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Department of Land Conservation and Development v. City of Klamath Falls

Court of Appeals of Oregon

February 28, 2018

DEPARTMENT OF LAND CONSERVATION AND DEVELOPMENT, Respondent Cross-Petitioner,
v.
CITY OF KLAMATH FALLS and Badger Flats, LLP, Petitioners Cross-Respondents.

          Argued and submitted November 28, 2017.

         Land Use Board of Appeals 2017047

          Gregory S. Hathaway argued the cause for petitioners-cross-respondents. With him on the brief were Hathaway Larson LLP and Joanna Lyons-Antley.

          Denise G. Fjordbeck, Assistant Attorney General, argued the cause for respondent-cross-petitioner. On the brief were Ellen F. Rosenblum, Attorney General, Benjamin Gutman, Solicitor General, and Judy C. Lucas, Assistant Attorney General.

          Before DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi, Judge.

         Case Summary: This case involves review of a decision of the Land Use Board of Appeals (LUBA). In 2017, the City of Klamath Falls approved an urban growth boundary (UGB) amendment that added 22.7 acres of land owned by Badger Flats, LLP, to the urban area that is included within the boundary. The Department of Land Conservation and Development (DLCD) appealed that decision to LUBA asserting, among other things, that the city's approval of the UGB amendment was contrary to Statewide Planning Goal 14. On appeal, LUBA agreed in part and disagreed in part with DLCD's challenges to the city's fnal order. On judicial review of LUBA's fnal order, DLCD challenges LUBA's application of Goal 14 to this case. Held: Before a UGB may be amended, there must be a demonstrated need under both subsections (1) and (2) of Goal 14. Thus, LUBA erred in holding

          [290 Or.App. 496] that "the fact that the city has an adequate 20-year supply of land does not categorically foreclose a fnding that a UGB amendment is justifed."

          [290 Or.App. 497] EGAN, C. J.

         This case involves review of a decision of the Land Use Board of Appeals (LUBA). In 2017, the City of Klamath Falls approved an urban growth boundary (UGB) amendment that added 22.7 acres of land owned by Badger Flats, LLP, to the urban area that is included within the boundary[1]The Department of Land Conservation and Development (DLCD) appealed that decision to LUBA asserting, among other things, that, in the circumstances of this case, the city's approval of the UGB amendment was contrary to Statewide Planning Goal 14. On appeal, LUBA agreed in part and disagreed in part with DLCD's challenges to the city's decision. DLCD seeks judicial review of LUBA's final order, [2] raising two assignments of error in which it challenges LUBA's application of Goal 14 to this case. As explained below, on review to determine whether LUBA's order is "unlawful in substance, " ORS 197.850(9)(a), we conclude that DLCD's first assignment of error is well-taken and, therefore, reverse and remand on DLCD's cross-petition.[3]

         We begin by setting forth the legal standards for UGB amendments that are relevant to the issue before us on review. ORS 197.175(1) requires cities and counties to exercise their planning and zoning responsibilities in accordance with state land use statutes and the statewide planning goals approved by the Land Conservation and Development Commission (LCDC). "[W]hen a city amends its comprehensive plan, including any amendment to its UGB, the city [290 Or.App. 498] must justify the change as being consistent with the LCDC goals, except to the extent that compliance with a goal is excused by an exception to [the goal's] application." 1000 Friends of Oregon v. LCDC, 244 Or.App. 239, 243, 259 P.3d 1021 (2011); see also OAR 660-024-0020(1) (with exceptions that are not relevant in this case, "[a] 11 statewide goals and related administrative rules are applicable when establishing or amending a UGB").

         "Goal 14 (Urbanization), OAR 660-015-0000(14), provides particular standards for setting or changing a UGB."[4]1000 Friends of Oregon, 244 Or.App. at 243. In part, Goal 14 requires that

"Establishment and change of urban growth boundaries shall be based on the following:
"(1) Demonstrated need to accommodate long range urban population, consistent with a 20-year population forecast coordinated with affected local governments; and
"(2) Demonstrated need for housing, employment opportunities, livability or uses such as public facilities, streets and roads, schools, parks or open space, or any combination of the need categories in this subsection (2).
"In determining need, local government[s] may specify characteristics, such as parcel size, topography or proximity, necessary for land to be suitable for an identified need.
"Prior to expanding an urban growth boundary, local governments shall demonstrate that needs cannot be reasonably accommodated on land already inside the urban growth boundary."

         With that background in mind, we turn to the facts, which are undisputed and are set forth in LUBAs opinion. The Klamath Falls UGB includes approximately 24, 000 acres; within the city limits there are 4, 322 developed acres and 10, 250 undeveloped acres. The urban area within the [290 Or.App. 499] Klamath Falls UGB has adequate capacity to satisfy the city's urban land needs for the next 20 years.

         In 2009, the city had an Economic Opportunities Analysis (EOA) prepared; the city adopted the EOA by ordinance, and it became an acknowledged part of the city's comprehensive plan pursuant to ORS 197.625(1).[5]The EOA includes a "Technical Appendix" that contains a "Subregional Commercial Land Need Analysis." That analysis divides the Klamath Falls area into four subregions that extend out from the city and existing UGB into rural lands outside the UGB: Klamath West, Klamath North, Klamath East, and Klamath South. The EOA identifies a deficit of the land in the Klamath West subregion to satisfy short-term (five year) commercial demand.[6]

         Badger Flats owns a parcel of land outside, but adjacent to, the Klamath Falls UGB in the Klamath West subregion. Badger Flats applied for a UGB amendment to add 22.7 acres of its land to the UGB, seeking to eventually construct "Badger Flats Lifestyle Center" on that land. As noted, in 2017, the city approved the UGB amendment.

         DCLD appealed the city's decision to LUBA, raising several assignments of error. Although LUBA accepted a number of DLCD's contentions on appeal, it rejected others. As relevant here, in its first assignment of error before LUBA, DLCD asserted, in part, that "absent a demonstration that the City's 20-year need for commercial land cannot be met in its existing UGB, amending an urban growth [290 Or.App. 500] boundary for a 'subregional short-term need for additional commercial land' is not in compliance with the statewide planning goals, " specifically, Goal 14. LUBA rejected that contention, stating that it declined "to adopt the categorical rule that DLCD urges us to adopt-that a lack of a 20-year need under Goal 14 need factor 1 categorically precludes a UGB amendment to correct a short-term subregional need." According to LUBA, such a categorical rule "is not clearly expressed in the text of Goal 14 or OAR chapter 660, division 24." Relying on Baker v. Marion County, 120 Or.App. 50, 852 P.2d 254, rev den, 317 Or. 485 (1993), overruled on other grounds by Milne v. City of Canby, 195 Or.App. 1, 96 P.3d 1267 (2004), LUBA held that

"the city might be required [to] give appropriate consideration and weight to the fact that there is an abundant supply of land to satisfy the city's 20-year need for urban land, but the fact that the city has an adequate 20-year supply does not categorically foreclose a finding that a UGB amendment is justified to correct a short-term subregional shortage of land."

         In its first assignment of error on review, DLCD contends that "LUBA erred in ruling that Goal 14 and OAR chapter 660, division 24, do not require a local government to base an amendment of its UGB on an identified 20-year need that cannot be reasonably accommodated on land already inside the UGB." The city and Badger Flats respond that, under Baker, LUBA did not err in concluding that the city was not categorically precluded under Goal 14 from amending its UGB, "notwithstanding that the city had a supply of land inside the UGB to meet the city's 20-year need for employment land." Thus, the question before us on review is whether, in light of ...


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