IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

SHG GARAGE SPE,

Respondents,

SHG RETAIL SPE; SHG HOTEL SPE, 

LLC; SOUND VISTA PROPERTIES, 

LLC; ELLIOTT NE LLC; LOT B, LLC; 

MADISON HOTEL LLC; HEDREEN, 

LLC; HEDREEN HOTEL LLC; 7TH & 

PINE LLC; ASHFORD SEATTLE 

WATERFRONT LP; EQR-HARBOR 

STEPS, LLC (SE); EQR-HARBOR 

STEPS, LLC (SW), EQR-HARBOR 

STEPS, LLC (NE); EQR-HARBOR 

STEPS, LLC (NW); EQR-SECOND & 

PINE, LLC; RRRR INVESTMENTS 

(UNIT 3800); RRRR INVESTMENTS 

(UNIT 3802); UNITED WAY OF KING 

COUNTY; and VICTOR and MARY 

MOSES,

Plaintiffs,

v.

CITY OF SEATTLE,

Appellant.

No. 85147-1-I 

DIVISION ONE

UNPUBLISHED OPINION

SMITH, C.J. — Washington statutes give municipalities the authority to 

make local improvements and fund those local improvements, in part, through 

assessments to property owners who obtain a special benefit from such 

improvements. The City of Seattle initiated a major, multiyear project to rebuild 

and transform its central waterfront. The City now appeals a superior court 
No. 85147-1-I/2

2

decision which annulled the Seattle City Council’s confirmation of a local 

improvement district assessment levied against property owners to help fund that 

project. We hold that the superior court erred in determining that the 

assessments were founded on a fundamentally wrong basis and that they were 

arbitrary and capricious. Accordingly, we reverse.

FACTS

In January 2019, the Seattle City Council created Local Improvement 

District (LID) No. 6751 to partially fund six major improvements to the downtown 

waterfront by assessing some costs of the improvements on the owners of 6,238 

parcels in the downtown area. The six LID improvements are: 

1. The Promenade: A continuous public open space extending along the 

west side of Alaskan Way from King Street to Pine Street;

2. The Overlook Walk: An elevated pedestrian bridge at the end of the Pike 

Street and Pine Street corridor that would connect Pike Place Market and 

the waterfront;

3. Pioneer Square Street Improvements: Includes streetscape, roadway, and 

sidewalk improvements to portions of South Main Street, South 

Washington Street, Yesler Way, and South King Street. These 

improvements would create pedestrian-friendly links between Pioneer 

Square and the waterfront.

4. Union Street Pedestrian Connection: An accessible pedestrian link 

between the new waterfront and Western Avenue.
No. 85147-1-I/3

3

5. Pike/Pine Streetscape Improvements: Pedestrian improvements along 

Pike Street and Pine Street between First Avenue and Ninth Avenue. 

These improvements will also provide enhanced pedestrian access to and 

from Pike Place Market and the waterfront.

6. Pier 58 (formerly known as the Waterfront Park): A rebuilt pier park 

located at the base of Union Street for social gatherings and 

performances.

The City Council limited the total amount of assessment to affected property 

owners to no more than $160 million plus the amount necessary to pay the costs 

of financing.

Calculation of Assessments Based on Special Benefit Study

In January 2019, the City commissioned ABS Valuation, Inc., (ABS) to 

estimate the increase in value accruing to each parcel due to the waterfront 

improvement projects, referred to as each parcel’s “special benefit.” ABS then 

allocated the cost of the projects among the LID parcel owners in proportion with 

those special benefits.

In November 2019, ABS submitted its final special benefit study to the City 

Council. Using mass appraisal techniques, market sales data, and lease data, 

ABS provided with- and without-LID values for each of the parcels based on 

“highest and best use” and market value of the affected properties. Although the 

study provided a general overview of ABS’s reasonings and analyses, it did not 

include the specific calculations used to arrive at the estimated values. 
No. 85147-1-I/4

4

Using a valuation date of October 1, 2019, ABS determined that the total 

special benefit estimate for all the LID parcels was $447,908,000. Then, to 

calculate the recommended assessments, ABS divided the total assessment limit 

by the estimated total special benefit to reach a cost/benefit ratio of 39.2 percent. 

