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2019-08-14 Planning Board MinutesCITY OF EDMONDS PLANNING BOARD Minutes of Meeting August 14, 2019 Chair Cheung called the meeting of the Edmonds Planning Board to order at 7:00 p.m. in the Council Chambers, Public Safety Complex, 250 — 5' Avenue North. BOARD MEMBERS PRESENT Matthew Cheung, Chair Daniel Robles, Vice Chair Alicia Crank Nathan Monroe Mike Rosen Roger Pence Conner Bryan, Student Representative BOARD MEMBERS ABSENT Todd Cloutier (excused) Carreen Nordling Rubenkonig (excused) READING/APPROVAL OF MINUTES STAFF PRESENT Rob Chave, Planning Division Manager Jeanie McConnell, Engineering Program Manager Jeff Taraday, City Attorney Jerrie Bevington, Video Recorder Karin Noyes, Recorder BOARD MEMBER MONROE MOVED THAT THE MINUTES OF JULY 10, 2019 AND JULY 24, 2019 BE APPROVED AS PRESENTED. BOARD MEMBER CRANK SECONDED THE MOTION, WHICH CARRIED UNANIMOUSLY. ANNOUNCEMENT OF AGENDA The agenda was accepted as presented. AUDIENCE COMMENTS There were no audience comments during this portion of the meeting. DEVELOPMENT SERVICES DIRECTOR REPORT TO PLANNING BOARD Chair Cheung referred the Board to the Development Services Director's Report that was provided in the packet. There were no comments or questions from the Board. PUBLIC HEARING REGARDING AMENDMENTS TO EDMONDS COMMUNITY DEVELOPMENT CODE (ECDC) 20.70 — STREET VACATIONS Ms. McConnell explained that the street vacation provisions currently reside in ECDC Title 20.70, and the proposed amendment would relocate them to ECDC Title 18, which is the Public Works section. The amendment also clarifies and reorganizes the provisions and adds a definitions section. The appraisal process and timing provisions were revised, as were the provisions related to applicability of monetary compensation. Lastly, the timeframe was modified to satisfy conditions. Specifically, the proposed amendments: • Move Title 20 to Title 18 (Public Works Section). • Change the review lead from Planning Division to Public Works Division. • Add a new definition section (ECDC 18.55.005) to provide additional clarity. • Revise Section 18.55.015.D to reflect the types of plans and other documents needed for the application. • Add a new Section 18.55.030, which gives the City the right to reserve easements for pedestrian walkways and trails. • Add a new appraisal section (18.55.XXX) to address timing of appraisal and collection of fees for 31 party appraisal. • Add Section 18.55.140 to clarify the processing of street vacations, allowing the ordinance to address timing by which the conditions need to be met, establishing compensation of the area to be vacated based on the appraisal, and giving the City Council the ability to not adopt a vacation ordinance based on review of the appraisal should they choose. Mr. McConnell explained that a "street vacation" means that the public is letting go of, or vacating, the public interest in a property. After a street, alley or easement (pedestrian and/or vehicular) is vacated, the public no longer has a right to use the property for access. Street vacations can be initiated by private property owners or the City Council. As per Revised Code of Washington (RCW) 35.79.040, `If any street or alley in any city or town is vacated by the city or town council, the property within the limits so vacated shall belong to the abutting property owners, one-half to each. " City Attorney Taraday shared a tool he learned at law school called a "Fee Simple Bundle of Rights," which is uses sticks to illustrate the concept of real estate ownership He explained that real estate ownership, in actuality, is the ownership of a number of potential rights of land, and the largest bundle of rights (sticks) available for private ownership is called the "Fee Simple Bundle of Rights." Fee simple ownership means that that the property owner owns every possible right that pertains to the real estate. If someone has the underlying fee, it might mean that they own just one tiny right or stick and the rest have been transferred via dedication. It is important to understand this concept in the context of street vacations. City Attorney Taraday explained that in the vast majority of instances an abutting owner owns the underlying fee. Therefore, if the public's interest in a street ever goes away, the City doesn't deed the property back to the abutting property owner because they already have a reversionary interest. Instead, the City vacates the dedication that had been on the property. He explained that a dedication, which is what creates a street, is defined in the subdivision statute as, "the deliberate appropriation of land by an owner for any general and public uses, reserving to himself or herself no other rights than such as are compatible with the full exercise and enjoyment of the public uses to which the property has been devoted. " Thinking of that definition in the context of the `Bundle of Rights" concept, it is important to understand that an owner cannot take advantage of many of those rights by having the underlying fee in the street. Property owners cannot exclude people from the street, sell the street, occupy and/or use the street without the City permission, or get a bank loan using the street as collateral. He summarized that when a dedication creates a street, many of the sticks in the bundle are being taken out of the bundle and given to the public. While there are some sticks left in the bundle that is owned by the abutting property owner, the majority of the sticks are now owned by the public. Regarding the Board's earlier question about whether the City can or should require monetary compensation for street vacations, City Attorney Taraday referred to two court cases that clarify the issue. The first is Nystrand vs. O'Malley, a 1962 Washington Supreme Court decision, which was referenced in Mr. Reidy's comments at a previous meeting. He read the following quote from the case, "The use by the plaintiffs in extending their garage onto the area, planting the trees and hedge and constructing the bulkhead was not inconsistent with the public's easement since the right to open the street for the public's use had not been asserted by the City. " In this case, the dispute was between two neighbors and did not involve a city. One neighbor felt he had the right to use the street in a particular way, and the other was saying he didn't have the right. The city did not take a position and was not party to the case in any way. Because the City did not participate or assert its own rights, the case makes it sound like the abutting property owner has more rights than he/she actually has. The second case is Baxter Wycoff vs. the City of Seattle, a 1965 Washington Supreme Court decision. He read the following quote from the case, "The lack of rights of the abutting owner to so use the street in front of his property does not depend on his interference with an actual or proposed public use of the street. The abutting owner simply has no legal right to make this Planning Board Minutes August 14, 2019 Page 2 kind of use of the dedicated public street unless an ordinance expressly authorizes permits for such use to be issued by the City even though no member of the public is inconvenienced by the private use. " In the latter case, a city is asserting its right to hold the property in trust for the public. When you consider the context of how they came before the court (one involved a city and the other did not), it explains why the law was articulated so differently. He shared another quote from the 1965 case, "The abutting owner has no right to build permanent structures in the street nor to set up storage yards therein for private business purposes. Assuming that such power exists, the granting of permission to a private person to so use the streets is totally within the discretion of the city. " Going back to the bundle of sticks. City Attorney Taraday summarized that there are not a lot of legal rights left to the underlying owner once a street has been dedicated to the public. For that reason, streets are not counted as part of the lot size when a property is appraised. City Attorney Taraday referred to a 1989 Washington Court of Appeals case, City of Seattle vs. ?? Land Company. The older streets in Seattle have glass tiles with