Oregon Coast Alliance v. City of Bandon

"We agree with intervenors that the city's findings adequately address the raw water storage issue and the city's finding that adequate water is available to serve Gravel Point is supported by substantial evidence."

The Petitioner appeals a city council decision approving a conditional use permit (CUP) and site plan review for a 110-room hotel, two restaurant spaces, meeting rooms, spa, and 32 villas. The subject property is a 24.2-acre site zoned Controlled Development 1, bounded by Beach Loop Drive, Face Rock Road, and Carter Street. Beach Ventures, LLC and Perk Development, LLC applied for conditional use, site plan review, and a height variance for a development known as Gravel Point. After public hearings, the planning commission approved the application but did not adopt supporting findings. The petitioner appealed, alleging multiple errors in the approval. Before the city council hearing, the applicants revised the proposal, including withdrawing the variance request. The city council held a public hearing, denied the petitioner’s request to keep the record open to respond to the revisions, and ultimately approved the modified application with conditions. This appeal followed.

Third Assignment of Error

The petitioner argues that the city council committed a procedural error by refusing to keep the record open to allow a response to intervenors’ post–planning commission modifications, thereby prejudicing petitioner’s substantial rights. Under ORS 197.835(9)(a)(B), remand is warranted if a procedural failure prejudices the petitioner’s right to an adequate opportunity to prepare and present its case. To establish procedural error, a petitioner must identify the violated procedure, show preservation, and demonstrate prejudice. After intervenors submitted a revised application and new supporting materials before the city council hearing, the petitioner submitted extensive materials on the hearing date and requested the record be left open, which the city denied. The reviewing body concluded that petitioner failed to demonstrate prejudice because the petitioner did not identify any evidence or argument it was prevented from submitting and had participated effectively in the hearing. Accordingly, the third assignment of error was denied.

Fourth Assignment of Error

The petitioner argues that the city council committed a procedural error by interpreting the local code to limit its de novo review to issues raised in the local appeal statement. The intervenors respond, and the reviewing body agrees, that petitioner failed to demonstrate prejudice, particularly because the city council addressed all issues the petitioner raised on appeal. Accordingly, the fourth assignment of error is denied.

First Assignment of Error

BMC 16.12.040(F) requires the city to find that public facilities and services have adequate capacity to serve a proposed conditional use. The petitioner argues that the city misinterpreted this criterion and made inadequate, unsupported findings regarding water and wastewater capacity for the Gravel Point development. Specifically, the petitioner contends that the city improperly relied on the intervenors’ estimated water and wastewater usage without expert analysis or supporting documentation and failed to address contrary testimony from a city resident suggesting higher water use.

The intervenors respond, and the reviewing body agrees, that BMC 16.12.040(F) does not require expert testimony or underlying data to support an applicant’s estimates. The city therefore did not misconstrue the code by relying on intervenors’ estimates. The city was also not required to make findings responding to the resident’s informal online research, which did not constitute substantial evidence. The record shows that intervenors’ estimates were reviewed by city public works and engineering staff, who concluded that existing water and wastewater systems had adequate capacity. Because a reasonable decision maker could rely on those estimates in the absence of overwhelming contradictory evidence, the city’s findings are supported by substantial evidence.

The petitioner argues that the city’s findings regarding adequate water system capacity are inadequate and unsupported by substantial evidence because the city relied on resident population figures rather than the “total water service population,” including tourists and transients. The challenged finding referenced population projections to reject petitioner’s argument that the system was engineered for a limited number of people.

Intervenors respond, and the reviewing body agrees, that the petitioner relied on outdated planning documents and, more importantly, that the population-based finding was an alternative rationale. The city also independently found adequate water capacity based on water volume, supported by the 2022 Water Master Plan and analysis by city engineers. The record shows that engineers verified sufficient system capacity, including planned infrastructure upgrades and fire-flow improvements, and concluded the city can serve new development despite seasonal raw water storage concerns. Because the city’s volume-based capacity finding is supported by substantial evidence, any error in relying on population figures was harmless and does not warrant remand.

