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Hill v. City of Portland

Court of Appeals of Oregon

August 8, 2018

Daniel HILL, Petitioner,
v.
CITY OF PORTLAND, Respondent.

          Argued and submitted July 12, 2018

          Land Use Board of Appeals 2018001

          Christopher P. Koback argued the cause for petitioner. Also on the brief was Hathaway Larson LLP.

          Lauren A. King argued the cause for respondent. Also on the brief was Linly F. Rees.

          Before Lagesen, Presiding Judge, and Egan, Chief Judge, and Garrett, Judge.

         Case Summary: Petitioner seeks judicial review of a final order of the Land Use Board of Appeals (LUBA). LUBA affirmed the decision of a City of Portland hearings officer in which the hearings officer rejected petitioner's challenges to two conditions that the city placed on approval of his application to divide his property; the first condition requiring petitioner to dedicate a right-of-way to accommodate future improvements and the second condition requiring petitioner to execute street and storm sewer waivers of remonstrance for future improvements. LUBA concluded that the city permissibly required petitioner to sign waivers of remonstrance, but did so on a different basis than the hearings officer. Petitioner contends that the hearings officer and LUBA erred in upholding both conditions. Held: The hearings officer and LUBA erred with respect to both conditions. In upholding the requirement that petitioner dedicate a right-of-way, the hearings officer and LUBA misapplied the legal test for determining whether a condition is an unconstitutional exaction under Nollan v. California Coastal Comm'n, 483 U.S. 825, 107 S.Ct. 3141, 971 L.Ed.2d 677 (1987), and Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994). Regarding the second condition, LUBA erred in affirming the hearings officer because the hearings officer failed to make the findings required under LUBA's decision in Clark v. City of Albany, 31 Or LUBA 375, 380, aff 'd, 144 Or.App. 192, 924 P.2d 877 (1996).

         [293 Or.App. 284] LAGESEN, P. J.

         Petitioner seeks judicial review of a final order of the Land Use Board of Appeals (LUBA). In that order, LUBA affirmed the decision of a City of Portland hearings officer in which the hearings officer rejected petitioner's challenges to certain conditions that the city placed on its approval of petitioner's application to divide his 1.06 acre property into three separate parcels. In particular, the hearings officer determined that a condition requiring petitioner to dedicate a two- to seven-foot wide right-of-way along the site's frontage along SE 122nd Avenue to accommodate future street improvements was not an unconstitutional exaction of property in violation of the Fifth and Fourteenth Amendments to the United States Constitution under Nollan v. California Coastal Comm'n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), and Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994). In addition, the hearings officer determined that the city permissibly conditioned its approval on the requirement that petitioner execute street and storm sewer waivers of remonstrance for future storm sewer and street improvements. Before us, petitioner contends that the hearings officer erred in both respects and that LUBA erred in concluding otherwise. For the reasons that follow, we conclude that the hearings officer's and LUBA's rejections of petitioner's unconstitutional exaction claim were based on an erroneous understanding of Nollan and Dolan. We also conclude that LUBA erred in upholding the condition requiring that petitioner sign waivers of remonstrance on the basis that it did. We therefore reverse and remand.

         BACKGROUND

         To frame the discussion, we start with an overview of the constitutional limitations on governmental exactions of private property as conditions of land use approvals. Under Nollan and Dolan, the Fifth and Fourteenth Amendments permit the government to exact a dedication of private property as a condition of approval of a land use permit if the government demonstrates (1) a nexus between a governmental interest that would furnish a valid ground for the denial of the permit and the exaction of property, and [293 Or.App. 285] (2) that the nature and extent of the exaction are roughly proportional to the effect of the proposed development. Brown v. City of Medford, 251 Or.App. 42, 47, 283 P.3d 367 (2012). For purposes of the first element, a governmental interest is one that allows the denial of a permit if the impacts of the project, alone or with other construction, would substantially impede that interest. Nollan, 483 U.S. at 835-36. The purpose of the Nollan/Dolan framework is to "enable permitting authorities to insist that applicants bear the full costs of their proposals while still forbidding the government from engaging in 'out-and-out.. . extortion' that would thwart the Fifth Amendment right to just compensation." Koontz v. St. Johns River Water Management Dist, 570 U.S. 595, 606, 133 S.Ct. 2586, 186 L.Ed.2d 697 (2013) (ellipsis in original).

         In this case, petitioner applied to the city to divide his property into three separate parcels. Under petitioner's proposal, an existing residence would remain on one of the new parcels and two new single-family residences would be permitted to be constructed on the other two parcels. The property fronts on two streets, SE 122nd Drive and SE 124th Avenue. The widths of those streets do not meet current city standards. The streets also do not contain improvements meeting current city standards and are not wide enough to accommodate those improvements.

         The city approved petitioner's application, but imposed several conditions of approval. First, the city required petitioner to dedicate additional rights-of-way along SE 122nd Drive and SE 124th Avenue so that those streets could be brought into compliance with city standards governing street width and improvements. It required those dedications to meet city standards even though it had found, when evaluating the transportation impacts of petitioner's proposed development, that "the transportation system is capable of safely supporting the proposed development in addition to the existing uses in the area for all travel modes" and that "[n] o mitigation is necessary for the transportation system to be capable of safely supporting the proposed development in addition to the existing uses in the area." The city also imposed a condition requiring that petitioner "complete [293 Or.App. 286] street and storm sewer waivers of remonstrance (for future street and storm sewer improvements) as required by the City Engineer."

         Petitioner appealed the decision to a city hearings officer. He challenged the condition requiring that he dedicate additional rights-of-way along SE 122nd Drive and SE 124th Avenue, and also the condition requiring that he sign waivers of remonstrance. He argued that the right-of-way dedication requirements were unconstitutional because they were not supported by findings that the impacts of the proposed development were sufficient to justify the conditions under the analysis required by Nollan and Dolan, especially in view of the city's findings that the transportation impacts of the project were insufficient to require mitigation. He further contended that the requirement that he sign waivers of remonstrance violated Portland City Code (PCC) 33.800.070.

         In response, the city abandoned the condition requiring that petitioner dedicate a right-of-way along SE 124th Avenue. As to the dedication required along SE 122nd Drive, the city contended that the right-of-way standards contained in PCC 33.654.120 required petitioner to demonstrate that the local street right-of-way adjacent to petitioner's property met current city design standards for rights-of-way, entitling the city to deny petitioner's application if it did not. That, in the city's view, permitted it to condition petitioner's permit on petitioner's dedication of sufficient land to bring the right-of-way into compliance with current city standards governing the width of rights-of-way and improvements in rights-of-way. Further, the city submitted evidence demonstrating that petitioner's proposed development would increase traffic along SE 122nd by approximately five percent. According to the city's ...


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