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2023.03.15 Code Interpretation1 FORMAL CODE INTERPRETATION DATE: March 15, 2023 TO: Interpretation Notebook FROM: Keith Niven, Director of Community Development SUBJECT: When Development Agreement Amendments Trigger Process VI Review. I. INTRODUCTION Generally, amendments or modifications 1 to development agreements 2 are processed and approved using the amendment process specified in Chapter 19.85 FWRC, Development Agreements, and require no additional review processes under City code. Such an amendment must be done by written instrument, signed by all parties, and processed and decided upon as if it were an application for a new Development Agreement. However, some particular proposals which involve a Development Agreement amendment may require Process VI Review, either alone or in conjunction with the standard Development Agreement amendment process, in order to be approved. Chapter 19.85 FWRC, Development Agreements, authorizes the City to “enter into a development agreement with a person having ownership or control of real property within its jurisdiction” in accordance with RCW 36.70B.170. See FWRC 19.85.020. Chapter 19.85 FWRC specifies the application, negotiation, and hearing requirements, as well as the final decision, method of appeal, and procedures for development agreement modification. See generally FWRC 19.85. An amendment to a Development Agreement is subject to review “as if it were an application for a new development agreement.” FWRC 19.85.200.3 Chapter 19.80 FWRC, Process VI – Council Rezones, provides that certain proposals to “amend the zoning map through a legislative rezone, amend development regulations, or amend the comprehensive plan must be reviewed and decided upon using process VI.” FWRC 19.80.010. 1 This interpretation uses the words “amendment” and “modification” in the context of changes to development agreements interchangeably. 2 This interpretation refers to development agreements, concomitant agreements, annexation agreements, contract rezones, and similar contractual zoning agreements as “Development Agreements.” 3 Similarly, any major modification to a development plan associated with a Development Agreement is also “decided upon as if it were an application for a new development agreement.” FWRC 19.85.210. DEPARTMENT OF COMMUNITY DEVELOPMENT 33325 8th Avenue South Federal Way WA 98003 253-835-7000; Fax 253-835-2609 www.cityoffederalway.com 2 The application, review, and hearing requirements of Process VI are detailed in the chapter, as are the decisional criteria, final action, and method of appeal. See generally FWRC 19.80. The Development Agreement amendment process in Chapter 19.85 FWRC and Process VI review in Chapter 19.80 FWRC are generally distinct processes used for different types of applications. As a result, most Development Agreement amendment proposals will only require review under the process in Chapter 19.85 FWRC. But in some circumstances, a particular proposal to amend a Development Agreement may instead require Process VI review under Chapter 19.80 FWRC, or review under both Chapters 19.80 and 19.85 FWRC. As a result, in order to clarify when Development Agreement amendments trigger Process VI review, the City has elected to issue this code interpretation. See FWRC 19.50.020, .040 (providing that an interpretation may be issued on the City’s initiative to clarify conflicting or ambiguous application of the code). II. ANALYSIS A. Standard of Review and Decisional Criteria. Under FWRC, a code interpretation decision shall be based on: (a) The defined or the common meaning, as applicable, of the words in the provision; (b) The general purpose of the provision as expressed in the provision; and (c) The logical or likely meaning of the provision viewed in relation to the comprehensive plan, this title, the Federal Way Revised Code as a whole, or other plans and studies prepared or adopted by the city. This interpretation outlines four situations 4 where a proposal to amend a Development Agreement would require Process VI review either alone or in addition to the Development Agreement amendment process under Chapter 19.85 FWRC. Specifically, this interpretation determines Process VI review is required when: (1) the Development Agreement specifies an amendment requires Process VI review; (2) the applicant initiates a separate but related application in conjunction with a Development Agreement amendment that requires Process VI review; (3) in review of a site-specific Process VI application, the City Council directs further analysis based on Chapter 19.85 FWRC pursuant to FWRC 19.80.260(e); or (4) the proposed Development Agreement amendment would be inconsistent with the City comprehensive plan absent an accompanying comprehensive plan amendment pursuant to Process VI. 4 While this interpretation covers many of the most common situations where Process VI review might be required as part of a Development Agreement amendment, it is by no means a complete exhaustive list and other situations which trigger the necessity for Process VI review may arise. 3 B. Process VI review is required when the existing Development Agreement specifies that amendment of the Development Agreement shall be processed and approved using Process VI review. Process VI review under Chapter 19.80 FWRC is required instead of review under Chapter 19.85 FWRC if the Development Agreement proposed to be amended contains a provision explicitly providing that amendment of the Development Agreement shall be governed by Process VI. In such a situation, the specific Development Agreement modification provision would control and require amendment of the Development Agreement under Process VI. Development Agreements are contracts, which must “set forth the development standards and other provisions that shall apply to and govern…the development of the real property for the duration specified in the agreement.” RCW 36.70B.170(1); see also FWRC 19.85.030 (same). Such development standards include “review procedures” as well as “[a]ny other appropriate development requirement or procedure.” RCW 36.70B.170(3)(h), (j); see also FWRC 19.85.030(g), (i) (same). A “development agreement and the development standards in the agreement govern during the term of the agreement…and may not be subject to an amendment to a zoning ordinance or development standard or regulation…after the effective date of the agreement.” RCW 36.70B.180 (emphasis added). In other words, Development Agreements are authorized to specify a mechanism of amendment, and such mechanism applies and is not generally subject to modification through later-changed code. See id. As a result, any Development Agreement that specifies amendment of the Development Agreement shall be pursuant to Process VI requires Process VI review for its amendment.5 C. A proposal which seeks to amend the zoning map through a legislative rezone, amend development regulations, or