1999-1075-Minutes for Meeting November 03,1999 Recorded 11/30/1999VOL: CJ1999 PAGE: 1075
RECORDED DOCUMENT
STATE OF OREGON
COUNTY OF DESCHUTES
*01999-1075 *Vol -Page Printed: 12/09/1999 11:20:38
DO NOT REMOVE THIS CERTIFICATE
(This certificate constitutes a part of the original instrument in accordance with
ORS 205.180(2). Removal of this certificate may invalidate this certificate and affect
the admissibility of the original instrument into evidence in any legal proceeding.)
I hereby certify that the attached instrument was received
and duly recorded in Deschutes County records:
DATE AND TIME:
DOCUMENT TYPE:
Nov. 30, 1999; 8:09 a.m.
Regular Meeting (CJ)
NUMBER OF PAGES: 45
MARY SUE PENHOLLOW
DESCHUTES COUNTY CLERK
MINUTES
DESCHUTES COUNTY BOARD OF COMMISSIONER MEETING
MARY SU-�_,-)ENHOLLOW
COUNTY CLERK
NOVEMBER 3,1999
Chair Linda Swearingen opened the meeting at 10:00 a.m., held at Sisters High School's Drama
Room. Commissioners present were Linda L. Swearingen, Dennis R. Luke and Tom DeWolf.
Also in attendance were Rick Isham, Legal Counsel; Steve Jorgensen, Community Development;
Sheriff Greg Brown; Timm Schimke, Solid Waste Department; Cliff Clemens, Sisters Eagle
Airport; Ed Fitch, Redmond Mayor; Joe Hannon, Redmond City Manager; and Don Gower, City
of Redmond Finance Department. Also present were Elton Gregory, Fair Board; Boyd Keiser,
Principal of Sisters High School; and numerous Citizens and Students of Sisters High School.
1. Citizen Input
Boyd Keiser introduced the members of the City of Redmond Administration, the Board of
County Commissioners, and other visitors.
2. Consideration of the Third Amendment to the City of Redmond Downtown Urban Renewal
Plan
Before the Board was the Signature of the Third Amendment to the City of Redmond
Downtown Urban Renewal Plan.
Don Gower of the City of Redmond Finance Department explained the background,
priorities and benefits of approval of the Third Amendment to the City of Redmond's
Downtown Urban Renewal Plan.
Rick Isham discussed the proposed realignments and various details regarding the use of
urban renewal funds.
SWEARINGEN: I would move approval of the Third Amendment to the City of Redmond
Downtown Urban Renewal Plan, upon receipt of final documents.
LUKE: I'll second.
VOTE: LUKE: Aye.
DEWOLF: Aye.
SWEARINGEN: Chair votes yes.
MINUTES Pagel of 8 November 3, 1999
Board of County Commissioners Meeting
3. Discussion and Public Input on the Possible Reclassification of the Sisters Eagle Air
Airport.
Before the Board was a discussion of the possible reclassification of the Sisters Eagle Air
Airport.
Steve Jorgensen, Community Development Department, explained the County's jurisdiction,
and how planning documents might be changed to protect the airport, which is unique in
that it falls between standard airport categories. He further stated that the County is looking
to consider it as a small, private airport with no expansion possibilities, and that it has to
stay "as is" due to the limited approach area. He further indicated that it might be difficult
to allow building on lots in the approach area.
Cliff Clemens, the owner of Eagle Air for many years, then spoke. He estimated
approximately 1,500 take -offs and landings per year, with many of them occurring in the
summer and on weekends. He discussed the history of the airport, its current use and its
importance to the community, including its utilization during emergencies and its
contribution to the local economy. We have had very good working relations with the
County, and the County knows more about the airport than any of the State people, and we
would like to have as much local control as possible.
Commissioner Luke explained the State of Oregon's requirement of different areas to protect
their airports, and the County has asked that Sisters Airport be taken off that list, which
means there will be an Oregon Department of Transportation hearing on whether this airport
should be protected. This does not mean it will be shut down; what it does mean is that it
can develop and conduct business as airports do without public hearings or public approval.
We did not think this was necessary here. The County is more than willing to work with the
owners of the airport to maintain what is already here and try to make it as safe as possible.
In essence, this will mean more local control.
