ARMSTRONG, P.J.
Under Oregon's land use laws, local governments may (and, in some cases, must) engage in periodic review of their comprehensive land use plans. See ORS 197.628 to 197.636. As a result of a periodic-review process, the City of Woodburn amended its urban growth boundary (UGB) to include additional land — 409 gross acres or about 362 net buildable acres — for industrial use. The city submitted that amendment to the Land Conservation and Development Commission (LCDC) for review. ORS 197.626(1)(b). LCDC approved the city's amendment of its UGB. Petitioners sought judicial review of LCDC's order of approval. We concluded that LCDC's order was inadequate for judicial review and, accordingly, reversed the order and remanded the case to LCDC for reconsideration. 1000 Friends of Oregon v. LCDC, 237 Or.App. 213, 239 P.3d 272 (2010) (Woodburn I). LCDC has now completed that reconsideration and issued a new order approving the city's UGB expansion.
Petitioners again seek judicial review.
In the late 1990s, the city began the periodic-review process to update its comprehensive plan and other planning documents. As part of that periodic-review process, the city completed various work tasks and, as relevant here, decided in 2005 to expand its UGB to include 409 gross acres for industrial uses. To support the need for that expansion, the city relied on work performed at its direction by consultant ECONorthwest. That work included an economic-opportunities analysis (EOA) — see OAR 660-009-0015 (requiring cities with areas within the UGB to perform an economic-opportunities analysis comparing the demand for land for industrial and other employment uses to the existing supply of such land); an economic development strategy — see OAR 660-009-0020 (requiring cities with areas within the UGB to adopt policy stating the economic-development objectives for the planning area, based on the economic-opportunities analysis required by OAR 660-009-0015); and a site-requirements analysis.
The city justified the number of acres of industrial land that it added to its UGB using a "target-industries" approach developed through the work of ECONorthwest. Put simply, the target-industries approach considers a local government's employment-growth projections and goals for employment, and establishes a framework for attracting the kind of employers that could reasonably be expected to support the kind and amount of employment growth to which the local government aspires. Given the site needs of those particular employers, the local government identifies potentially available land both within and outside its UGB and selects a group of sites and an amount of land that it believes will accommodate the employers that it seeks to attract. The target-industries approach differs from an "employees-per-acre" approach, under which a local government simply projects employment growth and divides that growth by a statistically accepted number of employees per acre of land in order to arrive at the number of acres needed to support employment growth.
In the target-industries approach developed here, the city aimed to promote economic growth by pursuing development that would create higher-paying jobs to attract new residents who would both live and work in Woodburn. To facilitate that goal, the city identified high-wage target industries that it believed might locate in Woodburn because of its location on I-5 between Portland and Salem. The city then identified the site and building requirements and preferences of the targeted industries. The city also adopted an employment-growth forecast. In light of academic and federal population estimates and forecasts, the city predicted a 20-year employment-growth rate of 3 percent, leading to a projected increase of 8,374 jobs. Ultimately, the city determined that, to further its economic-development strategy and accommodate the volume of job growth that it projected, it needed 42 total industrial sites, 23 of which were available on land within the existing UGB and 19 of which it decided to provide by expanding its UGB into its Southwest Industrial Reserve (SWIR).
In the Woodburn UGB Justification Report, to which LCDC referred in its original order and its order on remand, the city explained the reasons that it needed the additional sites:
(First and third emphasis in original; second emphasis added; footnotes omitted.)
Petitioners objected to the UGB amendment, and LCDC considered those objections. Petitioners contended, among other things, that the city had included more industrial land within its amended boundary than was needed to accommodate projected industrial job growth or the needs of its target industries and, accordingly, more industrial land than the city expected to develop over the 20-year planning period, in violation of Goal 9, the land use planning goal that addresses economic development. Woodburn I, 237 Or.App. at 222, 239 P.3d 272. Petitioners further argued that the city's target-industries approach "inflate[d]" the number of acres that needed to be included within the UGB to accommodate industrial job growth and did not address the demonstrated need for any additional industrial land to be included in the proposed UGB expansion as required by Goal 14, the land use planning goal that addresses urbanization. Id.
