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Close is Not Enough: The Court of Appeals Again Strikes Down Woodburn’s UGB Expansion

In our DJC column for November, 2010, It's About Time - How Not to Plan For Future Industry in Oregon, we wrote about the agonizing 15-year odyssey endured by the City of Woodburn to amend its urban growth boundary (UGB) to include an additional 409 acres of land, some of which is high value farmland and adjacent to the I-5 Freeway, for industrial use as part of periodic review.  The city justified the number of acres necessary for inclusion using a “target-industries” approach that evaluates the city’s employment needs based on the type of industries it would like to attract and then identifying an amount of land needed to attract those particular employers, given their site and building preferences.  The target-industries approach differs from the more typical “employees-per-acre” approach which projects employment growth and divides that growth by the number of employees per acre to reach the number of acres needed to support employment growth.

Petitioners 1000 Friends of Oregon and others objected to the target-industries approach and argued to the Oregon Court of Appeals that this approach resulted in designating more industrial land than was needed to accommodate projected job growth in violation of Statewide Land Use Planning Goal 9, Economic Development.  Petitioners also argued that the city’s target-industries approach “inflated” the number of acres needed to be included within the UGB in violation of Goal 14, Urbanization.  The Land Conservation and Development (LCDC) approved the city’s expansion of the UGB and concluded that the decision to “provide market choice among sites…is a key component of a successful industrial development strategy” required by the administrative rules implementing Goal 9.

In a 2010 proceeding, the Court of Appeals reversed and remanded, finding that LCDC failed to adequately explain its decision.  This concept is known as providing substantial reason.  “Although LCDC discusse[d] Goal 9 and its implementing rules and conclude[d] that the UGB amendment complies with both Goals 9 and 14, LCDC provided essentially no reasoning as to that conclusion with respect to Goal 14.”  Regarding Goal 9, the court stated that LCDC’s “mere reference to ‘market choice’ [was] insufficient to explain the reason that the city’s UGB expansion is consistent with that goal.”  Although the court did accept that some forms of “market choice” could be consistent with Goal 9, LCDC was left to determine to what extent it could exist and still comply with Goal 9.

Back at the drawing board, LCDC drafted a revised order and again approved the city’s decision for the same acreage.  This time, LCDC’s analysis was based on a determination of a “close correlation” between the amount of land needed using the target-industries when compared against the employees-per-acre approaches – a 51 acre or a 16% difference.  LCDC explained that “the more a city’s land need for employment based on its analysis of economic opportunities and sites diverges from what would be predicted…the more thoroughly the city will need to substantiate its economic opportunities analysis and resulting site needs.”  Since the two numbers, 311 acres needed under the employees per acre approach and 362 acres for the target employment approach, are “relatively close,” LCDC concluded that Goals 9 and 14 were satisfied.  On appeal for the second time, the Court of Appeals disagreed and found that LCDC failed to explain why a close correlation between the two approaches signified anything.  Why was a 16% divergence sufficient and when would these numbers diverge so much as to violate the goals?  The court explained that “LCDC did not explain why the relationship between the two numbers, in any case, should relieve it from reviewing—or local governments from explaining—why the amount of land proposed to be added to the UGB is consistent with the goal and other law just as carefully as it would if the correlation were not ‘close.’”  Just finding a “close correlation” did not provide adequate “analytical support” for LCDC’s conclusion.

LCDC’s second reason for affirming the city’s decision focused on the city’s analysis of population, employment, target industries and site requirements upon which LCDC found compliance with Goals 9 and 14.  Here, LCDC’s findings go through exhaustive detail explaining the steps taken by the city to determine how much additional land should be added to the UGB.  LCDC’s findings identified the applicable goals and other legal provisions, and concluded that the city’s decision complied with these requirements.  In what can only be describes as “déjà vu all over again,” the court-identified defect with this approach was that LCDC failed to provide “a meaningful explanation of why the steps taken by the city satisfy the legal standards.”  Sensing that it was not getting through in this second go-around, the court not only quotes two pages of LCDC findings but spends another two-and-a-half pages paraphrasing those same findings through the use of bullets and categorized them as statements of policy, fact, and conclusions.  The applicable standard “substantial reason” according to the court requires “an explanation of why the process in which a local government engaged and the results that it reached are consistent with the law.”

This decision is not just about an abject failure in writing findings but is indicative of an agency and local government desiring a particular result and working furiously to make the means justify that end with no particular consideration of whether the outcome was consistent with the law.  The land use laws, particularly when it comes to UGB amendments require two matters to be addressed – identifying a need for housing and employment lands and then expanding the UGB to accommodate the identified need and not the other way around.

 

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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