PHOENIX DEVELOPMENT v. CITY OF WOODINVILLE

• Decision Date: 02 November 2009
• Docket Number: No. 62167-0-I.,62167-0-I.
• Citation: 229 P.3d 800
• Court: Washington Court of Appeals
• Parties: 229 P.3d 800 (2009) 154 Wash.App. 492 PHOENIX DEVELOPMENT, INC., a Washington corporation, and G&S Sundquist Third Family Limited Partnership, a Washington limited partnership, Motions, Appellants, v. CITY OF WOODINVILLE, a Washington municipal corporation, and Concerned Neighbors of Wellington, a Washington nonprofit corporation, Respondents.

229 P.3d 800

PHOENIX DEVELOPMENT, INC., a Washington corporation, and G&S Sundquist Third Family Limited Partnership, a Washington limited partnership, Motions, Appellants, v. CITY OF WOODINVILLE, a Washington municipal corporation, and Concerned Neighbors of Wellington, a Washington nonprofit corporation, Respondents

No. 62167-0-I.

Court of Appeals of Washington, Division 1

November 2, 2009.

February 22, 2010.

COPYRIGHT MATERIAL OMITTED

George Richard Hill, McCullough Hill PS, Seattle, WA, John Maurice Groen, Groen Stephens & Klinge LLP, Bellevue, WA, for Appellants.

Greg Alan Rubstello, Michael Charles Walter, Keating Bucklin McCormack Inc. PS, Seattle, WA, Philip Albert Talmadge, Talmadge/Fitzpatrick, Tukwila, WA, for Respondent City of Woodinville.

J. Richard Aramburu, Jeffrey M. Eustis, Aramburu & Eustis LLP, Seattle, WA, for Respondent Concerned Neighbors of Wellington.

Timothy M. Harris, Building Industry Assoc. of Washington State, Olympia, WA, for Amicus Curiae Building Industry Association of Washington.

LEACH, J.

¶ 1 Phoenix Development, Inc., appeals decisions of the City of Woodinville denying site-specific rezone requests and subdivision applications for two properties. Because Phoenix's proposed rezones implement the Woodinville comprehensive plan and current zoning code and comply with the city code's general rezone criteria, we hold that the rezone denials were improper. We therefore reverse the city council's decision and remand for a determination on Phoenix's preliminary plat applications.

Background

¶ 2 This matter relates to two parcels located in the Wellington neighborhood of northwest Woodinville, a 38.7 acre parcel known as the Wood Trails proposal and a 16.48 acre parcel known as the Montevallo proposal.¹ In June 2004, Phoenix asked the city to amend the zoning map for these two parcels to rezone each from R-1, which allows one dwelling unit per acre, to R-4, which allows up to four dwelling units per acre² and submitted applications for subdivision approval. The preliminary plat applications proposed subdividing each parcel into 66 single-family residential lots³ and included the transfer of 19 density credits from Wood Trails to Montevallo to achieve the desired number of lots on the smaller Montevallo parcel. Because only nine density credits could be transferred, the number of lots in the Montevallo proposal was reduced to 56.⁴

¶ 3 City staff prepared a draft environmental impact statement (DEIS) analyzing the alternatives and impacts of the Wood Trails and Montevallo proposals. The city published the DEIS in January 2006. The key issues addressed in the DEIS were soil stability, seismic hazards, and erosion potential; surface water, ground water/seepage and water runoff; wildlife, threatened or endangered species, habitat and migration routes; land use, plans and policies, neighborhood character, open space and environmentally sensitive areas; transportation, existing and proposed street system, motorized traffic, non-motorized traffic/pedestrian movement/school safe walk routes and safety hazards; and parks and recreation. The DEIS evaluated the proposed developments (proposed action) and three alternatives: (1) development at the current R-1 zoning with individual septic systems like the existing land uses in the Wellington neighborhood (R-1 zoning alternative), (2) development of attached housing (townhomes) on the Wood Trails property, with single-family lots on the Montevallo property (attached housing alternative), and (3) no development on either site (no action alternative).

¶ 4 The final environmental impact statement (FEIS) published in December 2006 provided additional analysis and clarification of several elements, descriptions of minor changes to Phoenix's proposal, and responses to public comments. The FEIS identified the following key environmental issues:

Earth: Soil stability/possible sand layer, seismic hazards and erosion potential associated with development of Wood Trails.

Water Resources: Surface water, ground water/seepage and water runoff associated with development of Wood Trails and Montevallo.