ABS then multiplied the special benefit assessable to each parcel by the 

cost/benefit ratio to determine the recommended final assessment for each 

parcel.

Hearings before the Hearing Examiner

In December 2019, the City Council published and mailed notices of a 

public hearing for the final LID assessment roll to all property owners within the 

LID. The notices identified each property owner’s final assessment and provided 

information on how to object to the assessment. Of the 6,238 properties 

assessed, 430 property owners submitted timely objections. The City Council 

designated the City of Seattle Office of Hearing Examiner to conduct the 

hearings and provide a recommendation to the City Council.

The appeal hearings began in February 2020, soon after the onset of the 

COVID-191 pandemic. The objecting property owners presented their cases-inchief before the Hearing Examiner over the course of several days in March and 

April 2020. In June 2020, the City presented its case-in-chief and the objecting 

property owners were permitted to cross-examine the City’s witnesses. In lieu of 

additional live testimony, the City also submitted declarations; qualifying 

 

1 COVID-19 is the World Health Organization’s official name for 

“coronavirus disease 2019,” a severe, highly contagious respiratory illness that 

quickly spread throughout the world after being discovered in December 2019.
No. 85147-1-I/5

5

objectors were then permitted to submit closing briefs and responsive 

declarations.

In September 2020, the Hearing Examiner issued its initial findings and 

recommendations to the City Council. Of the 430 objecting property owners, the 

Hearing Examiner recommended remanding 17 properties for further analysis by 

ABS. On remand, the objecting property owners and the City submitted

supplemental declarations and briefing for the remanded properties. After ABS 

revised its analysis, it reduced the assessments for 15 of the 17 remanded 

properties.

In February 2021, the Hearing Examiner submitted its final findings and 

recommendations with the city clerk, recommending that the City Council accept 

the revised assessments for the 15 remanded properties and deny all the 

property owners’ objections.

Confirmation of the Assessment Roll

After the Hearing Examiner issued its final report, several property owners 

appealed the initial and final reports with the city clerk. The City Council 

delegated review of the appeals to its Public Assets and Native Communities 

Committee and set dates for hearing the appeals. 

After considering the property owners’ written submissions on appeal, the 

Committee voted to recommend that the full City Council deny all the appeals. 

The Committee did not discuss any of the individual appeals, nor any of the 

common issues affecting the property owners.
No. 85147-1-I/6

6

On June 14, 2021, the full City Council confirmed the final LID assessment 

roll and adopted the Hearing Examiner’s final findings and recommendations, 

which rejected all of the property owners’ appeals.

Appeal to the Superior Court

Twenty-one property owners (Owners) appealed their assessments to 

King County Superior Court. After a hearing on the appeals, the superior court 

nullified the LID assessments for each of the Owners’ properties and ordered the 

City to refund all assessments the appealing owners had paid to date. The court 

concluded that the City’s method of assessment was founded on a fundamentally 

wrong basis because it failed to consider the impacts of COVID-19, failed to 

demonstrate how removal of the viaduct impacted property values, failed to 

comply with professional appraisal standards, and failed to connect any value 

increase to any property-specific data. The court also concluded that the City’s 

process for assessing the Owners’ property was arbitrary and capricious 

because the City instructed its appraiser to hypothesize values too far in advance 

of completion of the projects, because the City instructed the appraiser to treat all 

the improvements as continuous, because the Hearing Examiner mistakenly 

disregarded credible testimony from the Owners’ witnesses, and because the 

City Council failed to independently review the Hearing Examiner’s 

recommendations. 

The City appeals.
No. 85147-1-I/7

7

ANALYSIS

Because this case involves a complex and specialized area of law, we 

begin with a brief overview of the principles governing LID assessments before 

turning to the parties’ arguments on appeal.

