Case Name: The State of Washington, on the Relation of The Washington State Convention and Trade Center, Respondent, v. Julia M. Evans, et al., Appellants
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1998-11-12
Citations: 136 Wash. 2d 811
Docket Number: No. 65607-0
Parties: The State of Washington, on the Relation of The Washington State Convention and Trade Center, Respondent, v. Julia M. Evans, et al., Appellants.
Judges: 
Reporter: Washington Reports
Volume: 136
Pages: 811–845

Head Matter:
[No. 65607-0.
En Banc.]
Argued May 12, 1998.
Decided November 12, 1998.
The State of Washington, on the Relation of The Washington State Convention and Trade Center, Respondent, v. Julia M. Evans, et al., Appellants.
Sanders and Madsen, JJ., dissent by separate opinion.
John P. Lycette, Jr.; Snook & Bolton, by Janet G. Lim; Garvey, Schubert & Barer, by Robert B. Spitzer; Hanson, Baker, Ludlow & Drumheller, P.S., by Linda M. Youngs; William J. Boyce; and Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim, by Thomas J. Greenan, for appellants.
Christine O. Gregoire, Attorney General, and Robert A. Wright and John R. Ellis, Assistants, for respondent.

Opinion:
Durham, C. J.
Property owners challenge a King County Superior Court order adjudicating public use and necessity that authorizes the State to condemn their property for expansion of the Washington State Convention and Trade Center (Convention Center or Center). At issue is whether the State may exercise the power of eminent domain under article I, section 16 (amendment 9), given the anticipated partial private use of the condemned property. We hold that the State may use the power of eminent domain to acquire the property for the Convention Center expansion project because the State seeks to condemn no more prop erty than would be necessary to accomplish the purely public component of the project.
FACTS
The Convention Center plans to construct 110,000 square feet of new heavy load exhibit space. The Legislature approved the use of eminent domain to acquire property for the expansion and approved a grant of $111.7 million of State funding. The Legislature conditioned this grant on the Center's ability to raise $15 million in outside governmental or private funding. RCW 67.40.180. The Washington State Convention and Trade Center Board (WSCTC Board) formed a task force to examine expansion possibilities, which narrowed the options down to either an addition to the east of the current facility or an addition to the north.
The east expansion alternative would extend onto the First Hill neighborhood, across Hubbell Place and the Union Street right-of-way to Terry Avenue. Four residential apartment buildings would be demolished, causing a total loss of 394 mixed-income housing units. Convention Center operations would be shut down for between six months to a year while current physical plant structures were being relocated.
The north expansion site would extend the existing Convention Center across Pike Street and Eighth Avenue. A 127-unit apartment tower, a condominium/garage structure, six parking lots, and a rental car outlet would be displaced. The current exhibit space sits roughly four stories above ground at Eighth Avenue. In order to be contiguous to the current exhibit space, a north expansion would likewise sit four stories above street level. The north alternative would thus create surplus ground level space that the Center could lease or sell to reach the $15 million in outside contribution required by the Legislature.
The task force evaluated both options and considered the financial requirements, community impact, and effect on urban fabric of each alternative. The task force preferred the north alternative, basing its decision, in part, on social and architectural concerns. However, one compelling factor in the decision to choose the north alternative was the State's ability to meet the legislative outside contribution requirement by leasing or selling the surplus space created underneath the north expansion. The WSCTC Board adopted these findings and designated the north site as the preferred alternative.
The Convention Center then solicited proposals for private development in the space below the proposed north expansion. R.C. Hedreen Company (Hedreen) submitted a development plan that was eventually chosen by the Center as the most suitable to its needs. The Board entered into an Option, Purchase and Development Agreement with Hedreen. Under this agreement, Hedreen will contribute the $15 million required for legislative approval of the project. Hedreen also will build the outer shell of the Convention Center. This shell will be supported by huge foundation columns, extending from the exhibit hall to the ground, which will be stabilized by interstitial floors. Also, numerous stairways, utility runs, and other support facilities will intrude down into the space underneath the exhibit hall. In return, Hedreen will take fee simple title to the remaining space below the Convention Center for construction of retail and parking, and will construct a hotel tower in the northwest corner of the parcel (on land already owned by the convention center and not subject to these eminent domain proceedings).
