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HomeMy WebLinkAbout2021-11-29 Applicant Final Legal Argument - 247-21-000553-MC 920-A1 Tracy Griffin From:Katzaroff, Kenneth <KKatzaroff@SCHWABE.com> Sent:Monday, November 29, 2021 3:51 PM To:Angie Brewer Cc:Schunk, Andrea K.; liz@lizfancher.com; 'Kameron DeLashmutt' Subject:Applicant Final Legal Argument - 247-21-000553-MC; 920-A [IWOV-pdx.FID4723617] Attachments:Applicant Final Legal Argument -553-MC; 920-A (11.29.2021)(with Exhibits).pdf; Final Argument of Kameron DeLashmutt (11.29.2021).pdf Follow Up Flag:Follow up Flag Status:Flagged [EXTERNAL EMAIL] Angie – I’ve attached pdfs of our final legal argument for File No. 247-21-000553-MC; -920-A. Hard copies are also being delivered shortly. Please confirm receipt. Ken Schwabe Williamson & Wyatt Kenneth Katzaroff Attorney Direct: 206-405-1985 kkatzaroff@schwabe.com Admitted in Washington and Oregon. LEARN HOW OUR CLIENTS ARE INNOVATING IN THEIR INDUSTRIES: www.schwabe.com/fueling-change __________________________________________________________ NOTICE: This email may contain material that is confidential, privileged and/or attorney work product for the sole use of the intended recipient. Any review, reliance or distribution by others or forwarding without express permission is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. U.S. Bank Centre | 1420 5th Avenue | Suite 3400 | Seattle, WA | 98101-4010 | M 206-622-1711 | F 206-292-0460 | schwabe.com Kenneth Katzaroff Admitted in Washington and Oregon T: 206-405-1985 C: 206-755-2011 KKatzaroff@SCHWABE.com November 29, 2021 VIA E-MAIL Hearings Officer Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development 117 NW Lafayette Ave. Bend, OR 97703 RE: Deschutes County File Nos. 247-21-000553-MC; -920-A. Our File No.: 135849-262760 Dear Hearings Officer Frank: Our office is co-counsel with Liz Fancher for the applicant (“Thornburgh”) in the above- referenced matters. This letter constitutes the applicants’ final legal argument. The applicant is seeking the approval of amendments to apply current destination resort code requirement to its CMP/FMP.1 These requirements all relate to OLUs and propose a 2.5:1 ratio of single-family homes to OLUs, a minimum rental period of 38 weeks per year for OLUs and application of OLU bonding rules. ORS 197.435 et seq. Deschutes County has approved the OLU ratio and rental availability modifications for all other Deschutes County resorts. The OLU ratio change does not authorize any new development.2 Instead, the maximum units allowed by unit type will remain 950 single-family units and 450 OLUs. The only change will be that the minimum development requirements for OLUs will be lowered. This is how the same change to a 2.5:1 ratio from a 2:1 ratio has been understood to operate in prior County ratio modification decisions. Exhibit 116 (Tetherow). See also Exhibits 114, 115, 117. 1 Unless otherwise noted, abbreviations have the same meaning as established in applicants’ earlier submittals. 2 Furthermore, the use of the 2.5:1 ratio has been approved for use by the Thornburgh Resort by DCC Chapter 18.113.060.D.2.a. It says that the 2.5:1 ratio “applies to destination resorts which were previously approved under a different standard.” Hearings Officer Frank November 29, 2021 Page 2 schwabe.com 1. Changes to Administrative Decision/Proposed Modifications The appealed administrative decision approved and required changes to the Thornburgh FMP that omit key elements of the original Resort approval that, unless corrected, will result in a remand by LUBA. Thornburgh, therefore, proposes the following changes. They include most of the changes to the applicant’s proposal made by the decision but retain requirements that were inadvertently omitted in the administrative decision. 21. The resort shall comply with DCC 18.113.060(D)(2). Specifically, DCC 18.113.060(D)(2) requires: 2. Individually owned residential units that do not meet the definition of overnight lodging in DCC 18.04.030 shall not exceed two and one-half such units for each unit of visitor oriented overnight lodging. Individually owned units shall be considered visitor oriented overnight lodging if they are available for overnight rental use by the general public for at least 38 weeks per calendar year through one or more central reservation and check in service(s) operated by the destination resort or by a real estate property manager, as defined in ORS 696.010. Each phase of development shall be constructed such that the number of overnight lodging units meets the 150 overnight lodging unit and 2:1 ratio of individually owned units to overnight lodging unit standards set out in DCC 18.113.060 (A) (1) and 18.113.060 (D)(2). Individually owned units shall be considered visitor-oriented lodging if they are available for overnight rental use by the general public for at least 45 weeks per calendar year. As required by ORS 197.445(4)(b)(B) at least 50 units of overnight lodging must be constructed in the first phase of development prior to the closure of sale of individual lots or units. [Note: The new text is that imposed by Condition 21b of the appealed administrative decision. The requirements of last sentence of the deleted text of Condition 21, above, was moved to Condition 33.] In addition to complying with the specific requirements of DCC 18.113.70 (U), 1-5, Applicant, its successors and assigns, shall at all times maintain (1) a registry of the individually owned units subject to deed restriction under DCC 18.113.070 (U)(2), requiring they be available for overnight lodging purposes; (2) an office in a location reasonably convenient to resort visitors as a reservation and check-in facility at the resort; and (3) a separate telephone reservation line and website in the name of “Thornburgh Resort”, to be used by members of the public to make reservations. As an alternative to or in addition to (3), Applicant may enter into an agreement with a firm (booking agent) that specializes in the Hearings Officer Frank November 29, 2021 Page 3 schwabe.com rental of time-sharing of resort property, providing the Applicant will share the information in the registry required by (1) and cooperate with the booking agent to solicit reservations for available overnight lodging at the resort. If applicant contracts with a booking agent, Applicant and the booking agent shall cooperate to ensure compliance with the requirements of DCC 18.113.070 (U)(5), by filing a report on January 1 of each year with the Deschutes County Planning Division. [Note: The applicant requests that these measures that assure that OLUs will be used as OLUs be retained (remove Condition E of appealed decision) rather than replaced by Condition 21d. The applicant did not propose to remove or amend these requirements and changes proposed do not warrant this change.] [Note: This paragraph includes the requirement imposed by Condition 21c of the appealed decision which is to comply with DCC 18.113.070(U)(5).] 33. The Resort shall, in the first phase, provide for the following: A. At least 150 separate rentable units for visitor-oriented lodging as follows: (a) The first 50 overnight lodging units must be constructed prior to the closure of sales, rental or lease of any residential dwellings or lots. (b) The resort may elect to phase in the remaining 100 overnight lodging units as follows: (i) At least 50 of the remaining 100 required overnight lodging units shall be constructed or guaranteed through surety bonding or equivalent financial assurance within five years of the closure of sale of individual lots or units, and (ii) The remaining 50 required overnight lodging units shall be constructed or guaranteed through surety bonding or equivalent financial assurances within 10 years of the closure of sale of individual lots or units. (iii) If the developer of a resort guarantees a portion of the required overnight lodging units required under subsection 18.113.060(A) (1)(b) through surety bonding or other equivalent financial assurance, the overnight lodging units must be constructed within 4 years of the date of execution of the surety bond or other equivalent financial assurance. (iv) The 2.5:1 accommodation ratio required by DCC 18.113.060 (D)(2) must be maintained at all times. (c) If a resort does not choose to phase the overnight lodging units as described in this condition of approval, then the required 150 units Hearings Officer Frank November 29, 2021 Page 4 schwabe.com of overnight lodging units must be constructed prior to the closure of sales, rental or lease of any residential dwellings or lots. [Note: The new text above is text imposed by Condition 21a of the appealed administrative decision.] B. Visitor-oriented eating establishments for at least 100 persons and meeting room which provide eating for at least 100 persons. C. The aggregate cost of developing the overnight lodging facilities and the eating establishments and meeting rooms required in DCC 18.113.060(A)(1) and (2) shall be at least $2,000,000 (in 1984 dollars). D. At least $2,000,000 (in 1984 dollars) shall be spent on developed residential recreational facilities.3 E. The facilities and accommodations required by DCC 18.113.060, other than overnight lodging units, must be physically provided or financially assured pursuant to DCC 18.113.110 prior to the closure of sales, rental or lease of any residential dwellings or lots. [Note: Subsection D corrects a typographical error. Subsection E is revised to reflect the fact that the bonding of OLUs is governed by FMP Condition 21.] 35. The contract with the owners of units that will be used for overnight lodging by the general public shall contain language to the following effect: “[Unit Owner] shall make the unit available to [Thornburgh Resort/booking agent] for overnight rental use by the general public at least 45 38 weeks per calendar year through a central reservation and check-in service.” [Note: The applicant proposes to retain rather than eliminate Condition 35. The only change proposed is a change from 45 to 38 weeks for OLU rental availability. The applicant did not propose any change to how OLUs will be monitored and wishes to retain the provisions of the existing approval.] 2. Relevant Approval Criteria for Review of Modifications DCC 18.113.080 Applicant’s Position As Ms. Gould states in her appeal of the FMP Modification Decision, DCC 18.113.080 applies to amendments of the Thornburgh CMP/FMP. Statement of Reasons for Appeal (Gould), p. 10. 3 The CMP decision incorporated into the FMP and former DCC 18.113.060.A required at least $2,000,000 in recreational improvements; not residential facilities. Exhibit 112, p. 42-43, 97. Hearings Officer Frank November 29, 2021 Page 5 schwabe.com That law allows substantial and insubstantial changes. If a change is insubstantial, it may be approved by the Planning Director. If it is substantial, it must be reviewed in the same manner as the original CMP. Condition 1 of the FMP requires a new application if a substantial change is made to the FMP but that application is an application seeking approval of a plan modification – not a new destination resort application. Deschutes County applies DCC 18.113.080 to the review of applications to modify an FMP despite the fact it says it applies to changes to a CMP. The likely reason for this is that the County code says that the FMP “incorporates all requirements of the County approval for the CMP.” DCC 18.113.040.B. In this case, the requirements proposed for change were all imposed during the review of the CMP. DCC 18.113.080 says: “Any substantial change, as determined by the Planning Director, proposed to an approved CMP shall be reviewed in the same manner as the original CMP. An insubstantial change may be approved by the Planning Director. Substantial change to an approved CMP, as used in DCC 18.113.080, means an alteration in the type, scale, location, phasing or other characteristic of the proposed development such that findings of fact on which the original approval was based would be materially affected.” DCC 18.113.080 authorizes the Planning Director to approve insubstantial changes if he or she finds that the changes are not substantial. The Planning Director made this finding and it is correct as shown by the review of the CMP criteria and CMP findings discussed below. The changes proposed by this application are all insubstantial. None of the changes are such that they would “materially affect” the findings of fact of the CMP, the original approval. Webster’s Third New International Dictionary Unabridged defines “materially” as we believe it is used in DCC 18.113.080 to mean: “to a significant extent or degree.” The application of the 2.5:1 ratio to Phase A of the Thornburgh Resort allows the applicant to build up to 375 dwellings in the phase (375 Residential Single Family: 150 OLU = 2.5:1). The following updated phasing chart4 from the FMP shows what the application of the 2.5:1 ratio means if the applicant does not elect to build all 450 approved OLUs. The applicant asks that it be approved by the hearings officer. It shows that the 2.5:1 ratio is met for each phase of single-family development. The number of OLUs currently required by the phasing chart are 4 This chart is provided to address Mr. Kleinman’s claim on page 3 of his rebuttal memorandum that “Thornburgh continues to fail to address the ‘Corrected Phasing Plan and Overnight and Density Calculations Chart’ *** adopted under Condition 37 of the FMP approval.” This chart is that chart with appropriate revisions that commit Thornburgh to comply with the 2.5:1 ratio. We note, however, that there is no FMP Condition 37. Hearings Officer Frank November 29, 2021 Page 6 schwabe.com shown in parentheses. These numbers are retained to show the maximum number of OLUs that may be built by the Resort. Item Phase A Phase B Phase C Phase D Phase E Phase F Phase G Total Residential Single Family (RSF) 375 75 150 125 125 50 50 950 Hotel Overnight 50 50 Residential Overnight 150 30 (150) 60* (0) 0 (63) 50** (62) 20** (0) 20** (0) 330 Net Overnight 150 30 60 50 50 20 20 380 Cumulative RSF 375 450 600 725 850 900 950 950 Cumulative Overnight 150 180 240 290 340 360 380 380 Ratio RSF:Overnight 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 * To be built in Phase B area as approved. ** To be built in Phase D or E area as approved. The phasing chart, above, simply allows the applicant to build what were Phase B residential single-family homes as a part of Phase A before moving onto Phase B and properly adjusts OLU minimums to demonstrate compliance with the 2.5:1 ratio.5 This does not change the total amount of residential single-family homes currently allowed by the FMP. Prior amendments to the FMPs of other resorts to allow reliance on new OLU code requirements have been approved as insubstantial changes. We believe that the proposed modifications are insubstantial because they do not materially affect the findings made by the BOCC in its decision approving the Thornburgh CMP based on the 2005 law. In the context of the County code’s rules for modifications in general that look to whether a change is substantial, and as already discussed above, “materially” means a change that is significant in extent or degree. FMP Condition 1 and DCC 22.36.040. A change that does not increase the total amount of single- family homes is not material and does not increase the overall impacts of the resort. We set out below the approval criteria that have been revised by the County that the applicant seeks to apply to its resort. The text added after the resort was approved is underlined and 5 If the hearings officer limits RSF units to 300 in Phase A, the only change that need be made to the chart is to provide 300 RSF in Phase A and 150 RSF in Phase B. Hearings Officer Frank November 29, 2021 Page 7 schwabe.com enclosed in brackets. Following the code language set out below, we explain why the change does not require a significant change to the findings. DCC 18.113.060 (A)(5) A. The destination resort shall, in the first phase, provide for and include as part of the CMP the following minimum requirements: 5. The facilities and accommodations required by DCC 18.113.060 must be physically provided or financially assured pursuant to DCC 18.113.110 prior to closure of sales, rental or lease of any residential dwellings or lots [or as allowed by DCC 18.113.060(A)(1)].6 Response: The relevant findings, found on page 43 of the CMP (Exhibit 124, p. 3), do not require alteration. No findings specifically address bonding for OLUS. The findings state that the applicant will comply with DCC 18.113.060(A). That code now requires that OLUs be bonded as provided by (A)(1) – the code language proposed to be included in FMP Condition 33. The change in how OLUs are bonded, therefore, are an insignificant change. DCC 18.113.060 (D) D. A destination resort shall, cumulatively and for each phase, meet the following minimum requirements: 2. Individually-owned residential units [that do not meet the definition of overnight lodging in DCC 18.04.030] shall not exceed two [two and one-half] such units for each unit of visitor-oriented overnight lodging. Individually-owned units shall be considered visitor-oriented lodging if they are available for overnight rental use by the general public for at least 45 [38] weeks per calendar year through one or more central reservation and check-in service(s) [operated by the destination resort or by a real estate property manager, as defined in ORS 696.010]. Response: The relevant findings regarding the 2:1 ratio, found on pages 46-48 of the CMP (Exhibit 124, p. 4-6), require a minor alteration only – the substitution of the 2:1 ratiowith the 2.5 ratio allowed by law. The findings mention that the applicant furnished information regarding the order and schedule for phasing and that the information exceeded what was required by DCC 18.113.050.B.8 which explains what information is to be provided for review of the CMP. The only factual difference of substituting a 2.5:1 ratio is to allow the applicant to provide fewer OLUs after Phase A’s OLU requirements have been satisfied. 6 The underlined text is a part of the current code. Hearings Officer Frank November 29, 2021 Page 8 schwabe.com The findings related to the 45 weeks availability requirement mention the requirement just once when referring to OLUs. A change to refer to the current 38 weeks requirement in this one location does not materially alter the findings. DCC 18.113.070(U) U. A mechanism to ensure that individually-owned units counting toward the overnight lodging total remain available for rent for at least 45 weeks per calendar year through a central reservation and check-in service. Such a mechanism shall include: [list of requirements includes a reference to 45 weeks] Response: The findings related to this criterion are found at page 86 of the CMP, Exhibit 124, p. 8. The only change needed is to substitute the reference to 45 weeks to 38 weeks. This change is not a substantial change. Ms. Gould’s Argument that Only DCC 18.113.080 Applies In Ms. Gould’s appeal of the FMP modification (p. 10), she claims that the inquiry regarding the modification application begins and ends with DCC 18.113.080 because the section provides criteria for the modification and DCC 22.36.040(B) says that the modification criteria of DCC 18.113.080 control over the criteria of DCC 22.36.040(B). This may be correct but the applicant addressed the criteria of DCC 22.36.040(B) because County staff decisions that modify destination resort approvals apply the criteria of DCC 22.36.040 when reviewing minor modifications of resort master plans and because Ms. Gould argues elsewhere that the proposed modification violates DCC 22.36.040. We note that if Ms. Gould’s reading of DCC 22.36.040(B) is correct, her argument that approval of the amendment violates DCC 22.36.040 is without merit. DCC 22.36.040 Most of Ms. Gould’s arguments that the change to the OLU ratio are substantial or significant changes are based on her erroneous view that the amendments authorize additional development. They do not. Prior County decisions make this fact abundantly clear. Exhibits 114-117. As a result, it is clear that the changes may be approved under the authority of DCC 22.36.040 as discrete changes to the FMP that do not result in a substantially different, new FMP. Deschutes County reviews applications for insubstantial changes against the criteria of DCC 22.36.040 as well as DCC 18.113.080. The sections of DCC 22.36.040 in dispute in this matter are subsections (2) and (3), below. “2. Unless otherwise specified in a particular zoning ordinance provision, the grounds for filing a modification shall be that a change of circumstances since Hearings Officer Frank November 29, 2021 Page 9 schwabe.com the issuance of the approval makes it desirable to make changes to the proposal, as approved. A modification shall not be filed as a substitute for an appeal or to apply for a substantially new proposal or one that would have significant additional impacts on surrounding properties. 3. An application to modify an approval shall be directed to one or more discrete aspects of the approval, the modification of which would not amount to approval of a substantially new proposal or one that would have significant additional impacts on surrounding properties. Any proposed modification, as defined in DCC 22.36.040, shall be reviewed only under the criteria applicable to that particular aspect of the proposal. Proposals that would modify an approval in a scope greater than allowable as a modification shall be treated as an application for a new proposal.” Mr. Kleinman states in his First Open Record Memorandum (Gould) that the change of the OLU ratio is substantial and that FMP Condition 1 and DCC 22.36.040 require approval of an entirely new CMP/FMP despite the fact that the changes will not authorize additional development. DCC 22.36.040(B) allows modifications unless the application is a “substantially new proposal or one that would have significant additional impacts on surrounding properties.” FMP Condition 1 allows changes unless the changes are substantial. Making changes to a discrete element of the resort – its OLUs –does not constitute a new proposal. The proposed changes will not authorize additional development so will not impose significant additional impacts on surrounding properties. The proposed change simply seeks to apply the existing law related to OLU ratios, rental availability and bonding. When the full scope and complexity of the Resort FMP and CMP is considered, it is clear that these minor changes do not result in a “substantially new proposal” – that is, a new destination resort.7 This is evident from a review of the relevant approval criteria for resorts that required plans for all aspects of the Resort. The changes proposed affect none of the following plans and documents that are a required part of a CMP (DCC 18.113.050):  an open space management plan  recreational amenities  a resource protection plan  an erosion control plan  wildlife mitigation plan  traffic study  design guidelines  deed restrictions  water and sewer utility system plans 7 This is particularly true given that the code specifically states that it applies to previously approved resorts, like Thornburgh. Hearings Officer Frank November 29, 2021 Page 10 schwabe.com  analysis of impacts on adjacent lands  plan for emergency medical and public service facilities and service  water availability study  water conservation and wastewater report  wildfire prevention, control and evacuation plans  description of interim development  employee housing survey  economic impact and feasibility analysis DCC 18.113.060 and 18.113.070 also impose extensive and detailed standards and approval criteria for resort CMPs. The changes proposed by the applicant relate to OLUs in DCC 18.113.060(A)(5), 18.113.060(D) and 18.113.070(U) only. These requirements are discussed in our response to Ms. Gould’s “a new CMP is required” argument. They are an insubstantial part of the relevant destination resort approval criteria in place in 2005. The findings related to the relevant approval criteria barely mention the requirements that are proposed for change. Mr. Kleinman argues that changing the ratio will mean that 375 homes will be built before the fifty-first OLU is built. This is not, however, a change. Under the current FMP, the applicant need not build the fifty-first OLUs until after constructing all 950 single-family homes, provided it posts financial assurances that the OLUs will be built. The modification proposed by Central Land will prevent this outcome by limiting the duration of bonding to a period of four years. DCC 18.113.060(A)(1)(b)(3). Ms. Gould’s Claim that a New CMP/FMP is Required Ms. Gould asserts that the criteria applicable to modifications require Thornburgh to file a new master plan application to obtain approval of the requested modifications because the changes proposed are substantial. In other words, in Ms. Gould’s view, the CMP/FMP may not be amended despite the clear language of DCC 18.113.080 that authorizes substantial modifications of a CMP/FMP. Ms. Gould’s argument disproves itself. If a modification is substantial and a new CMP/FMP is required, the modification is not an amendment of the existing CMP/FMP. Rather it is a new CMP. This is not what DCC 18.113.080 says. DCC 18.113.080 says only that a substantial modification of an FMP is to be reviewed in the same manner as the original CMP – not that a modification is not allowed or that an applicant must seek approval of a new CMP. The manner of review for the original CMP is a review as a land use action with notice. That is the process followed for the applicant’s Thornburgh FMP modification. This level of review is more rigorous than required for the review of an FMP. FMPs are reviewed as development permit without notice or an opportunity for public participation unless the review involves the exercise of discretion. DCC 18.113.100. The requirement that a substantial amendment be reviewed in the same manner as the original CMP assures the public that substantial changes will not be made using the FMP review process. In this case, the County reviewed the modification “in the same manner as the original CMP” by Hearings Officer Frank November 29, 2021 Page 11 schwabe.com reviewing it as a land use matter and conducting a hearing of the matter on appeal by Ms. Gould rather than reviewing the application as a development action. As a result, whether substantial or insubstantial, the modifications requested by this application may be approved without violating DCC 18.113.080 . Both the Board of Commissioners and Ms. Gould understand that significant changes may be made to an FMP without requiring the filing of a new CMP. In her appeal to the BOCC of the Phase A-1 tentative plan, Ms. Gould faulted the hearings officer for finding that it was her position that alleged substantial changes to the FWMP would require the resort to “start over.” Ms. Gould’s appeal advised the BOCC that her position was that “[t]he county process does not require a ‘start over’ but it does require that a modification be filed.” Exhibit 125, pp. 2-3 (text highlighted in yellow). The BOCC’s CMP approval reflects the Board’s position that a substantial change of converting OLU units and lots to a single-family residential use would be required and be allowed as a modification of the CMP. Exhibit 124, p. 4. It did not find that a new CMP and FMP would be needed for this substantial change. Sagebrush Subdivision Ms. Gould argues in her First Open Record Memorandum that reducing the minimum number of OLU units on the phasing chart to provide the ratio required by state and local law would make the resort “more of a ‘sagebrush subdivision’” and this gives rise to a substantially new proposal. This argument is contradicted by the law that plainly allows a 2.5:1 ratio as an appropriate ratio for destination resorts. Whether one views a destination resort built in compliance with destination resort law a “sagebrush subdivision” is irrelevant. 3. DCC 18.113.070.B/Raise It or Waive It Rule Ms. Gould argues that the amendment violates DCC 18.113.070.B that requires that all standards established by DCC 18.113.060 “are or will be met” by a proposed modification. Ms. Gould argues this means that the applicant must comply with the repealed requirements of DCC 18.113.060. This is not correct. The “goal post” rule requires that the modification be judged by the law in effect when the modification application was filed in 2021, not the law in effect in 2005 when the CMP was filed. ORS 215.427(3)(a). This is how the rule has been applied by LUBA and appellate courts – to pending land use applications then under review based on the law when those applications were filed. ORS 215.427(3)(a) says: “If the application was complete when first submitted or the applicant submits additional information, as described in subsection (2) of this section, within 180 days of the date the application was first submitted and the county has a comprehensive plan and land use regulations acknowledged under ORS 197.251, Hearings Officer Frank November 29, 2021 Page 12 schwabe.com approval or denial of the application shall be based upon the standards and criteria that were applicable at the time the application was first submitted.” Given the fact the applicant is seeking to apply the current requirements of DCC 18.113.060 to its decision it is clear that the amendment will meet the requirements of that section. 