[No. 35383-1-II. Division Two. October 9, 2007.]
[1] Building Regulations — Land Use Regulations — Judicial Review — Land Use Petition Act — Appellate Review — Record — Agency Record. An appellate court reviewing a local land use decision that a superior court has reviewed under the Land Use Petition Act (chapter 36.70C RCW) stands in the shoes of the superior court and limits its review to the record that was before the local agency. [2] Building Regulations — Land Use Regulations — Judicial Review — Land Use Petition Act — Appellate Review — Issues of Law — Standard of Review. Whether relief from a local land use decision is warranted under RCW 36.70C.130(1)(b) or (f) of the Land Use Petition Act because the decision involves an erroneous interpretation of the law or violates constitutional rights is a question of law that an appellate court reviews de novo. [3] Building Regulations — Land Use Regulations — Judicial Review — Land Use Petition Act — Appellate Review — Clearly Erroneous Decision — What Constitutes. An appellate court will not find a local land use decision to be the product of a clearly erroneous application of the law to the facts within the meaning of RCW 36.70C.130(1)(d) of the Land Use Petition Act unless it is left with a definite and firm conviction that a mistake has been made. [4] Building Regulations — Land Use Regulations — Vested Rights — Statutory Provisions — Effect. The vested rights doctrine, as codified in RCW 19.27.095(1), entitles land developers to have a land development proposal processed under the regulations in effect on the date that a complete building permit application is filed, regardless of subsequent changes in zoning or other land use regulations. [5] Building Regulations — Land Use Regulations — Vested Rights — Filing of Completed Permit Application — Necessity. RCW 19.27.095(1) is unequivocal and requires the submission of a valid and fully complete building permit application before development rights may vest under then-existing land use and development regulations. [6] Building Regulations — Land Use Regulations — Vested Rights — Filing of Site Development Plan Review Application — Statutory Provisions. The vested rights doctrine, as codified in RCW 19.27.095(1), has not been judicially expanded to vest development rights under existing land use laws and regulations upon the filing of an application for site development plan review. Only the filing of a valid and fully complete building permit application triggers the protection of the vested rights doctrine. [7] Building Regulations — Land Use Regulations — Vested Rights — Filing of Site Development Plan Review Application — Due Process. A land developer does not have a due process right to the vesting of development rights under existing land use laws and regulations upon the filing of an application for site development plan review if, under applicable laws and regulations, site development plan review approval is not a prerequisite to the submission of a building permit application and the developer is not otherwise prohibited from submitting a building permit application before applying for site development plan review. [8] Building Regulations — Land Use Regulations — Vested Rights — Detrimental Reliance — Effect. Detrimental reliance is not a basis for vesting development rights in Washington. [9] Building Regulations — Land Use Regulations — Vested Rights — Public and Private Interests. The vested rights doctrine, as codified in RCW 19.27.095(1), recognizes a tension between the private interests of land developers and public interests. Development interests and due process rights protected by the vested rights doctrine come at a cost to the public interest. The practical effect of recognizing a vested right is to sanction the creation of a new nonconforming use. A proposed development that does not conform to newly adopted laws is, by definition, inimical to the public interest embodied in those laws. If a vested right is too easily granted, the public interest is subverted. The vested rights doctrine balances the private interests of land developers and public interests by selecting a vesting point—the date that a valid and fully complete building permit application is filed—which prevents "permit speculation" and demonstrates substantial commitment by the developer, such that the good faith of the developer is generally assured. [10] Building Regulations — Land Use Regulations — Vested Rights — Filing of Site Development Plan Review Application — Difficulty and Expense of Preparing Plan — Effect. The difficulty or expense of preparing a site development plan does not justify expansion of the vested rights doctrine to entitle a land developer to the vesting of development rights under existing land use laws and regulations upon the filing of an application for site development plan review. The money that a land developer invests in a proposed development project does not alter the rule that only the filing of a valid and fully complete building permit application triggers the protection of the vested rights doctrine. Nature of Action: A land developer sought judicial review of a city hearing examiner's decision that development rights for a condominium project did not vest upon