space underneath that are frequently attached to basements of buildings abutting the street. Property owners pay the City of Seattle to use that space. In this case, a property owner claimed that, as the abutting owner, he had the right to use that space as long as it wasn't interfering with the public. He argued that that "other jurisdictions have held that where the fee is in the abutting owner, the City may not charge the abutting landowner rent for the use of such space. " The court, however, determined that, "To the extent that these authorities so hold, that is not the law in Washington. " City Attorney Taraday summarized that case law makes clear the extreme limitations placed on abutting owners within the context of a street dedication. On the other hand, a street vacation has a lot of value to an abutting property owner because all of the rights that applied to the street dedication would be given back to the property owner. All of the rights (or sticks) have value. Anytime they go back and forth between parties, there should be some transaction to compensate for the transfer of property. City Attorney Taraday read from Washington State Constitution Article 8 Section 7, `No county, city, town or other municipal corporation shall hereafter give any money or property or loan its money or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm or become directly or indirectly the owner in stock in or bonds of any association, company or corporation. " He said that while there is not a case that directly addresses this constitutional provision in the context of a street vacation, it is his opinion that City should require compensation for a street vacation because it would be considered a gift of public funds or property not to. The rights (sticks) are owned by the public. If the City gives them back to the property owner without compensating the public for the loss of those sticks, it would be a gift of public property, which violates Article 8 Section 7 of the Washington State Constitution. The State uses a two -prong analysis to determine if a "gifting" has occurred. The first is, are you trying to carry out a fundamental purpose of government, and he can't see any argument that giving property rights back to a private citizen would be classified as a fundamental purpose of government. Secondly, the court focuses on the consideration received by the public for the expenditure of public funds and the intent of the appropriating body. The court would look at what consideration the City received for giving the rights (sticks) back, and he believes having the rights appraised is appropriate. Appraisers are trained to measure the differences in fair market value between a before and after situation. Board Member Pence pointed out that the City does not pay compensation when it acquires "bundle of sticks" when plots are dedicated. At the time of a subdivision, developers are required to gift street dedications to the City to provide access to the lots. He understands City Attorney Taraday's viewpoint that street dedications are owned by the City and have value and that abutting property owners who have reversionary interest in the properties should provide compensation if the streets are vacated by the City. However, it is important to note that the City didn't pay to acquire the street dedications in the first place. City Attorney Taraday responded that consideration doesn't have to be identical in terms of flowing both directions. The consideration the original owner gets is an approved plat. While it is true that the City doesn't pay cash for the streets that are dedicated, it approves the plats and the owners profit from the approval. The only way you can get a subdivision approved is to transfer those sticks (rights) to the City. Once they are owned by the public, it is not relevant any more how they got to be in the public's hands. What is relevant is, should they be given back, and if so, why? Board Member Pence summarized that the City acquires sticks within the public right-of-way, and its payment is the administerial act of approving the subdivision. City Attorney Taraday agreed that is one way to look at it. It is pretty clear that a developer dedicates property for streets in order to get a subdivision approved. Planning Board Minutes August 14, 2019 Page 3 Board Member Monroe observed that the City sets the value of those rights at zero when they enter into negotiations with a developer of a subdivision, but then they want to sell them back for fair market value. City Attorney Taraday responded that the City does not establish a value when the property is being dedicated for streets as part of a subdivision application. No money changes hands at that point. Not all consideration is in the form of cash. Board Member Monroe commented that when a street vacation is granted, it expands a property and property owners are then required to pay taxes on the additional land. He asked if that would be enough compensation to the City to warrant approval of a vacation request. City Attorney Taraday said his opinion is that every property owner pays taxes, but not every property owner gets to have the street in front of their property back. He cautioned that if the City were to vacate every potential property without requiring any compensation, some residents in the City would get a windfall and others wouldn't. It wouldn't be fair to distribute public property unevenly so it goes to some people but not to all. His view is that the fair approach would be to compensate the public for the loss of those rights. The current code allows the City to obtain compensation, but State Law allows the City to require higher levels of compensation than the code currently provides for. It also doesn't force the City to make an either/or choice between an alternative easement or cash compensation. Board Member Monroe summarized that City Attorney Taraday's position is that paying taxes on the newly acquired property would not address the concern about the gifting of public funds. He asked if there are other states that do not require money to change hands. City Attorney Taraday was unable to answer the question but explained that it is a Washington State constitutional provision. Board Member Rosen commented that a street vacation could result in a property owner acquiring land that he/she does not want and is not equipped to pay taxes on, and this could cause a hardship or financial burden. City Attorney Taraday emphasized that no one would ever be forced to seek a street vacation. Most street vacations are initiated by a petitioner, who is the abutting owner who happens to want the property. Even if the City Council initiates a street vacation, it would not take affect until compensation is received. If the appraisal comes back higher than a property owner anticipates, he/she can pull the plug on the street vacation. No one would ever be forced to follow through. Board Member Rosen asked what would happen if one of the 10 property owners along an alley doesn't support the vacation. City Attorney Taraday said it would depend on the location. Highly motivated neighbors might be willing to pick up someone else's tab. Another scenario is that just half of the block could be vacated. However, he does not foresee the City would ever allow a checkerboard pattern of street vacations. Continuity would be required. Chair Cheung asked if the appraisal would be based on value to the City or the abutting property owner. There must not be a whole lot of value to the City if they are willing to give it away. All the City would lose is the public right-of-way. City Attorney Taraday recommended the Board seek feedback from an appraiser to provide specifics on how an appraisal would be done. He knows that when the City acquires right-of-way from an abutting property owner in order to widen a street, the property is appraised in the before and after conditions, and any damages the dedication might cause to the property are taken into account when determining how much the City must pay the abutting property owner. He suspects that a similar process would be used in street vacation situations, too. Board Member Monroe referred to proposed Section 18.55.040.13, which states that "The city shall not proceed with a city - council initiated vacation