Document Redmond_doc_1417e8a840

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 1 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax BEFORE THE HEARING EXAMINER FOR THE CITY OF REDMOND In the Matter of the Appeal of RTC 74th Street Property LLC Of the November 17, 2017 Approval of BLDG- 2016-09558 related to the Redmond Town Center Apartments project in Redmond, WA No. Redmond Town Center Apartments Impact Fees Appeal APPELLANTS’ HEARING BRIEF I. INTRODUCTION Appellants are the successor owners of Redmond Town Center, including RTC 74th Street Property LLC, the multi-family residential developer who has obtained land use approvals and a building permit for construction of the Redmond Town Center Apartments Project. This 286 unit mixed-use development will be the first residential project constructed at Redmond Town Center. It is a part of the Redmond Town Center mixed use master planned development for which the City has required, and the landowner has provided, extensive mitigation of transportation and park, recreation and open space impacts under SEPA for the full build-out of the Redmond Town Center property. At issue in this appeal is the City’s imposition of more than two million dollars in park, recreation, open space and transportation impact fees paid as a condition of issuing a building permit for the Redmond Town Center Apartments Project. These fees are in addition to and duplicative of the mitigation provided by Redmond Town Center for the same impacts. Where, as here, mitigation of a development impact has been imposed under SEPA, state and local law ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 2 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax prohibit cities from imposing a duplicative impact fee to address that same impact. The City’s failure in this case to exempt the development from payment of duplicative impact fees for park and transportation impacts, or to fully credit Appellants for its mitigation of these same impacts, amounts to unlawful “double dipping” that violates RCW 82.02.050-.090, RCW 82.02.100 and RMC 3.10.060. It also violates the proportionality standards of RCW 82.02.020 and constitutes an unconstitutional taking of property. II. QUESTIONS PRESENTED BY APPEAL 1. Has the City of Redmond acted unlawfully by requiring that more than two million dollars in park, recreation, open space and transportation impact fees be paid as a condition of issuing a building permit for a residential apartment project that is part of a mixed- use, master planned development, where the City previously required that development impacts on parks, recreation, open space and transportation facilities for the full master planned development be mitigated under the State Environmental Policy Act? 2. If the apartment project development is not exempt from park and transportation impact fees, must the City apply credits in reduction of the park and transportation impact fees where the apartment project is a phase of a master planned development that was required to dedicate land and construct improvements to mitigate impacts on park, trail and open space facilities and to design and construct transportation facilities and pay a pro-rata share of the cost of planned transportation improvements as conditions of approval of development of the land regulated by the master plan? III. SUMMARY OF ARGUMENT A. When mitigation of a development impact has been imposed under SEPA, state law prohibits cities from imposing an impact fee to address that same impact. B. Redmond’s impact fee regulations conform with state law by exempting development from impact fees when SEPA mitigation has been imposed to mitigate impacts on the types of public facilities that would be funded by the impact fees. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 3 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax C. To the extent that the project is not exempt from park and transportation impact fees, credits must be given for the mitigation. The credits exceed the amount of the impact fees and thus the impact fees may not be imposed. D. Requiring duplicative payment of mitigation for the same impacts amounts to payment of a prohibited tax, fee or charge on development that violates the proportionality standards of RCW 82.02.020 and the takings clauses of the state and federal constitutions. IV. FACTS A. Development Approvals and Environmental Review. Over a period of years during the 1980s and 1990s, the City of Redmond amended its land use plans and zoning, annexed land and approved an initial master plan and later a revised master plan, to facilitate development of approximately 119 acres of land known as Redmond Town Center. The boundaries of Redmond Town Center are shown in Appellants’ Exhibit 1 (Figure 4-1, page The City conducted extensive environmental review of the Redmond Town Center development as originally proposed, and as later modified, including the analysis set out in the following SEPA documents: • Maingate Draft and Final EIS 1982 • Draft and Final EIS for Redmond Town Center 1985 • Town Center Site Development and City Center Neighborhood Plan Alternatives Draft and Final Environmental EIS 1987 • First EIS Addendum for Redmond Town Center 1995 • Second EIS Addendum for Redmond Town Center 1997 Additionally, multiple SEPA threshold determinations for various phases of Redmond Town Center development have been issued over the years, including the Declaration of Nonsignificance (DNS) issued for the Redmond Town Center Apartments Project on August 24, 2016. A Summary of the major steps in the environmental review process and identification of significant environmental documents is included in the second EIS Addendum issued in 1997 ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 4 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax (Appellants’ Exhibit 13) and in the memorandum from Redmond Senior Planner Gary Lee to the Redmond Planning Commission (Appellants’ Exhibit B. Multifamily Residential Component of Redmond Town Center. The zoning and land use plans governing development of Redmond Town Center have continued to envision multifamily residential development as a component of mixed-use development on the Redmond Town Center property. The original development proposal featured a mixed-use commercial center including an enclosed regional shopping center, with related office, other retail and multifamily housing. The Redmond Town Center FEIS, November 1985, described the initial proposal: The proponent’s preferred course of action is receipt of necessary approvals that would allow development of the 124-acre site as a mixed use commercial center. The center would consist of a regional shopping center, offices, additional retail uses detached from the shopping center, multifamily housing, and public open space. Appellants’ Exhibit 1 (Redmond Town Center EIS). In addition to the proposed action, the 1984 FEIS analyzed the alternatives of zoning and development of the area as a business park and zoning and developing Redmond Town Center exclusively for multifamily housing. The multifamily housing alternative assumed 2,183 multifamily housing units would be developed on the property. Appellants’ Exhibit 1 at page 21. The City approved the proposed mixed-use commercial center proposal, subject to extensive conditions imposed to mitigate environmental impacts. Appellants’ Exhibit 2 (Ordinance 1416); Appellants’ Exhibit 3 (RTC Proposed Zoning Master Plan Conditions of Approval). The City subsequently annexed a major portion of the site, a former golf course, and zoned the entire site for a mix of uses, including retail, office and residential. Appellants’ Exhibit 5 (Ordinance 1551). In 1994, after failing to attract sufficient anchor department stores to meet conditions the City placed on development of the enclosed shopping center, the owner of Redmond Town Center proposed a modified development concept and master plan that replaced the enclosed ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 5 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax shopping center with an open air mixed-use district. The open air mixed-use district concept was approved in 1995 through changes to the City’s plans, zoning and adoption of a revised master plan (Master Plan). Appellants’ Exhibit 4 (Ordinance 1841); Appellants’ Exhibit 7 (Master Plan and Design Guidelines); Appellants’ Exhibit 25 (Planning Commission Recommendation); Appellants’ Exhibit 6 (RTC Phase I Site Plan and Master Plan Approval). The approvals of the revised Master Plan and zoning retained the mixed-use concept, including multifamily residential development as a permitted use. As part of its approval of the 1995 Master Plan, the City Council amended the Redmond Comprehensive Plan, Chapter 20B of the Redmond Community Development Guide (CDG). In CDG section 20B.130 (90) the Council established the City’s policy of encouraging