the filing of an application for site development plan review. After the developer filed its application for site development plan review, the city council passed an ordinance rezoning the subject property to a zoning category that precluded the sort of multifamily development the developer sought to construct. The hearing examiner determined that the developer, having failed to file a building permit application, did not have vested rights in the prior zoning. Superior Court: The Superior Court for Pierce County, No. 06-2-06745-8, Rosanne Buckner, J., on September 1, 2006, entered a judgment reversing the hearing examiner's decision. Court of Appeals: Holding that development rights did not vest when the developer filed the application for site development plan review, that the city's development scheme is not so burdensome that it unconstitutionally frustrates vested rights, and that the city's development scheme does not conflict with statutory or case law controlling vesting of development rights, the court reverses the judgment and remands the case for further proceedings. Jeffrey Ganson- and Lisa M. Worthington-Brown- (of Dionne & Rorick), for appellant. Loren D. Combs- and Gregory F. Amann- (of McGavick Graves, PS), for respondents. ¶1 VAN DEREN, A.C.J. — The City of Bonney Lake asks us to reverse the superior court's decision reversing a hearing examiner's decision denying vested development rights to Abbey Road Group, LLC FACTS ¶2 Abbey Road proposed to build a 575 unit condominium project on 36.51 acres within the city of Bonney Lake. In Bonney Lake, Title 14 of the Bonney Lake Municipal Code (BLMC) ¶3 On June 15, 2005, Abbey Road representatives attended a preapplication meeting with Bonney Lake. The zoning of the subject site is Commercial (C-2). Pursuant to BLMC Section 18.26.020, the C-2 zoning district permits multi-family development, subject to a Type 3 permit under BLMC Chapter 14.50, and environmental review under the State Environmental Policy Act [of 1971, chapter 43.21C RCW] (SEPA), if applicable. All application material is included and all information requested on the application forms (Building Permit and Planning Department) shall be submitted in order for a complete application. A Type 3 permit is approved by the [Director of the Bonney Lake Planning and Community Development Department (Director)] and can be appealed to the Bonney Lake Hearing Examiner. Administrative R. (AR) Ex. 15, at 1-2. ¶4 The letter also listed the following requirements for the site development plan review: SEPA checklist, public notification, preliminary storm water report, traffic impact analysis, various site plan versions, landscape and road/pedestrian plan, geotechnical report, and hydrogeologic impact study. The closing paragraph of the letter stated: This letter reflects the information provided at the preapplication meeting and is intended to assist you in preparing plans and materials for formal application. We hope you found the comments useful to your project. We have made every effort to identify major issues to eliminate surprises during the City's review of the formal application. The completion of the preapplication process in the content of this letter does not vest any future project application. Comments in this letter are only valid for one year. As you know, this is a preliminary review only and does not take the place of the full review that will follow submission of a formal application. Comments provided in this letter are based on preapplication materials submitted. AR Ex. 15, at 9 (emphasis added). ¶5 Abbey Road embarked on the development process, expending some $96,500 ¶6 In a letter dated October 12, 2005, the Director notified Abbey Road that its project was not vested under the prior ordinance because Abbey Road had not filed a building permit application. Abbey Road appealed the Director's determination. ¶7 The parties disputed the testimony before the hearing examiner about whether the city officials who attended the preapplication meeting also orally advised the Abbey Road representatives that vesting occurred only with the building permit application. City officials all agreed that there was no ambiguity about the necessity of a building permit application to vest Abbey Road's development rights to this project, while the Abbey Road participants claimed that the city did not give them a direct answer to their questions. But the evidence included the June 15 letter informing Abbey Road that "[i]n addition to this preapplication letter, please examine the complete BLMC and other relevant codes carefully," and that completion of the preapplication process "does not vest any future project application." AR Ex. 15, at 9. ¶8 The hearing examiner found that the Director correctly determined that: The submittal of a completed application for a Type 3 permit pursuant to Chapter 14.50 BLMC does not vest a multi-family or commercial project allowed outright by the applicable C-2 zone classification. An applicant must submit a completed application for a building permit to vest the project. Erickson [& Associates] v. McLerran, 123 Wn.2d 864[, 872 P.2d 1090] (1994); Noble Manor Company v. Pierce County, 133 Wn.2d 269[, 943 P.2d 1378] (1997). Clerk's Papers (CP) at 37. ¶9 Abbey Road filed a petition under the Land Use Petition Act (LUPA), chapter 36.70C RCW, seeking to reverse the hearing examiner's decision. And the superior court reversed the hearing examiner's decision, concluding: 2. [Abbey Road] was required by [Bonney Lake] to submit a Type 3 site development permit application . . . which they did do in a complete and timely fashion on September 13, 2005. 