Chair Linda Swearingen indicated there would be another hearing in the future before
anything is actually adopted, and suggested there be a joint City Council/County
Commission hearing to actually adopted the proposed Ordinance.
4. Presentation of Sisters Area Sheriff Services, including Consideration of a Contract with the
City of Sisters and the Sisters School District.
Before the Board was a Presentation of Sheriff Services in the Sisters Area.
Sheriff Greg Brown introduced the Sheriff Deputies currently working within the Sisters area.
He also explained how the Sheriffs Office coordinates services with the City of Sisters and
the Sisters School District, and that these programs have been very well accepted and
successful.
MINUTES Page 2 of 8 November 3, 1999
Board of County Commissioners Meeting
5. Presentation of Solid Waste Department Update on Various Services.
Before the Board was a Presentation of a Solid Waste Department Update on Various
Services.
Timm Schimke, Director of the Solid Waste Department, explained how services in and
around the City of Sisters are handled. He said that the recycling program has been very
successful in the Sisters area, being at nearly twice the level of other communities. In
response to questions from the students, he spoke about the time left for Knott Landfill, how
fees are generated and how much annual volume the landfill handles. He also discussed
programs used in other areas, and how they may or may not work in Central Oregon.
6. Discussion and Consideration of Sisters Avenue Intergovernmental Agreement, New City of
Redmond "Option B" Proposal, and Proposed Offer to Purchase Southerly Portion of Old
Fairgrounds.
Rick Isham, County Counsel, discussed the history of the fairgrounds, from its beginning as
the Potato Festival to the new facility. He then discussed the terms of the Agreement.
Commissioner Swearingen asked why the Fair Association, not the Board of County
Commissioners, are making decisions regarding a possible property sale.
Rick Isham responded that Arnett Enterprises took the position that if the County would not
cooperate in the sale, they would approach the Fair Association directly. He further stated
that the alignments listed in Option B are significantly different, and that it is hard to
determine if the property is still needed for public use. He explained that it is impossible to
describe the property adequately, and that some property may not be in the County's
ownership at the time; surveying is necessary, and there may be zoning issues.
Commissioner Swearingen asked what the normal procedure for the County to sell property
is. Rick Isham responded that typically it sells property through County auction of surplus
property as ordered by the Board of County Commissioners, following statutory procedures.
Commissioner Swearingen asked if the confusion on the part of the prospective buyer is due
to the Fair Association's involvement. Commissioner Luke asked if the previous Board had
entered into any agreements in this regard. Rick Isham indicated that he was told by Nancy
Schlangen, previous Commissioner, that they did not.
Commissioner DeWolf asked how the prospective purchasers happened to arrive at a figure
of $1.09 per square foot. Rick Isham answered that Elton Gregory of the Fair Association
used 1996 appraisals to establish value, before the sale to Fred Meyer Stores and before
sewer and water were installed.
Elton Gregory explained there has been a lack of communication, and wanted to straighten
out the issue. He stated that the sale of the southern portion of the property had been held up
due to the sale to Fred Meyer. He said he was anxious to get the property on the market, and
had several parties who were interested in it at the appraised value; but Arnett was the only
bidder.
MINUTES Page 3 of 8 November 3, 1999
Board of County Commissioners Meeting
Commissioner Swearingen asked where the signed letter from the Arnetts is; Elton Gregory
said he could not locate it, just an unsigned copy. Elton Gregory also stated that he was
representing the Fair Association and also worked for the County.
Commissioner Swearingen stated that the letter purportedly from the Arnetts was never
signed, and there was never a meeting of the minds. Further, she stated that the Arnetts might
have assumed they had a deal, but there was no transaction, only negotiations.
Commissioner Luke asked if a Request for Proposal was advertised in the newspaper; Elton
Gregory answered that he followed standard procedures. Commissioner Luke stated to Elton
Gregory that Elton had signed in the role of the Fair Board; Elton responded that he has a
letter from the Board of County Commissioners allowing him to act on its behalf except for
contracting.
Commissioner Swearingen indicated that the Arnetts thought they had a deal, but this never
went before the Board for its approval. She further stated that the County could not sell even
today due to incomplete legal descriptions.