The Convention Center instituted condemnation proceedings pursuant to RCW 67.40.020 and RCW 8.04 to acquire fee simple title to nine tracts of land in the north expansion area. One property owner granted immediate use and possession. The remaining property owners challenged the condemnation. They argued that the State was impermissibly seeking to condemn their property for private use. The property owners also argued that the decision to choose the north site based on the possibility of private funding was arbitrary and capricious.
The Superior Court, in its amended and final findings of fact and conclusions of law, ruled in favor of the Center and entered an order adjudicating public use and necessity. The Court found that (1) the expansion of the Convention Center is a public purpose; (2) the exhibit space would cover the entire area of the nine parcels sought to be condemned; (3) the Center will be making a public use of the exhibition space, the support columns, and stairwells, and the lateral flooring; and (4) the area beneath the hall and between the columns will be created as an inevitable consequence of constructing the public space, and must be leased to another entity or remain empty. The court also found that in order to be successful as an exhibit hall, the exhibit area must be open and cannot be penetrated by support columns. Thus, no structure can be built above the exhibit hall space. This structural requirement precludes access to the air rights above the exhibit hall and, therefore, such air rights would be taken for purely public purposes.
Based on these findings, the court concluded that the volumetric ratio of private use to public use is approximately 20 percent to 80 percent. The court thus held that the private use would accompany the public use in a subordinate way, and that sale of the space to private users to prevent waste is an incidental use. The court also held that the expansion to the north site rather than the east site was necessary. The north option dislocated fewer housing units and the Convention Center could continue operating during construction. Were the east site chosen, it would require the relocation of mechanical and utility functions resulting in a shutdown of the convention center for six months to a year.
The property owners appealed the trial court's order and the case was transferred to this court for direct review.
ANALYSIS
The power of eminent domain is an inherent power of the state. Miller v. City of Tacoma, 61 Wn.2d 374, 382, 378 P.2d 464 (1963). This power is limited by both the Washington State Constitution and by statute. Article I, section 16 (amendment 9) prohibits the State from taking private property for private use. RCW 8.04.070 requires that a proposed condemnation be necessary for the public use. This court has developed a three-part test to evaluate eminent domain cases. For a proposed condemnation to be lawful, the State must prove that (1) the use is public; (2) the public interest requires it; and (3) the property appropriated is necessary for that purpose. In re City of Seattle, 96 Wn.2d 616, 625, 638 P.2d 549 (1981) (citing King County v. Thielman, 59 Wn.2d 586, 593, 369 P.2d 503 (1962)). Property owners challenge the present condemnation on the first and third grounds. They argue that the expansion project is not "for public use" because Hedreen's participation creates an impermissible mix of public and private uses. They also argue that the adoption of the north alternative was not necessary given the availability of an east alternative that did not involve private participation.
Public Use
The constitution prohibits the taking of private property for a private use. However, this language does not create a blanket prohibition on the private use of land condemned by the State. As long as the property was condemned for the public use, it may also be put to a private use that is merely incidental to that public use. Chandler v. City of Seattle, 80 Wash. 154, 159, 141 P. 331 (1914); City of Tacoma v. Nisqually Power Co., 57 Wash. 420, 428, 107 P. 199 (1910). The property owners concede that the exhibit hall space will be put to a public use. The question then is whether Hedreen's participation in the expansion project corrupts the public nature of the project, or whether it is merely incidental.
The property owners argue that Hedreen's involvement in the project is not incidental. They rely on In re City of Seattle, 96 Wn.2d 616, 638 P.2d 549 (1981) {Westlake) for the proposition that a private use is not incidental if the public and private uses are combined "in such a way that the two cannot be separated." Westlake, 96 Wn.2d at 627. The property owners argue that the expansion project depends upon Hedreen's participation to meet legal and architectural requirements in such a way that the public and private spaces cannot be separated. Property owners err in their interpretation of Westlake and its application to the facts of this case.
