One of the biggest real estate developments in the South Sound is being built on top of one of the most contaminated pieces of land in the country.
Adding to the complexity, two cities – one large, one small – share regulatory authority for the 97-acre urban village of Point Ruston. “Share” is a diplomatic description. The reality is closer to a tug of war between Tacoma’s and Ruston’s ways of doing business.
To put it another way, the project has a Goldilocks problem: is the oversight from the two cities too hard or too soft?
Ruston wants to protect its town’s interests, which translates to a tougher approach — too hard? Tacoma wants to promote economic development, which translates to looser oversight — too soft? Point Ruston has become an experiment in what’s just right.
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Mix in an aggressive developer, and conflict can boil.
In December, when the city of Ruston tried to stop the developer from building a parking garage without a city permit, the building official went to the work site to post the orders and brought the police chief with him.
The development team and city officials had been bickering for months over permits. The developer said the presence of a cop raised the stakes. The building official said the chief helped keep the situation professional.
About a month later, the Ruston city official returned to deliver more paperwork about violations of city law. He didn’t bring a cop this time, a decision he came to regret.
A few moments after he pulled up to the construction office, one of the developers confronted him and told him he wasn’t welcome there. The building official said members of the development team got in their cars and followed him around the area, something the developer denies.
Such head-butting hasn’t happened over a building on the Tacoma portion of Point Ruston. There, the developer had little trouble getting a building permit for a movie theater. When it later missed a key inspection of the foundation, Tacoma hardly balked and approved it retroactively.
Point Ruston’s trouble with the parking garage and the relative ease with which it has built the movie theater reveal different philosophies toward development in Ruston and Tacoma.
These distinct approaches have shaped relationships on both sides. They also help explain why progress on the $1.2 billion development has been uneven.
On the Tacoma side, people are moving into condominiums and apartments. They have lunch at a cafe or exercise in a new gym. On the Ruston side, what will eventually become the commercial heart of the development is a moonscape with little activity.
A proposed partnership in which Tacoma and Ruston work together on permitting could help smooth and speed the work across the site. Or the agreement could get lost in the same gulf that now separates the two cities’ official attitudes toward development.
The stakes are high. Completion of the development removes an impenetrable eyesore on the Ruston Way waterfront and ensures what might be the best shot at cleanup of the Asarco copper smelter’s centurylong toxic legacy.
As things stand, said one outside observer, the project is mired in confusion and on a “dangerous” path.
“The question is how hungry the cities are,” said Tom Murphy, a former three-term mayor of Pittsburgh who oversaw the redevelopment of more than 1,000 acres of blighted industrial properties. “The cities need to know what they want. They need to speak with one voice.”
“This has to be the biggest thing going on in the cities,” he said, “so they shouldn’t be treating it like someone adding a fence to their backyard.”
TACOMA LESS PICKY
Much of the difference in how Ruston and Tacoma approach the Point Ruston project comes down to how the two cities use their local codes.
Think of a fruit salad: Ruston’s code lists the types of fruit required for its ideal dish. Tacoma’s code is open to different ingredients as long as the end result is still fruit salad.
Ruston’s code is more specific because it adopted the development’s master plan as code in 2008. Officials said they viewed the plan as a list of promises best guaranteed by writing them into the law. Because of this, any building permit that deviates from the plan is not in compliance with the law, Ruston officials say.
The difficulties inherent in that approach are heightened by the posture of Ruston city officials, who are sticklers for rules and process.
The project’s parking garage — the first significant structure to be built on the Ruston side — illustrates the point.
Point Ruston LLC, led by the father-and-son development team of Mike and Loren Cohen, applied for a permit for a parking garage in spring 2014. That much is undisputed.
The Cohens and Ruston disagree on almost everything else. The Cohens refer to the permit as one for merely the underground parking garage. The city says the permit application was not just for a parking garage, but the buildings on top and the improvements to the land around them.
Two months later, Ruston responded to the developer with a list of about 100 items to correct or adjust to the garage — a typical part of the permit application process.
The more unusual document went out in early June, when the city of Ruston delivered a 94-page planning and zoning review that took a look at the entire development on the Ruston side. It listed 90 ways in which developer’s plan deviated from the master development plan.