LID Assessments in Washington

Local governments may impose special assessments on property owners 

within a local improvement district to pay for improvements that specially benefit 

those properties. Hamilton Corner I, LLC v. City of Napavine, 200 Wn. App. 258, 

266, 402 P.3d 368 (2017). A “special benefit[]” is “the increase in fair market 

value attributable to the local improvements.” Doolittle v. City of Everett, 114 

Wn.2d 88, 103, 786 P.2d 253 (1990). “Fair market value ‘means neither a panic 

price, auction value, speculative value, nor a value fixed by depressed or inflated 

prices.’ ” Bellevue Plaza, Inc. v. City of Bellevue, 121 Wn.2d 397, 403, 851 P.2d 

662 (1993) (emphasis omitted) (quoting In re Loc. Improvement No. 6097, 52 

Wn.2d 330, 333, 324 P.2d 1078 (1958)). “To be subject to an LID assessment, a 

property must realize a benefit that is ‘actual, physical and material[,] . . . not 

merely speculative or conjectural,’ . . . that is ‘substantially more intense than [the 

benefit] to the rest of the municipality.’ ” Hasit LLC v. City of Edgewood, 179 Wn. 

App. 917, 933, 320 P.3d 163 (2014) (alterations in original) (quoting Heavens v. 

King County Rural Library Dist., 66 Wn.2d 558, 563, 404 P.2d 453 (1965)). And 

“a special assessment may not substantially exceed a property’s special benefit.” 

Hasit, 179 Wn. App. at 933. Moreover, a property should not be assessed 

“proportionately more than its share” of the total assessment relative to other 
No. 85147-1-I/8

8

properties in the LID. Cammack v. Port Angeles, 15 Wn. App. 188, 196, 548 

P.2d 571 (1976).

Affected owners have the right to a hearing addressing whether the 

improvement resulted in a special benefit to their property. Carlisle v. Columbia 

Irrig. Dist., 168 Wn.2d 555, 569, 229 P.3d 761 (2010). A city council may 

designate an officer to conduct hearings on the proposed assessments. 

RCW 35.44.070. The designated officer considers the evidence and the 

submitted objections and makes a recommendation to the city council. RCW 

35.44.070. The city council, sitting as a board of equalization, may then adopt or 

reject the officer’s recommendation. RCW 35.44.070, RCW 35.44.080(2). The 

city council may also revise or modify the assessment recommendation or order 

the assessment to be made de novo. RCW 35.44.080(3).

A city council’s decision may be appealed to the superior court. 

RCW 35.44.200. The superior court shall confirm the city council’s decision 

unless it finds “from the evidence that such assessment is founded upon a 

fundamentally wrong basis and/or the decision of the council or other legislative 

body thereon was arbitrary or capricious.”2 RCW 35.44.250. An assessment is 

founded on a fundamentally wrong basis if there exists “ ‘some error in the 

method of assessment or in the procedures used by the municipality, the nature 

of which is so fundamental as to necessitate a nullification of the entire LID, as 

opposed to a modification of the assessments as to particular property.’ ” 

 

2

If the superior court determines that the assessment is invalid, the city 

may reassess the assessments. RCW 35.44.280.
No. 85147-1-I/9

9

Abbenhaus v. Yakima, 89 Wn.2d 855, 859, 576 P.2d 888 (1978) (quoting 

Cammack, 15 Wn. App. at 196). A city council’s decision regarding a LID 

assessment is arbitrary and capricious if it constitutes “willful and unreasoning 

action, taken without regard to or consideration of the facts and circumstances 

surrounding the action.” Abbenhaus, 89 Wn.2d at 858. And “[w]here there is 

room for two opinions, an action taken after due consideration is not arbitrary and 

capricious even though a reviewing court may believe it to be erroneous.” 

Abbenhaus, 89 Wn.2d at 858-59. 

Standard of Review

On appeal, our review is limited to the record of proceedings before the 

city council. Abbenhaus, 89 Wn.2d at 859. We examine the propriety of the 

process and do not undertake an independent evaluation of the merits. Doolittle, 

114 Wn.2d at 93. In reviewing the council’s decision, we apply the same 

“fundamentally wrong basis” and “arbitrary and capricious” standards of review. 

Hamilton Corner I, 200 Wn. App. at 267. 

We presume that the city council’s assessment was proper, and the 

challenging party bears the burden of proving otherwise. Bellevue Assocs. v. 

