Development permits no longer hostage to challenges to permit regs

By John Riper Ashbaugh Beal

Recently the Washington Supreme Court issued a decision that may go a long way toward eliminating challenges to the legality of land use regulations as a tactic for derailing a developer’s permit application.

The case involves a proposed development at Point Wells a 61-acre site in the Southwest corner of Snohomish County. Point Wells was originally zoned for Urbane Industrial use and for nearly a century had been used for industrial purposes. The property owner wants to develop it into 3000 units of residential housing and over 100000 square feet of commercial and office space. Beginning in 2006 the developer successfully petitioned Snohomish County to modify the designation of the area from Urban Industrial to Urban Center.

In 2009 the County finalized an Environmental Impact Statement and issued a determination of nonsignificance for its redesignation of the Point Wells development. The County also passed several ordinances amending its building regulations to accommodate development of Point Wells as an Urban Center.

At that point in early 2011 an activist group and a nearby town petitioned the growth management hearings board seeking a ruling that the County’s ordinances in favor of the development violated Washington land use law particularly SEPA. But before the initial hearing the developer filed its permit applications for development of Point Wells.  Several months later the growth management board determined that the regulations adopted by the County to facilitate the development had indeed violated SEPA.

For decades Washington courts have recognized the rule that a developer’s permit rights vest as of the time of permit application such that later revisions to land use regulations won’t retroactively apply to the permit being sought by the developer. When the Snohomish County regulations were declared to be in violation of SEPA the developer contended that its permit should nevertheless be allowed because otherwise the determination of SEPA noncompliance would have retroactive application contrary to the vested rights doctrine. The activists challenging the development contended that because there was never any change to relevant Washington law no retroactive imposition was taking place. The growth management board according to the challengers had simply declared what the law was all along including declaring that the County’s ordinances were not validly enacted. The dispute wound its way through the courts until arriving at the Supreme Court.

The Supreme Court sided with the developer in a 6-3 decision. The Court reasoned that developers have a need for certainty over the state of regulatory requirements that they are bound to meet and that the vested rights doctrine is vital to achieving that interest.  The Court recognized that Washington law is more favorable in this respect by design than the law in most other states. The Court therefore ruled that the developer enjoyed a vested right for permitting of the project under the County’s ordinances at the time of permit application even though those ordinances were later found to be invalid.

The Court’s decision gives developers added certainty in knowing what land use requirements apply to a permit application. But perhaps more important the decision undercuts the strategy of blocking a development by challenging the validity of land use regulations existing at the time of the permit’s application.

The Court’s decision is in the case of Town of Woodway v. Snohomish County and can be read here.

John Riper is the Managing Partner at Ashbaugh Beal and practices in the Construction Law Group. He is a member of AGC’s Legal Affairs Committee. He can be contacted at jriper@ashbaughbeal.com.