LCDC approved the city's expansion of its UGB. LCDC reasoned as follows in rejecting petitioners' objections:
We concluded that LCDC's order did not provide an adequate basis for us to review petitioners' contentions. We noted that, "although LCDC discusse[d] Goal 9 and its implementing rules and conclude[d] that the UGB amendment complies with both Goals 9 and 14, LCDC provided essentially no reasoning as to that conclusion with respect to Goal 14. In particular, LCDC offered no explanation concerning the reasons that the need factors of Goal 14 are satisfied under the circumstances of this case." Id. at 223, 239 P.3d 272.
With respect to Goal 9, we stated that LCDC's "mere reference to `market choice' [was] insufficient to explain the reason that the city's UGB expansion is consistent with that goal." Id. at 225, 239 P.3d 272. We acknowledged that LCDC might have been correct that some forms of "market choice" would be consistent with Goal 9, but rejected the proposition that all "forms and degrees" of market choice would be. Id. We concluded that, "given the variety of the industries that the city targeted and the diversity and multiplicity of the sites that the city designated, it [was] incumbent on LCDC to cogently explain the reasons that the degree of market choice employed by the city * * * is consistent with the requirements of Goal 9 and OAR 660-009-0025." Id. at 226, 239 P.3d 272.
With respect to Goal 14, we observed that "a local government is not permitted to establish [a UGB] containing more land than the locality needs for future growth." Id. (internal quotation marks omitted). We noted that LCDC had provided only a summary conclusion that the city's UGB amendment was consistent with Goal 14; LCDC had not referred to or explained how the city had satisfied the Goal 14 need factors. Id. We concluded that LCDC's treatment was insufficient to explain why including more land than was expected to be developed during the planning period was consistent with Goal 14. Id.
In addition, we noted that compliance with Goal 9 does not necessarily establish compliance with Goal 14. Id. Accordingly, and because petitioners had asserted that the UGB amendment violated both goals, LCDC had to explain why the amendment was consistent with both the economic development principles of Goal 9 and the urbanization requirements of Goal 14. Id.
In conclusion, we stated:
Id. at 226-27, 239 P.3d 272.
On remand, LCDC circulated a draft revised order to the parties and considered written and oral arguments. On March 16, 2011, LCDC issued a revised order again approving the city's amendment of its UGB. LCDC's analysis rests on two foundations: first, what it characterized as a "close correlation" between the need for industrial land calculated using the employees-per-acre approach and the need for industrial land determined using the target-industries approach, and second, the city's analysis of population, employment, target industries, and site requirements, which LCDC concluded provided a factual and analytical base to establish that the city's decision was consistent with Goal 14, Goal 9, and ORS 197.712 (setting out comprehensive plan requirements). For the reasons explained below, we
LCDC began its analysis by comparing the projected land need (in buildable acres) based on employment projections and an employee-per-acre calculation — viz., 311 acres — with the projected land need based on the target-industries approach used by the city — viz., 362 acres. LCDC stated that "the relatively close correlation" between those two numbers "provide[d] important corroboration for the city's ultimate decision concerning the amount of land needed for industrial and office uses."
Here, according to LCDC, the two numbers (311 and 362) are "relatively close," and so LCDC determined that the population and employment projections "support a conclusion that the city's UGB expansion for industrial and office uses contains an amount of land that is reasonably related to both its forecasted growth (Goal 14, factor 1) and its employment opportunities (Goal 14, factor 2, and Goal 9)."
