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1000 Friends of Oregon v. Land Conservation & Development Commission

Court of Appeals of Oregon

January 2, 2014

1000 FRIENDS OF OREGON, FRIENDS OF MARION COUNTY, LOLITA CARL, KATHLEEN CARL, DIANE MIKKELSON, and MARION COUNTY FARM BUREAU, Petitioners,
v.
LAND CONSERVATION AND DEVELOPMENT COMMISSION; CITY OF WOODBURN; and MARION COUNTY, Respondents.

Argued and submitted on March 15, 2013.

Land Conservation and Development Commission 11WKTASK001802

Mary Kyle McCurdy argued the cause and filed the briefs for petitioners.

Patrick M. Ebbett, Senior Assistant Attorney General, argued the cause for respondent Land Conservation and Development Commission. With him on the brief were John R. Kroger, Attorney General, and Anna M. Joyce, Solicitor General.

N. Robert Shields argued the cause for respondent City of Woodburn. With him on the joint brief was Gloria M. Roy for respondent Marion County.

Before Armstrong, Presiding Judge, and Nakamoto, Judge, and Egan, Judge.

ARMSTRONG, P. J.

Under Oregon's land use laws, local governments may (and, in some cases, must) engage in periodic review of their comprehensive land use plans. See ORS 197.628 to 197.636. As a result of a periodic-review process, the City of Woodburn amended its urban growth boundary (UGB) to include additional land--409 gross acres or about 362 net buildable acres--for industrial use. The city submitted that amendment to the Land Conservation and Development Commission (LCDC) for review. ORS 197.626(1)(b). LCDC approved the city's amendment of its UGB. Petitioners sought judicial review of LCDC's order of approval. We concluded that LCDC's order was inadequate for judicial review and, accordingly, reversed the order and remanded the case to LCDC for reconsideration. 1000 Friends of Oregon v. LCDC, 237 Or.App. 213, 239 P.3d 272 (2010) (Woodburn I). LCDC has now completed that reconsideration and issued a new order approving the city's UGB expansion.

Petitioners again seek judicial review.[1] Petitioners challenge two aspects of LCDC's order: its approval of the amount of industrial land in the UGB amendment and its approval of the inclusion of particular high-value farmland within the UGB as industrial land. Petitioners contend that the city included more industrial land within its UGB than will be developed within the 20-year planning period and that LCDC did not adequately explain why that inclusion is consistent with Statewide Land Use Planning Goals 9 and 14 and other rules. Alternatively, petitioners challenge the city's inclusion within the UGB of high-value farm land, which by law has the lowest priority for urbanization. Petitioners assert that, by approving the inclusion of that land, LCDC made a decision that erroneously interpreted the law and is not supported by substantial evidence. Because we conclude that LCDC again did not adequately explain why the city's expansion of its UGB to include an additional 409 acres for industrial use is consistent with pertinent law, we reverse the order and remand for reconsideration. Accordingly, we do not reach the second issue--viz., the inclusion of high-value farmland within the city's UGB.

In the late 1990s, the city began the periodic-review process to update its comprehensive plan and other planning documents. As part of that periodic-review process, the city completed various work tasks and, as relevant here, decided in 2005 to expand its UGB to include 409 gross acres for industrial uses. To support the need for that expansion, the city relied on work performed at its direction by consultant ECONorthwest. That work included an economic-opportunities analysis (EOA)--see OAR 660-009-0015 (requiring cities with areas within the UGB to perform an economic-opportunities analysis comparing the demand for land for industrial and other employment uses to the existing supply of such land); an economic development strategy--see OAR 660-009-0020 (requiring cities with areas within the UGB to adopt policy stating the economic-development objectives for the planning area, based on the economic-opportunities analysis required by OAR 660-009-0015); and a site-requirements analysis.[2]

The city justified the number of acres of industrial land that it added to its UGB using a "target-industries" approach developed through the work of ECONorthwest. Put simply, the target-industries approach considers a local government's employment-growth projections and goals for employment, and establishes a framework for attracting the kind of employers that could reasonably be expected to support the kind and amount of employment growth to which the local government aspires. Given the site needs of those particular employers, the local government identifies potentially available land both within and outside its UGB and selects a group of sites and an amount of land that it believes will accommodate the employers that it seeks to attract. The target-industries approach differs from an "employees-per-acre" approach, under which a local government simply projects employment growth and divides that growth by a statistically accepted number of employees per acre of land in order to arrive at the number of acres needed to support employment growth.