amend the comprehensive plan, while also seeking to amend a development agreement, requires both Process VI review and standard Development Agreement amendment review. Development Agreement amendment review under Chapter 19.85 FWRC and Process VI review under Chapter 19.80 FWRC are both required when a proposal seeks to amend the zoning map through a legislative rezone, amend development regulations, or amend the comprehensive plan (necessitating Process VI approval), while also seeking to amend a development agreement (necessitating Development Agreement amendment approval). For example, an applicant might seek to simultaneously change broadly applicable development regulations that affect their property, while also seeking to amend a development agreement specific to the property.6 Because such a proposal contains a component explicitly requiring Process VI approval, as well as a component explicitly requiring Development 5 Indeed, while outside the scope of this interpretation, Development Agreements may also specify mechanisms for amendment/modification that involve neither Process VI nor the Development Agreement amendment/modification provisions currently in Chapter 19.85 FWRC. 6 While there is no requirement for the two aspects of the proposal to be applied for or considered simultaneously, such a proposal overall would require both approvals, and an applicant would be free to request simultaneous review of both proposals. 4 Agreement amendment, such a proposal would require both Process VI and Development Agreement amendment review and approval. D. City Council directs further analysis under Chapter 19.85 FWRC of a site-specific Process VI comprehensive plan amendment proposal applicable to a property with an existing Development Agreement. A third highly specific and likely very rare situation that would require Development Agreement amendment review under Chapter 19.85 FWRC as well as Process VI review under Chapter 19.80 FWRC could arise if a proposal sought a site-specific comprehensive plan amendment (Process VI) for a property with an existing Development Agreement. In considering a Process VI site-specific comprehensive plan amendment, Council may, pursuant to FWRC 19.80.260(3)(e), recommend preparation of a development agreement prior to final decision on the Process VI. See FWRC 19.80.260(3)(e) (providing that “[i]f the city council determines that a development agreement should be prepared for a site-specific request, the city council shall recommend further analysis based on Chapter 19.85 FWRC, Development Agreements”); see also FWRC 19.85.010, .020 (authorizing development agreements “associated with a comprehensive plan designation and related zoning change”). In normal circumstances, FWRC 19.80.260(3)(e) serves to direct development of a new development agreement in conjunction with a site-specific comprehensive plan amendment. Presumably, however, this provision could also be used to direct development of amendments to an existing Development Agreement in conjunction with a site-specific comprehensive plan amendment as well. E. Process VI approval is required if the proposed Development Agreement amendment would violate, be inconsistent with, or result in a de facto amendment to the comprehensive plan absent an accompanying comprehensive plan amendment under Process VI. Finally, while unlikely, a proposed Development Agreement amendment could potentially violate, be inconsistent with, or result in a de facto amendment to the existing comprehensive plan, and therefore, be subject to potential challenge absent an accompanying comprehensive plan amendment under Process VI. See RCW 36.70B.170(1) (requiring that a development agreement be “consistent with applicable development regulations”); see also RCW 36.70A.040 (requiring development regulations to be “consistent with and implement the comprehensive plan”); RCW 36.70A.120 (requiring that a jurisdiction “perform its activities…in conformity with its comprehensive plan”); Alexanderson v. Bd. Of Comm’rs, 135 Wn. App. 541, 548–50, 144 P.3d 1219 (2006) (invalidating an adopted contract memorandum of understanding that explicitly permitted a use directly inconsistent with the comprehensive plan and finding the memorandum of understanding was therefore a de facto amendment to the comprehensive plan). Determining whether a particular proposed Development Agreement amendment would potentially conflict or be inconsistent with the comprehensive plan—thus requiring an accompanying Process VI comprehensive plan amendment—requires a case-by-case inquiry. 5 Clearly, however, simple amendment of an existing Development Agreement would not alone be enough to require an accompanying comprehensive plan amendment without clear indication that the amendment would create a direct conflict or inconsistency with the comprehensive plan. For example, the comprehensive plan designations map (Map II-1) in the land use chapter of the City comprehensive plan displays the different land use designations in the City, and includes a key of “Special Conditions” which identifies currently applicable Development Agreements and the associated Ordinance Nos. for those Development Agreements in the City. Modification or amendment of one of the existing Development Agreements included in the Special Conditions key—thus potentially necessitating minor administrative updates to the map—would not alone create any conflict or inconsistency because changing the key does not substantively impact the map or associated designations, nor does merely changing the key conflict with any aspect of the purpose and function of the comprehensive plan land use designations. Similarly, a Development Agreement amendment that simply serves to modify development regulations applicable to a property, or to add an allowable use which does not create a conflict with the comprehensive plan designation nor permit what the comprehensive plan prohibits would similarly not require an associated Process VI. On the other hand, a Development Agreement amendment that seeks to allow a use directly inconsistent with the comprehensive plan designation applicable to the property, or that would otherwise create a direct conflict with an aspect of the comprehensive plan would likely require an associated comprehensive plan amendment under Process VI to prevent an inconsistency or de facto amendment challenge to the Development Agreement amendment. See Alexanderson, 135 Wn. App at 548–50. III. CONCLUSION In summary, Development Agreement amendments are generally processed and approved using solely the amendment process specified in Chapter 19.85 FWRC, Development Agreements, and require no additional review processes under City code. As explained above, however, some particular proposals which involve a Development Agreement amendment may require Process VI Review, either alone or in conjunction with the standard Development Agreement amendment process, in order to be approved.