DC Court of Appeals Upholds Approval of PUD Application on Reservoir and Filtration Complex

This post was authored by Matthew Loeser, Esq.

Intervenor Vision McMillan Partners, LLC (“VMP”) sought to develop a parcel of land located on the McMillan Reservoir and Filtration Complex. In 2016, the court vacated an order by the Zoning Commission that had approved VMP’s application for a planned unit development (“PUD”) on the site. On remand, the Commission approved VMP’s slightly revised PUD application. In this case, Petitioners Friends of McMillan Park (“FOMP”) and DC for Reasonable Development (“DC4RD”) challenged the Commission’s order.

FOMP and DC4RD first contended that the Commission erred by zoning Parcel 1 to the CR Zone District without providing notice or the opportunity to present evidence and argument, as required by the D.C. Administrative Procedure Act (“DCAPA”). The record reflected that VMP had previously requested that other parcels in the proposed PUD be zoned to the CR Zoning District; it was not until after the hearing following the remand that VMP requested that Parcel 1 be zoned to the CR Zone District. As such, FOMP and DC4RD argued that they were neither given adequate pre-hearing notice nor an opportunity to present evidence about that specific suggestion. As noted by the Commission in its order granting VMP’s application, however, FOMP and DC4RD failed to raise this objection before the Commission. Instead, FOMP responded to VMP’s suggestion in a post-hearing letter that raised only legal objections on the merits of the suggestion. Even assuming that the issue was not waived since it was not properly raised before the Commission, the court held that FOMP and DC4RD failed to identify any concrete prejudice they suffered as a result of the lack of specific notice.

FOMP and DC4RD next challenged the Commission’s ruling on the merits, specifically whether or not the proposed medical building on Parcel 1 was consistent with MidCity Area Element 2.6.5 of the Comprehensive Plan, which stated that development on the McMillan site “should consist of moderate to medium density housing, retail, and other compatible uses.” The court found that although that provision had “substantial force,” it did not “flatly prohibit any high-density development on the site”. The Commission concluded that even if the medical building would be inconsistent with the Mid-City Area Element, that inconsistency was necessary to advance other policies reflected in the Comprehensive Plan that it believed outweighed the policy as to intensity of use reflected in the Mid-City Area Element.

FOMP and DC4RD next contended that the Commission erroneously found that 20% of the total square footage of the proposed PUD’s housing would be affordable, when in fact the correct figure was approximately 15%. The court found that any error in this calculation was harmless, as district law generally required that developments in the CR Zone District allocate 8% of the gross floor area being devoted to residential use to affordable housing. Thus, a “substantial percentage” of the proposed PUD’s housing units had been reserved for affordable housing and would continue to view that to be an important benefit of the proposed PUD. Next, FOMP and DC4RD argued that the Commission also committed several errors in its analysis of the issue of possible displacement of current residents as a result of gentrification. The Commission found that an excess of housing demand relative to supply was the primary cause of those increases, rather than individual projects such as the proposed PUD. Furthermore, while the FOMP and DC4RD were correct that the Commission did not discuss the DHCD report at length and did not specifically mention DHCD’s statement about the possibility of displacement., the court did not find this to be reversible error.

FOMP and DC4RD lastly contended that the Commission erred in concluding that building a 113-foot-high medical building on Parcel 1 was the only economically feasible way “to retain a substantial part of the property as open space and make the site usable for recreation purposes.” The record reflected that despite occupying a relatively small portion of the PUD site, the medical building and the other planned healthcare building would provide 67% of the nearly $1.2 billion in tax revenue that the PUD was projected to generate over thirty years. The Commission also credited testimony by VMP’s witnesses that, outside of healthcare, there would be no discernable large-scale commercial demand for the site, and that reducing the height of the medical building below 113 feet would make the building unmarketable to healthcare tenants. As the Commission identified substantial evidence supporting its factual findings, the Commission’s order was affirmed.

Friends of McMillan Park v. District of Columbia Zoning Commission, 2019 WL 2849195 (DC App. 7/3/2019)