Westlake involved the proposed acquisition of the properties that now constitute the Westlake Mall in Seattle. The City of Seattle intended to create a downtown urban focal point in order to forestall the decay experienced by other cities' retail cores. To this end, the City attempted to condemn several parcels of land. The City planned to construct a park on part of the land acquired, and deed the rest of the land to a private developer, who would build a mall, a monorail terminal, and museum space.
Several property owners challenged the condemnation. On discretionary review, this court analyzed the mixed uses in the plan and observed that the retail shops were a substantial element of the project, essential to its functioning. The court stated that "[i]f a private use is combined with a public use in such a way that the two cannot be separated, the right of eminent domain cannot be invoked." Westlake, 96 Wn.2d at 627 (citing State ex rel. Puget Sound Power & Light Co. v. Superior Court, 133 Wash. 308, 233 P. 651 (1925)).
The court held that the use of the power of eminent domain to acquire the land was unconstitutional because the project did not constitute a public use. The court explained:
The City strenuously argues that since it has the statutory authority to condemn land for public squares, parks or museum purposes . . ., this project is a public use. Were the retailing functions only incidental to those uses, a different question would be presented. However, the evidence shows, as the trial court found, that the primary purpose of the undertaking was to promote the retail goal.
Westlake, 96 Wn.2d at 629.
The property owners argue that the facts in Westlake are substantially similar to those presented by the Convention Center expansion. The expansion and the retail development are financially interdependent. The statute authorizing the expansion provides that the project may not proceed without outside funding. Property owners reason, therefore, that the investment of $15 million by Hedreen is the "sine qua non" to the WSCTC's ability to proceed with the project. Thus, the public and private uses are combined in such a way that they cannot be separated. We disagree.
First, contrary to the property owners' assertions, private funding of a public project does not necessarily corrupt the public nature of that project. Appellants fail to cite any cases to support their argument that private contribution to a project's expenses defeats the exercise of eminent domain. On the contrary, in Town of Steilacoom v. Thompson, 69 Wn.2d 705, 419 P.2d 989 (1966), this court affirmed a finding of public use and necessity where a private developer advanced funds for condemnation awards and financed a public sewer extending to his development. Private funding of a public project alone is not sufficient to defeat the State's exercise of the power of eminent domain.
Second, unlike Westlake, the retail development in this case is not a primary purpose of the project. In Westlake, the City sought to condemn property to create a downtown retail focal point. One primary purpose of the project was to revitalize the downtown retail core, and its success hinged on the construction of the private retail space. The court observed that not only was the mall a substantial element of the project, it was "essential to its functioning." Westlake, 96 Wn.2d at 628. Condemnation was improper in Westlake because the project for which the land was to be condemned was predominantly private in nature.
In this case, the trial court found that the purpose of the Convention Center expansion is to expand the exhibit space, and that the new exhibit space will constitute a public use. The retail development of the floors beneath the expansion in no way affect its functioning as an exhibit space. The independence of the two projects is evidenced by the fact that if this court were to find for the property owners, the State could condemn the same land for the north expansion absent Hedreen's participation. Without the private development, the State could build the same exhibit hall, on the same property, hovering at the fourth story level on the same support columns. The project could go forward without private participation in entirely the same manner, except that three stories of vacant space would lie unused underneath the structure. Thus, the private development in this vacant space is a separable component of the expansion project. Hedreen's participation is a means to an end, but it is not an end in and of itself.
