Developer files $15 million claim against Gig Harbor

City Council members named in battle over Courtyards at Skansie

Nate Hulings

of the Gateway

A $15 million claim was filed against the City of Gig Harbor last week, naming city council members and alleging they purposefully delayed and interfered with a previously approved housing development.

Named in the claim, filed by Patrick Palace, a lawyer for local developer Gordon Rush, are current council members Steven Ekberg, Derek Young, Jim Franich, Paul Conan, Timothy Payne, Paul Kadzik and Ken Malich. Former council member Bob Dick is also named.

Claims provide a 60-day period for parties, in this case the City of Gig Harbor, to investigate the validity. If a settlement is not reached, a lawsuit can be filed.

The claim has been turned over to the city’s insurer for investigation, said Angela Belbeck, Gig Harbor city attorney.

Payne, one of the council members named in the claim, declined to directly comment. However, he did say there are several council members working to understand their options.

The Courtyards at Skansie Park is a proposed 174-lot plat on 18.8 acres of property at the northeast corner of Hunt Street and Skansie Avenue.

Rush’s vision for the development is to provide homes that middle-class families can afford, Palace said. He estimated home pricing in the “low 200s.”

Palace said the development could have provided 250 jobs and generated nearly $30 million for the city and its citizens. He also said that, in the past few years, the city has passed new ordinances that would drive up the cost of the proposed development.

These losses, coupled with Rush’s claim that the council “acted outside of the law” and “abused the legal process” were the main reason for the claim.

“This is really a case of last resort,” Palace said. “All my client is asking is to be put back where he was when the Hearing Examiner approved his plan.”

How did we get here?

Decisions have fallen in Rush’s favor dating back to 2006, when the Gig Harbor Hearing Examiner reviewed the plan for the Courtyards at Skansie Park development. In January 2007, the Hearing Examiner approved the 174-lot development with the stipulation that the developer adjust open space calculations.

In his decision, Michael Kenyon concluded that Planned Residential Developments and Residential-Business 2 requirements “can, and should be read harmoniously,” according to Court of Appeals documents.

He did have an issue with the inclusion of area setbacks in open space requirements and asked for North Pacific, one of Rush’s companies, to revise its calculations to meet the 30 percent open space requirement.

During a February 2007 City Council meeting, the council voted 5-2 to appeal the Hearing Examiner’s findings. A Land Use Petition appeal was filed in Superior Court two days later.

North Pacific also appealed the Hearing Examiner’s open space recalculation.

In September 2008, the Superior Court affirmed the Hearing Examiner’s decision for the development and also overturned the open space requirement.

Less than three weeks later, the City Council voted unanimously to appeal the decision.

The Washington State Court of Appeals then heard the city’s case. The city asked the court to reconsider the Hearing Examiner ruling to approve the application for a conditional use permit, allowing 11.75 units per acre for the proposed development.

RB-2 zoning, according to Gig Harbor Municipal code at the time of North Pacific’s application, allowed up to 12 units per acre with a conditional use permit, according to Court of Appeals documents.

The city argued that a PRD would require a rezone and that it also conflicted with the Comprehensive Plan.

In his written opinion, Judge J. Robin Hunt outlined and critiqued the city’s arguments.

“The City argues that North Pacific cannot use a PRD to build an increased density because it conflicts with the underlying RB-2 zoning; and count perimeter setback areas toward the requirement PRD 30-percent ‘open space’ calculation,” he wrote in his analysis. “These arguments fail.”

The Court of Appeals affirmed the Hearing Examiner’s decision that the “proposal falls within the density limits established for the underlying zone.”

Planned Residential Development also requires at least 30 percent of open space, a requirement the court said North Pacific met in its proposition. Despite using buffer acreage in open space calculations, the developers provided the required buffers and perimeter setbacks that conform to the Gig Harbor Municipal Code requirements, according to Court of Appeals documents.

Upon this decision, the City Council unanimously approved a motion to have legal counsel prepare a Motion to Reconsider for the Court of Appeals. That appeal was denied.

The city’s appeals went to the Washington Supreme Court, where it was denied review.

Reach Reporter Nate Hulings at 253-853-9243 or by e-mail at nate.hulings@gateline.com.