if the owners of 50% or more of the lineal footage of property abutting the subject property file a written objection. " He asked if this provision implies that the City could force property owners to assume ownership of the land. City Attorney Taraday said that, as proposed, the decision to not proceed with a vacation would occur earlier in the process and before there is a Resolution of Intent. If 40% of the abutting property owners object, his experience tells him the City Council would not approve the street vacation. If the Council does approve a street vacation in this situation, a certain dollar amount would have to be paid to the City in order to finalize the transaction. The 40% who object would not be required to pay the compensation amount, in which case, the 60% in favor could either withdraw their request or pay the entire compensation and the property owners in opposition would get a windfall. Board Member Monroe asked who would own the properties, and City Attorney Taraday explained that it doesn't matter where the money comes from. The properties would revert back to the apparent abutting property owners. Board Member Monroe voiced concern that the 40% who object could end up with a higher tax bill for property they didn't want. City Attorney Taraday agreed that is possible, but the likelihood of that being a significant amount of money is small. Vice Chair Robles thanked City Attorney Taraday for clarifying that a property owner would not be forced to purchase a street vacation. As far as unjustly receiving a windfall, Planning Board Minutes August 14, 2019 Page 4 citizens are already subjected to windfalls and judgment through the course of rezones, code changes, etc. He is not sure that argument would be strong in this case. Vice Chair Robles asked if fair market value assumes that anyone could bid on a 10-foot strip of right-of-way. City Attorney Taraday answered that an appraiser would define fair market value as the price at which a reasonable, willing and able buyer and a reasonable, willing and able seller are likely to enter into a transaction. This is typically determined by looking at comparable sales in the area. The properties are analyzed and a judgment is made to come up with a price per square foot for the land. Vice Chair Robles questioned how the fair market value would be established for a 100 square foot area in the middle of property abutted by two unwilling owners. It's attached to someone's property, which gives it value. A 100 square foot peace of land does not have any value on its own. City Attorney Taraday said it would have some inherent value, but Vice Chair Robles' question is more about whether an appraiser in this context would look at an assemblage premium. For example, an owner of a lot that is 9,500 square feet in size might request a street vacation because he/she needs an additional 500 square feet in order to subdivide the property into two, 5,000 square foot lots. The City would expect an appraiser to take into consideration that the street vacation would enable the property owner to get another lot worth of value. On a per -square -foot basis, 501 square feet might not be a lot of money. However, a vacant, buildable lot in Edmonds is worth quite a lot. Vice Chair Robles asked if an abutting property owner could list the street vacation as an amenity to the property when it is sold in a real estate transaction even if he/she has not exercised that right. City Attorney Taraday explained that the City Council has complete and total discretion to approve or deny a street vacation, and there are no criteria. The City Council does not have to provide a reason for the denials, either. He does not think anyone would want to stake a real estate purchase on this potential opportunity. Vice Chair Robles commented that the appraiser would also be making a speculative argument that the 80 square feet of land has value. City Attorney Taraday responded that, once an appraisal comes back, a property owner can decide to pay the compensation to have the extra land added to his/her lot or leave the land as is. Vice Chair Robles acknowledged that a property owner would not be forced to pay the compensation, and he asked if having a third -party appraiser to identify a transaction's value, who it is valuable for, and how the money is assigned would be a positive thing or confuse the matter more. City Attorney Taraday said he views the independent appraiser as being a key part of ensuring fairness. When appraisals come in for street vacations, City staff has noted there is too much variation in terms of what the City will receive. It is unfair that some people are submitting junk appraisals and paying hardly anything, and other people are doing it right and paying a fair amount of compensation. That disparity should not exist. The City can create a system where everyone is playing by the same rules and the appraisals are being done the same way. This provides confidence that a disparity in price is not because a completely different methodology was used. This is preferable to letting property owners choose whoever they want to do the appraisal. He said he and Ms. McConnell have given some thought to a process that would allow a property owner to have a second appraisal if they don't like the initial one. Ms. McConnell continued her presentation by pointing out that most of the street vacations that come before the City are initiated by private citizens versus the City Council. Petitioners understand that an appraisal is required and that compensation could potentially be necessary for the vacation to be completed. State Law requires compensation to the City in an amount equal to one-half or the full amount of the appraised value, which means that an appraisal needs to be done. In the existing code, an appraisal is the minimum application requirement and the appraiser is selected by the petitioner. As discussed at the last meeting, having that be a minimum application requirement means that the appraisal is being done before the City Council has determined it would even consider the property for vacation and before any easement requirements have been identified that would devalue the property. The proposed code moves the appraisal requirement to later in the process after staff has completed review and the City Council has approved a Resolution of Intent to Vacate. A requirement for a third -party appraiser was incorporated into the code, and the petitioner would be responsible for covering that cost. She noted that the current code also requires the petitioner to cover the cost of the appraisal. Ms. McConnell shared some ideas for how to address situations when a petitioner does not agree with the independent appraisal. The ideas include: • The petitioner could select an alternative appraiser from a list provided by the City. The list would have at least three names on the list. • The petitioner would pay for the alternative appraisal, as well as the initial independent third -party appraisal. Planning Board Minutes August 14, 2019 Page 5 • Both appraisals would be included in the City Council packet, along with the street vacation ordinance and the City Attorney's analysis of the differences between the two appraisals. • The City Council would decide the compensation amount using the two appraisals as brackets for their discretion. Ms. McConnell explained that RCW 35.79.030 states that compensation to the city or town shall be in an amount equal to one-half the appraised value of the area so vacated or at an amount not to exceed the full appraised value, which applies if the street or alley has been part of a dedicated public right-of-way for twenty five years or more or if the subject property or portions thereof were acquired at public expense. The City's existing code states that the City can accept monetary compensation or reservation of an easement to the City. The proposed code would state that monetary compensation and allowance for reservation of easements are both possibilities. The current code limits the compensation amount to one-half the appraised value, and State Law allows the City to accept the full appraised value. Ms. McConnell said that, as per the existing code, certain conditions can be placed on the City Council's approval of a Resolution of Intent