Pavlina v. City of Vancouver

• Decision Date: 13 July 2004
• Docket Number: No. 30829-1-II.,30829-1-II.
• Citation: 94 P.3d 366,122 Wash.App. 520
• Court: Washington Court of Appeals
• Parties: Dennis PAVLINA; and Gold Medal Group, LLC, a Washington limited liability company, Appellants, v. CITY OF VANCOUVER, Washington, a municipal corporation of the State of Washington, Respondent.

94 P.3d 366

122 Wash.App. 520

Dennis PAVLINA; and Gold Medal Group, LLC, a Washington limited liability company, Appellants, v. CITY OF VANCOUVER, Washington, a municipal corporation of the State of Washington, Respondent.

No. 30829-1-II.

Court of Appeals of Washington, Division 2.

July 13, 2004.

Le Anne Marie Bremer, Miller Nash, LLP, Vancouver, WA, for Appellants.

James J. McNamara, Vancouver, WA, for Respondent.

BRIDGEWATER, J.

Dennis Pavlina and Gold Medal Group, LLC appeal the imposition of impact fees imposed on them when they obtained a building permit for a commercial building. We hold, consistent with our decision in New Castle Investments v. City of LaCenter, 98 Wash.App. 224, 989 P.2d 569 (1999), review denied, 140 Wash.2d 1019, 5 P.3d 9 (2000), that although preliminary plat approval occurred in 1988, before the impact fee ordinance was adopted in 1995, the imposition of impact fees was correctly calculated at the time the petitioner applied for the building permit in 2002. We affirm and award attorney fees to the City of Vancouver.

Dennis Pavlina and Gold Medal Group, LLC are current owners of an office building project located in Clark County.¹ In October 1988, Clark County preliminarily approved short plat no. 88-79-1722. This approval created two lots; one lot became Parkway Plaza Phase III and the other lot became Parkway Plaza Phase IV (Phase IV). Parkway Plaza Phase III is not at issue in this appeal. The final short plat approval occurred on November 23, 1988.

As a condition of the plat approval, each lot in the short plat had to participate in the Road Improvement District (RID) # 87-01 based on its frontage on NE 77th Avenue. When the plat received approval, improvements to NE 77th Avenue had already been completed. Between preliminary and final short plat approval, in November 1988, the County preliminarily approved a site plan for Phase IV. Clark County issued a Determination of Nonsignificance (DNS) under the State Environmental Policy Act (SEPA) on May 2, 1988. At that time, the number of vehicular trips the project would generate was unknown. But a handwritten note in the margin of the SEPA checklist suggested that there would be 615 additional daily trips (ADTs) per phase. Because the project received a DNS, Clark County did not impose any measures to mitigate the impacts of the additional trips on the surrounding roadways.

The City of Vancouver (the City) annexed the site on January 1, 1993. In 1995, the City adopted an impact fee ordinance according to chapter 82.02 RCW. The City granted final site plan approval on October 28, 2002. It issued building permits on November 21, 2002. This same day, Pavlina paid the required impact fees under protest. Pavlina then appealed the impact fees.

On January 30, 2003, an open record appeal hearing occurred before the City's hearing examiner. The hearing examiner found the $111,112 in fees was consistent with chapter 20.97 of the Vancouver Municipal Code (VMC) and relevant state law. Pavlina then filed a Land Use Petition Act (LUPA) appeal with the Clark County Superior Court. After a hearing, the superior court affirmed the hearing examiner's decision.

I. Standard of Review

LUPA, chapter 36.70C RCW, governs review of land use decisions. Wenatchee Sportsmen Ass'n v. Chelan County, 141 Wash.2d 169, 175, 4 P.3d 123 (2000). This court may grant relief to Pavlina under RCW 36.70C.130, if Pavlina can establish that one of the standards in the statute has been met. Thornton Creek Legal Defense Fund v. City of Seattle, 113 Wash.App. 34, 47, 52 P.3d 522 (2002), review denied, 149 Wash.2d 1013, 69 P.3d 875 (2003). The standards are:

(a) The body or officer that made the land use decision engaged in unlawful procedure or failed to follow a prescribed process, unless the error was harmless;

(b) The land use decision is an erroneous interpretation of the law, after allowing for such deference as is due the construction of a law by a local jurisdiction with expertise;

c) The land use decision is not supported by evidence that is substantial when viewed in light of the whole record before the court;

(d) The land use decision is a clearly erroneous application of the law to the facts;

(e) The land use decision is outside the authority or jurisdiction of the body or officer making the decision; or

(f) The land use decision violates the constitutional rights of the party seeking relief.

