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East Side Plating, Inc. v. City of Portland

United States District Court, D. Oregon, Portland Division

July 11, 2019

EAST SIDE PLATING, INC., Plaintiff,
v.
CITY OF PORTLAND, Defendant.

          FINDINGS AND RECOMMENDATIONS

          YOULEE YIM YOU, UNITED STATES MAGISTRATE JUDGE

         Plaintiff East Side Plating, Inc. (“plaintiff or “ESP”) brought this action against defendant City of Portland (“defendant” or “the City”) in Multnomah County Circuit Court, and the City timely removed. SeeRemoval Notice, ECF #1. This court has original jurisdiction over the action pursuant to 28 U.S.C. §§ 1331 and 1343(a)(3). Plaintiff alleges claims for (1) declaratory relief, (2) injunctive relief, (3) unconstitutional takings, and (4) denial of procedural due process. Compl. ¶¶ 17-45, ECF #1. Defendant has filed a motion to dismiss for failure to state a claim under FRCP 12(b)(6). Def.'s Mot. to Dismiss (“Def.'s Mot.”), ECF #6. For the reasons set forth below, defendant's motion should be granted and this action should be dismissed with prejudice.

         BACKGROUND

         Plaintiff is in the business of coating metal parts used in the medical, dental, automotive, and electronics industries. Compl ¶ 4, ECF #1. It has operated at 310 SE Stephens Street in Portland ("the ESP property") since its inception in 1946. Id. The ESP property is in the Central Eastside Industrial District, an industrial sanctuary. Id. ¶ 5. It abuts publicly accessible streets to the north (SE Stephens Street) and west (SE Third Avenue), and a triangular parcel to the south, which abuts what was formerly SE Harrison Street. See Id. ¶ 4; Map, ECF #7-1, at 36. The southeast wall of ESP's facility runs along the property line, abutting the triangular parcel. Compl. ¶¶ 4, 6, ECF #1; Map, ECF #7-1, at 36. The southeast wall of the facility has a large door, hereafter referred to as the "SE door." Id. ¶ 4.

         (Image Omitted)

         Map, ECF #7-1, at 36.

         Plaintiff previously owned the triangular parcel, but in 1963, the Oregon Department of Transportation (“ODOT”) acquired it from plaintiff by eminent domain in preparation for construction of the Mt. Hood Freeway. Id. ¶ 4; Suppl. Findings and Conclusions 2, ECF #7-1, at 10. In 1974, the freeway project was canceled, and plaintiff has continued to use the triangular parcel unabated. Compl. ¶ 4, ECF #1; Suppl. Findings and Conclusions 2, ECF #7-1, at 10.

         Plaintiff retrofitted its facility from 2011 to 2013 under permits approved by the City, which among other things, mandated that plaintiff use the SE door for emergency egress. Id. ¶ 5. As part of these upgrades, plaintiff installed wastewater treatment equipment that removes metal ions from its wastewater using sodium hydroxide. Id. ¶ 6. Plaintiff receives large deliveries of sodium hydroxide from tanker trucks via the triangular parcel and the land that was formerly SE Harrison Street, and the deliveries are deposited into a storage tank located just inside the SE door. Id. These deliveries at the SE door are critical to plaintiff's operations. Id. ¶ 7. Plaintiff claims that if it “cannot accept deliveries of sodium hydroxide at its current location, [it] would not be able to continue operations at the site.” Id.

         In August 2015, the City purchased the triangular parcel from ODOT, and in October 2015, the City's Office of Management and Finance (“OMF”) petitioned to vacate the portion of SE Harrison Street abutting the triangular parcel to create a single parcel (“the City property”). Compl. ¶ 7, ECF #1. Plaintiff objected to the street vacation. Id. ¶ 8.

         In December 2015, the City's Planning and Sustainability Commission voted to recommend that the proposed street vacation be denied. Id. However, the City Engineer recommended that the street be vacated over the Commission's recommendation. Id. ¶ 9. The City Council approved the vacation of SE Harrison Street by passing Ordinance No. 187591 on February 18, 2016. Id., Ex. 4, at 5, ECF #1, at 32.

         Ordinance No. 187591 includes language that “[t]he City shall work in good faith towards a reasonable engineering design to accommodate the delivery of chemicals to East Side Plating.” Ordinance No. 187591 § c, ¶ 8, ECF #7-1, at 4. The ordinance further recognizes:

OMF can maintain beneficial use of its property and still provide 15 foot-wide access for trucks along part of the northern edge of its property and 10 feet of buffered emergency egress along the entire northern edge of the property. A tractor and trailer with combined length of up to 75 feet will be able use the 15 foot-wide access.[1]

Id. § 1, ¶ 9 (a)-(b), ECF #7-1, at 2. It also states:

Notice is given that the street vacation will not be effective until a certified copy of the vacating Ordinance has been recorded by the City in Multnomah County Deed Records. Prerequisites to recording the vacating Ordinance are that 30 days have passed after final Council passage of the Ordinance, that all conditions of the vacating Ordinance have been met, and that all vacation costs have been paid.

