I

On October 28, 2005, Lounsbury and Associates, Inc., on behalf of Wal-Mart Stores, Inc., filed a lease application for three adjoining parcels of city-owned land. [1] The property is shown on the attached map (Exhibit 1). [2] One of the parcels contains an under-utilized baseball field; another contains a tent camping park; and the third is undeveloped property containing a large mound of dirt from previous city construction projects.

The property is held in trust by the City for the Kenai Municipal Airport. Federal rules and grant assurances require the property to be utilized for the benefit of the airport. The rent-free use of the property for a ball field and tent camping area by the general fund is allowed only until the property is needed by the airport for airport construction or revenue needs. Since the property is now needed (and in demand) for airport revenue needs, should the property not be leased to Wal-Mart, Inc., the City’s general fund would have to pay 6% of the fair market value of the property to continue using the ball field and tent camping portion of the property.

The Kenai Municipal Code sets out a detailed process for consideration of lease applications. The first step of that process is for the application to be sent to the Planning and Zoning Commission (Commission) to answer a set of specific questions. First, whether the proposed use in the application is the highest and best use and conforms to the Airport Master Plan and other goals set by the Commission or the City Council. [3] The second is whether the proposed use complies with the zoning ordinance and comprehensive plan of the City. [4]

The process before the Commission is limited to those specific issues. It is not meant to be a general review of the lease application or other issues concerning development of the property. Those issues are dealt with during other stages in the process.

The Commission reviewed the lease application on November 9, 2005. A public hearing was held on November 9, 2005. Eighteen people testified regarding Wal-Mart during the meeting. Commissioner Bryson moved to find the intended use complied with the requirement of the city code as set forth in the staff memoranda of Kim Howard (Assistant to the City Manager) and Nancy Carver (Planning and Zoning Assistant). The motion was seconded by Commissioner Amen. The motion passed by a vote of six in favor and none against. On November 16, 2005, Debbie McKay (McKay) filed an appeal of the Commission’s decision to the Board of Adjustment (Board).

The Board of Adjustment held a public hearing on December 6, 2005. Nine people testified during the public hearing. Following the public testimony, the public hearing was closed and the Board went into deliberations. At the end of deliberations, the Board reconvened and voted 7 to 0 to deny the appeal. The Board stated a written decision would follow.

III. STANDARD ON APPEAL

An appeal from the Commission is a de novo appeal. The Kenai Municipal Code states, “The Board of Adjustment may reverse or affirm, wholly or partly, or may modify the order, requirement, decision, or determination as ought to be made, and to that end shall have all the powers of the body from whom the appeal is taken. [5] The Board need not defer to the finding or decision of the Commission. While the Board may take the concerns of neighborhood owners into consideration, it may not base its decision solely on neighborhood support or opposition. [6]

IV. THE COMMISSION’S ROLE IN THE LEASE APPLICATION PROCESS

The Wal-Mart lease application involves a process set out in the municipal code. While we understand why members of the public might want the Commission to conduct a broad review of all the issues related to the application, that is not the Commission’s role under the city code. The Commission was charged with making a specific set of findings and recommendations and forwarding those to the Council. The role of the Commission was to be a part of an overall process as set out in the code.

The Commission was charged with determining whether the intended use was consistent with the zoning code and the Comprehensive Plan. The Commission found that the intended use was consistent with both. There is no dispute that the property is in the Light Industrial Zone (IL). “Retail Business” is a principal permitted use in the IL Zone. [7] The Commission was correct in finding the intended use was consistent with Kenai Zoning Code.

The Commission was also charged with determining whether the intended use was consistent with the City of Kenai Comprehensive Plan (Plan). Page 28 of the Plan contains a legend that shows the city’s economic areas. This legend is different than the zoning map in the city code. The Plan map lists the property in question as “central commercial.” Page 29 of the Plan describes the “Central Commercial” area as a:

district [that] supports retail, service, and office businesses that serve all of Kenai and the larger region. It is the Kenai sub-region’s main commercial district. Retail, service, office, and public uses predominate. (Emphasis added).

A large box store is consistent with the description of a retail business that serves all of Kenai and the larger region.

There was testimony that the Comprehensive Plan was intended to discourage large box stores and encourage a compact city center. The map on page 28 of the Plan contains an area designated the “City Center.” The proposed lease area is located about one-half mile outside of the designated “City Center” area. Thus, the proposed lease area is in the area the plan has designated “Central Commercial,” not the area designated “City Center.”

Page 30 of the Plan covers the development policy for the “City Center” area. Regarding the “City Center” and Millennium Square, the Plan is intended to:

discourage highway-oriented, low density, free-standing commercial buildings or land uses in the city center. This type of development runs counter to the policy of a compact, intensive, pedestrian-friendly city center, and is better located elsewhere. (Emphasis added).

