Full Text
1 2 3 4 5 6 7 8 Hearing Examiner Sharon A. Rice BEFORE THE HEARING EXAMINER FOR THE CITY OF REDMOND 9 In the Matter of the SEP A Appeal of File Nos: BLDG-2016-09802 BPLN20 16-02092 10 11 WPDC CLEVELAND, LLC of approved Building Permit BLDG-20 16- 12 09802/BPLN-2016-02092 authorizing alterations to the structure at 16390 Cleveland 13 Street, Redmond APPELLANT WPDC CLEVELAND, LLC'S RESPONSE IN OPPOSITION TO APPLICANT'S MOTION TO DISMISS 14 15 16 17 18 19 20 21 22 23 24 25 26 Issued Februar 17, 2017. I. SUMMARY The City code requires Applicant to obtain a land use permit prior to obtaining a building permit or change of occupancy permit. Applicant knew this from the start but chose to proceed otherwise, going so far as to strategically abandon its Site Plan Entitlement permit in the face ofpublic scrutiny. In the City's words, the Applicant "jumped the gun[, so] we've kind of gotten ourself all twisted up in time and processing [T]here was a mistake here in that the building permit was issued for the tenant improvement prior to this. There should have been this site plan entitlement application submitted before the building permit was issued." Applicant cannot divest the Hearing Examiner of jurisdiction by gaming the permit process. Appellant respectfully requests that the Hearing Examiner deny Applicant's motion in its entirety, grant Appellant's cross-motion and require Applicant to follow the rules like everyone else. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - I PDX\ 131246\221725\AAL \20643369.10 SCHWABE, WILLIAMSON & WYATT, PC Atlorneys al Law US Bank Centre 1420 5th Ave., Suite 3400 Seatlle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 2 II. STATEMENT OF ISSUES 3 This appeal addresses the City's issuance of two permits, BLDG-2016-09802 and 4 BPLN2016-02092, for the Origins Cannabis Project (collectively, the "Decision"). 5 Appellant raised 13 enumerated issues with subparts in the Appeal. Applicant seeks 6 dismissal of nine general, enumerated issues raised in the Appeal on two grounds: 7 enumerated Appeal issues 1, 2, 4, and 6 "concern code requirements for site entitlement 8 permits for which no application is pending"; and enumerated Appeal issues 3 through 6, 9 8, 9 and 13 "concern code requirements for change of use from a business license for which 10 no application is pending." See Applicant's Motion to Dismiss at 2:4-9. 11 Applicant's Motion to Dismiss, and particularly the phrasing of the issues, presents 12 both a classic straw man fallacy (an intentional distortion of the other party's position) and 13 red-herring fallacy (a relevance fallacy used as a diversionary tactic that may or not be 14 intended to deceive). 1 Properly framed, the issues are whether Applicant was required to 15 obtain a land use permit a Site Plan Entitlement) prior to obtaining a building or 16 change of occupancy permit, and whether Applicant's proposed improvements to allow 17 for a marijuana retail sales business in the building must comply with applicable codes, so 18 that a licensed marijuana retailer may occupy the building. Applicant moves without 19 reference to fact or law. Appellant has cross-moved on these same issues and respectfully 20 requests that the Hearing Examiner grant Appellant's motion, issue a stop work order and 21 deny Applicant's motion in its entirety. 22 III. EVIDENCE RELIED UPON 23 Appellant relies on the March 2, 2017 Appeal of Origins Cannabis Type I Permit 24 BLDG-2016-09802 and BPLN2016-02092 and attachments thereto ("Appeal"); the 25 26 1 See Wikipedia discussion at herring. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 2 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WYATT, P.C Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 Declaration of Aaron M. Laing and exhibits thereto; the Declaration of Kevin R. Wallace 2 and exhibits thereto; the Declaration of Michael J. Read, P.E. and exhibits thereto; the 3 Declaration of Matthew M. Woolsey and exhibits thereto; the Declaration of Jason Bailey; 4 the Declaration of Lee Keller and exhibit thereto; and the Declaration of Rick Driftmier, 5 AlA and exhibit thereto. These seven declarations and exhibits were filed on May 1, 2017. 6 Appellant further relies on the Second Declaration of Aaron M. Laing and exhibits 7 thereto filed with this response brief, the Hearing Examiner's March 17, 2017 Order Setting 8 Pre-Hearing Document Exchange Schedule and the Hearing Examiner's April 21, 201 7 9 order in Response to Request for Hearing Examiner Action. 10 IV. MATERIAL FACTS 11 Appellant relies on the facts set forth in the Appeal and Appellant's May 1, 2017 12 Motion for Partial Summary Judgment as if fully set forth herein and the additional material 13 facts set forth below. By contrast, Applicant relies solely on the Declaration of Sean Miller 14 in Support of Respondent Andorra Ventures LLC's Dispositive Motion to Dismiss Errors of 15 Procedure, Fact and Law Nos. 1 Through 6, 8, 9, and 13, which does not contain any of the 16 factual allegations set forth in Section II of Applicant's brief, except the allegation that the 17 old warehouse building was subject to a lease that has since been terminated. Compare 18 Miller Decl. with Motion to Dismiss at 2:1-4:2. While the lease termination is a tacit 19 acknowledgement that there is a change in occupant I occupancy, Applicant makes no 20 argument based on the alleged lease or its termination. It's unclear why Applicant even 21 submitted the declaration or referenced it in its brief. What is clear, however, is that 22 Applicant is being parsimonious with the facts and persisting in its effort to piecemeal the 23 permit process to avoid both public review and complying with basic permit requirements. 