The petitioner argues that even if the city’s water system has adequate capacity, the city erred in finding that water service is “available or can be made available” under BMC 16.12.040(F) because of raw water storage deficiencies, particularly during late summer low-flow periods. Petitioner relies on evidence from the 2022 Water System Master Plan, city council testimony, a city manager’s newsletter, and consultant memoranda describing sedimentation, reduced reservoir capacity, and disagreements with ODFW and hatchery operators over dredging.

The city found that while raw water storage deficiencies exist due to sedimentation in the Ferry Creek Reservoir, the water treatment plant has sufficient capacity, the city holds adequate water rights, and the storage issue can be resolved through routine dredging and longer-term solutions identified in the 2022 Water Master Plan. City staff concluded that current potable water capacity is more than sufficient to serve the Gravel Point development.

Intervenors respond, and the reviewing body agrees, that the record includes evidence that dredging efforts are underway and that existing capacity is sufficient to serve Gravel Point, with planned storage improvements intended to accommodate future growth. The city’s findings adequately address the raw water storage issue and are supported by substantial evidence.

Accordingly, the first assignment of error is denied.

Second Assignment of Error

The petitioner argues that the city improperly found the conditional use criteria satisfied by deferring compliance with comprehensive plan policies governing street vacations to a future proceeding. BMC 16.12.040(A) requires conditional uses to be consistent with the comprehensive plan, and BCP Policy 4 imposes mandatory criteria limiting street vacations that adversely affect scenic views, wildlife, wetlands, drainage, or utilities, and requires a clear public benefit.

The proposal included vacating existing platted rights-of-way and dedicating new, reconfigured streets. Rather than determining compliance with BCP Policy 4 during the conditional use review, the city approved the application subject to a condition requiring a later street vacation approval by the city council. That condition did not require application of the conditional use or comprehensive plan criteria in the future proceeding, nor did it guarantee equivalent notice and participation rights.

Applying Rhyne v. Multnomah County, the reviewing body concluded that the city improperly chose the third permissible option without ensuring that the later proceeding would apply the relevant standards with equivalent procedural protections. Because the city did not find that BMC 16.12.040(A) and BCP Policy 4 were satisfied, and did not condition approval to require compliance with those standards in a procedurally adequate later process, the city erred.

Accordingly, the first subassignment of error is sustained.

The petitioner argues that the city improperly deferred required geologic assessment review. During the local proceedings, petitioner asserted that intervenors failed to address the geologic assessment criteria in BMC Chapter 17.78. City staff acknowledged that the site includes areas of high landslide susceptibility within the Hazards Overlay Zone and that a geologic assessment or exemption is required. Intervenors agreed that geologic assessment review is necessary and accepted a condition of approval requiring completion of that review.

The city found that geologic assessment review is a separate Type II application under BMC Chapter 17.78 and that intervenors were permitted, under BMC 16.04.090, to choose not to consolidate that review with the conditional use application. The city imposed a condition requiring geologic assessment approval before zoning compliance. Petitioner challenges this deferral in two more subassignments of error.

In the third subassignment of error, petitioner argues that geologic assessment review could reveal information relevant to the conditional use site suitability standards in BMC 16.12.040(D) and (E), and that the city was therefore required to determine compliance with those standards concurrently with geologic assessment review.

The reviewing body agrees with intervenors that this issue was not preserved. Under ORS 197.835(3) and ORS 197.797(1), issues must be raised before the local hearings body with sufficient specificity to provide fair notice and an opportunity to respond. Petitioner’s generalized assertion below that “various criteria” could not be determined without geologic assessment review was insufficient to raise the specific issue of whether compliance with the site suitability standards must be deferred pending geologic assessment. Because the issue was raised for the first time on appeal, it constituted unfair surprise. Accordingly, the issue is waived, and the third subassignment of error is denied.

Petitioner’s second subassignment of error is also denied for failure to identify the authority for its proposition.

The second assignment of error is sustained, in part.

Decision remanded.