Washington Legislature Adopts a “Hirst Fix,” and Department of Ecology Considers Comments on Its Interpretation of the New Legislation

The Washington Legislature recently passed Engrossed Senate Substitute Senate Bill 6091 (“ESSB 6091”), also known as the “Hirst Fix,” which seeks to redress some of the implications of the recent Hirst decision issued by the Washington State Supreme Court by easing restrictions on new domestic wells in rural areas. The law also initiates a significant new mitigation planning effort in most watersheds in the state to offset impacts of those new wells. ESSB 6091 resolved a contentious and vexing legislative impasse that had spanned two legislative sessions and had held the Capital Budget hostage. On the heels of ESSB 6091, the Washington State Department of Ecology released its “Initial Policy Interpretations” of ESSB 6091 (“Ecology’s Interpretation”). For the most part, the document recites provisions of the new law, but Ecology also advances more nuanced interpretation of the law that merit attention as the law is implemented.

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IN BRIEF

In RMG Worldwide LLC v. Pierce County (RMG), the developer of a residential and golf course development that began in 1990 attempted, two decades later, to revive an old land use application and to confirm vesting based on that stale rezone application. The County and the courts rejected both approaches.

In 1990 RMG filed a Planned Development District (PPD) application and rezone with Pierce County for creation of 96 homes and a golf course. The County identified an alternative permitting approach to approve the golf course under an Unclassified Use Permit (UP) under the General zoning of the site at that time. Soon after the UP was approved and RMG built the golf course, RMG applied for a major amendment to the UP to establish a 96 lot residential development, which was approved then built adjacent to the golf course. In 1994 the County rezoned the site, which was located outside of the Urban Growth Area (UGA), to Rural Reserve.

In 2005 RMG began an effort to redevelop the golf course area into a residential subdivision. RMG first sought, unsuccessfully, to amend the Comprehensive Plan, to place the property inside the County UGA and apply urban zoning. In 2014 RMG proposed to amend its 1990 UP to convert the golf course into home sites, but the County determined that any new residential subdivision would need to be consistent with the Rural Reserve zoning, not the General Use zoning in effect in 1990. Alternatively, RMG proposed that the County revive RMG’s 1990 PPD and rezone application, but the County determined that the application had been abandoned. The County Hearing Examiner affirmed the County’s determinations, as did the superior court and the Court of Appeals.

In its opinion, the Appeals Court held that RMG’s PDD Rezone application did not provide any vested rights, so the current Rural Reserve zoning applied. Quoting several recent several court decisions, the court found: “the vested rights doctrine is now statutory” and vesting extends only to complete building permit applications (RCW 19.27.095(1)), subdivisions (RCW 58.17.033(1)) and development agreements (RCW 36.70B.180).

The Court also held that RMG had abandoned its PDD rezone application. First, the Court confirmed that a land use application can expire or be abandoned. For support, the Court cites to the short deadlines under the County code for initial application review (30 days) and for issuance of a final decision (120 days), the 28 day completeness determination under RCW 36.70B.070, and the language in the County code that the “property owner is responsible for monitoring the time limits and review deadlines. . . .” Next the Court cites to substantial evidence showing that RMG had an intention to abandon its application, including RMG’s alternative application for the UP, RMG’s failure to pursue the PDD from 1991 to 2014, and RMG’s requests for inclusion in the UGA and for urban zoning of its property.

RMG is one of the first Washington cases addressing how a land use application may expire or be abandoned. While the facts in this case are extreme, the legal principles regarding abandonment should be heeded by land use practitioners. When multiple alternative land use approvals are pursued by developers, if the intent is to keep each alternative alive, that intention should be clearly expressed and actions that imply an alternative intent should be avoided. Likewise, developers should be proactive to communicate their intentions to continue to pursue a land use application, particularly if the jurisdiction has exceeded its code or statutory review period for that application.

The Court of Appeals recently clarified the separation between contract claims and claims subject to the Land Use Petition Act (“LUPA”) in City of Union Gap v. Printing Press Properties, L.L.C., 409 P.3d 239 (Wash. Ct. App. 2018), which centered on a development agreement between the city of Union Gap and Printing Press Properties (“Printing Press”). Among its terms, the development agreement gave the City of Union Gap authority to approve access from Printing Press’s development to an adjacent arterial.

After the city of Yakima issued permits to Printing Press to allow access to the adjacent arterial, Union Gap sued Printing Press claiming Printing Press’s development plans were a breach of the development agreement. Printing Press argued that LUPA barred Union Gap’s suit because Union Gap did not appeal Yakima’s issuance of the permits, and that Union Gap’s suit was a “collateral attack” on Yakima’s decision. The Court rejected Printing Press’s argument ruling that Union Gap’s suit sought to enforce its contract rights under the development agreement and stated, “LUPA should not bar the enforcement of private agreements concerning the use of land.” The Court determined that the suit rose independently of the Yakima permits, reasoning that if Printing Press had started construction without any permits from Yakima, Union Gap would have filed the same suit alleging breach of contract.

The Court’s decision also illustrates the importance of drafting clear provisions in development agreements. Printing Press argued that the development agreement applied only to a portion of its tract that was within Union Gap’s boundaries at the time of the agreement. The development agreement did not clearly describe Printing Press’s land, and portions of the agreement’s language supported Printing Press’s argument. Based on other language in the agreement, however, the Court ultimately concluded the agreement covered Printing Press’s entire tract, and the agreement did not protect Printing Press’s access rights. The Court also observed that if Printing Press intended to protect its access rights, “one might expect the parties to delineate that important right, together with the particulars of the right, in the development agreement.”

On December 2017, the Seattle City Council passed Ordinance 125490, which added a new chapter to the Seattle Municipal Code (“SMC”), Chapter 6.600, Short-Term Rentals, providing a package of regulations that apply to all short-term rental operators, short-term rental platforms offering rental units within the City of Seattle, and bed and breakfast operators who list a bed and breakfast unit on a short-term rental platform.

The ordinance defines short-term rentals as lodging that is not a hotel or motel and is offered to guests for a fee for fewer than 30 consecutive nights. Short-term rental platforms are defined as the means through which an operator may offer a unit, though the definition excludes mere publication of a short-term rental advertisement.

The ordinance, which takes effect January 1, 2019, will limit short-term rental operators to offering a maximum of one dwelling unit (or a portion thereof), or a maximum of two dwelling units if one of the units is the operator’s primary residence. The ordinance provides a number of exceptions and grandfathering provisions for operators who offered short-term rentals before September 30, 2017. For example, grandfathered operators will be allowed to continue operating up to two units and, after one year, will have the opportunity to add a third dwelling unit if the unit is the operator’s primary residence. Grandfathered operators with rentals in the Downtown Urban Center, south of Olive Way and north of Cherry Street, will be allowed to continue operating those units and to offer an additional unit or a maximum of two units, if one of the units is the operator’s primary residence.

The ordinance also requires all short-term rental operators and platforms to obtain a license pursuant to SMC Chapter 6.600, in addition to a business license, and allows penalties and enforcement actions for violations of the regulations. By June 1, 2018, the Department of Finance and Administrative Services is to provide a written status update regarding any progress made implementing the short-term rental regulatory licensing and tax requirements. The Department may also consider changes to the fees imposed on rental platforms, such as a per-night fee or an annual fee.