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HomeMy WebLinkAboutRes 1419 - Findings, Conclusions & Decision on SBD Inc's Request for Hardship Exemption ,�J:• q a 4 c D i0 6) 1908 u City of Washington Resolution No. nrl 9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ADOPTING THE CITY COUNCIL'S FINDINGS, CONCLUSIONS, AND DECISION REGARDING SBD, INC.'S REQUEST FOR A HARDSHIP EXEMPTION UNDER ORDINANCE 1867. WHEREAS, in accordance with the hardship exemption provision in Section 8 of Tukwila Ordinance No. 1867, SBD, Inc. requested a hearing asserting that it suffers an unusual and unreasonable hardship as a result of the moratorium imposed by Ordinance No. 1867; and WHEREAS, the City Council conducted an open record public hearing on SBD, Inc.'s request for a hardship exemption on May 17, 1999 and May 24, 1999; and WHEREAS, the City Council has requested the City Attorney to prepare the Council's Findings and Conclusions consistent with its directions regarding SBD, Inc.'s request; and WHEREAS, the City Council has reviewed the Findings, Conclusions and Decision and desires to adopt the same through passage of a resolution; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Findings and Conclusions. City Council hereby adopts the Findings and Conclusions attached hereto as Exhibit A by reference as the Council's Findings and Conclusions on SBD, Inc.'s request for a hardship exemption under Section 8 of Ordinance No. 1867 as if fully set forth herein. Section 2. Decision. City Council denies SBD, Inc.'s request for a hardship exemption based on City Council's Findings and Conclusions. PASSED BY THE CITY COUNCg,OF THE CITY iF TUKWILA, WASHINGTON, at a Regular Meeting thereof this 7 7 day of I .1999. l -4-4----- Dave Fenton, Council President ATTEST AUTHENTICATED: am- elf.4 J E. Cantu, CMC, City Clerk APPROVED AS TO FORM: Y: ,Z., :r Offiof the City rney Filed with the City Clerk: c i 79 Passed by the City Council:_ 7 9 Resolution Number $/9 SBD HARDSHIP REQUEST 6/3/99 EXHIBIT A (Attach to Res. #1419) City Council's Findings, Conclusions, and Decision City Council for the City of Tukwila, Washington, having first conducted an open record public hearing on May 17, 1999 and continued on May 24, 1999, having first considered the testimony offered during the hearing, and having first considered all of the written exhibits submitted for the record, now enters the following findings and conclusion and issues its decision below. I. Findings. A. Procedural History. 1. On February 1, 1999 the City Council passed Ordinance No. 1867 which imposed a moratorium "upon the filing of applications for business licenses, building permits, development permits or any other permits or approvals required for food or drink establishments seeking to conduct gambling activities, whether as a principal use or as an accessory use, including social card games, punch boards, or pull tabs, and a moratorium on the same fro establishments seeking to expand their operations if currently conducting gambling activities, including social card games, punch boards, or pull tabs." 2. On April 14, 1999, SBD, Inc. requested a hearing pursuant to Section 8 of Ordinance No. 1867 asserting that it has suffered an unusual and unreasonable hardship as a result of the moratorium and that a hardship waiver for SBD Inc. would not be contrary to the intent and purpose of Ordinance No. 1867. 3. On May 17, 1999 City Council conducted an open record public meeting on SBD, Inc.'s request. That hearing was left open and was continued to May 24, 1999 so that Council could receive further information and take additional testimony regarding on the hardship issue. 4. On May 24, 1999 City Council closed the hearing and indicated that it would issue findings and conclusions at the next regular City Council Meeting, June 7, 1999. B. Factual Findings. 1. SBD, Inc. owns and operates the Riverside Casino located at 14060 Interurban Avenue S., Tukwila, Washington. 2. SBD Inc. does not own the real property on which the Riverside Casino is situated. The BBN Trust owns that property. BBN Trust is the lessor and SBD Inc. is the lessee of the premises. 1 3. SBD Inc. seeks to expand its operations by developing another casino establishment immediately adjacent to Riverside Casino at 14040 Interurban Avenue S. 4. SBD Inc. does not currently own the property, which is the site for its proposed casino development. SBD Inc. asserts that it has an option to purchase that property. 5. To further its plans for developing the additional casino, SBD Inc. requested a pre- application meeting with City staff. The pre- application meeting was conducted on September 3, 1998. 6. On December 29, 1998 SBD Inc. submitted various permit applications to the City, including, a conditional use permit application, design review application, shoreline permit application, and a SEPA checklist and application. 7. SBD Inc. expended $2,625.00 in permit application fees. 8. On January 22, 1999, the City's Department of Community Development issued to SBD Inc. two separate notices of incomplete applications. Those notices indicated that SBD Inc.'s applications were incomplete for several reasons. 9. By letter dated February 8, 1999 the City's Department of Community Development outlined what measures SBD Inc. might pursue during the effect of the moratorium, short of submitting applications to the City, to further SBD Inc.'s development interests. The letter cautioned that any such pursuits would be taken at SBD Inc.'s peril as the City has not yet decided how it will address gambling establishments in its land use considerations. 10. SBD Inc.'s current development plans require the vacation of a portion of Maule Avenue within the City of Tukwila. 