An old fire truck sits outside Portland City Hall with a sign reading "Shut Down Zenith Oil." Environmental advocates sued the city over its Feb. 3 approval of Zenith's land use credential. Credit: Photo by Jeremiah Hayden
The city of Portland faces a new legal challenge over its handling of a controversial land use decision after it approved a land use compatibility statement, or LUCS, application for Zenith Energy on Feb. 3.
Nonprofit organizations Northwest Environmental Defense Center, 350 PDX, Willamette Riverkeeper, as well as 18 individual Portland residents filed a Notice of Intent to Appeal with Oregon’s Land Use Board of Appeals, or LUBA, on Feb. 24, just three weeks after the city’s approval.
"Earth to Oregon" is a recurring column by Jeremiah Hayden covering developments in environmental policy and litigation in Oregon.
The Notice of Intent to Appeal is a brief document, and city attorneys will be required to respond with a record documenting its decision-making process.
“Notice is hereby given that Petitioners intend to appeal the ‘Land Use Compatibility Statement’ (LUCS) issued by the City of Portland to applicant Zenith Energy Terminals Holdings LLC,” the appeal document said.
The parties say the process was flawed because it failed to provide opportunities for public involvement, and are seeking an order from LUBA remanding the decision back to the city for a lawful public process.
Mary Stites, Northwest Environmental Defense Center staff attorney, said the legal question is whether the city’s decision followed ORS 197.015, which defines local land use process. The law defines “land use decisions” as those decisions or determinations made by city, county and state governments and agencies.
“It’s supposed to be a kind of process that any city planner could look at the application and say it meets the code or it doesn’t meet the code,” Stites said. “It’s supposed to be very straightforward.”
However, the Zenith decision goes well beyond the normal process, and the city should adhere to other factors outlined by the state when operating under exceptional circumstances, as outlined in the ORS 197.015, according to Stites.
The city approved Zenith’s land use credential in 2022 as a conditional LUCS after it promised to transition to renewable fuels by Oct. 3, 2027. A conditional LUCS is highly uncommon, according to the city.
Among other factors, the conditional status should require a more discretionary process, according to Stites.
“The land use compatibility statement that Zenith has received … involve the level of discretion that tends to bring that process beyond the scope of this statutory exclusion of land use compatibility statements,” Stites said.
LUBA is an administrative court, and the only forum in Oregon for appeals to local land use decisions. It was established in 1979, and is a three-member board appointed by the governor. Any party can submit a Notice of Intent to Appeal to LUBA within 21 days of a local decision if it believes the local decision was incorrectly decided.
Advocates have long argued the Zenith LUCS is a “quasi-judicial process,” meaning state law would require the city to provide sufficient notice of land use hearings in the vicinity of the property, to local neighborhood associations and community groups, among other requirements.
“All documents or evidence relied upon by the applicant shall be submitted to the local government and be made available to the public,” according to state law.
Zenith needed the LUCS from the city in order to acquire a state air permit from DEQ to continue its operations at the Critical Energy Infrastructure Hub — a massive cluster of fuel-filled tanks nested between Forest Park and the Willamette River.
The lawsuit comes just one month after the City Council held a Jan. 21 work session on Zenith followed by two hours of public testimony, with the overwhelming majority asking the city to deny the LUCS.
During the work session, City Councilor Angelita Morillo asked Robert Taylor, city attorney, to clarify what jurisdiction the City Council had if it became a quasi judicial decision.
“We’ve advised as things presently stand, that this is an admin decision for the executive branch to determine whether the LUCS should be granted or denied,” Taylor said. “If the City Council wanted to treat it as a quasi judicial decision for council to decide, Council has some options that they could pursue, and I would be happy to discuss those options in a confidential setting.”
The City Attorney’s office did not respond to Street Roots request for comment at the time of publishing, asking what other options were available or if its risk assessment of legal implications prior to approval considered the potential for environmental advocates suing the city. Mayor Keith Wilson’s office also did not respond.
The appeal may come as little surprise to the city. Environmental advocates sent a letter on Dec. 16, 2024 putting the city “on notice” about the legal vulnerabilities if the city was to approve the LUCS, and demanding the city commit to a public process.
“We write to put you on notice that environmental and community groups will be watching closely to ensure that the City complies with state law and does not attempt another backroom deal with Zenith,” the letter said.
Stites said Zenith’s history with local officials requires compliance with other city processes.
“Zenith has had so many backdoor conversations, off the record conversations, with city officials and city decision-makers, so much so that they were investigated by the City Auditor,“ Stites said. “That, to us, shows that this is not this kind of straightforward black-and-white administrative process that doesn’t involve any discretion, and as such, there needs to be compliance with the other processes in our city code in implementing the land regulations that guide these kinds of discretionary procedures.”
The Portland City Auditor determined Zenith Energy violated city lobbying code in its pursuit of a Land Use Compatibility Statement, or LUCS, in 2022, after the company spent significant time and resources wooing city officials, including a tour of its facilities in July 2022.
In its determination letter sent March 26, the auditor’s office said Zenith failed to register as a lobbying entity and failed to file a report with the city of Portland for the third quarter of 2022. That is a violation of Portland City Code Sections 2.12.030 and 2.12.040.
Renewable fuels — a term climate advocates say is fashionable for fossil fuel companies who want to continue operations while appearing to address climate change — are chemically similar to fossil fuels, and the risk of storage tank leaks, train derailments, explosions or other accidents is not substantially different. Portland City Council’s Feb. 27 Climate, Resilience, and Land Use Committee agenda includes three presentations related to renewable fuels.
Stites said it is important for decision-makers to slow down and consider the ramifications of expanding infrastructure for fossil fuel companies.
“We’re seeing a lot of this renewable fuels infrastructure try to pop up in Oregon, whether it’s Zenith or next the NEXT Refinery in Columbia County,” Stites said. “I think the best thing to compare to is like the dam craze that we are now having to deal with the implications of.”
Stites said the state has locked itself into generations of infrastructure without thinking about the ramifications, the consequences of which are often exacerbated by climate change.
“We have the playbook right in front of us as to why we should think really, really critically about infrastructure that we lock ourselves into, especially when it’s being counted by those who have created the crisis that we’re in today,” Stites said
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