24 Applicant complains that the City erred in issuing the building permit and change of 25 occupancy permit in the name of Origins Cannabis instead of Andorra. See Motion to 26 Dismiss at 3:3, n.3. Applicant then asserts-without any evidence-that "It is important to APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 3 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- note that there is as yet no lease to or business permit application by Origins; and 2 other tenants besides Origins will occupy portions of the building." See id. Applicant 3 concludes, "Andorra cannot apply for a retail marijuana business license - only the retail 4 marijuana tenant may apply for such a license." See id. at 3:18-19. 5 In reality, Sean Miller, a member of Applicant Andorra Ventures LLC, is the 6 Managing Partner of Origins Cannabis, an existing marijuana retail sales business in West 7 Seattle and the already-state-licensed and soon-to-be tenant of the Redmond Origins 8 Cannabis Project. See 2nd Laing Decl., Exs. CC (email from Mr. Miller using his Origins 9 Cannabis account); LL (City email identifying Mr. Miller as contact for "Future Tenant" of 10 "cannabis shop"); NN (Origins Cannabis website homepage); TT (email from Planning 11 Director Robert Odle confirming all four licenses for marijuana retail sales in Redmond have 12 been issued by the State, including for the Project Site). 13 All four of Redmond's retail marijuana business licenses have been issued, and the 14 state stopped accepting applications for licenses as of March 31, 2016. See id., Exs. MM, 15 TT, WW, XX & YY. The City does not require a business license for the proposed 16 occupant business in any part of the land use process for permitting or construction of a 17 space; rather, a potential business licensee "must confirm zoning requirements applicable for 18 [the proposed] location . . . in order [t]o confirm that the building, space, or suite is an 19 appropriate use for [the proposed] type of business." See id. 20 In early April, Mr. Miller told a nearby Redmond business owner that the Redmond 21 Origins Cannabis shop would be opening in June 2017. See id., Ex. MM. 22 The City and Applicant have known that the Origins Cannabis building permit and 23 change of occupancy permit were intended to allow for the operation of a retail marijuana 24 sales business on the Project Site since at least the September 1, 2016 pre-application 25 meeting with Mr. Miller. See 2nd Laing Decl., Exs. DD, EE. In preparation for the pre- 26 application meeting, Mr. Miller contacted the City on August 22, 2016 to verify whether the APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 4 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WYATT, PC. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 Project Site "complies with i502 retail use"-that is, whether the Site is within any state- 2 required buffer. See id., Ex. CC. After erroneously concluding that the Site is outside 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 required buffers, City staff correctly determined that, in addition to a building permit and change of occupancy permit, "[Applicant] would be required to obtain any and all applicable permits." See id., Ex. EE. The City has consistently and unequivocally recognized that the Origins Project will result in both a "change in occupancy" new tenants I occupants) and a "change in use" change from warehouse I storage use to retail and other uses). See, e.g., 2 11ct Laing Decl., Exs. FF, JJ, TT. On December 8, 2016, the day before Mr. Miller submitted the building permit and change of occupancy permit applications, City Building Plans Examiner sent an email with subject line "Andora (sic) "Origins' Recreational Marijuana" to other staff to alert them that "this permit will be coming in for a change of occupancy tomorrow 12/9/16." See id., Ex. FF. On January 4, 2017, City Planner Cameron Zapata emailed Mr. Miller the following: I-Ii Sean, Per our phone conversation, I am sending this email to recap what we had discussed. • The previous use was storage/warehouse . • The retail marijuana shop will only be going in retail space A, however since the entire space is changing occupancies, impact fees will be generated for the whole structure. Please see the attached impact fee estimate. • The exterior improvements can be a separate permit, however the drawings will be required to be updated to only reflect the interior improvements. An issue matrix will be sent to you by Jozanne Moe (plans examiner) once all reviewers have completed their review and this comment will be included in the matrix. • We had also discussed that the exterior work will require [you] to go through the Design Review Board, I have attached the application and APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 5 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave, Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 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 schedule to this email for your reference. The approval of the DRB will hold up the approval of the exterior alteration permit See 2nd Laing Decl., Ex. J.J (emphasis added), The City went on to confirm that the "change in use" from "warehouse" or "storage" to "retail sales" would trigger a transportation impact fee. See 2nd Laing Decl., Ex. KK. In an email exchange between January 25, 2017 and February 10, 2017, City Planner Gary Lee raised the following questions: The cinderblock building was used for storage. What category should we charge them for impact fees, and should they be given a credit for the existing storage use? For this cinderblock building that was used as warehouse (not retail sales) should we charge them impact fees for retail sales for all of their square feet? And give them credit for "warehousing/storage" for all of the existing square feet? See id. (emphasis added). In response, City Engineer I Planner Andy Chow stated: "For the change of use, it will be subject to transportation impact fee if the new use will generate additional 30 peak hour vehicle trips compared to existing use." Jd. (emphasis added). Despite the fact that a marijuana retail sales license had been issued to allow for a store to locate at the Project Site, City Code Enforcement Officer Deborah Farris explained that additional permits would be required: Hi Rob, To address Councilman Myers's concerns: A "Change of Occupancy" is being required because of the previous building certificate of occupancy of the building. Because the building is located in Downtown on Cleveland St., the land use allows for any type of retail. However, the building use (or occupancy) requires a "Change of Occupancy" because it is currently a warehouse APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 6 PDX\131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, P.C. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 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 shell. Improvements will need to be made so that the building can be used for retail. At a minimum, they will need to install bathrooms, bring it up to ADA standards, hook up to water and sewer, and create safe ingress and egress. These are all International Building Code requirements. Bringing the building up to code would be required regardless of the actual retail use; in other words, it doesn't make any difference whether the business owners wanted to sell women's fashions; open a massage parlor, a restaurant, or sell marijuana. The owner has also opted to do major renovations of the building under a "Tenant Improvement". Here is the description: "TI - Change of Occupancy - Origins - Construction includes TI to divide the building into multiple retail suites, storage and offices, including the construction of a new 2nd story ( 459 sq ft) mezzanine. Total area of construction = 3268 sq ft. Interior only work. Exterior work is on a separate permit." See 2 11d Laing Decl., Ex. TT (italics in original; bold and underlining added). It bears repeating that "Bringing the building up to code would be required regardless of the actual retail use; in other words, it doesn't make any difference whether the business owners wanted to sell women's fashions; open a massage parlor, a restaurant, or sell marijuana." See id. (emphasis added). In fact, this is precisely what City Planner Mr. Lee told a friend of the Site's prior owner in August 2013, when Mr. Lee received an inquiry about converting the building to a fruit stand: Jason, I have done some research regarding your question and have determined that in order to use the building as you are showing, the building will need other significant improvements to make it occupy-able for retail/commercial use, including providing a restroom and doing seismic upgrades (according to the building Department). You should contact the Building Department directly about probable requirements. I am sure that your friends (the property owners) have heard this before with other proposals/inquiries to improve the building. In any case, the fruit stand, or any other retail use, will require significant upgrades to the building to APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 7 PDX\131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---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 make it occupy-able for use (even with few or no architectural modifications) - and thus would trigger the frontage improvements and requirement to reduce the size of the building (in order to widen the sidewalk). The major reason for this is because the building was originally constructed for storage, and not for retail/commercial occupancy, and thus the building was not originally improved to retail/commercial occupancy standards. Let me know if you have any other questions about this. See 2nd Laing Decl., Ex. UU (emphasis added). In preparing his response, Mr. Lee made an inquiry to City Plans Examiner Jozanne Moe, who explained "Carol did a building history and there was nothing we could find. All we know is that it was a previous warehouse building. So this would be a change of use and would be required to be brought up to the 2012 IBC. Previous people have tried to move in there and I believe there were no City Services to the building." See id., Ex. VV. (emphasis added). Ms. Moe further noted, "It will probably be quite expensive." See id. By City code, Site Plan Entitlement is required for any private proposal for new construction or exterior modification to a building or site, including commercial, expansion, or exterior remodeling of structures where the proposed use is shown as permitted in the applicable permitted use chart." See 2nd Laing Decl., Ex. HH; RZC 21. 76.070. Y.2. Site Plan Entitlement permits require public notice. See id. The City requires "a Change of Occupancy permit to change the building code occupancy from one occupancy classification to another occupancy classification such as commercial to residential and residential to commercial." See 2nd Laing Decl., Ex. GG. "Examples of common change of use projects are; existing office buildings that are being changed into a school/daycare, a house that is being changed into an office or retail building, a warehouse building that is being changed into automotive repair or a storage building into a church." See id. (emphasis added). As part of the permit process, the City advises applicants to "[r]esearch the Redmond Zoning Code (RZC) to determine what occupancies APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 8 PDX\131246\221725\AAL\20643369. I 0 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 are allowed in the building and what land uses are allowed in that zoning area." See id. 2 (Emphasis added.) The City further advised: "Determine if you need a land use permit. In 3 addition to the change of occupancy, if your proposal is