In re Costco Stormwater Discharge Permit

         On Appeal from Superior Court, Environmental Division Thomas S. Durkin, J.

          Jon T. Anderson of Burak Anderson & Melloni, PLC and Alexander J. LaRosa of Murphy Sullivan Kronk, Burlington, for Appellant R.L. Vallee, Inc.

          David L. Grayck of Law Office of David L. Grayck, Montpelier, for Appellant Timberlake Associates LLP.

          Mark G. Hall of Paul Frank Collins P.C., Burlington, for Appellee.

          William H. Sorrell, Attorney General, and Justin Kolber and Elizabeth Tisher, Assistant Attorneys General, Montpelier, for Appellees Agency of Natural Resources and Natural Resources Board.

          PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.

          ROBINSON, J.

         ¶ 1. This appeal is from a decision of the environmental division of the superior court affirming several permits issued to appellee Costco Wholesale Corporation for the expansion of its existing retail store and the addition of an adjacent six-pump gasoline station in the Town of Colchester. Appellants R.L. Vallee, Inc. and Timberlake Associates LLP own retail gasoline-service facilities located near the planned development. Appellant Vallee contends the trial court erroneously: (1) determined that Costco's proposed traffic-mitigation measures were sufficient for issuance of an Act 250 permit; (2) made findings concerning the impact of an underground stormwater outlet pipe not addressed below, and with respect to which the court limited cross examination by Vallee's counsel; (3) concluded that the project would not adversely affect a Class 2 wetland for issuance of an individual wetland permit; and (4) excluded testimony and a related exhibit prepared by appellant Vallee's wetland consultant. Appellant Timberlake asserts that the trial court erred in relying on a presumption with respect to the project's impact on water pollution and waste disposal under Act 250. We affirm.

         ¶ 2. Costco owns property off Route 7 in the Town of Colchester, where it operates a members-only retail store. The Costco facility lies just north of the intersection of the junction of Route 7, or the Roosevelt Highway, and Interstate 89 at Exit 16. To facilitate plans to expand the store, reconfigure a portion of its parking lots, and add a gasoline sales facility, Costco applied for-and was granted-a number of local and state permits, including final plat and site plan approval from the Town of Colchester; a stormwater discharge permit from the Agency of Natural Resources (ANR); an Act 250 land use permit; and an individual wetlands permit from ANR. During the application and review process, appellant Timberlake successfully petitioned ANR to reclassify a Class 3 wetland located on the project site to a Class 2 wetland (the so-called "Lot 5 wetland"), thereby triggering a fifty-foot buffer requirement around the wetland. As a result of this change, Costo was required to get an individual wetland permit, which in turn required a ruling that the project would not adversely affect the wetland's identified functions and values. Vermont Wetland Rule § 9.5(a), 6 Code of Vt. Rules 12 004 056, available at http://www.lexisnexis.com/hottopics/codeofvtrules (Wetland Rules).

         ¶ 3. Appellants Vallee and Timberlake appealed all of the permit determinations to the environmental division. A number of the appeals were settled, and the rest-the final plat and site plan approval, stormwater discharge permit, wetland reclassification, individual wetland permit, and Act 250 permit-were the subject of a coordinated multiple-day trial. In August 2015, the court issued findings, conclusions, and a final judgment order affirming the remaining permits on appeal. Appellants Vallee and Timberlake separately appealed.^[1] We set forth relevant facts as they relate to the arguments on appeal.

         ¶ 4. "[B]ecause the trial court determines the credibility of witnesses and weighs the persuasive effect of evidence, this Court will not disturb [its] factual findings unless, taking them in the light most favorable to the prevailing party, they are clearly erroneous." In re Route 103 Quarry, 2008 VT 88, ¶ 4, 184 Vt. 283, 958 A.2d 694 (quotation omitted). The trial court's findings "will not be disturbed merely because they are contradicted by substantial evidence; rather, [an appellant] must show that there is no credible evidence to support them." In re Miller Subdivision Final Plan, 2008 VT 74, ¶ 13, 184 Vt. 188, 955 A.2d 1200. "Although we review the environmental court's legal conclusions de novo, we will uphold those conclusions if they are reasonably supported by the findings." In re Application of Lathrop Ltd. P'ship I, 2015 VT 49, ¶ 21, ___Vt. ___, 121 A.3d 630 (citation and quotation omitted).

         ¶ 5. We note, as well, that "we generally give substantial deference to an agency's interpretations of its own regulations"-in this case ANR's interpretation of the regulations governing the wetland and stormwater discharge permits at issue. In re ANR Permits in Lowell Mountain Wind Project, 2014 VT 50, ¶ 15, 196 Vt. 467, 98 A.3d 16. Appellants here "bear the burden of showing that ANR's interpretation is wholly irrational and unreasonable in relation to its intended purpose." Id. ¶ 17 (quotation omitted).