Id. § 3, ECF #7-1, at 5. (emphasis added).

         The Supplemental Findings and Conclusions, attached as Exhibit 3 to Ordinance No. 187591, recognizes that “ESP does not have a lease, access agreement, or other legal instrument providing access to or use of [the triangular parcel] which they access via SE Harrison St.” Suppl. Findings and Conclusions 2, ECF #7-1, at 10. It also recognizes:

ESP's agreement with ODOT had historically been informal and they do not have an agreement with OMF to access the OMF property. Rights-of-way to the north and west of ESP's property will remain intact and can provide alternative access to the facility.

Id. at 7.

         On February 24, 2016, the Portland City Council approved the relocation of a homeless camp, Right 2 Dream Too, to the City property. In doing so, councilmembers made the following remarks regarding ESP:

Amanda Fritz: We'll be working with [E]ast [S]ide [P]lating to make sure they have access to their viable business which has been a very clean business, which has not polluted the air or the ground the way some businesses that have been operating legally in the city of Portland have been found to do. It's a safe place for people to be they have 19 employees inside their building and will now have new good neighbors who will be part of the community on the central eastside. I believe will make sure that it's a safer place to be for everyone.

         Official Minutes at 56-57, Portland City Council Meeting (Feb 24, 2016), http://efiles. portlandoregon.gov/Record/8880466/file/document?__ga=2.256055307.1693193312.1561749157-2027747818.1554927533.

Charles Hales: We are also about business. We want to be a prosperous city. I want to reiterate what I said last week at the hearing. We will make it work for you at east side plating. You're a legitimate business. You have a transportation need to solve. We have good engineers. We are [sic] put them at your disposal and solve the problem and we won't charge you a lot of money. In fact we won't charge you any money because we want you to be a successful business and I know you will be a good neighbor.

Id. at 59.

         In March 2016, OMF advised the City that it agreed “to abide by and perform each and all of the applicable terms and provisions” of Ordinance No. 187591. Compl., Ex. 5, ECF #1, at 34. Plaintiff alleges that in June 2016, “at a meeting at ESP, PBOT confirmed the work the City would do in furtherance of access for the tanker trucks, including installing a wider driveway and some curb work and circulated plans for the homeless camp that included the fifteen-foot wide ESP access alley.” Id. ¶ 11. Plaintiff further alleges that it requested an easement from OMF, but was offered an annually renewable permit. Id.

         According to the Complaint, construction for Right 2 Dream Too began in August 2016, but later that month, Oregon's Land Use Board of Appeals denied approval of the site due to zoning issues. Compl. ¶ 12, ECF #1; see also Ordinance No. 188812 ¶¶ 4-5, https://efiles. portlandoregon.gov/Record/11686729/File/Document.

         The City recorded Ordinance No. 187591 on April 4, 2017. ECF #1. Plaintiff contends:

Two months later, PBOT completed the street work portion of the Harrison Street vacation and installed a driveway for ESP running from SE 3rd Avenue to the SE Door. The driveway, however, did not conform to the plans that the City had presented to ESP, see Exhibit 3, and impaired ESP's deliveries. Moreover, the driveway remained unpaved and in gravel form with a construction fence outlining the fifteen-foot access alley to ESP's SE Door.

Id.

         The Bureau of Internal Business Services (“BIBS”), which was managing the City property, determined that it was not suitable for active use, could not identify any future uses, and deemed it “excess.” Ordinance No. 188812 § 1, ¶¶ 4, 5. BIBS offered the City property to other bureaus in July 2017, but none were interested. Id. § 1, ¶ 6. Accordingly, BIBS decided to dispose of the property, notified the public of its decision, and provided 60 days for public comment. Id. § 1, ¶ 7. During the public comment period, several property owners including plaintiff “contacted BIBS to indicate interest in the property.” Id. § 1, ¶ 8. Plaintiff suggested purchasing the City property for $319, 000 or alternatively an easement for $45, 000. Compl. ¶¶ 13, 15, ECF #1.

         On February 7, 2018, Portland City Council passed Ordinance No. 188812, declaring the City property to be “surplus real property, ” and authorized BIBS to “take all steps necessary to dispose of the Property by sale, disposition or exchange as determined commercially prudent, under the best price, terms and conditions.” Ordinance No. 188812 § 1, ¶¶ 10, a-b. In its Complaint, plaintiff references this decision, noting that the City Council “approved disposition of the City Property in its entirety, ” with “no allowance for ESP's continued access to its property.” Compl. ¶ 14, ECF #1. Additional discussions between ESP and the City took ...


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