4. FMP Conditions 10 and 38 Do Not Apply Ms. Gould argues that the FMP modifications should not be approved because the resort’s OWRD water permit is “in jeopardy.” She also claims that modification should not be approved because it has not demonstrated, to the satisfaction of Ms. Gould, that it has the cold mitigation water required by the FWMP. These arguments are based on FMP Conditions 10 and 38. FMP Conditions 10 and 38 relate to the Resort’s water rights permit and its wildlife mitigation plan, including the FWMP. FMP Condition 10 plainly states it applies “at the time of tentative plat/site plan review for each individual phase of the resort development.” FMP Condition 38 requires annual reporting to the county to assure compliance with the FWMP. It is does not authorize a review of compliance during the review of any land use applications. DCC 22.36.040.C says “[a]ny proposed modification *** shall be reviewed only under the criteria applicable to that particular aspect of the proposal.” Likewise, Ms. Gould’s argument that the “no net loss” standard of DCC 18.113.070(D) should be applied to this application lacks merit. Even without this code provision, it is a basic rule of law that only laws that relate to a land use action may be applied as approval criteria. In this case, the approval criteria are the same as the proposed changes so their approval necessarily complies with the relevant approval criteria. Therefore, Condition 10 and 38 simply do not apply to review of the modification application. Furthermore, none of the requested changes will authorize an increase in development that will require the use of more water or that will create new impacts on wildlife habitat. This is due to the fact that the FMP limits development of the resort to 950 single-family homes and 450 OLUs. The applicant has not asked to increase those limits so they remain as approved. The only impact of the change from a 2:1 to 2.5: 1 ratio is that the minimum number of OLUs that must be built will be lowered. Obviously, if fewer units are built, the change will result in lesser impacts to water, wildlife, and traffic. 5. Accounting of OWRD Mitigation under FMP Condition 10 Does Not Require Compliance with FWMP Ms. Gould’s current counsel, despite numerous failed efforts to do so, attempts to argue that FMP Condition 10 requires Thornburgh to address a host of issues related to the FWMP. As LUBA found in Gould v. Deschutes County, __ Or LUBA __ (LUBA No. 2020-095, June 11, 2021): Hearings Officer Frank November 29, 2021 Page 13 schwabe.com “Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10. *** [W]e agree with intervenor that Condition 10 is concerned only with satisfaction of DCC 18.113.070(K) regarding the availability of water for resort use and mitigation for the volume of consumptive use, as required by OWRD under the water right.” LUBA’s recent decision is in accord with legal precedent. According to the Oregon Court of Appeals, FMP Condition 38 assures compliance with the Terrestrial WMP, the M&M Plan, the Fish WMP (FWMP) and the August 11, 2008 letter re Whychus Creek mitigation which were referred to collectively by the County’s hearing officer as the “WMP.” Gould v. Deschutes County, 233 Or App 623, 634-635, 227 P3d 758 (2010). Ms. Gould’s former legal counsel Paul Dewey understood that a review under Condition 10 would not address or assure compliance with the FWMP. He argued in Ms. Gould’s Petition for Review of the FMP to LUBA in 2009 that the only conditions of approval related to fish resources are FMP Conditions 38 and 39. Exhibit 123, p. 31. In footnote 8 of Ms. Gould’s Petition for Review, Mr. Dewey made it clear that the OWRD review required by FMP Condition 10 would make no determination regarding the FWMP or the County’s no net loss standard. “It is not an answer to the lack of a showing of feasibility and conditions of approval for the Big Falls Ranch and COID mitigation water that OWRD will be requiring mitigation for groundwater permits and that no legal impediment is shown to a OWRD determination. OWRD will be requiring mitigation, but not necessarily this mitigation which is being proposed here specifically for fish and wildlife mitigation, not just to satisfy OWRD requirements. OWRD will be making no determinations to satisfy these county fish and wildlife standards.” Exhibit 123, p. 33. In his First Open Record Memorandum, Mr. Kleinman claims “the reference in FMP Condition 10 to an accounting of mitigation under the water right incorporates the FWMP. It does not and could not have done so because the FWMP did not exist when FMP Condition 10 was written as Condition 10 of the CMP. Mr. Kleinman attempts to support this faulty claim by saying that the FWMP is an addendum to a wildlife mitigation plan “adopted under OWRD’s review process.” This is clearly wrong because the FWMP which is located in numerous places in the record clearly states on page 1: “This report was prepared on behalf of Thornburgh Resort Co., LLC (“Thornburgh”) as an Addendum to the Thornburgh Resort Wildlife Mitigation Plan prepared by Tetra Tech EC, Inc.” The Oregon Court of Appeals said the following on this topic: Hearings Officer Frank November 29, 2021 Page 14 schwabe.com “Thornburgh's wildlife management plan contains two components. The first addresses terrestrial wildlife and is described in the “Thornburgh Resort LLC Wildlife Mitigation Plan for Thornburgh Resort” (“Terrestrial WMP”) and the “Off–Site Habitat Mitigation and Monitoring Plan for the Thornburgh Destination Resort Project,” dated August 2008 (“M & M Plan”). The second component addresses off-site fish habitat and is described in the “Thornburgh Resort Fish and Wildlife Mitigation Plan Addendum Relating to Potential Impacts of Ground Water Withdrawals on Fish Habitat” (“Fish WMP”) and an August 11, 2008, letter proposing additional mitigation for Whychus Creek.” Gould v. Deschutes County, 233 Or App 623, 625-626, 227 P3d 758 (2010). 6. Condition 38 As determined by LUBA in its review of the Phase A-1 tentative plan (discussed below), FMP Condition 38 does not apply during the review of development applications unless approval of the modification will result in a change of the WMP. None of the proposed FMP modifications result in a change to the WMP or its FWMP. Compliance with FMP 38 and the WMP/FWMP is assured by annual reporting and staff review of the reports – not by concurrent review with development applications. If the County had intended to allow a review for compliance with FMP Condition 38 during the review of development applications, it would have said so – just as it did when it wrote FMP Condition 10. LUBA’s decision regarding the Thornburgh Phase A-1 tentative plan makes it clear that issues of compliance with Condition 38 are not relevant in a review of a development application. It rejected the same Condition 38 claims Ms. Gould continues to raise during the review of this application – dam removal on Deep Canyon Creek, abandonment of wells and the transfer of water from Deep Canyon Creek by Big Falls Ranch. “As established in prior appeals, the mitigation plan satisfies the substantive no net loss/degradation standard for destination resort development. We agree with intervenor that the details of the mitigation plan are established by the FMP, and compliance (or noncompliance) with the mitigation measures will be established by annual reporting required by FMP Condition 38. We reject petitioner's argument that the FMP required intervenor to “fill in the details” to obtain approval of a tentative plan during phased development. Petition for Review 56. Petitioner has not demonstrated that the approved subphasing, as conditioned, alters any mitigation requirement under the FMP mitigation plan. Petitioner's argument provides no basis for remand. *** The mitigation plan involves (1) the removal of two wells on the subject property, (2) the removal of two dams that impede the flow of spring water from Deep Hearings Officer Frank November 29, 2021 Page 15 schwabe.com Canyon Creek to the Deschutes River, and (3) transfer of water from Deep Canyon Creek that Big Falls Ranch uses for irrigation for mitigation. Record 215. Petitioner argues that the hearings officer erred in failing to require as a condition of approval for the tentative plan that, prior to beginning construction, intervenor remove the dams and the wells. Petitioner argues that while the body of the hearings officer's decision states that the first dam will be removed prior to construction under the tentative plan, he failed to include dam removal as a condition of approval. Intervenor responds, and we agree, that removal of the dams and provision of mitigation water is required by the FMP approval and the tentative plan does not alter the mitigation plan. Response Brief 55. The hearings officer was not required to impose additional conditions to the approval of the tentative plan.” Gould v. Deschutes County, 79 Or LUBA 561, 583 (2019). The terms of FMP Condition 38 are final and may not be collaterally attacked every time the applicant seeks a development approval or modification of discrete parts of the FMP. Gansen v. Lane County, __ Or LUBA __ (LUBA No. 2020-074, 2/22/2021)(local governments are barred from collaterally attacking their own prior land use decision in subsequent reviews; in challenging a development approval that relies upon a prior final land use decision, LUBA will not review arguments that the prior decision was procedurally or substantively incorrect); Landwatch Lane County v. Lane County, 79 Or LUBA 65, 72-73 (2019) (arguments that a prior final partition failed to comply with applicable procedures are outside LUBA's scope of review as a collateral attack on the partition decision); Lockwood v. City of Salem, 51 Or LUBA 334, 344 (2006) (arguments that two prior city decisions extending the effective date of a preliminary public facility agreement were invalid are outside LUBA's scope of review as a collateral attack on those two prior unappealed city decisions); Sahagian v. Columbia County, 27 Or LUBA 341, 344 (1994) (arguments that challenge an unappealed prior decision redesignating park property as forest are a collateral attack on that earlier unappealed redesignation decision); Perry v. Yamhill County, 26 Or LUBA 73, 77, aff'd, 125 Or App 588, 865 P2d 1344 (1993) (in an appeal of a county decision determining that two lots comply with conditions of a prior preliminary subdivision approval, arguments that challenge the prior approval are outside LUBA's scope of review as a collateral attack on the prior subdivision approval). See also, Doney v. Clatsop County, 142 Or App 497, 921 P2d 1346 (1996); Scott v. Josephine County, __ Or LUBA __ (LUBA No. 2020-080, 3/9/2021)(impermissible to attack final lot line adjustment decision in a CUP review seeking development approval on the same property); Just v. Linn County, 59 Or LUBA 233, 236 (2009)(challenges to the correctness or validity of a prior final permit decision amount to an impermissible collateral attack on the decision). Given this well-settled case law, Ms. Gould’s claim that FMP Condition 38 should have provided for public review and a hearing is barred as it should have been raised during the review on appeal of the FMP. To raise it now is an impermissible collateral attack on the FMP. Hearings Officer Frank November 29, 2021 Page 16 schwabe.com 7. Gould’s Claims re Newton’s Technical Memo Exhibit 119 Ms. Gould’s attorney presents an undeveloped legal argument in rebuttal that “to the extent Mr. Newton’s analysis with respect to the subject wells differs from what he submitted in support of the CMP and FMP, this is highly problematic for the applicant.” We do not find any statements regarding the BFR wells in the FWMP and are unable to further respond to this opaque claim because Mr. Kleinman has failed to point to any document in the record that supports his claim.8 Mr. Kleinman next makes the unsubstantiated claim that “it appears that Mr. Newton is now saying that well conditions were or are different from those relied upon previously” and that this necessitates an amendment of the CMP and FMP. Only a substantial change to the Resort plan, not allegedly new evidence about issues addressed during the review of the plan, merit approval of a modification as is evident from the modification criteria we have discussed at length above. Finally, Mr. Kleinman asserts that an alleged difference in evidence provided in the past and today is an impermissible collateral attack upon the CMP and FMP/FWMP and documentation filed to support approval of those plans. First, the rule that bars impermissible collateral attacks does not apply to evidence – it applies to final land use decisions only. Second, Mr. Kleinman has failed to identify what provision of the CMP or FMP is allegedly being attacked by Mr. Newton’s evidence about Deep Canyon Creek and the Big Falls Ranch wells. 8. Response to Lot of Record Arguments COLW and Ms. Gould argue that, contrary to the authorization of development granted for the entire Resort property by the FMP and the Phase A-1 tentative plan, that Tax Lots 7800 and 7900 of the Resort may never be developed and that a modification of the FMP may never be approved. This argument is based on the faulty premise that the recording of a deed for a part of a lawfully-created property creates new parcels that irrevocably destroy the lawfully-created parent parcel. This claim is not supported by law and is inconsistent with the plain language of ORS 92.017. Given the fact that Central Land owns multiple lots of record, changes to the boundaries of these properties may be approved as property line adjustments rather than by partitioning and opponents have not shown that this is incorrect. We have provided extensive arguments regarding the lot of record issue raised by Central Oregon LandWatch (COLW) in our letter dated November 3, 2021. We will not repeat those arguments in the same detail here. Instead, we will respond to arguments in documents COLW 8 The FWMP, the document that describes the Resort’s mitigation program does not rely on an analysis of the Big Falls Ranch well in order to garner approval. Instead, it relies on the purchase of Deep Canyon Creek water rights from the ranch. This approach was approved by hearings officer Briggs when she approved the FMP. See, footnote 8, FMP Decision (entire decision filed by Mr. Kleinman). Hearings Officer Frank November 29, 2021 Page 17 schwabe.com filed on November 5, 2021 (amends prior COLW argument) and November 11, 2021, and documents filed by Ms. Gould. EFU Zone COLW argues that DCC 22.04.040(B)(1)(a) requires Central Land to verify that its property is a lot of record because it is located in the EFU zoning district and is subject to strict limits on development. While DCC 22.04.040(B)(1)(a) makes lot of record verification a requirement in the EFU zone, the rules of the EFU zoning district do not apply to destination resort development applications such as the site plan and FMP modification applications.9 This is plainly stated by County FMP modification decisions, Exhibit 114 (pp. 6-7) and Exhibit 115 (pp. 5-6), and DCC 18.113.020, below. “18.113.020 Applicability 1. The provisions of DCC 18.113 shall apply to proposals for the development of destination resorts, as defined in DCC Title 18, in areas designated DR by the County zoning maps. The provisions of DCC 18.113 shall not apply to any development proposal in an area designated DR other than a destination resort. 2. When these provisions are applicable, they shall supersede all other provisions of the underlying zone. Other provisions of the zoning ordinance, made applicable by specific map designations, such as the SMIA, AH, CH, FP or LM, or otherwise applicable under the terms of the zoning ordinance text shall remain in full force and effect, unless otherwise specified herein.” The County’s FMP modification approval (2.5:1 ratio and 38 weeks) for Pronghorn Resort found: “Pronghorn was approved under DCC Chapter 18.113 through applications nos. CU-00-118 and M-02-1. As stated in foregoing findings, the MUA-10 and EFU zone standards do not apply to Pronghorn, since it was approved under DCC 18.113.” Exhibit 115, p. 7. “The standards and criteria under DCC 18.113 are the only ones that apply to the resort.” 9DCC 22.04.040(B)(1) makes lot of record verification a requirement of the EFU zone. It does not make it a requirement of the DR zone. The DR zone is the only zone that applies to the review of Resort development applications. Hearings Officer Frank November 29, 2021 Page 18 schwabe.com Exhibit 115, p. 6. COLW’s arguments that the intent of the lot of record rules is to protect EFU land from “fragmentation” may or may not be correct but this is not the intent of the DR zone supersedes the EFU zone and is the actual law that controls the development of the subject parcel. Creation by Deed COLW’s argument that Tax Lot 7800 and 7900 were created by deed on August 31, 2021 is not correct. ORS 92.017 says: “92.017 When lawfully created lot or parcel remains discrete lot or parcel. A lot or parcel lawfully created shall remain a discrete lot or parcel, unless the lot or parcel lines are vacated or the lot or parcel is further divided, as provided by law.” Deeds are not a method of land division “provided by law.” As a result, the Central Land and Pinnacle deeds did not alter the lawfully created parcel boundaries of either Tax Lot 7800 or 7900 because those boundaries were not divided as provided by law. While the areas described by the deeds, when held in separate ownership, are not lawfully created lots of record, the original parcel is not permanently unbuildable as a result. This draconian punishment is not supported by ORS 92.017.10 ORS 92.017 recognition that the original lot of record remains a discrete lot allows development of the lawfully created lot if the part erroneously conveyed is reunited with the remainder property under the same ownership. Exemption from Lot Verification All land within Tax Lots 7800 and 7900 has been excepted from the lot verification requirements of DCC 22.04.040 because they have been determined to be one or more lots of record in formal decisions issued by Deschutes County in LR-91-56 and LR-98-44 (decisions filed by COLW and Central Land). The same is true for the entire resort property because such a finding was made in the BOCC’s decision approving the CMP.11 10COLW’s argument, if accepted, would constitute an unconstitutional regulatory taking of private property prohibited by the 5th and 14th Amendments to the US Constitution and similar provisions of the Oregon Constitution. Given the fact that the County has approved a tentative plan that will create new lots in the areas conveyed by the 2021 deeds, this taking would be a temporary taking but an economically impactful one. 11 All subareas of the resort, with the exception of Tax Lots 7801 and 8000, have also been determined to be lots of record in County land use decision. Copies of deeds and a partition approval were included with my November 3, 2021 letter to Hearings Officer Frank. They show that Tax Lots 7801 and 8000 are lots of record. We do so without waiving our position that the lot of record issue related to the CMP and FMP was settled by approval of the CMP. Hearings Officer Frank November 29, 2021 Page 19 schwabe.com We have also shown in our letter of November 3, 2021 that all parts of the property other than Tax Lots 7801 and 8000 have been determined to be lots of record and are also exempt from the lot verification requirements of DCC 22.04.040. We have also provided evidence in our rebuttal arguments to demonstrate that Tax Lots 7801 and 8000 are lots of record. If the hearing officer does not agree that the BOCC’s decision finding that the entire resort is a lot of record is binding, this evidence demonstrates that the component parts of the resort are either exempt from verification or merit a finding that they are lots of record. DCC 22.04.040(B) 2. Exceptions. Verification shall not be required if one of the following exceptions apply: * * * c. The lot or parcel was previously determined to be a lot of record in a formal decision issued by the County or a finding in a land use action prior to November 1, 2017; COLW argues that Tax Lots 7800 and 7900 no longer exist. This is simply not correct because ORS 92.017 provides that lawfully created parcel boundaries remain until they are changed by a lawful vacation or land division. The July 30, 2021 deed of 0.5 acres from Central Land to Pinnacle, therefore, did not cause these lots of record to “cease to exist.” The same is true for Tax Lot 7801 and all other Resort parcels. These parcels exist until lawfully vacated or divided. ORS 92.017.12 Furthermore, because Central Land owns numerous adjoining lots of record, the deed to Pinnacle did no more than attempt to reconfigure its adjacent lots of record by moving common boundary lines between lots of record. It did not divide land. ORS 92.176 ORS 92.176 is a remedy that allows an owner of a part of a lot of record created without partition approval to obtain permission to develop a part but not all of the lot of record. Central Land is not seeking permission to develop the area erroneously conveyed. Instead, it is the sole owner of and is seeking to develop Tax Lots 7800 and 7900 which were both lawfully created. The same argument holds true for Tax Lot 7801 although no development is currently proposed for that property. Law of the Case 12 Pinnacle has quitclaimed this .5-acre property back to Central Land so that Tax Lots 7800 and 7900 are owned by Central Land only. Hearings Officer Frank November 29, 2021 Page 20 schwabe.com The applicant has not argued that law of the case applies. That doctrine applies to the review of the same land use application on remand and subsequent appeal. State v. Pratt, 316 Or 561, 569, 853 P2d 827 (1993) as cited in State v. Langley, 331 Or 430, 493, 16 P3d 489 (2000). The law that bars impermissible collateral attacks discussed earlier is the applicable law. Hearings Officer’s Authority to Approve Application COLW argues that the hearings officer lacks authority to approve pending land use applications due to the provisions of DCC 22.04.040(B)(1)(a) and DCC 22.20.015(A). This is simply not correct. Lot verification is not required because the Resort property and Tax Lots 7800 and 7900 have been determined to be lots of record and DCC 22.04.040(B)(2) excepts such properties from a lot verification review under DCC 22.04.040(B)(1). The Board of Commissioners has also interpreted DCC 22.20.015. It has determined that hearings officers may and often should refrain from denying land use applications due to alleged code violations. See, Exhibit 113. A “violation” only exists if it has been determined to exist and hearings officers are not mandated by DCC 22.20.015(C) to make such a determination. The Phase A-1 tentative plan recently received final County approval. When the Phase A-1 final plat is recorded, property lines arguably created by the 2021 deeds will be eliminated. Weyerhaeuser Real Estate Development Co. v. Polk County, 246 Or App 548, 267 P3d 855 (2011). Given this fact, the hearings officer should decline to decide whether a violation exists and approve development applications for the Resort. No purpose other than delay would be served by denial of the pending applications. Hartmann v. Washington County COLW cites Hartmann v. Washington County, 36 Or LUBA 442 aff’d without opinion 165 Or App 177, 991 P2d 65 (1999) for the proposition that the deed to the .5-acre parcel created three undevelopable units of land. The Hartmann case, however, has nothing to do with the creation of parcels by deed. It involves a partition and a property line adjustment approved by Washington County. The parcel in question did not qualify for development with a nonfarm dwelling because it was created after January 1, 1993. It was not determined by Washington County to be undevelopable. Yamhill County v. Ludwick The case of Yamhill County v. Ludwick, 294 Or 778, 663 P2d 398 (1983) finds that if a County requires a legal lot of record verification a property owner must show that his or her property was lawfully created in order to be divided. The case does not require that a county impose a lot of record verification requirement in its code. McKay Creek Valley Association v. Washington County, 118 Or App 543, 848 P2d 624, rev den, 317 Or 272, 858 P2d 1314 (1993) (property need not be a legally created lot or parcel to qualify for development where local code did not Hearings Officer Frank November 29, 2021 Page 21 schwabe.com impose such a requirement); Marshall v. City of Yachats, 158 Or App 151, 973 P2d 374, rev den, 328 Or 594, 987 P2d 514 (1999). Deschutes County has not imposed a lot of record requirement in the DR zone – the zone that controls the review of development applications. None is required by the State law that is applicable to land mapped for destination resort development. ORS 197.435 to 197.467. As a result, the lot of record issue raised by COLW and Ms. Gould does not warrant denial of the Central Land FMP modification or OLU site plan applications. Property Line Adjustment Property line adjustments are not partitions and do not require partition approval. ORS 92.010(9)(b) and (12); DCC 17.08.040, Partition Land. COLW offers no legal argument to demonstrate any flaw in the applicant’s argument that the deeds conveyed in July 2021 were a step in the completion of a property line adjustment between adjoining parcels owned by Central Land. COLW claims that the fact that Pinnacle paid money for the land conveyed means that the deed was an unlawful partition. COLW asks the hearings officer to arrive at this conclusion because COLW believes Pinnacle would not have paid money for land when the adjustment was not then complete. This argument does not hold water. It is far less logical for Pinnacle to have paid money for an unlawfully created new partition parcel that can never be developed (according to COLW) than for a reconfigured parcel that simply required the completion of additional steps to be a lawfully adjusted parcel.13 Rescission COLW takes issue with the use of the word “rescission” in the deed that reconveyed the .5-acre area of land back to Central Land and then presents an argument about reformation that has no bearing on the issues before the hearings officer. Rescission and reformation are, however, different terms with different meanings. Actions for reformation, as can be seen from the cases cited by COLW, are brought where one party seeks to compel the other to change the terms of an agreement. The term “rescission” is properly applied to a mutual agreement by parties to void a prior agreement and was the correct term to use in describing the August deed from Pinnacle to Central Land. The term “rescind” is defined by Webster’s Third New International Dictionary Unabridged as relevant here “to abrogate (a contract) by tendering back or restoring to the opposite party what one has received from him.” A “recission” (rescission) is defined as “an act of rescinding ***.” Nothing prevents parties to a transaction from rescinding the transaction 13 State law requires a survey and recorded deeds for each adjusted parcel to finalize a property line adjustment. ORS 92.190 (3). One but not both deeds were recorded. A County land use approval may or may not be required. The County code does not impose such a requirement. It merely states that adjustments that meet certain conditions are not partitions. Hearings Officer Frank November 29, 2021 Page 22 schwabe.com without judicial intervention. Judicial action in equity is required only when parties do not agree to mutually rescind an agreement. Gould Appeal Unlike COLW’s arguments, Ms. Gould’s appeal generally refers to two deeds. The deed not addressed by COLW is a deed that conveyed a part of Tax Lot 7801 to Pinnacle. The legal description of that deed has been corrected to convey all of Tax Lot 7801 to Pinnacle. Tax Lot 7801 is a legal lot of record because it was created by a Deschutes County partition approval that is a part of the record in this matter. Our rebuttal argument provides findings that establish that Tax Lot 7801 is a lot of record. The boundaries of Tax Lot 7801 were not irrevocably altered by the July 2021 deed to Pinnacle such that the legal description of the deed could not be corrected in August 2021. Tax Lot 7801 is a legal lot of record. 