Haystack Rock, LLC v. City of Cannon Beach

For the purpose of defining LUBA’s jurisdiction under ORS 197.015(10)(b)(B), a “building permit” is “a decision approving or denying specifications for the construction or alteration of a structure that is regulated under the state building code.”

Petitioner appealed a City approval of a development permit to construct a driveway and related features as part of an application to construct a dwelling on an undeveloped subdivision lot. The driveway would involve grading, tree removal, and construction in the dedicated right-of-way for the subdivision. The City approved the development permit on March 21, 2022, and the window for a local appeal deadline was fourteen days from the time of the decision. Petitioner owned land adjacent to the proposed development site and learned of the approved development permit on April 11, 2022, after the fourteen-day deadline of April 4, 2022.

On appeal to LUBA, Petitioner made eight assignments of error, only the first of which LUBA reached: that the City committed procedural error that prejudiced Petitioner’s substantial rights under ORS 197.835(9)(a)(B).

Under ORS 197.015(10)(b)(B), building permits issued under clear and objective standards are excluded from LUBA’s jurisdiction.

Before reaching Petitioner’s assignment of error, LUBA first addressed the City’s motion to dismiss, which claimed LUBA lacked jurisdiction because this was a building permit excluded from its review under ORS 197.015(10)(b)(B). LUBA briefly reviewed the legislative context of the building permit exclusion and interpreted the definition of “building permit” under ORS 197.015(10)(b)(B) for the first time, stating it is “a decision approving or denying specifications for the construction or alteration of a structure that is regulated under the state building code.”

Here, LUBA noted that while the development permit did authorize construction of a dwelling as well as vehicular access, tree removal, and grading, the City code required evaluation of the permit using land use standards and did not involve application of the building code to the dwelling. LUBA also observed the record showed the building permit accompanying the challenged development permit was not in the record but was listed as “in review” with the City. LUBA concluded the challenged decision did not fall under the building permit exclusion of ORS 197.015(10)(b)(B).

Under ORS 227.175(10)(a)(A), a local government “may approve or deny an application for a permit without a hearing if the [local government] gives notice of the decision and provides an opportunity for a local appeal and de novo hearing.” Owners of land adjacent to the subject property are entitled to notice of decisions regarding applications for a permit to develop the subject land to allow a chance for appeal. ORS 227.175(10)(c)(A).

Turning to Petitioner’s first assignment of error, LUBA agreed the City had committed a procedural error that prejudiced Petitioner’s substantial rights under ORS 197.835(9)(a)(B) when it failed to notify Petitioner of the decision approving the development permit on the adjacent property as required by ORS 227.175(10)(c)(A). LUBA began by clarifying this was a statutory permit which required the exercise of discretion, and the local criteria for evaluating permits for development in a city right-of-way all involved the exercise of discretion. LUBA noted that while the City insisted the permit only approved development on the applicant’s property and not on the right-of-way, the record showed in several places that development in the right-of-way was explicitly contemplated in the development permit. This meant it was a statutory permit subject to the requirements of ORS 227.175(10)(c)(A), including notice to adjacent land owners like Petitioner. LUBA concluded the City’s failure to provide notice of its decision prejudiced Petitioner’s substantial rights by preventing them from timely appealing the decision locally, and that remand was necessary to provide Petitioner that notice and opportunity to appeal.

As the decision was being remanded for a local appeal where the City’s decision could substantially change, LUBA finally concluded it would be premature to address Petitioner’s remaining assignments of error.

Remanded.