The city also listed another 14 tasks the developer had to complete before the city would even consider issuing the permit, including installing a park in another part of the development with a children’s play area, picnic shelters and play fields.
Mike Cohen called the document “fanatical.” The developer says it has always planned to do these things, just not as a condition of one building permit being issued.
Ruston officials said the document was a large and in-depth response to a vague permit application, and that it was an attempt to streamline the process by identifying all the possible issues upfront.
“What developers like to do is, do as little as possible. ‘Someday we’ll do the park. Someday we’ll do the trail,’ ” said Rob White, Ruston’s planner. The 94-page document was intended to say “we understand you don’t have to do all of it yet. But we want to know what you are going to do and when.”
The document, though, clearly wasn’t a request for deadlines. It states unequivocally that the work “must be completed prior to building permit issuance.”
White said the developer ought to have known that it could have asked for discretion on the deadlines. “My obligation is to identify the requirements,” he said. “I don’t say, ‘ask me if you can maybe not do this.’ ”
In late August, everyone met at Ruston’s community center to hash things out. After five hours, nothing had changed.
Ruston refused to continue processing the permit application without a response to the 94-page document, and the Cohens refused to respond to an interpretation of land-use law they considered part of “a battle plan for litigation and nothing more.”
Despite not having a permit, the Cohens decided to build anyway, arguing that federal law allowed them to.
GETTING ROCKS IN PLACE
Work on another part of the project, the movie theater building, has gone much more smoothly, perhaps in part because it is being built in Tacoma.
Point Ruston applied for that permit in mid-November 2013. Four months later, in March 2014, the city of Tacoma issued a foundation permit so the developer could start work even though the final building permit was still to come.
“That was to enable the construction to start,” said David Johnson, Tacoma’s building official. The rest of the details needed for the building permit wouldn’t affect the foundation — things like the plumbing, heating and ventilation.
“You get the big rocks in place, and the smaller ones will fit,” he said.
On the day the concrete for the foundation was to be poured, city of Tacoma inspectors couldn’t check the rebar reinforcements beforehand because the inspectors were missing a special certification that allows them to work on a contaminated site. Point Ruston went ahead with the pour, despite having no inspection.
When Tacoma discovered that, it didn’t issue a stop work order or send a police officer. Tacoma planners issued a notice of violation, then accepted inspections from the developer’s engineer to retroactively verify the work was done properly and safely, even if the city’s process wasn’t followed. This allowed the developer to continue building and, city officials said, giving them confidence that the structure was safe.
“This developer, like many developers, is assertive,” said Peter Huffman, Tacoma’s Planning and Development Services director. “That’s what Ruston is seeing. In a perfect world, a developer does exactly what we asked them to do, but it doesn’t work that way.”
Tacoma took a similar approach last fall after the Fire Department discovered the developer had installed a propane line and tank without proper permits. The line and illegally large tank weren’t known to the department for more than a year, but fire officials quickly determined the system was safe and went about retroactively permitting it instead of demanding the developer rip it out of the ground.
Taking a hard-line approach “would have had a huge impact on their operation,” Johnson said. People living in the condos would have been without gas to fire some of their appliances.
EPA SAYS DEVELOPER WRONG
While Tacoma has worked to accommodate the developer, state and federal officials have raised concerns about some of the developer’s practices. The Environmental Protection Agency has said the developer is misinterpreting a federal law that allows some construction on the site without a local permit. Cohen has said the development is using the law as intended.
The propane gas system has been a particular flash point, with top regional officials from the Environmental Protection Agency saying the developer’s actions were “ gravely concerning.” A gas system not properly permitted and inspected not only could threaten human lives, but it could jeopardize the cleanup of land deeply contaminated with arsenic and lead. State regulators have ordered the developer to bring the Tacoma system into compliance with state rules or remove it.
Tacoma has told the developer in recent months that it wants Point Ruston to have better project management and more efficiency. The developer hasn’t been as organized as the city would like, Huffman said.
“I’m not a firefighter, so I don’t like fire drills,” Huffman said. “Everyone agrees there’s a better way of doing business.”