11. In 1994 SBD Inc. sought the vacation of a portion of Maule Avenue. The vacation sought at that time was unrelated to the current project proposed by SBD Inc. 12. On May 2, 1994, the Tukwila City Council passed Ordinance No. 1702 which provided for the vacation of Maule Avenue between S. 141st St. and S. 141st Pl. 13. The vacation, however, is contingent upon the completion of all of the requirements of an agreement entered into by SBD Inc., the City and BBN Trust. The requirement that all of the obligations of the agreement be performed before vacation was a condition City Council imposed in lieu of monetary consideration for the vacation. The agreement was attached to the ordinance and incorporated by reference into the ordinance. 14. Despite the passage of more than four years since the passage of Ordinance No. 1702 and since the signing of the agreement attached to it, the parties to the 2 agreement have not fulfilled its requirements. As a result, Maule Avenue has not yet been vacated. The agreement attached to Ordinance No. 1702 provided that the parties must perform all of its provisions within a year of its execution. 15. Because SBD Inc.'s development proposal requires that a portion of Maule Avenue be vacated, the lack of street vacation has impaired its ability to go forward with its proposed project. 16. SBD Inc. claims that BBN Trust has wrongfully delayed complying with agreement and, as a result, has caused the delay of the street vacation. 17. BBN Trust claims that it cannot comply with the terms of the agreement because the agreement requires BBN Trust to construct a parking lot on property that BBN Trust does not own. According to BBN Trust, it is unclear who owns the property. 18. SBD Inc. also asserts that there is an issue of whether the City's right of way relating to 140th street is actually located within the street. SBD Inc. asserts that this issue has impacted its ability to complete its applications for it proposed project. The 140th street issue is not indicated in either of the January 22, 1999 notices of incomplete applications as a basis for the finding of incompletion. 19. SBD Inc., and its proposed expansion, is on the Washington State Gambling Commission's list of businesses that may potentially receive a mini casino license. 20. SBD Inc. is the only business on the State list in Tukwila that submitted permit applications to the City prior to the effective date of the moratorium. 21. Other businesses have indicated a desire to expand current gambling operations, but failed to file permit applications before the effective date of the moratorium. 22. The Silver Dollar Casino located at 14027 Interurban Avenue S., Tukwila, Washington, seeks a hardship waiver in the event City Council decides to grant hardship relief to SBD Inc. 23. SBD Inc. indicates that it has expended approximately $200,000 in its casino expansion and development efforts, this figure includes the permit application fees, other costs associated with its proposed development and money expended for an option to purchase the property where its proposed project will be situated. 24. SBD Inc. indicates that it has gross monthly revenue in excess of $600,000. 25. Ordinance No. 1867 was adopted in February, 1999 to halt the unstudied and unplanned proliferation of gambling establishments within the City until the City could 3 study and properly provide for such land uses within it Comprehensive Plan, Zoning Code and Development Regulations. 26. City Council specifically rejected the notion that, because some gambling establishments currently exist on Interurban Avenue, additional gambling establishments should be permitted in the same area when it adopted Ordinance No. 1867. 27. City Council could potentially decide, after the moratorium is lifted, to ban all gambling within Tukwila as provided for in state law. II. Conclusions. 1. SBD Inc.'s failure to submit complete permit applications prior to the effective date of the moratorium does not give rise to an unusual or unreasonable hardship. When SBD Inc. failed to submit "complete" permit applications it did not "vest" in its ability to go forward with the proposed project. All businesses within the City of Tukwila are subject to the same constraint. Like SBD, Inc., other business seeking to expand their casino operations (i.e. Silver Dollar Casino), are subject to the moratorium because those businesses did not submit complete permit applications to the City prior to the effective date of Ordinance No. 1867. 2. SBD Inc.'s assertion that its situation is unusual or unique and that it suffers an unreasonable burden under the moratorium due to circumstances beyond its control is not persuasive. SBD Inc. claims that the actions of a third party, BBN Trust, has prevented the vacation of Maule Avenue. SBD Inc. was a party to an enforceable agreement, the terms of which were to be executed prior to the vacation of Maule Avenue. BBN Trust, according to the terms of that agreement, was to perform its obligations within a year of execution. When BBN Trust did not do so, SBD Inc. could have pursued remedies available to it over the past several years to ensure compliance with the agreement in order to obtain the vacation of Maule Avenue. When SBD Inc. submitted permit applications to the City prior to vacation of Maule Avenue, its submission was premature. It did so with knowledge that Maule Avenue had not yet been vacated. Whether Maule Avenue will ever be vacated is questionable due to issues raised by BBN Trust. BBN Trust asserted that it cannot complete its obligations under the agreement because it does not own the property on which it is to perform its obligation. BBN further asserts that the ownership issue is unresolved. Thus, it is questionable whether SBD Inc. would be able to submit complete permit applications, even if the moratorium was not in effect. Given what BBN Trust has alleged regarding its obligation to perform under the agreement and given the time that has elapsed since the passage of Ordinance No. 1702 without performance on the agreement, (which agreement required performance of all the obligations within a year of its execution), it is uncertain when Maule Avenue will be vacated or whether Maule Avenue will ever be vacated. 