Businesses' case against city denied


Staff writer

A suit filed against the city of Federal Way over its sign code has been dismissed, leaving business owners and the city at odds over whether the city should compensate them for forcing them to make their signs comply with city code.

King County Superior Court Judge Ronald Kessler dismissed the case — and didn’t certify the class of plaintiffs — saying business owners failed to exhaust the options available at the city level prior to filing the suit.

Tyler Weaver, an attorney representing the business owners, said they have filed a notice of appeal, but it could be several months before an appellate court ruling is handed down.

Weaver said business owners will continue to argue the city should have financially compensated them for the amount of money it cost them to conform their signs.

Their lawsuit asks the court to resolve whether the city should have to pay just compensation for the loss of the signs, whether the city can substitute a 10-year amortization period for compensation, whether the city violated state law relating to due process and whether the city’s sign code constitutes a taking of property without compensation.

A state law known as the Scenic Vistas Act, passed in 1970 and amended in 1977, requires the state, counties, cities and towns to compensate business owners if the jurisdiction wants them to change signs located along state highways.

The city of Federal Way’s sign code, adopted in 1990 and amended in 1995, required business owners to convert their tall single- or multi-tenant pole signs to pedestal or ground-mounted signs. In 2000, code enforcement officers began fining businesses $100 a day for each day non-conforming signs were left in place.

Plaintiffs in the suit against Federal Way say the city should have financially compensated them, but Federal Way city staff argued the 10-year amortization period given to business owners served as fair compensation.

According to the suit, several business owners removed or changed their signs in 1995 and 1996 after receiving notices they would have to conform to the ordinance by 2000 or be fined.

“The City did not indicate that it would provide any compensation of the loss of a sign or the loss of a right to erect a non-conforming sign, not even for signs covered by the Scenic Vistas Act,” according to the suit.

In 2000, Harry Horan, owner of Horan Real Estate, and David Rhodes, owner of two strip malls in Federal Way, filed suit challenging the city’s ability to force them to change their signs without compensation under the Scenic Vistas Act after their businesses received notices of violation.

In February 2002, a panel of three appellate court judges ruled the city would have to compensate business owners with nonconforming signs located along state highways, like Pacific Highway South, if it wanted them to change their signs.

Later that month, the city received notice that a class action lawsuit would be filed by businesses located along Pacific Highway South who were seeking compensation because they had assumed the costs to change their signs.

Then city attorney Bob Sterbank called the potential class action suit meritless because city ordinance and state statute require those seeking compensation from the city to first file a claim with the city. Sterbank said none of the plaintiffs listed on the class action had done so.

City attorney Pat Richardson, who took Sterbank’s place after he went to Olympia, said none of the plaintiffs have yet filed a claim. None appealed the ordinance, either, which would have resulted in a hearing before a hearing examiner.

“There were several avenues ... potentially available to plaintiffs and they didn’t take them,” she said.

Staff writer Erica Jahn: 925-5565,

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