Elton Gregory said that his Fair Board is under the impression that the deal with the Arnetts is
still a deal. Commissioner Luke stated that the Redmond City Counselor has said that some
of their property has been sold for $5.00 per square foot; and asked why the County's is going
for $1.09 per square foot, including services. Elton Gregory responded that he did not realize
the transaction would take so long.
Commissioner Luke stated to Elton that the property was offered as-is, with no guarantees;
but now the Arnetts are asking for a lot of things. He further stated that in the transaction
with Fred Meyer Stores, money was never spent until the County had complete documents
with all signatures.
Commissioner DeWolf explained that if there is a contract already signed, the Board would
have no problem with it; but it is not a deal, and the parties have no obligation to finalize as it
stands. He suggested a reappraisal and that it be reopened for bids, which would be a benefit
to the County.
Rick Isham stated that Jim Bonnarens has requested an updated appraisal, which should be
received within a few weeks. It will be based upon high-density zoning, with potential
commercial zoning, as Redmond may rezone adjacent lands, with mixed use possible.
Commissioner Luke stated that it should be sold at the highest and best use, and residential
may not be best. Rick Isham explained that the appraisal cannot zone otherwise unless there
is a probability of a zone change.
Max Merrill, Attorney representing the Arnetts, then spoke. He stated that the County,
through Elton Gregory as its agent, put out a bid proposal, and that the Arnetts met all the
requirements of the proposal. He said they were told by the County's agent, Elton Gregory,
that the price, terms and all required changes as negotiated were acceptable. He further stated
that the Arnetts would still want to close on the original proposal.
MINUTES Page 4 of 8 November 3, 1999
Board of County Commissioners Meeting
Commissioner DeWolf asked if there was anything in writing; Mr. Merrill stated no, but in
good faith the Arnetts felt the oral representations made regarding proposal are binding. He
said the minimum bid was established and the Arnetts met it. Commissioner Swearingen
stated again that the proposal is not even signed; Mr. Merrill said that this is "nit-picking" and
the Arnetts will go to court if necessary.
Commissioner Luke stated that there is no acceptance on public record, and the Request for
Proposal was not even dated or posted; he said that it must be made public and must in
writing, or there is no deal. Mr. Merrill stated that Elton Gregory was authorized to represent
Deschutes County. He further said that he feels that there was acceptance, with the legal
description the only hold up to closing; he further stated that he feels the problems can be
handled, and the Arnetts still wish to close.
Commissioner Luke explained that the Arnetts' letter of credit has expired. Mr. Merrill
answered that they were told it wasn't necessary; that the cash is available to close but they
did not want to transfer funds while the closing was dragging on.
Ron Bryant, Attorney for the Arnetts and the Fair Association, then spoke. He stated that the
property has always belonged to the Fair Association with a reversionary right, as a non-
profit corporation member organization. He indicated in the 1960's it was mandated by the
Legislature that counties had passed a law appointing Fair Boards, with the Fair Board
members coming from Fair Association members. He explained that the property went to
Deschutes County by title only, i.e. "title holding trustee with a right of reverter"; and that it
is Fair Association property.
Mr. Bryant also stated that the County did not participate in the sale to Fred Meyer Stores,
merely held title; but now it involves bond money and is much more complicated. He
reiterated that it is not County property, and that the Fair Board and the Arnetts wish to close.
Commissioner DeWolf asked why the County was not removed from the picture if this was
the case. Commissioner Luke stated that he was not aware the previous Board of
Commissioners had not signed an offer, as the file is incomplete. Mr. Bryant responded that
most of the agreement was oral. Commissioner Luke stated that an oral agreement is not
good enough, that agreements regarding the sale of property must be in writing.
Commissioner Swearingen stated that it has been Legal Counsel's position all along that there
was never a deal. Rick Isham said that the Arnetts had questioned changes in the road
alignment, and he had explained the Board of Commissioners had not approved of the sale.
Rick further stated that he met with Mr. Bryant, whose opinion was the exact opposite.
Commissioner DeWolf asked Rick Isham if the Fair Association actually has authority to
exclude the County. Rick did not have an exact answer, but estoppel can force an entity to
complete a transaction, although it is very difficult against a public entity. He stated that he
would research and evaluate the original deed.