9. Gould’s Arguments re Drought and BLM Land in Post-Hearing Letter Ms. Gould’s arguments about drought do not relate to relevant approval criteria. The proposed modification seeks to apply the current Resort rules for OLUs to an approved development. Due to this fact, approval of the request necessarily complies with the relevant criteria. The provisions of law to be added are themselves the criteria applicable to the issue being changed. None relate to drought. Ms. Gould alleges that the Resort is in violation of an agreement with BLM. This allegation is not relevant to the review of the appealed application as it does not raise an argument that this is a violation of any County land use decision or code. 10. Modification is Not an Impermissible Collateral Attack on FMP Approval Mr. Kleinman argues that the application for a modification of the FMP is an impermissible collateral attack. This is not correct. It is a request authorized by the County code law that allows all holders of land use permits to propose and obtain approval of changes of the approved plan. Mr. Kleinman appears to be claiming that the applicant’s acknowledgment during the review of the Phase A-1 tentative plan that it remains obligated to fulfill all Phase A requirements before selling lots makes the modification a collateral attack on the tentative plan. This makes no sense. The applicant’s modification application in no way alters its commitment to comply with Phase A requirements. FMP Condition 21 requires that at least 50 OLUs be constructed in Phase A prior to the closure of sales of individual lots or units. This requirement is not proposed for change. The requirement will be moved to Condition 33 if this application is approved as we have requested. Phase A requirements for bonding have changed since 2005 and the applicant has proposed to comply with them. Other ORS 197.435 - .467 destination resorts have not sought a change to bonding rules. We assume this is the case because the bonding rules under which Thornburgh and the other resorts Hearings Officer Frank November 29, 2021 Page 23 schwabe.com were approved place no limit on the duration of bonding. This allows resorts to build 50 OLUs and bond for all of the remaining required OLUs indefinitely. The approval of the requested change will impose a hard and fast limit on the duration of bonding in return for changes that delay the time at which bonding is required. 11.ODFW Letter Dated November, 1, 2021 COLW submits a letter dated November 1, 2021, from ODFW that questions Thornburgh’s modification application (File No. 247-21-000553-MC; -920-A). That letter has no bearing on this site plan review application as indicated by ODFW’s own comment and reference. Further, it is based upon the erroneous belief that Thornburgh was requesting an amendment to the FMP to allow additional single family residential development, which it is not. ODFW’s comments also claim that the previous support for the FWMP may need to be revisited due to current conditions. However, that claim is irrelevant as the FMP and the adopted FWMP are not subject to collateral attack and remain binding on Thornburgh. Lastly, the letter and its attachment of an earlier ODFW letter make it clear that ODFW’s concerns arise if Thornburgh proposes to reduce mitigation water. Thornburgh has not proposed a reduction of its mitigation obligations. 12.Additional Crossover Arguments to File No. 247-21-000849-A Ms. Gould and others have made substantially similar, although not always the same, arguments in a related case, File No. 247-21-000849-A. These arguments include additional claims regarding Condition 10, for example. As such, rather than fully repeat response to these claims, we incorporate all responses here and include a copy of our final legal argument for that case as Exhibit 127. Respectfully submitted this 29th day of November, 2021. Very truly yours, SCHWABE, WILLIAMSON & WYATT, P.C. Kenneth Katzaroff PDX\135849\262760\JKKA\32339479.1 EXHIBIT LIST FOR FILE 247-21-000920-A/247-21-553-MC Updated November 19, 2021 Central Land has filed the following evidence in the record of File 247-21-000920-A/247-21- 553-MC in its hearing letters and in post-hearing submittals: Exhibit Description of Exhibit 101 Petition for Review (Gould) to LUBA for LUBA No. 2018-140 (Phase A-1 Tentative Plan (part) 102 Findings and Decision for MC-13-4, Modification of Caldera CMP and FMP (38 weeks of OLU rentals) 103 Lot of Record memorandum by Liz Fancher and Ken Katzaroff for Central Land and its exhibits A-E. 104 BOCC Decision Thornburgh CMP Decision, File CU-05-5, DC 2006-151 (part re lot of record) 105 Lot of Record Determination, File 247-14-000450-LR (TL 7700 and 7701) 106 Lot of Record Determination LR 91-56 (TL 7800) 107 Lot of Record Determination LR-98-44 (TL 7900) 108 File 247-140999449-LR, Lot of Record Determination for TL 5000, 5001 and 5002 109 Patent deed from USA to Lorenzo Thomas (TL 7800) 110 Illustration of Possible Lot Line Adjustment of TL 7800, 7801 and 7900 111 Decision Approving Phase A-1 Tentative Plan, File 247-18-000386-TP/454-SP/592- MA (re controlling zoning rules) 112 BOCC Decision Thornburgh CMP Decision, File CU-05-5, DC 2006-151 (part re FMP Condition 33) 113 BOCC Decision re Review of Alleged Code Violations during land use application review; File 247-18-000241-A/247-A, 247-17-000775-ZC/776-PA 114 Administrative Decision Approving Change in OLU Ratio and Availability for Pronghorn Resort, File MC-13-06 115 Administrative Decision Approving Change in OLU Ratio and Availability for Eagle Crest Resort, File MC-14-13 116 Administrative Decision Approving Change in OLU Ratio for Tetherow Resort, File MC-13-03 117 Administrative Decision Approving Change in OLU Availability for Tetherow Resort 118 Decision of Board of Commissioners for File 247-15-000464-CU/247-18-000009- A, includes hearings officer’s decision for File 247-15-000464-CU 119 Memorandum from David Newton, P.E., C.E.G. dated November 11, 2021 120 Answering Brief; ORS 197.455 & Condition 10 121 Notice of Hearing 122 Letter from K DeLashmutt Dated September 7, 2021, Detailing Owned Water Rights 123 Timeline of Approvals 124 BOCC 2006 CMP 125 Gould 2018 Appeal 126 -508-SP; -849-A Submittal and Exhibits 127 -508-SP; -849-A Final Legal Argument and Exhibits U.S. Bank Centre | 1420 5th Avenue | Suite 3400 | Seattle, WA | 98101-4010 | M 206-622-1711 | F 206-292-0460 | schwabe.com Kenneth Katzaroff Admitted in Washington and Oregon T: 206-405-1985 C: 206-755-2011 KKatzaroff@SCHWABE.com November 29, 2021 VIA E-MAIL Hearings Officer Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development 117 NW Lafayette Ave. Bend, OR 97703 RE: Deschutes County File Nos. 247-21-000508-SP; -849-A. Our File No.: 135849-262760 Dear Hearings Officer Frank: Our office is co-counsel with Liz Fancher for the applicant (“Thornburgh”)1 in the above- referenced matters. This letter constitutes Thornburgh’s final legal argument. Unless otherwise specified, any abbreviations correlate to those from applicant’s previous submittals. Any exhibits referenced maintain the label/exhibit number from previous submittals. This letter is structured differently than Thornburgh’s other filings in this matter. This is because Appellant Gould and others have raised a myriad of issues that are irrelevant to the matters at hand and are not applicable criteria. Section I of this document addresses relevant applicable criteria. Section II provides responses to the various immaterial issues. Thornburgh does not fully repeat the arguments previously addressed during the open record or rebuttal periods. I. ARGUMENT AND ANALYSIS OF RELEVANT ISSUES AND APPLICABLE CRITERIA A. Thornburgh’s Requested Corrections to the Administrative Decision 1. The Hearings Officer Should Delete Condition C of the Administrative Decision As discussed at the hearing and in our pre-hearing submittal, Thornburgh requests that the Hearings Officer remove Condition C of the administrative decision. Condition A allows for minor and insubstantial changes to the site plan at the time of final site plan review and sign-off and is a standard condition of approval in Deschutes County. Condition C is not and disallows any change, whether minor or otherwise. This is infeasible as site plans are not drawn with 1 References to Thornburgh also include Pinnacle Utilities, LLC, which is a related entity. Exhibit 127 Page 1 of 60 Hearings Officer Frank November 29, 2021 Page 2 schwabe.com sufficient precision to avoid minor changes, nor does the site plan review criteria at DCC Chapter 18.124 require such precision. Applicant requests that Condition C be removed and that Condition A be retained. 2. The Hearings Officer Should Make Findings Regarding FMP Conditions and Not CMP Conditions no Longer in Effect The administrative decision erroneously listed conditions of approval from the Conceptual Master Plan (the CMP) instead of conditions of the FMP approval. These erroneous conditions were conditions 3, 8, 9, 11, 13, 14A, 14B, 15, 24, 30, and 37. Hearings Officer Anne Briggs found that these conditions were satisfied and no longer applied. Exhibit 12, p. 26. The Board of Commissioners (BOCC) also determined, during the review of the Thornburgh golf course site plan, that these CMP conditions are not relevant review criteria for development applications. Exhibit 2, p. 6. The administrative decision also misstates Condition 28. Condition 28 now states “see conditions #38 and #39. Exhibit 12, p. 29. Thornburgh requests that the conditions be corrected to reflect the actual and binding conditions from the FMP. B. The FMP Authorizes this Site Plan Thornburgh’s Final Master Plan (the FMP) became a final and binding land use decision in 2018. Exhibit 29, p. 5. The FMP provided the general location of all buildings, including visitor accommodations. DCC 18.113.090. To actually develop and construct the resort, however, site plan review is required. DCC 18.113.040.C. That is what is occurring here. The FMP authorized and made a general plan of development for the resort and this site plan application and the administrative approval provide the more granular detail required to review the improvements. Appellant Gould has not argued that the OLUs are not authorized by the FMP, that there is some criteria in the code that is not met, or that the site plan is somehow deficient.2 Instead, the appellant merely argues that certain conditions of the FMP – which Thornburgh agrees are binding – are not met. This is based upon the appellant’s erroneous arguments or interpretations that have been routinely rejected by the County, LUBA, and the Court of Appeals. These arguments should be similarly rejected here. C. The Site Plan is Linked to the FMP and not the Phase A-1 Tentative Plan Appellant Gould argues that the site plan cannot be approved because it is “inextricably linked” to the Phase A-1 tentative plan and the appellant has appealed the approval of the tentative plan.3 2 The only claim presented about the site plan is that it does not provide sufficient detail for Appellant Gould’s attorney to conclude that the units proposed are OLUs. 3 The approval is included as Exhibit 8 to Thornburgh’s materials. Exhibit 127 Page 2 of 60 Hearings Officer Frank November 29, 2021 Page 3 schwabe.com Appellant Gould has unsuccessfully argued in multiple forums that Phase A development applications and may not proceed independently. For instance:  Phase A -1 Tentative Plan, County Decision, Exhibit 1, p. 23: “nothing in the destination resort statutes, the Code or the FMP mandates that an applicant file all development applications for a particular phase at once.”  Phase A-1 Tentative Plan at LUBA, Gould v. Deschutes County, 79 Or LUBA 561 (2019): Thornburgh “may obtain approval of a tentative plan without providing details about construction” of the OLUs and Thornburgh “will subsequently submit site plans that show how the lots will be developed to provide the OLUs and recreational amenities.” Id. At 567-568.  Golf Course approval by BOCC, Exhibit 2, p. 3: “[t]he Phase A-1 tentative plan decision on appeal does not approve a site plan. Instead, it authorizes the division of lots from the greater Thornburgh property. The relevant approval criteria for the subject golf course and irrigation lakes do not require that the property be divided.”  Golf Course appeal at LUBA rejected Appellant’s argument that the golf course was dependent on final approval of the Phase A-1 tentative plan. Given the fact that this argument has been routinely rejected, and given the fact that the appellant has not provided any legal citation or authority to support her argument, it should be rejected. To the extent the site plan is “inextricably linked” to any land use decision, it is the FMP. This is what is contemplated by the destination resort statutes and code. For example, DCC 18.113.040.C requires that each element of a phase receive specific approval but does not require all development in the resort phase to be reviewed concurrently. Further, the appellant’s argument that a tentative plan or other “subphase of the resort of which the OLUs are a part” must be approved first (and therefore this site plan cannot be approved), is without merit. Gould Statement of Reasons for Appeal, p. 2 (“Gould Statement”). The OLUs proposed are part of Phase A, as approved by the FMP. Nothing in the law requires that all elements of Phase A be completed and reviewed concurrently. This issue was addressed and resolved by LUBA against Appellant Gould in its review of the Phase A-1 tentative plan. Appellant Gould’s claim that OLUs cannot be approved “independently of a destination resort and its approved master plan” is correct. What is not correct, however, is her argument that the OLU site plan was approved independent of the destination resort and the FMP. The construction of the OLUs is both authorized and required by the FMP and the DCC Chapter 18.113 Destination Resort (“DR”) overlay zoning that applies to the subject property. OLUs are a commercial residential use that must be provided on the Resort property before single-family dwelling lots may be sold. Furthermore, the FMP and resort law do not require that OLUs be built on subdivision lots. As a result, a final plat approval is not a prerequisite to approval of the Exhibit 127 Page 3 of 60 Hearings Officer Frank November 29, 2021 Page 4 schwabe.com OLU site plan. An approval of OLUs on the greater Resort property is not, as alleged by Appellant Gould, any change to the FMP – much less the substantial change alleged by Appellant Gould. Appellant Gould cites no part of the FMP that imposes this alleged requirement – and there is none. Appellant Gould alleges that if the applicant builds OLUs on Tax Lots 7700, 7800 and 7900 “rather than Lots 193-205 as proposed on the Phase A-1 Tentative Plan, this would place them in violation of the Tentative Plan should it ultimately be approved.” This is not correct because the site plan contemplates that the final plat will establish the lot boundaries shown on the site plan. Whether those lines are or are not created prior to the time the applicant seeks building permit approvals for the OLUs is immaterial to any relevant approval criterion, including a finding of consistency with the FMP. D. Condition 10 Applicant agrees that compliance with FMP Condition 10 is required during development review. DCC 18.113.040.C. Condition 10 says: 10. Applicant shall provide, at the time of tentative plat/site plan review for each individual phase of the resort development, updated documentation for the state water right permit and an accounting of the full amount of mitigation, as required under the water right, for that individual phase. Appellant Gould argues that compliance with Condition 10 is not shown. This is incorrect. Thornburgh included a Mitigation Debit Table as Exhibit 14 to its application, which is included here for convenience as Exhibit 42. This is all that is required to meet the mitigation accounting requirement of Condition 10, as it has been routinely interpreted and affirmed. LUBA has held, on two occasions, that the updated documentation for the state water right permit is met by proof that the permit is “non-cancelled” as shown by Exhibit 17. Appellant Gould has not argued that the information provided is insufficient to meet the requirements of the condition. Instead, Appellant Gould argues that the interpretation of the condition is somehow incorrect or that a specific water permit, G-17036 is “expired” and therefore Condition 10 cannot be met. Appellant Gould is incorrect. Thornburgh has also provided an accounting of additional water rights it has acquired. These rights can be used by the resort for mitigation purposes under the OWRD permit.4 Exhibit 24. 1. Thornburgh Holds a Valid, Non-Cancelled Water Right 4 As discussed below and in our previous submittals (and detailed by LUBA), this type of mitigation is separate and distinct from the mitigation required for the FWMP. Exhibit 127 Page 4 of 60 Hearings Officer Frank November 29, 2021 Page 5 The facts related to the water rights permit are unchanged since the County’s review of the Phase A-1 tentative plan; Thornburgh holds a valid, non-cancelled water right. This fact has been confirmed by the Oregon Water Resources Department (“OWRD”), the local watermaster, and the Thornburgh’s own water lawyer, Janet Neuman. Exhibit 43, Ms. Neuman's final legal argument, responds to the arguments made by Appellant Gould on water. As the hearings officer may note, unlike Mr. Karl Anuta (Appellant Gould’s lawyer), Ms. Neuman provides legal citation to support her arguments.5 Ms. Neuman arguments are based upon the law, and not upon her opinion of the law or generalized statements that provide no legal authority. Appellant Gould’s claim that the water right is “expired” and may not be relied upon to meet Condition 10 is simply incorrect. The fact of the matter is, contrary to Mr. Anuta and Appellant Gould’s claim, an OWRD permit remains valid unless and until steps are taken against the permit, which they have not. The permit is not cancelled or expired.6 Exhibit 43. Appellant Gould argues that reliance on Bouman v. Jackson County, 23 Or LUBA 628 (1992) is incorrect. In that case, LUBA determined an applicant is not required obtain all necessary state agency permits so long as it is determined that a proposal can comply with obtaining such permits. In other words, so long as they are not legally precluded. The County made such findings during review and approval of the CMP/FMP. Further, Thornburgh has obtained a water permit. Appellant Gould argues about the status of that permit – contrary to evidence in the recorded from OWRD itself. Since there has been no change in the status of the permit (pending review of an extension request) since the BOCC and LUBA found compliance with FMP Condition 10 and approved the golf course site plan, the administrative decision did not err in determining that compliance with Condition 10 had been met. In particular, LUBA has found that “[w]e conclude that the county did not err in finding that Condition 10 is satisfied by documentation that Permit G-17036 is not cancelled and an accounting of the amount of mitigation water needed for the golf course site plan.” Id., slip opinion, p. 18. It follows, then, that the hearings officer would not err in adopting the same interpretation and findings of compliance as those previously determined to be correct by the BOCC, LUBA and the Court of Appeals. Gould v. Deschutes County, ___ Or LUBA ___ (LUBA No. 2020-095, June 11, 2021)(“Gould Golf”), aff’d without opinion 314 Or App 636 (2021). 5 In all of his testimony, Mr. Anuta makes only two citation to law. These two citations are ORS 537.110, which states that all water in the state belong to the public, and ORS 537.130. ORS 537.130 requires a permit before a new appropriation of water is made and is inapplicable to water transfers. 6 Thornburgh notes that the cancellation statutes are also discretionary and not mandatory. schwabe.com Exhibit 127 Page 5 of 60 Hearings Officer Frank November 29, 2021 Page 6 schwabe.com 2. The County is Not the Arbiter of State Water Law As the BOCC noted (Exhibit 26), the County is not the arbiter of Oregon’s water laws, nor does it have authority or expertise in the area. It, therefore, is reasonable for the hearings officer (and the County), to defer to the state agency that has jurisdiction – OWRD. Information in the record provides that the permit is non-cancelled. Exhibit 17. The Watermaster, Jeremy Giffin, has confirmed this fact. Exhibit 18. Appellant Gould argues that this statement is merely the Watermaster’s “personal understanding” – implying that it should not be relied upon. Gould Statement, p. 13. However, the Oregon Legislature has specifically delegated authority to watermasters to enforce Oregon Water Law. ORS 540.045. LUBA has opined that “[l]ocal government land use proceedings should not displace established processes for obtaining state agency permits.” Bouman, 23 Or LUBA 628, 646 (1992). Appellant Gould’s arguments regarding the OWRD permit are an attempt to do just that – obtain a finding in a local government land use proceeding that is inconsistent with OWRD’s position. Appellant Gould argues that the County’s Building Official is improperly equipped to determine whether a water right permit will “actually be available and ready to use.” Gould First Open Record Memorandum, p. 2 (“Gould Open Record”). Arguments related to the building permit review process are irrelevant to this land use proceeding. Further, the issue of whether there is water available was settled at the CMP/FMP stage.7 Appellant Gould argues that the Building Official must also determine that the application is in “full compliance with and able to proceed under those permits” and that “[t]his is the last chance for the county to compel proof of actual compliance [with the permit].” Gould Open Record, p. 3. This argument misses the mark and is not what Condition 10 requires; updated information and an accounting under the water permit. The record also shows that Thornburgh holds a valid and non-cancelled water permit, including information directly from OWRD – and the hearings officer may rely upon the expertise of OWRD in determining the status of the permit. See Johnson et al v. Marion County, 58 Or LUBA 459, 462-463 (2009)(reliance on agency expertise constitutes substantial evidence). Appellant Gould appears to be arguing that the County must step in to the shoes of OWRD to enforce state water law. That is incorrect. OWRD not the County, has statutory authority to enforce state water law. For example, the Oregon legislature has provided state watermasters with significant authority to enforce the water laws of this state. See ORS 540.010-155. For example, ORS 540.060 authorizes watermasters to arrest “any person violating a provision of the 7 DCC 18.113.070(K) required the applicant to demonstrate that “adequate water will be available for all proposed uses at the destination resort.” FMP Condition 10’s requirement that a water right permit be obtained was found to be satisfied during the review of the FMP leaving only the requirement that a report on the status of the permit and accounting of mitigation required by the water permit be provided during development review. Exhibit 127 Page 6 of 60 Hearings Officer Frank November 29, 2021 Page 7 schwabe.com Water Rights Act[.]”. It is not the case that this site plan decision is the proper time to assure compliance with the state’s water laws. 3. Appellant Gould’s Continued and Oft-Rejected Argument that the FWMP is Implicated by Condition 10 Appellant Gould has, to absolutely no avail, continued to argue that the FWMP is somehow implicated by Condition 10. It is not. LUBA has properly and correctly held that compliance with the FWMP is assured by Condition 38. Gould Golf, slip opinion, p. 13. Appellant Gould’s argument relies, primarily, on her misunderstanding of the term “mitigation.” Condition 10 requires mitigation under the water right, i.e. the consumptive mitigation under the Deschutes Basin Mitigation requirements from anywhere in the General Zone of Impact. Condition 38 requires compliance with the FWMP which requires cold water mitigation to meet the “no net loss” standard found in the County’s code. As part of the “no net loss” standard, and as pointed out by the appellant, Thornburgh is bound to acquire the Big Falls Ranch (“BFR”) water. Thornburgh has closed on a portion of that right (Exhibit 118) and maintains an enforceable contract to purchase the rest (Exhibit 28). Thornburgh does not seek to change those requirements during this site plan review. Appellant Gould’s argument that Condition 10 somehow implicates Condition 38 is also disproved by the land use history of the resort. Condition 10 was imposed by the CMP before the FWMP was written or approved by the County during the FMP review. 4. Condition 10 Has Been Consistently Interpreted the Same Way The language or requirements of Condition 10 have not changed since the BOCC imposed it in 2006. Appellant Gould, nevertheless, continues to raise the same rejected arguments about the meaning of the condition. In approving the Phase A-1 tentative plan, hearings officer Dan Olsen found “Condition 10 appears primarily to be an informational requirement requiring documentation of the state water permit and an accounting of mitigation ‘under the water right.’” Exhibit 1, p. 10. LUBA affirmed that determination. 79 Or LUBA 561 (2019).9 The Oregon Court of Appeals affirmed. Staff issued an administrative approval of the golf course site plan and applied the same interpretation of Condition 10. On appeal to the BOCC, it found that Thornburgh had satisfied the requirements of Condition 10 by showing that Pinnacle (Thornburgh) had a water right 8 This includes the assignment of that portion of the BFR water right to Thornburgh, completing the transaction by updating OWRD’s records. 