Claus v. City of Sherwood

ORS 92.040 authorizes an applicant to develop one portion of the subdivided property under the standards in effect at the time of the subdivision application and develop another portion of the subdivided property under the standards currently in effect.

Petitioner appealed the City’s approval for modification of an approved site plan to develop a self-storage building and hotel on Light Industrial (LI) property.

In 1995, the City approved a planned unit development (PUD) for Intervenor’s 55-acre property. In 2012, the In 2020, the City amended Sherwood Zoning and Community Development Code (SZCDC) 16.31.020 to allow hotels as conditional uses in the LI zone, and in 2022, Intervenor successfully applied for, among other things, a major modification of the 2017 site plan to site a 100-room hotel. Petitioner unsuccessfully appealed to the City. 

On appeal to LUBA, Petitioner made one assignment of error, including two sub-assignments. First, Petitioner argued the City improperly construed ORS 92.040(2) when it decided that former SZCDC 16.32.020(H) was a valid local government law because only laws in place at the time of the subdivision application should be applied. Petitioner argued, even if the former rule could be applied, Intervenor should be limited by the statutory vesting period outlined in ORS 92.040(3). Petitioner argued that Intervenor and the City agreed on a vesting period shorter than the statutory 10 years with their 2012 subdivision approval. Second, Petitioner argued that Intervenor cannot elect to develop a storage facility on one tax lot under the standards of the 1995 PUD Decision and elect to develop a hotel on another tax lot under modern standards.

ORS 92.040(2) provides “when a local government makes a decision on a land use application for a subdivision . . . , only those local government laws implemented under an acknowledged comprehensive plan that are in effect at the time of application shall govern subsequent construction on the property unless the applicant elects otherwise." At the time of the 2012 subdivision application, SZCDC 16.32.020(H) allowed Intervenor to choose to develop uses permitted under the 1995 PUD Decision.

ORS 92.040(3) provides that “the government may establish a time period during which decisions on land use applications under subsection (2) of this section apply. However, in no event shall the time period exceed 10 years." In an earlier decision, Claus I, the City concluded that the 10-year vesting period is the default, and it began running upon approval of the 2012 subdivision. 

In Athletic Club of Bend, Inc. v. City of Bend, the Oregon Court of Appeals interpreted ORS 92.040 to mean that a developer has flexibility in electing different sets of laws for different tax lots under the statute. The court in that case reasoned that, if the parcels were owned by separate owners, they would each have the right to elect their choice of permitted uses. 

LUBA rejected both sub-assignments of error, finding that the City properly applied ORS 92.040(2) or (3), and that Intervenor properly exercised their statutory right to elect different sets of laws for different lots. LUBA relied on its earlier holding in Claus I to hold that the former SZCDC law is a “local government law” as required by the statute and to determine that the 10-year statutory period is a default. Finally, LUBA relied on Athletic Club of Bend to hold that nothing in the statute limits a developer from choosing different sets of laws for each lot, and that the intention of the statute is to promote developer flexibility.

Affirmed.