Cerelli v. City of Manzanita

Where a local government does not incorporate portions of their comprehensive plan into their land use provisions, under ORS 197.195(1), in a limited land use decision, an applicant’s failure to demonstrate compatibility with the comprehensive plan cannot be used as a reason to deny their application.

Petitioner appealed the City’s denial of their application to construct a 34-unit hotel complex in an area zoned Special Residential/Recreational (SRR). Petitioner’s application materials included a traffic impact analysis which said the hotel could generate up to 309 per day. Opponents of the project submitted a letter from a traffic engineer that, among other things, also estimated there could be a peak of 309 trips per day. The City voted to deny the application.

On appeal to LUBA, Petitioner made eight assignments of error, three of which LUBA’s review turned on: 3) that the City violated ORS 197.195(1) in directly applying provisions from the City’s comprehensive plan to Petitioner’s application rather than the implementing local code, 4) the City improperly applied the density restrictions of residential areas after erroneously finding many of Petitioner’s units could fit the definition of “dwelling unit,” and 7) the City’s conclusion that the hotel was incompatible with the surrounding residential uses was not supported by substantial evidence.

Under ORS 197.195(1), “[a] limited land use decision shall be consistent with applicable provisions of city or county comprehensive plans and land use regulations. . . . A decision to incorporate all, some, or none of the applicable comprehensive plan standards into land use regulations shall be undertaken as a post-acknowledgment amendment. . . . If a city or county does not incorporate its comprehensive plan provisions into its land use regulations, the comprehensive plan provisions may not be used as a basis for a decision by the city or county or on appeal from that decision.”

LUBA sustained Petitioner’s third assignment of error, finding that while the local code required a proposed development be compatible with the comprehensive plan, the City impermissibly relied on the plan itself to decide that Petitioner’s application did not satisfy the local code requirements. Relying on the comprehensive plan to deny an application in a limited land use decision, LUBA concluded, was not permissible under ORS 197.195(1).

Similarly, LUBA sustained Petitioner’s seventh assignment of error because the City again relied on parts of the comprehensive plan to deny Petitioner’s application. In addition to that reliance, LUBA found that the City’s conclusion that the hotel was incompatible with the surrounding residential area because it would generate “more than 309” trips and that most of the trips would be to the downtown area was not supported by the evidence in the record. LUBA pointed out the record showed evidence that there could be “up to 309” trips, and nothing indicated those trips would be to the downtown area. This was not sufficient evidence to support the City’s conclusion.

LUBA also sustained the fourth assignment of error, finding that while the City had not chosen to deny the application for failure to satisfy the density standard, it had also not adopted a reviewable interpretation of that standard and its related provisions and had merely said Petitioner’s units could qualify as “dwelling units” without deciding if they were. LUBA concluded remand was appropriate for the City to adopt reviewable interpretations of the provisions and seek the information needed from Petitioner to determine whether the hotel units qualified as “dwelling units” under the density standard.

Remanded.