Snohomish County has agreed to pay two groups of developers nearly $1.7 million to settle lawsuits over how the County Council and the hearing examiner handled land-use decisions.
One case involved the County Council’s decision to sideline a pending request for a zoning change on land between Snohomish and Lake Stevens. That settlement gave $1.6 million to Bellevue development partnership SR9/US2 LLC.
Separately, the county agreed to pay $90,000 to another developer, Lake Goodwin a Joint Venture LLC, over a decision by the county hearing examiner to order a formal environmental impact study for 600 homes that were proposed as nine separate subdivisions.
With the settlement, the joint venture can now seek approval to build those homes on about 2,000 acres of rural land near the lake, which is northwest of Marysville.
Despite legal rulings saying the county was wrong in both cases, the county’s decisions were based on common sense, Councilman Brian Sullivan said.
“We really have to learn from our mistakes and tighten up the process,” Sullivan said. County codes should now be changed to better guide similar developments and protect against future lawsuits, he said.
Both settlements stem from development requests that began in 2006, a year before Sullivan was elected to the council. The four other councilmen, three of whom were attending a conference in Washington, D.C., were not reached for comment.
SR9/US2 LLC wanted to build houses and businesses on 140 acres northwest of U.S. 2 and Highway 9. The company asked the county to put the rural land in the city of Snohomish’s urban growth boundary to allow for the development.
The city of Snohomish later joined forces with the developer, sparking a dispute with Lake Stevens over who should be allowed to annex the land. That fight continues.
The company applied for the zoning change in 2006.
In 2007, the County Council decided it needed an in-depth environmental review that would take more than a year.
During the review process, the company says it paid $162,000 directly to the county’s planning department to prepare a supplemental environmental impact statement, plus $1 million on consultants, for a hearing that was to take place in 2009.
In June 2008, the council voted to remove SR9/US2’s request from the hearing docket and labeled it “do not process further.”
County officials said they had to turn down the request because population estimates showed no need for urban development in that area. The developer sued in King County Superior Court and in June of last year, a judge agreed the county treated the developer unfairly.
The $1.6 million settlement was signed Feb. 4. Michael Reid, a co-manager of SR9/US2, declined to comment.
The Lake Goodwin project is a joint venture between the McNaughton Group of Edmonds and Granite Land Co. of California. In 2006, the joint venture applied for the first of nine separate permits to build adjacent rural-cluster subdivisions on the land northwest of Marysville.
Nearby residents opposed to the development formed a nonprofit group called 7-Lakes.
The group’s founder said Wednesday she was upset by the settlement.
“They rolled over and paid a developer for pushing through crap,” said Ellen Hiatt Watson, who ran for county council in 2009. “I believe that we still have a conservation opportunity and we’ll still be pursuing that.”
Company officials say they plan to build the homes, though Watson said she doubted they would.
The recent legal activity centers around one application for a 49-home subdivision. Dykes reasoned that the developer needed to consider the combined impact of all applications and the 600 houses that would be there after all the subdivisions were built.
Last year, she ordered an environmental impact statement, a move that could delay construction by months and cost hundreds of thousands of dollars.
In December, King County Superior Court judge Paris Kallas overruled hearing examiner Barbara Dykes, calling her order “arbitrary and capricious, and illegal.” The judge’s decision allowed the developer to file a separate damage suit.
County attorneys asked the judge to reconsider, but were turned down.
The $90,000 agreement came on Feb. 26.
“We’re satisfied with the resolution,” said Brian Holtzclaw, the McNaughton Group’s general counsel. “We appreciated coming to a quick resolution.”
Holtzclaw said the company intends to build the homes.
The settlement was significantly lower than the $2 million McNaughton’s leadership initially said the company wanted.
The county’s decision to settle the Lake Goodwin case was intended to minimize risk to taxpayers, said Michael Held, a Snohomish County senior deputy prosecuting attorney who handled the case. The county might have won an appeal, but also risked losing much more than $90,000.
“Obviously, there’s no guarantee the county would prevail,” Held said. “We were confronted with the spectre of damages potentially in the millions of dollars.”
Noah Haglund: 425-339-3465, nhaglund@heraldnet.com.
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