Point Wells: Court gives BSRE yet another chance to fix and resubmit its applications to develop Point Wells as an Urban Center

Thursday, February 24, 2022

Point Wells photo by Steven H. Robinson

By Tom McCormick

Point Wells, located at the northern end of Richmond Beach Drive, is home to a contaminated marine fuel and asphalt oil storage and distribution facility. 

In 2009-2010, at the urging of the oil company that owned Point Wells, Snohomish County designated the site as an Urban Center, re-zoned it, and enacted an updated Urban Center Development Code—the County’s code.

Prior to 2010, Paramount of Washington, LLC, owned all of Point Wells, including the land and the oil tanks, pipelines, equipment, etc. A related company, Paramount Petroleum Corporation, used the site to run its marine fuel and asphalt oil storage and distribution business. Together, these entities are referred to as "Paramount".

In 2010, Paramount sold the land at Point Wells to BSRE Point Wells, LP (BSRE) for $19.5 million, but not the oil tanks, pipelines, equipment, etc. As part of the purchase agreement, BSRE gave Paramount a 10-year license to continue using the site to operate its marine fuel and asphalt oil storage and distribution business (operations were discontinued in June 2020). Also in 2010, BSRE and Paramount entered into a development agreement, whereby BSRE agreed to seek Snohomish County's approval of a proposed urban center at Point Wells.
Architectural drawings from Perkins+Wells

In 2011, BSRE submitted development applications to Snohomish County for a massive urban center with more than 3,000 residential units, in towers as tall as 180 feet, and more than 100,000 square feet of commercial space.

Both the City of Shoreline and the Town of Woodway opposed the County’s 2009-2010 designation of Point Wells as an urban center, concerned that their infrastructures could not possibly handle a massive urban center there. They, along with Save Richmond Beach, filed a petition with the Growth Management Hearings Board asking it to invalidate the County’s action. 

The Board did invalidate the County’s urban center designation in April 2011, but by then BSRE had submitted its development applications to the County, thereby acquiring vested status to proceed. The City, the Town, and Save Richmond Beach filed a lawsuit in 2011 asking for a ruling that BSRE was not vested. But in 2014, the Washington Supreme Court in a 6-3 decision confirmed BSRE’s vested status.

In recent years, the City, the Town, and local residents have continued their opposition to BSRE's proposed urban center, all having submitted materials and testimony to the county and its Hearing Examiner in support of denying BSRE's applications.

2018 hearing 

Because BSRE failed to make numerous corrections required by the County, the County in 2018 denied BSRE’s applications. It based its denial on a provision in the County’s code that allows for denial of a proposal without preparing an Environmental Impact Statement (EIS) when the proposal is in “substantial conflict with adopted plans, ordinances, regulations or laws.”

In the 2018 denial, the County’s Hearing Examiner identified seven substantial conflicts:
  1. 21 buildings exceeded the County’s 90-foot maximum building height, and did not qualify for a 90-foot height bonus available for projects with nearby access to high capacity transit (HCT);
  2. multiple buildings in the proposed urban plaza did not comply with the County’s setback requirements because they were not stepped down in height according to each building's distance from the adjacent low-density residential zones;
  3. plans for a secondary access road substantially conflicted with the County’s landslide hazard rules;
  4. the proposed urban plaza buildings were impermissibly located in a landslide hazard area;
  5. the geotechnical report failed to confirm the site's suitability for the proposed development—virtually the entire site is susceptible to high liquefaction;
  6. several buildings are impermissibly located within the marine buffer, less than 150 feet from the ordinary high water mark; and
  7. the proposal to mitigate impacts to critical areas by innovative development design substantially conflicted with County requirements.

2019 court ruling
 
BSRE appealed the Hearing Examiner’s 2018 denial of its applications by filing a Land Use Petition with the King County Superior Court. Rather than rule on whether the above seven substantial conflicts were valid reasons for the County to deny BSRE’s applications, the court’s Judge John McHale ruled on procedural grounds that BSRE should be given a "one-time reactivation opportunity." BSRE was given six months to fix and resubmit its applications to address the seven substantial code conflicts.

Point Wells from Google Earth

2019-2021 resubmittal and hearing

BSRE resubmitted its applications in late 2019. A second hearing was held in November 2020. BSRE fixed two of the seven substantial conflicts — it relocated several buildings so that none were within 150 feet of the ordinary high water mark, and it revised its proposal to mitigate impacts to critical areas by its innovative development design. BSRE failed to fix to the County’s satisfaction the other five substantial conflicts (items 1 through 5 above). As a result, on January 29, 2021, the County’s Hearing Examiner for a second time denied BSRE’s applications. BSRE again appealed, filing a second Land Use Petition with the King County Superior Court.

2022 court ruling

On February 22, 2022, the court’s Judge Josephine Wiggs-Martin issued her decision, kicking the can down the road yet again. Rather than ruling on whether BSRE’s applications substantially conflicted with the County's code, the judge gave BSRE additional time to try to fix the five remaining substantial conflicts.

