DEPARTMENT OF LAND CONSERVATION AND DEVELOPMENT, Respondent Cross-Petitioner,
CITY OF KLAMATH FALLS and Badger Flats, LLP, Petitioners Cross-Respondents.
and submitted November 28, 2017.
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.
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.
DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi,
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
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."
Or.App. 497] EGAN, C. J.
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 boundaryThe 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,  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
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").
14 (Urbanization), OAR 660-015-0000(14), provides particular
standards for setting or changing a UGB."1000 Friends
of Oregon, 244 Or.App. at 243. In part, Goal 14 requires
"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
"Prior to expanding an urban growth boundary, local
governments shall demonstrate that needs cannot be reasonably
accommodated on land already inside the urban growth
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.
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).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.
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.
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."
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 ...