to Vacate such as reservation of certain easements. The code requires that the conditions must be met within 90 days of approval of the Resolution of Intent to Vacate. The proposed amendment still has a 90-day requirement for compliance, but adds a provision that allows some flexibility if otherwise stated in the resolution. If there are extenuating circumstances, it might take more time for a petitioner to comply with the conditions, and the proposed amendment would allow the City discretion to grant an extension. As requested by the Board, Ms. McConnell briefly reviewed the 2018 compensation history, noting that one street vacation was initiated in 2018 by an abutting property owner. The owner paid half of the appraised value, which was $28,800. The property owner approached the request knowing about the compensation requirement. They fell under the existing code, which meant an appraisal had to be done before an application was made. This is indicative of the types of street vacation requests the City receives. Ms. McConnell reviewed that the proposed amendments were introduced to the City Council Planning, Public Safety and Personnel Committee on July 9t1i and the Planning Board on July loth. The Planning Board will conduct a public hearing tonight and forward a recommendation to the City Council. The item is tentatively scheduled for a public hearing and final decision by the City Council on September 17'. Ken Reidy, Edmonds, commented that the discussion about the "Fee Simple Bundle of Rights" did not included a discussion about opened and unopened easements. When an easement is not being used by the City to open up a street or alleyway, the fee title owner of the property has rights to use the property. Mr. Taraday read about those rights in court case Nystrand vs. O'Malley. He said there are numerous examples all over the City where property owners use the right-of-way when the City hasn't put in a street or alley yet. He specifically referred to a situation where someone sold their servient estate ownership interest to a neighbor, which is another bundle of sticks. He summarized that the rights of the two are not absolute. The servient estate also has rights, and that's really important to appreciate. Mr. Reidy recalled that when the proposed code amendment was introduced to the Board on July loth, City staff did not mention that the 2012 Planning Board was tasked by the City Council on two occasions to review this same item. Amendments were needed to clarify certain parts of ECDC 20.70 and make the wording consistent with State Law. He spoke at both of those public hearings (May 9, 2012 and November 14, 2012). The end result of this effort was that the City Council adopted Ordinance 3910, which made the City's laws more consistent with State Law (RCW 35.79.030). He questioned why the Planning Board is now being asked to consider a major rewrite of this code section. He said he is unaware of any changes to State law that makes this necessary. He asked who is pushing this effort that changes laws adopted by a previous City Council. For example, the either/or provision is legal under State Law, and the City Council made a legislative choice to establish that law. Why is staff now proposing that the either/or law be eliminated. It is good law that the citizens support. He asked that the Board recommend that the either/or provision be left intact. Mr. Reidy asked why the proposed code amendment has been in the works since at least May 3, 2018 without an opportunity for property owners or citizens to be involved in the process. He noted that Ordinance 3910 clarifies the type of easements the City may retain when deciding to vacate a street or alley easement. The City Council may reserve rights for the City for construction repair and maintenance of public utilities and services, which is consistent with State Law. Ordinance 3910 does not say that the City Council may require property owners to grant rights to third parties, yet the Edmonds City Council Planning Board Minutes August 14, 2019 Page 6 has required property owners to grant easements to third parties during the last three street vacations. Instead of correcting their historical acts, he fears the City is attempting to change the code to promote similar acts in the future. He said he is not aware that any property owner has asked for this change. He pointed out that Ms. McConnell's reference to a recent street vacation that required a $28,800 compensation failed to mention that the property owner was also required to grant an easement to the Edmonds School District for an unpermitted pipe they had put in years ago. He cautioned against the City elevating third -party rights above those of the property owner. Mr. Reidy referred to the proposed language in ECDC 18.55.140.B.3, which states that, `Any challenge to one or more conditions imposed pursuant to a resolution of intent to vacate must be brought in Snohomish County Superior Court no later than 30 days following the adoption of the resolution of intent. If such a challenge is successful, the city council shall determine whether to amend the resolution of intent by adopting a different set of conditions or to deny the street vacation in its entirety. " He said RCW 35.79.030 does not say anything about a 30-day challenge period. It simply says that "such ordinance may provide that the City retain an easement or the right to exercise and grant easements in respect to the vacated land for the construction, repair and maintenance ofpublic utilities and services. " Mr. Reidy stated that it is not the property owner's job to see that all laws and ordinances are faithfully enforced; that is the Mayor's job. Shifting the burden to others by giving them 30 days to challenge the City Council's required conditions is very wrong and unfair. It should be kept simple to comply with State and City Laws. The City Council can retain an easement or rights. Retain means to keep possession of, but it does not mean that the City can require property owners to grant easements to third parties. Mr. Reidy pointed out that street vacations are legislative acts. He asked what would be the next legislative act that someone tries to make subject to a 30-day appeal period to Snohomish County Superior court if the proposed amendments are adopted. He commented that the courts do not want to be involved in the legislative process. Legislative acts are the City Council's responsibility and the City Council should be able to act within the law without involving the Superior Court. Mr. Reidy recalled that at the Board's July 10' meeting, City staff explained that if there was thought to be value to the land and an appraiser found value to the property, the City would not be able to just gift public land to an adjacent property owner. However, Ordinance 4143, effective February 20, 2019 did not require compensation even though the related appraisal showed the property had value. This was perfectly legal, as requiring compensation is permissive. The statement about gifting of public land is alarming for several reasons. It shows that City staff tasked with updating the code section may not have a complete understanding of this area of law. History shows that the City has not required compensation on many occasions. If gifting public land was not something the City was able to do, why would it have done so earlier this year? He suggested that gifting is not an issue because the property owner almost always owns the title. If the street or alley has been part of a dedicated public right-of-way for less than 25 years, State Law allows the City the option of requiring compensation in an amount which does not exceed one-half the appraised value of the area so vacated. He questioned why the other half wouldn't be considered a gift of public funds or a windfall? Resolution Number 1145 documents that the City Council voted to credit back costs, including the cost of the appraisal, to the abutting property owner by reducing the required compensation by $3,750. Should this be considered a gift or a windfall? He asked the Board to appreciate that compensation is permissive. He asked why City Attorney Taraday is talking about a potential windfall if payment is not required. The City Council has great legislative discretion, and they don't