"The Court finds that there was a lack of good faith [by the County] in the processing and review of the application upon reactivation and thus, a lack of compliance with Judge McHale’s Order on Remand. Reactivation is meaningless if a full and fair process and review does not occur. A fair and meaningful process and review on reactivation must occur.

A meaningful reactivation also means that the same things are not resubmitted with minor tweaks. The Court agrees with the County that “hope is not a plan.” The identified issues need to be addressed; the review process is not going to go on ad infinitum."

New Timeline
  • BSRE gets six months, until August 22, 2022, to submit its "initial revisions" to the applications. Parties must engage in a back-and-forth during this time ("BSRE shall have the opportunity to meet at least once with the County and correspond with the County during this period to discuss any questions or comments BSRE may have.”).
  • The County gets four months, until December 26, 2022, to provide a "comment letter" to BSRE based on the revisions submitted. Parties must engage in a back-and-forth during this time.
  • BSRE gets two months from the date of receipt of the County’s comment letter to revise its plans and make its final submission. Parties must engage in a back-and-forth during this time. The whole process must be complete by February 27, 2023.
  • After BSRE’s final submission, it is expected that the County will review BSRE’s applications one last time. If any substantial conflicts with the County's code remain, one would expect that the County would again deny BSRE’s applications without the preparation of an EIS. If all conflicts are resolved, one would expect that the County would continue to process BSRE’s applications, and resume the previously suspended preparation of an EIS.

Commentary

It seems that Judge Wiggs-Martin’s 2022 ruling puts BSRE in the same dilemma it was in after Judge McHale issued his ruling in 2019. BSRE gets additional time to fix and resubmit its applications to address the five remaining substantial code conflicts, but without the help of a court ruling that BSRE says it needs on two critical path issues: the maximum building height (BSRE contends it is 180 feet, not 90 feet), and the applicability of the required residential setback (BSRE contends the setback rules do not apply).

Consider, for example, the dilemma presented by the maximum building height. When BSRE resubmits its applications in six months, will it unconditionally reduce the height of all buildings to 90 feet thereby acquiescing to the County’s interpretation that the maximum building height is 90 feet, and that a 90-foot bonus height is unavailable due to the lack of HCT access, or, will BSRE resubmit with buildings as tall as 180 feet, thereby all but guaranteeing that the County will again deny BSRE's applications due to a substantial conflict with the County’s maximum building height provision?

I would not be surprised if BSRE, the County, or the intervenor City of Shoreline, asks Judge Wiggs-Martin to reconsider her ruling, to rule specifically on the two critical path issues (maximum building height, and required residential setback). 

Will history repeat itself? 

After Judge McHale issued his 2019 ruling, the City of Shoreline asked Judge McHale to reconsider his ruling. The City asked him to rule on the merits of the maximum building height issue. Without explanation, Judge McHale declined to do so. Separately, BSRE appealed Judge McHale’s 2019 reactivation ruling to the Court of Appeals, asking the court to rule on the merits of the two critical path issues (maximum building height, and required residential setback). The court declined to do so, saying that the appeal was not yet ripe for review.

We will soon know whether Judge Wiggs-Martin will be asked to reconsider her decision (motions for reconsideration must be filed by March 4, 2022). The question then becomes will she grant the motion, and agree to rule on whether the Hearing Examiner was correct or incorrect in concluding that the maximum building height under the County’s code is 90 feet due to the lack of HCT access, and second, whether the Hearing Examiner was correct or incorrect in concluding that the code’s residential setback provisions do indeed apply to Point Wells.

Judge Wiggs-Martin's remand to give BSRE time to fix its applications, without the benefit of a ruling on the merits of the two critical path issues, returns the parties to where they were after Judge McHale’s 2019 ruling -- which also gave BSRE time to fix its applications. 

We know how that turned out. BSRE did not acquiesce to the county’s interpretation of the two critical path issues. In late 2019, BSRE resubmitted its applications with numerous buildings remaining taller than 90 feet, and with several buildings violating the residential setback requirements.

2-25-22 revision of final paragraph


3 comments:

Anonymous,  February 24, 2022 at 5:11 PM  

thanks for the recap = this seems like an example of how developers with deep pockets will wear down opposition to their plans. And the cynical side of me suspects the deep pockets can make all the $ spent fighting the opposition tax deductible.

jim fryett March 15, 2022 at 10:22 AM  

The BSRE legal approach is a standard form of contention often utilized by Real Estate litigators for the developer. They cannot argue the facts (ie 90' height restriction or meeting setback requirements) so they argue on procedural grounds (who has the right to rule on a decision). They fully expect to prevail on this approach bc as the courts have demonstrated procedure is more important to their stature and place in law. In their conflict to not 'make law' judges can fail to uphold the purpose of the law. BSRE could simply reform the project to meet those rules set on behalf of the greater public good, but with such a loss of millions of dollars profit at stake, they will not acquiesce. The community must stand.

jim fryett March 15, 2022 at 10:25 AM  

Thank you for the well presented update and concise review. Hopefully your fellow publishers in Edmonds, Woodway and beyond will tag and support your article.

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