Developer sues Spokane Valley over delays, requirements in proposed Painted Hills development

The city of Spokane Valley has given the go-ahead for a planned development on the former Painted Hills Golf Course, but one of the conditions of approval could delay the decadelong effort even further.

The Valley’s contracted hearing examiner, Andy Kottkamp, ruled in March that the up-to-584-unit housing development could finally move forward, after years of challenges from neighbors and community members worried about how the development could impact the neighborhood’s appearance and the local environment.

But Black Realty, the NAI Black offshoot hoping to develop the plot, filed a lawsuit against the city earlier this month despite receiving approval to move forward.

“We had no choice but to file this action to get this to change into something that works for everybody,” said Dave Black, CEO of NAI Black.

In particular, Black and his partners take issue with a stipulation Kottkamp made at the city’s request that would require the formation of a flood control district to oversee and maintain the system that developers plan to install on the site. The lawsuit refers to the requirement as a “poison pill” intended to kill the project.

A large chunk of the property lies within a floodplain for nearby Chester Creek, and neighbors have long worried any action taken to mitigate seasonal flooding could push that flood risk onto their properties.

Black Realty has planned to install a large, multifaceted flood control system, which includes a network of culverts and pipes directing water to swales, an infiltration pond and an empty 4-acre field when needed. In addition, developers would dump around 330,000 cubic yards of dirt atop the old course to bring it above the floodplain – the equivalent of more than 21,000 commercial dump-truck loads.

The developers had intended for a newly established Home Owners Association to take on the responsibility of maintenance and oversight of the system once construction is completed, but city officials expressed concerns over the viability of the HOA – and being stuck with the responsibility and cost of maintenance in the future.

The lawsuit alleges the city’s requirement of a flood control district isn’t just impractical, it’s unlawful. The city is essentially requiring a larger jurisdiction to take action, Black said.

Spokane Valley spokeswoman Jill Smith declined to comment on the lawsuit as litigation is ongoing.

A flood control district can be established in Washington through one of two ways. County commissioners can vote to create one, or registered voters in a proposed flood control district can petition for its creation. The petition would need signatures from at least 25% of the voters in the area that would be reviewed by a county auditor and then forwarded to the county commission for adoption via resolution.

Black said his company has learned Spokane County officials have no interest in establishing a flood control district for the neighborhood, due in part to ongoing frustrations with the Newman Lake Flood Control Zone District.

County Engineer Matt Zarecor expressed his concerns about requiring the formation of a district in an email to Spokane Valley Senior Planner Lori Barlow and Planning Manager Chaz Bates in January – just a day before the development plans came before the hearing examiner.

“They tend to take much more time than would be expected, and the budget rarely covers the expenses,” Zarecor wrote, according to an excerpt included in the lawsuit. “Not sure what to do at this late in the game. I would just prefer not to have a condition on the plat that the County would likely not support.

“Never looks good when government agencies aren’t on the same page.”

Spokane County spokesperson Pat Bell confirmed Wednesday that the county commissioners have not expressed interest in forming a district.

Black said Spokane County officials have floated the idea of establishing a drain water account instead of a flood control district. Residents would be charged a fee, and the county would oversee all maintenance for the flood control system.

Black believes the account is a much better solution for all parties involved, if having the HOA oversee the maintenance of the system is still not an option.

“It doesn’t require a separate administration organization,” Black said. “It’s more a self-insurance fund in the unlikely event that the HOA went defunct.”

Black and his associates are seeking damages from the city for the ongoing delays in development through their lawsuit, in addition to a reversal of the hearing examiner’s decision requiring a flood control district.

Oct. 3 will mark 11 years since Black bought the property at auction for $1.1 million, which led to more than a decade’s worth of work trying to get the development off the ground.

Despite the community pushback, setbacks and what he considers unwarranted requirements, Black is confident the project will reach the finish line eventually.

“We’ll get it resolved one way or another,” Black said.

“It’s just a matter of how much time. And how expensive it’ll be.”