         I. Traffic Issues

         ¶ 6. Appellant Vallee first asserts that the evidence failed to support the trial court's finding that Costco's proposed near-term highway improvements were sufficient to mitigate the development's traffic impacts under Criterion 5 of Act 250. See 10 V.S.A. § 6086(a)(5)(A) (providing that Act 250 permit requires finding that development "[w]ill not cause unreasonable congestion or unsafe conditions with respect to use of the highways"). Vallee contends that, while long term improvements to the traffic flow at the I-89/Route 7 intersection may mitigate the traffic impacts of this project, the near-term improvements proposed by Costco are themselves insufficient to mitigate those impacts.

         ¶ 7. The trial court found that both Lower Mountain View Drive and Hercules Drive provide access to Costco from Route 7. Lower Mountain View Drive intersects Route 7 about 100 yards north of the junction with I-89 and generally provides the greater flow of traffic into and out of the Costco development. Hercules Drive intersects with Route 7 farther north and provides better access to Costco visitors who are coming from or traveling to locations north of the I-89/Route 7 junction.

         ¶ 8. During the afternoon weekday rush hour, traffic is particularly congested on Route 7 at the I-89 interchange, and will sometimes back up to the intersection with Lower Mountain View Drive. The congestion has led the Vermont Agency of Transportation (VTrans) to propose improvements to the I-89/Route 7 Exit 16 junction, including a signalized interchange known as a Double Crossover Diamond. VTrans is pursuing permits for these improvements. The improvements will be funded through several sources, including area businesses such as Costco. However, the timeframe for its completion is uncertain and could run to ten years or more.

         ¶ 9. The trial court further found that the proposed Costco development would likely cause 155 new vehicle trips during peak traffic hours. Most but not all of this new traffic will exit Costco via Lower Mountain View Drive, turning left onto Route 7, toward the I-89 interchange. To mitigate the impact of the additional traffic-which the court found to be "measurable, but not substantial"-Costco proposed to construct certain near-term improvements to the Route 7/Lower Mountain View Drive intersection, including the addition of a second dedicated left-hand turn lane from Lower Mountain View Drive onto southbound Route 7, a second dedicated right-hand turn lane for vehicles turning right from Lower Mountain View Drive onto northbound Route 7, and another travel lane for through traffic and traffic turning right onto Route 7 from Lower Mountain View Drive. In addition, Costco has proposed better synchronization of traffic lights at all area intersections "to allow for more optimal traffic flow, " and a "Do Not Block Driveway" sign at the curb cut for Vallee's facility. The court found that these improvements would "fully mitigate the additional traffic that the proposed Costco [development] will generate, " and thus determined that the development complied with Criterion 5.

         ¶ 10. Vallee maintains that there was "no evidence" to support the trial court's finding that Costco's proposed near-term improvements to the Lower Mountain View Drive intersection, without reconfiguration of the I-89 interchange, were sufficient to mitigate the project's full traffic impacts. Vallee contends that the expert simulations relied upon by Costco assumed the completion of the reconfiguration of the I-89 interchange, and that reconfiguration was essential to mitigate the project-generated traffic. Vallee argues that the improvements to the Route 7/Lower Mountain View Drive intersection are inadequate to mitigate the effects of the additional traffic at the I-89/Route 7 interchange, and that they do nothing more than increase "storage capacity" for cars to wait in traffic at Lower Mountain View Drive and Exit 16. For these reasons, Vallee argues the trial court erred in refusing to condition approval of the Act 250 permit upon completion of the I-89 interchange improvements.

         ¶ 11. As noted, before granting an Act 250 permit, a district commission or court must find that a project "[w]ill not cause unreasonable congestion or unsafe conditions with respect to use of the highways." 10 V.S.A. § 6086(a)(5)(A). The burden of proof in this regard "shall be on any party opposing the applicant." Id. §6088(b). The applicant nevertheless bears the burden of production to establish at least a "prima facie case" of compliance. In re Champlain Parkway Act 250 Permit, 2015 VT 105, ¶ 15, ___Vt.___, 129 A.3d 670. While a court or district commission may not deny an application "solely for the reasons set forth" in Criterion 5, it may impose "reasonable conditions and requirements" consistent with the police power to "alleviate the burdens created" by the project. 10 V.S.A. § 6087(b); see also id. § 6086(c) ("A permit may contain such requirements and conditions as are allowable proper exercise of the police power.").

         ¶ 12. Viewed in the light of these standards, we conclude the record evidence here was sufficient to support the trial court's findings and conclusions under Criterion 5. With respect to the impact of the additional traffic at the I-89 interchange, Costco's traffic expert testified that the estimated 155 additional peak-hour trips generated by the project represented "a very small percentage of the overall daily [vehicular] traffic" in the area, which numbered in thousands along the busy Route 7 corridor adjacent to Costco; that this figure was less than the daily fluctuations in traffic volume at those intersections, and thus "small enough" to be considered by traffic engineers as "insignificant"; and ...