City of Bellevue, 108 Wn.2d 671, 674, 741 P.2d 993 (1987). We also presume 

(1) that an improvement is a benefit, (2) that an assessment is no greater than 

the benefit conferred, (3) that an assessment is equal or ratable to an 

assessment on other similarly situated property, and (4) that the assessment is 

fair. Abbenhaus, 89 Wn.2d at 861. However, these presumptions merely 

“ ‘establish which party has the burden of going forward with evidence.’ ” Hasit, 
No. 85147-1-I/10

10

179 Wn. App. at 935 (quoting Bellevue Plaza, 121 Wn.2d at 403. If “ ‘the other 

party adduces credible evidence to the contrary,’ the burden shifts to the city” to 

support its assessments. Hasit, 179 Wn. App. at 935-36 (quoting Bellevue 

Plaza, 121 Wn.2d at 403). “[C]laims of unfairness made before the city council, 

without supporting evidence of appraisal values and benefits, are inadequate to 

overcome these presumptions of fairness and appearance of correctness.” 

Abbenhaus, 89 Wn.2d at 861.

As an initial matter, we note that the Owners misquote two legal principles. 

First, citing Heavens, the Owners state that “LID assessments must . . . not 

exceed the actual special benefit accruing to each property as a result of the LID 

improvements.” This is incorrect. Instead, the LID assessment must not 

substantially exceed the special benefit accruing to a property. Hasit, 179 Wn. 

App. at 933; Heavens, 66 Wn.2d at 563. Second, quoting Bellevue Associates, 

the Owners state that the fundamentally wrong basis standard refers to “ ‘some 

error in the method of assessment or in the procedures used by the 

municipality[.]’ ” But this selective citation omits the second half of that sentence, 

which elaborates: “ ‘the nature of which is so fundamental as to necessitate a 

nullification of the entire LID, as opposed to a modification of the assessment as 

to a particular property.’ ” Bellevue Assocs., 108 Wn.2d at 675 (emphasis 

omitted) (quoting Abbenhaus, 89 Wn.2d at 859). 

Expert Appraisal Evidence

The parties dispute whether the Owners’ expert testimony before the 

Hearing Examiner qualifies as expert appraisal evidence sufficient to overcome 
No. 85147-1-I/11

11

the presumption that the City’s assessment was valid. Although testimony from 

expert appraisers does qualify as expert appraisal evidence, the Owners’ 

evidence did not demonstrate that the properties did not benefit from the 

improvements and was thus insufficient to overcome the presumption of validity. 

To overcome the presumption that a LID improvement is a benefit, a 

challenging party must present “expert appraisal evidence showing that the 

property would not be benefited by the improvement.” Bellevue Plaza, 121 

Wn.2d at 403. For example, in In re Indian Trail Trunk Sewer System, expert 

testimony from the property owners’ appraisers “regarding fair market value of 

their assessed property” showing that the land was not affected by the 

improvements and that the improvements “had an adverse effect upon the value 

of the land” was sufficient to rebut the presumption in favor of validity. 35 Wn. 

App. 840, 842-43, 670 P.2d 675 (1983). Likewise, in In re Consolidated Appeals

of Jones, expert testimony “that the improvements did not enhance the market 

value of [the owners’] properties” was adequate to rebut the presumption of 

validity. 52 Wn.2d 143, 145, 324 P.2d 259 (1958).

Here, the Owners do not contend that their properties would not be 

specially benefitted, nor did they provide evidence demonstrating as much. 

Instead, the Owners allege that testimony before the Hearing Examiner provided 

“sufficient information to calculate an alternative special benefit amount.” At the 

same time, however, the Owners also contend that “the LID study and the 

potential benefit estimates are simply too speculative to allow for a reliable 

counter-appraisal.” Because the Owners have not provided expert evidence 
No. 85147-1-I/12

12

demonstrating that their properties would not be specially benefitted, the Owners 

have not overcome the presumption of validity.

Fundamentally Wrong Basis

The Owners contend that the City’s appraisal was founded on a 

fundamentally wrong basis for four reasons: (1) ABS’s study did not analyze how 

removal of the viaduct affected property values; (2) the study’s assumptions were 

rendered inaccurate by COVID-19; (3) the study did not comply with professional 

appraisal standards; and (4) the study did not conduct any property-specific 

analysis. We disagree.

Because “fundamentally wrong basis” is less well-defined by case law, a 

few examples of instances in which LID assessments were determined to be 

founded on fundamentally wrong bases are provided before we address the

Owners’ arguments.

