Fight over sewers in Puyallup
EIJIRO KAWADA; The News Tribune
The developer of a 101-unit housing subdivision on South Hill is
suing Puyallup over its power to impose development requirements on
projects outside the city limits.
And builders' associations are backing the developer, saying they
are concerned statewide about the issue the lawsuit raises.
Puyallup says the suit is about a breach of contract by Federal
Way developer Regent-Mahan, and that the building industry is trying
to create a buzz around something that has nothing to do with the
merits of the case.
"They are committing fraud on taxpayers by signing a voluntary
contract, enjoying the benefit and suing the city," said Puyallup
City Attorney Gary McLean.
Whatever the outcome, the lawsuit likely will have a ripple
effect on how cities deal with developers who want to build houses
just outside city borders.
Both sides made their arguments Wednesday in front of Pierce
County Superior Court Judge Brian Tollefson. Puyallup had filed for
summary judgment, which means it wants the judge to throw the
lawsuit out. But time ran out Wednesday, and arguments will continue
If Tollefson throws out the case, developers say it would hamper
their ability to build affordable houses in Washington.
If Tollefson rules in favor of Regent-Mahan, many cities will be
reluctant to sign agreements with developers, McLean said.
At issue are "utility extension agreements" that developers often
sign with cities when they build houses in urban growth areas - land
outside city limits that is likely to be annexed later into adjacent
In such an agreement, a city guarantees utility services, such as
sewer, to a developer planning to build houses in its urban growth
areas. In return, the developer promises that houses will be built
in accordance with city codes, which usually are stricter than
In Pierce County, developers often benefit from these agreements
because they can build more houses with sewer connections than
Regent-Mahan signed two utility extension agreements with
Puyallup in the summer of 2002 to develop the 23-acre Blackstone
The developer says he had no other choice but to sign the
agreements since Puyallup is the only sewer provider in the area;
the city says there are other providers.
Later, Regent-Mahan filed the lawsuit, questioning Puyallup's
authority to force the developer to follow the city's codes and
claiming $5 million in damages. The lawsuit alleges that the city's
development requirements caused costly delays and redesigns of the
project, among others damages.
"Our view is that the city can no longer leverage their sewer
extension authority," said Carolyn Lake, attorney representing
Regent-Mahan. "This is an issue erupting statewide."
The Master Builders Association of King and Snohomish Counties
filed a similar lawsuit against the City of Stanwood earlier this
month. In the Puyallup case, officers from the Building Industry
Association of Washington and Master Builders Associations have
filed declarations supporting Regent-Mahan.
McLean said the developer clearly has benefited from the
agreement by creating more lots than it would have under septic
systems. It then turned around and sued the city.
But Lake said her client didn't benefit from the agreement
because he didn't have any choice but to ask for a sewer connection
The agreements Regent-Mahan signed with Puyallup say that the
developer will not sue as a result of the process for obtaining the
utility service. But Lake now says that specific clause should be
voided because it allows the city to withhold an essential city
service over which it has a monopoly.
Several Puyallup officials, along with three City Council
members, came to hear the arguments Wednesday. In their declarations
to support the city, some said they never would have approved the
agreement with Regent-Mahan had they known it would come to
"This never happened before," City Attorney McLean said. "What
(Regent-Mahan) has done could spoil the apple cart for all
developers. Why would cities do this if they think developers are
going to sue them later?"
(Published 12:01AM, November 20th,