Mr. Bryant stated that there was no consideration given by the County, and that it is the
responsibility of the government entity to provide additional documents.
MINUTES Page 5 of 8 November 3, 1999
Board of County Commissioners Meeting
Then the Board of Commissioners and Joe Hannon of the City of Redmond discussed the
roadwork involving the Oregon Department of Transportation. Joe indicated a small portion
of the property is to be changed, but it involves an environmental study in regard to Highway
97, and it may take up to 18 months to determine the alignment. Elton Gregory indicated that
it was his feeling that the Board of Commissioners didn't want to get involved and just
wanted to close the deal, but then it was held up by ODOT.
At this point the Board of Commissioners indicated a desire to close the discussion until
further research and clarification could be done by Legal Counsel.
(See attached copies of letters and other correspondence relating to this issue.)
15. Additions to the Agenda
Before the Board was an addition to the Agenda as presented by Rick Isham.
The Board had previously approved the purchase of what is referred to as the "Kidnastics
Building" from the Oregon Department of Transportation, and the County paid them the
money in September, and we now have the deed. The law has changed and it is now required
that the Board accept the deed. An acceptance of the deed previously approved has been
prepared for signature.
SWEARINGEN: I would move acceptance of the deed.
LUKE: Second.
VOTE: LUKE: Aye.
DEWOLF: Yes.
SWEARINGEN: Chair votes aye.
CONVENE AS THE GOVERNING BODY OF 4-H/EXTENSION COUNTY SERVICE
DISTRICT
7. Approval of Weekly Accounts Payable Vouchers for 4-H/Extension County Service District
in the Amount of $446.80.
SWEARINGEN:I would move approval of weekly accounts payable vouchers for 4-
H/Extension County Service District in the amount of $446.80, subject to
review.
LUKE: I'll second.
VOTE: LUKE: Aye.
DEWOLF: Aye.
SWEARINGEN: Chair votes yes.
MINUTES Page 6 of 8 November 3, 1999
Board of County Commissioners Meeting
CONVENE AS THE GOVERNING BODY OF 9-1-1 COUNTY SERVICE DISTRICT
8. Before the Board was Approval of Weekly Accounts Payable Vouchers for 9-1-1 County
Service District in the Amount of $13,580.47.
SWEARINGEN: I would move approval of the weekly accounts payable vouchers for 9-1-1
County Service District in the amount of $13,580.47, subject to review.
LUKE: I'll second.
VOTE: LUKE: Aye.
DEWOLF: Aye.
SWEARINGEN: Chair votes yes.
CONVENE AS THE GOVERNING BODY OF THE BEND LIBRARY COUNTY SERVICE
DISTRICT
9. Before the Board was Approval of Weekly Accounts Payable Vouchers for the Bend
Library County Service District I
in the Amount of $60,611.50.
Commissioner Luke indicated that he would not vote for this item, as it needs to be
reviewed to learn whether it comes under the bond; it was his belief that it does not.
DEWOLF: I would move approval of the weekly accounts payable vouchers for the
Bend Library County Service District (Construction) in the amount of
$60,611.50, subject to review.
SWEARINGEN: Second.
VOTE: LUKE: No.
DEWOLF: Aye.
SWEARINGEN: Chair votes aye.
RECONVENE AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS
Consent Agenda.
Before the Board was Approval of the Consent Agenda.
Consent Agenda Items:
10. Signature of a Deed of Dedication of a Right of Way for Property Located at Dayton
Road;
MINUTES Page 7 of 8 November 3, 1999
Board of County Commissioners Meeting
11. Signature of an Oregon Liquor Control Commission License for Black Butte Ranch
Lodge;
12. Signature of Order No. 99-141 and Order No.99-142, Tax Refunds for Overpayments
and Vouchers;
13. Signature of Order No. 99-165, to Vacate a Portion of the 1909 E. W. Richardson
Road in Alfalfa; and
14. Approval of Weekly Accounts Payable Vouchers, Subject to Review.
DEWOLF: I would move approval of the Consent Agenda.
SWEARINGEN: I'll second.
VOTE: LUKE: Aye.
DEWOLF: Aye.
SWEARINGEN: Chair votes yes.
Chair Linda Swearingen adjourned the Meeting at 12:35 p.m..