In In re Shilshole Avenue, our Supreme Court invalidated an assessment 

levied for the purpose of raising the grade of the road by 16 to 18 feet because 

the evidence demonstrated that the properties would have equally benefited from 

an increase of only nine feet. 85 Wash. 522, 525, 148 P. 781 (1915). The court 

noted that assessments for the portion of the project that raised the street more 

than nine feet were “made against the property of these appellants to pay 

damages for a thing which did not benefit that property, was founded upon a 

fundamentally wrong basis and is wholly indefensible.” Shilshole Ave., 85 Wash. 

at 536.
No. 85147-1-I/13

13

Similarly, in Doolittle, the court determined that an assessment was 

founded on a fundamentally wrong basis where the city appraised and assessed 

four adjacent properties as a single tract of land, concluding that the highest and 

best use of the properties would be a single large commercial building covering 

all four lots. 144 Wn.2d at 91-92. At the time of the appraisal, a single 

commercial property occupied three of the lots and the fourth had been 

developed for a separate commercial use. Doolittle, 144 Wn.2d at 90. On 

appeal, our Supreme Court reasoned that because the fourth lot was never used 

in combination with the other lots, it was an error for the appraiser to disregard 

the owner’s actual use and consider the lots as a single unified parcel. Doolittle, 

144 Wn.2d at 103.

More recently, in Hasit, this court determined that an assessment was 

founded on a fundamentally wrong basis because it included costs for 

“oversizing” the sewer pipes, which would only benefit future users not assessed 

under the LID. 179 Wn. App. at 938. In that case, the record showed that the 

city deliberately built the pipes larger than necessary to serve the LID because it 

wanted to be able to serve future users outside of the LID. Hasit, 179 Wn. App. 

at 940. The city also rejected other financing options to fund the expansion in 

favor of having the LID owners pay for the larger pipes. Hasit, 179 Wn. App. at 

940-41. On appeal, this court explained that city could not assess owners for 

improvements that did not provide a special benefit. Hasit, 179 Wn. App. at 941.
No. 85147-1-I/14

14

1. Viaduct Removal

The Owners claim that the LID assessments were founded on a 

fundamentally wrong basis because ABS’s study did not analyze how the viaduct 

removal impacted property values by the waterfront. Because the Owners 

provided no evidence refuting ABS’s “before” valuation, we disagree. 

A primary assumption of the ABS study was “that in the before (without 

LID) scenario, the Alaskan Way viaduct has been removed and Alaskan Way is 

rebuilt, to WSDOT standards, at street level.” Therefore, “any view amenity 

enhancement created by removal of the viaduct [was] not considered in [ABS’s] 

analysis.” But the study and the record contain adequate information for the 

Owners to evaluate how ABS valued the “before” scenario. Robert Macaulay, 

ABS’s lead appraiser, testified that to appraise the “before” scenario, ABS relied 

on renderings of the rebuilt Alaskan Way and considered factors such as 

proximity to the improvements, relevant market information on rents and 

vacancy, market conditions, and capitalization rates. In response, the Owners 

claim that the ABS’s analysis is unreliable, but do not proffer any evidence 

regarding the value of their properties before and after the improvements. 

Because the Owners fail to provide any relevant evidence to rebut the 

presumption that the City’s assessment was proper, the assessments were not 

founded on a fundamentally wrong basis.

2. Impact of COVID-19

The Owners argue that all assumptions in the ABS study were rendered 

false by COVID-19 and therefore, that the assessments were founded on a 
No. 85147-1-I/15

15

fundamentally wrong basis. Because the assessments predate the onset of the 

pandemic, we disagree.

Though the Owners assert that it is contrary to law to ignore the impacts of 

COVID-19, they present no authority to support their contention that the 

pandemic invalidated any and all assumptions in ABS’s study. On the contrary, 

settled case law provides that fair market value “ ‘means neither a panic price, 

auction value, speculative value, nor a value fixed by depressed or inflated 

prices.’ ” Bellevue Plaza, 121 Wn.2d at 404 (emphasis added) (quoting Loc. 

Improvement No. 6097, 52 Wn.2d at 333). Here, the Owners have not shown 

that COVID-19 impacted the values of their properties or that these hypothetical 

reductions are not merely a “panic price.” The Owners merely allege that 

ignoring the effect of COVID-19 is “unfair.” 

