By Shareholder James Howsley & Paralegal/Land Use Planner Joseph Schaefer
Winter 2014
In September 2010 the Oregon Court of Appeals rejected The City of Woodburn's attempt to expand its urban growth boundary (the "UGB") to add 409 acres for industrial use, concluding that the order of the Land Conservation and Development Commission (the "LCDC") approving the expansion did not adequately explain compliance with Goal 9 (economic development) and Goal 14 (conversion of rural land to urban uses). Strike one.
The City and the LCDC had proposed two new concepts to justify the size of the expansion. First, the City intended to make more sites available than would actually be developed over 20 years to provide "market choice" — an adequate inventory of sites from which potential industrial users could select. The court of appeals decided that given the variety of industries targeted and the diversity of sites in the planned expansion area, the LCDC had not adequately explained why the market choice approach complied with Goal 9.
The second new concept was that industrial users often purchase more land than they intend to develop within the 20-year planning period to allow room for future growth. The court decided that under Goal 14, local governments are not permitted to include more land than would actually be developed in 20 years.
Of course, in the site-acquisition world, market choice and demand are not new concepts at all. But for Oregon's state-controlled land use system, the concepts are a departure from established precedents. The words "market" and "demand" do not appear in Goal 14. Market demand for a variety of sites and for oversized sites that will be only partially developed in the short term are not sufficient justification for expanding a UGB.
The LCDC reconsidered and reapproved the expansion in March 2011, finding that notwithstanding discussion of market choice in the City's documents, the City did not actually provide market choice because it planned for only one site in each of its two largest site classes (100 acres and 50-100 acres).
In addressing the challenge from 1000 Friends of Oregon, the LCDC acknowledged that UGBs cannot be expanded beyond an indentified need for the 20-year period. It found that accounting for the surplus land purchased for later use is not providing more than a 20-year supply; rather, it is providing sites with the characteristics necessary to provide jobs. The LCDC explained how the City's expert consultants at ECONorthwest analyzed industry needs and established an adequate factual base for the City to rely on.
The LCDC also compared Woodburn's current situation with that of Wilsonville in 1980, when Wilsonville had large tracts of serviced industrial land close to I-5. Eighty percent of Wilsonville's current industrial buildings were built after 1980. The LCDC found that Woodburn's I-5 access and location between Salem and Portland made the intended industrial expansion reasonable.
1000 Friends of Oregon appealed the March 2011 order and the court of appeals again rejected the UGB expansion — strike two — concluding that the LCDC's analysis was not supported by substantial reason. It did not address the LCDC's reasoning for including surplus land purchased for later use within the UGB; rather, it faulted the LCDC for not applying that reasoning to the legal requirements.
The importance of well-written findings is an old story in land use and similar administrative proceedings. The findings and the analysis supporting them must be expressed using the specific structure and style required by particular administrative agencies. In less controversial matters, poorly drafted findings sometimes suffice, but in major cases with sophisticated opponents, scrupulous attention to the findings is crucial. In this instance, the LCDC provided 33 single-spaced pages of analysis, yet the court was unable to see the reasoning that led the LCDC from the facts to the conclusion that the UGB expansion complied with state law.
There is also an elephant in the room. 1000 Friends of Oregon asserts that the City is wrongfully expanding toward high-value farmland west of I-5 and should grow toward less valuable land on the east side of the freeway. The court of appeals has yet to respond to that assertion.
This case contrasts with a March 2013 Washington Supreme Court decision affirming Camas' annexation of a 440-acre urban growth area, mostly for employment land. Camas and Woodburn have many similarities, including size. Camas proposed the expansion in 2005 in its Growth Management Act ("GMA") update, which is akin to Oregon's periodic review. Washington local governments must also perform rigorous research, weigh numerous competing land use goals, adopt findings explaining their decisions, and withstand administrative and legal appeals as occurred with Camas.
The difference is that Washington's local governments can evaluate natural resource and employment land uses on an equal footing under the so-called "WAC Factors" and are not restricted by state laws that proscribe where and when different types of economic development can occur. Washington also allows master planning of major industrial development that requires a parcel of land larger than available urban parcels. The Washington legislature recognized in the GMA that the long-term economic development objectives might necessitate flexibility.
Metro, the Portland Business Alliance, the Port of Portland, Business Oregon, Group MacKenzie, and the National Association of Industrial and Office Parks recently completed a study analyzing the supply of employment-based lands in the region. The conclusion of the study is dire. There simply is not enough available dirt and this hurts the region in business recruitment efforts. It may be time for Oregon to adopt some of the tools employed in Washington to combat the dearth of available employment lands. Otherwise, places like Woodburn that are trying to grow jobs may face strike three.
