A Seattle city housing ordinance that triggered a bitter fight with the Port of Seattle over protection of industrial lands has been struck down by a state hearings board. The ruling said the city failed to conduct proper environmental reviews and thwarted public participation in approving the legislation.
The legislation, which would have allowed hundreds of apartments near the SODO sports stadiums, now goes back to the City Council for reconsideration, barring an appeal by the city. But the progressive sweep of the mayor’s office, City Council, and City Attorney, including the defeat of the bill’s champion, Council President Sara Nelson, leaves the fate of the effort to bring housing to the stadium area in doubt.
“It’s a bad idea, and the hearings board agreed,’’ Councilmember Dan Strauss, a vocal opponent of Nelson’s ordinance, said this week.
Port Commissioner Toshiko Hasegawa called the decision “a win for international trade, our region’s industrial workforce, and community advocates who stood against housing injustice,” she said in social media. “It’s disappointing that so many resources were expended fighting this bad policy. This was totally avoidable.”
Backers of the ordinance (building-trades labor unions, housing activists, and the public districts that own the football and baseball stadiums) expressed disappointment. “At a time when housing affordability is a major public concern, we believe this decision, made entirely on minor procedural grounds, is a setback for creating an affordable and livable city,’’ said Joshua Curtis, executive director of the T-Mobile Park Public Facilities District.
In a 51-page decision, the state Growth Management Hearings Board upheld key challenges brought by the Port and BNSF Railroad. The opponents asserted residential development that threatened cargo movement near shipping terminals. The hearings board ruled that the city failed to provide proper public participation and review of the environmental impacts. The ordinance was also inconsistent with the city Comprehensive Plan to prevent loss of industrial lands and conflicts with the state’s Growth Management Act (GMA). “Further, because the City did not conduct SEPA review, and because the Ordinance substantially interfered with the GMA’s goals, the Board invalidated the Ordinance,” the board said.
Nelson, who was defeated by challenger Dionne Foster, deferred comment to the City Attorney. The court’s decision was not only a setback for Nelson. The decision was also a defeat for property owner Chris Hanson, who lost his bid to build a basketball arena in SODO in 2016. The building-trades unions and owners of the football and baseball stadiums had long pushed for changes in the 93-acre Stadium Transition Area Overlay District, created in 2000 to minimize conflicts between the stadiums and surrounding industrial businesses. They hoped to win approval to build up to 1,000 residential units and small-business “makers’’ spaces near T-Mobile Park, although the actual number would be closer to 375 units.
After her ordinance passed 6-3 in March, Nelson said the bruising battle was worth the effort. “I’ve always been up for a fight for what’s right,” Nelson said. “I am proud I passed legislation that creates affordable housing, creates makers’ spaces, and improves public safety in an underutilized area, the stadium district.”
The hearings board’s ruling was a big win for the Port and its longshore allies who said the housing project would undermine efforts to protect scarce industrial lands from commercial and residential encroachment. Residences would conflict with Port operations and tie up freight traffic, the Port charged.
The SODO housing battle was only the latest in the long war over preservation of industrial lands, including the Port harbor terminals and the network of freight streets, warehouses, and distribution centers that support international and domestic trade. Developers have long eyed waterfront property for all sorts of alternative uses — hotels, condominiums, and convention centers.
The latest conflict can be traced to 2023 when Mayor Bruce Harrell proposed a Maritime and Industrial strategy aimed at protecting industrial areas but also allowed new housing opportunities in key areas.
That development plan’s preferred alternative, however, would have opened the door to residential development near the SODO sports stadiums. The environmental review of that plan found that limited housing “would not cause additional adverse impacts’’ to Port operations. That was a red flag to the Port, which consistently fought residences near the freight routes and cargo-container operations on the Duwamish River. Mayor Harrell relented and removed the SODO housing component at the last minute from his 2023 legislation. Hotels, however, would be allowed there.
Although Nelson voted for the 2023 legislation, she was unhappy that SODO-area housing had been left out. She favored a mixed-use approach proposed by Hanson and the stadium authorities, which combined workspaces for small businesses with workforce housing. She drafted legislation that would allow housing in the urban zone and would relax restrictions on residences near freight routes.
Nelson muscled the ordinance through her own committee, an approach that irritated some of her colleagues. “This is about how we govern and how we lead by example. This process has created division,” Strauss complained in March. “Once we make this change, our deepwater port is forever threatened.” Following adoption, Mayor Bruce Harrell let the ordinance take effect without his signature.
The state hearings board’s primary criticism of the ordinance was that an environmental review conducted for the 2023 industrial-lands policy did not fully address potential environmental effects of the SODO legislation and conflicts with established industrial-lands protections. Without more study, the public was denied information about potential negative impacts.
The ordinance “failed to preserve industrial land for industrial uses by encroaching on and removing the 200-foot buffer which protected and preserved the City’s Major Truck Streets for the rail and water-dependent operations that rely on them,’’ the board said. “This is particularly concerning because the City failed to conduct comprehensive review as required by its policy,’’ and “failed to ensure predictability and permanence for industrial activities.”
At the same time, the hearings board undercut one of the Port’s main arguments against the housing project. The board concluded that the Port had not proved the apartments would significantly impede cargo traffic, a mainstay of its opposition to residential development. “While it is evident that intermodal rail facilities as well as truck traffic accessing the Port facilities rely on the City’s Major Truck streets … there is an absence of evidence which would demonstrate the Ordinance, by its terms, fails to encourage or otherwise thwarts the goal of efficient multimodal transportation systems, or that it is contrary to regional priorities or not coordinated with county and city comprehensive plans,” the board said in its ruling. The board also disagreed with Port arguments regarding alleged disruptions to economic development and public facilities.
But even as the Port fights to preserve industrial lands, it has been dealing with a decline in cargo shipped through Seattle dating back to the COVID pandemic and worsened by Trump’s trade war with China. Two shipping terminals bordering SODO, T-46 and T-30, are largely shuttered and no longer handling international containers. The Northwest Seaport Alliance, a joint venture of the Seattle and Tacoma ports, has been seeking alternative cargo for the terminals.
Where the city legislation is headed next uncertain. Ann Davison’s office has not decided about an appeal. The city could take steps to remedy the problems in the ordinance identified by the hearings board — such as conducting a new environmental review — but that would still be subject to challenge. A separate lawsuit by the Port is still pending.
Victories by progressive candidates in key races makes pushing through a SODO upzone again far more politically complicated. Labor is split on the issue, with the influential longshore workers opposing the ordinance at odds with pro-housing building-trade unions. Seattle Port commissioners got deeply involved in the city races this year: Commission President Hasegawa endorsed Wilson, while she and fellow commissioners Sam Cho, Fred Felleman, and Ryan Calkins backed Dionne Foster.
Housing was a dominant issue in all the city races. The question remains whether Mayo Katie Wilson or the revamped City Council are inclined to rekindle such a divisive issue that would, in the end, generate relatively little new housing. Regardless of the outcome, the city will still face questions about how and where to preserve manufacturing and industrial lands in a rapidly changing regional and national economy.
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