changing the use from a land 4 use perspective, a land use permit may be required." See id. (Emphasis added.) The 5 City's required forms ask, among other things, whether "Exterior Modifications to 6 Building?", "Additional building square footage[?]" and "Change of Land Use? (RZG) i.e., 7 warehouse to gym*" are being proposed. See id. The forms make clear distinctions between 8 different types of retail and other "Land Uses" such as "Warehousing/Storage." See id. 9 As noted above, Applicant initially followed the required process by holding a pre- 1 0 application conference and having a land use permit file assigned to the Project. See 2 11d 11 Laing Decl., Exs. DD, EE & FF. Inexplicably, Applicant abandoned its required land use 12 permit (Site Plan Entitlement) when it submitted its building permit and change of 13 occupancy permit applications on December 9, 2016 without a Site Plan Entitlement permit 14 application (or even reference to its land use permit file number LAND-2016-01420). See 15 id., Exs. DD, EE & II. However, as stated on the permit forms (and the approved permits), 16 in Applicant's own words the Project name is "Origins TI & Change of Use." See id. Ex. II. 17 Applicant checked both the "Change of Occupancy" and "Change of Land Use" boxes in the 18 City's required forms, as well as the "Additional building square footage proposed?" box. 19 See id., Exs. GG & II. 20 A few weeks after the Appeal was filed, Applicant belatedly submitted a Site Plan 21 Entitlement application but withdrew it in the face of public scrutiny and issues raised by 22 City Planner Mr. Lee and the Design Review Board. See Laing Decl., Ex. ZZ. Mr. Lee's 23 colloquy with the Design Review Board about the Origins Cannabis Project's utterly flawed 24 permit process bears repeating: 2 25 2 Portions of this transcript are quoted at length in Section IV., Material Facts, in Appellant's Motion for Partial 26 Summary Judgment, including pinpoint citations. For brevity (too late), the citations are omitted here. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 9 PDX\131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, PC. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---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 17 MR. LEE: That's a good question. We 18 did have a preapplication meeting, but not with the 19 Design Review Board earlier in the year, and at that 20 point the revisions weren't as dramatic or 21 (unintelligible). 22 They jumped the gun. They submitted a 23 building permit application and the we issued a 24 part of the building permit and then there was an 25 appeal on that building for the application. So now 1 we've kind of gotten ourself all twisted up in time 2 and processing. So we jumped into ,just approval. MR. LEE: 10 So as we mentioned earlier, we had an 11 appeal on a building permit and the building permit 12 appealed basically all the things that we're talking 13 about here, parking, mari,juana use, and the appeal is 14 somewhat not ripe for appeal because the land use 15 permit should be building first and then consolidating 16 all the issue into one appeal hearing. 17 So the appeal hearing will probably be 18 extended. We do have a request for information 19 regarding traffic. So that the take up committee will 20 be asking for some more information regarding the 21 traffic impact analysis; therefore, probably will have 22 definitely have to reschedule the hearing to get 23 that material in and reviewed before a decision is 24 25 1 2 J 4 5 6 7 8 9 10 11 12 issued. So people usually don't appeal building permits. Just have that's what they appeal here. They usually appeal land use permits, and usually there's a land use permit that has the public notice that goes out. So there was a mistake here in that the building permit was issued for the tenant improvement prior to this. There should have been this site plan entitlement application or administrative modification application submitted before the building permit was issued. So trying to get that all taken care of. CHAIRMAN MEADE: So, I'm sorry. Just to follow up on that a little bit. So was the city APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 10 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 PDX\ l 3 l 246\22 l 725\AAL\20643369. l 0 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 13 what is the city going to do or what is the city 14 currently doing with the building permit application? 15 MR. LEE: The building permit 16 application that was appealed for was a tenant 17 improvement for the interior only including this 18 mezzanine. There was a plan shown for the exterior 19 modifications, but we told them we cannot issue that 20 permit until this application is submitted. 21 So they gave so the building permit 22 that was issued was only for the inside, okay, 9 CHAIRMAN MEADE: One more question. 10 On the tenant improvement plans, did that call for 11 plumbing and power, heating? 12 MR. LEE: So with this yes, yes. 13 And there will be some construction plan that will 14 require mutual hookups. As far as this, there will be 15 some more construction review to provide all necessary 16 water service, because that's-- the building permit 17 application is for a change in occupancy from a 18 warehouse to a commercial space that requires 19 plumbing. 17 MR. KRUEGER: Well, I'm not ready to 18 vote on this. I want this to go through the normal 19 procedures. 