have to require compensation ever. In fact, since 1998, the City Council has not required compensation for most street vacations. For example, there were 15 street vacations in 1998 and none required compensation. History proves that it can be a public benefit to vacate streets without the need to require compensation. Mr. Reidy referred to City Attorney Taraday's memorandum, which also states that payment for a street vacation would benefit the general public. He questioned if the general public would have legal standing to contest a street vacation if the City Council did not require compensation? He referred to Grays Harbor 2000 vs. the City of Seattle, in which the City of Seattle vacated 15.2 acres of streets and did not charge compensation. Citizens appealed the decision, saying they were harmed as part of the public because the City did not charge compensation, but the judge ruled that they didn't have standing to contest the decision. He emphasized that the City and property owner have higher rights than the general public. Mr. Reidy commented that State Law is clear that the respective rights of the City and property owner are not absolute, and case law is clear that the property owner, and not the general public, has the right to use unopened streets and alleyways. In conclusions, Mr. Reidy expressed his belief that staff's comment that the City would not be able to just gift public land to an adjacent property owner indicates that they do not have a keen understanding of the las. If such a major code rewrite was needed, he asked why the citizens were not made aware of it? He recalled that in late 2016, he pointed out in a public hearing Planning Board Minutes August 14, 2019 Page 7 on a street vacation that acquiring an appraisal so early in the process was wrong. He is glad the proposed amendment will address this issue, but in general, the existing code is good. It was just reviewed in 2012 and it remains solid. He suggested the best approach would be to leave the recently updated code as is, with just the one change to move the appraisal requirement to later in the process. He asked the Board not to move away from the legislative intent of the City Council that adopted the either/or law and compensation law that didn't go for the full appraisal value. There is no need to change the choices that were made in 2012. At the request of Board Member Pence, Mr. Reidy submitted his statement in writing. Fennis Tupper, Edmonds, said he has been a resident of Edmonds for 39 years and his property was part of George Brackett's original plat. His northern boundary line was the northern boundary of the City, and there is a 7.5-foot undedicated alley easement in his backyard. He noted that the street code requires 15 feet, but when the City annexed the Holy Rosary property to the north of his property, it did not require them to dedicate the other 7.5 feet. If you view the property on Google Maps or the City's GSA maps, you will see that almost every property owner has put up a fence and incorporated the 7.5 feet into their lots. In the 39 years he has lived in the City, he has witnessed many street vacations, especially in his neighborhood. For example, some of 8' Avenue that was never going to be opened because of a stream was vacated. A 7.5-foot easement between 8' and 9r' Avenues was also vacated with no compensation required. Mr. Tupper referred to Mr. Reidy's earlier question about why it would be okay to give away half of the public's funds by not charging the full amount. It is just not a valid legal argument. He said he watched the July 10' Planning Board Meeting on Channel 21 and was flabbergasted at some of the testimony that was provided by staff. He visited the Municipal Research Service Center's (MSRC) website (www.msrc.or ) for additional clarification. The MSRC is a non-profit organization that helps local governments across Washington State to better serve the citizens by providing legal and policy guidance on any topic. He learned that a public right-of-way is generally an easement, and when the right-of-way is vacated, the fee title to the property underlying the right-of-way held by the abutting property owner becomes unencumbered by the easement. What the vacation accomplishes is extinguishment of the right-of-way easement. Ms. McConnell said that abutting property owners cannot use the easement because the City has jurisdiction over it. However, per the MSRC, if the right-of-way has not been opened and is not improved, the obstruction of public travel is not an issue and the property owner is not subject to the same restrictions as when it is opened and improved. Typically, property owners can use the unopened, unimproved right-of-way as they can the rest of their property, but it is subject to the possibility of it being opened and improved at some point in the future. Mr. Tupper also referenced Ms. McConnell's statement that if there was thought to be value to land and an appraiser did find value to the property, the City could not just gift it to an abutting property owner. However, it is important to note that the City does not have title to the property. It only has an easement right, which is just one stick (right) in the bundle. Mr. Tupper said that about six years ago he discovered that the Lighthouse Law Group's corporate registration with the State had lapsed and hadn't been paid for or renewed. After discovering that, he went to the City of Seattle's website and found that the law firm, which had been formed about five years earlier, had never applied for a City of Seattle business license or paid City of Seattle taxes. He asked Mr. Taraday for a copy of his business license, and he told him it had lapsed. However, the following day he was down at the City of Seattle applying for the license. There is something about integrity and truth, and telling him that the license had lapsed was very untruthful. Michelle Dotsch, said she was present at the last meeting and heard Mr. Reidy address the Board. She was born and raised in Edmonds and knows there are a lot of alleys that people walk and bike through. She recalled that City staff displayed a map at the last meeting that showed an alley in just one area, but a short Google search located a variety of Google Map photographs of local streets with unopened easements. In many of these situations there is landscaping, buildings, fencing, etc. She submitted maps showing where all of the easements are located, noting that some have access to driveways to actual parking garages on the backside with no access for vehicles on the front side. The owners of these properties would be significantly impacted by the proposed amendments, yet there are only two public hearings during the summer when people are out of town. It is easy to do a Google Map search to find the property owners. She expressed her belief that the process needs more time and attention. The City needs to reach out to the public by mailing notices to affected property owners. Chair Cheung closed the public comment portion of the hearing. Planning Board Minutes August 14, 2019 Page 8 Board Member Monroe advised that Board Member Rubenkonig was unable to attend the meeting but submitted a written comment asking about the impetus of staff s proposal to update the street vacation provisions. City Attorney Taraday explained that as staff has worked through street vacations over the past few years, it noted provisions that were either not as clear as they needed to be or not as helpful to the City as allowed by State Law. He disclosed that he represents the City of Edmonds and his responsibility is to advance the interest of the City of Edmonds and not individual property owners. If he sees that State Law allows the City of Edmonds to collect more money for a street vacation than it is currently collecting, it is his job, as the City Attorney, to make that option available to the policymakers and let them decide whether or not they want to amend the code. The City is leaving money on the table right now. He feels an obligation to bring that forward and let the policymakers make a decision about whether that is a good thing or not. Board Member Monroe noted that, as proposed, the city attorney would provide an analysis of an appraisal. City Attorney Taraday said that is one option. He