DATED this 3rd day of November 1999 by the Deschutes County Board of Commissioners.
ATTEST:
Recording Secretary
ennis R. Luke, Commissioner
MINUTES Page 8 of 8 November 3, 1999
Board of County Commissioners Meeting
DESCHUTES COUNTY LEGAL COUNSEL
RICHARD L. IS M WExt. 6625
County Counsel
TO: ida L. Swearingen, Chair October 28, 1999
Tom DeWolf, Commissioner
Dennis R. Luke, Commissioner
RE: Southerly :Portion of Old Fairgrounds File No. 3-709
Attached is a copy of a letter which I received from Ed Fitch; as an attorney for Arnett
Enterprises, LLC; responding to my letter dated October 20, 1999. Ed Fitch's letter states, in
part, "...the Arnetts believe they have a binding commitment to purchase the property for the
purchase price of $863,000." The essence of the letter is that most of the issues that were raised
in my letter can be worked out, with the exception of the "guarantee." Ed Fitch proposed to hold
funds at closing until title to the land under the vacated Canal Boulevard is cleared through a
quiet title action.
Contemporaneous with receipt of that letter, Ed. Fitch telephoned me and indicated that my
October 20, 1999, letter came as a complete surprise. He stated that the Arnetts were ready to go
forward to purchase the property. He indicated a willingness on the part of his clients to sign a
purchase agreement and authorized me to deliver a copy of his October 21, 1999, letter to you.
I had a phone message from Ed Fitch on Monday, October 25. 1 returned his call. He indicated
that Ron Bryant had been the mayor of the City of Redmond in 1974, and had signed a
correction deed which provided that the Fair Association could request reconveyance of the
property to the Fair Association. I obtained a copy of the 1974 deed. The section he referred to
reads:
"PROVIDED, said premises to be reconveyed by Grantee to Deschutes County Fair
Association, its successors and assigns, at the expense of said Deschutes County Fair
Association, upon receipt by Grantee of a written request by said association for such
reconveyance."
This 1,974 Corrective Bargain and Sale Deed was a modification of a 1968 deed from the City of
Redmond to Deschutes County, granting the property to Deschutes County. Because of the
reconveyance clause in the 1974 deed, Ed Fitch told me that he felt that the Fair Association had
the power to implement the sale of the southerly portion of the old fairgrounds to the Arnetts. Ed
Fitch also said that Ron Bryant had talked with Elton Gregory regarding the proposed sale. He
reported that Elton Gregory told Ron Bryant that Elton felt he had a deal with the Arnetts. He
said that the Arnetts were waiting to close.
I received an additional telephone call from Ed Fitch on October 27, 1999. He told me that
Randy Arnett had told him that he was aware of the expiration date of the letter of credit and had
discussed the expiration with Elton Gregory. Ed Fitch relayed that Elton Gregory told Randy
Arnett not to worry about the expiration of the letter of credit because Elton was sure that the
Arnetts were "good for it." I take that to mean that the Arnetts had sufficient funds to close the
proposed sale. Ed Fitch stated that the Arnetts presently have the funds available to purchase the
property.
Regarding the "Option B" road dedications, I received an e-mail from Mike Berry regarding his
conversation with Jeff England, City of Redmond Engineer. A copy of the e-mail is attached. If
I understand the e-mail correctly, no work has yet been done to describe or implement the Option
B map which was provided to the Board of Commissioners on. October 7. Additionally, the
e-mail indicates that the City intends to vacate the right-of-way dedications the City received
from the County and the Fair Association, As I understand the plan, the City would then
purchase new right-of-ways from the new owners of the southerly portion of the old fairgrounds.
When the new right-of-ways are acquired, the City will build the roads described in Option B.