9 This decision was remanded on other grounds. Exhibit 127 Page 7 of 60 Hearings Officer Frank November 29, 2021 Page 8 schwabe.com permit in good standing with OWRD that was “non-cancelled” and by filing a mitigation debit table that estimates the amount of water needed for the golf course and Phase A-1 tentative plan. LUBA upheld the Board’s golf course site plan decision. It found that Condition 10 requires an accounting of the amount of mitigation water required under the water right and does not require any showing of compliance with the FWMP. LUBA held that compliance with the FWMP is ensured by compliance with FMP Condition 38; not FMP Condition 10. Gould Golf, slip opinion, p. 13. Thornburgh requests that this hearings officer apply the same standard and interpretation by the County staff and the BOCC, and affirmed on review to LUBA and the Court of Appeals. E. Condition 38 Appellant Gould continues to argue that Thornburgh is not complying with the FWMP because, she claims, certain actions have not been taken with regards to Deep Canyon Creek. Appellant Gould’s arguments not only miss the mark but are also incorrect. FMP Condition 38, unlike FMP Condition 10, does not apply during the review of development applications unless the site plan application changes the WMP or its FWMP. This site plan review application for the resort’s OLUs does not propose or require a change to the WMP or its FWMP. Appellant Gould argues that Condition 38 requires a “continuous showing of the developer’s [sic] abiding by the” wildlife plans at the time of development application review. Gould Statement, p. 4. This is not correct. Compliance with FMP 38 and the WMP/FWMP is assured by annual reporting and staff review of the reports – not by concurrent review with development applications. If the County had intended to allow a review for compliance with FMP Condition 38 during the review of development applications, it would have said so – just as it did when it wrote FMP Condition 10. LUBA’s decision regarding the Phase A-1 tentative plan for the resort makes it clear that issues of compliance with Condition 38 are not relevant in a review of a development application. It rejected the same Condition 38 claims Ms. Gould continues to raise during the review of this application – dam removal on Deep Canyon Creek, abandonment of wells and the transfer of water from Deep Canyon Creek by Big Falls Ranch. “As established in prior appeals, the mitigation plan satisfies the substantive no net loss/degradation standard for destination resort development. We agree with intervenor that the details of the mitigation plan are established by the FMP, and compliance (or noncompliance) with the mitigation measures will be established by annual reporting required by FMP Condition 38. We reject petitioner's argument that the FMP required intervenor to “fill in the details” to Exhibit 127 Page 8 of 60 Hearings Officer Frank November 29, 2021 Page 9 schwabe.com obtain approval of a tentative plan during phased development. Petition for Review 56. Petitioner has not demonstrated that the approved subphasing, as conditioned, alters any mitigation requirement under the FMP mitigation plan. Petitioner's argument provides no basis for remand. *** [Emphasis added.] The mitigation plan involves (1) the removal of two wells on the subject property, (2) the removal of two dams that impede the flow of spring water from Deep Canyon Creek to the Deschutes River, and (3) transfer of water from Deep Canyon Creek that Big Falls Ranch uses for irrigation for mitigation. Record 215. Petitioner argues that the hearings officer erred in failing to require as a condition of approval for the tentative plan that, prior to beginning construction, intervenor remove the dams and the wells. Petitioner argues that while the body of the hearings officer's decision states that the first dam will be removed prior to construction under the tentative plan, he failed to include dam removal as a condition of approval. Intervenor responds, and we agree, that removal of the dams and provision of mitigation water is required by the FMP approval and the tentative plan does not alter the mitigation plan. Response Brief 55. The hearings officer was not required to impose additional conditions to the approval of the tentative plan.” Gould v. Deschutes County, 79 Or LUBA 561, 583 (2019)(“Gould TP”). The terms of FMP Condition 38 are final and may not be collaterally attacked every time the applicant seeks a development approval or modification of discrete parts of the FMP. Gansen v. Lane County, __ Or LUBA __ (LUBA No. 2020-074, 2/22/2021)(local governments are barred from collaterally attacking their own prior land use decision in subsequent reviews; in challenging a development approval that relies upon a prior final land use decision, LUBA will not review arguments that the prior decision was procedurally or substantively incorrect); Landwatch Lane County v. Lane County, 79 Or LUBA 65, 72-73 (2019) (arguments that a prior final partition failed to comply with applicable procedures are outside LUBA's scope of review as a collateral attack on the partition decision); Lockwood v. City of Salem, 51 Or LUBA 334, 344 (2006) (arguments that two prior city decisions extending the effective date of a preliminary public facility agreement were invalid are outside LUBA's scope of review as a collateral attack on those two prior unappealed city decisions); Sahagian v. Columbia County, 27 Or LUBA 341, 344 (1994) (arguments that challenge an unappealed prior decision redesignating park property as forest are a collateral attack on that earlier unappealed redesignation decision); Perry v. Yamhill County, 26 Or LUBA 73, 77, aff'd, 125 Or App 588, 865 P2d 1344 (1993) (in an appeal of a county decision determining that two lots comply with conditions of a prior preliminary subdivision approval, arguments that challenge the prior approval are outside LUBA's scope of review as a collateral attack on the prior subdivision approval). See also, Doney v. Clatsop County, 142 Or App 497, 921 P2d 1346 (1996); Scott v. Josephine County, __ Or LUBA __ (LUBA No. 2020-080, 3/9/2021)(impermissible to attack final lot line adjustment decision in a Exhibit 127 Page 9 of 60 Hearings Officer Frank November 29, 2021 Page 10 schwabe.com CUP review seeking development approval on the same property); Just v. Linn County, 59 Or LUBA 233, 236 (2009)(challenges to the correctness or validity of a prior final permit decision amount to an impermissible collateral attack on the decision). Therefore, Appellant Gould’s arguments are properly rejected. Appellant Gould’s claim that FMP Condition 38 should have provided for public review and a hearing is also barred because it should have been raised during the review on appeal of the FMP. To raise it now is an impermissible collateral attack on the FMP. Appellant Gould quotes at the FWMP at length during her Open Record Memorandum. Thornburgh agrees that the FWMP applies to development of the resort – we just disagree that proof of compliance with the plan is required during the review of development applications. Thornburgh’s interpretation has been confirmed and upheld by the BOCC, LUBA, and the Court of Appeals. 1.Water Rights Are the Issue – Not Specific Flows Appellant Gould argues the FWMP requires specific flows of water from Deep Canyon Creek. This issue has been settled by approval of the FMP. It may not be collaterally attacked. See Exhibit 44, footnote 9, which is a portion of Exhibit 11 and submitted for convenience. In the FMP decision, the hearings officer concluded that water rights and not specific flow requirements were the proper measure of compliance with the FWMP. Applicant has secured the required water rights to effectuate the FWMP, namely the Big Falls Ranch water right. Although Appellant Gould complains that a full copy of Thornburgh’s agreement with Big Falls Rancher to purchase the water rights has not been disclosed to her, it need not be nor can the appellant point to any rule, statute, or decision that requires such. To the contrary, review bodies, including the BOCC, have consistently rejected this argument. Relatedly, Appellant Gould argues that Thornburgh is in violation of the FWMP because the BFR water rights are not currently protected in stream. However, nothing in the FWMP requires that water rights be transferred in stream in advance of use. In fact, the contrary is true – mitigation is required by the FWMP at the time of use and as development actually occurs and not during or before the land use review stage. Gould TP, p. 574. This makes sense as no impacts have occurred unless and until development occurs. 2.Appellant’s Claims Regarding Reporting Appellant Gould claims that no accounting regarding Condition 38 has been provided. Gould Open Record, p. 11. This is correct but no reporting is, as we have shown in prior submittals, required at this time. This does not mean that Thornburgh has not complied with Condition 38, however. As discussed above, mitigation under the FWMP is required at the time of pumping/development. Once that occurs, Condition 38 requires annual reporting “to the county detailing the mitigation activities that have occurred over the previous year.” Exhibit 12, p. 10. Exhibit 127 Page 10 of 60 Hearings Officer Frank November 29, 2021 Page 11 schwabe.com 3. Appellant Misunderstands ODFW’s Relevancy Appellant Gould argues that the WMP and FWMP represent agreements with ODFW. See Statement of Reasons for Appeal, p. 4. This is incorrect. No agreement with ODFW exists or is binding on Thornburgh. What is binding, however, is the FWMP. Thornburgh is not seeking to change the FWMP, the compliance for which is assured through Condition 38 and staff review at the time mitigation is required (not at the site plan review stage). F. Opponents Lot of Record Misunderstanding COLW and Ms. Gould argue that, contrary to the authorization of development granted for the entire Resort property by the FMP and the Phase A-1 tentative plan, that Tax Lots 7800 and 7900 of the Resort may never be developed and that the site plan may never be approved. This argument is based on the faulty premise that the recording of a deed for a part of a lawfully- created property creates new parcels that irrevocably destroy the lawfully-created parent parcel. This claim is not supported by law and is inconsistent with the plain language of ORS 92.017. Given the fact that Central Land owns multiple lots of record, changes to the boundaries of these properties may be approved as property line adjustments rather than by partitioning and opponents have not shown that this is incorrect. We have provided extensive arguments regarding the lot of record issue raised by COLW in our letter dated November 3, 2021. We will not repeat those argument in the same detail here. Instead, we will respond to arguments in documents COLW filed on November 5, 2021 (amends prior COLW argument) and November 11, 2021 and documents filed by Ms. Gould. 1. EFU Zone Requirements do not Apply COLW argues that DCC 22.04.040(B)(1)(a) requires Central Land to verify that its property is a lot of record because it is located in the EFU zoning district and is subject to strict limits on development. While DCC 22.04.040(B)(1)(a) makes lot of record verification a requirement in the EFU zone, the rules of the EFU zoning district do not apply to destination resort development applications such as the site plan and FMP modification applications.10 This is plainly stated by County FMP modification decisions, Exhibit 23, and DCC 18.113.020, below. “18.113.020 Applicability 1. The provisions of DCC 18.113 shall apply to proposals for the development of destination resorts, as defined in DCC Title 18, in areas designated DR by the County zoning maps. The provisions of DCC 18.113 shall not apply to any 10DCC 22.04.040(B)(1) makes lot of record verification a requirement of the EFU zone. It does not make it a requirement of the DR zone. The DR zone is the only zone that applies to the review of Resort development applications. Exhibit 127 Page 11 of 60 Hearings Officer Frank November 29, 2021 Page 12 schwabe.com development proposal in an area designated DR other than a destination resort. 2. When these provisions are applicable, they shall supersede all other provisions of the underlying zone. Other provisions of the zoning ordinance, made applicable by specific map designations, such as the SMIA, AH, CH, FP or LM, or otherwise applicable under the terms of the zoning ordinance text shall remain in full force and effect, unless otherwise specified herein.” The County’s FMP modification approval (2.5:1 ratio and 38 weeks) for Pronghorn Resort found: “Pronghorn was approved under DCC Chapter 18.113 through applications nos. CU-00-118 and M-02-1. As stated in foregoing findings, the MUA-10 and EFU zone standards do not apply to Pronghorn, since it was approved under DCC 18.113.” Exhibit 23, p. 7. “The standards and criteria under DCC 18.113 are the only ones that apply to the resort.” Exhibit 23, p. 6. COLW’s arguments that the intent of the lot of record rules is to protect EFU land from “fragmentation” may or may not be correct, but this is not the intent of the DR Zone, which supersedes the EFU zone and is the actual law that controls the development of the subject parcel. 2. Creation by Deed COLW’s argument that Tax Lot 7800 and 7900 were created by deed on August 31, 2021 is not correct. ORS 92.017 says: “92.017 When lawfully created lot or parcel remains discrete lot or parcel. A lot or parcel lawfully created shall remain a discrete lot or parcel, unless the lot or parcel lines are vacated or the lot or parcel is further divided, as provided by law.” Deeds are not a method of land division “provided by law.” As a result, the Central Land and Pinnacle deeds did not alter the lawfully created parcel boundaries of either Tax Lot 7800 or 7900 because those boundaries were not divided as provided by law. While the areas described by the deeds, when held in separate ownership, are not lawfully created lots of record, the original parcel is not permanently unbuildable as a result. This draconian punishment is not Exhibit 127 Page 12 of 60 Hearings Officer Frank November 29, 2021 Page 13 schwabe.com supported by ORS 92.017.11 ORS 92.017 recognition that the original lot of record remains a discrete lot allows development of the lawfully created lot if the part erroneously conveyed is reunited with the remainder property under the same ownership. 3. Exemption from Lot Verification All land within Tax Lots 7800 and 7900 has been excepted from the lot verification requirements of DCC 22.04.040 because they have been determined to be one or more lots of record in formal decisions issued by Deschutes County in LR-91-56 and LR-98-44 (decisions filed by COLW and Central Land). The same is true for the entire resort property because such a finding was made in the BOCC’s decision approving the CMP.12 We have also shown in our letter of November 3, 2021 that all parts of the property other than Tax Lots 7801 and 8000 have been determined to be lots of record and are also exempt from the lot verification requirements of DCC 22.04.040. We have also provided evidence in our rebuttal arguments to demonstrate that Tax Lots 7801 and 8000 are lots of record. If the hearing officer does not agree that the BOCC’s decision finding that the entire resort is a lot of record is binding, this evidence demonstrates that the component parts of the resort are either exempt from verification or merit a finding that they are lots of record. 4. Requirements of DCC 22.04.040(B) DCC 22.04.040(B) provides: 2. Exceptions. Verification shall not be required if one of the following exceptions apply: * * * c. The lot or parcel was previously determined to be a lot of record in a formal decision issued by the County or a finding in a land use action prior to November 1, 2017; 11COLW’s argument, if accepted, would constitute an unconstitutional regulatory taking of private property prohibited by the 5th and 14th Amendments to the US Constitution and similar provisions of the Oregon Constitution. Given the fact that the County has approved a tentative plan that will create new lots in the areas conveyed by the 2021 deeds, this taking would be a temporary taking but an economically impactful one. 12 All subareas of the resort, with the exception of Tax Lots 7801 and 8000, have also been determined to be lots of record in County land use decision. Copies of deeds and a partition approval were included with my November 3, 2021 letter to Hearings Officer Frank. They show that Tax Lots 7801 and 8000 are lots of record. We do so without waiving our position that the lot of record issue related to the CMP and FMP was settled by approval of the CMP. Exhibit 127 Page 13 of 60 Hearings Officer Frank November 29, 2021 Page 14 schwabe.com COLW argues that Tax Lots 7800 and 7900 no longer exist. This is simply not correct because ORS 92.017 provides that lawfully created parcel boundaries remain until they are changed by a lawful vacation or land division. The July 30, 2021 deed of .5 acres from Central Land to Pinnacle, therefore, did not cause these lots of record to “cease to exist.” The same is true for Tax Lot 7801 and all other Resort parcels. These parcels exist until lawfully vacated or divided. ORS 92.017.13 Furthermore, because Central Land owns numerous adjoining lots of record, the deed to Pinnacle did no more than attempt to reconfigure its adjacent lots of record by moving common boundary lines between lots of record. It did not divide land. 5. ORS 92.176 Does Not Apply ORS 92.176 is a remedy that allows an owner of a part of a lot of record created without partition approval to obtain permission to develop a part, but not all, of the lot of record. Central Land is not seeking permission to develop the area erroneously conveyed. Instead, it is the sole owner of and is seeking to develop Tax Lots 7800 and 7900 which were both lawfully created. 6. Law of the Case does Not Apply Thornburgh has not argued that law of the case applies. That doctrine applies to the review of the same land use application on remand and subsequent appeal. State v. Pratt, 316 Or 561, 569, 853 P2d 827 (1993) as cited in State v. Langley, 331 Or 430, 493, 16 P3d 489 (2000). The law that bars impermissible collateral attacks discussed earlier is the applicable law. 7. The Hearings Officer May Approve the Application COLW argues that the hearings officer lacks authority to approve pending land use applications due to the provisions of DCC 22.04.040(B)(1)(a) and DCC 22.20.015(A). This is simply not correct. Lot verification is not required because the Resort property and Tax Lots 7800 and 7900 have been determined to be lots of record and DCC 22.04.040(B)(2) excepts such properties from a lot verification review under DCC 22.04.040(B)(1). The Board of Commissioners has also interpreted DCC 22.20.015. It has determined that hearings officers may and often should refrain from denying land use applications due to alleged code violations. See, Exhibit 7. A “violation” only exists if it has been determined to exist and hearings officers are not mandated by DCC 22.20.015(C) to make such a determination. 13 Pinnacle has quitclaimed this .5-acre property back to Central Land so that Tax Lots 7800 and 7900 are owned by Central Land only. Exhibit 127 Page 14 of 60 Hearings Officer Frank November 29, 2021 Page 15 schwabe.com The Phase A-1 tentative plan recently received final County approval. When the Phase A-1 final plat is recorded, property lines arguably created by the 2021 deeds will be eliminated. Weyerhaeuser Real Estate Development Co. v. Polk County, 246 Or App 548, 267 P3d 855 (2011). Given this fact, the hearings officer should decline to decide whether a violation exists and approve development applications for the Resort. No purpose other than delay would be served by denial of the pending applications. 8. Case Law Does Not Support Opponents Lot of Record Arguments COLW cites Hartmann v. Washington County, 36 Or LUBA 442 aff’d without opinion 165 Or App 177, 991 P2d 65 (1999) for the proposition that the deed to the .5-acre parcel created three undevelopable units of land. The Hartmann case, however, has nothing to do with the creation of parcels by deed. It involves a partition and a property line adjustment approved by Washington County. The parcel in question did not qualify for development with a nonfarm dwelling because it was created after January 1, 1993. It was not determined by Washington County to be undevelopable. The case of Yamhill County v. Ludwick, 294 Or 778, 663 P2d 398 (1983) finds that if a County requires a legal lot of record verification, a property owner must show that his or her property was lawfully created in order to be divided. The case does not require that a county impose a lot of record verification requirement in its code. McKay Creek Valley Association v. Washington County, 118 Or App 543, 848 P2d 624, rev den, 317 Or 272, 858 P2d 1314 (1993) (property need not be a legally created lot or parcel to qualify for development where local code did not impose such a requirement); Marshall v. City of Yachats, 158 Or App 151, 973 P2d 374, rev den, 328 Or 594, 987 P2d 514 (1999). Deschutes County has not imposed a lot of record requirement in the DR zone – the zone that controls the review of development applications. None is required by the State law that is applicable to land mapped for destination resort development. ORS 197.435 to 197.467. As a result, the lot of record issue raised by COLW and Ms. Gould does not warrant denial of the Central Land FMP modification or OLU site plan applications. 9. Property Line Adjustments are Allowed Property line adjustments are not partitions and do not require partition approval. ORS 92.010(9)(b) and (12); DCC 17.08.040, Partition Land. COLW offers no legal argument to demonstrate any flaw in the applicant’s argument that the deeds conveyed in July 2021 were a step in the completion of a property line adjustment between adjoining parcels owned by Central Land. COLW claims that the fact that Pinnacle paid money for the land conveyed means that the deed was an unlawful partition. COLW asks the hearings officer to arrive at this conclusion because COLW believes Pinnacle would not have paid money for land when the adjustment was not then complete. This argument does not hold water. It is Exhibit 127 Page 15 of 60 Hearings Officer Frank November 29, 2021 Page 16 schwabe.com far less logical for Pinnacle to have paid money for an unlawfully created new partition parcel that can never be developed (according to COLW) than for a reconfigured parcel that simply required the completion of additional steps to be a lawfully adjusted parcel.14 10. COLW Arguments About Rescissions COLW takes issue with the use of the word “rescission” in the deed that reconveyed the .5-acre area of land back to Central Land and then presents an argument about reformation that has no bearing on the issues before the hearings officer. Rescission and reformation are, however, different terms with different meanings. Actions for reformation, as can be seen from the cases cited by COLW, are brought where one party seeks to compel the other to change the terms of an agreement. The term “rescission” is properly applied to a mutual agreement by parties to void a prior agreement and was the correct term to use in describing the August deed from Pinnacle to Central Land. The term “rescind” is defined by Webster’s Third New International Dictionary Unabridged as relevant here “to abrogate (a contract) by tendering back or restoring to the opposite party what one has received from him.” A “rescission” is defined as “an act of rescinding ***.” Nothing prevents parties to a transaction from rescinding the transaction without judicial intervention. Judicial action in equity is required only when parties do not agree to mutually rescind an agreement. 11. Gould’s Argument on Lot of Record Unlike COLW’s arguments, Ms. Gould’s appeal generally refers to two deeds. The deed not addressed by COLW is a deed that conveyed a part of Tax Lot 7801 to Pinnacle. The legal description of that deed has been corrected to convey all of Tax Lot 7801 to Pinnacle. Tax Lot 7801 is a legal lot of record because it was created by a Deschutes County partition approval that is a part of the record in this matter. Our rebuttal argument provides findings that establish that Tax Lot 7801 is a lot of record. The boundaries of Tax Lot 7801 were not irrevocably altered by the July 2021 deed to Pinnacle such that the legal description of the deed could not be corrected in August 2021. Tax Lot 7801 is a legal lot of record. G. FMP Condition 14C Appellant Gould argues that approval of the construction of OLUs on the greater Resort property before the Phase A-1 tentative plan approval is final would make compliance with Condition 14C unachievable. This is not true. FMP Condition 14C does not require that the applicant 14 State law requires a survey and recorded deeds for each adjusted parcel to finalize a property line adjustment. ORS 92.190 (3). One but not both deeds were recorded. A County land use approval may or may not be required. The County code does not impose such a requirement. It merely states that adjustments that meet certain conditions are not partitions. Exhibit 127 Page 16 of 60 Hearings Officer Frank November 29, 2021 Page 17 schwabe.com convey all land and subject it to the language set out in the condition. Instead, it requires the applicant to include the FMP Condition 14C if and when it deeds land in the Resort to others. The Resort is entitled to retain ownership of parts of the Resort property without deeding land to third parties first so that the language of Condition 14C is in the chain of title. H. FMP Condition 21 Appellant Gould argues that insufficient detail is provided to determine compliance with Condition 21, claiming that there is “insufficient detail as to the design of the structures to demonstrate that the requisite number of OLUs will actually be created.” Gould Statement, p. 14. Thornburgh does not understand what additional information it could provide; the specific details of the structures down to potential furniture placement has been provided. The burden of proof also provided the following information about the design of each lock-off unit and building to demonstrate that it is a lock-off unit that will be separately rentable: 1. Each OLU has a separate outside entrance so guests can enter their unit separate from other units. 2. Each unit has a separate unit number (e.g.: 24-c) to identify it separately from other units. 3. Each OLU has a separate, private bathroom. 4. Each OLU has an individual sleeping area, with a variety of sleeping options. 5. Each OLU will have a television allowing guests to relax in their unit separate from other guests. 6. Each OLU has a separate key, unique to that unit so that only a guest of the unit may open the locked door to the unit and sharing will occur only if units in a building are rented by a group or family that wishes to rent adjoining units. 7. Parking spaces are provided for each OLU that are used in common with other guests adjacent to each structure. 8. Each OLU has a central location near the golf course and golf clubhouse. In our OLU site plan application burden of proof we explained that during its review of the CMP, LUBA approved the use of lock-off units as OLUs for the OLUs proposed by the 2021 OLU site plan. LUBA found that the County’s code and CMP decisions provide adequate assurances that these units will operate as the overnight lodging units required to be provided in destination resorts. Gould v. Deschutes County, 54 Or LUBA 205, 223-224 (2007), rev’d and rem’d on other grounds, 216 Or App 150, 171 P3d 1017 (2007). I. Appellant Gould Misunderstands the Wildlife Plans Appellant Gould claims that the “August 2008 Supplement” to the Wildlife Mitigation Plan is in fact the FWMP dated April 21, 2008. This is untrue as is evident based on the plan dates – one in August and the other in April. Appellant Gould refers to the FWMP as the Resort’s agreement with ODFW as to the preservation of fish habitat. This is not correct as there is no agreement between the resort and Exhibit 127 Page 17 of 60 Hearings Officer Frank November 29, 2021 Page 18 schwabe.com ODFW. The FWMP is the County-approved mitigation plan. ODFW offered comments on the plan and the applicant voluntarily addressed ODFW concerns in crafting the plan but it is not an agreement with ODFW. Further, ODFW has no authority that requires its agreement to approve or deny this or any land use application in Deschutes County. J. Impermissible Collateral Attacks Ms. Gould claims error because the Decision discussed impermissible collateral attacks. Ms. Gould’s claim should be rejected. LUBA has made it clear that issues addressed and resolved by the approval of the CMP and FMP are not subject to a collateral attack each and every time the applicant files a development application. The Board of Commissioners has agreed as shown by its decision approving construction of the resort’s golf course. K. FMP Condition 33 Condition 33 does not provide a relevant approval criterion that applies to review of the OLU site plan. Instead, it imposes requirements that apply prior to the closure of sales, rental or lease of any individually-owned residential dwellings or lots. The 80 OLUs proposed by the applicant are all overnight lodging units. L. DCC 18.113.070.U – Deed Restrictions and CC&Rs The construction of OLUs on the greater resort property prior to the filing of the final plat will not result in a violation of DCC 18.113.070.U’s deed restriction and CC&R requirements. Those requirements apply only if the overnight lodging units are individually-owned units. If OLUs are built prior to filing of the final plat, they will be owned by Central Land and Cattle Company, LLC, the owner of the greater resort property and the resort developer. They will not be “individually-owned” so DCC 18.113.070.U’s requirements will not apply until individual lots are platted and sold. M. Notification to BLM and DSL Appellant Gould claims that both BLM and DSL failed to receive notice. This is incorrect. Both agencies received notice. Exhibit 21. N. ORS 197.455 Opponent Paul Lipscomb argues that ORS 197.455 bars the application because the City of Bend has a population above 100,000 which would prevent the “siting” of a destination resort. Mr. Lipscomb made this same argument at LUBA and at the Court before the Court of Appeals, and was rejected because ORS 197.455 simply does not apply; it applies to mapping criteria at the County. See Gould v. Deschutes County, __ Or LUBA __ (2021)(LUBA No. 2020-095, June 11, 2021), aff’d without opinion, 314 Or App 636 (2021). Exhibit 127 Page 18 of 60 Hearings Officer Frank November 29, 2021 Page 19 schwabe.com II. ARGUMENT AND RESPONSE TO IRRELEVANT ISSUES A. Drought Conditions are Not Applicable Criteria Appellant Gould’s arguments about drought do not relate to relevant approval criteria of the appealed administrative decision. The proposed site plan seeks to approval for OLUs consistent with the FMP. No applicable criteria relate to drought. Opponents argue that the drought conditions or other changed circumstances should nevertheless warrant consideration and denial. That argument is without legal merit. To the extent this argument relates to live water flows versus water rights, that question was settled – conclusively – at the FMP stage and may not be collaterally attacked. Exhibit 44. Several commenters also mentioned that they live in irrigation districts and that water has been curtailed. This is not applicable criteria to the site plan application and Thornburgh has no bearing on irrigation district water rights. B. Water Management Conservation Plan (WMCP) Appellant Gould argues that the Water Management Conservation Plan (“WMCP”) is not in effect. Appellant Gould misunderstands the importance of the WMCP – which is not a County requirement and is irrelevant to this site plan review. As stated at the hearing, Thornburgh voluntarily withdrew the WMCP at OWRD’s request. This was because Appellant Gould filed a challenge in Circuit Court.15 Rather than litigate the issue, OWRD specifically requested Thornburgh withdraw the plan, which it did. Like Appellant Gould, Thornburgh believes that the WMCP has “no bearing in this case.” Statement of Reasons for Appeal, p. 13. C. Claims by Mr. Lambie Appellant Gould’s water expert makes several claims that in his letter dated November 19, 2021 that are incorrect. This is likely because Mr. Lambie’s expertise is related to other basins (almost exclusively in California). Thornburgh’s expert, Mr. Newton, specializes specifically in Oregon with a focus on the Deschutes Basin. As we have previously stated, Mr. Newton consulted with OWRD to form study and adopt the Deschutes Basin rules and regulations that govern all water use in the area. 15 This is just yet another example of the appellant’s disingenuous challenges. The Water Management Conservation Plan provided specific conservation measures, which now are inapplicable. Exhibit 127 Page 19 of 60 Hearings Officer Frank November 29, 2021 Page 20 schwabe.com For example, Mr. Lambie claims that Deep Canyon Creek flows will be diminished because BFR will continue to pump water rights that Thornburgh has purchased. Lambie Letter, dated November 19, 2021, p. 2. That is incorrect. BFR has no right to pump this water and must annually report its use. Should BFR pump more than it is now legally entitled to use, the OWRD watermaster can and will enforce against it. ORS 540.045; ORS 540.060. D. BOCC’s Determinations on Collateral Attacks Appellant Gould claims that the administrative decision erroneously relies upon Exhibit A to the BOCC’s golf course decision. Gould Statement, p. 4. Instead, the decision merely refers to it in numerous places. Exhibit A to the golf course decision provided an extensive review of items that the BOCC determined were previously decided during the CMP/FMP review processes. On appeal to LUBA, Appellant Gould did not challenge these findings (which are instructive on several arguments/matters raised by the appellant here). The entire BOCC decision was included in the record by Thornburgh as Exhibit 2. E. Condition 28 Does Not Apply Appellant Gould argues that Condition 28 applies – it does not. Gould Statement, p. 15. Condition 28 refers to a condition of the CMP, which has been replaced by Conditions 38 and 39 of the FMP. Exhibit 2, p. 6. F. Condition 17 of the Phase A-1 Tentative Plan Appellant Gould argues that Condition 17 of the hearings officer decision of the Phase A-1 tentative plan (remanded) remain in part. Gould Open Record, p. 13. This is incorrect. LUBA’s question on remand struck the entire condition, not a portion. See Gould v. Deschutes County, 79 Or LUBA 561, 580 (2019)(“[o]n remand, the county must consider whether, without TP Condition 17, the tentative plan for Phase A-1 satisfies the no net loss/degradation standard...”