Moreover, before the Hearing Examiner, the Owners’ own expert 

acknowledged that the Appraisal Institute’s guidance on conducting appraisals 

during the pandemic did not apply to appraisals done before the onset of the 

pandemic. The Owners fail to demonstrate that the ABS study needed to 

account for value changes due to COVID-19; this is not a basis on which to 

conclude that the assessments were founded on a fundamentally wrong basis.

3. Professional Appraisal Standards

The Owners also contend that the assessments were founded on a 

fundamentally wrong basis because the ABS study did not comply with 

professional appraisal standards. We disagree.
No. 85147-1-I/16

16

The Owners first argue that the study did not comply with Uniform 

Standards of Professional Appraisal Practice3(USPAP) Standards 1 and 2, 

which govern direct property appraisals. Because the appraisal at issue was a 

mass appraisal, which is governed by separate standards, and not a direct 

appraisal, it is unclear why compliance with Standards 1 and 2 is necessary.

Next, the Owners assert that the study did not comply with USPAP 

Standards 5 and 6, which govern mass appraisals. Specifically, Standard 5 

covers development of a mass appraisal while Standard 6 sets out the 

requirements for mass appraisal reporting. Standard 5 requires that an appraiser 

“employ recognized techniques for specifying property valuation models” and 

“employ recognized techniques for calibrating mass appraisal models.” Standard 

6 requires that mass appraisal reports “summarize and support the model 

specification(s) considered, data requirements, and the model(s) chosen” and 

“summarize calibration methods considered and chosen, including the 

mathematical form of the final model(s).” Because ABS’s study is a report on a 

mass appraisal to determine special benefits, Standard 6 provides the relevant 

guidelines.

It is also important to note that a valuation model does not need to be a 

mathematical model. As explained in the Washington Local and Road 

Improvement Districts Manual,

 

3

 UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE & ADVISORY 

OPINIONS (Appraisal Standards Bd. of The Appraisal Foundation) (USPAP). 

Washington has adopted the USPAP as the standard of practice governing real 

estate appraisal activities. WAC 308–125–200(1).
No. 85147-1-I/17

17

[s]ometimes mathematical formulas will not fairly distribute special 

benefit. When a mathematical formula is not used, a qualified, 

experienced appraiser should be employed to conduct a special 

benefit analysis. On projects where there is a mixture of land uses, 

zoning, or when major topographic changes occur in the district, it 

is recommended that the special benefit analysis method be used. 

MUN. RSCH. & SERVS. CTR., LOCAL AND ROAD IMPROVEMENT DISTRICTS (LID)

MANUAL FOR WASHINGTON STATE ch. 5, at 58 (6th ed. 2009).4

Here, the ABS study and Macaulay’s testimony before the Hearing 

Examiner demonstrate that the study complied with Standard 6. The study’s 

methodology section states that the appraiser considered recent sales of 

comparable commercial and multi-family residential land, local commercial and 

apartment lease rates, and supply and demand information for commercial and 

residential markets, such as vacancy rates and absorption costs for estimating

before and after values. The appraiser also interviewed developers of proposed 

and underway projects in the LID vicinity to obtain perspective on the LID 

improvements and its influence on property values. The study then explains how 

it calculated a cost/benefit ratio by dividing the total assessment cap by the total 

estimated special benefit assessable to the properties. 

The study details in over 140 pages how special benefits were calculated 

for commercial, residential, and special purposes properties by analyzing 

comparable projects and relevant market data. To assess before and after

values, the study considered supply and demand factors, vacancy and 

occupancy rates, capitalization rates, and market conditions. The study 

 

4

 https://mrsc.org/getmedia/4233f39b-f38b-4766-8c22-a0f0d9340d91/

Local-And-Road-Improvement-Districts-Manual.pdf.aspx?ext=.pdf 

[https://perma.cc/XE7L-6X8W].
No. 85147-1-I/18

18

categorizes properties by use (commercial, residential, and special purpose) and 

applies different valuation methods (income based, sales comparison, or cost) 

based on the type of property. The study notes that many increases in property 

values are because of the “enhanced location, pedestrian connectivity and 

appeal created by the waterfront improvement amenities,” which are reflected in 

increased rents, lower vacancy levels and capitalization rates, and lower 

perceived investment risk. The study uses data from commercial market data 

research services, public records, individual buyers and sellers, local realtors, 

and developers and area property managers. The study’s addenda contain 

pages of graphs summarizing this data.

