SPOAKNE -- The City Hearing Examiner has reversed a previous decision that will allow the owners of Whitley Fuel to rebuild at the the previous site, much of which was destroyed by fire.

Whitley Fuel had been at odds with the city about how to rebuild.

Most of their fuel depot was destroyed by what investigators call an arson fire.

The fire caused about 20-million dollars in damage.

KREM.com

The fireball that exploded from Whitley Fuel in North Spokane.

The problem is that the rules had changed since it first moved into the location at 2733 N. Pittsburg in 1923.

This appeal filed by Whitley in July accused the Spokane City Planning Office of making several wrong decisions that stood in the way of rebuilding on this 44,000-square foot site in East Spokane.

In June, the planning director sent a letter to Whitley detailing concerns about storing and distributing fuel oil on the site even though it had been doing it for decades.

The planning board's point: More than 60% of the site was destroyed by the fire.

Therefore anything rebuilt had to conform to current zoning laws. In 2005 the site was zoned as light industrial

Now, storing and selling petroleum is considered "high impact use" which requires a 600-foot buffer-zone from homes.

"Such materials have to be kept at least 600 hundred feet from the boundary of a residential zone."

Whitley Fuel is just 300 feet from a neighborhood.

The company argued that planners were wrong in considering fuel lubricants as high impact.  Barring them from rebuilding their warehouse "is inconsistent with similar warehouse uses located within the city limits." These decicions are "depriving the appellant (Whitley fuel) of the ability to develop this property."