Plants & Animals: Wildlife, threatened or endangered species, habitat and wildlife connectivity routes associated with development of Wood Trails and Montevallo.

Land Use: Land use plans and policies, neighborhood character, open space and critical areas associated with development of Wood Trails and Montevallo.

Transportation: Transportation, existing and proposed street system, motorized traffic, non-motorized traffic/pedestrian movement/school safe walking routes and safety hazards associated with development of Wood Trails and Montevallo.

Public Services: Parks and recreation associated with development of Wood Trails and Montevallo. Fire, police, schools, water and sewer were determined not to be significant environmental issues.

The FEIS includes tables comparing the impacts, mitigation, and significant unavoidable adverse impacts of the proposed action and each alternative action on the Wood Trails and Montevallo sites.⁵ These tables show that the majority of the significant unavoidable adverse impacts for the proposed action are also likely to occur under the R-1 zoning alternative. The FEIS concludes that "all likely impacts could be mitigated by a redesign — by adopted City regulations and/or by elements incorporated into the design of the proposal — to a level that is considered less than significant."⁶

¶ 5 Staff reports for Montevallo and Wood Trails also analyzed whether the proposals complied with the comprehensive plan and the Woodinville Municipal Code (WMC). The city code criteria for a rezone provide:

A zone reclassification shall be granted only if the applicant demonstrates that the proposal is consistent with the Comprehensive Plan and applicable functional plans at the time the application for such zone reclassification is submitted, and complies with the following criteria:

(1) There is a demonstrated need for additional zoning as the type proposed.

(2) The zone reclassification is consistent and compatible with uses and zoning of the surrounding properties.

(3) The property is practically and physically suited for the uses allowed in the proposed zone reclassification.⁷

¶ 6 Staff concluded that both proposals met the R-4 residential zone criteria and met two of three rezone criteria, under subsections 2 and 3. The staff report did not make a recommendation as to the first criterion, the "demonstrated need" requirement of WMC 21.44.070(1), stating that this criterion "ultimately requires an objective judgment by the Hearing Examiner and City Council based upon relevant City plans, policies, goals, and timeframes."⁸ Staff recommended approval of the requested rezones as long as the "demonstrated need" requirement was met. Staff recommended that the rezone approvals be subject to a number of conditions, including mitigation measures to protect the environment, fire department access requirements, park and transportation impact fees, tree retention, and surface water management.

¶ 7 Public hearings regarding the Montevallo and Wood Trails rezone requests and preliminary plat applications were held on March 14 and 15 and April 5, 2007. The hearing examiner considered testimony and documentary evidence, including the FEIS and a lengthy analysis of the proposals submitted by the Concerned Neighbors of Wellington (CNW).⁹ The hearing examiner recommended that the city council approve the rezones from R-1 to R-4. The hearing examiner also recommended approval of the subdivision of Wood Trails into 66 lots with the transfer of nine lots to Montevallo and the subdivision of Montevallo into 56 lots, subject to numerous conditions.¹⁰ In the decision for each property, the hearing examiner clearly set forth the R-4 rezone criteria, applied those criteria to his findings, and concluded that all criteria were met.

¶ 8 On August 20, 2007, the city council entered findings, conclusions, and decision denying Phoenix's requests to rezone Wood Trails and Montevallo from R-1 to R-4. Based on its decision regarding the rezones, the council summarily denied the subdivisions as inconsistent with the sites' existing R-1 zoning designation.¹¹ The council, in its "legislative capacity," found that the existing R-1 zoning designation was appropriate for Phoenix's property.¹² In its "quasi-judicial capacity," the city council concluded that the rezones would be "inconsistent with significant Comprehensive Plan Policies," that the "demonstrated need" criterion in WMC 21.44.070 had not been met, and that the rezones did not "bear a substantial relationship to the public health, safety, morals or welfare" as required by case law.¹³ The council concluded that public services in areas serving the Wood Trails and Montevallo proposals were not adequate¹⁴ and that the city could not provide adequate services to those parcels in the near-term because the resources were already committed under the city's capital improvement plan for infrastructure in other parts of the city, such as the downtown area, which the city council had previously selected for focused growth.¹⁵ The council found that additional public services were needed to support the proposed developments, that reallocating capital resources to the subject area would be premature and inefficient, and that the mitigation measures that the developments would contribute, such as impact fees, would not correct the public service deficiencies.¹⁶

¶ 9 Phoenix filed a land use petition in superior court, seeking reversal of the city council's denial of its rezone and subdivision requests. The superior court dismissed...