Before the Hearing Examiner, Macaulay testified that ABS calculated 

before and after values by “looking at other studies [ABS] had done, looking at 

other cities and how . . . the market reflected change due to the implementation 

of projects similar to [the Waterfront LID].” Macaulay also testified that ABS 

analyzed over 25 studies throughout different market areas relative to 

streetscapes, bike lanes, open spaces, and parks. Macaulay noted that contrary 

to the Owners’ assertion, ABS “didn’t look at the whole LID area as one giant 

park.” Macaulay also explained that the study does not specify how much each 

factor contributed to value increases because “[t]he market just doesn’t function 

that way” and ABS was “trying to reflect the market as it functions.” During the 

proceedings, ABS also produced spreadsheets for each of the Owners’ 

properties that showed detailed before and after valuations.
No. 85147-1-I/19

19

Because ABS complied with applicable USPAP standards and because 

the Owners fail to present additional evidence showing that the valuations were 

inaccurate, the assessments were not founded on a fundamentally wrong basis.

4. Property-Specific Analysis

The Owners contend that ABS’s “hypothesized micro-benefits are neither 

reasonably measurable nor a legal basis to assess property owners.” In doing 

so, they repeat much of their previous arguments and are not persuasive. As 

noted, ABS adequately documented and explained its before and after 

valuations. And because ABS conducted a mass appraisal, as opposed to a 

direct appraisal, it was not required to produce the type of detailed, propertyspecific analysis that the Owners seek. Again, without evidence from the 

Owners showing that the percentage increases are inaccurate, the Owners 

cannot overcome the presumption that the City’s assessment was accurate. The 

study’s lack of unnecessary property-specific analysis does not render the 

assessments invalid.

Finally, we briefly note that while the Owners asserted in briefing that ABS 

miscalculated the special benefit, they maintained at oral argument that there 

was no special benefit to any of their properties.5 No evidence exists in the 

record to support this argument, and the Owners do not provide any explanation 

for it in their briefing.

 

5 Wash. Ct. of Appeals oral argument, SHG Garage SPE v. City of 

Seattle, No. 85147-1-I (Feb. 27, 2024), at 10 min., 40 sec. through 10 min., 50 

sec., audio recording by TVW, Washington State’s Public Affairs Network, 

http://www.tvw.org.
No. 85147-1-I/20

20

Arbitrary and Capricious

The Owners contend that the City’s process was arbitrary and capricious 

for four reasons: (1) the City instructed ABS to hypothesize values too far in 

advance; (2) the City instructed ABS to treat all improvements as continuous 

when they were not; (3) the Hearing Examiner misapplied the presumption of 

correctness to disregard testimony from the Owners’ witnesses; and (4) the City 

Council failed to independently review the Hearing Examiner’s recommendations. 

We disagree.

1. Timing of Appraisal

The Owners first contend that the 2019 appraisal was completed too far in 

advance of the LID improvements. In support of this assertion, the Owners rely 

exclusively on a section of the LID Manual,

6 which states that market value is 

estimated “typically as of the date of the final assessment roll hearing,” and 

Seattle Municipal Code (SMC) § 20.04.070(B)(1), which requires the proposed 

final assessment roll to be filed within 90 days following completion of the 

improvements. 

But neither the LID Manual nor the SMC provide clear requirements for 

when an appraisal date must be set. The LID Manual only describes what 

“typically” happens in a final special benefit study—it does not set hard and fast 

rules for how special benefits must be measured. And the Owners provide no 

authority to suggest that the LID Manual is binding upon the City or its appraiser. 

The Owners’ reliance on SMC § 20.04.070(B)(1) is similarly unpersuasive as it 

 

6

 MUN. RSCH. & SERVS. CTR., supra, at 55.
No. 85147-1-I/21

21

only addresses when the proposed final assessment roll must be filed, not when 

the appraisal date must be set. 