18 See id., Ex. ZZ (Bold text and underlining added.) Mr. Lee and the Design Review Board 19 also acknowledged issues with Applicant's estimate of the cost of the proposed 20 improvements vis-a-vis the value of the existing building on the Project Site. See id. 21 A few days later, Mr. Lee reached out to City Development Services Supervisor Ms. 22 Lewis with the following request: "Please see me when you are free - before you leave 23 regarding building valuation for new storefronts of BLDG-2016-09802," noting that the 24 meeting's importance was "High." See 2 11d Laing Decl., Exs. RR. The next day (April 12, 25 2017), Applicant withdrew its Site Plan Entitlement permit application and stated that it 26 "would not be refiling it," asserting now (without evidentiary support) that it "made a sound APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 11 PDX\131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, PC Atlorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seatlle, WA 98101-4010 [PHONE REDACTED] ---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 business decision that the site entitlement permit had become too cumbersome . . . " Appellant's Motion to Dismiss at 3:15-17. On April21, 2017, City Building Inspector Kenneth Mcleod left the following voice message for Ms. Moe regarding the Project, following an inspection of the ongoing work: Hey Jozanne this is Kenny it's Friday the 21st at about 12:40. In the afternoon beautiful day I have some questions for you regarding I, I believe it's kind of a touchy sketchy weird permit for Origins Cannabis it's that CMU block building that's right down kitty corner to with Amanda door kinda next door to the steakhouses that trying steak house anyway and there's some things going on there that I'd kinda like to know I need to be brought up to speed on some of the (sic) application things have been deleted and added and that kind of stuff so if you get an opportunity before 2:30 give me a call on my cell phone (425) 223-9022 it's after two thirtieth let's just touch base next week see you. See 2nd Laing Dec!., Exs. 00, PP & QQ. On April 28, 2017, Applicant emailed the City a significantly revised floor plan of the approved interior improvements to add a third retail space, remove the "use" of the mezzanine (but not the mezzanine itself) and reconfigure the entry way to a shared lobby for the three retail spaces instead of individual exterior entrances for the two original retail spaces. Compare 2nd Laing Dec!., Ex. SS with Woolsey Decl., Ex. A. Applicant appears to have submitted this revised floor plan to allow it to complete and open the marijuana retail sales business in June 2017, despite lacking required permits to modify the building's exterior, any parking, any loading space and any space for garbage I recycling in a building located about 800 feet from a playground under construction.3 3 These facts are established in Section IV., Material Facts, in Appellant's Motion for Partial Summary Judgment, including pinpoint citations. The citations are omitted here. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS- 12 PDX\ 131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, P.C. Allorneys al Law US Bank Cenlre 1420 51h Ave., Suite 3400 Seallle, WA 98101-4010 [PHONE REDACTED] ---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 v. STANDARD OF REVIEW Applicant does not specify the standard of review or provide any legal authority for its motion, so it is not clear whether it is a motion to dismiss per CR 12(b)(6) or a summary judgment motion per CR 56( It does not matter, because Applicant cannot meet its burden under either standard, so the motion should be denied in its entirety. Per CR 12(b)(6), a motion to dismiss may be granted if "'it appears beyond doubt that the plaintiff can prove no set of facts, consistent with the [appeal], which would entitle the [appellant] to relief."' See Bowman v. John Doe, 104 Wn.2d 181, 183, 704 P.2d 140 (1985). Factual allegations in an initial pleading are presumed true for purposes of a CR 12(b)(6) motion. See Lawson v. State, 107 Wn.2d 444, 448, 730 P.2d 1308 (1986). To survive a motion to dismiss, an initial pleading must only "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."' See Ashcrofi v. Iqbal, 556 U.S. 662, 678 (2009). Factual, non-conclusory allegations must be accepted as true for the purposes of a motion under CR 12(b)(6)." See id. By contrast, summary judgment is appropriate when "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." See CR 56( Donatelli v. D. R. Strong Consulting Eng 'rs, Inc., 179 Wn.2d 84, 90, 312 P .3d 620 (2013). The purpose of a motion for summary judgment is to determine whether a genuine issue of material fact exists, not to resolve any existing factual issue. See Hudesman v. Foley, 73 Wn.2d 880, 886, 441 P.2d 532, 533 (1968). The moving party has the burden of proving that there is no genuine issue of material fact, irrespective of whether the movant or opponent would have the burden of proof at trial on the issue. In ruling on a summary judgment motion, the Hearing Examiner must consider the material evidence and all reasonable inferences therefrom most favorably to the nonmoving party and, when so considered, if reasonable minds might reach different conclusions the motion should be denied. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS- 13 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WYATT, P.C. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seatt'e, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 2 3 4 VI. AUTHORITY AND ARGUMENT As noted in the conclusion of Appellant's cross-motion, there is a well-established legal principle that one cannot accomplish indirectly what one cannot accomplish directly. See, e.g., Smith v. Orthopedics Intern., Ltd., P.S., 170 Wn.2d 659, 669, 244 P.3d 939 (2010). 5 This principle is central to this appeal. Applicant's motion boils down to the circular 6 reasoning that "because [the issues] pertain to business or site entitlement permits for which 7 no application is pending," the issues are not properly before the Hearing Examiner for 8 review, even though it is the very failure to obtain such permits that is the gravamen of this 9 appeal. Applicant cannot deprive the public of notice and the right to comment or the 10 Hearing Examiner of jurisdiction by proceeding with an admittedly strategic, unlawful and 11 piecemeal permit process. 