spent a lot of his career doing imminent domain work and deposing appraisers. Board Member Monroe pointed out that the proposed amendment does not say that Jeff Taraday will provide an analysis, it simply says that whoever is the city attorney would do the analysis. City Attorney Taraday expressed his belief that most city attorneys would be able to do that work. Board Member Monroe observed that, as per his earlier statement, City Attorney Taraday is charged with advancing the City's interest and not that of private property owners. City Attorney Taraday said he would provide an analysis to the City Council, and the City Council Members are also tasked with representing the City of Edmonds and looking out for the City's interest. He asked who better to advise the City Council than the person who has the fiduciary duty to look out for the interest of the City of Edmonds. Ms. McConnell explained that the proposed amendments are intended to clarify and address issues that have come up over the past few years as staff worked through street vacation applications. As proposed, the restructured process would be smoother to follow and easier for the staff and public to understand the requirements. Moving the appraisal to a later point in the process after the Resolution of Intent to Vacate has been approved will benefit petitioners so they don't spend money up front on something that may have no traction. The provisions were looked at holistically and are intended to address issues that kept coming up as staff dealt with residents coming to the front counter. In an effort to be transparent, City Attorney Taraday said the intent behind the current either/or provision is unclear to him. They could review the legislative history and try to identify the intent, but there is not always a clear answer for why a provision was adopted into the code. However, it is completely arbitrary to try and equate the reserving of a simple easement to the City on one hand and fair market value payment for the street vacation on the other. For example, you could have a huge street vacation worth a lot of money, but if the City happens to have a small water line there that requires the preservation of a small easement, the existence of the water line could create a completely arbitrary condition where the City either needs to vacate the street cost free, reserve the easement or deny the street vacation. Denying the street vacation request is not in the property owner's best interest. It is important to create conditions that allow street vacations to come forward, and the either/or provision forces the City to make a difficult choice between three options that are not good. Eliminating the either/or provision could create a situation where a reserved easement could end up reducing the amount of compensation that a property owner is required to pay. On the other hand, retaining the either/or provision would prohibit the City from requiring compensation if any portion of the easement is reserved. Board Member Crank said her initial understanding was that the proposed amendments were intended to catch the City's code up with the State Law, but it appears that has already been done. She asked if the true intent is to collect the money that is being left off the table and put it into the City coffers. If that is the case, itis important that the intent is clear so that the Board doesn't continue its conversation thinking they are trying to catch up with something that they have already caught up to. Secondly, she asked if there is a timing issue that requires that the Board's recommendation be forwarded to the City Council for a September public hearing. City Attorney Taraday reviewed that the focus of the 2012 update was fairly narrow and not intended to be a full rewrite of the street vacation code. One reason it has taken so long to bring the proposed update forward is that, frequently in City government, there is too much to do and not enough time and resources. Projects end up getting re -prioritized. It took a while for staff to realize that the full appraised value provision was not in the code. Rather than doing piecemeal amendments to the code, staff felt it was better to wait until they could do a complete rewrite of the entire chapter. Planning Board Minutes August 14, 2019 Page 9 Ms. McConnell said that once staff starts a project, they try to keep it moving. They are pulled to a variety of different projects, and staff availability to work on projects is limited. The larger the gap is in between, the more time it takes staff to sync back into the project and bring it forward again. The tentative public hearing before the City Council on September 17' is purely an effort to keep the amendment moving forward while the issue is fresh on everyone's mind. Regarding the issue of retained easements by either the City or another agency, Board Member Pence commented that petitioners are asking the City to give the bundle of sticks back to the abutting property owners. The retention of an easement is the City merely saying that one of those sticks will have to be retained in the public interest. The petitioner would still have all the rights to use the land subject to the easements that are retained, and this will have an impact on the appraised value of the parcel. He doesn't see retained easements as an issue at all since they are part of the reality of the process. Board Member Pence questioned the use of the term "third -party appraiser," since it has not been referenced in the conversation. Currently, the appraiser is chosen by and becomes a client of the petitioner. Under the proposed amendment, the City would select the appraiser and that appraiser would be a servant of the City. There would be no third -party involvement in the proposed process. However, there may be some merit in having third -party appraiser who is truly independent of both the City and the petitioner. He said he has been involved in public property acquisition issues through condemnation, and the agency has its appraiser and if the unwilling seller doesn't like the appraisal, he/she hires a different appraiser. The issue goes to court and the differences are adjudicated. He suggested that for smaller -scale issues, it would be more appropriate to have just one appraiser that both sides select from a list of qualified appraisers. This would save expense, if nothing else. Again, he said the use of a third -party appraiser is not properly chosen in the proposed amendments. Board Member Rosen asked if he understood correctly that, as proposed, the petitioner would be required to pay for the appraisal. If the petitioner disagrees with the appraisal, he/she would be required to pay for the second appraisal, too. City Attorney Taraday said that is one of the options for addressing the Board's initial concern about the appraisal process. From his perspective, it would not make sense for the City to pay for an appraisal unless the street vacation was initiated by the City Council. Board Member Rosen suggested that the better distinction would be for whoever initiates the street vacation to pay for the appraisal. Board Member Rosen voiced concern that the proposed amendments might set the City up for some unintended consequences. He asked how the City could reduce that risk. City Attorney Taraday responded that the proposed amendment would not have any impact on rights that abutting owners have to use streets, whether opened or unopened. From his perspective, it has always been the case that if you want to build something in a street, you have to get an encroachment permit from the City. They are not making any changes regarding City policy on that issue. Board Member Monroe asked if the conditions attached to a street vacation approval could require a petitioner to obtain an agreement from a third -party utility. City Attorney Taraday explained that the City can never be compelled to approve a street vacation. It can deny the request at any time for any reason. In addition, the City is a code city organized under Title 35.A, which is different than other types of cities that exist in the state. Code cities have the broadest possible powers under the Washington State Constitution. Code cities are home ruled cities in that they don't need to point to something that is