Thus, the Plan does not state that box-store type development is not allowed in the city. Instead, it states it should be located outside of the area designated as the “City Center.” The proposed lease area is located outside of the “City Center” in an area the Plan calls for retail development serving the entire Kenai area. We find the Commission was correct in holding that the proposed development is consistent with the City’s Comprehensive Plan.

The Commission was also charged with determining whether the application was complete and the proposed use is the highest and best use and conforms to the Airport Master Plan. [8] It has not been alleged that the application is not complete and our review of it leads us to hold that it is complete.

An appraisal done on the property by Julie Derry of Derry & Associates indicated that the “highest and best use” of the property was for commercial/industrial development in conformance with the zoning regulations and requirements. We have already held that the proposed use is a principal permitted use in the IL Zone and that it complies with the Kenai Comprehensive Plan. We find the proposed use for commercial development is the highest and best use of the property.

The Commission also held the proposed use was consistent with the existing 1997 Airport Master Plan. While there is an ongoing update of the Airport Master Plan, that update had not been adopted yet so the 1997 Master Plan was controlling. That Plan calls for the property to be zoned light industrial (IL). It is zoned light industrial and the proposed use is a principal permitted use in the Kenai Zoning Code. [9] Therefore, we find the proposed use is consistent with the Airport Master Plan.

KMC 21.10.060(a) also states the Commission should review the application for “other goals set by the Commission or City Council.” We interpret this section to mean that the Commission would review the application for clearly established goals, not simply any issues that may come up on a particular application. Establishing goals on an ad hoc, case by case basis would lead to arbitrary and unfair decision making. The leasing goals established by the City are included in the Airport Master Plan, the City Code and the Kenai Comprehensive Plan. The Commission properly considered those in making its recommendation.

We note that McKay did not appeal any of the findings the Commission was charged with making. However, we thought this Board should nonetheless review those findings in this appeal. We hold that the Commission made the correct findings as described above.

V. LANDSCAPE SITE PLAN

The notice of appeal alleges that “at least two items have been overlooked in the process.” Those items deal with the requirements of the landscaping/site plan regulations in KMC 14.25.045(c) and (e). KMC 14.25.045(c) requires that the site plan shall list any special permits or approval which may be required for completion of the project. KMC 14.25.045(e) requires that the snow removal and storage in the site plan be compatible with the surrounding area.

The landscape site plan regulations in KMC 14.25 apply to all commercial or industrial development and all development in the Townsite Historic District above $20,000. As noted in Section II above, the lease application process has several steps to it. The initial part of that process required the Planning and Zoning Commission to answer some specific questions relating to planning and zoning issues. The Commission’s recommendations on those specific issues are then forwarded to the Kenai City Council for consideration and its review of the lease application.

The landscaping/site plan submission occurs later in the administrative process. The Kenai Municipal Code requires that a preliminary landscaping/site plan be submitted and approved before construction and “prior to any land clearing and/or tree clearing” on the property. [10] The plan is submitted to the Planning and Zoning Administration. It is not considered by the Planning and Zoning Commission. Because it was not within the jurisdiction of the Commission to consider the landscaping/site plan requirements, the Commission did not err in failing to consider those requirements. Additionally, because the landscaping site plan need not be filed until prior to construction or land clearing or tree cutting, the Wal-Mart does not need to submit a landscaping/site plan at this time.

Because of the above, it was not error for the Commission to not consider the requirements of the landscaping/site plan requirements of KMC 14.25.045. It should be noted that Wal-Mart, Inc. will be required to submit a landscaping/site plan later in the process and have it approved by the City Council and the Planning and Zoning Administration. We do not mean to imply that the issues raised by McKay regarding the landscaping/site plan are not important; they are. Instead, we hold that this is not the proper point in the process to raise those issues.

VI. ECONOMIC ISSUES

While McKay’s appeal refers specifically to the two landscaping/site plan issues, she does mention some other issues in passing. She alleges that Wal-Mart is “systematically successful in closing down most businesses in the small towns they inhabit” and, “Kenai is a small town and cannot sustain a Wal-Mart, as well as Safeway, IGA, [and] Three Bears. What will you say to those people that are losing their jobs, no longer gainfully employed?” This portion of her appeal is focused on the economic impacts of a Wal-Mart in the community.

