its reputation, tenor of the community, and diminished future investment,” and that this claimed injury is “both speculative and economic and fail[s] to form the basis for KS Tacoma's standing.” AR at 567.

¶ 9 KS Tacoma unsuccessfully moved for reconsideration of the Board order dismissing its petition for lack of standing. In its order denying reconsideration, the Board clarified its previous decision:

The Board is not ruling that a corporation could never assert a concrete injury within the zone of interests protected by the SMA. The Board, however, is ruling that a corporation must establish a specific injury that is related to an identifiable corporate interest or right protected by the environmental law at issue.

AR at 575. The Board's order denying reconsideration also reiterated that KS Tacoma had failed to establish associational standing and, thus, it could not assert the interests of third parties to establish its standing to appeal the 2009 revision.⁵

¶ 10 On August 24, 2010, KS Tacoma appealed the Board's orders to Thurston County Superior Court. Hollander and the City applied for direct review to this court under RCW 34.05.518. On October 22, 2010, the Board entered an order granting a certificate of appealability, and we accepted direct review.

ANALYSIS

I. Standard of Review

¶ 11 The Administrative Procedure Act (APA), chapter 34.05 RCW, controls our review of agency actions, including that of the Board. Former RCW 90.58.180(3) (2003); Batchelder v. City of Seattle, 77 Wash.App. 154, 158, 890 P.2d 25 (1995). In reviewing an agency action, we apply the APA standards directly to the agency record. Burnham v. Dep't of Soc. & Health Servs., 115 Wash.App. 435, 438, 63 P.3d 816 (2003). To grant relief from the Board's summary judgment order, we must determine that “[t]he agency has erroneously interpreted or applied the law; [t]he order is not supported by evidence that is substantial when viewed in light of the whole record[; or t]he order is arbitrary or capricious.” ⁶ RCW 34.05.570(3)(d), (e), (i).

¶ 12 We review de novo dismissals of claims on summary judgment under CR 56. Reid v. Pierce County, 136 Wash.2d 195, 201, 961 P.2d 333 (1998). Summary judgment is appropriate only if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” CR 56(c).

¶ 13 Although the APA does not expressly authorize summary judgments, case law has established that agencies may employ summary proceedings. Kettle Range Conservation Grp. v. Dep't of Natural Res., 120 Wash.App. 434, 456, 85 P.3d 894 (2003). When reviewing an agency's summary judgment order, “we consider the APA standard of review together with the summary judgment standard of review, viewing disputed facts in the light most favorable to the nonmoving party while considering whether the moving party is entitled to judgment as a matter of law if based on undisputed facts.” Kettle, 120 Wash.App. at 456, 85 P.3d 894. But the nonmoving party “may not rely on speculation, argumentative assertions that unresolved factual issues remain, or having its affidavits considered at face value.” Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wash.2d 1, 13, 721 P.2d 1 (1986).

II. Standing under the SMA

¶ 14 The SMA limits standing to persons “aggrieved by the granting, denying, or rescinding of a permit on shorelines of the state.” Former RCW 90.58.180(1). RCW 34.05.010(14) defines “[p]erson” as, “any individual, partnership, corporation, association, governmental subdivision or unit thereof, or public or private organization or entity of any character, and includes another agency.” KS Tacoma, a corporate entity, has the same rights and protections under the SMA as an individual person. To qualify as an “aggrieved” person for purposes of establishing its standing under the SMA, KS Tacoma must put forth factual allegations demonstrating the following conditions:

(1) The agency action has prejudiced or is likely to prejudice [KS Tacoma];

(2) That [KS Tacoma]'s asserted interests are among those that the agency was required to consider when it engaged in the agency action challenged; and

(3) A judgment in favor of [KS Tacoma] would substantially eliminate or redress the prejudice to [KS Tacoma] caused or likely to be caused by the agency action.

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