HomeMy WebLinkAbout2007.07.23 - Letter to Michelle Sandoval RE Robert's PropertyCity of Port Townsend
Office ofCity Attorney
250 Madison Street, 92, Port Townsend, WA 98368
Telephone: (360) 385 -5991 Fax: (360) 385 -4290
e -mail: jwatts@gjtyofpt.us
July 23, 2007
Ms. Michelle Sandoval
Windemere Real Estate
1220 Water Street
Port Townsend, WA 98368
Re: Lots 1 -10, Phillips Addition, City of Part Townsend (Roberts /Horton)
Dear Michelle,
OF pQAT pp
This letter follows up on my email to you of June 29. I apologize for the delay, but it took me
some time to prepare this letter and assemble the documents. In my June 29 email, I provided
you information from First American Title that there was no separate deed from Roberts to
Howard for lot 10 in 1992. The only deed from Roberts to Howard was the deed for lots 1 -10
in January 1992. In 1993, Roberts foreclosed on lots 1 -9, leaving Howard with lot 10. I
advised you that this appears to create a problem under the City's critical areas ordinance
CAO). The problem is that if the transaction separating lot 10 from lots 1 -10 occurred after
the effective date of the CAO on October 19, 1992, then (because lot 10 is only 5,000 SF) the
transfer of lot 10 violates the 10,000 SF minimum lot size requirements in the CAO for lots
affected by wetlands. (These emails are #11 in the enclosed table and materials).
On July 20, 2007, Kathy Roberts called me and we briefly discussed this matter. I told her I
was finishing up a letter on the situation, and would mail it to her. I am sending her a copy by
email today, and will also mail the hard copy and attachments to her.
Because the problem affects lot 10 as well as lots 1 -9, I am sending a copy of this letter to Mr.
Thomas Horton, the owner of lot 10 according to the records of Jefferson County.
I am basing my comments on the information I have. If the Roberts or Mr. Horton, or
anyone, has any documents that shed a different light on this matter, or can provide an
analysis that shows my comments to be in error, I would of course want to review that
information or analysis before the City reaches any final decision is this matter.
712312007 City Attorney Page 2
The problem regarding lots 1 -10 and whether or to what extent they can be developed under
the City's existing critical areas regulations came to light as follows: You and Judy Surber of
the City's Planning Department have had several conversations over the last couple of months
about the listing you have for Roberts' lots 1 -9, and what development - given the presence
of wetlands on the property - would be allowed on lots 1 -9 under the City's CAO. The City
has also received recent inquiries from prospective buyers of lots 1 -9 asking about the
development potential of these lots. In the course of reviewing the CAO and other
development issues for lots 1 -9, Judy noticed that the wetland and development issues affecting
lots 1 -9 also affect lot 10, and more so for lot 10 because lot 10 is only 5,000 SF, Because the
CAO requires lots affected by wetlands to have a minimum lot size of 10,000 SF, the question
Judy asked was how did a 5,000 SF lot (lot 10) - substandard in size under our CAO -
become a stand -alone lot. It was in the course of that review that we here at the City became
aware that the separation of lot 10 from lots 1 -10 appears to have occurred after our.CAO was
adopted. If so (as stated above), the separation would not be in violation with the City's CAD,
and would not have been allowed.
I want in this letter to provide you,. the Roberts and Mr. Horton with copies of the documents
I have, my analysis of the documents, andthen with some comments on where we might go
from here. I also provide some comments on the "reasonable use" provisions of the City's
CAO.
1. Separation of lot 10 from lots 1 -10.
The sequence of events as I understand them is set out in the attached table. The documents
that I have are referred to in the table and are separately enclosed. (I don't have all the
documents that are listed in the table.) My review and analysis is preliminary only based on
the information I have. If there are other documents or information that anyone has that might
affect this matter, please let me know.