LCDC did not explain why a close correlation between projected land need based on an employee-per-acre ratio and projected land need based on a target-industries analysis "corroborates" the number projected by the target-industries analysis. Moreover, although LCDC indicated that a local government with a target-industries-based number that is "more" divergent from the employee-per-acre-based number will need to provide "more" thorough substantiation of its EOA and site needs, it gave no content to that analysis: how much more "divergence" requires how much more substantiation? Here, the numbers diverge by more than 16 percent. Would 20 percent no longer be considered "close"? Most importantly, LCDC did not explain why the relationship between the two numbers, in any case, should relieve it from reviewing — or local governments from explaining — why the amount of land proposed to be added to the UGB is consistent with the goals and other law just as carefully as it would if the correlation were not "close." We are not persuaded that the purportedly "close correlation" in this case provides analytical support for LCDC's conclusion that the city added a legally permissible amount of industrial land to its UGB. Accordingly, we turn to the other justifications for approval of the UGB expansion in LCDC's order on remand to determine whether they support the conclusion that LCDC reached.
In its order on remand, LCDC concluded that the city's analysis of population, employment, target industries, and site requirements provided a factual and analytical base to establish that the city's decision was consistent with Goal 14, Goal 9, and ORS 197.712. LCDC thoroughly reiterated the steps undertaken by the city and its consultant in order to arrive at the conclusion that, under a target-industries analysis and to support the economic opportunities that the city wished to offer, the city needed to add 409 gross acres of land for industrial use. The city indeed engaged in a lengthy process, resulting in a voluminous record, in this periodic-review
LCDC's discussion of Goal 14, factor 2, is illustrative:
That discussion, while lengthy, does not include reasoning. It includes findings of fact (including facts about what the city or its consultant did during the periodic-review process) and statements of law or policy. It also includes conclusions that the facts in this case satisfy the law. It does not include the reasoning that led LCDC from the facts to its conclusion.
We have extracted each proposition included in LCDC's discussion and categorized it as follows:
To the extent that LCDC intended to base its conclusion that the city's actions complied with Goal 14, factor 2, on the proposition that the city had engaged in a particular process, that is insufficient. If it were sufficient, local governments could establish compliance with Goal 14, factor 2, simply by verifying that they had engaged in the correct process, regardless of their conclusions. Substantial reason requires, at the least, an explanation of why the process in which a local government engaged and the results that it reached are consistent with the law.
In addition, LCDC incorporated into its discussion of Goal 14, factor 2, "the reasons set forth in the department's response to the written argument of the parties." We have examined that response and conclude that it fails to supply LCDC's order with substantial reason. The response relies on the same two foundations described above: (1) the "close correlation" between the amount of land actually added to the UGB and the amount that would have been added using an employees-per-acre approach ("[E]ven under the employee per acre method of estimating future land need, the approximately 360 net acres of land that the city has added to its UGB for industrial and office uses * * * is reasonably related to the amount of land shown to be needed under a traditional employee per acre methodology.") and (2) the city engaged in "steps [that] are a permissible means of complying with Goals 9 and 14[.]" As we have explained, those foundations do not provide substantial reason.
We have carefully reviewed LCDC's entire order on remand, and we conclude that LCDC did not adequately explain the reasons that led it to conclude the city's UGB amendment complied with applicable law. As noted, in light of that disposition, we do not address petitioners' arguments regarding the inclusion of certain high-value farmland within the UGB as industrial land.
Reversed and remanded for reconsideration.
Here, as noted above, before the 2011 amendments became effective, LCDC conducted its post-remand review of the city's actions and issued its revised order — which noted that "[j]udicial review is pursuant to the provision[s] of ORS 183.482 and 197.650" — and petitioners sought judicial review of that order. In light of that unique posture, we conclude that the former standard of review in ORS 197.650(1) (2009) applies. That understanding is consistent with what we understand to be the legislature's intent in adopting Oregon Laws 2011, chapter 469, as a coordinated package of legislation that would streamline review of local government decisions regarding their UGBs. See also 1000 Friends of Oregon v. LCDC, 244 Or.App. [239], 267-68, 259 P.3d 1021 (2011) (applying pre-2011 standard of judicial review where the case was pending before the effective date of the 2011 amendments and our decision issued thereafter).
