One of the region’s biggest land developers is suing Snohomish County, claiming officials unfairly favored a rival builder.
Lawsuits by The McNaughton Group object to how the county approved possibly millions of dollars in housing on three dozen acres of rural land near Mill Creek.
The county violated state Growth Management Act rules by stretching the urban boundary for one builder, said Mark McNaughton, owner of the Edmonds-based development company.
“This sets a pretty dangerous precedent by circumventing the Growth Management Act for one person’s benefit,” he said.
McNaughton filed a lawsuit in King County Superior Court last week, shortly after filing a lawsuit with the Central Puget Sound Growth Management Hearings Board.
The King County lawsuit is scheduled to be heard in 2008, and the hearings board case in January.
The lawsuit criticizes how county officials changed land rules in July for only CamWest Development Inc. The vote came just six months after closing the books on a major 10-year revision of county plans.
McNaughton said he, too, had proposals for rural properties that were not given the same consideration.
“If we all sit silent to that, we’re setting the table for that to continue,” McNaughton said.
The 92 acres in the center of the fight is east of the city limits of Mill Creek.
The land is controlled by CamWest, a Kirkland-based builder working on plans for housing on the land.
County and Mill Creek city officials proudly point to how the county’s approval locks up 51 acres of sensitive land at the headwaters of Little Bear Creek.
300 homes
For builders, the move allows as many as 300 homes on the remaining 41 acres, CamWest vice-president Bruce Knowlton said.
If that many homes sell for the going rate of $500,000 or more, the project over time could total $150 million.
CamWest hoped to win approval in 2005. Failing that, it sued the county. In a settlement, the builder agreed to withdraw its lawsuit if the County Council reconsidered the project.
The council voted 3-1 last month, with councilmen Kirke Sievers, Dave Gossett and John Koster approving the measure. Councilman Gary Nelson voted against it and Councilman Dave Somers was absent.
County Executive Aaron Reardon said he supported the CamWest proposal last year. He signed it into law in July following legal advice from the Prosecutor’s Office, he said.
“It was a negotiated settlement agreement, and the project protects critical environmental habitat at the headwaters of Little Bear Creek,” Reardon said.
The lawsuit by McNaughton came as a surprise, Knowlton said. CamWest has broad support for its unique building plans, he said.
CamWest lobbied for the better part of two years for the county to approve a trade: Pull 20 acres out of the county’s urban area in exchange for upgrading 36 rural acres for urban-style housing.
“We’ve gone a long way to create a solution that provides for a good neighborhood and maintains a large forested tract of land within the Little Bear Creek drainage basin,” Knowlton said.
“I think that this was a unique proposal and ultimately I think the council recognized that and they approved it.”
A political process
Developers rarely – if ever – sue over each others’ projects, observers said.
Both McNaughton and CamWest develop tens of millions of dollars in projects. CamWest is both developer and homebuilder; McNaughton mostly buys land, subdivides it and sells lots to home building companies.
Both developers gave thousands of dollars to political campaigns, including to the campaigns of councilmen Koster and Gossett. They’ve also given thousands to Reardon for his 2007 campaign.
Politicians went too far this time to approve CamWest’s project, McNaughton said.
Filing a lawsuit was an awkward step for McNaughton’s firm, and breaks an unwritten rule between developers, he said.
“It’s hard to appeal another developer’s project,” McNaughton said. “It shines a light on us. For us it was a question of ethics.”
$1 million agreement
CamWest was advised to seek support from Mill Creek officials to strengthen the case for making the land urban, Knowlton said.
A deal was struck last year when the Mill Creek City Council agreed to write a letter to the county on behalf of CamWest.
In exchange, CamWest agreed to conserve sensitive wetlands. In an unusual move, they agreed to voluntarily pay the city $3,200 in park fees per new house – as much as $969,000.
Mill Creek officials were sold on protecting Little Bear Creek, and the park fees were secondary, Mill Creek Mayor Pro Tem Terry Ryan said.
“It was the right thing to do for the environment,” Ryan said. “It was a unique opportunity and a unique agreement.”
As houses are built, the park fees will be collected and buy improvements to make up for the park shortfalls in the county, Ryan said.
McNaughton described the park money as a way to buy the city’s support.
“It’s wrong for the city of Mill Creek to extract $1 million,” he said.
Ryan called the accusation “absurd” and the criticism “business posturing.”
“(The lawsuit is) not about bad blood” between developers, McNaughton said. “It’s how it all happened.”
County Councilman Gossett said the small urban expansion settles CamWest’s lawsuit. He called the project “innovative” and able to permanently protect the creek headwaters.
That’s “increasingly the kind of thing we’ll be looking for in proposals,” Gossett said.
County Councilman Nelson was the lone opposition to the CamWest bid in July.
“From a processing standpoint, it’s totally unfair to extract this one applicant and give them the green light,” Nelson said. Otherwise, he praised the innovative plans and payment of park fees.
Of the lawsuit, Nelson said, “I think they’ve got a good case.”
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