Finally, the property owners place mistaken emphasis on Westlake's statement that public and private uses may not be "combined . in such a way that the two cannot be separated." Westlake, 96 Wn.2d at 627. Westlake gleaned this test from a series of power plant cases decided in the early 1900s. These cases ruled on the use of eminent domain where land was to be condemned for the purpose of creating a single facility with both public and private uses. See, e.g., State ex rel. Puget Sound Power & Light Co. v. Superior Court, 133 Wash. 308, 233 P. 651 (1925); Chandler v. City of Seattle, 80 Wash. 154, 141 P. 331 (1914); City of Tacoma v. Nisqually Power Co., 57 Wash. 420, 107 P. 199 (1910); State ex rel. Harris v. Superior Court, 42 Wash. 660, 85 P. 666 (1906). The framework created by these cases is not helpful here because the expansion project does not contemplate alternate public and private use of the same facility. Rather, the expansion project will consist of two entirely separate facilities, one wholly public, the other wholly private.
In Puget Power, the State sought to condemn land for a power plant that was to supply electricity to public and private consumers. In order to determine the ultimate nature of the use for which the land was to be condemned, the court compared the amount of each use, and examined whether the two uses were both integral to the decision to condemn the land. In effect, the court examined whether the public use alone was sufficient to justify the condemnation. The court looked " 'to the substance rather than the form, to the ends rather than to the means' " and held that
[tjhere is neither allegation nor finding in this case that there is at this time, or according to any anticipated need for the near future, any necessity for the taking of this property for public use. On the contrary, it appears clearly that if there is any necessity whatever for acquiring the property it is for the prosecution of uses that are both public and private and which are combined in such manner that they may not be separated.
Puget Sound Power, 133 Wash, at 312, 314-15.
The power plant cases all dealt with commingled public and private uses. Where a joint public/private facility served dual purposes, the court was faced with the task of determining whether the condemnation served a public or private use. Thus, the court attempted to discern whether the project was of a predominantly public or private nature. These cases emphasized that some private use of condemned land is permissible as long as the private use is not itself the impetus for the condemnation.
"[I]f a private use is combined with a public one in such a way that the two could not be separated, that the right of eminent domain may not be invoked to aid the joint enterprise. We mean by this, that the two purposes must together exist as main, or principal, ones; but where the private purpose is simply an incident, and the public use the principal, then the incident will not destroy or defeat the principal."
Nisqually Power Co., 57 Wash. at 428 (quoting Lake Koen Navigation, Reservoir & Irrigation Co. v. Klein, 63 Kan. 484, 497, 65 P. 684 (1901)).
The power cases were distinctive in that the condemnation was for a single facility that had alternating public and private uses. These cases are thus factually dissimilar to the present case. The Convention Center expansion is not a commingled public/private use. Instead, it is two distinct facilities: an exhibit hall and ground level retail. The expansion project contemplates a wholly public facility stacked above a wholly private development. Thus, although the Hedreen development is an integral part of the expansion plan, under the framework created by Westlake and the power cases, the two uses are not combined in such a way that they cannot be separated.
However, this initial determination that the two uses are not so combined cannot alone validate the State's use of eminent domain. We must still examine whether the Hedreen development is incidental to the expansion project. Article I, section 16 prohibits the taking of private property for private use. Thus, this court must ensure that the entire parcel subject to the eminent domain proceedings will be employed by the public use. The relevant inquiry is whether the government seeks to condemn any more property than would be necessary to accomplish purely the public component of the project. If the anticipated public use alone would require taking no less property than the government seeks to condemn, then the condemnation is for the purpose of a public use and any private use is incidental.
Applying this rule to the present case, we hold that the expansion project is a public use, and that the Hedreen development is merely incidental. The new exhibit space is a public use, and its footprint spans the entire property to be condemned. Because the expansion alone would require taking no less property than the government seeks to condemn, the Hedreen development in the space beneath the exhibit hall is merely incidental.
Necessity
In order for the State to invoke the power of eminent domain, the land must not only be taken for a public use, but also the property appropriated must be necessary for the public use. City of Tacoma v. Welcker, 65 Wn.2d 677, 399 P.2d 330 (1965). Appellants argue that, given the availability of the east alternative where private development is not feasible, the decision to expand on the north site based on the availability of co-development was arbitrary and capricious.
