Kitsap hearing on Spring Hill appeal focuses on whether mitigation sequencing alone authorizes wetland fill

Kitsap County’s hearing on the Spring Hill SEPA appeal on March 14 focused on whether the county can require a separate critical area variance before allowing wetland fill that the applicant says has already been analyzed under mitigation sequencing. The hearing examiner, Philip Rex, presided over testimony from County planners, the applicant’s counsel and wetland consultants about avoidance, buffer definitions and how local code should be read with Department of Ecology (DOE) guidance and Corps of Engineers review.

The dispute matters because the applicant, proposing an affordable housing development called Spring Hill in the Kingston urban growth area, seeks to impact a limited area of category-4 wetlands and to provide on-site mitigation and a conservation easement. The developer says the project’s mitigation plan substantially avoids wetlands and provides a “functional lift.” County staff disagreed, issued a SEPA determination of significance (DS), and tied that determination in part to what staff described as inadequate demonstration of avoidance and the question whether a critical area variance is required under the Kitsap County Code.

Project purpose and practicability were central to the debate. Applicant witnesses and its counsel argued the project purpose (to deliver for-sale affordable housing at a scale necessary to make financing feasible) informs what alternatives are practicable and that, based on the applicant’s cost analyses, very large reductions in units (applicant-era “minimum density” figures as low as 66 units were discussed) would render the project infeasible. County planners countered that SEPA and county code require a robust examination of alternatives, including orientation, building type, layout and other design changes, and that cost alone may not render an alternative impracticable.

Kitsap County planner and witness Matthew (Mike) Gurney testified about the permit-review sequence used by the Department of Community Development (DCD) and repeatedly told the hearing the county had not received analyses or submittals sufficient to demonstrate avoidance to the county’s satisfaction. Gurney said, “cost alone is not something that you can justify,” when asked about whether financing constraints could be the sole basis to reject alternatives. He acknowledged the county accepts DOE guidance and that Corps and Ecology review is happening in parallel but said staff had not engaged directly with the Corps project lead in this case.

Wetland experts called by the applicant — Joanne Bartlett and Robin Myers — testified that, in their experience, mitigation sequencing (avoidance, then minimization, then compensatory mitigation, with monitoring) is the established pathway for authorizing wetland impacts when those impacts are unavoidable, and that they had not previously seen a county require a separate critical area variance in connection with mitigation sequencing in their collective experience. Applicant counsel highlighted that Corps and Ecology reviews have not raised avoidance objections and that the proposed mitigation is structured to achieve no-net-loss of wetland function on site.

County counsel and staff emphasized the buffer rules in the county’s critical areas ordinance and DOE guidance. They argued the illustrative buffers shown on pre-development drawings are regulatory in that reduced buffer widths and any averaging or administrative buffer reductions trigger 19.202.20 procedures — and that more than modest reductions require a formal variance. County staff flagged the absence of a variance application and said steps in the county review had been set to “disapproved” where submittals did not meet information requests.

Hearing rhetoric also reflected broader tension: applicant counsel accused DCD of operating under a “no-impact” policy — summarized in internal emails and the staff report as “Kitsap County code does not allow these residential uses, including affordable housing, at the expense of impacting critical areas” — and argued that this policy effectively converts the mitigation sequencing code into a de facto prohibition. County counsel and staff said the department was applying code and state guidance and that the project had not demonstrated avoidance to the degree required.

The hearing closed with extended legal argument. Applicant counsel asked the examiner to reverse the DS and issue a determination of nonsignificance (DNS or MDNS) and to rule that a critical area variance is not required where mitigation sequencing has been properly applied and accepted by the lead agencies. County counsel asked the examiner to uphold the DS based on an asserted failure to show avoidance and the need — in staff’s view — for a variance or further analysis. Examiner Philip Rex said he would issue a written decision after reviewing testimony and legal briefing.

An important practical note for readers: the appeal concerns a procedural SEPA decision and statutory interpretation of county code sections addressing critical areas, buffers and mitigation sequencing. No formal County Commission or board votes on the Spring Hill plat or final permits were taken at the hearing; outcomes such as issuance of Corps nationwide permits and county variance findings would be separate, subsequent actions if needed. The hearing record includes multiple exhibits and email exchanges, and the Hearing Examiner said his written ruling would follow the record.

The case underscores how mitigation sequencing, local buffer rules and the role of outside agencies (U.S. Army Corps of Engineers and Washington Department of Ecology) interact in permitting wetlands impacts. It also highlights the real-world tradeoffs local planners, developers and courts confront where housing policy goals intersect with environmental regulations.