A Development Agreement without a development?

West Bay Yards

West Bay Yards Development Project was initially presented to Olympia’s Community Planning and Development staff (CP&D) in May. At a “presubmission conference” the architect provided 19 pages of detail, including a site plan, designs showing the location of all elements of the project, numerous renditions of the buildings, floor plans for the apartments, etc.

Instead of following with a formal project application, the developer applied for a “development agreement.” This would be a contract between city and developer that fixes for 15 years “the standards and other provisions that will apply to and govern the development.” (RCW36.70F.170)

However, that’s not how the City staff describes the West Bay Yards Development Agreement now pending. Staff “talking points” provided in response to a public records request say rather that this development agreement “establishes a framework and parameters of a future project” and vests that project to regulations now in effect. Adding that “there is no actual project being considered at this time,” they follow with two paragraphs about the project that is not being considered. They even include project specifics that the applicant has agreed to.

The City made no effort to inform the community about this project that isn’t a project, or about the Development Agreement that doesn’t meet the criteria for a development agreement. Despite this, there is growing public concern about both the process for and the consequences of pursuing the West Bay Yards Development Agreement without any environmental review or public participation.

Olympia has a dozen new “market rate” mixed use apartment buildings downtown with more on the way. There is only one stretch of shoreline still available and free of development along Budd Inlet at West Bay Drive.

One community group, Olympia Coalition for Ecosystem Preservation (OCEP) stepped in last December, with an appeal of the CP&D staff determination that there would be “no significant environmental impact” (DNS) associated with the approval of the Development Agreement. OCEP argued that the State Environmental Policy Act requires that an environmental review must start as early as possible in the process of considering a prospective development.

They asked the City’s Hearing Examiner for a summary judgment invalidating the DNS and ordering a full environmental impact review. There was more than enough information about the development of the Hardel property to trigger review under SEPA before going further with the Development Agreement.

SEPA requires environmental review of a project as soon as reasonable detail is known

OCEP asked for summary judgment because the law is clear: as soon as a project is sufficiently well defined to allow some meaningful review, SEPA commands that an environmental review start. It does not matter that more review can or will be done later. When, as in this case, the project’s principal elements were known, the City violated the law when it issued a Determination of Non-Significance and deferred any environmental review until after the Development Agreement was approved.

In its motion, OCEP described the many principal features of the proposal that could reasonably be identified: including 478 housing units; five mixed-use buildings; 20,500 feet of commercial retail, restaurant, and recreation space; a shoreline trail; shoreline fill and restoration; frontage improvements; utilities; and various other elements. The project had already been presented to the CP&D staff at a “presubmission conference” in May 2020.

The proposed Agreement even commits the City to a specific plan for filling in tidelands behind the ordinary highwater mark and commits large swaths of the shoreline to impervious surfaces, contrary to the intent of the state Shoreline Management Act and the City’s own Shoreline Master Plan.

David Bricklin, attorney for OCEP, pointed out that environmental review is required before a development agreement is drafted because, as one court said, it “begs reason” to think that approving a development agreement will not result in a project with significant environmental impacts.

The City avoids addressing how much is known about the WBY project

In its response to OCEP’s summary judgement motion, the City and developer failed to acknowledge let alone address the substance of the Coalition’s argument, namely, whether the West Bay Yards project facilitated by the Development Agreement is sufficiently well defined to enable environmental review now.

Instead, City attorney Jeff Myers focused on the idea that the staff issued its DNS because the Development Agreement Application is “the proposal” that does nothing more than set out the procedural framework and rules under which consideration of the project will be made. He argued that the project, the 478 living units, the five buildings, etc., is not “the proposal” so that the Development Agreement and the project must be considered “independent and sequential,” which would not require SEPA review at this time.

The City argues a development agreement offers certainty only if it precedes a project

To insist on environmental review at this stage, Myers said, would contradict the meaning of the Development Agreement. He followed with this rhetorical nonsequiter: Who is going to invest millions in redeveloping old plywood mills on brownfields that are eyesores and harm local communities if they aren’t given certainty that the regulations will not change?

In fact, environmental review of the project proposal would incorporate the mitigations and other “standards and provisions” into a development agreement that would promise certainty for the investors. Deferring review until after a Development Agreement is signed is a recipe for unexpected consequences – for the developer and/or the city, especially since the current property owner, Hardel Plywood, would no longer be responsible for any cleanup once the deal is made.