3. [Abbey Road's] complete Type 3 site development permit application . . . is vested under the zoning and other land use control ordinances in effect at the time the complete application was filed. . . . 4. [Abbey Road has] a vested right to develop the [p]roperty in accordance with [its] site development permit application under the zoning and other land use control ordinances in effect at the time the complete application was filed on September 13, 2005; 5. [Abbey Road's] Type 3 site development permit application . . . and . . . development . . . are not subject to [the post-application ordinance that rezoned the property]. CP at 115-16. ¶10 Bonney Lake appeals. ANALYSIS ¶11 Bonney Lake contends that: (1) the hearing examiner properly determined that Erickson was controlling and, therefore, the hearing examiner did not erroneously interpret the law; (2) the hearing examiner properly applied the law to the facts in determining that Abbey Road's application for a site development plan review did not vest rights because Abbey Road never filed a building permit application; and (3) the hearing examiner properly determined that Abbey Road's constitutional rights were not violated because Bonney Lake's procedures comport with public policy and were not unduly burdensome such that they improperly frustrated vesting. ¶12 Abbey Road urges us to affirm the trial court, arguing that Erickson is not controlling authority and, therefore, the trial court correctly concluded that filing an application for site development plan review vested the project. In support, Abbey Road asserts that Washington's common law vested rights doctrine has been vicariously expanded or, in the alternative, we should expressly expand the vested rights doctrine to protect its due process rights. I. STANDARD OF REVIEW (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). Abbey Road challenges the hearing examiner's decision under (b), (c), (d), and (f), asserting that the hearing examiner's decision was an erroneous interpretation of the law, a clearly erroneous application of the law to the facts not supported by substantial evidence, II. WASHINGTON'S VESTED RIGHTS DOCTRINE Notwithstanding the weight of authority, we prefer to have a date certain upon which the right vests to construct in accordance with the building permit. . . . The more practical rule to administer, we feel, is that the right vests when the party, property owner or not, applies for his building permit, if that permit is thereafter issued. This rule, of course, assumes that the permit applied for and granted be consistent with the zoning ordinances and building codes in force at the time of application for the permit. Hull v. Hunt, 53 Wn.2d 125, 130, 331 P.2d 856 (1958). Thus, Washington's date certain common law vested rights doctrine "entitles developers to have a land development proposal processed under the regulations in effect at the time a complete building permit application is filed, regardless of subsequent changes in zoning or other land use regulations." Erickson, 123 Wn.2d at 867-68. ¶16 In 1987, the legislature codified Washington's common law vested rights doctrine. 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. III. BUILDING PERMIT APPLICATION ¶17 Bonney Lake contends that because Abbey Road did not submit a building permit application no development rights vested and, therefore, the hearing examiner properly applied the law to the facts under RCW 36.70C.130(d). IV. VICARIOUS EXPANSION OF VESTED RIGHTS DOCTRINE ¶20 In Victoria Tower, Seattle attempted to modify existing development rights after it adopted new ordinances in response to SEPA. 49 Wn. App. at 757. Division One initially remanded the case, holding that Seattle could not modify vested rights based on the new ordinances under the vested rights doctrine. Victoria Tower I, 49 Wn. App. at 762-63. On remand, Seattle's City Council reaffirmed its earlier decision by relying on policies that were adopted before the developers filed their building permit application. Victoria Tower P'ship v. City of Seattle, 59 Wn. App. 592, 595-96, 800 P.2d 380 (1990) (Victoria Tower II). Division One upheld the city council's second decision, concluding that it was consistent with due process and clearly not erroneous. Victoria Tower II, 59 Wn. App. at 605. ¶21 Although Abbey Road admits that the "vesting doctrine for building permits was well settled at the time" of the Victoria Tower I decision, it asserts that the developer's application in Victoria Tower was for a MUP and not for a building permit. Br. of Resp't at 22. Apparently Abbey Road reasons that Division One must have determined that filing a MUP application vested development rights. But a fair reading of both Victoria Tower decisions does not support Abbey Road's conclusion. In fact, both Victoria Tower decisions repeatedly refer to the developer's building permit application. 