(Emphasis added). LUBA did not selectively delete a portion of the condition as Appellant Gould claims. G. Appellant Gould’s Supreme Court Appeal Appellant Gould has, as indicated, appealed the Gould Golf case to the Supreme Court of Oregon. Gould Rebuttal Memorandum dated November 19, 2021. Thornburgh searched but is unaware of a single case that has been granted discretionary review to the Supreme Court of a land use decision that was affirmed without an opinion by the Court of Appeals. Further, Thornburgh previously included Appellant Gould’s brief to the Court of Appeals. Exhibit 27. The assignment of error presented in that case – and thus the only issue Appellant Gould may raise – is: “LUBA made errors of law and rendered a decision which was unlawful in substance in denying petitioner’s third assignment of error, relating to the applicant’s failure to provide the Exhibit 127 Page 20 of 60 Hearings Officer Frank November 29, 2021 Page 21 schwabe.com required, updated documentation for its state water right permit and an accounting of the full amount of mitigation, as required under that water right, for this phase of its destination resort.” Exhibit 27, p. 12. Given that the Court of Appeals has not once, but twice, upheld this interpretation of Condition 10, Thornburgh believes it is unlikely that the Supreme Court will accept discretionary review of the interpretation of a condition of a single land use decision that does not implicate any issue of state law or general application. H. Arguments Related to Agreements with BLM Appellant Gould argues that Thornburgh is in violation of agreements with BLM, including that there is no cattle guard on the right of way across the BLM property or fencing, claiming that this is a “deviation from the agreement.” Submittal of Annunziata Gould, dated November 12, 2021. Thornburgh’s agreement with BLM is not relevant to the appealed administrative decision as Appellant Gould has not raised an argument about how alleged noncompliance with that agreement is a violation of any applicable approval criterion or County land use decision. Thornburgh has previously submitted information to the record including the construction drawings approved by BLM and the BLM ROW grant to show it obtained BLM approval of the road as it is constructed. Exhibit 37 and 38, respectively. I. ODFW Letter Dated November 1, 2021 COLW submits a letter dated November 1, 2021, from ODFW that questions the Thornburgh’s modification application (File No. 247-21-000553-MC; -920-A). That letter has no bearing on this site plan review application, as indicated by ODFW’s own comment and reference. Further, it is based upon the erroneous belief that Thornburgh was requesting an amendment to the FMP to allow additional single family residential development, which it is not. ODFW’s comments also claim that the previous support for the FWMP may need to be revisited due to current conditions. However, that claim is irrelevant as the FMP and the adopted FWMP are not subject to collateral attack and remain binding on Thornburgh. Lastly, the letter and its attachment of an earlier ODFW letter make it clear that ODFW’s concerns are if Thornburgh proposes to reduce mitigation water. Thornburgh has not proposed a reduction of its mitigation obligations. J. Additional Crossover Arguments to File No. 247-21-000920-A Ms. Gould and others have made substantially similar, although not always the same, arguments in a related case, File No. 247-21-000920-A. These arguments include additional claims regarding Condition 10, for example. As such, rather than fully repeat response to these claims, Exhibit 127 Page 21 of 60 Hearings Officer Frank November 29, 2021 Page 22 schwabe.com we incorporate all responses here and include a copy of our final legal argument for that case as Exhibit 45. Respectfully submitted this 19th day of November, 2021. Very truly yours, SCHWABE, WILLIAMSON & WYATT, P.C. Kenneth Katzaroff PDX\135849\262760\JKKA\32340092.1 Exhibit 127 Page 22 of 60 EVIDENCE FOR INCLUSION IN THE RECORD FILE 247-21-000508-SP/247-21-000 Updated 11.19.2021 Central Land is filing the following evidence in the record of its application seeking site plan approval to build 80 overnight lodging unit (OLU) to address issues raised by Annunziata Gould. Exhibit Description of Exhibit 1 Decision Approving Phase A-1 Tentative Plan, File 247-18-000386-TP/454-SP/592- MA (relevant parts) 2 BOCC Decision Thornburgh Golf Course, File 247-19-000881-SP (without Exhibit B) 3 BOCC Decision Thornburgh CMP Decision, File CU-05-5, DC 2006-151 (part) 4 Deed recorded at 2021-44813 5 Deed recorded at 2021-50325 6 Illustration of Lot Line Adjustment between TL 7800 and 7900 7 BOCC Decision for Tumalo Irrigation District, File 247-17-000775-ZC/-776-PA (relevant part) 8 Hearings Officer’s Decision for Phase A-1 Tentative Plan on Remand, 247-21- 000731-A 9 BOCC Order declining review of Phase A-1 Tentative Plan on Remand, 247-21- 000731-A 10 Fish and Wildlife Mitigation Plan, Addendum April 21, 2008 (FWMP) 11 Central Land’s Final Argument for 247-21-000731-A with its exhibits by Liz Fancher 12 FMP Decision dated October 6, 2008 by Hearings Officer Briggs (conditions of approval and findings re FWMP) 13 Letter from Janet Neuman to Gregory Frank dated September 14, 2021 14 Central Land’s Final Argument for 247-21-000731-A by Kameron DeLashmutt 15 Central Land’s Final Argument Response to John Lambie for 247-21-000731-A with its exhibits 16 Answering Brief by Central Land before Oregon Court of Appeals (golf course) 17 OWRD Permit Query re Thornburgh water permit G-17036 on November 2, 2021 18 OWRD Email of December 24, 2019 re golf course site plan and July 8, 2020 letter from Janet Neuman to BOCC 19 Memorandum from David Newton, P.E., C.E.G. dated August 24, 2021 re Impact of Well Site Relocations 20 Memorandum from David Newton, P.E., C.E.G. dated November 11, 2021 21 Notice of Proposed Hearing 22 BOCC Decision – Condition 38 Findings 23 Decisions and DCC 18.113.020 Findings 24 Letter from K DeLashmutt Dated September 7, 2021, Detailing Owned Water Rights 25 Site Plan Approval and Condition C Exhibit 127 Page 23 of 60 26 BOCC Discussion on Water and Condition 10 27 Opening Brief for A176353 (Golf Course Appeal to Court of Appeals) 28 Big Falls Ranch Memorandum of Agreement 29 Timeline of Approvals and Interpretation of Condition 10 & 38 30 NOAA Precipitation Data 31 Farmers Explore Changing Frog Rules 32 Frogs, Fish And Farmers Feel Out Compromise On Deschutes River - OPB 33 The Deschutes Basin's Last Great Problem – Bend Magazine 34 KTVZ – C.O. Farmers 35 LaBeau Instream Lease 36 ODFW Letter dated June 13, 2008 37 BLM Construction Drawings 38 BLM ROW Grant 39 Lot of Record Information 40 Patent Record recorded at 1 Pat 532 (Deschutes County Clerk) 41 ORAPs 42 Mitigation Debit Table 43 Legal Argument of Janet Neuman 44 Portion of FMP Decision Regarding Water Rights 45 Final Legal Argument in File Nos. 247-21-000553-MC; -920-A Exhibit 127 Page 24 of 60 Mitigation(acre feet)50.0151.010.8zLt.8l_,3 5 6L,t44EXHIBIT 14: MITIGATION DEBITTABLEWater(acres)28.084.06.0118.0ApplicationPhase A-1 Tentative PlanGolf Cou rse & Lake Site Planlnitial Golf Cabins (2a)TotalMitigation Permitted (req)Mitigation remainingExhibit 42 Page 1 of 1Exhibit 127 Page 25 of 60 Janet E. Neuman janet.neuman@tonkon.com 503.802.5722 direct 503.221.1440 main November 29, 2021 VIA EMAIL: Angie.Brewer@deschutes.org Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department 117 NW Lafayette Ave. Bend, OR 97703 Re: Files No. 247-21-000508-SP, 247-21-000849-A, 247-21-000920-A, and 247-21- 000553-MC: Central Land and Cattle Company / Thornburgh Resort Dear Hearings Officer Frank: I am water rights counsel for Mr. Kameron DeLashmutt, Pinnacle Utilities, LLC (“Pinnacle”), and Central Land & Cattle Company, LLC (“CLCC”), the Applicant in the above-referenced files ("Applicant"). My comments are limited to legal arguments related to specific water issues raised by Ms. Gould’s attorney, Mr. Anuta, in his November 4th, 2021 Hearing Memorandum (“Anuta Hearing Memo”) and his November 19th, 2021 Rebuttal Memorandum (“Anuta Rebuttal Memo”), as well as Mr. Lambie’s November 19, 2021 Technical Memorandum; no new evidence is presented here. Additional final argument is being submitted by Mr. DeLashmutt and by his and CLCC’s land use attorney Mr. Katzaroff. Mr. Anuta’s submissions on behalf of Ms. Gould make three basic arguments, each of which is addressed below: 1.Mr. Anuta argues that the Resort is not in compliance with the Fish and Wildlife Management Plan because the Big Falls Ranch (“BFR”) water rights in Deep Canyon Creek have not yet been permanently protected as an instream water right. (Anuta Rebuttal Memo 1-7; Anuta Hearing Memo 5- 8.) The short answer to this argument is that the Applicant is in full compliance with the FWMP. Mr. Anuta does not, and cannot, provide any evidence for requiring a permanent instream water right to be in place in Deep Canyon Creek right now, during development review. In fact, Ms. Gould has been unsuccessfully making this same argument for several years at every stage of the land use process. The FWMP and OWRD require the mitigation to be provided prior to actual water use, Exhibit 43 Page 1 of 8 Exhibit 127 Page 26 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 2 and the Applicant will fully comply with those requirements, providing incremental mitigation commensurate with the phases of development.1 In the meantime, some of the benefits from the proposed mitigation are already occurring because water is no longer being diverted directly from the creek, the diversion impoundments have been partially removed from the creek,2 and the Applicant has purchased 90 acres of water rights from BFR—so that amount of water is not being pumped from the creek or the ground.3 See Exhibit 11 (OLU Application) Request for Assignment documents. Mr. Anuta argues, without support, that the water being left instream in the creek can be diverted by hundreds of junior water users downstream. Mr. Anuta did not provide any evidence that there are any junior surface water users below the BFR point of diversion who are not able to pump their full water allocation and who would thus use this water. What the evidence does show is that the river between BFR and Lake Billy Chinook is receiving very substantial groundwater discharge. Mr. Newton submitted evidence that the river below BFR is receiving hundreds of CFS per mile in inflows from groundwater. See Exhibit 20 at 10 (OLU Application); Exhibit 119 (Modification). Therefore, junior users in this reach should be getting the water they need. 1 “Applicants proposing municipal or quasi-municipal use have the option of providing mitigation in incremental uses tied to specified phases of development; however, the mitigation obligation for each phase of development must be provided in full before water use may begin for that phase.” See FWMP, attached to Anuta Water Rebuttal as Exhibit A, at page 4 of 18 (emphasis added). The FWMP also states that the Applicant will abandon three existing domestic wells on the property “when the Resort water system is developed.” Id. at page 10 (emphasis added). 2 The remaining portions of the impoundment structures will be removed when the transfers are complete, as provided in the FWMP. Id. Furthermore, this issue was already addressed in the Phase A-1 decision—mitigation will be incremental and is required at the time of use, not now. Gould v. Deschutes County, 79 Or LUBA 561, 574 (2019). 3 Both Mr. Anuta and Mr. Lambie claim that the Applicant will not be able to transfer the BFR rights instream in any event because they have not (and maybe cannot) “unwind” the transfer whereby the POD for the Deep Canyon Creek surface water rights were granted a change in POA to some of BFR’s wells. They are simply wrong. As Mr. Lambie states on page 3 of his September 7, 2021 Technical Memorandum, the Deep Canyon Creek rights remain surface water rights even though their authorized POD is now a POA (a well). And the record contains proof that 90 acres of the transferred rights have already been assigned to the Applicant. Exhibit 43 Page 2 of 8 Exhibit 127 Page 27 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 3 Sometimes it seems that Mr. Anuta does not read the Applicant’s submissions—or at best, ignores whatever he does not like. He continues to say that protecting Deep Canyon Creek water instream is subject to some long-drawn-out process and will never provide mitigation for impacts of the project, despite the Applicant’s having addressed this issue numerous times, including submitting proof that the Deep Canyon water rights are still surface water rights even though they are currently allowed to be withdrawn from a well. Exhibit 11, E-mail from Sarah A. Henderson, OWRD to Kameron DeLashmutt dated September 9, 2019 and E-mail chain from Patrick Starnes ending Sepember 3, 2021 at 11:12 am.4 Mr. Anuta’s continued mischaracterization of these water rights does not change the facts. In fact, Mr. Anuta’s own consultant, Mr. Lambie, confirms that the Deep Canyon rights are surface water rights. Lambie September 7 Memo. Surface water rights afford additional options, such as being leased instream while processing permanent instream transfer applications. Additionally, this mitigation does not need to be provided now, but when the Resort is using water. Mr. Anuta also dismisses the Applicant’s testimony as to other water rights that have been purchased which could be available for mitigation. He says that none of them matter because they have not been “permanently transferred into instream rights” either and they won’t provide valid mitigation, because only water from COID and BFR are acceptable under the FWMP and ODFW would need to approve any change. (Mr. Lambie also claims that ODFW approval is required.) This is incorrect. First, the FWMP requires compliance with OWRD mitigation requirements. OWRD “allows mitigation water to be obtained from any source in the Deschutes Basin above the Madras gage.” Exhibit 10, p. 3. The plan specifically discusses other potential sources of mitigation (McCabe Family Trust) as well. Exhibit 10 at 6. Furthermore, OWRD’s mitigation program provides multiple ways to provide mitigation, including by voluntarily cancelling other rights in lieu of mitigation. See OAR 690-505-06710(8). Finally, ODFW has no “approval” or regulatory role concerning the FWMP, the county requirements, or OWRD’s mitigation requirements. 2. Mr. Anuta speculates that the Resort might ask for an increase in the number of single-family homes it is allowed to build at some point in the 4 Exhibits 11, 12 and 17 were filed in the record of the OLU site plan. They were also filed in the record of the FMP modification application but were not separately numbered. Exhibit 43 Page 3 of 8 Exhibit 127 Page 28 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 4 future and that would have “serious implications for water usage.” (Anuta, page 5; Gould page 1.) Mr. Anuta and Ms. Gould argue that approving a change in the ratio of overnight lodging units (“OLUs”) to individually owned homes will allow Thornburgh to build more homes and will result in “significant water use.” Mr. Anuta concedes that the Resort is not asking for more homes “at this precise moment.” For that reason alone, this argument should be disregarded. Furthermore, he offers no support or evidence for his claim that the Applicant plans to propose more houses, or of the “serious implications for water usage” of that theoretical proposal. The Applicant has not asked to increase the number of homes, but simply to change the ratio of OLUs to houses. As a result of this modification, either the overall amount of development will remain the same or fewer OLUs will be built. No additional single family homes will be built and no additional water usage is required or requested. Ms. Gould and Mr. Anuta can raise this challenge if more houses are requested—though at that time, they will need to prove—not just assert—that the Resort’s water usage would change. In his Hearing Memorandum, Mr. Anuta suggested that the Applicant is somehow hiding the ball with regard to the status of the Water Management and Conservation Plan (“WMCP”). First of all, the WMCP is an OWRD requirement, not a County requirement, so the plan’s current status is not pertinent to this proceeding. The WMCP was approved by OWRD. Pinnacle later withdrew the plan because Ms. Gould—through Mr. Anuta—had filed suit against OWRD to challenge the agency’s order approving the plan. In order to relieve OWRD from spending time and resources defending against a largely procedural attack not impacting actual water use, the Applicant withdrew the plan and will resubmit it again at a future date. In the meantime, given that the WMCP is not relevant to County requirements, Ms. Gould’s arguments on this matter should be disregarded. 3. As in every other filing he submits, Mr. Anuta argues that the Resort’s existing water permit is expired. (Anuta, page 7-8.) Every time Mr. Anuta mentions Thornburgh’s existing water permit G-17036, he makes the same repetitive argument claiming that the permit is expired. That is wrong and repeating this assertion does not make it a fact. Prior to the end of the permit term (the “C date”), the permit holder filed an extension application as allowed by law, thereby tolling the permit’s expiration. OAR 690-315-0070. When OWRD issued an order granting the extension, of course Ms. Gould/Mr. Anuta filed suit. Mr. Anuta is correct that OWRD withdrew its order of approval for Exhibit 43 Page 4 of 8 Exhibit 127 Page 29 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 5 reconsideration and will send the matter to a contested case, but that does not change the permit’s current status. Mr. Anuta cannot claim victory before the contested case has even been referred to a hearing and his insistence that Ms. Gould will prevail in her challenge to the extension is simply bluster. OWRD has informed the County on several occasions that Permit G-17036 is an existing, valid, non-cancelled permit in good standing; the OWRD website also shows the permit as non-cancelled. See Exhibit 17 and Exhibit 12 of OLU Burden of Proof. That is a fact. The permit did not “expire by its terms” because the Applicant filed an extension application prior to its expiration date, as allowed by law. OWRD issued a Final Order (“FO”) approving the extension. While OWRD then withdrew the Final Order for reconsideration in response to a lawsuit filed by Mr. Anuta on Ms. Gould’s behalf, withdrawing the order did not cause the permit to “expire.” The permit is now, again, subject to the previously-issued Proposed Final Order (“PFO”) recommending approval of the extension. The permit is currently in place, and it will remain in place unless and until OWRD resolves Ms. Gould’s protest of the extension and takes specific action to cancel the permit. My previous comments provided the legal analysis as to why the permit is still valid, and that OWRD has taken no action to cancel the permit. See Exhibit 11, pdf p. 17, Exhibit 18. Mr. Anuta has not provided any case, statute, rule, or citation to any authority to counter this analysis. Briefly, to restate that analysis, no statute or rule provides for the automatic or unilateral cancellation of a water right permit, and OWRD has not taken any of the steps required to cancel a permit. ORS 537.410 to ORS 537.450 provide a detailed process for cancelling a permit. OWRD “may” cancel the permit for, among other things, failure to “complete the construction work within the time required by the law, or as fixed in the permit, or within such further time as may be allowed under ORS 537.230 . . .” ORS 537.410. (Emphasis added.) Thornburgh complied with these statutes and applied for an extension prior to the permit’s expiration, and that extension application is currently subject to OWRD’s Proposed Final Order proposing to grant the extension. Gould’s challenge to that decision by the agency does not automatically result in a cancellation. Thornburgh is pursuing to complete work “within such further time.” Consequently, OWRD has no authority to cancel the permit while an extension proceeding is still pending. This is consistent with the Oregon Attorney General Opinion No. 1637 that stresses the need to follow cancellation procedures in Oregon’s water code. See 25 Op. Att’y Gen. 91 at 6 (1951) (“the grounds for Exhibit 43 Page 5 of 8 Exhibit 127 Page 30 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 6 cancellation are specifically set out. Where a statute authorizes revocation of a permit for causes enumerated, such permit cannot be revoked on any other grounds other than the causes specified.”).5 Relatedly, OWRD cannot unilaterally cancel a permit. Under ORS 537.260(1), OWRD “may . . . order cancellation of the permit” but only after the permit completion date “has expired and the owner of the permit fails or refuses” to submit proof of completion as required by ORS 537.230. OWRD “may” order cancellation, but it is not required to do so. ORS 537.260(1). Pursuant to ORS 537.211(1), “…upon receipt of the permit the permittee may proceed with the construction of the necessary works and may take all action required to apply the water to the designated beneficial use and to perfect the proposed appropriation.” That is exactly what Thornburgh is attempting to do by seeking site plan approval and developing the first phase of the Resort. Mr. Anuta also overstates the significance of Ms. Gould’s challenge to the PFO proposing to grant Thornburgh’s extension request. Under ORS 537.230(4), “for good cause shown, [OWRD] shall order and allow an extension of time” to complete works to perfect a water right. (Emphasis added.) The “good cause shown” standard is the standard that will be litigated in Gould’s challenge. It is reasonable to believe that “good cause” exists given that the primary reasons Thornburgh’s efforts to complete perfection of its water right permit were Gould’s dozens of legal challenges at the County, LUBA, and in the Courts. Mr. Anuta now presents an additional argument. He claims that Thornburgh may still be able to pump water, but that amount is limited to the amount Thornburgh was pumping prior to the extension request. Again, Mr. Anuta provides no legal authority for his claim – other than his opinion. In a letter to the BOCC dated July 8, 2020, I addressed issues relevant to this argument. That letter referred to an email from Kyle Gorman, OWRD District Manager to David Arnold where Mr. Gorman confirmed Permit G-17036 is in compliance with its water quantity mitigation obligations to date and that further mitigation is only required when pumping occurs. And Mr. Gorman further clarified that the only requirement for pumping water under the Incremental Development Plan (IDP) is posting the mitigation water the IDP requires. See Exhibit 13, OLU Application. 5 OWRD issued a final order approving the extension. Upon challenge by Gould, OWRD withdrew the final order to allow the issue to go a contested case hearing, which remains pending. Id. Exhibit 43 Page 6 of 8 Exhibit 127 Page 31 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 7 Mr. Anuta also dismisses the Applicant’s testimony pertaining to additional water rights he has acquired for possible transfer to the Resort. He claims that any transfers will not be approved because of a lack of capacity in the groundwater resource. To the extent that some of these acquired rights are surface water rights, including both the BFR water rights and the LeBeau water right, his argument is irrelevant.6 4. Mr. Anuta’s arguments are not helped by Mr. Lambie’s technical submissions. Mr. Lambie said that there “is no assignable water right” from Deep Canyon Creek. (Lambie November 19, 2021 Technical Memorandum at 1.) As described in footnote 3 above, this is contrary to the facts in the record. Ninety acres of the Deep Canyon rights have already been “disentangled” and assigned to the Applicant. Having assigned that portion of the rights, BFR is not, and cannot, withdraw that amount of water from either the creek or its wells. This is a real change, and is improperly dismissed by Mr. Lambie as simply an “agreement between these two business partners for some fractional reduction in extraction.”7 Id. at 2. Mr. Lambie also asserted that OWRD’s review of T-12651 determined that the transfer to pumping from groundwater would result in interference with other groundwater rights. Lambie claims this means there is a potential to diminish BFR groundwater rights other than Deep Canyon Creek water rights and that this may make “water” physically or legally unavailable for mitigation. But the Ground Water Review for T-12651 (attached to Mr. Lambie’s September 7, 2021 Technical Memorandum) in fact concluded at page 3 that the transfer would not be likely to result in another groundwater right not receiving the water to which it is legally entitled. 6 Mr. Anuta is correct that OWRD denied the Applicant’s recent request to use water under a five-year limited license. The Applicant was surprised by this denial, since the license application covers the same water use as was already approved in issuance of G- 17036. Further, OWRD found that the groundwater is not over-appropriated and the proposed use will not cause injury to other water rights. For these and other reasons, the Applicant believes that OWRD erred, both factually and legally, when denying the limited license. Mr. Anuta engages in more fortune-telling when he asserts that Applicant’s other OWRD applications, including a transfer application, T-13703, will also be denied. 