Before the City ties its hands, it should complete its initial environmental review. Indeed, per SEPA, it must by law complete that review before making any commitments. The City and developer argue that the proposed development agreement involves no legally binding commitments by the City so it should not trigger environmental review, but then acknowledge that the City is committed to applying only existing land use regulations for 15 years — on a shoreline subject to as yet unforeseen consequences of sea level rise, among others.

WBY attorney argues that the development will occur with or without an agreement

Heather Burgess, attorney for the Applicant, offered an even less relevant argument. Burgess claimed that the time for a SEPA review was 6 years ago when the zoning for the site was addressed in the Comprehensive Plan update – that also resulted in a DNS.

West Bay Yards, she declared,” is destined for development with or without a development agreement” a statement contradicting Myers’ claim that no one would invest in the site without a development agreement. Also, according to Burgess, for a developer to answer environmental questions would require a substantial investment, while during the “eternity” it would take, the city could change the rules or put a moratorium on development.

A toxic development site

Ms. Burgess is right to worry about undertaking an environmental review now. Signs at West Bay Park south of the site warn people not to touch the water or sediments. The Hardel property is one of the most contaminated industrial sites in the South Sound. It’s directly west of the old Cascade Pole site and subject to the tides washing contaminants between the two shores. It is full of polyaromatic hydrocarbons (PAH) that disperse into the air, and dioxins, some of the deadliest poisons on the planet.

Regardless of the change in zoning and the Comprehensive Plan, the City cannot legally reclassify land use from industrial to residential without an Environmental Impact Statement. A SEPA review would require that alternatives to the proposed project be considered and determine if proposed actions comply with state and federal laws. A moratorium could be enacted if the site was determined to be unsuitable for healthy human habitation. Like the Sundberg Gravel Pit site which has been put on Ecology’s list of contaminated sites under the Model Toxics Control Act, both are former toxic industrial sites on which the City now proposes to build housing.

The Hearing Examiner rules in favor of staff

The Hearing Examiner, deciding for the developer and staff, found that for purposes of SEPA review the “proposal” (always in quotes) was the Development Agreement, “not the project itself,” even though the West Bay Yards project is described in detail in Section 1 of the Agreement. The Development Agreement also states it will have “no further force and effect if the Developer does not construct the Project substantially as described in this Agreement…”

Curiously, Scheibmeir observed in his decision that if the City’s West Bay Restoration Assessment incorporated Into the Agreement served as an assurance that this would be the maximum the developer was required to do, his decision would have been different. The Agreement would have required fuller environmental review.

We are left with a ruling that states no environmental review is needed prior to a binding Development Agreement because the Development Agreement, which is required to provide certainty for the developer, provides no assurances to the Developer about possible restoration requirements.

Is there a conflict of interest?

Consider the following. The Development Agreement includes City and Port properties that are part of the West Bay Environmental Restoration Assessment. Therefore, this project is partly a City project that should be reviewed by an impartial person, not the City’s own Hearing Examiner or others who represent the City.

Ms. Burgess is the attorney for West Bay Yards. She is also the attorney for the Chamber of Commerce, representing the City of Olympia through its Shared Legislative Agenda partnership with other local jurisdictions. In this role she advocates for specific regional projects to Thurston County legislators in the 2nd, 20th, 22nd and 35th districts.

She is also attorney for the Port of Olympia, and President of the Economic Development Council, a private advocate that receives funds from the City of Olympia. Her firm represents developers regularly in need of approval from the city, including the Sundberg Gravel Pit/Green Cove Park project in West Olympia and Views on Fifth.

Mr. Scheibmeir’s law firm is a member of the Lewis County Chamber of Commerce, as is Ms. Burgess through the Phillips Burgess law firm. Mr. Scheibmeir’s practice areas include business and real property law, but nothing touching on environmental law.

Esther Kronenberg and Jerry Dierker are allies and residents of the Green Cove Watershed.

The power of the Hearing Examiner Some time ago, Olympia adopted a policy of putting decisions about development projects into the hands of staff and the Hearing Examiner (HEX). Under the Olympia Municipal code, the Hearing Examiner also has the authority to consider constitutional issues—unlike any other city in the state. This curtails public participation and shields the City Council from any responsibility to make land use decisions that are unpopular. Since he was hired by the City Council in 2013, the current Hearing Examiner, Mark Scheibmeir, has never ruled against city staff. Some of his recent decisions involving citizen-opposed projects include ruling for the staff in the Westman Mills project on Port property, Views on 5th, the Parkside on Cooper Point Rd. and the marine fueling dock at the Port. He continued his streak with his ruling for the City on the Olympia Coalition appeal.