As set forth in the table, William and Mary Roberts purchased lots 1 -10 in the 1970s. On
January 21, 1992, Roberts conveyed lots 1 -10 to Haran Howard ( #4 in the table). The
Roberts took a deed of trust on lots 1 -9 only ( 0), apparently the earnest money agreement
provided that Howard would get one lot (lot 10) "free and clear ( 0). While the parties may
have intended their 1992 transaction to separate lot 10 from lots 1 -10, the 1992 transaction did
not, in my view, do so. After the deed ( #4) was recorded, lot 10 retained the same tax parcel
number. Lots 1 -10 were still in single ownership (now Howard). The deed of trust for lots 1-
9 did not segregate lot 10 from lots 1 -10 because a deed of trust is a mortgage or security
document and not a conveyance of property by deed. If at the time of this transaction, the
parties had recorded two deeds (one for lot 10 and a separate one for lots 1 -9, or obtained a
separate tax parcel number from the assessor for lot 10), then lot 10 might be considered
segregated or legally divided from lots 1 -10. That did not happen.
The CAO was adopted in October 1992 and became effective October 19. ( #8). The
ordinance came about from requirements of the Growth Management Act (GMA), which
712312007 City Attorney Page 3
requires local jurisdictions to protect environmentally sensitive areas. It requires a minimum
lot size of 10,000 SF for lots impacted by wetlands, and provides for development standards
for lots affected by wetlands. PTMC 19.05.060 (A)(1). At the time the CAO was adopted in
late 1992, Howard owned lots 1 -10. The City provided timely and all legally required notice
of the adoption of the CAO.
After the CAO was adopted, the information I have is that lots 1-9 were foreclosed on by the
Roberts, and conveyed to them by trustee's deed in October, 1993 ( #11), leaving Howard with
lot 10 (a 5,000 SF lot). It is this transaction (lots 1 -9 back to the Roberts, and leaving Howard
with lot 10) that separated the ownership of lot 10 from lots 1 -10.
In 1993, at Howard's request, the assessor assigned a new tax parcel number for lot 10. Prior
to this, lots 1 -10 had a single tax parcel number ( #12). The assignment of a tax parcel
number, done by the assessor for tax purposes, does not mean the property meets the land use
or development standards of the City codes (here the CAO). The assessor doesn't determine
and has no authority to determine whether a lot does or does not comply with City codes.
Whether a lot meets the CAO requirements for lot size is determined by reference to the CAO
and not the assessor records). In fact, lot 10 (at. 5,000 SF) did not comply with the CAO
minimum size requirements.
In 1997, the County foreclosed on lot 10 for nonpayment of taxes, and Horton purchased it at
the foreclosure sale (( #13). The County's foreclosure did not make lot 10 a lot that complied
with the CAO any more than the assessor's assignment of a tax number did. Again, whether a
lot meets the CAO requirements for lot size is determined by reference to the CAO (and not
the County foreclosure action).
If lot 10 was not legally separated from lots 1 -10 before the CAO became effective (October
19, 1992), then the City can not recognize the separation of lot 10 from lots 1 -10, or recognize
lot 10 as a stand -alone lot, because the separation violates the minimum lot size requirement of
the CAO. In other words, if the separation of lot 10 from lots 1 -10 did not comply with the
CAO (in this case, the minimum lot size requirements), the deeds showing separate ownership
do not affect the application of the CAO. Under the City's CAO, the block comprising lots 1-
10 would still be considered one parcel.
I appreciate that the Roberts, Howard, Horton, and the County, may not have realized that lot
10 did not meet the minimum size requirements of the CAO. Nonetheless, the fact remains
that ignorance of the City codes is not a basis to ignore them. I appreciate that if lots 1 -10 are
considered as one parcel, this results in ownership issues that must be sorted out. However,
the CAO -- which the City must abide by - sets minimum lot size requirements that would not
be met if lot 10 were recognized as a stand alone parcel.
2. Reasonable Use a— CAO.
From the wetland delineation done in 2006 by the Roberts' consultant, Loggy, and updated in
April, 2007 (# 17), lots 1 -10 are substantially covered by wetlands. Applying wetland buffer
712312007 City Attorney Page 4
requirements under either the City's 1992 CAO, or the current CAO adopted in 2005, there is
almost no upland area available for a building site or sites.