Citing Bellevue Associates, the Owners asserted at oral argument that a

property valuation must be conducted immediately before and after the special 

benefits attach.7 But this is a mischaracterization of Bellevue Associates. In that 

case, our Supreme Court stated that “[t]he measure of special benefits is ‘the 

difference between the fair market value of the property immediately after the 

special benefits have attached and its fair market value before they have 

attached.’ ” Bellevue Assocs., 108 Wn.2d at 675 (emphasis added) (quoting 

Heavens, 66 Wn.2d at 564). The immediacy requirement that the Owners 

mention applies only to the valuation of the property after the special benefits 

have attached, not before. The Owners offer no other argument suggesting that 

the time between the appraisal and the completion of the LID improvements 

rendered the valuations inaccurate.

2. Continuous Improvements

The Owners next argue that the City acted arbitrarily and capriciously by 

instructing ABS to treat the separate LID improvements as one continuous 

improvement. Because the City complied with the applicable statutes governing 

continuous and contiguous improvements, we disagree.

RCW 35.42.050 requires a city council to assess discontinuous 

improvements separately unless it makes a finding that all properties within the 

 

7 Wash. Ct. of Appeals oral argument, supra., at 11 min., 33 sec. through 

11 min., 50 sec.
No. 85147-1-I/22

22

LID will benefit from the improvements as a whole. Here, the City Council made

such a finding in Ordinance 125760:8 “It is hereby found that the [LID] 

boundaries embrace as nearly as practicable all the property specially benefited 

by the LID Improvements.” Because the City complied with RCW 35.42.050, its 

actions were not arbitrary and capricious.

3. Presumption of Correctness

The Owners also claim that the Hearing Examiner misapplied the 

presumption of correctness to disregard testimony from Owners’ expert 

witnesses. But as previously noted, “[w]here there is room for two opinions, an 

action taken after due consideration is not arbitrary and capricious even though a 

reviewing court may believe it to be erroneous.” Abbenhaus, 89 Wn.2d at 858-

59. Similarly, here, the Hearing Examiner’s weighing of evidence is not arbitrary 

and capricious merely because the Owners disagree with how the Examiner 

weighed the evidence. Absent any authority or evidence to the contrary, the 

record reflects that the Hearing Examiner considered the evidence before it and 

determined that the City’s evidence was more persuasive.

4. City Council Review of Hearing Examiner’s Recommendations

Finally, the Owners maintain that the City Council has a duty to 

independently review the appeals and that it failed to do so. But the record 

reflects that the City Council appropriately delegated review of the appeals to a 

committee as authorized by law.

 

8

 Seattle Ordinance 125760, at 5 (Jan. 28, 2019), https://clerk.seattle.gov/

~archives/Ordinances/Ord125760.pdf [https://perma.cc/38HR-C4ER].
No. 85147-1-I/23

23

The City Council may direct any appeals from any finding, 

recommendation, or decision of the hearing examiner to a committee of the City 

Council. SMC § 20.04.090(C). If the City Council chooses to delegate hearing 

the appeals to a committee, it does not need to independently review the 

appeals. SMC § 20.04.090(E) (city council or committee conducts review on 

appeal).

Here, the City Council chose to delegate hearing of the appeals to the 

Public Assets and Native Communities Committee. After considering the 

appeals, the Committee voted to recommend denying the appeals to the full City 

Council. The Owners’ assertion that the City Council, sitting as a board of 

equalization, has a duty to independently review the appeals is unpersuasive. In 

support of this contention, the Owners cite SMC § 20.04.070(A), which provides 

that “[a]t the time fixed for the hearing [on the final assessment roll], the City 

Council, a committee thereof, the Hearing Examiner, or designated officer shall 

sit as a Board of Equalization for the purpose of considering the assessment roll.” 

Because SMC § 20.04.070(A) addresses hearings on the final assessment roll 

and not appeals, it is unpersuasive. Moreover, it still permits a committee of City 

Council to sit as a board of equalization. Here, the City Council did not need to 

independently review the appeals and delegation to the Committee was 

appropriate.

The Owners also contend that certain comments by council members 

suggest that the Committee and City Council did not properly review the appeals. 

This is also unpersuasive because “comments and alleged motives of council 
No. 85147-1-I/24

24

members do not transmute the City’s actions into arbitrary and capricious 

conduct.” Hasit, 179 Wn. App. at 951. We hold that the City’s LID assessments 

were not calculated on a fundamentally wrong basis and that the City Council did 

not act arbitrarily or capriciously in adopting the LID assessments.

We reverse.

WE CONCUR: