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Development Agreements to Mitigate the Impacts of Development (RCW 82.02.020) and “Discretionary” Development Agreements

Carol A. Morris
Morris Law, P.C.
3304 Rosedale Street N.W., Suite 200
Gig Harbor, WA 98380

1 Speech delivered before the Washington State Association of Municipal Attorneys (2015).

A. What is a “Development Agreement?” A development agreement is a contract entered into between a property owner and a municipality to address the issues that may arise during the lengthy and expensive project planning and construction process. It may address any number of development issues, including, but not limited to, conditions of annexation, extension of vested rights, the responsibility of each party for infrastructure installation, timing of such installation for phased developments, dedications, payment of fees to the municipality and code enforcement. 1

B. What is a “Development Agreement to Mitigate the Impacts of Development (RCW 82.02.020)?” Not all development agreements are the same. Consider the situation in which a developer submits an application for a preliminary plat to the city, and the city determines from a traffic study that off-site road improvements are reasonably necessary as a direct result of the preliminary plat. 2 If the city were to impose a fee, tax or charge on the development, even if that were used for payment of off-site road improvements, it triggers RCW 82.02.020 (which generally prohibits such fees, taxes or charges). However, RCW 82.02.020 creates an exception for “voluntary agreements” that allow payment in lieu of dedication of land or to mitigate a direct impact that has been identified as a direct result of a proposed development, subdivision or plat.

Although RCW 82.02.020 uses the term “voluntary agreement,” developers have argued that where the local government’s approval of the proposed permit application is conditioned upon the agreement’s execution, such agreements are not voluntary.3 The Washington courts have disagreed, finding that:

within the context ofRCW 82.02.020, the word ‘voluntary’ means precisely that the developer has the choice of either (1) paying for those reasonably necessary costs which are directly attributable to the developer’s project or (2) losing preliminary plat approval. The fact that the developer’s choices may not be between perfect options does not render the agreement ‘involuntary’ under the statute. . .. Moreover, [the developer] does not claim that he has absolute right to receive plat approval, he clearly does not. The county is authorized to withhold plat approval if appropriate provisions have not been made for the public health, safety and general welfare.4

Usually, approval of the project permit decision will include the condition to mitigate the impacts from the direct result of the development. However, there are any number of reasons that a city and developer may enter into a separate development agreement addressing the mitigation. For example, a developer may be required to install a right hand turn lane to address the traffic impacts of the development. The city may be planning a transportation improvement project in the next five years5 to include a right hand turn lane in that location. The parties may enter into a development agreement that requires the developer to pay the cost of this right hand turn lane to the city, and the city will construct the improvement.

There are other reasons to incorporate mitigation conditions in a development agreement. Take the […]

2017-01-12T22:43:40+00:00 June 28th, 2016|Model Development Code|