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OP-ED: The critical role played by state agency permits in land use

From Daily Journal of Commerce.

Determining what role a permit issued by a state agency will play in a local land use proceeding can be tricky. The interrelationship between local government land use approvals and state agency-issued environmental or operations permits is especially complicated.

State law and Statewide Planning Goal 2 requires “coordination and consistency” between the actions of state agencies and local government to ensure that they “complement both state and local land use planning objectives.” Further, coordinated decision-making is “necessary to streamline state and local permitting procedures.” To achieve that objective, administrative rules require some state agencies, such as the Oregon Department of Transportation, to adopt plans that are consistent with the Statewide Planning Goals as well as coordination plans to ensure that agency permitting standards and processes further local government planning objectives. These state agency plans are reviewed by the Department of Land Conservation and Development for compliance.

Beyond these express planning and direct coordination requirements, numerous state agency-issued permits are required before a development or an activity may occur, and are not subject to express coordination requirements. Examples include air quality permits from the Department of Environmental Quality, wetland fill permits from the Division of State Lands (and/or the Army Corps of Engineers), or substantive operations permits. Typically, these agency approvals are secondary to the land use process, as securing a state agency permit may be attached as a condition of approval to a land use permit or a business license.

However, these agency-issued permits can have a more significant impact in the local government land use permitting process. These cases go beyond whether the state-agency permit was granted improvidently. Instead, it is state-issued permit existence and scope that has played a critical decision-making role in a seemingly unrelated land use case that has been exemplified in two recent LUBA decisions: Glenwood 2006 LLC v. City of Beaverton and Morgan v. Jackson County.

In the Glenwood 2006 LLC case, the city issued a Design Review Compliance Letter and building permit to modify an existing building for operation as a “beverage container redemption center” (BCRC). Operators would recycle containers collected from grocery stores or individuals, within a Community Service zone. The petitioner appealed these two decisions, arguing that the BCRC was an industrial use and that the decision required a Type II hearing, notice and an opportunity for a hearing, to determine whether the BCRC qualifies as a “similar use” allowed in the Community Service zone.

The city responded that the petitioner’s challenges represented an improper collateral attack on an Oregon Liquor Control Commission (OLCC) form on which a city staff person checked a box to indicate that the proposed BCRC is permitted. The Land Use Board of Appeals (LUBA) disagreed, finding that the OLCC form was not mentioned in the design review decision. Therefore, there was no indication that an OLCC sign-off was intended to serve as the land use determination in this case. As a result, the city erred by not addressing this issue in its design review decision and thus the matter was remanded.

This case suggests that state agency permit documents that contain zoning use determinations cannot similarly bind a local government to that same determination. Yet in Morgan v. Jackson County, a case decided by LUBA the same month, the lack of a state agency-issue permit was determinative.

In the Morgan case, the county verified an automobile storage, repair and sales business as a lawful, nonconforming use on the grounds that the use had been “lawfully” established on the date when contrary zoning was first applied, among other things. Operating a vehicle sales business requires a license issued by the Department of Motor Vehicles, with violations punishable by a fine or imprisonment.

The petitioner argued that the record did not include evidence that the intervenors obtained the required license at the time that the use began and therefore, it was not lawfully established and could not be approved. The intervenor / applicant relied on previous LUBA holdings that the obligation to establish that the use was lawful was limited to consideration of other federal, state or local requirements relating to the use. For example, fire or building code violations or the lack of a DEQ-required air quality permit at the time the use was established do not render the use unlawful.

LUBA explained that the focus of the “lawful use” language is focused on “compliance with the then-applicable zoning ordinances or land use regulations. However, the DMV dealer license in this case was different. LUBA explained that whereas an air quality permit might be required to regulate emissions from a piece of equipment, an aspect of the use, the DMV dealer license was required for the use itself. The county erred by failing to require proof of a valid DMV-issued dealer license as part of finding that the use had been lawfully established and had operated lawfully continuously thereafter and therefore, its decision was reversed.

These two cases illustrate how critical coordination and cohesive decision-making between agencies and local government decision-making can be. They also show that there is no bright-line rule for what role state-agency permit obligations play in the Oregon land use process.

Edward Sullivan is a retired practitioner of land use and municipal law for more than 45 years. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

Reposted from Daily Journal of Commerce: http://djcoregon.com/news/2017/11/07/op-ed-the-critical-role-played-by-state-agency-permits-in-land-use/