12 Appellant asserts that the Origins Cannabis Project's building and change of 13 occupancy permits were issued prematurely and in error in part because the Applicant failed 14 or refused to obtain the prerequisite land use permits. By piecemealing the process and not 15 pursuing required land use permits, Applicant evaded required public notice and comment 16 periods, which would have given Appellant (and others) an opportunity to provide 17 information to avoid the substantively erroneous issuance of the two permits. Appellant 18 raised these issues from the outset, and both hypothetical facts and actual, irrefutable 19 evidence and related inferences preclude granting Applicant's motion. See Bowman, 104 20 Wn.2d at 183; Donatelli, 179 Wn.2d at 90; CR 56( 21 Appellant has cross-moved on the process issues and met its burden. Applicant 22 admits it lacks (abandoned) the required land use permit and that it seeks a change of use to 23 retail marijuana sales for a site and building that don't meet code. Appellant respectfully 24 requests that the Hearing Examiner grant its motion, issue a stop work order until the appeal 25 process is complete and all required permits have issued, and deny Applicant's motion in its 26 entirety. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS- 14 PDX\1312461221725\AAL\20643369. 10 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---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 A. The Hearing Examiner has Jurisdiction Over Type I Appeals, and the Type I Permits at Issue Were Processed and Issued in Error. Appellant incorporates by reference Section VI. A. of its Motion for Partial Summary Judgment as if fully set forth herein. Here, Applicant correctly states that the Hearing Examiner has jurisdiction over appeal of Type I permit decisions, citing RZC 21. 76.060.D.4. Appellant has asserted that the Type I permits at issue were issued in error both substantively and procedurally, including (but not limited to) Applicant's failure or strategic refusal to obtain necessary prerequisite land use permits, including (but not limited to) a Site Plan Entitlement permit. The City has admitted and explained at length that this processing error occurred. Both hypothetical facts and actual, irrefutable evidence and related inferences confirm that this occurred. Applicant does not even assert (as a fact) or argue (as law) that it was not required to obtain a Site Plan Entitlement permit; rather it admits that such a permit was needed for some improvements and then reiterates in various phrasing that "no site entitlement permit is pending." See Motion to Dismiss at 3:2-1 0; 3: 12-14; 3: 15-17; 5: 14-15; and 6:10-12. At the initial hearing on this appeal, Appellant raised the permit process issues and the problems and inefficiencies that would result if the piecemeal permit process were not corrected. See March 17, 2017 Order Setting Pre-Hearing Document Exchange Schedule at 1-2. Despite knowing that part of the basis of the Appeal is Applicant's failure or refusal to obtain a necessary land use permit Site Plan Entitlement), Applicant has chosen to make a baffling strategic decision to withdraw such permit application and (it appears) drastically revise its approved interior-only modification permit (though it's not clear that an application has been submitted) just weeks before the appeal hearing. If necessary, Appellant will appeal whatever permits come from the newly-submitted materials, because they still constitute a change in use and likely won't address the many deficiencies Appellant has already identified. APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 15 PDX\131246\221725\i\AL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, PC Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 Applicant's argument that it can deprive the Hearing Examiner of jurisdiction on the 2 basis that it failed I refused to obtain a necessary permit and then later submitted and 3 withdrew such permit is novel, at best, and should not be rewarded. One cannot accomplish 4 indirectly what one cannot accomplish directly. See Smith, 170 Wn.2d at 669. Appellant 5 respectfully requests that the Hearing Examiner grant its motion, issue a stop work order 6 until the appeal process is complete and all required permits have issued, and deny 7 Applicant's motion in its entirety. 8 9 B. Applicant's Failure to Obtain a Required Land Use Permit Does Not Deprive the Hearing Examiner of Jurisdiction Over This Appeal. 10 Appellant again incorporates by reference Section VI. A. of its Motion for Partial 11 Summary Judgment as if fully set forth herein. 12 Applicant correctly states that the Hearing Examiner has jurisdiction over appeal of 13 Type I permit decisions, citing the relevant code provisions. However, Applicant goes on to 14 argue that, in the absence of the requisite Site Plan Entitlement permit application, Appellant 15 has no due process rights. See Motion to Dismiss at 6:2-3. Applicant's entire argument is a 16 classic "strawman" as it mischaracterizes the actual issue by distorting Appellant's position. 17 To wit: Applicant generally cites to whole sections of the City's code without discussion but, 18 as before, misses the point that the applicable code provisions require a land use (e.g, Site 19 Plan Entitlement) permit for the Project prior to issuance o,lthe building permit and that the 20 building permit must conform to the approved land use permit. See RZC 21.76.020.H.; RZC 21 21.76.070.Y. 22 Applicant concedes that a Type II permit would have given Appellant the notice and 23 process to which it was due; however, Applicant fails to recognize controlling Washington 24 case law that states that Appellant has a due process right in the City following the correct 25 process prior to issuing a Type I building permit and that Appellant has a general due 26 process right to information about "the pendency of proceedings affecting [Appellant's) APPELLANT'S RESPONSE 1N OPPOSITION TO MOTION TO DISMISS - 16 PDX\131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, P.C. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 property." See South Hollywood Hills Citizens Ass'n, 101 Wn.2d at 74; Prekeges, 98 Wn. 2 App. at 281 (requiring substantial compliance with notice provisions). Applicant's permits 3 clearly affect Appellant's property and have already resulted in numerous instances of 4 trespass. Appellant received no notice, because Applicant failed or refused to apply for and 5 obtain the necessary, prerequisite Type II land use permit prior to obtaining its building and 6 change of occupancy permits. Again, one cannot accomplish indirectly what one cannot 7 accomplish directly. See Smith, 170 Wn.2d at 669. Both hypothetical facts and actual, 8 irrefutable evidence and related inferences (including without limitation Mr. Lee's 9 comments to the Design Review Board) support the Appeal and preclude granting 10 Applicant's motion. See Bowman, 104 Wn.2d at 183; Donatelli, 179 Wn.2d at 90. 11 Applicant then goes on to make what may be the most ironic statement in this entire 12 matter: "First, 'piecemealing implies multiple permits. As noted above, [Applicant] 13 withdrew its site entitlement permit application; thus there could be no piecemealing." See 14 Motion to Dismiss at 6:10-12. As carefully and thoroughly detailed in Appellant's cross- 15 motion and in Section IV., Material Facts, above, multiple permits are required for the 16 Origins Cannabis Project. Applicant doesn't argue otherwise; Applicant simply argues that 17 multiple permits aren't being sought at this time. 18 Applicant's persistence in trying to pursue a project without required permits-while, 19 it appears, making a renewed effort at revising the current interior-improvements-only 20 permit-is the very essence of piecemealing. 4 Again, one cannot accomplish indirectly 21 through piecemealing) what one cannot accomplish directly through submitting a 22 substantively defective permit application). See Smith, 170 Wn.2d at 669. And, again, both 23 hypothetical facts and actual, irrefutable evidence and related inferences (including without 24 limitation Mr. Lee's comments to the Design Review Board) support the Appeal and 25 4 Merriam-Webster defines "piecemeal" as "one piece at a time" or "in pieces or fragments." See 26 APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 17 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & VVYATT, PC Allorneys al Law US Bank Centre 1420 5th Ave., Suite 3400 Seallle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 preclude granting Applicant's motion. See Bowman, 104 Wn.2d at 183; Donatelli, 179 2 Wn.2d at 90. 3 Applicant concludes this section of its brief by arguing that, having abandoned its 4 Site Plan Entitlement permit, there is "no expansion or enlargement of leasable floor area 5 before the Examiner." See Motion to Dismiss at 6:20-21. Not so. Applicant appealed the 6 permits that were issued, which contain the mezzanine that results in "an expansion or 7 enlargement of leasable floor area" in the old warehouse. The City issued a "stop work 8 order" for work on the mezzanine and required Applicant to obtain a Site Plan Entitlement 9 permit for, among other things, the mezzanine. A recent inspection of the Project prompted 10 City Building Inspector Mr. Mcleod to leave a voice message for City Plans Examiner Ms. 11 Moe referring to the situation as "kind of a touchy sketchy weird permit for Origins 12 Cannabis" and noting that "some of the (sic) application things have been deleted and added 13 and that kind of stuff " 14 Whatever the case, Applicant sought and then abandoned a necessary permit and then 15 recently submitted new interior plans that retain the mezzanine. Applicant still has a permit 16 to construct the mezzanine, has actually constructed portions of it, and has not removed the 17 mezzanine from its plans. Once again, Applicant appears to be trying to accomplish 18 indirectly (by withdrawing one permit and submitting revised plans that still show the 19 mezzanine) what it cannot accomplish directly (gaining approval for additional floor space 20 without meeting code requirements). Accord Smith, 170 Wn.2d at 669. Both hypothetical 21 facts and actual, irrefutable evidence and related inferences (including without limitation 22 Applicant's latest revised plans and the concerns raised by the Building Inspector) support 23 the Appeal and preclude granting Applicant's motion. See Bowman, 104 Wn.2d at 183; 24 Donatelli, 179 Wn.2d at 90. 25 26 APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 18 PDX\131246\221725\AAL\20643369.1 0 SCHWABE, WILLIAMSON & WYATT, P.C. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---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 c. A Marijuana Retail Sales Business License is Irrelevant for the Issues Before the Hearing Examiner. Appellant incorporates by reference Sections VI.A. through VI.F. of its Motion for Partial Summary Judgment as if fully set forth herein. Applicant's effort to focus the Hearing Examiner's attention on what is not here- that is, the alleged lack of a City business permit for retail marijuana sales use-is a red- herring. A business license is not required for a change of use (or occupancy)-it is nowhere in the City's required permit forms for a building permit or change of occupancy permit. Rather, the City's business license requirements follow (not precede) procuring a properly entitled, permitted location for a business. Applicant admits as much, explaining that the City