Urban Renewal Comm'n of Or. City v. Williams

322 Or.App. 615

521 P.3d 494

URBAN RENEWAL COMMISSION of the City of Oregon City, Plaintiff-Respondent Cross-Appellant,

v.John F. WILLIAMS, Jr., Defendant-Appellant Cross-Respondent,andThomas J. O'Brien, Defendant,

and

City of Oregon City, a municipal corporation of the State of Oregon, Defendant-Respondent Cross-Respondent.

Urban Renewal Commission of the City of Oregon City, Plaintiff-Respondent Cross-Respondent,

v.John F. Williams, Jr., Defendant-Appellant Cross-Respondent,andThomas J. O'Brien, Defendant,

and

City of Oregon City, a municipal corporation of the State of Oregon, Defendant-Respondent Cross-Appellant.

A167583

Court of Appeals of Oregon.

Argued and submitted December 10, 2020.

November 16, 2022

Jesse A. Buss argued the cause and filed the briefs for appellant-cross-respondent.

Gabriel M. Weaver and William K. Kabeiseman argued the cause for respondents-cross-appellants and respondents-cross-respondents. Also on the joint combined answering and cross-opening brief were Ciaran P. A. Connelly and Ball Janik LLP; and Bateman Seidel Miner Blomgren Chellis & Gram, P.C. On the joint reply brief on cross-appeal were William K. Kabeiseman and Bateman Seidel Miner Blomgren Chellis & Gram, P.C.; and Gabriel M. Weaver and Ball Janik LLP.

Before Ortega, Presiding Judge, and Shorr, Judge, and Powers, Judge.

ORTEGA, P. J.

This declaratory judgment action concerns a local initiative that amended the Oregon City Charter, adding section 59E, which purports to restrict urban renewal activities in the city. Defendant Williams was a proponent of the initiative. The Urban Renewal Commission of the City of Oregon City (URC) brought this declaratory judgment action against Williams and the City of Oregon City, seeking to have section 59E declared unconstitutional under Article IV, section 1(5), of the Oregon Constitution, and declared preempted by the urban renewal statutes in ORS chapter 457. The city, although a defendant in the action, is aligned with URC's position in this case. On cross-motions for summary judgment, the trial court granted summary judgment to Williams on URC's claim that section 59E violates Article IV, section 1(5), and granted summary judgment to URC on its preemption claim, declaring that section 59E was preempted and unenforceable. Williams appeals from the judgment, arguing that section 59E is not preempted by state law. URC and the city cross-appeal, arguing that section 59E violates Article IV, section 1(5). On Williams's appeal, we affirm the trial court, concluding that section 59E is preempted by ORS chapter 457, that ORS chapter 457 does not violate the city's home rule, and that nothing of section 59E survives that conclusion. Based on that disposition, we dismiss as moot both the cross-appeal and Williams's motion to dismiss the cross-appeal for lack of jurisdiction.

The relevant facts are undisputed. Williams was the proponent of a local initiative to amend the Oregon City Charter, the purpose of which was to curtail urban renewal activities in the city. The voters passed the initiative in 2016 and it became section 59E in the city charter. Section 59E provides:

"After June 30, 2016, the City of Oregon City, the Urban Renewal Agency of the City of Oregon City, or any agency created in whole or in part by the city, whether acting alone or in concert with other persons, entities or agencies:

"(a) Shall not finance, or authorize the financing of, any urban renewal plan or project, in whole or in part, with tax increment financing revenues,^[1]

"(b) Shall not borrow or spend, or authorize the borrowing or spending of, money to buy land or property for the purpose of urban renewal, or the development of property not owned by the city.

"(c) Shall use any and all existing tax increment revenues solely for the purpose of retiring existing Urban Renewal Agency debt."

URC operates under a current urban renewal plan approved by the city. That plan provides for tax increment financing for urban renewal projects and for URC to acquire property for those projects. Shortly after the voters adopted section 59E, URC brought this declaratory judgment action seeking to invalidate it. URC alleged that section 59E was invalid under Article IV, section 1(5), as an administrative, and not legislative, action and was preempted by ORS chapter 457. URC moved for summary judgment on both bases, and Williams cross-moved for summary judgment.

The trial court first concluded that section 59E was legislative in nature because the prohibitions contained in that section "are policy decisions of general applicability and of a lasting duration." As a result, it granted summary judgment to Williams on URC's claim that section 59E was unconstitutional. The trial court next concluded that all three parts of section 59E are preempted by ORS chapter 457 because the two laws could not operate concurrently. Because the court determined that all parts of section 59E are preempted, the court did not reach Williams's arguments regarding severing the preempted portions such that the remainder of section 59E could remain enforceable. The court therefore granted summary judgment to URC on that basis. The court entered a judgment declaring:

"1. Section 59E of the Oregon City Charter is legislative in nature.

"2. Section 59E is preempted by ORS Chapter 457. Section 59E cannot operate concurrently with ORS Chapter 457. The Court does not reach the question of the severability of the provision of [section] 59E.

"3. Section 59E of the Oregon City Charter is not enforceable."

This appeal and cross-appeal followed.

As explained in La Grande/Astoria v. PERB , 281 Or. 137, 142, 576 P.2d 1204, aff'd on reh'g , 284 Or. 173, 586 P.2d 765 (1978) :

"[T]he validity of local action depends, first, on whether it is authorized by the local charter or by a statute, or if taken by initiative, whether it qualifies as ‘local, special (or) municipal legislation’ under [A]rticle IV, section 1 (5); second, on whether it contravenes state or federal law."

URC and the city's cross-appeal addresses the first half of that inquiry and Williams's appeal addresses the second. Because we conclude on Williams's appeal that the trial court did not err, we do not reach the cross-appeal or Williams's motion to dismiss the cross-appeal.

On appeal, Williams argues that section 59E is not preempted by ORS chapter 457 because both laws can be complied with concurrently. Williams asserts that ORS chapter 457 only authorizes the creation of an urban renewal program and that it does not require a program or that the program has certain features. Because section 59E, Williams argues, only has placed certain policy limits on the city's program, it is not in conflict with ORS chapter 457. Williams further argues that, even if the two laws are in conflict, section 59E controls under the city's home rule. Finally, Williams argues that, even if section 59E does not control, the trial court should have severed the preempted portions of section 59E and preserved the remainder.

URC responds that Williams is viewing the issue with the wrong frame because URC is a separate public body from the city under ORS chapter 457. As such, URC argues that it is not governed by the city charter; it is governed by the urban renewal plan, and the city—through section 59E of the city charter—cannot take away powers from URC that are authorized in the current plan without amending the plan using the process set forth in ORS chapter 457. As result, URC asserts, ORS chapter 457 expressly preempts section 59E, or, to the extent it is not expressly preempted, it is implicitly preempted, because section 59E is fundamentally incompatible with the statutory scheme. Finally, URC responds that Williams did not properly preserve his severance argument and, to the extent he did, all of section 59E is preempted.

In addressing the parties’ arguments, we start with the legal framework we must apply to determine whether section 59E contravenes state law. La Grande/Astoria , 281 Or. at 142, 576 P.2d 1204. La Grande/Astoria explains the analytical process:

"[T]he first inquiry must be whether the local rule in truth is incompatible with the legislative policy, either because both cannot operate concurrently or because the legislature meant its law to be exclusive. It is reasonable to interpret local enactments, if possible, to be intended to function consistently with state laws, and equally reasonable to assume that the legislature does not mean to displace local civil or administrative regulation of local conditions by a statewide law unless that intention is apparent. However, when a local enactment is found incompatible with a state law in an area of substantive policy, the state law will displace the local rule."

Id . at 148-49, 576 P.2d 1204 (internal citations omitted). Thus, the question is whether section 59E is incompatible with ORS chapter 457, "either because both cannot operate concurrently or because the legislature meant its law to be exclusive." Id. If a party is relying on the latter, the legislative intention to preempt local laws must be unambiguous. Rogue Valley Sewer Services v. City of Phoenix , 357 Or. 437, 454, 353 P.3d 581 (2015).

We turn to ORS chapter 457, which contains a comprehensive scheme for urban renewal. ORS 457.035 creates an urban renewal agency in each municipality:

"In each municipality, as defined in ORS 457.010, there hereby is created a public body corporate and politic to be known as the ‘urban renewal agency’ of the municipality. However, the urban renewal agency shall not exercise its powers until or unless the governing body of the municipality, by nonemergency ordinance, declares that blighted areas exist in the municipality and that there is need for an urban renewal agency to function in the municipality and elects to have the powers of an urban renewal agency exercised in any of the three ways provided in ORS 457.045."

ORS 457.035(1).² Municipality is defined as "any county or city in...