Judy asked Loggy to identify potential building sites for lots 1 -9, and Loggy identified several
such sites which are shown in the Loggy materials. No application for a permit under the
CAO has been made, and until one is made, the City is unable to determine how the CAO
would apply. However, it appears that the sites identified are all in wetland buffer areas,
meaning they would not be allowed as building sites. In situations where the CAO standards
would prevent all development, the CAO allows a modification or exception of development
standards to give the owner a "reasonable use." While reasonable use is determined on a
case -by -case basis and depends on the facts and circumstances, the reasonable use here - for
lots 1 -10 - may be one building site. Again, until an application is actually submitted,
reviewed and a decision made by the City Development Services Department (DSD), my
comments on reasonable use are preliminary only. The reasonable use provisions of the City's
current CAO, including. application and decision criteria, are at PTMC 19.05.050(D). Under
the reasonable use exception, the development is conditioned to the extent possible to avoid
harm to any wetlands or their buffers. The City's 2005 CAO is available on line
www.cityofpt.us; go to Council; go to Resolutions and Ordinances; go to 2005, then go to
Ordinance 2899).
The question of how the CAO is applied here hinges on whether lot 10 is a stand -alone lot. If
it is, then the CAO (and reasonable use) would apply to allow one building site on lot 10, and
would separately apply to allow one (or possibly more) building sites on lots 1 -9. In other
words, the question is: Do lots 1 -10, considered as a single parcel (if the 1993 separation of
lot 10 is invalid), allow for only one building site under reasonable use, or more than one site?
If only one, then Horton and Roberts need to address where that one site is. If two sites are
available, then Horton and Roberts might cooperate to convey additional Roberts land to
Horton so Horton has.a 10,000 SF property. Again, until the wetland analysis is done for lots
1 -10, and application for CAO permits is made, the City cannot say if there is only one site or
more than one site for lots 1 -10.
I would point out a provision in the CAO that may affect the outcome. The CAO provides
that reasonable use is only allowed to the extent that: "d. The inability of the applicant to
derive reasonable use of the property is not the result of actions by the applicant after the
effective date of the ordinance codified in this chapter or its predecessor... ". PTMC
19.05.050(D)(3)(d). If Roberts helped "cause" the current situation by foreclosing on lots 1 -9
in 1993, does this disentitle Roberts from obtaining reasonable use on lots 1 -9?
3. Next Steps .
First, as stated above, please provide any documents or analysis that shows that lot 10 was
legally separated frpm lots 1 -10 before the 1992 CAO, or that the preliminary interpretations I
have made are incorrect.
712312007 City Attorney Page 5
On June 12, 2007, you, City Manager David Timmons, Judy Surber and I met to discuss what
we knew at that time. In that meeting, Mr. Timmons said there might be a possible solution in
the City purchasing lots 1 -10 for stormwater, conservation and habitat purposes, with proceeds
going as Horton and Roberts agreed. This was merely a suggestion as a possible remedy, and
not an offer to purchase the property. Any purchase would have to be based on a qualified
appraisal and would be subject to City Council approval. If the parties at any point want to
discuss a possible City purchase, please let me know.
I appreciate this is a very complicated and unusual situation. The City is doing its best trying
to sort this out and follow -- as we must - the legal requirements of the City codes
concerning development of parcels affected by the CAO. If the parties would like to meet for
further discussion, please let me know. We would of course like to see some resolution that
works for the parties and that is consistent with the City code.
In the meantime, there is nothing I am aware of which prevents Howard from marketing or
selling lot 10, or the Roberts from marketing or selling lots 1 -9. As set forth above, what
development may be allowed is an open question. The City will tell anyone who inquires
about lots 1 -10 that it appears that there is a problem with the transfer of ownership of lot 10
from lots 1 -10); that from our review the transfer occurred in 1993, after the City adopted the
minimum lot size requirement in the CAO; that lots 1 -10 may be considered a single parcel for
development under the CAO and lots 1 -9 may not be developable as a separate parcel from lot
10; and that lot 10 may not be developable as a separate parcel from lots 1 -9; and that until an
application is made for development under the CAO the City cannot determine what
development would be allowed on lots 1.10.
I am mailing this letter certified mail to the Roberts and Mr. Horton, and also by first class
mail. The attachments are enclosed with the certified mail letter only.
Thank you and let me know any questions.
Sincerely,
John Watts
City Attorney
cc: William Roberts and Mary Kathleen Roberts
P.O. Box 2434
Homer, AK 99603 -2434
Thomas Horton
20114 115't' St. East
Bonney Lake, WA 98391 -7705