will not issue "or even consider" a business license "until a retail (Andorra's planned tenant) has procured a location and lease; the Washington Liquor and Cannabis Board has issued a retail cannabis license for that location ; and the City conducts its own review and issues a city business license " See Motion to Dismiss at 7:15-19 (emphasis added). The state has already issued the license for the location, and Applicant's member I owner Mr. Miller has already confirmed that his existing retail marijuana sale business, Origins Cannabis, will occupy the Project Site (in June, if his expectations go as planned). Thus, the actual issue on Appeal is whether the proposed location and building meet code; they do not. These issues are properly before the Hearing Examiner, and Applicant does not argue that the Site or building meet code. Appellant has cross-moved on the process issues and met its burden, and Applicant's motion must be denied. Applicant correctly points out that the first basic step toward obtaining a City business license for a marijuana retail sales business is to "procure[] a location." See id. It should go without saying (but apparently must be said, in light of Applicant's arguments) that this entire permitting process is the effort to procure a location for the Origins Cannabis business. Applicant admits as much in its brief (and the record unequivocally APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 19 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WYATT, P.C. Atlorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 proves this fact) but goes on to make the unfounded and contradictory argument that the 2 City's issuance of a business license (after the location is procured) is what would actually 3 trigger code requirements to provide parking, a loading space, and a garbage I recycling 4 space as well as bringing the building up to code. See generally id. at 7-10. 5 Applicant's basic argument is circular: because no business license has issued, "there 6 has been no change in use or application for a marijuana retail sales business license." See 7 Motion to Dismiss at 8:13-15. To the contrary, Applicant and the City have confirmed that 8 the Project will result both in an enlargement and a change of land use (warehouse I storage 9 to retail) and a change of occupancy (new tenant or tenants and different uses)-the permits 10 themselves are titled "Origins Tenant Improvements and Change of Use." The City told the 11 Site's prior owner's representative that a change of use from warehouse to a retail fruit stand 12 would require that the building I site be brought up to code. As explained by City Staff to 13 Councilmember Myers, "Bringing the building up to code would be required regardless of 14 the actual retail use; in other words, it doesn't make any difference whether the business 15 owners wanted to sell women's fashions; open a massage parlor, a restaurant, or sell 16 marijuana." The City told Applicant as much, too, and Applicant checked the "Change of 17 Land Use" box on the permit forms in addition to the "Change of Occupancy" boxes. 18 Properly framed, the actual basic issues raised by Applicant are whether, under RZC 19 21.41.040 & .050 and other City codes, the Project Site and Project will provide "a 20 permanent structure designed to comply with the City Building Code" outside of state 21 mandated buffers. Applicant again attempts to do indirectly (avoid substantive scrutiny of 22 its permits by arguing they can't be reviewed until a business license issues) what it can't do 23 directly (obtain a business license for a site and building that do not meet code 24 requirements). See Smith, 170 Wn.2d at 669. Both hypothetical and actual, irrefutable facts 25 and inferences demonstrate that Applicant failed to obtain necessary permits to allow for the 26 proposed renovation and that Applicant has not met and cannot meet substantive code APPELLANT'S RESPONSE IN OPPOSITION TO MOTION TO DISMISS - 20 PDX\131246\221725\AAL\20643369.10 SCHWABE, WILLIAMSON & WfATT, PC. Attorneys at Law US Bank Centre 1420 5th Ave., Suite 3400 Seattle, WA 98101-4010 [PHONE REDACTED] ---PAGE BREAK--- 1 requirements to allow for any retail use, much less retail marijuana use. See Bowman, 104 2 Wn.2d at 183; Donatelli, 179 Wn.2d at 90; CR 56(c). This red-herring argument must fail, 3 and Applicant's motion must be denied. See id. 4 VII. CONCLUSION 5 Applicant does not dispute in its motion that it must bring the old warehouse building 6 up to code for any change of use and that a marijuana retail sales business in Redmond 7 requires a code-compliant building located outside of required buffers. Applicant instead 8 seeks to skirt the City's required permit process by piecemealing its applications in order to 9 avoid both public scrutiny and complying with substantive requirements. Applicant's 10 baseless assertions about what constitutes a "change of use" or "change of occupancy" are 11 contrary to its own statements and admissions in its various permit applications as well as 12 the representations it made to the City throughout the process. Applicant cannot avoid the 13 prerequisite permit process to obtain a land use permit by strategically abandoning such 14 permit. Nor can Applicant insulate its building permit and change of occupancy permit from 15 review by asserting that a business license is needed to trigger a use change. Applicant has 16 not and cannot provide a code-compliant building on the Site for any retail use, much less a 17 marijuana retail sales business. Appellant has cross-moved on these same issues and 18 respectfully requests that the Hearing Examiner grant Appellant's motion, issue a stop work 19 order and deny Applicant's motion in its entirety. 20 Dated this 8th day of May, 2017. 21 22 23 24 25 26 SCHWABE, WILLIAMSON & WYATT, P.C. By: Aaron