7 Mr. Lambie suggests that BFR would have to stop pumping groundwater entirely in order for any flow to be restored in Deep Canyon Creek. Id. at 2. This might be a surprise to BFR, since, until recently, it was actively diverting its surface water rights from the creek. Exhibit 43 Page 7 of 8 Exhibit 127 Page 32 of 60 November 29, 2021 Hearings Officer Gregory Frank c/o Angie Brewer, Senior Planner Deschutes County Community Development Department Page 8 Finally, Mr. Lambie uses a photo and “theory” to challenge Mr. Newton’s reported personal observations that springs flow into Deep Canyon Creek at more than one location and that water has been flowing recently in the creek. Mr. Newton’s report speaks for itself. See Exhibits 20, 119. Conclusion Mr. Anuta’s November 4th Summary of Water Related “Facts” Supporting Gould Appeal is misnamed. That submission is a broken record of repeat arguments contrary to the actual facts. As demonstrated above, the November 19th Rebuttal Memorandum suffers from the same deficiencies. Sincerely, s/ Janet E. Neuman Janet E. 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-920-A. Our File No.: 135849-262760 Dear Hearings Officer Frank: Our office is co-counsel with Liz Fancher for the applicant (“Thornburgh”) in the above- referenced matters. This letter constitutes the applicants’ final legal argument. The applicant is seeking the approval of amendments to apply current destination resort code requirement to its CMP/FMP.1 These requirements all relate to OLUs and propose a 2.5:1 ratio of single-family homes to OLUs, a minimum rental period of 38 weeks per year for OLUs and application of OLU bonding rules. ORS 197.435 et seq. Deschutes County has approved the OLU ratio and rental availability modifications for all other Deschutes County resorts. The OLU ratio change does not authorize any new development.2 Instead, the maximum units allowed by unit type will remain 950 single-family units and 450 OLUs. The only change will be that the minimum development requirements for OLUs will be lowered. This is how the same change to a 2.5:1 ratio from a 2:1 ratio has been understood to operate in prior County ratio modification decisions. Exhibit 116 (Tetherow). See also Exhibits 114, 115, 117. 1 Unless otherwise noted, abbreviations have the same meaning as established in applicants’ earlier submittals. 2 Furthermore, the use of the 2.5:1 ratio has been approved for use by the Thornburgh Resort by DCC Chapter 18.113.060.D.2.a. It says that the 2.5:1 ratio “applies to destination resorts which were previously approved under a different standard.” Exhibit 45 Page 1 of 25 Exhibit 127 Page 36 of 60 Hearings Officer Frank November 29, 2021 Page 2 schwabe.com 1. Changes to Administrative Decision/Proposed Modifications The appealed administrative decision approved and required changes to the Thornburgh FMP that omit key elements of the original Resort approval that, unless corrected, will result in a remand by LUBA. Thornburgh, therefore, proposes the following changes. They include most of the changes to the applicant’s proposal made by the decision but retain requirements that were inadvertently omitted in the administrative decision. 21. The resort shall comply with DCC 18.113.060(D)(2). Specifically, DCC 18.113.060(D)(2) requires: 2. Individually owned residential units that do not meet the definition of overnight lodging in DCC 18.04.030 shall not exceed two and one-half such units for each unit of visitor oriented overnight lodging. Individually owned units shall be considered visitor oriented overnight lodging if they are available for overnight rental use by the general public for at least 38 weeks per calendar year through one or more central reservation and check in service(s) operated by the destination resort or by a real estate property manager, as defined in ORS 696.010. Each phase of development shall be constructed such that the number of overnight lodging units meets the 150 overnight lodging unit and 2:1 ratio of individually owned units to overnight lodging unit standards set out in DCC 18.113.060 (A) (1) and 18.113.060 (D)(2). Individually owned units shall be considered visitor-oriented lodging if they are available for overnight rental use by the general public for at least 45 weeks per calendar year. As required by ORS 197.445(4)(b)(B) at least 50 units of overnight lodging must be constructed in the first phase of development prior to the closure of sale of individual lots or units. [Note: The new text is that imposed by Condition 21b of the appealed administrative decision. The requirements of last sentence of the deleted text of Condition 21, above, was moved to Condition 33.] In addition to complying with the specific requirements of DCC 18.113.70 (U), 1-5, Applicant, its successors and assigns, shall at all times maintain (1) a registry of the individually owned units subject to deed restriction under DCC 18.113.070 (U)(2), requiring they be available for overnight lodging purposes; (2) an office in a location reasonably convenient to resort visitors as a reservation and check-in facility at the resort; and (3) a separate telephone reservation line and website in the name of “Thornburgh Resort”, to be used by members of the public to make reservations. As an alternative to or in addition to (3), Applicant may enter into an agreement with a firm (booking agent) that specializes in the Exhibit 45 Page 2 of 25 Exhibit 127 Page 37 of 60 Hearings Officer Frank November 29, 2021 Page 3 schwabe.com rental of time-sharing of resort property, providing the Applicant will share the information in the registry required by (1) and cooperate with the booking agent to solicit reservations for available overnight lodging at the resort. If applicant contracts with a booking agent, Applicant and the booking agent shall cooperate to ensure compliance with the requirements of DCC 18.113.070 (U)(5), by filing a report on January 1 of each year with the Deschutes County Planning Division. [Note: The applicant requests that these measures that assure that OLUs will be used as OLUs be retained (remove Condition E of appealed decision) rather than replaced by Condition 21d. The applicant did not propose to remove or amend these requirements and changes proposed do not warrant this change.] [Note: This paragraph includes the requirement imposed by Condition 21c of the appealed decision which is to comply with DCC 18.113.070(U)(5).] 33. The Resort shall, in the first phase, provide for the following: A. At least 150 separate rentable units for visitor-oriented lodging as follows: (a) The first 50 overnight lodging units must be constructed prior to the closure of sales, rental or lease of any residential dwellings or lots. (b) The resort may elect to phase in the remaining 100 overnight lodging units as follows: (i) At least 50 of the remaining 100 required overnight lodging units shall be constructed or guaranteed through surety bonding or equivalent financial assurance within five years of the closure of sale of individual lots or units, and (ii) The remaining 50 required overnight lodging units shall be constructed or guaranteed through surety bonding or equivalent financial assurances within 10 years of the closure of sale of individual lots or units. (iii) If the developer of a resort guarantees a portion of the required overnight lodging units required under subsection 18.113.060(A) (1)(b) through surety bonding or other equivalent financial assurance, the overnight lodging units must be constructed within 4 years of the date of execution of the surety bond or other equivalent financial assurance. (iv) The 2.5:1 accommodation ratio required by DCC 18.113.060 (D)(2) must be maintained at all times. (c) If a resort does not choose to phase the overnight lodging units as described in this condition of approval, then the required 150 units Exhibit 45 Page 3 of 25 Exhibit 127 Page 38 of 60 Hearings Officer Frank November 29, 2021 Page 4 schwabe.com of overnight lodging units must be constructed prior to the closure of sales, rental or lease of any residential dwellings or lots. [Note: The new text above is text imposed by Condition 21a of the appealed administrative decision.] B. Visitor-oriented eating establishments for at least 100 persons and meeting room which provide eating for at least 100 persons. C. The aggregate cost of developing the overnight lodging facilities and the eating establishments and meeting rooms required in DCC 18.113.060(A)(1) and (2) shall be at least $2,000,000 (in 1984 dollars). D. At least $2,000,000 (in 1984 dollars) shall be spent on developed residential recreational facilities.3 E. The facilities and accommodations required by DCC 18.113.060, other than overnight lodging units, must be physically provided or financially assured pursuant to DCC 18.113.110 prior to the closure of sales, rental or lease of any residential dwellings or lots. [Note: Subsection D corrects a typographical error. Subsection E is revised to reflect the fact that the bonding of OLUs is governed by FMP Condition 21.] 35. The contract with the owners of units that will be used for overnight lodging by the general public shall contain language to the following effect: “[Unit Owner] shall make the unit available to [Thornburgh Resort/booking agent] for overnight rental use by the general public at least 45 38 weeks per calendar year through a central reservation and check-in service.” [Note: The applicant proposes to retain rather than eliminate Condition 35. The only change proposed is a change from 45 to 38 weeks for OLU rental availability. The applicant did not propose any change to how OLUs will be monitored and wishes to retain the provisions of the existing approval.] 2. Relevant Approval Criteria for Review of Modifications DCC 18.113.080 Applicant’s Position As Ms. Gould states in her appeal of the FMP Modification Decision, DCC 18.113.080 applies to amendments of the Thornburgh CMP/FMP. Statement of Reasons for Appeal (Gould), p. 10. 3 The CMP decision incorporated into the FMP and former DCC 18.113.060.A required at least $2,000,000 in recreational improvements; not residential facilities. Exhibit 112, p. 42-43, 97. Exhibit 45 Page 4 of 25 Exhibit 127 Page 39 of 60 Hearings Officer Frank November 29, 2021 Page 5 schwabe.com That law allows substantial and insubstantial changes. If a change is insubstantial, it may be approved by the Planning Director. If it is substantial, it must be reviewed in the same manner as the original CMP. Condition 1 of the FMP requires a new application if a substantial change is made to the FMP but that application is an application seeking approval of a plan modification – not a new destination resort application. Deschutes County applies DCC 18.113.080 to the review of applications to modify an FMP despite the fact it says it applies to changes to a CMP. The likely reason for this is that the County code says that the FMP “incorporates all requirements of the County approval for the CMP.” DCC 18.113.040.B. In this case, the requirements proposed for change were all imposed during the review of the CMP. DCC 18.113.080 says: “Any substantial change, as determined by the Planning Director, proposed to an approved CMP shall be reviewed in the same manner as the original CMP. An insubstantial change may be approved by the Planning Director. Substantial change to an approved CMP, as used in DCC 18.113.080, means an alteration in the type, scale, location, phasing or other characteristic of the proposed development such that findings of fact on which the original approval was based would be materially affected.” DCC 18.113.080 authorizes the Planning Director to approve insubstantial changes if he or she finds that the changes are not substantial. The Planning Director made this finding and it is correct as shown by the review of the CMP criteria and CMP findings discussed below. The changes proposed by this application are all insubstantial. None of the changes are such that they would “materially affect” the findings of fact of the CMP, the original approval. Webster’s Third New International Dictionary Unabridged defines “materially” as we believe it is used in DCC 18.113.080 to mean: “to a significant extent or degree.” The application of the 2.5:1 ratio to Phase A of the Thornburgh Resort allows the applicant to build up to 375 dwellings in the phase (375 Residential Single Family: 150 OLU = 2.5:1). The following updated phasing chart4 from the FMP shows what the application of the 2.5:1 ratio means if the applicant does not elect to build all 450 approved OLUs. The applicant asks that it be approved by the hearings officer. It shows that the 2.5:1 ratio is met for each phase of single-family development. The number of OLUs currently required by the phasing chart are 4 This chart is provided to address Mr. Kleinman’s claim on page 3 of his rebuttal memorandum that “Thornburgh continues to fail to address the ‘Corrected Phasing Plan and Overnight and Density Calculations Chart’ *** adopted under Condition 37 of the FMP approval.” This chart is that chart with appropriate revisions that commit Thornburgh to comply with the 2.5:1 ratio. We note, however, that there is no FMP Condition 37. Exhibit 45 Page 5 of 25 Exhibit 127 Page 40 of 60 Hearings Officer Frank November 29, 2021 Page 6 schwabe.com shown in parentheses. These numbers are retained to show the maximum number of OLUs that may be built by the Resort. Item Phase A Phase B Phase C Phase D Phase E Phase F Phase G Total Residential Single Family (RSF) 375 75 150 125 125 50 50 950 Hotel Overnight 50 50 Residential Overnight 150 30 (150) 60* (0) 0 (63) 50** (62) 20** (0) 20** (0) 330 Net Overnight 150 30 60 50 50 20 20 380 Cumulative RSF 375 450 600 725 850 900 950 950 Cumulative Overnight 150 180 240 290 340 360 380 380 Ratio RSF:Overnight 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 2.5:1 * To be built in Phase B area as approved. ** To be built in Phase D or E area as approved. The phasing chart, above, simply allows the applicant to build what were Phase B residential single-family homes as a part of Phase A before moving onto Phase B and properly adjusts OLU minimums to demonstrate compliance with the 2.5:1 ratio.5 This does not change the total amount of residential single-family homes currently allowed by the FMP. Prior amendments to the FMPs of other resorts to allow reliance on new OLU code requirements have been approved as insubstantial changes. We believe that the proposed modifications are insubstantial because they do not materially affect the findings made by the BOCC in its decision approving the Thornburgh CMP based on the 2005 law. In the context of the County code’s rules for modifications in general that look to whether a change is substantial, and as already discussed above, “materially” means a change that is significant in extent or degree. FMP Condition 1 and DCC 22.36.040. A change that does not increase the total amount of single- family homes is not material and does not increase the overall impacts of the resort. We set out below the approval criteria that have been revised by the County that the applicant seeks to apply to its resort. The text added after the resort was approved is underlined and 5 If the hearings officer limits RSF units to 300 in Phase A, the only change that need be made to the chart is to provide 300 RSF in Phase A and 150 RSF in Phase B. Exhibit 45 Page 6 of 25 Exhibit 127 Page 41 of 60 Hearings Officer Frank November 29, 2021 Page 7 schwabe.com enclosed in brackets. Following the code language set out below, we explain why the change does not require a significant change to the findings. DCC 18.113.060 (A)(5) A. The destination resort shall, in the first phase, provide for and include as part of the CMP the following minimum requirements: 5. The facilities and accommodations required by DCC 18.113.060 must be physically provided or financially assured pursuant to DCC 18.113.110 prior to closure of sales, rental or lease of any residential dwellings or lots [or as allowed by DCC 18.113.060(A)(1)].6 Response: The relevant findings, found on page 43 of the CMP (Exhibit 124, p. 3), do not require alteration. No findings specifically address bonding for OLUS. The findings state that the applicant will comply with DCC 18.113.060(A). That code now requires that OLUs be bonded as provided by (A)(1) – the code language proposed to be included in FMP Condition 33. The change in how OLUs are bonded, therefore, are an insignificant change. DCC 18.113.060 (D) D. A destination resort shall, cumulatively and for each phase, meet the following minimum requirements: 2. Individually-owned residential units [that do not meet the definition of overnight lodging in DCC 18.04.030] shall not exceed two [two and one-half] such units for each unit of visitor-oriented overnight lodging. Individually-owned units shall be considered visitor-oriented lodging if they are available for overnight rental use by the general public for at least 45 [38] weeks per calendar year through one or more central reservation and check-in service(s) [operated by the destination resort or by a real estate property manager, as defined in ORS 696.010]. Response: The relevant findings regarding the 2:1 ratio, found on pages 46-48 of the CMP (Exhibit 124, p. 4-6), require a minor alteration only – the substitution of the 2:1 ratiowith the 2.5 ratio allowed by law. The findings mention that the applicant furnished information regarding the order and schedule for phasing and that the information exceeded what was required by DCC 18.113.050.B.8 which explains what information is to be provided for review of the CMP. The only factual difference of substituting a 2.5:1 ratio is to allow the applicant to provide fewer OLUs after Phase A’s OLU requirements have been satisfied. 6 The underlined text is a part of the current code. Exhibit 45 Page 7 of 25 Exhibit 127 Page 42 of 60 Hearings Officer Frank November 29, 2021 Page 8 schwabe.com The findings related to the 45 weeks availability requirement mention the requirement just once when referring to OLUs. A change to refer to the current 38 weeks requirement in this one location does not materially alter the findings. DCC 18.113.070(U) U. A mechanism to ensure that individually-owned units counting toward the overnight lodging total remain available for rent for at least 45 weeks per calendar year through a central reservation and check-in service. Such a mechanism shall include: [list of requirements includes a reference to 45 weeks] Response: The findings related to this criterion are found at page 86 of the CMP, Exhibit 124, p. 8. The only change needed is to substitute the reference to 45 weeks to 38 weeks. This change is not a substantial change. Ms. Gould’s Argument that Only DCC 18.113.080 Applies In Ms. Gould’s appeal of the FMP modification (p. 10), she claims that the inquiry regarding the modification application begins and ends with DCC 18.113.080 because the section provides criteria for the modification and DCC 22.36.040(B) says that the modification criteria of DCC 18.113.080 control over the criteria of DCC 22.36.040(B). This may be correct but the applicant addressed the criteria of DCC 22.36.040(B) because County staff decisions that modify destination resort approvals apply the criteria of DCC 22.36.040 when reviewing minor modifications of resort master plans and because Ms. Gould argues elsewhere that the proposed modification violates DCC 22.36.040. We note that if Ms. Gould’s reading of DCC 22.36.040(B) is correct, her argument that approval of the amendment violates DCC 22.36.040 is without merit. DCC 22.36.040 Most of Ms. Gould’s arguments that the change to the OLU ratio are substantial or significant changes are based on her erroneous view that the amendments authorize additional development. They do not. Prior County decisions make this fact abundantly clear. Exhibits 114-117. As a result, it is clear that the changes may be approved under the authority of DCC 22.36.040 as discrete changes to the FMP that do not result in a substantially different, new FMP. Deschutes County reviews applications for insubstantial changes against the criteria of DCC 22.36.040 as well as DCC 18.113.080. The sections of DCC 22.36.040 in dispute in this matter are subsections (2) and (3), below. “2. Unless otherwise specified in a particular zoning ordinance provision, the grounds for filing a modification shall be that a change of circumstances since Exhibit 45 Page 8 of 25 Exhibit 127 Page 43 of 60 Hearings Officer Frank November 29, 2021 Page 9 schwabe.com the issuance of the approval makes it desirable to make changes to the proposal, as approved. A modification shall not be filed as a substitute for an appeal or to apply for a substantially new proposal or one that would have significant additional impacts on surrounding properties. 3. An application to modify an approval shall be directed to one or more discrete aspects of the approval, the modification of which would not amount to approval of a substantially new proposal or one that would have significant additional impacts on surrounding properties. Any proposed modification, as defined in DCC 22.36.040, shall be reviewed only under the criteria applicable to that particular aspect of the proposal. Proposals that would modify an approval in a scope greater than allowable as a modification shall be treated as an application for a new proposal.” Mr. Kleinman states in his First Open Record Memorandum (Gould) that the change of the OLU ratio is substantial and that FMP Condition 1 and DCC 22.36.040 require approval of an entirely new CMP/FMP despite the fact that the changes will not authorize additional development. DCC 22.36.040(B) allows modifications unless the application is a “substantially new proposal or one that would have significant additional impacts on surrounding properties.” FMP Condition 1 allows changes unless the changes are substantial. Making changes to a discrete element of the resort – its OLUs –does not constitute a new proposal. The proposed changes will not authorize additional development so will not impose significant additional impacts on surrounding properties. The proposed change simply seeks to apply the existing law related to OLU ratios, rental availability and bonding. When the full scope and complexity of the Resort FMP and CMP is considered, it is clear that these minor changes do not result in a “substantially new proposal” – that is, a new destination resort.7 This is evident from a review of the relevant approval criteria for resorts that required plans for all aspects of the Resort. The changes proposed affect none of the following plans and documents that are a required part of a CMP (DCC 18.113.050):  an open space management plan  recreational amenities  a resource protection plan  an erosion control plan  wildlife mitigation plan  traffic study  design guidelines  deed restrictions  water and sewer utility system plans 7 This is particularly true given that the code specifically states that it applies to previously approved resorts, like Thornburgh. Exhibit 45 Page 9 of 25 Exhibit 127 Page 44 of 60 Hearings Officer Frank November 29, 2021 Page 10 schwabe.com  analysis of impacts on adjacent lands  plan for emergency medical and public service facilities and service  water availability study  water conservation and wastewater report  wildfire prevention, control and evacuation plans  description of interim development  employee housing survey  economic impact and feasibility analysis DCC 18.113.060 and 18.113.070 also impose extensive and detailed standards and approval criteria for resort CMPs. The changes proposed by the applicant relate to OLUs in DCC 18.113.060(A)(5), 18.113.060(D) and 18.113.070(U) only. These requirements are discussed in our response to Ms. Gould’s “a new CMP is required” argument. They are an insubstantial part of the relevant destination resort approval criteria in place in 2005. The findings related to the relevant approval criteria barely mention the requirements that are proposed for change. Mr. Kleinman argues that changing the ratio will mean that 375 homes will be built before the fifty-first OLU is built. This is not, however, a change. Under the current FMP, the applicant need not build the fifty-first OLUs until after constructing all 950 single-family homes, provided it posts financial assurances that the OLUs will be built. The modification proposed by Central Land will prevent this outcome by limiting the duration of bonding to a period of four years. DCC 18.113.060(A)(1)(b)(3). Ms. Gould’s Claim that a New CMP/FMP is Required Ms. Gould asserts that the criteria applicable to modifications require Thornburgh to file a new master plan application to obtain approval of the requested modifications because the changes proposed are substantial. In other words, in Ms. Gould’s view, the CMP/FMP may not be amended despite the clear language of DCC 18.113.080 that authorizes substantial modifications of a CMP/FMP. Ms. Gould’s argument disproves itself. If a modification is substantial and a new CMP/FMP is required, the modification is not an amendment of the existing CMP/FMP. Rather it is a new CMP. This is not what DCC 18.113.080 says. DCC 18.113.080 says only that a substantial modification of an FMP is to be reviewed in the same manner as the original CMP – not that a modification is not allowed or that an applicant must seek approval of a new CMP. The manner of review for the original CMP is a review as a land use action with notice. That is the process followed for the applicant’s Thornburgh FMP modification. This level of review is more rigorous than required for the review of an FMP. FMPs are reviewed as development permit without notice or an opportunity for public participation unless the review involves the exercise of discretion. DCC 18.113.100. The requirement that a substantial amendment be reviewed in the same manner as the original CMP assures the public that substantial changes will not be made using the FMP review process. In this case, the County reviewed the modification “in the same manner as the original CMP” by Exhibit 45 Page 10 of 25 Exhibit 127 Page 45 of 60 Hearings Officer Frank November 29, 2021 Page 11 schwabe.com reviewing it as a land use matter and conducting a hearing of the matter on appeal by Ms. Gould rather than reviewing the application as a development action. As a result, whether substantial or insubstantial, the modifications requested by this application may be approved without violating DCC 18.113.080 . Both the Board of Commissioners and Ms. Gould understand that significant changes may be made to an FMP without requiring the filing of a new CMP. In her appeal to the BOCC of the Phase A-1 tentative plan, Ms. Gould faulted the hearings officer for finding that it was her position that alleged substantial changes to the FWMP would require the resort to “start over.” Ms. Gould’s appeal advised the BOCC that her position was that “[t]he county process does not require a ‘start over’ but it does require that a modification be filed.” Exhibit 125, pp. 2-3 (text highlighted in yellow). The BOCC’s CMP approval reflects the Board’s position that a substantial change of converting OLU units and lots to a single-family residential use would be required and be allowed as a modification of the CMP. Exhibit 124, p. 4. It did not find that a new CMP and FMP would be needed for this substantial change. Sagebrush Subdivision Ms. Gould argues in her First Open Record Memorandum that reducing the minimum number of OLU units on the phasing chart to provide the ratio required by state and local law would make the resort “more of a ‘sagebrush subdivision’” and this gives rise to a substantially new proposal. This argument is contradicted by the law that plainly allows a 2.5:1 ratio as an appropriate ratio for destination resorts. Whether one views a destination resort built in compliance with destination resort law a “sagebrush subdivision” is irrelevant. 