The nature of the determination of public necessity, and thus the standard of judicial review of a declaration of public necessity, differs from that applied to a declaration of public use. Unlike a determination of public use, questions concerning whether an acquisition is necessary to carry out a proposed public use are legislative. Thus, a determination of necessity by a legislative body is conclusive in the absence of proof of actual fraud or such arbitrary and capricious conduct as would constitute constructive fraud. Welcker, 65 Wn.2d at 684.
The property owners have not presented facts that would amount to fraudulent behavior by WSCTC. Fraud or constructive fraud would occur if the public use was merely a pretext to effectuate a private use on the condemned lands. This court has not previously enumerated factors to consider when determining whether a public use is truly necessaiy, but some relevant considerations are the dollar contribution of the private party, the percentage of public versus private use, and whether the private use is occurring in an architectural surplus of usable space.
There is no indication in this case that the State is using the exhibit hall expansion as a pretext in order to condemn the land for private use. Hedreen is contributing only $15 million to a project requiring well over a $100 million investment. Hedreen will be occupying a majority of the developed space. However, the trial court correctly observed that, given the structural requirements of the exhibit hall, the buildable airspace above the Center must be left vacant and is thus taken for the public use. Including the airspace, 80 percent of the usable area will be occupied by a public use. Finally, the area to be occupied by Hedreen will be created due to structural requirements of the exhibit hall. Because the heavy load exhibit space must be contiguous to the existing exhibit hall, it must be built on the fourth story level. Several floors of surplus space thus will be created out of architectural necessity. This area not needed by the Convention Center would lie vacant without private participation.
The property owners contend that the decision to expand north was arbitrary and capricious because it was based on the private development options presented by the north expansion. Although this was one basis for the WSCTC Board's choice of the north site, it was not the sole justification. Indeed, the trial court found that several other factors, in addition to the private development potential, motivated the election of the north site over the east site: (1) the building on the east site would have required dislocation of many more low income residential units; (2) the relocation of mechanical and utility functions on the east site would have required a shutdown of the Convention Center for many months; and (3) further future expansion would not be possible on the eastern site. Appellants do not challenge these findings.
Given the existence of these other factors justifying expansion to the north, the trial court correctly concluded that the Convention Center's decision to expand north was not arbitrary and capricious.
CONCLUSION
The Hedreen development is not combined with the expansion project in such a way that the two cannot be separated, nor is the State seeking to condemn any more land than that necessary for the expansion alone. Thus, the private use by Hedreen of the condemned land is incidental to the expansion project. Furthermore, in the absence of proof of arbitrary and capricious behavior amounting to constructive fraud, we will not disturb the legislative determination that the north expansion is necessary for the public use. The property owners do not allege that the exhibit hall expansion was used as a pretext to effectuate Hedreen's development. Nor have they shown that the choice of the north alternative based in part on housing dislocation, mechanical requirements and future expansion possibilities was arbitrary and capricious. Therefore, we hold that the State may lawfully exercise the power of eminent domain to acquire the parcels for the Convention Center expansion.
Dolliver, Smith, Guy, Johnson, Alexander, and Talmadge, JJ., concur.
The property owners also suggest that the expansion is dependent upon the Hedreen development to satisfy a zoning ordinance that requires pedestrian oriented frontage at ground level. At this juncture, the significance of the zoning ordinance is unclear. The trial court found that the Hedreen development did fulfill the zoning requirement. However, in the absence of the development, there is no indication from the record whether the City of Seattle would halt the project rather than grant a variance. The city is a participant in the expansion. It has promised the Center $7.5 million for construction and has granted WSCTC a 30-year lease to manage and operate its Freeway Park parking garage.
Pursuant to Laws of 1995, ch. 386 (codified at RCW 67.40.180), WSCTC would have to obtain outside funding from the County or private donations in order to proceed without Hedreen's participation.
Prior to 1927, production of power in order to supply private industry was considered to be a private use. This court ruled that power production was per se a public use in State ex rel. Chelan Elec. Co. v. Superior Court, 142 Wash. 270, 253 P. 115, 58 A.L.R. 779 (1927).