RCW 36.70C.130(1)(a)-(f). Pavlina asserts that subsections (b) and (d) apply to his case. On review of a LUPA decision, this court stands in the shoes of the superior court and reviews 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).

II. Legislative History

In 1990, the legislature adopted RCW 82.02.050 as part of the Growth Management Act. RCW 82.02.050 authorizes cities to impose impact fees on those involved in development activities. RCW 82.02.090(1) defines "[d]evelopment activity" as "any construction or expansion of a building, structure, or use, any change in use of a building or structure, or any changes in the use of land, that creates additional demand and need for public facilities."

RCW 82.02.090 distinguishes between "[p]roject improvements" and "[s]ystem improvements." Project improvements are site improvements and facilities designed to provide service for a particular development project and "that are necessary for the use and convenience of the occupants or users of the project, and are not system improvements." RCW 82.02.090(6). System improvements are public facilities included in a capital facilities plan that are designed to provide service to service areas within the community at large. RCW 82.02.090(9).

A city can only impose impact fees collected under RCW 82.020.050 on system improvements that are reasonably related to new development. RCW 82.02.050(3)(a). The fees shall not exceed a "proportionate share" of the costs of system improvements reasonably related to the new development. RCW 82.02.050(3)(b); City of Olympia v. Drebick, 119 Wash.App. 774, 83 P.3d 443 (2004). And finally, the fees shall be used for system improvements that will reasonably benefit the new development. RCW 82.02.050(3)(c). A "[p]roportionate share" is that portion of the cost of public facility improvements that are reasonably related to the service demands and needs of new development. RCW 82.02.090(5).

RCW 82.02.020 is another tool for cities to impose the cost of constructing and maintaining public facilities and services on the developments creating the need for these services and facilities. This statute enables cities to mitigate the "direct" impacts of new development with reasonably and necessary exactions and dedications.

A municipality need not spend impact fees collected under RCW 82.02.050 on infrastructure that specifically benefits a particular development. Wellington River Hollow, LLC v. King County, 113 Wash.App. 574, 587, 54 P.3d 213 (2002), review denied, 149 Wash.2d 1014, 70 P.3d 965 (2003). Instead, the impact fees need only provide a general benefit to the entire area. Wellington River Hollow, 113 Wash.App. at 587, 54 P.3d 213.

The City enacted VMC 20.97.030(C) and VMC 20.97.060(B) and (C) in 1995 after the legislature enacted RCW 82.02.050. VMC 20.97.030(C) states: "[t]o the extent that new development in service areas and overlay service areas places demands on the public facility infrastructure, those demands should be partially satisfied by shifting a proportionate share of the responsibilities for financing the provision of such new facilities from the public at large to the developments actually creating the demands." These enactments are similar to RCW 82.02.050(1).

VMC 20.97.060(B) and (C) illustrate how the City plans to impose impact fees on "new development and growth." RCW 82.02.050. The relevant parts of those sections state:

(B) For single-family/duplex residential subdivisions and short subdivisions hereinafter approved, the per lot impact fee shall be calculated at the time of preliminary plat or short plan approval, noted on the face of the final plat, and imposed on a per lot basis at the time of building permit application. For new multi-family and non-residential development hereafter approved, the impact fee shall be calculated at the time of site plan approval or building permit application if the proposed development is not sufficiently defined to permit such calculation. Notwithstanding the foregoing, the fee shall be re-calculated for building permit applications filed more than three (3) years following the date of the applicable preliminary plat, preliminary short plat or site plan approval.

(C) For development not necessitating or having been previously granted preliminary plat, preliminary short plat or site plan approval, the impact fee shall be calculated and imposed at the time of building permit application.

VMC 20.97.060(B) and (C). The City's intent in enacting its impact fee ordinance and the legislature's intent in RCW 82.02.050 are at issue in this appeal.

III. New Castle v. City of LaCenter Standards

In New Castle, we held that impact fees do not change a land use decision. New Castle, 98 Wash.App. at 232, 989 P.2d 569. As such, cities may impose impact fees on new developments. Here, the court relied on New Castle to affirm the hearing examiner's decision. Pavlina asserts that New Castle does not apply because the City could not impose impact fees on a project the City approved before it adopted its impact fee ordinance.

A. Preliminary Site Plan Approval

Pavlina argues that a municipality's preliminary site plan approval is a final land use decision for the purpose of charging traffic impact fees. He asserts that he received the right to complete the project according to the terms of the approval (with his preliminary approval of the Parkway project). We disagree because the...