housing on the Redmond Town Center site by allowing maximum residential development capacity to be measured separately from commercial development, with the quantity of one type of development not limiting the other: 20B.130 (90) Encourage residential development on the Mixed-Use Center site by providing for housing square footage in addition to the maximum commercial building area allowed. The City continues to encourage residential development within Redmond Town Center, through its current Comprehensive Plan policies, including Downtown Neighborhood Policy DT-32: Encourage development of residential uses by maintaining the maximum commercial building area for Town Center of 1,490,000 square feet without transfer of development rights (TDRs) or 1,800,000 square feet with the use of TDRs. In 1998 the Redmond Town Center owner applied for and subsequently received approval of a mixed use housing development project to be located on Parcel 2C in Redmond Town Center. Appellants’ Exhibit 41 (Approval letter, Attachment E to Transportation study). (This approved development was never constructed). In 2001, the Redmond Town Center owner proposed amendments to Redmond Town Center zoning that would raise the maximum limit on commercial development. The Redmond ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 6 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax Technical Committee provided a report to the Planning Commission that included a summary of the owner’s plans for development of remaining undeveloped parcels, including a plan for residential development of what is now the Redmond Town Center Apartments development site that is the focus of this appeal: The Macerich Company plans to add a two-story department store with 110,000 to approximately 120,000 square feet of gross leasable area on the west half of parcel 5B. A retail/commercial use of this size is currently allowed under the existing 1.49 million square feet floor area limit. The east half of this parcel is envisioned by the owner to eventually include mid-rise residential use with ground floor commercial. . . . . Residential uses within the sub-district (Town Center) are not bound by the commercial floor area limit. In addition to the potential 250 unit mixed-use residential structure on the east half of parcel 5B, existing regulations allow several hundred more residential units, which could be constructed on vacant parcels or over the existing surface parking lots within Town Center. Residential additions would be bound by height limits and design standards, as in other districts. Appellants’ Exhibit 39 (Memorandum to Planning Commission from Technical Committee); Appellants’ Exhibit 46 (Aerial Photo showing Redmond Town Center Apartments Project site). The Technical Committee memorandum to the Planning Commission regarding the 2001 proposed amendments addressed traffic generated by the then existing Redmond Town Center development, and future development anticipated to occur under the proposed amendments: The City’s traffic consultant prepared an updated trip generation analysis (see Exhibit F) indicating that the site has produced far less peak hour traffic than predicted, and that the addition of a hotel, plus already allowed retail and residential, will not increase peak trips above what has already been prepared for. Appellants’ Exhibit 39 at page 7. The additional future development analyzed by the traffic study included 500 residential units. Appellants’ Exhibit 41. The traffic analysis was accompanied by a SEPA notice of Determination of Nonsignficance and Adoption of Existing Environmental Document finding no probable significant environmental impact would result from the Redmond Town Center owner’s proposal. Appellants’ Exhibit 41. The proposed ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 7 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax increase in the maximum amount of commercial development was approved, together with an increase in the height limit for mixed retail/residential structures by adoption of Ordinance 1992, Appellants’ Exhibit 42. C. SEPA Mitigation of impacts of full development of Redmond Town Center. As a condition of its approval of the Master Plan in 1995, the City required the Redmond Town Center property owner to mitigate impacts identified in the environmental documents as likely to be caused by full development of the property. In most cases, the mitigation was required to be fully performed prior to occupancy of the first phase of the master planned development. Appellants’ Exhibits 6, 15 and 28. 1. Construction of transportation facilities and dedication of land. The City required that extensive street, intersection, signalization, lighting, sidewalk and related transportation improvements be provided by the Redmond Town Center owner as mitigation of impacts upon public transportation facilities, including dedication of land for rights-of-way and conveyance of easements. Approximately 6,000 lineal feet of bike trails were required to be added to the City and regional bike trail system. The cost of the transportation mitigation was very significant. In its recommendation to the City Council for approval of the 1995 Master Plan and zoning actions, the Planning Commission identified the total cost to be incurred by Redmond Town Center for off-site transportation improvements as $16,519,000, comprised of $7,856,000 for the value of land required to be dedicated for off-site street improvements and $7,416,000 as the costs for design and construction of the off-site transportation improvements. Appellants’ Exhibit 25. In a presentation to the City Council regarding transportation mitigation as recorded in the minutes of the special meeting of the Redmond City Council held on June 27th, 1995, Don Cairns, Redmond Transportation Division Manager, “stated that the value of dedicated right-of-way combined with the cost of engineering/construction total approximately $15.3 million”. Appellants’ Exhibit 26 at page 226 of the minutes. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 8 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax Many of the required transportation improvements were identified as needed future improvements by the City’s transportation capital facility plans. The Transportation Facilities Program (TFP), identified TFP projects including those added to by adoption of Ordinance 1847 on July 18, 1995, (Appellants’ Exhibit 19, Exhibit A, page A-2-3) and those identified in the Traffic Impact Analysis Report (1995 Traffic Impact Analysis) prepared to evaluate traffic impacts of full development of the site under the 1995 Master Plan and zoning. The 1995 Traffic Impact Analysis was included in the April, 1995 EIS Addendum issued in connection with the 1995 Redmond Town Center approvals, as Appendix C. Appellants’ Exhibit 12. The Six-Year Transportation Improvement Program adopted by City Council Resolution No. 1023 on June 18, 1996 listed “Town Center Improvements” as Project No. 37, with the total cost in the amount of $14,400,000 listed as funded, with the funding source identified as “DEVLPR.”. Appellants’ Exhibit 30. A list titled “CURRENT TOWN CENTER IMPROVEMENTS’ appears on the last two pages of Exhibit 30. 2. Payment of a SEPA pro rata transportation fee. In addition to being required to mitigate impacts on public transportation facilities under SEPA through dedication of land for new and expanded transportation facilities and by designing and construction transportation facilities, the City also required the owner to pay transportation impact fees pursuant to the City’s “pro-rata share” (pre-GMA) SEPA transportation impact mitigation fee system. Appellants’ Exhibit 4 (Ord. 1841); Appellants’ Exhibit 6 (Phase I Site Plan Review and Master Plan Approval); Appellants’ Exhibit 28 (Transportation Mitigation Agreement). The methodology used to quantify the short and long term impacts of full development of Redmond Town Center, including the pro rata share system, was described in the 1995 Traffic Impact Analysis: DETERMINATION OF IMPACT Methodology Short-term Analysis. The analysis of traffic impacts for this project was evaluated for the short-term (1997) and the long-term (2010). For the short-term, the City requires individual ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 9 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax intersection LOS analysis to determine if short-term mitigation is required. Appellants’ Exhibit 12 at page 8 of the Analysis. In addition, long-term impact is determined by the pro rata share methodology. Based on this process, trips are generated for a new development and assigned to the long-term roadway network using the City of Redmond’s traffic forecasting model. Impacts to the planned long-term roadway improvements are identified at locations where the new development will generate ten or more p.m. peak-hour trips. These long term road