Huffman and Johnson wrote a five-page memo to the city manager in February detailing accommodations and workarounds Tacoma has employed to keep Point Ruston moving forward. The list dates back years, to the beginning of the project. The men said the accommodations are typical of how Tacoma deals with developers.
At least one developer disagrees. Jeffrey Oliphant, who built the Tacoma Walmart, is suing the city over delays in permitting he believes were an intentional attempt to discourage his project.
“We never asked for anything out of the ordinary and roadblocks were thrown right and left,” he said.
Other developers who have worked in Tacoma said the accommodations the city has made for Point Ruston aren’t unusual or worrisome, particularly given the size and complexity of the project.
“Considering the market it’s in, this project is almost unprecedented,” said Mike Hickey, a business owner and real estate broker who also developed the Columbia Bank Center in downtown Tacoma. “Tacoma doesn’t have a lot of projects like that, so they’ll go above and beyond what other cities will do.”
Tacoma has a history of accommodating projects that are important to the community, Hickey said. When he was leading the construction of downtown’s Columbia Bank Center, the city worked on a permitting schedule that ultimately allowed Russell Investments to move into the building more quickly.
Cohen said the memo is proof that Tacoma is a great place to do business. Like most developers, he doesn’t see any problems with the way his project is being run, but said he’s willing to make some adjustments if they will help Tacoma.
DISPUTES LINGER IN RUSTON
Mistakes that happen on the Ruston side of the development are not so easily — or cordially — resolved. The dispute over the parking garage festers to this day.
Construction of the garage began in September. Ruston’s building official, Michael Barth, initially went to the site every day and took pictures of the work as it progressed. At one point, watching construction of the first wall, he noticed rebar was being installed following one set of plans, but that another set of plans called for more reinforcement. Barth believed more rebar was required, but there wasn’t an approved set of building plans to consult since Ruston had not issued a permit.
Barth alerted the crews, and they added more rebar.
Without his intervention, Barth said, workers would have repeated the weaker construction for the other walls. This is proof, Ruston officials say, that Point Ruston’s process isn’t safe and that third-party inspection reports can’t be relied upon.
The developer’s own inspectors “could not have identified it,” Barth said. “I can’t fault them. They were not offered the opportunity to identify it. Because there is no building permit and approved plan of record, they had to rely on what Point Ruston gave to them.”
Cohen said Ruston officials exaggerate this incident. Cohen insists his inspectors would have noticed the problem. And even if they hadn’t caught it, Cohen said, the problem was so small it wouldn’t have mattered.
Ruston city officials have used this incident “as a propaganda tool,” Cohen said. “They cite it as example No. 1 as to why their permit regime is absolutely necessary to follow through with. I think it's disingenuous for them to use that tiny issue, which didn’t result in anything.”
Tacoma’s building department, sensitive to criticism that it’s not helpful enough to developers, has moved in recent years toward what officials there call the “culture of yes.” Rather than throw the book at someone who changes a construction plan or takes steps out of sequence, the city will work with that person to achieve compliance.
“That’s what we do. We facilitate,” Huffman said. “We pride ourselves on being facilitators, not regulators.”
That can mean some negotiating, he said, but not about issues of life and safety.
“There are rules, then there are the results we’re going to get,” Johnson said. “It’s the results we care about.”
Ruston officials say they care about results too, and that the developer isn’t living up to the commitments it made to public spaces and public access.
Ruston planner White said he can approve a change only if it’s equivalent or better than what was called for in the original plan. If a resident believed a permit varied too much from the code, he or she could appeal, and that could lead to an expensive legal battle, he said.
More broadly, city officials say they have an obligation to the public to make sure the development looks like what was promised in the master development plan.
Ruston officials believe they can’t wait on the public amenities or they’ll lose leverage as more and more commercial space is built. Instead of a public plaza, they’d end up with a “parcel by the railroad tracks with a nice picnic table,” said Bruce Hopkins, Ruston’s mayor.
Tacoma City Councilman David Boe, who has been a practicing architect for decades, said the differences between Ruston and Tacoma have nothing to do with the competence or professionalism of their staffs. Ruston and other cities in the South Sound have a “heavily regulatory” posture, Boe said, while Tacoma planners “make sure we are hitting the intent” of the code.