4 3. SBD Inc.'s permit applications were incomplete for other reasons, in addition to the Maule Avenue vacation issue. None of the reasons for incomplete application demonstrates an unusual or unreasonable hardship on SBD Inc. There are several other reasons why SBD, Inc.'s permit applications were deemed incomplete. These other issues are not created by any third party. These other issues are the same types of issues that could potentially face any developer when submitting permit applications. The moratorium would have affected any other similarly situated applicant in the same manner. Thus, SBD, Inc.'s situation is neither unique nor constitutes an unreasonable hardship. 4. Requiring SBD Inc. to put its development plans on hold during the moratorium is not an unusual or unreasonable hardship. All affected businesses or prospective businesses must put their plans on hold as a result of the moratorium. The City in it's February 8, 1999 letter to SBD Inc. indicates that SBD Inc. could take several steps in moving toward its development goals, short of submitting applications to the City. SBD Inc., as a business decision, chose not to pursue any of those options and chose to place its development plans on hold, including those things that it could have done short of submitting permit applications to the City. 5. SBD Inc.'s inability to expand its business is not an unusual, unique or unreasonable burden. SBD Inc. currently owns and operates the Riverside Casino. SBD Inc. is essentially seeking to expand its business to occupy the property adjacent to the Riverside Casino. SBD Inc.'s inability to expand its operations due to the moratorium is not unique. Other existing casinos (i.e. Silver Dollar Casino) have indicated a desire to expand and cannot do so because of the moratorium. 6. Monetary impact alone is not an unusual, unique or unreasonable burden. The inability to expand or develop gambling operations at this time undoubtedly leads to the loss of potential revenue to those businesses seeking to expand or develop such business. Development regulations, in general, may change and such changes may financially impact developers. If a development regulation changes and a developer submitted a "complete" permit application before the regulation changes, the developer "vests" in the old regulation and need not comply with the new regulation. If a developer submits an application that is not complete and does not vest, that developer cannot argue that it should not be bound by the new regulation simply because the developer expended money towards its development project or towards the submission of a permit application in anticipation that regulations may not change. The vesting rule applies universally without regard to such economic impacts. Similarly, the moratorium is a development regulation that has impacted SBD Inc. monetarily. This alone does not dictate that SBD Inc. should be relieved from the effect of the moratorium. Moreover, SBD Inc.'s stated expenditures on the proposed project are not substantial in relation to the revenue its current business operation generates. The Riverside Casino is financially flourishing. SBD Inc. is merely prevented by the moratorium from expanding its operation at this time. 5 7. The burden the moratorium suffers on SBD Inc. may actually serve to protect SBD Inc. At this time SBD Inc. is unable to go forward with its proposed development project. If SBD Inc. is provided a hardship waiver, it will likely proceed with its development plans and it will likely expend greater sums of money in doing so. It would, however, do so at its own peril. After the moratorium expires City Council must decide how it will address the gambling establishment issues. City Council could potentially ban all gambling establishments in the City pursuant to state law. Under such a scenario, SBD Inc. would suffer much greater financial losses if it has proceeded forward with its proposed development. Thus, the moratorium not only provides the City with the needed time to study the issues; it also provides developers, like SBD Inc., some protection from investing in a venture that potentially may be banned. 8. Providing SBD Inc. with a hardship waiver would be contrary to the intent and purpose of the moratorium. As indicated in Findings No. 25 and 27, City Council is still uncertain how it will ultimately address gambling establishments in the City's Comprehensive Plan, zoning code and development regulations. The intent of moratorium was to afford the City time to study the issues to make determinations in the best interest of the City as a whole. Allowing the development of an additional casino establishment in the face of this uncertainty is clearly contrary to the intent and purpose of the moratorium. III. Decision. SBD Inc.'s request for a hardship waiver is DENIED. SBD Inc. has not demonstrated an unusual or unreasonable hardship. A hardship waiver under the circumstances would be contrary to the intent and purpose of Ordinance No. 1867. This decision is based upon the City Council's findings and conclusion set forth above 6