49 Wn. App. at 758-62; see also 59 Wn. App. at 604. Therefore, either the Victoria Tower courts assumed that the two types of permits were equivalent or the distinction between a MUP and a building permit was not before those courts. See Erickson & Assocs., Inc. v. McLerran, 69 Wn. App. 564, 568, 849 P.2d 688 (1993). ¶22 Contrary to Abbey Road's argument, Victoria Tower II is entirely consistent with Washington's common law vested rights doctrine that has long required a building permit application to preserve development rights under the building codes in effect when it was filed. Moreover, the legislature codified the common law vesting rules in 1987, the year that Division One decided Victoria Tower I. Thus, Abbey Road's reliance on Victoria Tower I is misplaced and neither the vested rights statute nor the common law vested rights doctrine has been expanded to include an application for the review of the site development plan at issue here. V. EXPANSION OF VESTED RIGHTS DOCTRINE TO PROTECT DUE PROCESS RIGHTS ¶24 The hearing examiner found that: [Bonney Lake's] procedure most closely approximates that of the City of Seattle in [Erickson & Associates, Inc. v. McLerran, 123 Wn.2d 864, 872 P.2d 1090 (1994).] Although [Bonney Lake] does not have a vesting ordinance as did Seattle, the Washington Supreme Court would refuse to extend the vested rights doctrine to a Type 3 permit application the same as it did in Seattle's MUP. The MUP is similar to the City's Type 3 permit and does not defeat vesting as an MUP applicant may vest rights at any time. CP at 38. Abbey Road disagrees with the hearing examiner's conclusion, asserting that the issue in Erickson was the validity of a vesting ordinance and, therefore, it is inapposite. ¶25 The Seattle ordinance at issue in Erickson allowed vesting when a building permit application was submitted or when a MUP was issued. Erickson, 123 Wn.2d at 866. In Erickson, the developers first contended that, contrary to Seattle's vesting ordinance, the vested rights doctrine allowed development rights to vest when a MUP was submitted but also argued that, if the court found that the rights did not vest, the court should expand the doctrine to allow vesting upon submission of a MUP. Erickson, 123 Wn.2d at 869, 873. The court disagreed with both of the developers' arguments and declined to extend the vested rights doctrine to a MUP. It held that Seattle's vesting ordinance "is constitutional and satisfies the requirements of case and statutory law." Erickson, 123 Wn.2d at 877. The court also stated that "[g]iven the substantial legislative activity in land use law, we are unwilling to modify or expand the vested rights doctrine unless it is required to protect the constitutional interests at stake." Erickson, 123 Wn.2d at 876. The court explained that: [O]ur vesting doctrine is rooted in constitutional principles of fundamental fairness. The doctrine reflects a recognition that development rights represent a valuable and protectable property right. By promoting a date certain vesting point, our doctrine insures "that new land-use ordinances do not unduly oppress development rights, thereby denying a property owner's right to due process under the law." Our vested rights cases thus establish the constitutional minimum: a "date certain" standard that satisfies due process requirements. Erickson, 123 Wn.2d at 870 (citations omitted) (quoting Valley View Indus. Park v. Redmond, 107 Wn.2d 621, 637, 33 P.2d 182 (1987). Therefore, we examine whether Bonney Lake's development process provides a date certain standard for vesting development rights. ¶26 Here, because Bonney Lake has not adopted a vesting ordinance, RCW 19.27.095(1) requires that vesting occur only when a building permit application is filed. And Abbey Road argues that, under the Seattle vesting ordinance at issue in Erickson, a developer could file a building permit application at any time in the process and thereby control the vesting date, 123 Wn.2d at 871, while under Bonney Lake's scheme, a building permit application may be submitted only after the city has reviewed and approved a site development plan. The hearing examiner disagreed, concluding that: The Type 3 process does not prohibit an applicant from filing a building permit application prior to completion of the process. To the contrary, the intent of the [BLMC] is to streamline and combine reviews for various permits and guide development in the City. The [BLMC] encourages concurrent review of building permit applications and Type 3 applications. [Abbey Road] could have filed a building permit application . . . and vested the project. CP at 37-38. The hearing examiner's conclusion is consistent with BLMC 14.50.060 ("[n]o building permit shall be issued for work requiring a Type 3 permit until the 15-day appeal period has lapsed") and BLMC 14.90.020(D) ("If one permit cannot be reasonably processed until another is issued, such as a building permit[,] the 120 days within which a notice of decision must be issued for the contingent permit . . . shall not begin until the other permit has been issued."). ¶27 Abbey Road asserts that the hearing examiner's conclusion was in error because "it