expressly stated in State Law to authorize their actions. They just can't contradict State Law. As long as they aren't violating the statute, they are good. He cannot point to a specific State Law that requires petitioners to obtain agreement from third - party utilities, other than Title 35.A, which grants code city home rule authority. Board Member Monroe summarized that the answer to his question is yes, the City can require a petitioner to obtain agreement from a third -party utility. Board Member Monroe asked why the timeline for challenging a street vacation is 30 days and not a longer time period. City Attorney Taraday referred to the case, King County vs. Federal Way, where a street vacation was challenged. The issue in that case was whether or not the challenge was timely. The court determined that when challenging a street vacation under a declaratory judgment action, the action must be brought within a reasonable period of time. The court ultimately held that 30 days was the appropriate time period. He expressed his belief that it is not fair to citizens to make them guess about how much time they have to file a challenge. It is a lot more transparent to put the timeline in the code. Because a timeline is not set forth in the RCW, the City has the authority to decide what the reasonable time period is, but it must be a reasonable period of time to get something before the court and before a street vacation has been finalized and the ordinance adopted. Board Member Monroe voiced concern that it might be difficult for a property owner to get everything in order in that short amount of time. Planning Board Minutes August 14, 2019 Page 10 Board Member Monroe reiterated that the City takes all but one of the sticks when a property is subdivided. If a property owner asks for them back, the City will determine what they are worth and require the property owner to provide compensation. In addition, the City may decide to give only some of the sticks back and hold onto others sticks for some type of public use. The petitioner would have 30 days to challenge the City's decision. Again, he asked if the City would require a petitioner to obtain an agreement with a third -party utility if an easement is to be retained. Ms. McConnell answered that the petitioner would be responsible for contacting the utility and working out the easement agreement and this would be spelled out as part of the condition process. That is why 90 days might not be enough time, and the ordinance might establish a longer time period as appropriate. Board Member Monroe commented that City Attorney Taraday and Ms. McConnell are doing a great job of maximizing City revenue wherever possible, and that's what the amendments are about. However, that is not something the Planning Board is has to do. City Attorney Taraday cautioned that this is not a type of taxation. In the case of a street vacation, the City is transferring valuable property rights at a price that has been agreed upon by a professional appraiser. It is not an unfair transaction. Board Member Monroe observed that the City has a lot of power and discretion in these transactions. City Attorney Taraday agreed, but in all of his years doing imminent domain and other types of appraisal work, he has never seen a situation where a city tries to low or high -ball an appraisal. In the grand scheme of the budget, the City won't be motivated to game the appraisal process to get an extra amount of money. Money matters a lot more to the smaller guy. Board Member Monroe referred to City Attorney Taraday's earlier comment that sometimes the City receives a low -ball appraisal, and he would provide an analysis to the City as to what appraisal is the most accurate. City Attorney Taraday said his analysis would be informed by many years of working with appraisals. Board Member Monroe commented that as long as necessary easements are retained, the City would not be impacted by a street vacation. The land belongs to the property owner and not the City, and the City needs to show a reason to use it. If the City isn't using it, the rights, by default, should be given back to the property owner. As long as the City would not be damaged by the transaction, it is incumbent on the City to make it easy and cheap. He said he likes the current either/or language, which protects the City from damages, and he also likes the proposal to move the appraisal to later in the process. All of the other amendments are unnecessary, especially if the primary intent is to get more revenue for the City. In particular, he does not like the 30-day timeline for challenging a street vacation, and he does not like the proposed appraisal process. City Attorney Taraday said he understands that the appraisal language is controversial, and a policy decision will need to be made. The Board's task is to make a recommendation to the City Council on the policy question, and the City Council will make the ultimate decision. However, aside from this policy question, the other proposed amendments are needed to clarify the process and should be considered on their merit. Regarding the 30-day timeline for challenging a street vacation, City Attorney Taraday suggested that it is better for the City Council's constituents to know what the timeline is rather than having to guess. He recommended that a timeline be clearly established in the code, and he suggested the Board discuss what might be a better period of time. Board Member Monroe expressed his belief that the timeline should be longer to allow sufficient time for a petitioner to gather the needed information to issue a challenge. Vice Chair Robles said he really appreciates City Attorney Taraday's transparency that his job is to represent the City. However, the Board's job is to represent the citizens. He also appreciates the working relationship that exists between the staff and the Board. However, if the Board advised the citizens that the purpose of the proposed amendments is to raise revenue for the City, he suspects that people who aren't land owners would support the change, but those who own land would not. There are too many questions at this time for him to formulate a recommendation to the City Council. It will take more work to get enough information to get to the right solution. The City's broad powers need to be carefully checked to figure out how they impact the citizens. He voiced concern that the proposed amendments are based upon the Fee Simple Bundle of Rights analogy, which cannot be codified. There needs to be a basis of logic for the code, and if they need to have a valid analogy to explain a proposed code amendment, it needs to be reconsidered. Board Member Rosen summarized that the City Council is looking to the Board for guidance. It appears that the Board agrees with the following: • Retain the current either/or provision. Planning Board Minutes August 14, 2019 Page 11 • Change who pays for the original appraisal based on who initiates the request. • Move the appraisal to later in the process. • Increase the timeline for challenging a street vacation to something greater than 30 days. Board Member Monroe asked if the Board had reached a consensus on who would choose the appraiser, the petitioner or the City. Vice Chair Robles responded that the City cannot expect to clean the process up with a third -party appraisal. It will be a messy process and negotiations will be required. If there is an appeal, Board Member Rosen asked if it would be possible to give the petitioner the option of either finding his/her own appraiser or using another appraiser from the City's list. Board Member Crank asked if there are other cities in Washington State that have addressed the appraisal issue. It might be helpful to find out what processes other cities are using as opposed to grasping for their own ideas. City Attorney Taraday agreed that staff could research the processes employed by other cities and report back. Chair Cheung commented that the person who is asking for the street vacation will obviously be interested in a lower appraisal. On the flip side, the City will pick an appraiser that will identify the highest value for the property. Because the authority is already with the City, if the applicant had an unreasonably low appraisal, the City could simply deny the