‘I’M … NORMALLY RELATIVELY NICE’
The city of Ruston issued a stop-work order for the parking garage in late December, but workers kept building. Barth came to the site Jan. 20 to post notices for violating the stop-work order. He didn’t bring a cop with him this time, something he now says was a “big mistake.”
When he delivered the paperwork to the construction office on the Tacoma side of the development, Loren Cohen “got in my face” and told him to leave, Barth said.
“Never have I experienced such animosity and anger from a developer at this scale,” Barth said in a February interview.
According to an email Barth sent just after 11 p.m. on the day of the incident, Cohen told Barth he could not post the notices at the construction offices. Barth said city code requires him to post the notices at the job sites, and asked if Cohen was interfering with his official duties. Barth said he asked other Point Ruston employees to at least wait until he left to tear down the notices, because that act alone is a misdemeanor.
The incident ended, Barth said, with him leaving the site and driving through the streets and roundabouts near the development, snapping pictures of the construction out of the window of his pickup truck as Loren Cohen followed in his Escalade, and Mike Cohen approached in his Audi. Barth and Mike Cohen ended up having a six-minute conversation through their driver’s side windows, Barth wrote, going over the dispute over permitting and the underlying culture clash.
Cohen disputes Barth’s description of the day’s events, saying in April that there was no attempt to intimidate Barth.
“I’m five-foot-six and normally relatively nice,” Cohen said.
Cohen said Ruston was trying to “salt the record” and “sully our reputation” by making the email to city and federal environmental officials part of the public record.
In any event, Cohen said it was around that time when the developer’s relationship with the city was “was at or near the bottom.”
Two days after that encounter, Mike Cohen started the process of trying to secede from Ruston by filing an annexation request with the city of Tacoma.
TYRING TO WORK TOGETHER
The squabbling between the Cohens and Ruston reached the state Capitol, where a bill was floated that Ruston feared would take away its right to veto an annexation. In the face of that threat, city of Ruston officials made a counterproposal in March: a permitting partnership with Tacoma that would allow the two cities to present a “consistent front” to the developers.
It’s unclear how that partnership as envisioned would work any better. The developer would still have to meet Ruston’s strict requirements, and Ruston wants to retain oversight over permitting decisions.
Ruston City Councilman Lyle Hardin, who is involved in the negotiations over the pending partnership, said the city wants “our staff people to oversee and approve everything that happens on the Ruston side.”
As for the developer, any agreement must make it simpler to get work done. That means limiting Ruston’s influence, Loren Cohen said.
“The only outcome that makes sense is for Tacoma to be delegated most if not all of the authority to process and implement permits for this project,” he said. If the agreement doesn’t do that, “it won’t be worth the paper it’s written on.”
Somewhere in the middle of that dispute sits Tacoma. City officials aren’t saying much about the state of negotiations, but Tacoma City Manager T.C. Broadnax said one must-have for the partnership will be conflict resolution.
“There needs to be a clear understanding of how decisions will be made when there are disagreements between the two planning heads,” Broadnax said in April. It does no good, he said, to have the agreement and “we still get stuck” because there’s no process to get to a decision.
Ruston agrees conflict resolution is important, Mayor Hopkins said, as long as it’s not expensive. But Hopkins and other city officials disagree with Tacoma’s position that the partnership’s biggest payoff would be in allowing Ruston to take advantage of Tacoma’s larger planning staff.
They say the Ruston staff is unequaled in skill and experience. Barth and White both have nearly 20 years of experience in their respective fields. Barth, Ruston’s contracted building official, has more than two dozen professional certifications.
White, Ruston’s contracted planner, is a development consultant and has worked with the city of Ruston since 2008. Before that he was Gig Harbor’s planning director.
“As we do now,” Hardin said, “we will give Tacoma’s staff advice when they miss things.”
For now, Ruston and Tacoma continue to negotiate. Ruston sent a list of goals and objectives. Tacoma’s planners returned a draft agreement in late April.
The Tacoma council was set to hear an update on the talks in early May, but that meeting was postponed until May 20 because Ruston wasn’t ready, and the Tacoma council committee didn’t have a quorum.
“That we have a draft at this point is a good thing,” Johnson said.