In Gunderson v. City of Portland, LUBA Nos. 2010-39, -40 and -41 (Jan. 21, 2011) (slip op), Oregon's Land Use Board of Appeals ("LUBA") remanded the City of Portland's North Reach River Plan ("NRRP") for further work by the City relative to Statewide Land Use Goal 9 (Economic Development) and implementing rule OAR 660-009-0010. The appeal period expires on February 11, 2011, and in a press release issued February 4, the Bureau of Planning and Sustainability stated that the City had not yet decided whether to appeal. Regardless, the decision provides useful insight into what LUBA is looking for in an economic opportunities analysis ("EOA"). The City may use this information to refine the City's draft 2009 EOA and better position itself to take advantage of opportunities as the economy rebounds, whether it be a decision to annex West Hayden Island or to rezone certain industrial sites in anticipation of light rail.

The NRRP amended portions of Portland's comprehensive plan and code text and maps affecting a 12-mile stretch of the Willamette River, including the 5,500-acre Portland Harbor industrial area and most of the City's Heavy Industrial zoned land. The area represents a likely tension point between economic development and natural resource protection because it contains one-third of the City's industrial land base, the City's primary shipping channel and major road, rail and pipeline routes, and environmental features such as bottomland hardwood forests, wetlands, riparian corridors, islands and beaches. Goal 9 requires that comprehensive plans "[p]rovide for at least an adequate supply of sites of suitable sizes, types, locations, and service levels for a variety of industrial and commercial uses consistent with plan policies." LUBA held that where a city enacts zoning amendments that are likely to reduce the supply of buildable industrial and commercial lands, the city has an obligation to demonstrate that despite reductions in development potential for industrial and commercial lands, the city's land supply inventories continue to comply with Goal 9. Slip op at 7-8. LUBA concluded that the record did not support a determination that the NRRP would not have an effect on Portland's supply of industrial land. The provisions in the NRRP, including mitigation requirements and eventual designation and construction of a trail, could reduce the amount of industrial land available for development. LUBA found that the City did not determine the amount of industrial land potentially lost and did not have an acknowledged EOA forecasting industrial land needs in 2010 against which to compare any NRRP-related reduction in inventory. LUBA also concluded that even if the City was entitled to rely on a draft 2009 EOA included in the record, the draft EOA failed to provide an adequate factual base for the potential reduction in industrial zoned lands. The study showed a deficit of industrial lands if transportation needs were considered, and failed to consider the different types of industrial land available (i.e., riverfront and non-riverfront.)

As part of the NRRP, the City also rezoned the 42-acre McCormick and Baxter site from Industrial Sanctuary to Mixed Employment. OAR 660-009-0010(4) provides that when the zoning designation of two or more acres within an urban growth boundary is being changed from industrial, consistency with the most recent EOA and the relevant portions of the comprehensive plan—or amendment of the comprehensive plan to address the rule's requirements—must be demonstrated. Portland did not amend its comprehensive plan to include a new EOA. LUBA held that the record did not support a finding that the proposed zoning amendment is consistent with the most recent EOA and the parts of Portland's acknowledged comprehensive plan that address the requirements of the applicable administrative rule.

As noted above, it is not yet known if the City will appeal the decision. Whether or not an appeal is filed, however, revisiting the 2009 EOA to evaluate LUBA's concerns relative to changes in the zoning of industrial zoned lands is a worthwhile exercise. An adequate inventory of industrial lands is not solely an issue of number of acres. The different characteristics of sites should be considered.