petition. He said he doesn't see why the City needs to require a petitioner to choose an appraiser on the City's list. If they come in with an appraisal that is incorrect, the City can simply deny the petition, and the petitioner could then appeal the decision and select a different appraiser from the City's list. Vice Chair Robles pointed out that appraisers are all licensed and should be unbiased. City Attorney Taraday responded that appraisers are trained in different specialties, and the proposal is for the City to have a list of qualified appraisers who are trained to do street vacation work. Board Member Rosen suggested the Board could forward the proposal to the City Council with a recommendation of approval with the following exceptions: • Retain the either/or provision. • Change who pays for the initial appraisal based on who initiates the request. • Change the timeline for challenging a street vacation from 30 days to 60 days. • Request that staff come up with a recommendation for alternatives to the appraisal process rather than requiring a petitioner to choose from the City's list of qualified appraisers. • Encourage the City Council to specifically reach out to any resident who borders a project that might be impacted, notifying them of the upcoming public hearing. Vice Chair Robles suggested that the Board's recommendation to the City Council should also make it clear that the objective of the proposed amendments is to raise additional funds for the City. Board Member Crank agreed that additional revenue is an underlying element the proposal, but not necessarily the intent. Board Member Monroe suggested that the timeline for challenging a street vacation should be increased from 30 days to 90 days. City Attorney Taraday commented that, whatever the timeline is set at, the City won't be able to adopt street vacation until 30 days after the timeline has expired. Some constituents will want a street vacation to happen more quickly. Board Member Rosen asked if a petitioner could waive his/her right to appeal, which would then shorten the process. City Attorney Taraday agreed this is an interesting concept. He can imagine certain street vacations where it would be clean and easy for a petitioner to waive the right to appeal, but if several property owners are involved in the petition, it could be more difficult. The Board agreed they would like to add an option to waive the right to appeal if possible. The Board discussed retaining the current code language that would allow the City to accept either monetary compensation or reservation of an easement. The proposed new language would allow the City to require both. Board Member Monroe commented that a street vacation would not damage the City in anyway, as long as the necessary easements are maintained. City Attorney Taraday clarified that the current code only prevents the City from collecting compensation if the easement is for the City, but if the City directs a petitioner to work out an easement with a utility, the City can collect compensation, too. Board Member Monroe suggested this provision needs to be changed. From the petitioner's point of view, it shouldn't make any difference whether the easement is for the City or a utility. City Attorney Taraday agreed it doesn't make sense, but rather than treat all easements equally, the intent of the amendment is to evaluate the effect of the easement on value and subtract that amount from the required compensation. He cautioned against a provision that would result in the City's Planning Board Minutes August 14, 2019 Page 12 inability to collect compensation if there is any condition involving retention of an easement for any party. Currently, only an easement to the City would ban other compensation. He explained that, currently, it is difficult for appraisers to take easements into account because appraisals are done before easement conditions are imposed. The proposed amendment would move the appraisal to later in the process so that easements can be taken into account when determining the correct compensation. Board Member Pence summarized that, if a petitioner does not get all of the sticks (rights) back and some are being reserved for a public purpose, it really shouldn't matter whether that public purpose is the city or some other public entity. The sticks (rights) that don't get turned back to the petitioner can all be accounted for in the appraisal. City Attorney Taraday explained that the City needs some motivation to approve a street vacation. He explained that it is not possible for the Board to know what the City's future needs will be with respect to all of the streets and easements. He said he considers easements to be valuable rights, and simply giving them away could result in significant public cost in the future. Chair Cheung commented that if the City wasn't able to collect compensation for street vacations, perhaps it would be more cautious about giving up easements. Board Member Crank commented that recognizing the monetary aspect of street vacations is neither good nor bad, it just is. You always need to know what something is valued at whether you end up giving it away for free or not. She recommended against spending too much more time talking about this aspect of the proposal. She suggested they move forward with discussions on the other elements of the proposal and then make a recommendation to the City Council. Vice Chair Robles expressed his belief that the City Attorney's position regarding the monetary aspect of the proposal should be articulated to the public. Board Member Pence said he would like staff to provide feedback in writing, responding to the public comments and the Board's conversations. The proposed amendments could be tweaked to represent more of a consensus and the Board could discuss the updated proposal at their next meeting. He said he is not comfortable sending a recommendation to the City Council now. Chair Cheung agreed and noted that the Board is particularly interested in increasing the timeline for challenging a street vacation from 30 days to 60 days and perhaps adding a provision that would allow a petitioner to waive the appeal period. There are also some outstanding questions regarding the provision that would allow the City to collect compensation and require that an easement be reserved. City Attorney Taraday agreed to work with staff to prepare an updated version of the proposed amendment that incorporates the thoughts expressed by the Board. However, it will take more time for staff to update the document. He summarized that there are some items that appear to have majority support. Where there are still issues, he agreed to provide alternative language for the Board's consideration. The Board could continue their deliberation in October based on an updated draft. Chair Cheung closed the public hearing. REVIEW OF EXTENDED AGENDA Chair Cheung advised that the August 28' agenda will include an update on the Vision 2050 Multicounty Planning Policies and a presentation on the RoadMap Project (Ruckelshaus Center Report). The September 11' meeting is scheduled as a joint meeting with the Architectural Design Board and an update on the Urban Forest Management Plan. The Board will continue its deliberations on the Street Vacation Code Amendments on October 91 PLANNING BOARD CHAIR COMMENTS Chair Cheung announced that some parking issues will be coming before the Board, so it is important for them to keep apprised of what is happening with the parking study, etc. PLANNING BOARD MEMBER COMMENTS Board Member Monroe reported that he attended the kickoff meeting for the parking study, which was well attended and informative. At this time, they are working to identify a framework for the study. Planning Board Minutes August 14, 2019 Page 13 The Board Members expressed appreciation for staff s hard work on the street vacation code amendments and their desire to represent the City's best interest. Board Member Crank reported that there were public comments at the last Airport Commission meeting regarding noise. She predicts that noise will continue to be a topic since it was just announced that a new flight would be added from Everett to Spokane. �I11111"Ou_I_II01" The Board meeting was adjourned at 9:30 p.m. Planning Board Minutes August 14, 2019 Page 14