See the running update in previous post here.

Analysis:

The Sammamish City Council spent a great deal of time on the Ace problem last night and in the end directed the City Attorney, Bruce Disend, to meet with Ace’s attorney to see if a developer’s agreement could be reached.

Ace’s attorney argues that a Developer’s Agreement will enable the City to compress permitting processes and essentially bypass environmental regulations–or mitigate them–in a way that makes building Ace on an environmentally constrained property feasible.

Ace also has retained a company called Watershed to come up with a mitigation plan. The principal of Watershed is Bill Way, who lives on the Lake Sammamish waterfront in our City. I’ve known Bill for years and he is a stand-up guy, dedicated to protecting the environment. His company has come up with creative ways to do so, including for the widening of 228th and its impact on George Davis Creek, as well as Skyline and Eastlake high school projects. This creek runs through the properties involved in the Ace proposal.

Way has in the past contracted with the City. He knows what he’s talking about and if mitigation can be found, he will be the one to find it.

But as complex as this is, the environmental mitigations are the least of the problems facing Ace. As the staff presentation indicates, there are a host of challenges that have to be overcome and the timing is too daunting to do it, something I’ve been referencing for some time. Ace needs to break ground by March 1 or shortly thereafter. Rezoning, local, state and federal permitting reviews are needed, environmental regulations have to be addressed and, in the view of staff, changed, and so on.

Ace’s attorney essentially takes the position that a Development Agreement (DA) is the magic wand that can solve all these problems. But the City Attorney, Disend, and an outside attorney consulted by the City, differ.

Council Member John Curley slipped last night at the end of the Ace discussion and revealed that a Confidential memo from Disend concluded that a Development Agreement wasn’t possible. Curley didn’t say why–whether it is the concept of the Agreement itself, for which the City Code doesn’t currently contain provisions to allow for one, or for other reasons. But this is the City’s general counsel and his opinion carries great weight.

Ace’s attorney says the Council can adopt a Development Agreement by Resolution–an ordinance isn’t necessary.

But more problematic is the opinion of outside counsel the City consulted, a Seattle-based law firm that specializes in representing governments, including land use issues. This attorney said DAs, while a good tool that serves as a contract and which is governed by contract law, these still must confirm with code and comprehensive plans. He’s never seen one that can essentially bypass regulations or incorporate a commercially-based Reasonable Use Exception, another key element to the Ace proposal. He said legal challenges would be likely (which then would blow the Ace timeline anyway) and there is no case law to support the thesis advanced by Ace’s attorney–Sammamish would be breaking new ground.

Breaking new ground is not new for Sammamish; it’s done so in the past on issues like traffic impact fees and some of the Town Center concepts. But this is different. The City Attorney and this outside specialist-attorney say it can’t be done in this case, and the latter says doing so will all but invite lawsuits and appeals.

Setting aside for the moment that any legal action or appeal will kill the project before it gets off the ground, let’s look at the legal opinions from the viewpoint of the City Council. These officials are elected to set policy for the City, which includes taking–or avoiding–actions that minimize the risk of legal liabilities. You have two attorneys giving advice here, both of whom focus on municipal law, including land use and environmental regulations, and both say a developers’ agreement won’t work. One says proceeding is all but inviting legal action.

From a fiduciary standpoint, the City Council would be unwise to ignore these legal opinions. I even think there might be personal liabilities at risk in such circumstance, although clearly the City would cover legal representation. I have to wonder what the City’s insurance company would think about covering liabilities in such a case, in which action is taken in the face of these clear legal opinions.

Nonetheless, the Council directed Disend to meet with Ace’s attorney to see if a Development Agreement can be crafted.

But this doesn’t necessarily solve the permitting reviews that would be required by state and even federal laws. Since when have we seen the state and federal governments move quickly on anything?

The City Staff has worked for 13 months to try and find a solution. While I believe there have been a couple of missed opportunities to succeed, it hasn’t been for the lack of trying. I think the City Council as a whole got involved too late to give a push for resolution. Individual Council Members were involved, though I’m also told by two of them and by Ace that the City Manager invited them to stay out of an administrative process. This sounds bad, but in fact there are legal reasons for this. Still, Council should have weighed in long before now. And give credit to the City Manager: he obtained a year’s lease extension for Ace from Regency to give time to find a solution.

I think there were mistakes made by the City, to be sure, but give credit where credit is due: it’s worked very hard to try and find a solution, and the effort isn’t over yet.

I’ve opined previously I just don’t see logistically how this project can be approved in the next 50 days. I hate to say it, and I sure don’t want it to be true, but I think it highly likely we’re facing a Sammamish without Ace Hardware.