3. DCC 18.113.070.B/Raise It or Waive It Rule Ms. Gould argues that the amendment violates DCC 18.113.070.B that requires that all standards established by DCC 18.113.060 “are or will be met” by a proposed modification. Ms. Gould argues this means that the applicant must comply with the repealed requirements of DCC 18.113.060. This is not correct. The “goal post” rule requires that the modification be judged by the law in effect when the modification application was filed in 2021, not the law in effect in 2005 when the CMP was filed. ORS 215.427(3)(a). This is how the rule has been applied by LUBA and appellate courts – to pending land use applications then under review based on the law when those applications were filed. ORS 215.427(3)(a) says: “If the application was complete when first submitted or the applicant submits additional information, as described in subsection (2) of this section, within 180 days of the date the application was first submitted and the county has a comprehensive plan and land use regulations acknowledged under ORS 197.251, Exhibit 45 Page 11 of 25 Exhibit 127 Page 46 of 60 Hearings Officer Frank November 29, 2021 Page 12 schwabe.com approval or denial of the application shall be based upon the standards and criteria that were applicable at the time the application was first submitted.” Given the fact the applicant is seeking to apply the current requirements of DCC 18.113.060 to its decision it is clear that the amendment will meet the requirements of that section. 4. FMP Conditions 10 and 38 Do Not Apply Ms. Gould argues that the FMP modifications should not be approved because the resort’s OWRD water permit is “in jeopardy.” She also claims that modification should not be approved because it has not demonstrated, to the satisfaction of Ms. Gould, that it has the cold mitigation water required by the FWMP. These arguments are based on FMP Conditions 10 and 38. FMP Conditions 10 and 38 relate to the Resort’s water rights permit and its wildlife mitigation plan, including the FWMP. FMP Condition 10 plainly states it applies “at the time of tentative plat/site plan review for each individual phase of the resort development.” FMP Condition 38 requires annual reporting to the county to assure compliance with the FWMP. It is does not authorize a review of compliance during the review of any land use applications. DCC 22.36.040.C says “[a]ny proposed modification *** shall be reviewed only under the criteria applicable to that particular aspect of the proposal.” Likewise, Ms. Gould’s argument that the “no net loss” standard of DCC 18.113.070(D) should be applied to this application lacks merit. Even without this code provision, it is a basic rule of law that only laws that relate to a land use action may be applied as approval criteria. In this case, the approval criteria are the same as the proposed changes so their approval necessarily complies with the relevant approval criteria. Therefore, Condition 10 and 38 simply do not apply to review of the modification application. Furthermore, none of the requested changes will authorize an increase in development that will require the use of more water or that will create new impacts on wildlife habitat. This is due to the fact that the FMP limits development of the resort to 950 single-family homes and 450 OLUs. The applicant has not asked to increase those limits so they remain as approved. The only impact of the change from a 2:1 to 2.5: 1 ratio is that the minimum number of OLUs that must be built will be lowered. Obviously, if fewer units are built, the change will result in lesser impacts to water, wildlife, and traffic. 5. Accounting of OWRD Mitigation under FMP Condition 10 Does Not Require Compliance with FWMP Ms. Gould’s current counsel, despite numerous failed efforts to do so, attempts to argue that FMP Condition 10 requires Thornburgh to address a host of issues related to the FWMP. As LUBA found in Gould v. Deschutes County, __ Or LUBA __ (LUBA No. 2020-095, June 11, 2021): Exhibit 45 Page 12 of 25 Exhibit 127 Page 47 of 60 Hearings Officer Frank November 29, 2021 Page 13 schwabe.com “Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10. *** [W]e agree with intervenor that Condition 10 is concerned only with satisfaction of DCC 18.113.070(K) regarding the availability of water for resort use and mitigation for the volume of consumptive use, as required by OWRD under the water right.” LUBA’s recent decision is in accord with legal precedent. According to the Oregon Court of Appeals, FMP Condition 38 assures compliance with the Terrestrial WMP, the M&M Plan, the Fish WMP (FWMP) and the August 11, 2008 letter re Whychus Creek mitigation which were referred to collectively by the County’s hearing officer as the “WMP.” Gould v. Deschutes County, 233 Or App 623, 634-635, 227 P3d 758 (2010). Ms. Gould’s former legal counsel Paul Dewey understood that a review under Condition 10 would not address or assure compliance with the FWMP. He argued in Ms. Gould’s Petition for Review of the FMP to LUBA in 2009 that the only conditions of approval related to fish resources are FMP Conditions 38 and 39. Exhibit 123, p. 31. In footnote 8 of Ms. Gould’s Petition for Review, Mr. Dewey made it clear that the OWRD review required by FMP Condition 10 would make no determination regarding the FWMP or the County’s no net loss standard. “It is not an answer to the lack of a showing of feasibility and conditions of approval for the Big Falls Ranch and COID mitigation water that OWRD will be requiring mitigation for groundwater permits and that no legal impediment is shown to a OWRD determination. OWRD will be requiring mitigation, but not necessarily this mitigation which is being proposed here specifically for fish and wildlife mitigation, not just to satisfy OWRD requirements. OWRD will be making no determinations to satisfy these county fish and wildlife standards.” Exhibit 123, p. 33. In his First Open Record Memorandum, Mr. Kleinman claims “the reference in FMP Condition 10 to an accounting of mitigation under the water right incorporates the FWMP. It does not and could not have done so because the FWMP did not exist when FMP Condition 10 was written as Condition 10 of the CMP. Mr. Kleinman attempts to support this faulty claim by saying that the FWMP is an addendum to a wildlife mitigation plan “adopted under OWRD’s review process.” This is clearly wrong because the FWMP which is located in numerous places in the record clearly states on page 1: “This report was prepared on behalf of Thornburgh Resort Co., LLC (“Thornburgh”) as an Addendum to the Thornburgh Resort Wildlife Mitigation Plan prepared by Tetra Tech EC, Inc.” The Oregon Court of Appeals said the following on this topic: Exhibit 45 Page 13 of 25 Exhibit 127 Page 48 of 60 Hearings Officer Frank November 29, 2021 Page 14 schwabe.com “Thornburgh's wildlife management plan contains two components. The first addresses terrestrial wildlife and is described in the “Thornburgh Resort LLC Wildlife Mitigation Plan for Thornburgh Resort” (“Terrestrial WMP”) and the “Off–Site Habitat Mitigation and Monitoring Plan for the Thornburgh Destination Resort Project,” dated August 2008 (“M & M Plan”). The second component addresses off-site fish habitat and is described in the “Thornburgh Resort Fish and Wildlife Mitigation Plan Addendum Relating to Potential Impacts of Ground Water Withdrawals on Fish Habitat” (“Fish WMP”) and an August 11, 2008, letter proposing additional mitigation for Whychus Creek.” Gould v. Deschutes County, 233 Or App 623, 625-626, 227 P3d 758 (2010). 6. Condition 38 As determined by LUBA in its review of the Phase A-1 tentative plan (discussed below), FMP Condition 38 does not apply during the review of development applications unless approval of the modification will result in a change of the WMP. None of the proposed FMP modifications result in a change to the WMP or its FWMP. Compliance with FMP 38 and the WMP/FWMP is assured by annual reporting and staff review of the reports – not by concurrent review with development applications. If the County had intended to allow a review for compliance with FMP Condition 38 during the review of development applications, it would have said so – just as it did when it wrote FMP Condition 10. LUBA’s decision regarding the Thornburgh Phase A-1 tentative plan makes it clear that issues of compliance with Condition 38 are not relevant in a review of a development application. It rejected the same Condition 38 claims Ms. Gould continues to raise during the review of this application – dam removal on Deep Canyon Creek, abandonment of wells and the transfer of water from Deep Canyon Creek by Big Falls Ranch. “As established in prior appeals, the mitigation plan satisfies the substantive no net loss/degradation standard for destination resort development. We agree with intervenor that the details of the mitigation plan are established by the FMP, and compliance (or noncompliance) with the mitigation measures will be established by annual reporting required by FMP Condition 38. We reject petitioner's argument that the FMP required intervenor to “fill in the details” to obtain approval of a tentative plan during phased development. Petition for Review 56. Petitioner has not demonstrated that the approved subphasing, as conditioned, alters any mitigation requirement under the FMP mitigation plan. Petitioner's argument provides no basis for remand. *** The mitigation plan involves (1) the removal of two wells on the subject property, (2) the removal of two dams that impede the flow of spring water from Deep Exhibit 45 Page 14 of 25 Exhibit 127 Page 49 of 60 Hearings Officer Frank November 29, 2021 Page 15 schwabe.com Canyon Creek to the Deschutes River, and (3) transfer of water from Deep Canyon Creek that Big Falls Ranch uses for irrigation for mitigation. Record 215. Petitioner argues that the hearings officer erred in failing to require as a condition of approval for the tentative plan that, prior to beginning construction, intervenor remove the dams and the wells. Petitioner argues that while the body of the hearings officer's decision states that the first dam will be removed prior to construction under the tentative plan, he failed to include dam removal as a condition of approval. Intervenor responds, and we agree, that removal of the dams and provision of mitigation water is required by the FMP approval and the tentative plan does not alter the mitigation plan. Response Brief 55. The hearings officer was not required to impose additional conditions to the approval of the tentative plan.” Gould v. Deschutes County, 79 Or LUBA 561, 583 (2019). The terms of FMP Condition 38 are final and may not be collaterally attacked every time the applicant seeks a development approval or modification of discrete parts of the FMP. Gansen v. Lane County, __ Or LUBA __ (LUBA No. 2020-074, 2/22/2021)(local governments are barred from collaterally attacking their own prior land use decision in subsequent reviews; in challenging a development approval that relies upon a prior final land use decision, LUBA will not review arguments that the prior decision was procedurally or substantively incorrect); Landwatch Lane County v. Lane County, 79 Or LUBA 65, 72-73 (2019) (arguments that a prior final partition failed to comply with applicable procedures are outside LUBA's scope of review as a collateral attack on the partition decision); Lockwood v. City of Salem, 51 Or LUBA 334, 344 (2006) (arguments that two prior city decisions extending the effective date of a preliminary public facility agreement were invalid are outside LUBA's scope of review as a collateral attack on those two prior unappealed city decisions); Sahagian v. Columbia County, 27 Or LUBA 341, 344 (1994) (arguments that challenge an unappealed prior decision redesignating park property as forest are a collateral attack on that earlier unappealed redesignation decision); Perry v. Yamhill County, 26 Or LUBA 73, 77, aff'd, 125 Or App 588, 865 P2d 1344 (1993) (in an appeal of a county decision determining that two lots comply with conditions of a prior preliminary subdivision approval, arguments that challenge the prior approval are outside LUBA's scope of review as a collateral attack on the prior subdivision approval). See also, Doney v. Clatsop County, 142 Or App 497, 921 P2d 1346 (1996); Scott v. Josephine County, __ Or LUBA __ (LUBA No. 2020-080, 3/9/2021)(impermissible to attack final lot line adjustment decision in a CUP review seeking development approval on the same property); Just v. Linn County, 59 Or LUBA 233, 236 (2009)(challenges to the correctness or validity of a prior final permit decision amount to an impermissible collateral attack on the decision). Given this well-settled case law, Ms. Gould’s claim that FMP Condition 38 should have provided for public review and a hearing is barred as it should have been raised during the review on appeal of the FMP. To raise it now is an impermissible collateral attack on the FMP. Exhibit 45 Page 15 of 25 Exhibit 127 Page 50 of 60 Hearings Officer Frank November 29, 2021 Page 16 schwabe.com 7. Gould’s Claims re Newton’s Technical Memo Exhibit 119 Ms. Gould’s attorney presents an undeveloped legal argument in rebuttal that “to the extent Mr. Newton’s analysis with respect to the subject wells differs from what he submitted in support of the CMP and FMP, this is highly problematic for the applicant.” We do not find any statements regarding the BFR wells in the FWMP and are unable to further respond to this opaque claim because Mr. Kleinman has failed to point to any document in the record that supports his claim.8 Mr. Kleinman next makes the unsubstantiated claim that “it appears that Mr. Newton is now saying that well conditions were or are different from those relied upon previously” and that this necessitates an amendment of the CMP and FMP. Only a substantial change to the Resort plan, not allegedly new evidence about issues addressed during the review of the plan, merit approval of a modification as is evident from the modification criteria we have discussed at length above. Finally, Mr. Kleinman asserts that an alleged difference in evidence provided in the past and today is an impermissible collateral attack upon the CMP and FMP/FWMP and documentation filed to support approval of those plans. First, the rule that bars impermissible collateral attacks does not apply to evidence – it applies to final land use decisions only. Second, Mr. Kleinman has failed to identify what provision of the CMP or FMP is allegedly being attacked by Mr. Newton’s evidence about Deep Canyon Creek and the Big Falls Ranch wells. 8. Response to Lot of Record Arguments COLW and Ms. Gould argue that, contrary to the authorization of development granted for the entire Resort property by the FMP and the Phase A-1 tentative plan, that Tax Lots 7800 and 7900 of the Resort may never be developed and that a modification of the FMP may never be approved. This argument is based on the faulty premise that the recording of a deed for a part of a lawfully-created property creates new parcels that irrevocably destroy the lawfully-created parent parcel. This claim is not supported by law and is inconsistent with the plain language of ORS 92.017. Given the fact that Central Land owns multiple lots of record, changes to the boundaries of these properties may be approved as property line adjustments rather than by partitioning and opponents have not shown that this is incorrect. We have provided extensive arguments regarding the lot of record issue raised by Central Oregon LandWatch (COLW) in our letter dated November 3, 2021. We will not repeat those arguments in the same detail here. Instead, we will respond to arguments in documents COLW 8 The FWMP, the document that describes the Resort’s mitigation program does not rely on an analysis of the Big Falls Ranch well in order to garner approval. Instead, it relies on the purchase of Deep Canyon Creek water rights from the ranch. This approach was approved by hearings officer Briggs when she approved the FMP. See, footnote 8, FMP Decision (entire decision filed by Mr. Kleinman). Exhibit 45 Page 16 of 25 Exhibit 127 Page 51 of 60 Hearings Officer Frank November 29, 2021 Page 17 schwabe.com filed on November 5, 2021 (amends prior COLW argument) and November 11, 2021, and documents filed by Ms. Gould. EFU Zone COLW argues that DCC 22.04.040(B)(1)(a) requires Central Land to verify that its property is a lot of record because it is located in the EFU zoning district and is subject to strict limits on development. While DCC 22.04.040(B)(1)(a) makes lot of record verification a requirement in the EFU zone, the rules of the EFU zoning district do not apply to destination resort development applications such as the site plan and FMP modification applications.9 This is plainly stated by County FMP modification decisions, Exhibit 114 (pp. 6-7) and Exhibit 115 (pp. 5-6), and DCC 18.113.020, below. “18.113.020 Applicability 1. The provisions of DCC 18.113 shall apply to proposals for the development of destination resorts, as defined in DCC Title 18, in areas designated DR by the County zoning maps. The provisions of DCC 18.113 shall not apply to any development proposal in an area designated DR other than a destination resort. 2. When these provisions are applicable, they shall supersede all other provisions of the underlying zone. Other provisions of the zoning ordinance, made applicable by specific map designations, such as the SMIA, AH, CH, FP or LM, or otherwise applicable under the terms of the zoning ordinance text shall remain in full force and effect, unless otherwise specified herein.” The County’s FMP modification approval (2.5:1 ratio and 38 weeks) for Pronghorn Resort found: “Pronghorn was approved under DCC Chapter 18.113 through applications nos. CU-00-118 and M-02-1. As stated in foregoing findings, the MUA-10 and EFU zone standards do not apply to Pronghorn, since it was approved under DCC 18.113.” Exhibit 115, p. 7. “The standards and criteria under DCC 18.113 are the only ones that apply to the resort.” 9DCC 22.04.040(B)(1) makes lot of record verification a requirement of the EFU zone. It does not make it a requirement of the DR zone. The DR zone is the only zone that applies to the review of Resort development applications. Exhibit 45 Page 17 of 25 Exhibit 127 Page 52 of 60 Hearings Officer Frank November 29, 2021 Page 18 schwabe.com Exhibit 115, p. 6. COLW’s arguments that the intent of the lot of record rules is to protect EFU land from “fragmentation” may or may not be correct but this is not the intent of the DR zone supersedes the EFU zone and is the actual law that controls the development of the subject parcel. Creation by Deed COLW’s argument that Tax Lot 7800 and 7900 were created by deed on August 31, 2021 is not correct. ORS 92.017 says: “92.017 When lawfully created lot or parcel remains discrete lot or parcel. A lot or parcel lawfully created shall remain a discrete lot or parcel, unless the lot or parcel lines are vacated or the lot or parcel is further divided, as provided by law.” Deeds are not a method of land division “provided by law.” As a result, the Central Land and Pinnacle deeds did not alter the lawfully created parcel boundaries of either Tax Lot 7800 or 7900 because those boundaries were not divided as provided by law. While the areas described by the deeds, when held in separate ownership, are not lawfully created lots of record, the original parcel is not permanently unbuildable as a result. This draconian punishment is not supported by ORS 92.017.10 ORS 92.017 recognition that the original lot of record remains a discrete lot allows development of the lawfully created lot if the part erroneously conveyed is reunited with the remainder property under the same ownership. Exemption from Lot Verification All land within Tax Lots 7800 and 7900 has been excepted from the lot verification requirements of DCC 22.04.040 because they have been determined to be one or more lots of record in formal decisions issued by Deschutes County in LR-91-56 and LR-98-44 (decisions filed by COLW and Central Land). The same is true for the entire resort property because such a finding was made in the BOCC’s decision approving the CMP.11 10COLW’s argument, if accepted, would constitute an unconstitutional regulatory taking of private property prohibited by the 5th and 14th Amendments to the US Constitution and similar provisions of the Oregon Constitution. Given the fact that the County has approved a tentative plan that will create new lots in the areas conveyed by the 2021 deeds, this taking would be a temporary taking but an economically impactful one. 11 All subareas of the resort, with the exception of Tax Lots 7801 and 8000, have also been determined to be lots of record in County land use decision. Copies of deeds and a partition approval were included with my November 3, 2021 letter to Hearings Officer Frank. They show that Tax Lots 7801 and 8000 are lots of record. We do so without waiving our position that the lot of record issue related to the CMP and FMP was settled by approval of the CMP. Exhibit 45 Page 18 of 25 Exhibit 127 Page 53 of 60 Hearings Officer Frank November 29, 2021 Page 19 schwabe.com We have also shown in our letter of November 3, 2021 that all parts of the property other than Tax Lots 7801 and 8000 have been determined to be lots of record and are also exempt from the lot verification requirements of DCC 22.04.040. We have also provided evidence in our rebuttal arguments to demonstrate that Tax Lots 7801 and 8000 are lots of record. If the hearing officer does not agree that the BOCC’s decision finding that the entire resort is a lot of record is binding, this evidence demonstrates that the component parts of the resort are either exempt from verification or merit a finding that they are lots of record. DCC 22.04.040(B) 2. Exceptions. Verification shall not be required if one of the following exceptions apply: * * * c. The lot or parcel was previously determined to be a lot of record in a formal decision issued by the County or a finding in a land use action prior to November 1, 2017; COLW argues that Tax Lots 7800 and 7900 no longer exist. This is simply not correct because ORS 92.017 provides that lawfully created parcel boundaries remain until they are changed by a lawful vacation or land division. The July 30, 2021 deed of 0.5 acres from Central Land to Pinnacle, therefore, did not cause these lots of record to “cease to exist.” The same is true for Tax Lot 7801 and all other Resort parcels. These parcels exist until lawfully vacated or divided. ORS 92.017.12 Furthermore, because Central Land owns numerous adjoining lots of record, the deed to Pinnacle did no more than attempt to reconfigure its adjacent lots of record by moving common boundary lines between lots of record. It did not divide land. ORS 92.176 ORS 92.176 is a remedy that allows an owner of a part of a lot of record created without partition approval to obtain permission to develop a part but not all of the lot of record. Central Land is not seeking permission to develop the area erroneously conveyed. Instead, it is the sole owner of and is seeking to develop Tax Lots 7800 and 7900 which were both lawfully created. The same argument holds true for Tax Lot 7801 although no development is currently proposed for that property. Law of the Case 12 Pinnacle has quitclaimed this .5-acre property back to Central Land so that Tax Lots 7800 and 7900 are owned by Central Land only. Exhibit 45 Page 19 of 25 Exhibit 127 Page 54 of 60 Hearings Officer Frank November 29, 2021 Page 20 schwabe.com The applicant has not argued that law of the case applies. That doctrine applies to the review of the same land use application on remand and subsequent appeal. State v. Pratt, 316 Or 561, 569, 853 P2d 827 (1993) as cited in State v. Langley, 331 Or 430, 493, 16 P3d 489 (2000). The law that bars impermissible collateral attacks discussed earlier is the applicable law. Hearings Officer’s Authority to Approve Application COLW argues that the hearings officer lacks authority to approve pending land use applications due to the provisions of DCC 22.04.040(B)(1)(a) and DCC 22.20.015(A). This is simply not correct. Lot verification is not required because the Resort property and Tax Lots 7800 and 7900 have been determined to be lots of record and DCC 22.04.040(B)(2) excepts such properties from a lot verification review under DCC 22.04.040(B)(1). The Board of Commissioners has also interpreted DCC 22.20.015. It has determined that hearings officers may and often should refrain from denying land use applications due to alleged code violations. See, Exhibit 113. A “violation” only exists if it has been determined to exist and hearings officers are not mandated by DCC 22.20.015(C) to make such a determination. The Phase A-1 tentative plan recently received final County approval. When the Phase A-1 final plat is recorded, property lines arguably created by the 2021 deeds will be eliminated. Weyerhaeuser Real Estate Development Co. v. Polk County, 246 Or App 548, 267 P3d 855 (2011). Given this fact, the hearings officer should decline to decide whether a violation exists and approve development applications for the Resort. No purpose other than delay would be served by denial of the pending applications. Hartmann v. Washington County COLW cites Hartmann v. Washington County, 36 Or LUBA 442 aff’d without opinion 165 Or App 177, 991 P2d 65 (1999) for the proposition that the deed to the .5-acre parcel created three undevelopable units of land. The Hartmann case, however, has nothing to do with the creation of parcels by deed. It involves a partition and a property line adjustment approved by Washington County. The parcel in question did not qualify for development with a nonfarm dwelling because it was created after January 1, 1993. It was not determined by Washington County to be undevelopable. Yamhill County v. Ludwick The case of Yamhill County v. Ludwick, 294 Or 778, 663 P2d 398 (1983) finds that if a County requires a legal lot of record verification a property owner must show that his or her property was lawfully created in order to be divided. The case does not require that a county impose a lot of record verification requirement in its code. McKay Creek Valley Association v. Washington County, 118 Or App 543, 848 P2d 624, rev den, 317 Or 272, 858 P2d 1314 (1993) (property need not be a legally created lot or parcel to qualify for development where local code did not Exhibit 45 Page 20 of 25 Exhibit 127 Page 55 of 60 Hearings Officer Frank November 29, 2021 Page 21 schwabe.com impose such a requirement); Marshall v. City of Yachats, 158 Or App 151, 973 P2d 374, rev den, 328 Or 594, 987 P2d 514 (1999). Deschutes County has not imposed a lot of record requirement in the DR zone – the zone that controls the review of development applications. None is required by the State law that is applicable to land mapped for destination resort development. ORS 197.435 to 197.467. As a result, the lot of record issue raised by COLW and Ms. Gould does not warrant denial of the Central Land FMP modification or OLU site plan applications. Property Line Adjustment Property line adjustments are not partitions and do not require partition approval. ORS 92.010(9)(b) and (12); DCC 17.08.040, Partition Land. COLW offers no legal argument to demonstrate any flaw in the applicant’s argument that the deeds conveyed in July 2021 were a step in the completion of a property line adjustment between adjoining parcels owned by Central Land. COLW claims that the fact that Pinnacle paid money for the land conveyed means that the deed was an unlawful partition. COLW asks the hearings officer to arrive at this conclusion because COLW believes Pinnacle would not have paid money for land when the adjustment was not then complete. This argument does not hold water. It is far less logical for Pinnacle to have paid money for an unlawfully created new partition parcel that can never be developed (according to COLW) than for a reconfigured parcel that simply required the completion of additional steps to be a lawfully adjusted parcel.13 Rescission COLW takes issue with the use of the word “rescission” in the deed that reconveyed the .5-acre area of land back to Central Land and then presents an argument about reformation that has no bearing on the issues before the hearings officer. Rescission and reformation are, however, different terms with different meanings. Actions for reformation, as can be seen from the cases cited by COLW, are brought where one party seeks to compel the other to change the terms of an agreement. The term “rescission” is properly applied to a mutual agreement by parties to void a prior agreement and was the correct term to use in describing the August deed from Pinnacle to Central Land. The term “rescind” is defined by Webster’s Third New International Dictionary Unabridged as relevant here “to abrogate (a contract) by tendering back or restoring to the opposite party what one has received from him.” A “recission” (rescission) is defined as “an act of rescinding ***.” Nothing prevents parties to a transaction from rescinding the transaction 13 State law requires a survey and recorded deeds for each adjusted parcel to finalize a property line adjustment. ORS 92.190 (3). One but not both deeds were recorded. A County land use approval may or may not be required. The County code does not impose such a requirement. It merely states that adjustments that meet certain conditions are not partitions. Exhibit 45 Page 21 of 25 Exhibit 127 Page 56 of 60 Hearings Officer Frank November 29, 2021 Page 22 schwabe.com without judicial intervention. Judicial action in equity is required only when parties do not agree to mutually rescind an agreement. Gould Appeal Unlike COLW’s arguments, Ms. Gould’s appeal generally refers to two deeds. The deed not addressed by COLW is a deed that conveyed a part of Tax Lot 7801 to Pinnacle. The legal description of that deed has been corrected to convey all of Tax Lot 7801 to Pinnacle. Tax Lot 7801 is a legal lot of record because it was created by a Deschutes County partition approval that is a part of the record in this matter. Our rebuttal argument provides findings that establish that Tax Lot 7801 is a lot of record. The boundaries of Tax Lot 7801 were not irrevocably altered by the July 2021 deed to Pinnacle such that the legal description of the deed could not be corrected in August 2021. Tax Lot 7801 is a legal lot of record. 