improvements are identified in Redmond’s Transportation Facilities Plan (TFP). Long-term Mitigation Appendix C provides a breakdown of the project list and pro rata costs for Redmond Town Center. Based on current projected construction and right-of-way costs associated with each project, the proportionate share cost for the project trips under Alternative 1 totals $5,531,973 and is summarized as follows: Project Pro rata Cost in 1995 Dollars Redmond TFP $5,395,298 WSDOT/Redmond Interlocal (SR 520/SR 202) 136,675 Total $5,531,973 Appellants’ Exhibit 12 at page 42 of the Analysis. (Table format added). A detailed Mitigation Table prepared as part of the analysis of Redmond Town Center transportation mitigation provides an itemization of the TFP projects and mitigation fee amounts, showing the same total fee of $5,531,973. Appellants’ Exhibit 29. Many of the transportation facilities that were required to be constructed as a condition of approval of the 1995 Redmond Town Center Master Plan were identified as system improvements on the TFP. The City reduced the pro-rata fees by crediting a portion of the costs of construction of the required TFP improvements as reflected in the correspondence between Redmond Transportation Division Manager, Don Cairns, and Redmond Town Center ownership representatives included in Appellants’ Exhibit 31. The net amount of the cash fees that remained owing as a condition of ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 10 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax issuance of the building permit for phase I of Redmond Town Center is reflected in the Redmond Town Center Traffic Mitigation Agreement dated March 8, 1996. Appellants’ Exhibit 28. 3. Mitigation of impacts on Public Park, recreation and open space facilities. The City required that the impact of full development of the Redmond Town Center property on public park, recreation and open space facilities be mitigated under SEPA by requiring the owner of Redmond Town Center to provide 56 acres of open space— approximately 47% of the site—with 44 acres of land dedicated to public open space use. Requirements were imposed to construct public trails and other facilities in the public open space areas. Appellants believe this to be the largest land area devoted to mitigation of development impacts on parks, recreation and open space facilities in the history of the City. Ordinance 1841, Exhibit B, at page 11; Appellants’ Exhibit 11 (Technical Committee Report to Planning Commission) at page 10 and Exhibit F to the report; Appellants’ Exhibit 6. The Redmond Town Center public access open space was identified on the City’s Capital Improvement Program element on page 68 of the City’s Parks, Recreation and Open Space Plan 2000 (PRO Plan 2000), as attached to Ordinance 1800. Appellants’ Exhibit 18 (incorrectly identified as Exhibit 15 on Addendum to Application for Appeal). The land devoted to public use is depicted on multiple City documents, including the diagrams of open space areas and improvement plans contained in Appellants’ Exhibit 20; and the Redmond Downtown Park Vicinity Map (Appellants’ Exhibit 16) and the park and trails facilities map included in Redmond’s Current Comprehensive Plan at pages 10-13. The right of the public to perpetual use of the open space land was conveyed to the City through the recorded public Access Open Space Agreements entered into as of September 17, 1996 and September 24 1996. Appellants’ Exhibits 21, 22 and 24. The significant public benefits derived by the public from dedication of the land to public open space use are identified in Resolution 1095 forwarding the City’s recommendation to King County for classification of the property as open space for taxation purposes. Appellants’ Exhibit 17. The ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 11 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax value of the land devoted to public open space based on the assessed land value was identified as $7,927,900 in the Open Space Taxation Agreement between the property owners and King County, received by the County on August 19, 1999. Appellants’ Exhibit 23. D. The required SEPA mitigation on public transportation facilities and public parks, recreation and open space facilities has fully mitigated all impacts of development of Redmond Town Center on these public facilities. The required mitigation has proven to be more than adequate. The Redmond Technical Committee described the results of the transportation mitigation imposed on Redmond Town Center in its September 12, 2001 report to the Planning Commission on a proposal to increase the amount of allowed commercial development: The mixed-use portion of City Center is more restricted than any other portion of downtown, with allowed FARs less than half of what the other districts are allowed, and no current potential to take advantage of TDRs. This limitation stems from the timing of the proposal, first coming forward in the early 1980s, when no other project of this size existed within the city. Since the first zoning was adopted in 1988, the limit has been raised, but with caution, to avoid development which might proceed too quickly and overwhelm the downtown transportation system. The experience with Town Center has been positive, adding evening uses and pedestrians to the downtown, and producing much less traffic than studies in 1988, 1993 and 1997 have predicted. . . . . The traffic study prepared in 1997 estimated that the Town Center site with 1.49 million square feet would attract a total of 3,336 peak hour trips, which included 2,367 trips that would be drawn to the site because of the uses, as well as 969 trips already passing by the site that would now enter. This number was determined using conservative estimates provided in the ITE (Institute of Transportation Engineers) Trip Generation Manual. The updated analysis checked actual driveway trip counts at the center, compared to the forecast. Below is a summary of the updated trip generation analysis. The analysis indicates that total trips, including destination and pass by, average 2,492 at peak hour. Appellants’ Exhibit 39 at pages 6 and 7 of the memorandum; Appellants’ Exhibit 43. The actual driveway trip counts as referenced in the Technical Committee memorandum have been updated. At the request of the Appellants’, TENW, the same traffic engineering firm that provided the driveway counts referenced by the Technical Committee, performed updated ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 12 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax traffic counts in September, 2017. Current, actual traffic, plus increased trips attributable to vacancy in tenant space at the time of the counts, and plus additional trips that will result from ongoing and permitted future development within Redmond Town Center (including the Redmond Apartment Project) is less than the traffic volume that was used as the basis for full build out of Redmond Town Center—the volume upon which the City based its required transportation mitigation. Appellants’ Exhibit 44. The City required that a Phase I and Phase II traffic impact analysis of the transportation impacts of the Redmond Town Center Apartments Project be performed. The Phase I analysis is summarized in the Phase II Traffic Impact Analysis dated July 11, 2016. Appellants’ Exhibit 45. The Phase II analysis concludes that the traffic generated by the Redmond Town Center Apartments Project is “not expected to result in any significant adverse traffic operational impacts or increase in average vehicle delay at any of the signalized or unsignalized study intersections per the detailed traffic operational impact analysis”. Appellants’ Exhibit 45 at page 11 of the report. Redmond fully mitigated the impacts of full development of the Redmond Town Center property on park, recreation, trails and open space facilities. The capital facility service standards for these facilities at the time of approval of Redmond Town Center was set forth in the City’s Comprehensive Plan capital facilities provisions: Parks and recreational facilities: Shall be based on the following ratios: Neighborhood parks: 1.0 acres per 1,000 population Community parks: 3.0 acres per 1,000 population Resource parks: 2.5 acres per 1,000 population Trails: 0.25 miles per 1,000 population Current city standards are identified in park impact fee worksheets dated 12/21/2016: ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 13 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax Appellants’ Exhibit 19, page A-1-8; Appellants’ Exhibit 60; Appellants’ Exhibit 6; Appellants’ Exhibit 11; Appellants’ Exhibit 17; Appellants’ Exhibit 27; Appellants’ Exhibit 42. V. LAW AND ARGUMENT A. THE STANDARD OF REVIEW ON APPEAL IS FAIRNESS The Hearing Examiner’s authority on appeal of the imposition of GMA impact fees is very broad. The Hearing Examiner is authorized to modify the City’s action based on principles of fairness. RCW 82.02.070. Impact fees—Retained in special accounts— Limitations on use—Administrative appeals. . . . . Each county, city, or town that imposes impact fees shall provide for an administrative appeals process for the appeal of an impact fee; the process may follow the appeal process for the underlying development approval or the county, city, or town may establish a separate appeals process. The impact fee may be modified upon a determination that it is proper to do so based on principles of fairness. The county, city, or town may provide for the resolution of disputes regarding impact fees by arbitration. [Emphasis added]. RCW 82.02.060. Impact fees—Local ordinances—Required provisions. The local ordinance by which impact fees are imposed: . . . . Shall allow the county, city, or town imposing the impact fees to adjust the standard impact fee at the time the fee is imposed to consider unusual circumstances in specific cases to ensure that impact fees are imposed fairly. These standards of fairness dictate approval of this appeal where, as here, the City seeks to impose duplicative fees for the same impacts. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 14 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax B. When Mitigation of a Development Impact Has Been Imposed Under SEPA, State Law Prohibits Cities From Imposing an Impact Fee to Address that Same Impact. 1. Redmond GMA impact fees must be consistent with state law. The State of Washington has preempted the authority of cities to impose fees or charges on development of land or buildings. RCW 82.02.020. This “preemption statute” provides: RCW 82.02.020. State preempts certain tax fields—Fees prohibited for the development of land or buildings—Voluntary payments by developers authorized—Limitations—Exceptions. Except as provided in RCW …82.02.050 through 82.02.090, no county, city, town, or other municipal corporation shall impose any tax, fee, or charge, either direct or indirect, on the construction or reconstruction of residential buildings, commercial buildings, industrial buildings, or on any other building or building space or appurtenance thereto, or on the development, subdivision, classification, or reclassification of land. In Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wn.2d 740, 755 (2002), the Washington Supreme Court ruled that RCW 82.02.020 must be strictly construed and that, to be valid, an impact fee must comply with an exception in the statute: RCW 82.02.020 requires strict compliance with its terms. Trimen Dev. Co. v. King County, 124 Wn.2d 261, 270, 877 P.2d 187 (1994); R/L Assocs., Inc. v. City of Seattle, 113 Wn.2d 402, 409, 780 P.2d 838 (1989). A tax, fee, or charge, either direct or indirect, imposed on development is invalid unless it falls within one of the exceptions specified in the statute. Henderson Homes, Inc. v. City of Bothell, 124 Wn.2d 240, 247, 877 P.2d 176 (1994) (citing R/L Assocs., 113 Wn.2d at 409, 780 P.2d 838). In this case, the City is relying on an exception in RCW 82.02 which authorizes cities subject to the Growth Management Act (“GMA”) to impose impact fees on development to finance public facilities. See RCW 82.02.050-.090. However, such authority is subject to certain limitations and requirements in RCW 82.02 that cities must comply with, including provisions that prohibit imposition of duplicative impact fees that address the same impacts. See, e.g., RCW 82.02.100(1). In this case, the City’s imposition of duplicative fees for the same impacts in this case are inconsistent with this statute, including limitations therein on imposition of fees that are not proportional to the impact of the development. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 15 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax 2. When it authorized GMA Impact Fees, the State Legislature stated its intent to preclude duplicative mitigation for the same impact. When the Legislature authorized local governments subject to the Growth Management Act to collect impact fees (GMA Impact Fees) it expressly stated its intent that development projects not be subjected to duplicative mitigation for the same impact: RCW 82.02.050. Impact fees—Intent—Limitations. It is the intent of the legislature: To ensure that adequate facilities are available to serve new growth and development; To promote orderly growth and development by establishing standards by which counties, cities, and towns may require, by ordinance, that new growth and development pay a proportionate share of the cost of new facilities needed to serve new growth and development; and To ensure that impact fees are imposed through established procedures and criteria so that specific developments do not pay arbitrary fees or duplicative fees for the same impact. [Emphasis added]. In this case, the City of Redmond evaluated the impacts of full development of Redmond Town Center under SEPA and required mitigation of impacts of development on public transportation facilities and public park, recreation and open space facilities. Redmond Town Center Apartments will be constructed on an undeveloped parcel of land within Redmond Town Center. The impacts of Redmond Town Center Apartments on public transportation facilities and park and recreation facilities were included when Redmond imposed mitigation for the full build-out of the Redmond Town Center property. The City is precluded from double dipping by now imposing transportation impact fees and park impact fees in addition to the SEPA mitigation. This violates both the express intent and substantive provisions of RCW 82.02. 3. The Legislature expressly prohibited duplicative mitigation for the same impact through legislation codified in RCW 82.02.100 and RCW 43.21C.065. In 1992, by unanimous vote of the House of Representatives and the Senate, the Legislature prohibited what is commonly referred to as “double dipping” by enacting ESHB ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 16 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax 2842. Appellants’ Exhibit No. 54. This legislation added fundamental restrictions on the authority of cities to impose impact fees: RCW 82.02.100(1). A person required to pay a fee pursuant to RCW 43.21C.060 [SEPA authority to condition or deny approvals] for system improvements shall not be required to pay an impact fee under RCW 82.02.050 through 82.02.090 [GMA Impact Fees] for those same system improvements. (Language in brackets added). RCW 43.21C.065. A person required to pay an impact fee for system improvements pursuant to RCW 82.02.050 through 82.02.090 shall not be required to pay a fee pursuant to RCW 43.21C.060 for those same system improvements. These absolute legislative prohibitions are specifically addressed to mitigation of impacts under SEPA. They prohibit duplicate mitigation of impacts by imposition of impact fees. A local jurisdiction may mitigate an impact on public facilities under SEPA, or through imposition of GMA Impact Fees, but it is unlawful for it to do both. SEPA requires that governmental actions such as approval of private development projects be considered in light of the impacts of the project on the environment and SEPA authorizes governments to impose conditions on development approvals to mitigate development impacts on the environment. “Environment” as defined by SEPA includes both the natural and built environment, including “Transportation systems” (WAC 197-11-444(2) and “Parks or other recreational facilities” (WAC 197-11-444 Redmond mitigated the impacts of full build-out of Redmond Town Center on public transportation systems and parks and other recreation facilities as authorized by SEPA. By requiring that an impact fee be paid to pay for transportation systems and parks, recreation and open space, the City clearly has violated the Legislature’s intent that impact fees not be charged for the same impacts that have been fully mitigated through SEPA. As applied to the facts of this case, RCW 82.02.100 prohibits Redmond from requiring payment of a transportation impact fee or a park impact fee as a condition of issuing a building permit for the Redmond Town Center Apartments Project because the impacts of development of ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 17 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax Redmond Town Center on City transportation facilities and on park facilities have already been mitigated through SEPA. a. As used in RCW 82.02.100, the term “required to pay a fee” includes required non-cash mitigation such as dedications of land and construction of improvements. The prohibition in RCW 82.02.100 on duplicative payment of fees includes non-cash mitigation. In this regard, there is no legal basis to distinguish between SEPA mitigation imposed by Redmond in the form of requirements to pay fees and SEPA mitigation imposed in the form of