In the target-industries approach developed here, the city aimed to promote economic growth by pursuing development that would create higher-paying jobs to attract new residents who would both live and work in Woodburn. To facilitate that goal, the city identified high-wage target industries that it believed might locate in Woodburn because of its location on I-5 between Portland and Salem. The city then identified the site and building requirements and preferences of the targeted industries. The city also adopted an employment-growth forecast. In light of academic and federal population estimates and forecasts, the city predicted a 20-year employment-growth rate of 3 percent, leading to a projected increase of 8, 374 jobs. Ultimately, the city determined that, to further its economic-development strategy and accommodate the volume of job growth that it projected, it needed 42 total industrial sites, 23 of which were available on land within the existing UGB and 19 of which it decided to provide by expanding its UGB into its Southwest Industrial Reserve (SWIR).

In the Woodburn UGB Justification Report, to which LCDC referred in its original order and its order on remand, the city explained the reasons that it needed the additional sites:

"Goal 14, Land Need factor (2), recognizes that changes to a UGB may be based on demonstrated need for employment opportunities.
"* * * * *
"The employment land needs analysis in ECONorthwest's 'Site Requirements for Woodburn Target Industries' (October 2003) concluded that about 370 acres would need to be developed for basic employment uses to accommodate a mid-range need of 7, 140 new employees between 2000 and 2020, based on employee-per-acre ratios. However, to attract targeted industries[, ] Woodburn must provide choice among and an adequate inventory of suitable sites. Under the site suitability method, it is possible that some sites may not fully develop during the planning period, either because a portion of the site will be held for future development or because a reserved site will not be selected by a targeted industry. * * * [T]he proposed Plan includes measures to ensure that * * * such parcels cannot be re-designated for commercial use.
"Woodburn's employment land needs are designed to meet ORS 197.712 and the Goal 9 Rule (OAR Chapter 660, Division 009) requirements that cities 'identify the types of sites that are likely to be needed by industrial and commercial uses which might expand or locate in the planning area.' To be clear, industrial site needs are not based on floor-area ratios or employee per acre ratios."

(First and third emphasis in original; second emphasis added; footnotes omitted.)

Petitioners objected to the UGB amendment, and LCDC considered those objections. Petitioners contended, among other things, that the city had included more industrial land within its amended boundary than was needed to accommodate projected industrial job growth or the needs of its target industries and, accordingly, more industrial land than the city expected to develop over the 20-year planning period, in violation of Goal 9, the land use planning goal that addresses economic development. Woodburn I, 237 Or.App. at 222. Petitioners further argued that the city's target-industries approach "inflate[d]" the number of acres that needed to be included within the UGB to accommodate industrial job growth and did not address the demonstrated need for any additional industrial land to be included in the proposed UGB expansion as required by Goal 14, the land use planning goal that addresses urbanization. Id.

LCDC approved the city's expansion of its UGB. LCDC reasoned as follows in rejecting petitioners' objections:

"[The city's UGB Justification Report] identif[ied] the total number of sites required for all the site size needs, and [found] 42 total sites needed for all targeted industries. According to 1000 Friends, this is an oversupply of sites that leads to more land than is justified. However, the city has designated these sites to provide for the required short-term supply as well as to provide market choice among sites. The Commission finds that this is a key component of a successful industrial development strategy, and is required by OAR 660-009-0025. In addition, the objection states that the city acknowledges that 'not all of the industrial land proposed for inclusion is expected to develop by 2020.' This is due to the fact that industrial users often choose to purchase a site larger than their immediate need in order to ensure that they have adequate land for future expansion, and the statement referred to by the objector is recognition of that fact. Additionally, OAR 660-009-[0]025(2) specifies that plans must designate serviceable land suitable to meet the site needs identified in ...

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