The Oregon Court of Appeals has reversed a decision by the Land Use Board of Appeals (LUBA), ruling that LUBA does have jurisdiction to review a Land Use Compatibility Statement (LUCS) issued by the City of Portland to Zenith Energy Terminals Holdings, LLC. The case, brought by the Northwest Environmental Defense Center and other petitioners, centers on whether the city’s LUCS, which included specific conditions on Zenith’s operations, constitutes a “land use decision” subject to LUBA’s review.
Background: Zenith’s Operations and the LUCS
Zenith Energy operates a fossil fuel facility in Portland, categorized as a Bulk Fossil Fuel Terminal under the city’s land use code. To obtain air contaminant discharge permits from the Oregon Department of Environmental Quality (ODEQ), Zenith needed a LUCS from the city, confirming the facility’s compatibility with local land use regulations.
In 2022, the city issued a LUCS that included four conditions on Zenith’s operations, enforceable by the city. No one challenged this initial LUCS. The current dispute arose from Zenith’s request for updated permits from ODEQ to cover proposed operational changes, including expanding the scope of the permits and installing new equipment to produce sustainable jet fuel. Again, Zenith sought a LUCS from the city.
In February 2025, the city issued a new LUCS. This time, the city checked boxes indicating the use was “allowed outright” and also “allowed; findings are attached.” The attached findings included the same four conditions as the 2022 LUCS, along with “compliance measures.” These conditions involved ceasing crude oil transloading and storage, removing storage tanks, complying with emission limits, and ceasing asphalt refining. The findings also granted the city access for compliance checks and required Zenith to provide compliance reports.
The Dispute: Jurisdiction and Enforceable Conditions
The petitioners appealed the 2025 LUCS to LUBA, arguing that the city’s decision was a land use decision subject to LUBA’s jurisdiction. The city and Zenith argued that LUBA lacked jurisdiction because the LUCS simply confirmed that Zenith’s proposed use was allowed outright under existing zoning regulations. LUBA agreed with the city and Zenith, dismissing the appeal and sending it to circuit court. The environmental groups then appealed to the Oregon Court of Appeals.
The Court of Appeals’ Ruling: LUBA Has Jurisdiction
The Court of Appeals disagreed with LUBA, concluding that LUBA *did* have jurisdiction. The court emphasized that while a LUCS is often a simple confirmation of land use compatibility, the city’s 2025 LUCS went further by imposing enforceable conditions on Zenith’s operations. These conditions, the court reasoned, constituted a “land use decision” under Oregon law (ORS 197.015(10)).
The court rejected the argument that because the underlying use was “allowed outright,” the conditions were irrelevant for jurisdictional purposes. The court stated that the inclusion of these enforceable conditions transformed the LUCS into something more than a mere confirmation of compatibility. It became a decision imposing specific requirements on Zenith’s land use.
The court highlighted that Portland City Code (PCC) 33.700.030 makes it unlawful to violate conditions of a land use approval. By imposing these conditions and stating they were enforceable under this code section, the city was explicitly treating them as “conditions of land use approval.”
The court also dismissed Zenith’s argument that the conditions were merely descriptive. The court emphasized the language in the LUCS findings stating that the facility would be subject to these limitations, enforceable by the City of Portland, after approval of the LUCS.
Implications of the Ruling
The Court of Appeals’ decision means that LUBA must now review the petitioners’ challenge to the city’s 2025 LUCS. This could potentially lead to further restrictions on Zenith’s operations in Portland. More broadly, the ruling clarifies the scope of LUBA’s jurisdiction over LUCS decisions, particularly when those decisions include enforceable conditions on land use. Local governments cannot simply fold land use decisions into a LUCS to avoid LUBA review. If the LUCS includes conditions on land use, it is likely subject to LUBA’s jurisdiction.