requirements to dedicate land and construct public improvements. All such mitigation, when imposed for the purpose of mitigating impacts on public facilities for which impact fees are imposed, triggers the prohibition on double dipping imposed by RCW 82.02.100. The prohibition on double dipping imposed by RCW 82.02.100 applies in this case to preclude transportation impact fees and park impact fees. Through exercise of SEPA authority, the City mitigated impacts of development of Redmond Town Center on transportation facilities by requiring payment of cash “pro-rata share” transportation fees, as well as by requiring expenditures of money to construct public improvements and to set aside private property for public use for transportation rights-of-way. Appellants’Exhibit 28. The City’s park impact mitigation consisted of requirements to devote 56 acres of land to open space, including 44 acres private land that was required to be dedicated for use by the Public. Park mitigation also included requirements to design and construct public trails and related facilities. Appellants’ Exhibit 6. Both the transportation impact mitigation and the park impact mitigation are governed by RCW 82.02.100 because requirements to mitigate impacts of development by dedicating land and constructing public improvements as a condition of development approval are logically and legally the equivalents of requirements to mitigate development impacts by paying cash fees as a condition of development approval. This equivalence is well established in Washington law ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 18 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax In Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wn.2d 740, 755 (2002), the Washington Supreme Court characterized requirements to dedicate land and construct improvements as “in kind” fees: Further, this court has recognized that for purposes of RCW 82.02.020 a tax, fee, or charge can be in kind as well as in dollars. San Telmo Assocs. v. City of Seattle, 108 Wn.2d 20, 24, 735 P.2d 673 (1987) (requirements that owners of low income rental units provide relocation notice and assistance, and replacement of a specified percentage of the low income housing with other suitable housing or contributing to the low income housing replacement fund in lieu thereof, when residential units are demolished or redeveloped to other use violated RCW 82.02.020 as indirect charge on development). The open space condition here is comparable to conditions in a number of cases analyzed under RCW 82.02.020. E.g., Vintage Constr. Co. v. City of Bothell, 135 Wn.2d 833, 959 P.2d 1090 (1998) (RCW 82.02.020 applicable where ordinance required dedication of five percent of land for parks or payment of $400 per lot in lieu thereof; developer entered a “voluntary agreement” to pay in lieu fees) (adopting opinion of the Court of Appeals in Vintage Constr. Co. v. City of Bothell, 83 Wash.App. 605, 922 P.2d 828 (1996)); Trimen, 124 Wn.2d 261, 877 P.2d 187 (RCW 82.02.020 applicable where ordinance required dedication of land for open space or payment of fee in lieu thereof; developer paid in lieu fees under voluntary agreement); Henderson Homes, 124 Wn.2d 240, 877 P.2d 176 (RCW 82.02.020 applicable where condition required payment of $400 per lot park mitigation fee); United Dev. Corp. v. City of Mill Creek, 106 Wn.App. 681, 698- 99, 26 P.3d 943 (RCW 82.02.020 applicable where condition required frontage improvements for drainage along adjacent boulevard) review denied, 145 Wn.2d 1002, 35 P.3d 380 (2001); Castle Homes & Dev., Inc. v. City of Brier, 76 Wn.App. 95, 882 P.2d 1172 (1994) (RCW 82.02.020 applicable where voluntary agreement required payment of $3,000 per lot or provision of offsite traffic improvements); View Ridge Park Assocs. v. City of Mountlake Terrace, 67 Wn.App. 588, 839 P.2d 343 (1992) (RCW 82.02.020 applicable where ordinance required developers to construct onsite recreational facilities or pay a fee in lieu thereof). Indeed, the Camas ordinance authorizing the set aside condition is quite similar to the ordinance at issue in Trimen, which required a dedication or reservation of open space, or a fee in lieu thereof. Consequently, the Court in Isla Verde held that a condition of development approval that required that portions of the development site be set aside as open space violated RCW 82.02.020: ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 19 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax We conclude that the open space set aside condition is an in kind indirect “tax, fee, or charge” on new development. Similarly, the U.S. Supreme Court recognized the equivalence of conditions imposed on real property development approvals that require conveyances of land and those that require payment of money in Koontz v. St. Johns River Water Management District, 570 U.S. 133 S. Ct. 2586 (2013). The Court held that, like conditions that require conveyance of an interest in real property, monetary exactions imposed as conditions of development approval must also satisfy the nexus and rough proportionality requirements established by the Court’s holdings in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994). For purposes of application of the prohibition in RCW 82.02.100 on duplication of payment of fees to mitigate the same impact, there is no distinction under this statute between payment of fees, dedication of land, or construction of improvements to mitigate the impact. All are considered fees for purposes of RCW 82.02.100. GMA impact fees may not be imposed to mitigate the same impacts that were mitigated by these requirements. b. The term “same system improvements” as used in RCW 82.02.100 refers to the same type of public facilities for which impact fees may be imposed—streets or parks or schools or fire protection. RCW 82.02.090 defines the terms “public facilities” and “system improvements” as follows: "Public facilities" means the following capital facilities owned or operated by government entities: Public streets and roads; publicly owned parks, open space, and recreation facilities; school facilities; and fire protection “ "System improvements" mean public facilities that are included in the capital facilities plan and are designed to provide service to service areas within the community at large, in contrast to project improvements. “System improvements” as used in RCW 82.02.100 thus refers to a subset of all public facilities. The further qualification of system improvements made by using the word “same” in the term “same system improvements” narrows the reference further by restricting the scope of ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 20 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax the prohibition on double dipping according to the type of public facility for which impact fees are imposed. If a city has required that the impact upon a particular type of public facility be mitigated under SEPA, the city is prohibited from imposing an impact fee to fund improvements to the same type of public facilities. SEPA mitigation for streets and roads; parks, open space and recreation facilities, school facilities and fire protection facilities precludes assessment of an impact fee for the same category of public improvements. For example, the requirement under SEPA to provide mitigation of an impact on streets and roads precludes imposition of impact fees to fund the “same system improvements”—i.e. street and road facilities—but does not preclude imposition of an impact fee to fund school or fire facilities. Such an interpretation is also consistent with the intent and limitations on the City’s imposition of impacts fees under RCW 82.02.050(1)(c), which provides that the “intent of the Legislature is to ensure the impact fees are imposed through established procedures and criteria so that specific developments do not pay arbitrary or duplicative fees for the same impacts.” (emphasis added). It’s the duplication of the amounts paid for the same impacts to system improvements as a whole that is prohibited, not the impacts to any one capital facility. See, City of Olympia v. Drebick, 156 Wn.2d 289, 296 (2006) (“the legislature authorized local governments to calculate the fees by tying the particular development to the service area's improvements as a whole, not to particular system improvements within the service area.”). This does not mean, nor are we arguing, that the exemption should apply to new or additional impacts of a development. In this case, however, there are no new or additional impacts to transportation or parks and open space that were not adequately addressed and mitigated under SEPA. Thus, in this case, the impact fees violate RCW 82.02.100 because they require Appellant to make duplicate payments for the same impacts. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 21 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax c. Redmond has acknowledged the correct interpretation of “same system improvements” when it adopted GMA impact fees. When the Redmond first adopted a park impact fee in 1996, it expressly recognized the prohibition on double dipping imposed by RCW 82.02.100 through adoption of CDG 20C.110.050: 20C.110.050. Exemptions to the Requirement to Pay Impact Fees. The following are excluded from the requirement to pay some or all of the required impact fees: . . . . The property on which the development activity will take place is exempt from the payment of fire or park, recreation, open space or trail facilities impact fees under RCW 82.02.100 because the property is part of a development activity which mitigated its impacts on the same system improvements under the State Environmental Policy Act (SEPA). To be exempt for a fee from any of the system types, a development activity shall have mitigated its system improvement impacts for that system type. For example, to be exempt from fire impact fees, the use or development activity shall have mitigated it impact on fire systems. Section 5 of Ordinance No. 1913, Appellants’ Exhibit 37. (This section of the Code was later amended to also apply to transportation impact fees. CDG 20C.110.050 A.(5) expressly recognized that the exemption mandated by State law applies according to the type of facilities for which the fee is imposed, and as such could prohibit all impact fees or only one or more types of impact fees, depending upon the type or types of system improvements for which SEPA mitigation was imposed . The language of CDG 20C.110.050 A. specified that the exemption applied to “some or all of the required impact fees”. It included an example to illustrate the meaning of “same system improvements” as used in RCW 82.02.100: For example, to be exempt from fire impact fees, the use or development activity shall have mitigated it impact on fire systems. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 22 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax The exemption from impact fees set out in CDG 20C.110.050 A. closely tracks the facts of this case. The term “development activity” is defined by RCW 82.02.090 to mean: "Development activity" means any construction or expansion of a building, structure, or use, any change in use of a building or structure, or any changes in the use of land, that creates additional demand and need for public facilities. "Development activity" does not include buildings or structures constructed by a regional transit authority. By adopting Ordinance 1913, Redmond complied with RCW 82.02.100 as applied to the facts of this case because the effect of the code was to exempt all phases of Redmond Town Center development from transportation and park impact fees—fees that would be duplicative of the SEPA mitigation that was imposed on approval of the full build-out of Redmond Town Center pursuant to the Master Plan. The effect of the exemption contained in CDG 20C.110.050 A. can be understood in the context of the proposed Redmond Town Center Apartments project: Appellant RTC 74th Street Property LLC submitted its application to develop Revised Parcel 5-B within Redmond Town Center. That application sought approval from the City for a “development activity”—construction of a building— on property that is “part of a development activity which mitigated its impacts on the same system improvements under the State Environmental Policy Act (SEPA)”—the Redmond Town Center Master Planned Development. SEPA provides that, whenever possible, mitigation should be provided before the impact to which it is directed occurs. This is the mitigation sequence that Redmond followed when it required that the impacts of its approvals of the full development of Redmond Town Center be mitigated prior to occupancy of the first phase of Redmond Town Center Development. CDG 20C.110.050 as adopted by Ordinance 1913 complied with RCW 82.02.100, and as applied to Redmond Town Center and the Redmond Town Center Apartments project, also complied with RCW 82.02.100 by exempting phases of development of Redmond Town Center such as the Redmond Town Center Apartments from transportation impact fees and parks, recreation and open space impact fees because impacts on these facilities had been mitigated ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 23 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax prior to occurrence of the impacts that would come with each of the eventual phases of development of the Redmond Town Center property. “Same system improvements” as used in RCW 82.02.100 does not refer to the same specific public facilities—impact fees are imposed to fund the cumulative costs of a slate of public improvements that changes over time. This is reflected in the language of CDG.20C.110.050(5), which provides that “[t]o be exempt for a fee from any of the system types, a development activity shall have mitigated its system improvement impacts for that system type.” This is precisely what has occurred here: all impacts to the transportation system and public open space were fully mitigated under SEPA. In fact, no one has suggested otherwise, or even that the impacts from the Redmond Town Center Apartment Project are not the same or have increased. Thus, as required by RCW 82.02.100, the City cannot required payment of additional fees for the same system improvements—i.e., for the same impacts that were mitigated under authority of SEPA. SEPA authorizes governments to impose conditions on development approvals to mitigate development impacts on the environment. “Environment” as defined by SEPA includes both the natural and built environment, including “Transportation systems” (WAC 197-11- 444(2) and “Parks or other recreational facilities” (WAC 197-11-444 Redmond mitigated the impacts of full build-out of Redmond Town Center on public transportation systems and parks and other recreation facilities as authorized by SEPA. By requiring that an impact fee be paid to pay for transportation systems and parks, recreation and open space, the City clearly has violated the Legislature’s intent that impact fees not be charged for the same impacts that have been fully mitigated through SEPA and the express prohibition of such duplicative mitigation in RCW 82.02.100. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 24 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax C. Redmond’s Current Impact Fee Regulations Exempt Development from Impact Fees When SEPA Mitigation Has Been Imposed to Mitigate Impacts on that Same Facility Type. 1. RMC 3.10.060 conforms with RCW 82.02.100 by providing an exemption from impact fees. CDG 20C.110.050 remained in effect until the City reorganized and revised the Community Development Guide in April 2011. As part of that code revision process, the City recodified its impact fee provisions as RMC Chapter 3.10. Ordinance 2587. RMC 3.10.060 is the exemption section that corresponds to the prior CDG exemption section, CDG 20C.110.050 . The new exemption section ,which remains in effect today, reads: 3.10.060 Exemptions from the requirement to pay impact fees. The following development activities are exempt from the requirement to pay some or all of the fire, park, school, and transportation impact fees required by this chapter: . . . . Where a fee has previously been paid for the development activity under the State Environmental Policy Act (SEPA) for all of the system improvements for which impact fees are imposed by this chapter, the development activity shall be exempt from the payment of all impact fees pursuant to RCW 82.02.100. Where a fee previously paid for the development activity under SEPA does not cover all system improvements for which an impact fee is imposed under this chapter, an impact fee credit shall be given to ensure that the City is not collecting both SEPA and impact fees for the same system improvements. The intent of this current code language is the same as the precursor CDG provision. When a fee has been imposed under SEPA to mitigate impacts on one or more of the system improvement types, but not all, then the City is required to take action “to ensure that the City is not collecting both SEPA and impact fees for the same system improvements.” The action in this case is specified as giving of an “impact fee credit”. To be consistent with the required result, “impact fee credit” must be interpreted to mean a credit in the amount of the impact fee or fees that would have been imposed but for the prior SEPA mitigation. This meaning is consistent RCW 82.02.100, and renders the Code provision valid. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 25 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax The language of the new Code exemption provision is similar to the prior CDG exemption language. RMC 3.10.060 continues to be titled: “Exemptions from the requirements to pay impact fees”. Like its counterpart in the prior CDG, the recodified regulation continues to exempt development activities from “some or all” of the impact fees required by “this chapter”. The new code section continues to implement the requirements of RCW 82.02.100 by prohibiting the city from “collecting both SEPA fees and impact fees for the same system improvements”. RMC 3.10.060) The intent of this modified code provision is to continue to provide for a “partial exemption”-- i.e., to exempt a development that has mitigated its impacts on one or more types of system improvements subject to impact fees, but not all, from being charged an impact fee to fund the same types of system improvements for which the SEPA mitigation was required. This result is achieved by the straightforward method of crediting the amount of the impact fee or fees which the City is prohibited from charging when a determination of the amount of impact fees owing as a condition of issuance of a building permit for the development is made. If not read in context, it could be assumed that “impact fee credit” refers to credits as provided for in RMC 3.10.130. However, this reading would not ensure that the exemption from impact fees mandated by RCW 82.02.100 and the required result specified in the Code— ensuring “that the City is not collecting both SEPA and impact fees for the same system improvements”—would be achieved. And more fundamentally, this reading would not ensure that the exemption from impact fees mandated by RCW 82.02.100 and the required result specified in the Code-- ensuring “that the City is not collecting both SEPA and impact fees for the same system improvements”--would be achieved. For example, if the cost of a SEPA pro rata fee for transportation improvements, or a requirement to actually construct the transportation improvements, required a developer to pay a smaller dollar cost than the GMA transportation impact fee calculated pursuant to RMC 3.10, a credit in the amount of the cost of the mitigation pursuant to RMC 3.10.130 would reduce the amount of the impact fee, but would leave the excess amount of the impact fee remaining due. RCW 82.02.100 prohibits this as does RMC ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 26 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax 3.10.060(A)(6) because the express mandate of both the State statute and the Code language is that the City is not permitted to collect SEPA fees and impact fees for the same system improvement. A reduced fee is not consistent with a prohibition on imposing any fee and to interpret “impact fee credit” this way would be incorrect because the interpretation would conflict with the objective of the Code section and it would render the Code invalid because it would be inconsistent with State law. RMC 3.10.050(A) can be given a reasonable interpretation such that it complies with RCW 82.02.100. When interpreted properly, Redmond’s current impact fee regulations continue to comply with RCW 82.02.100 by continuing to prohibit double dipping. RMC 3.10.060 continues to exempt Redmond Town Center Apartments from payment of transportation and park impact fees as applied to the facts of this case. 2. Redmond has exempted prior phases of Redmond Town Center from transportation and park impact fees. Again, in 2002 the City issued a SEPA DNS and Notice of Adoption of SEPA documents in connection with approvals for construction of a 110,000 square foot two-story department store initially occupied by the Bon Marche, and currently by Macy’s. Appellants’ Exhibit 40. The store is located in Redmond Town Center, immediately adjacent on the west to the Redmond Town Center Apartments development site. The City recognized that the Bon Marche building project was exempt from paying transportation and park impact fees. A note provided by the City of Redmond Public Records Clerk from Jim Roberts, Assistant Director of Planning and Community Development, to Carol “Anderson” [Carol Osborne, former Director of Public Works?] in an email dated September 23, 2002 confirmed that “Because of traffic system improvements previously made by Town Center, transportation impact fees will not be required for the Bon Marche building permit. Also, because of the valuation of the open space dedication at Town Center, Pak impact fees will not be required. Fire impact Fees are required for this project”. Appellants’ Exhibit 55. The City of Redmond Impact Fee Calculation Form prepared ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 27 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax in connection with issuance of building permit number B020301 for the Bon Marche project shows no fees were charged for transportation or park impact fees. Appellants’ Exhibit 56. On April 3, 1998, the City recognized that a subsequent phase of development of Redmond Town Center was exempt from the requirement to pay a transportation impact fee or a park impact fee when it issued a building permit for a construction of a two-story, 34,900 square foot retail building to be occupied by REI. Appellants’ Exhibit 57. The building permit includes an itemized list of charges, but shown no fee was imposed for “TRANSPORTATION IMPACT FEES” or “PARK IMPACT FEES”. As it did with these prior phases of development, the City should exempt payment of impact fees for the Redmond Town Center Apartments Project since, like these prior phases of development, the impacts to the transportation system and parks, trails and open space facilities were fully mitigated under SEPA and thus RMC 3.10.060(A)(6) and RCW 82.02.100 apply to prohibit payment of impact fees for these same impacts. 3. Redmond’s interpretation of system improvements conflicts with RCW 82.02.100 by allowing impact fees to be charged for the same impact that has been mitigated under SEPA. In the context of communicating why the City decided that transportation impact fee credits do not apply in the case of the Redmond Town Center Apartments Project, Redmond City Attorney Jim Haney explained how the City interprets the term “system improvements” as used in the impact fee statutes and Redmond’s impact fee code provisions: [o]nly “system improvements” qualify for impact fee credits under RCW 82.02.060 and RMC 3.10.130 and the improvements constructed by Town Center do not qualify as system improvements because they are not included in the City’s capital facilities plan at the time the impact fees are being imposed today and have not been included in the City’s capital facilities plan since they were completed many years ago. Letter from James E. Haney to Larry Martin, Attachment C to Application for Appeal. Mr. Haney did not address RCW 82.02.100, but this interpretation of “system improvement” would necessarily come into play in applying this statute as well. As applied to the facts of this case, this interpretation conflicts with RCW 82.02.100 and 82.02.050. Defining system improvements ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 28 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax this way results in arbitrary and duplicative impact fees. This definition would always deny credit to long-term, phased developments where a requirement to construct or pay the complete cost of public improvements is imposed under SEPA at the outset of the development. These facilities would drop off the capital facilities plan upon completion, and thereafter not be the basis for exemption from duplicative impact fees. The correct interpretation is that to qualify as system improvements, public facilities must be identified on the capital facility plan that is in place as of the time the facilities are required and funded or constructed. Impact fees are authorized to fund needed new facilities. RCW 82.02.050. When a public facility listed on a capital facility plan has been constructed, it ceases to be a needed new facility. As noted by Mr. Haney, when constructed, the facilities will be eliminated from the City’s list of needed new capital facilities. This deletion from the list will occur on whatever date the City happens to update it capital facility plan. According to the City’s interpretation, at the point in time the completed facility is deleted from the capital facility plan, the public facilities for which the prior SEPA mitigation was imposed will no longer be classified as system improvements. This amounts to a retroactive recharacterization of the SEPA mitigation. Per the City’s interpretation, the costs incurred by the property owner for the improvements would no longer be relevant to determining the City’s authority to again require mitigation in the form of impact fees to address the same impact of the development upon the same types of public facilities for which the mitigation was imposed. This results in arbitrary impact fees based on the random point in time that a facility is removed from the capital facilities plan. It results in duplicative impact fees charged for the same impact for which SEPA mitigation has previously been required and paid to fully mitigate the impacts to the transportation system. These results violate the express intent of the Legislature in authorizing GMA impact fees as a limited exception to its preemption in RCW 82.02.020 of local governmental authority to impose charges on development of land and buildings. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 29 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax 4. When the term “system improvements” is correctly defined, RCW 82.02.100 and RMC 3.10.060(A)(6) guarantee that a phased, master planned development such as the Redmond Town Center will not be subjected to arbitrary or duplicative impact fees. The Redmond Town Center property owner was required to pay SEPA-based transportation fees, dedicate land for right-of-way, and design and construct transportation facilities that were then listed on Redmond’s Transportation Facilities Plan (TFP) when the Master Plan was approved and when the mitigation was provided. The TIP is the component of Redmond’s capital facilities plan in which the City identifies needed new transportation facilities that were subject to its pre-GMA pro rata share impact fee as described above in Section IV D. Exhibit 12. Pursuant to SEPA, the Redmond Town Center Property owner was also required to dedicate 44 acres of its land to public open space. That land was then identified on the Redmond Capital Facility element of its Parks Recreation and Open Space Plan as “Town Center Open Space”. (Technical Committee Report to Planning Commission) at page 10 and Exhibit F to the report: Appellants’ Exhibit 6. This capital facilities plan is the component of Redmond’s capital facilities plan in which the City then identified needed new parks, recreation and open space facilities. Appellants’ Exhibit 18. Thus, this land was identified as a system improvement needed to serve future City growth. This SEPA mitigation precludes the City from now charging an impact fee to fund park, recreation and open space facilities because it results in SEPA mitigation and GMA impact fees being charged for the same impact—the development impact on public park, recreation and open space facilities. This is prohibited by RCW 82.02.100 and RMC 3.10.060) The transportation facilities and parks, recreation and open space facilities for which SEPA mitigation was imposed were system improvements as defined by RCW 82.02.090(9) at the time the mitigation was imposed by the City: “System improvements” mean public facilities that are included in the capital facilities plan and are designed to provide service to service areas within the community at large, in contrast to project improvements. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 30 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax When that mitigation was imposed, RCW 43.21C.060 precluded the City from subsequently imposing a GMA impact fee to fund the same types of system improvements: RCW 82.02.100(1) A person required to pay a fee pursuant to RCW 43.21C.060 for system improvements shall not be required to pay an impact fee under RCW 82.02.050 through 82.02.090 for those same system improvements. The City’s interpretation of system improvements would render this a temporary protection from arbitrary and duplicative impact fees because the system improvements would be retroactively transformed into non-system improvements when the City got around to deleting them from its capital facility plans. Such an arbitrary result conflicts with RCW 82.02.100. If applied to its impact fee regulations, this interpretation would invalidate Redmond’s impact fee system. D. To the Extent That the Project Is Not Exempt From Park and Transportation Impact Fees, Credits Must Be Given for the SEPA Mitigation. The Credits Exceed the Amount of the Impact Fees and Thus the Impact Fees May Not Be Imposed RCW 82.02.060 provides: The local ordinance by which impact fees are imposed: . . . . Shall provide a credit for the value of any dedication of land for, improvement to, or new construction of any system improvements provided by the developer, to facilities that are identified in the capital facilities plan and that are required by the county, city, or town as a condition of approving the development activity; Redmond’s impact fee regulations include provisions for credits for dedications, improvements and new construction required as conditions of development approval in RMC 3.10.130. Credit for Conveyance of Land for and/or Construction of Improvements. Whenever a development approval is conditioned upon a developer’s conveyance of land for and/or construction of specified system improvements, the developer shall be entitled to a credit against the impact fee that would be imposed for the value of the land or property interest conveyed and/or the actual cost of construction. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 31 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax This section appears to be intended to implement the requirement of RCW 82.02.060 However, these credit provisions hinge on the definition of “system improvements”. However, as discussed above, Redmond’s interpretation of RCW 82.02.060 and RMC 3.10.130 would render this a temporary protection from arbitrary and duplicative impact fees because the system improvements would be retroactively transformed into non-system improvements when the City deleted them from its Transportation Facility Program. Such an arbitrary result conflicts with RCW 82.02.100. If applied to its impact fee regulations, this interpretation would invalidate Redmond’s impact fee system. To be valid as applied to the facts of his appeal, RCW 82.02.130 would need to provide credit for the cost of system improvements that were required to be funded and constructed, and for the value of land dedicated for system improvements as defined with reference to those public facilities identified on the City’s Transportation Improvement Program and the Capital Facilities element of the Redmond Parks and Recreation Plan when the mitigation was performed. When properly implemented, RCW 82.02.130 requires that credits in reduction of the transportation and park impact fees be provided. As shown by Appellants Exhibit 23, and as will be demonstrated by evidence presented at the hearing, the value of the land that the City required be devoted to public open space as identified on the Capital Facilities element of the City Parks and Recreation Plan, and for transportation improvements identified on the City Transportation Improvement Program, and the cost of the improvements required to be constructed in the public open space and the cost of the required transportation improvements, is far in excess of the amount of the transportation and park impact fees imposed by the City on the Redmond Town Center Apartments Project. E. Requiring Payment of Duplicative Fees for the Same Impacts Constitutes a Prohibited Tax, Fee or Charge on Development That Violates RCW 82.02.020 and Constitutes an Unconstitutional Taking of Property. In order to avoid the prohibition in RCW 82.02.020 on a city’s imposition of any “tax, fee or charge, either direct or indirect,” on development activities, the impact fees at issue in this appeal must satisfy one of the statute’s enumerated exceptions. In this case they do not. ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 APPELLANTS’ HEARING BRIEF - 32 4817-5604-6939v.2 0098779-000002 Davis Wright Tremaine LLP LAW OFFICES 777 108th Avenue NE, Suite 2300 Bellevue, WA 98004-5149 [PHONE REDACTED] main · [PHONE REDACTED] fax Imposing duplicative fees to address the same impacts does not meet any of the statute’s exceptions. See RCW 82.02.050-.090 and RCW 82.02.100. Nor does it satisfy the proportionality standards of RCW 82.02.020 or the nexus and rough proportionality standards of for unconstitutional takings. See RCW 82.02.020 (Any dedication of land or fee in lieu of dedication must be “reasonably necessary as a direct result of the proposed development.”); see, also, Koontz v. St. Johns River Water Management District, 570 U.S. 595; 133 S. Ct. 2586 (2013) (monetary exactions imposed as conditions of development approval must also satisfy the nexus and rough proportionality requirements established by the Court’s holdings in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994)). Imposition of the impact fees subject to the appeal violates RCW 82.02.020 and constitutes a taking under the state and federal constitutions. VI. CONCLUSION For the reasons set forth herein, and to be established at the hearing, Appellants’ appeal should be granted and the City should be required to refund the impacts fees paid for open space and transportation impacts. DATED this 5th day of February, 2018. Davis Wright Tremaine LLP Attorneys for Appellants By Larry C. Martin, WSBA #8499 Charles E. Maduell, WSBA #15491