As noted above, the Commission had specific planning and zoning issues to decide. They did not include potential economic impacts (either positive or negative) of a Wal-Mart coming to Kenai. However, our supreme court has made it clear that it is not the function of Planning and Zoning Commissions to provide economic protection for existing businesses. Earth Movers of Fairbanks, Inc. v. Fairbanks North Star Borough, 865 P.2d 741, 744-745 (Alaska 1993) citing Swain v. County of Winnebago, 111 Ill. App. 2d 458, 250 N.E. 2d 439, 444 (Ill. App. 1969)(“It is not the function of the county zoning ordinance to provide economic protection for existing businesses.”); and Sunbrite Car Wash, Inc. v. Board of Zoning & Appeals, 69 N.Y. 2d 406, 508 N.E. 2d 130, 135, 515 N.Y.S. 2d 418 (N.Y. 1987)(Zoning laws do not exist to ensure limited business competition). See also McQuillen Mun Corp. § 25.318.10 (3^rd Ed.).

McKay does not argue that the proposed store is not an allowed use under the zoning code, but rather that the Commission should take a stand to keep a new business (specifically Wal-Mart) from competing with existing grocery stores. Should the Commission then scrutinize a future lease application for a gas station in order to assure it won’t impact existing gas stations? We do not think so. We agree that it is not the function of a Planning and Zoning Commission to regulate economic competition under the guise of planning and zoning issues. We find the Commission did not err in declining to consider the economic impact of a Wal-Mart on existing businesses.

McKay also alleges having a Wal-Mart in Kenai would hurt tourism. Protection of tourism is not an issue the Commission was charged with considering. Moreover, there is no evidence that a Wal-Mart would hurt tourism. Certainly, having a large box store in Soldotna and Wal-Marts in Anchorage does not seem to have harmed tourism in those cities. The Commission did not err by not considering the effect of Wal-Mart on tourism or in not finding that it would hurt tourism.

VII. SALMON HABITAT

McKay argues that the store would harm salmon habitat because it will be placed on wetlands adjacent to a salmon stream. While her appeal was on the landscaping/site plan issues, she did bring up the store’s effect on salmon on her notice of appeal. If a portion of the property sought to be leased by Wal-Mart is determined to be “wetlands,” a Corps of Engineers’ permit will be required under the Clean Water Act. [11] The permit process will examine whether a portion of the property is “wetlands,” the impacts of construction on the property and whether a permit to build on those wetlands areas should be granted. The Corps of Engineers is the agency tasked with examining those issues and their expertise exceeds the expertise of either the Commission or this Board. Phil North, local representative of the Environmental Protection Agency, testified to that requirement during the hearing. Additionally, the Corps permitting process will allow a more thorough and scientific process than this forum allows. Also, the issues raised by McKay regarding such things as snow storage and runoff will be dealt with in the site plan review later in the process. Because the Commission was not charged with examining the wetlands and salmon habitat issues relating to the property, and the Corps’ permitting and landscaping/site plan review processes will better deal with those issues, it was appropriate for the Commission not to consider the wetlands and salmon habitat issues.

VIII. STANDING

the reason for the appeal, which must include a description of harm to the appellant. Any person(s) aggrieved by a decision of the administrative official or Commission may file an appeal.

I don’t live within the Kenai City Limits (sic), I live in Nikiski. However, I shop in Kenai, bank in Kenai, dine in Kenai, go to Kenai for entertainment, medical, health care. I consider it my city.

The legal doctrine of standing concerns whether a person is the “proper party to request an adjudication of a particular issue.” Moore v. State, 553 P.2d 8, 24 n 25 (Alaska 1976), quoting Flast v. Cohen, 392 U.S. 83, 100-01, 20 L.Ed 2d 947, 961, 88 S. Ct. 1942 (1968). In Alaska, the general concept of standing has been interpreted broadly. Trustees for Alaska v. State, 736 P.2d 324, 327 (Alaska 1987). However, the Alaska Supreme Court has held there is an exception to that rule in the area of planning and zoning law. Earth Movers of Fairbanks, Inc. v. Fairbanks North Star Borough, 865 P.2d 741, 743 (Alaska 1993). In Earth Movers, the court noted that “standing in zoning cases has been more restrictive than general standing principles, primarily in order to prevent excessive litigation and undue delay of final dispositions.” Supra.

The court in Earth Movers also held that the use of the term “aggrieved” in a municipal ordinance dealing with planning and zoning appeals is consistent with a more restrictive view of standing. Supra. As noted above, KMC 14.20.290(a)(3) allows appeals only by those “aggrieved” by a decision of the Commission or administrative official.

