Editor's Note: The Washington State Supreme Court recently issued Abbey Road Group, LLC v. City of Bonney Lake, an important case in the area of vested development rights. Matthew Stock, an attorney with the Buck Law Group—a Seattle-based land use, environmental, dispute resolution and civil litigation firm that is a Northwest Hub sponsor—provides background and insight into this decision. You can reach him by sending an email to mstock@bucklawgroup.com.
The Washington State Supreme Court issued Abbey Road Group, LLC v. City of Bonney Lake on Oct. 8, its latest foray into the field of vested development rights. While the opinion was divided, a majority of the justices clearly held that development rights do not vest upon the filing of a site plan application. The justices’ discussion of the city’s vesting procedures and due process, however, may leave some scratching their heads.
The Facts of the Case
On Sept. 13, 2005, three months after meeting with city staff to initially discuss its development proposal, local developer Abbey Road Group, LLC submitted a site plan application for a 24-building, 575-unit condominium project within the City of Bonney Lake.
Generally speaking, site plan applications constitute a preliminary part of the development process and often precede the building permit application; they are typically required for commercial, industrial and multifamily development proposals. Abbey Road’s site plan application was fairly comprehensive, and included a checklist for SEPA (State Environmental Policy Act), traffic impact analysis, stormwater report, and detailed site and landscaping plans. All told, Abbey Road spent nearly $100,000 preparing the documents. At no point, however, did Abbey Road file a building permit application, which would ultimately prove fatal to its cause.
The same day Abbey Road submitted its site plan application, the Bonney Lake City Council passed Ordinance No. 1160, rezoning Abbey Road’s property from “commercial” (which allowed for Abbey Road’s condominium proposal) to “residential/conservation” (which didn’t). One month later the city’s planning director notified Abbey Road that because it had not filed a building permit application before the rezone, its proposal had not vested under the prior commercial zoning. Accordingly, the city could no longer consider Abbey Road’s proposed condominium project.
Abbey Road challenged the planning director’s determination before the city hearing examiner. When the hearing examiner ruled in favor of the city, Abbey Road filed suit under a Land Use Petition Act (LUPA) and the matter ultimately ended up before the Washington State Supreme Court. There, the issues were whether Abbey Road’s development rights vested upon the filing of a site plan application, and whether the city’s vesting process was so unduly oppressive that it violated Abbey Road’s due process rights.
Washington’s Vesting Rule
“Vesting” generally refers to the notion that a development proposal will be considered under only those land use regulations in effect at the time the developer completes certain, specific actions (which may vary by jurisdiction), regardless of any subsequent changes to those regulations. Most states follow the so-called “majority rule” and will not consider a proposal to be vested until the governing authority issues a building permit and the developer undertakes substantial development in reliance on that permit.
Washington follows the more development-friendly “minority rule,” and considers development proposals to be vested when the developer simply submits a complete building permit application. Washington has codified this rule at RCW 19.27.095(1), which provides that:
“A valid and fully complete building permit application for a structure, that is permitted under the zoning or other land use control ordinances in effect on the date of the application shall be considered under the building permit ordinance in effect at the time of application, and the zoning or other land use control ordinances in effect on the date of application.”
Washington’s rule effectively enables developers to fix the applicable land use regulations for any given development proposal by submitting a complete building permit application. It offers greater predictability than the majority rule and ensures that subsequently enacted land use regulations will not deprive land owners of their due process rights. A local government is free to enact its own vesting ordinance so long as it is no more restrictive than the state statute.
The Court’s Analysis
Abbey Road first argued that the court should extend Washington’s vesting rule to include site plan applications, such as the one it filed with the city before the city rezoned its property. According to Abbey Road, the costs associated with site plan applications were sufficient to entitle a developer to a vested right and to deter permit speculation.
The court summarily rejected this argument. According to the lead opinion, similar arguments had been raised and rejected in Erickson & Associates, Inc. v. McLerran, a 1994 case that Abbey Road had failed to adequately distinguish. Moreover, Abbey Road failed to explain how the court could disregard the express language of RCW 19.27.095(1), which conditions vesting on the submission of a “valid and fully complete building permit application.”
Next, Abbey Road argued that the city’s vesting process was unduly oppressive under West Main Associates v. City of Bellevue. This is where things got interesting.
By way of background, West Main is a 1986 decision in which the State Supreme Court struck down Bellevue’s vesting ordinance on due process grounds because it prohibited developers from filing building permit applications—and thus vesting their projects—until a series of preliminary procedures had been completed. Among these preliminary procedures was Bellevue’s approval of the developer’s site plan.
Unlike Bellevue, the City of Bonney Lake did not have a vesting ordinance in place. Instead, Abbey Road based its argument on the city’s commercial building permit application form, which required developers to submit six copies of the approved site plans along with the building permit application. According to Abbey Road, this application procedure created the same kinds of unconstitutional hurdles that had been struck down in West Main.
In response, the city argued that Abbey Road had misinterpreted its building permit application form, stating that nothing in the city’s code prevented a developer from submitting a building permit application before a site plan application is approved. (Whether or not such a building permit application would be “complete” was left unanswered.)
The lead opinion, authored by Justice Charles Johnson and joined by Justices Owens and Stephens, dismissed West Main as incongruous and rejected Abbey Road’s argument. Despite the building permit application form’s stated requirements, the three justices concluded that nothing in the city’s code or application procedures affirmatively prohibited Abbey Road from submitting a building permit application until after the city approved its site plan application.
Based on their reading of RCW 19.27.095, the justices reasoned that such a building permit application would be “complete” so long as Abbey Road submitted an approved site plan as soon as possible. Perhaps most significantly, because Abbey Road never submitted a building permit application, it could not establish that the city would have deemed such an application to be incomplete.
The concurrence, authored by Justice Madsen and joined by Justice Fairhurst, acknowledged Abbey Road’s “legitimate concern” over the city’s building permit application process—which called for six copies of the approved site plans—but concluded that Abbey Road’s failure to submit a building permit application was fatal to its argument.
The dissent, authored by Justice Sanders and joined by Justices Alexander, Chambers and James Johnson, wasn’t having any of it. Whether or not Abbey Road could have submitted a building permit application before the city approved its site plan application was beside the point. The real issue, which neither the lead opinion nor the concurrence adequately addressed, was whether such a building permit application would be complete, as required by the plain language of RCW 19.27.095(1).
According to the dissent, the majority’s “unwarranted and unstated assumption that Abbey Road could have filed a fully complete building permit and vested its rights without an approved [site plan application]” was completely preposterous. Thus, while the city may not have had an actual ordinance that ran afoul of West Main, its building permit application procedures—which conditioned Abbey Road’s ability to vest on the city’s discretionary pre-application procedures—did.
Conclusion
In short, a developer cannot vest a project by simply submitting a site plan application. Whether or not a developer, such as Abbey Road, could have vested a project by submitting a building permit application without an approved site plan, however, is an open question, and one that is likely to come before the court in the future. Until the court resolves that question, developers operating in jurisdictions that do not have vesting ordinances in place may opt to employ such a strategy to preserve their development rights.