contradicts the testimony of the Building Official and [Bonney Lake's] own Commercial Building Permit Application form." Br. of Resp't at 28. Before the hearing examiner, Abbey Road elicited testimony that, in the past, Bonney Lake had required a particular developer to first obtain a "letter of completeness" on a site development plan review before submitting a building permit application. AR at 48. But, as was pointed out on cross-examination, the prior development project did not involve a dispute over vested rights. Here, the summary of the preapplication meeting reflected specific, albeit disputed, mention of a building permit. Furthermore, contrary to Abbey Road's assertions, our review of the BLMC shows no requirement for a developer to obtain site development plan review approval before submitting a building permit application. Thus, consistent with Erickson, vesting occurs no later than the building permit application stage. 123 Wn.2d at 870. We hold that this establishes a sufficient date certain for rights to vest. ¶28 Abbey Road also asserts that it "had a right to rely on [Bonney Lake's] application form." Br. of Resp't at 39. The second page of the building permit application form has a check box to indicate that six copies of the "Approved Site Development Plans" are attached. AR Ex. 28. The hearing examiner found that by checking the "not applicable" box on the form, the building permit application would have been deemed complete for vesting purposes. CP at 35; see RCW 19.27.095(1) (requiring a "fully complete building permit application" for vesting). And it is undisputed that no BLMC ordinance specifically requires site development plan review approval before an applicant can submit the building permit application. ¶30 Thus, we decline Abbey Road's invitation to expand the vested rights doctrine to a site development plan review application, absent a building permit application, because Bonney Lake's ordinances and processes satisfy statutory and constitutional concerns. VI. BURDEN OF SITE DEVELOPMENT PLAN REVIEW DOES NOT CREATE VESTED RIGHTS ¶32 Abbey Road also asserts that the hearing examiner "ignored the realities of large commercial or multi-family development" in finding that Bonney Lake's process does not impermissibly frustrate vesting. Br. of Resp't at 28. Abbey Road states: [I]t is not practical or feasible to submit complete building permit applications for large commercial or multi-family developments prior to Type 3 site development approval. Architectural design and engineering of building plans is expensive and time consuming. A relatively minor change in a site development plan such as setbacks, ingress-egress, or resizing of a storm water pond could have a domino effect on building plans, requiring buildings to be moved, resized or even eliminated. Br. of Resp't at 33. This argument was also directly addressed and rejected in Erickson: Erickson lastly argues the practicalities of modern property development require us to extend the vested rights doctrine to Seattle's MUP process to maintain the balance of private and public interests embodied in the doctrine. Both parties agree land development in Washington has become an increasingly complex, discretionary, and expensive process. . . . Development interests and due process rights protected by the vested rights doctrine come at a cost to the public interest. The practical effect of recognizing a vested right is to sanction the creation of a new nonconforming use. A proposed development which does not conform to newly adopted laws is, by definition, inimical to the public interest embodied in those laws. If a vested right is too easily granted, the public interest is subverted. This court recognized the tension between public and private interests when it adopted Washington's vested rights doctrine. The court balanced the private property and due process rights against the public interest by selecting a vesting point which prevents "permit speculation", and which demonstrates substantial commitment by the developer, such that the good faith of the applicant is generally assured. The application for a building permit demonstrates the requisite level of commitment. Erickson, 123 Wn.2d at 873-74. Thus, Abbey Road's argument does not persuade us to abandon Washington's bright-line rule for vesting development rights. ¶33 We hold that no development rights vested when Abbey Road filed an application for site development plan review. Furthermore, we hold that Bonney Lake's development scheme is not so burdensome that it unconstitutionally frustrates vesting rights under ordinances and building codes in effect when a building permit is filed, nor does it conflict with statutory or case law controlling vesting of development rights. Accordingly, we are not persuaded that the hearing examiner erroneously interpreted or applied the law or that the hearing examiner's decision is clearly erroneous or constitutionally flawed. ¶34 We reverse the trial court's decision that Abbey Road has a right to develop the 575-unit condominium project within Bonney Lake city limits based on its filing for site development plan review and we remand for further proceedings consistent with this opinion. ARMSTRONG and PENOYAR, JJ., concur.