Does McKay qualify as an “aggrieved” person? A property owner in the neighborhood or an adjoining property owner is generally held to be an aggrieved person. McQuillen Mun Corp. § 25.318.10 (3d Ed.) Some courts have held that a property owner or resident of a city may also be considered an “aggrieved” party and has standing. McQuillen Mun Corp. § 25.318 (3d Ed.). However, owners of property not directly affected by the decision are not “aggrieved” by virtue of merely asserting a general civic interest in the effects of the decision. McQuillen Mun Corp. § 25.318 (3d Ed.); Tyler v. Board of Zoning Appeals of Town of Woodridge, 145 Conn. 655, 145 A.2d 832(1958)(Property owner located five miles away did not have standing to challenge zoning decision); Waltham Motor Inn, Inc. v. LaCava, 3 Mass. App. Ct. 210, 326 N.E.2d 348 (1975)(Mere residency in municipality or general civic interest in outcome not enough to grant standing); Property Owners Ass’n of Garden City Estates v. Board of Zoning Appeals of Incorporated Village of Garden City, 2 Misc. 2d 309, 123 N.Y.S. 2d 716 (NY Sup. Ct. 1953)(Resident of municipality whose interest is merely in strict enforcement of zoning rules for the general benefit of the community does not have standing).

McKay is not a resident of the City of Kenai, nor does she allege that she is a property owner either nearby the proposed site or even in the City. She alleges what must be described as a general civic interest in the community and what she perceives as potential negative effects of Wal-Mart. As the case law cited above indicates, that interest is not sufficient to make McKay an “aggrieved” person.

It should be noted that we have reviewed McKay’s standing only in relation to the specific planning and zoning issues that were before the Commission. Standing must be analyzed on a case-by-case basis. We are not holding that a non-resident of Kenai could never have standing to appeal an issue to the Board. We only hold that in this case Mc. McKay did not have standing because of the specific planning and zoning questions the Commission was charged with deciding.

While we hold that McKay was not an “aggrieved” person under KMC 14.20.290 and, therefore, did not have standing to bring this appeal, we have opted to review and rule on the issues she raised because of the general interest the Wal-Mart lease application has created in the community. Specifically, we did not wish to give the impression that an appeal was dismissed on a “technicality” without the issues she raised also being discussed by this Board.

IX. CONCLUSION

For the reasons set forth above, the appeal of McKay is both denied on the merits of the issues raised and dismissed for lack of standing.

1. In addition to the Board’s discussion in Section V, Landscape Site Plan, we would note that there will be an opportunity in the future for a public hearing on Wal-Mart’s landscape site plan during which members of the public will have the opportunity to comment.

2. Section VI, Economic Issues, addresses the difficult subject of economic issues. We agree that it is not the role of the Planning and Zoning Commission under the City Code to engage in an economic assessment of the impacts of an applicant’s proposed development. The City’s planning and zoning ordinances deal with land use issues, but do not include a requirement for an economic assessment of an applicant’s development plans and, therefore, the Commission does not address the economic impacts, both positive and negative, of a development project like the proposed Wal-Mart supercenter development.

We join in the finding that the Commission did not err in declining to consider the economic impact of a Wal-Mart on existing businesses. However, the discussion of the lack of evidence on adverse impacts is unnecessary to the result. While the Board’s comments about lack of evidence are true, in part that is because that issue was not before the Commission for decision. In addition, the City does not have an economic assessment ordinance under which evidence would be developed regarding the benefits, costs and adverse impacts of an applicant’s development project. As a result, there is a lot of speculation as to benefits, costs and adverse impacts, but no evidence.

In our view, it is the role of the City Council and Administration in this process, with input from the public, to attempt both to maximize the benefits and to mitigate the costs and adverse impacts of an applicant’s proposed development project, thereby obtaining the optimum result for the City and its residents.

3. While it does not affect the outcome of this appeal, we do not feel there was evidence in the record to support a statement of whether the ball field was underutilized or not. Accordingly, we would delete the word “underutilized” in Section II.

NOTE: This decision constitutes a final order under Alaska Appellate Rule 602. An appeal of this decision to the Superior Court must be filed within thirty days (30) days of the date of this decision.

[1] See KMC 21.10.010-140.

[2] The parcels are Tract B-1 (per Plat No. 94-14), Baron Park No. 10, Tract C, Baron Park No. 5 (per Plat No. 86-165) and Lot 1, Baron Park No. 5 (Per Plat No. 86-165).

[3] See KMC 21.10.060(a).

[4] See KMC 21.10.030(a)(5).

[5] KMC 14.20.290(b)(2).

[6] South Anchorage Coalition v. Coffee, 862 P.2d 168, 172, n. 11 (Alaska 1993).

[7] KMC 14.22.010.

[8] KMC 21.10.060(a).

[9] KMC 14.22.010.

[10] KMC 14.25.035.

[11] See Law of Wetlands Regulation, §2.01(2) William Want (1991).

BEFORE THE BOARD OF ADJUSTMENT FOR THE CITY OF KENAI

IN THE MATTER OF THE APPEAL OF DEBBIE )

McKAY OF PLANNING & ZONING FINDINGS )

REGARDING WAL-MART LEASE APPLICATION )

I. DECISION