9. Gould’s Arguments re Drought and BLM Land in Post-Hearing Letter Ms. Gould’s arguments about drought do not relate to relevant approval criteria. The proposed modification seeks to apply the current Resort rules for OLUs to an approved development. Due to this fact, approval of the request necessarily complies with the relevant criteria. The provisions of law to be added are themselves the criteria applicable to the issue being changed. None relate to drought. Ms. Gould alleges that the Resort is in violation of an agreement with BLM. This allegation is not relevant to the review of the appealed application as it does not raise an argument that this is a violation of any County land use decision or code. 10. Modification is Not an Impermissible Collateral Attack on FMP Approval Mr. Kleinman argues that the application for a modification of the FMP is an impermissible collateral attack. This is not correct. It is a request authorized by the County code law that allows all holders of land use permits to propose and obtain approval of changes of the approved plan. Mr. Kleinman appears to be claiming that the applicant’s acknowledgment during the review of the Phase A-1 tentative plan that it remains obligated to fulfill all Phase A requirements before selling lots makes the modification a collateral attack on the tentative plan. This makes no sense. The applicant’s modification application in no way alters its commitment to comply with Phase A requirements. FMP Condition 21 requires that at least 50 OLUs be constructed in Phase A prior to the closure of sales of individual lots or units. This requirement is not proposed for change. The requirement will be moved to Condition 33 if this application is approved as we have requested. Phase A requirements for bonding have changed since 2005 and the applicant has proposed to comply with them. Other ORS 197.435 - .467 destination resorts have not sought a change to bonding rules. We assume this is the case because the bonding rules under which Thornburgh and the other resorts Exhibit 45 Page 22 of 25 Exhibit 127 Page 57 of 60 Hearings Officer Frank November 29, 2021 Page 23 schwabe.com were approved place no limit on the duration of bonding. This allows resorts to build 50 OLUs and bond for all of the remaining required OLUs indefinitely. The approval of the requested change will impose a hard and fast limit on the duration of bonding in return for changes that delay the time at which bonding is required. 11.ODFW Letter Dated November, 1, 2021 COLW submits a letter dated November 1, 2021, from ODFW that questions Thornburgh’s modification application (File No. 247-21-000553-MC; -920-A). That letter has no bearing on this site plan review application as indicated by ODFW’s own comment and reference. Further, it is based upon the erroneous belief that Thornburgh was requesting an amendment to the FMP to allow additional single family residential development, which it is not. ODFW’s comments also claim that the previous support for the FWMP may need to be revisited due to current conditions. However, that claim is irrelevant as the FMP and the adopted FWMP are not subject to collateral attack and remain binding on Thornburgh. Lastly, the letter and its attachment of an earlier ODFW letter make it clear that ODFW’s concerns arise if Thornburgh proposes to reduce mitigation water. Thornburgh has not proposed a reduction of its mitigation obligations. 12.Additional Crossover Arguments to File No. 247-21-000849-A Ms. Gould and others have made substantially similar, although not always the same, arguments in a related case, File No. 247-21-000849-A. These arguments include additional claims regarding Condition 10, for example. As such, rather than fully repeat response to these claims, we incorporate all responses here and include a copy of our final legal argument for that case as Exhibit 127. Respectfully submitted this 29th day of November, 2021. Very truly yours, SCHWABE, WILLIAMSON & WYATT, P.C. Kenneth Katzaroff PDX\135849\262760\JKKA\32339479.1 Exhibit 45 Page 23 of 25 Exhibit 127 Page 58 of 60 EXHIBIT LIST FOR FILE 247-21-000920-A/247-21-553-MC Updated November 19, 2021 Central Land has filed the following evidence in the record of File 247-21-000920-A/247-21- 553-MC in its hearing letters and in post-hearing submittals: Exhibit Description of Exhibit 101 Petition for Review (Gould) to LUBA for LUBA No. 2018-140 (Phase A-1 Tentative Plan (part) 102 Findings and Decision for MC-13-4, Modification of Caldera CMP and FMP (38 weeks of OLU rentals) 103 Lot of Record memorandum by Liz Fancher and Ken Katzaroff for Central Land and its exhibits A-E. 104 BOCC Decision Thornburgh CMP Decision, File CU-05-5, DC 2006-151 (part re lot of record) 105 Lot of Record Determination, File 247-14-000450-LR (TL 7700 and 7701) 106 Lot of Record Determination LR 91-56 (TL 7800) 107 Lot of Record Determination LR-98-44 (TL 7900) 108 File 247-140999449-LR, Lot of Record Determination for TL 5000, 5001 and 5002 109 Patent deed from USA to Lorenzo Thomas (TL 7800) 110 Illustration of Possible Lot Line Adjustment of TL 7800, 7801 and 7900 111 Decision Approving Phase A-1 Tentative Plan, File 247-18-000386-TP/454-SP/592- MA (re controlling zoning rules) 112 BOCC Decision Thornburgh CMP Decision, File CU-05-5, DC 2006-151 (part re FMP Condition 33) 113 BOCC Decision re Review of Alleged Code Violations during land use application review; File 247-18-000241-A/247-A, 247-17-000775-ZC/776-PA 114 Administrative Decision Approving Change in OLU Ratio and Availability for Pronghorn Resort, File MC-13-06 115 Administrative Decision Approving Change in OLU Ratio and Availability for Eagle Crest Resort, File MC-14-13 116 Administrative Decision Approving Change in OLU Ratio for Tetherow Resort, File MC-13-03 117 Administrative Decision Approving Change in OLU Availability for Tetherow Resort 118 Decision of Board of Commissioners for File 247-15-000464-CU/247-18-000009- A, includes hearings officer’s decision for File 247-15-000464-CU 119 Memorandum from David Newton, P.E., C.E.G. dated November 11, 2021 120 Answering Brief; ORS 197.455 & Condition 10 121 Notice of Hearing 122 Letter from K DeLashmutt Dated September 7, 2021, Detailing Owned Water Rights 123 Timeline of Approvals 124 BOCC 2006 CMP 125 Gould 2018 Appeal Exhibit 45 Page 24 of 25 Exhibit 127 Page 59 of 60 126 -508-SP; -849-A Submittal and Exhibits 127 -508-SP; -849-A Final Legal Argument and Exhibits Exhibit 45 Page 25 of 25 Exhibit 127 Page 60 of 60 PO Box 1597, Redmond, OR 97756 ThornburghResort.com November 19, 2021 Hearing Officer Gregory Frank c/o Senior Planner Angie Brewer Deschutes County Community Development Re: 247-21-00849-A, 508-SP (OLU Site Plan) and 247-21-000920-A, -553-MC (Modification of FMP) Dear Hearing Officer Frank, This is the appeal of the approval for a site plan allowing 24 cabins that would provide 80 units of overnight lodging and an application to apply current resort law re:OLUs to the Thornburgh Resort.. These OLU’s are required by Thornburgh’s CMP/FMP approval, and is a part of the resort’s continuing effort to comply with Resort approvals going back to the 2006 Board approval of the CMP. In this appeal, instead of addressing relevant site plan criteria pertaining to approval of this application, project opponents led by Gould, want to make the case about water, whether we have it, can get it, if we can mitigate for it, and if so whether it is from the proper location. Inspite of being resolved long ago (beginning in 2006) Gould continues to raise these issues over and over again. Central to Gould’s case are CMP and FMP conditions 10 and 38. Gould argued about the need for the Condition in 2006 and once implemented she has argued about its interpretation in 10 different proceedings since. Integral to Condition 10 are the arguments about Thornburghs water rights permit. Both of Gould attorney’s repeatedly state the permit is expired. This is clearly wrong. We have shown that OWRD lists the permit as non-cancelled – not expired. Instead of citing to any legal authority, or providing any support whatsoever for their claims, they instead operate on the premise that if they repeat this claim often enough it must be true. It isn’t. Every jurisdiction has denied her claims. On top of the Condition 10 claims, Gould has argued about FMP Condtion 38, and what it requires, in front of Planning Staff, the Hearing Officer, the BOCC, LUBA and the Court of Appeals. In August 2020 the BOCC in summarizing Gould’s ongoing attacks related to conditions 10 and 38 said: “The constant barrage of frivolous claims regarding this issue are barred by the CMP, the FMP and the FWMP. They should be disregarded and denied outright.” See BOCC Exhibit 2. During the hearing on the golf course site plan the BOCC also made it clear that the water rights permit was governed by the Oregon Department of Water Resources, not the Board of County Commissioners, and that the issue was outside their scope with Commissioners Tony DeBone and Patti Adair, respectively stating: ‘Its not domain for decision’, and that it is ‘outside our level of concern.’ Commissioner Phil Henderson agreed. See Exhibit 26. Gould appealed the Golf Course site plan raising the same arguments to LUBA. And when denied she appealed to the Court of Appeals, who also denied the claims. She then raised them again in the Phase A- 1 remand proceeding, the Phase A-2 Tentative Plan, the approval of the OLU, approval of the FMP Modification, and the approval of the Welcome Center and Clubhouse. Even though she was unsuccessful at every step it has not stopped her from raising the same issue again in the two current appeals, the OLU’s and the Modificiation of the OLU ratio. And as Kleinman informs us in the first paragraph of his rebuttal Gould has appealed the Court of Appeals AWOP to the Oregon Supreme Court citing issues related to the water rights permit. We can expect to hear the same arguments in the appeals of the Phase A-2 Tentative Plan, theWelcome Center and the Phase A-1 TP to LUBA, yet again. We are often told of the “delicate balance”1 struck to save fish and wildlife, routinely followed by the warning that this is the last time to take the actions needed to ensure the fish are saved. This balance and fish habitat are not, however, threatened. There are no new water uses allowed or requested by either application. So every drop of water we use is already being used, or has been authorized to be used, or mitigated with water that was being used or could be used for mitigation. BFR Water: Lambie in his technical memo dated 11/19/21 claims Newton is mistaken when he stated there is an agreement between BFR and Thornburgh to discontinue of use Deep Canyon Creek. Lambie is wrong. Thornburgh has provided proof of its agreement, as well as proof of its purchase of 90 acres of BFR water that was assigned to Pinnacle as noted by OWRD. Anuta states “Mr. DeLashmutt claims because Pinnacle now owns the BFR water and is apparently not using that right currently… those water rights are providing benefits for fish and wildlife.” I never said Thornburgh was apparently not using that right. I emphatically have stated that water is not being used by either Thornburgh or BFR. It is being left in Deep Canyon Creek. That has been said numerous times by myself and several members of the Thornburgh team. Anuta goes on to say it is “possible that fish and wildlife are benefitting, but given how Oregon water law works it is much more likely that the entities who are reaping the benefits are the next most senior irrigator’s who are in line downstream on the Deschutes River.” Since Thornburgh has not put that water permanently instream Anuta says that the next user in line (of which Anuta implies there are hundreds) can and likely will, given the shortages in the Basin, take that water and use it to meet their own needs. Anuta claims the Deep Canyon Creek water is fair game to almost any user downstream. He concludes that is how the water right seniority process works. There are numerous flaws to Anuta’s claims, including; 1. First, Mr. Anuta says there are hundreds of users of the Deschutes River and then speculates that “many” may “take” the water. He later acknowledges that only downstream users, not the hundreds of users of Deschutes River water, might be able to do this and has not shown that there are many in a position to do so. This claim should be disregarded outright because Mr. Anuta has provided no documentation there are any surface water users downstream, much less hundreds or “many.” 2. Second, In order to take the water as Anuta claims, a right downstream must be junior, and must not be receiving the full amount of their water rights permit. Anuta has provided no evidence any surface water rights below BFR are not, or have not received, ever the full amount of their permit. Evidence in the record shows the river is substantial at the confluence with Deep Canyon Creek, (See Dorsey Photos, Central Land Exhibit 15) meaning it is highly unlikely that any downstream user would not be receiving its full allocation of water. The USGS map (See Newton Ex. 20) shows substantial 1 It should be noted that the term “delicate balance” was coined by Mr. Kleinman and is not found anywhere in the FWMP. groundwater is being discharged into the river at this area, upwards of 305 CFS/mile shortly below BFR. Further, Goulds expert Lambie states that in BFR’s filing for a Certificate of Beneficial Use (COBU) for the transfer that 15.55 cfs of groundwater was available at the 4 BFR wells (See Lambie November 4, 2021 technical memo). The evidence shows there is substantial water all around this area, in the river and in the ground, to be discharged into the river. Further, the Ground Water Review Form for T-12651(See: Lambie September 7, 2021, pg. 17), states that the transfer will not increase interference with another Surface Water source, ie: the Deschutes River, and will not result in another groundwater right not receiving the water that it is legally entitled to. Lambie states that OWRD determined the transfer T-12651 will result in interference with other groundwater sources. Lambie claims this means there is a potential to diminish BFR groundwater rights other than Deep Canyon Creek water rights and that this may make “water” unavailable for mitigation. As was shown above Lambie conveniently failed to disclose the fact OWRD found the transfer would not impair any other rights from receiving their full right. In addition Lambie’s own memo rebuts his claims stating: “The BFR filed their Claim of Beneficial Use (COBU) for T‐12651 on September 30, 2020. This COBU for T‐12651 describes what they have done to perfect the transfer. In it BFR has demonstrated that they have the current capacity to divert the full Rate of 10 cfs, the equivalent of extracting 4,488 gpm. BFR in fact demonstrates in their COBU that they have the capacity to extract 15.55 cfs or upwards of 7,000 gpm from these same four wells. T‐12651 can be considered complete as they have demonstrated that they can divert all the rate and duty the water rights transferred.” And: “We expect that OWRD will be issuing Certificates with the respective priority dates of 1967 and 1973 to divert water from these same two sources, Deep Canyon Creek and McKenzie Canyon flows. It will be listed in those pending certificates as appropriation of these two surface waters at these four wells.” See Lambie, November 19, 2021 memo. The evidence from OWRD relied on by Lambie shows BFR’s pumping won’t reduce the amount of water other groundwater rights get. It also indicates there are hundreds of CFS of water available in the river below BFR to support any surface water rights and that the BFR pumping will not increase intereference with other surface water sources. Without adding further evidence this alone indicates the chance a surface water user (if any) below BFR is, would, or will receive less than their full water right is nil. Anuta has not, and cannot provide evidence to the contrary. Lambie argues that “until extraction is slowed or stopped at BFR’s three wells *** the spring flows will remain diminished and the water unavailable for mitigation credit.” That would assume that when Pinnacle purchased the BFR water that BFR kept pumping it2. As we have shown that is not what is happening. BFR stopped pumping from the Creek then when Pinnacle purchased the water, BFR stopped pumping it entirely. Under Lambie’s argument the water is available for mitigation credit. 2 Mr. Lambie’s most recent reports provide an analysis based on the assumption that BFR will pump the Deep Canyon Creek water rights from groundwater after they are sold to Pinnacle. As a result, the conclusions in the report should not be relied on by the hearings officer. But then Lambie claims there are no assignable water rights here for ODFW mitigation from Deep Canyon Creek. unless they are “disentagled” and that ODFW cannot call upon that water unless T-12651 is reversed. First, there is no such thing as ODFW mitigation. It is unclear what Lambie refers to when he says ODFW cannot call upon that water. It is OWRD, not ODFW that deals with water rights. Further, Thornburgh submitted proof of its assignment of 90 acres of surface water rights sourced from Deep Canyon Creek, which Lambie has acknowledged. It is clear there was no disentangling needed to perfect that assignment nor was there any need to reverse T-12651 prior to perfecting that assignment. It seems that Lambie is attempting to rewrite the FWMP with additional terms and conditions. The FWMP is not on trial here, and the attempt to relitigate its terms are a collateral attack on the FMP and the FWMP and should be disregarded. Instream Water: The protection of water instream can occur in multiple ways. For example, the applicant provided a letter from OWRD thanking Pinnacle for putting water instream, and for the benefits that instream transfer provides to fish and wildlife. While Anuta dismisses that letter as referring to a temporary transfer, it proves OWRD believes water can be protected instream, and can benefit fish and wildflife in ways other than a permanent instream transfer. Also, it is undisputed that BFR has assigned a portion of its Deep Canyon Creek water to Pinnacle, and by effecting that assignment BFR has lost the right to pump that amount of the Deep Canyon Creek water. That water now remains in the creek. As the record lacks any evidence there is a single surface water right below BFR that is currently, or has ever, gotten less than the full amount of water they are legally entitled to, there will be no taking of water as Anuta claims. As such, the moment the Deep Canyon water was assigned to Pinnacle, it was protected instream. While Anuta stresses how critical a “permanent” instream transfer is, Kleinman makes clear Gould will oppose any such transfer Thornburgh makes of the BFR water, irrespective of the merits. So on the one hand they claim the transfer is critical, then on the other hand state that they will oppose any transfers. It seems the critical thing to them is to have a process they can protest and use to cause delays to development of the resort. Groundwater Review: Anuta at the hearing and in his opening memo refer to the groundwater review for the limited license, arguing that groundwater is not available. Anuta picks and chooses what to cite overlooking that the groundwater reviewer also determined that groundwater for the proposed use is not over appropriated, will likely be available in the amounts requested without injury to prior water rights. Further, “Groundwater studies conducted by the USGS in collaboration with OWRD estimated recharge and groundwater appropriation for the Deschutes Basin as a whole and those results showed that recharge to the basin vastly exceeds groundwater appropriation, therefore, groundwater for the proposed use is not over-appropriated.”3 See Anuta Opening Memo. Surfacewater vs. Groundwater: It is surprising to see this come up again. Golds arguments have evolved in relation to this. Initially Anuta and Kleinman argued that when the BFR transfer was complete the water became groundwater and because it was groundwater that the transfer had to unwound to turn it back to surface water. Evidence submitted from Neuman and Newton on behalf of Thornburgh stated it was surface water, which was confirmed by both Sarah Henderson and Kelly Starnes of OWRD. Then Lambie also agreed it was surface water, the source of which was Deep Canyon Creek. Now that it is acknowledged the BFR water is still surface water the argument has evolved to be that since the surface 3 I referred to this at the hearing. water is being co-mingled with groundwater that the transfer needs to be unwound to disentangle the water in order to show that it is wet water. There is no legal or OWRD support for this argument. Deep Canyon Discharge: Lambie also argues Newton is wrong that water enters Deep Canyon Creek at points other than the spring. Lambie offers as his proof the fact that he has performed geohydrologic studies in other spring fed creeks (not Deep Canyon Creek), and that he has worked in watersheds where spring flow accretes at along a fracture plane that is interconnected (not Deep Canyon Creek) and, thus he has a clear sense of what those look like. He has not been to Deep Canyon Creek and cites no experience there, nor does he even point to any experience he has anywhere else in the Deschutes Basin. Newton by contrast is one of Oregons foremost experts on the Hydrology of the Deschutes Basin, having been a consultant to OWRD for 20+ years, a critical member of OWRD’s team educating stakeholders and legislators in the development of the overall plan and the laws pertaining to Deschutes Basin mitigation program. He has consulted BFR on water, and water rights issues since the 1990’s. He has been up and down Deep Canyon untold times in the last decades. Newton is supremely qualified to offer his assessment, which he has done following another a visit to Deep Canyon. His evidence on this topic, therefore, is of greater weight than Mr. Lambie’s opinion which was based on very limited information. Circular Arguments: Gould appealled OWRD’s approval of the extension of Thornburgh’s water rights permit and has repeatedly and unsuccessfully argued that her OWRD challenge bars development of the Resort due to FMP Condition 10. After tying the Phase A-1 tentative plan up in an endless string of appeals focused on the expired water permit argument, Gould then claims because everything is inextricably linked to the A-1 plan nothing can be approved until A-1 is “final.” LUBA denied essentially the same “inextricably linked” argument during its review of the Phase A-1 tentative plan. Drought, Water Shortages, etc..: Numerous parties provided information pertaining to the lack of water, how irrigation districts have reduced the allocations in this area because of drought, how farmers in Madras have been dramatically impacted by the lack of water. We heard that we don’t need more golf courses, how obscene it is that we would use water to irrigate more golf courses, how stupid it is to do so, etc. One message being voiced is that farming is good while development of a resort community is bad, obscene or worse…. And Mr. Kleinman tells us a delicate balance was struck in the resorts FWMP that is vital to protecting the fish in Whychus Creek4. In response I submitted evidence that shows: 1. The water shortage is focused in the upper Deschutes, and is caused by the endangered classification of the Spotted Frog and the ensuing lawsuits. 2. That Deschutes County declared a drought because of frog-related water shortage and the impacts it created to North Unit farms. 3. That the irrigation districts are the antiquated, inefficient users of water providing 3x times the water per acre to its customers, up to 6.05 acre feet of water per acre of irrigated land, and; 4. Many of the districts’ customers are small inefficient farmers who do not implement effective water management practices. 5. That precipitation in Deschutes County has been relatively stable over the last 125 years, averaging o 21.72” annually from 2001-2010, and slightly higher at 4 This alleged “delicate balance” is the FWMP that was developed to show Thornburgh met the no net loss standard of the destination resort code. o 21.80” annually from 2011-2020. I also explained and submitted evidence that using our land for resort development with quasi-municipal water use causes far less impacts than farming, which is permitted outright. Information and evidence included; 1. That we own 1940 acres of land and have another 400 acres leased all of which is zoned farmland. 2. That we own very substantial water rights, including a permit for 2,129 af, and certificated rights for 1,250 af, the latter requiring no mitigation. 3. That farming is outright permitted on our land. 4. That farming would incur no wildlife, nor fish miitgiation of any kind. 5. That we are limited to 2.24 af/acre of water use for golf but that our water rights allow 4 af/acre 5for farming uses. 6. That farming has greater impacts in the summertime months that are of concern for fish and wildlife than does resort development. See Thornburgh Resort memo, 11/19/2021 with Exhibits. As I noted before the elements cited above are not relevant to the case at hand, and in many cases are impermissible collateral attacks on prior approvals. We have chosen to respond to opponent comments, no matter that they were irrelevant. Issue Relevant to Modification. Additional Trophy Homes: Gould argues we are reducing the ratio of overnight lodging so that we can increase the number of “trophy homes” we can build.6 That claim is baseless. No matter how many times we say it is false, that it is not what we are doing, Gould and her counsel double down and restate their same arguments. They never provide any support for their argument whereas we have provided copies of similar Deschutes County OLU ratio decisions to support ours. The fact is that we are approved for 950 homes. That is the number of single-family homes we are allowed to build. If we wanted to increase that number we would have specifically asked to do so in the modification application. We have not and have made that fact abundantly clear.7 Conversely, DCC 18.113 allows for a density of 1.5 5 Lambie 11/19/2021 memo also notes the Deep Canyon Creek water is 4af/acre. 6 During the hearing Gould argued all the (fictitious) new homes we are building will have big lawns using lots of water. For an indication of what our landscaping plans are, I would direct the reader to look at the site plan for these OLUs which have 100% native and natural landscaping and no lawns. Commissioner Adair’s comments relating to Thornburgh’s sensitivity regarding water use at the Golf Course site plan hearing (See Ex. 26) provides further insight as to our plans to minimize water usage. 7 This is another example of the circular arguments referred to. Here they claim we are increasing the number of homes that will increase the water usage that will impact the fish. The problem is that it is all false. Gould also claims we are changing the acreage of developed land and need to provide wildlife mitigation for that. This overlooks the fact that allowing a reduction in the number of OLU’s will reduce developed land if less than the maximum number of OLUs is built. This will reduce wildlife impacts that cause a corresponding reduction in our mitigation homes/acre. With 1940 acres Thornburgh is allowed up to 2910 homes. By choice we asked for and received approval for 950 homes, which is 33% less than the code allows. Had we wanted 3x the homes, we could have asked for and obtained permission to build them when we sought approval of the CMP. I appreciate you taking the time to read and review this material. Sincerely, Kameron DeLashmutt Thornburgh Resort obligations. Gould is correct that we have not asked to reduce our mitigation obligations with the modification application.