RLI: vmb
s u o�.AF.fi wt��Cwnxvo�datoe�9occ ro &W&X+r rwtim as FO dc
c: Ed Fitch
Elton Gregory
Ron Bryant
Carl Dudi
10 2 1 - 99 IS : 50 'a5.11 5.18 1 895 11RSAN"l-I:1lERSt1N fih002 / 00 a
BRSCA NT
EMERSON
& FITCH
Attorneys at Law
October 21, 1999
VIA FACSUME 383-0496
(Hard Copy vk Fust.Gass MQ
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:V s 9• t
=: Arnett Fairgrounds Purebme
Dear Rioiz
Riunxld I. Ri am
Craig P. Emerson
Edward P. Fitch
Geoffrey J. Gnkey
Stcven D. Bryant
Gregory P. Colvin
I have had a chance to review your letter dated October 20, 1999 with Ron Bryant, John Amen,
and Sheldon Amm Ratifier than go through each historim 1. event item-bph m, suf 1w it to say
that the A=&b believe they have a bin&g oommitment to purchase the property for the
purchase price of $8630000. The Arnetts are prepared and have been prepared to close this
transaction for some time.
Regarding the Issues you have raised in your letter of October 20, 1999, let me comment as
WOWS:
1. As I indicated to you and the commissioners 1astMarch, Me proposed northerly a*aAon
of South Canal Boulevard was an issue that was indqmdent of any closing. Whea I
brought tris matter up last Mamh, I advised you and the commissioners I was doing So
that
that ase issues wmre be sedmby
of five es with the Wand would naderstand
2. Them is no condition as to dosing fW ft proms► needs to bo rezoned. I know it was
discussed last spring, but it has b000= apparent that the toniag issua is more
complicated than originally thought, and would tate too much time to resolve prior to
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101Z1 1 99 15:51 la541 548 1895 BRYANT-ESIE.RS(1N lei 00J 001
13RYANT
EMERSON
& PITCH
Auornaya at I,.aw
Richard L. Iaham
Legal Counaol
October 21, 1999
Page 2
closing. The Arnetts have agreed to close the transaction and address the road and
zoning issues with the city post -closing.
3. The Arnetts agree to pay the reimbursement of $16,500 for the extension of water and
sewer to Lot 2.
4. The Amey are agreeable to the reservation of the utility casemeat on Canal Boulovard
and have previously communicated that agreement to the city.
S. the building restrictive covenant is an important issue which should be addressed at
closing. As I Indicated to you, the current language proposed by the county could be
subject to different interpretations. Ron Bryant spoke with Dave Grm at Fred Meyer,
and Fred Meyer agrees that clarifying the restrictive language at this time would be
helpful. Fred Meyer also agrees generally with our intupretatlon and will forward to
you and to us some clarifying language.
6. Regarding the title insurance, we agree that the ALTA title is prohibitively expensive,
but I understood from you that our request for providing survey informadon and maps
on the property was not a problem and would be forthcoming.
7. Regarding Canal Boulevard, there is an issue that came up because the property on the
east side of Canal Boulevard was not owned by the fairgrounds. The Anietts arc
prepared to hold the city harmless and to initiate a quite title aeon on the tuna to be
wacatcd and the small strip of land on the east tide of Canal Boulevard. X would tugge st
that we hold back at closing S50,028.71, which would be released to the fair association
or county once the quiet title action is completed. My estimate on the quiet title action
would be appmidmately 90 days t. The money would retrain in an interest bearing
account pending the resolution of ft quiet title aotion.
Rick, I think we have: a clear path to closing. I do not think it will take very long. I drink the
parties have cooperated In good faith up to this point In time. We ark quite firaMy =pdjed
that this issue is being dragged into the ongoing dispute betweoa the fair association and the
cotmty. We Lave always understood gat this tiansactiQa was Szza. There has rbever been a
formal request for lWn or me by you or Elton that any speeifio heat be done or this trartsaedon
---
10-121/99 15:51 $541 548 1895
BRYANT
EMERSON
& FITC:H
Atiurm:yy at Law
BRTANT-EMERSON
004/004
Richard L. /sham
Legal Counsel
October 21, 1999
Page 3
would be in jeopardy. We are assuming that all the parties are ready to move forward and get
these issues resolved.
Please get back to me at your earliest convenience. Thank you.
Very truly yours,
Bdward P. Fitch.
Mri.P:lr
oo: Arnett Enterprises, LLC
Joe Hannan, City Manager
City of Redmond
Pabc t o l- t
From: mikeb@co.deschutes.or.us <mikeb@co.deschutes.or.us>
To: Rick Isham (E-mail) <ricki@deschutes.org>
Date: Tuesday, October 26, 1999 2:27 PM
Subject: Fairgrounds Utility Easement
Rick,
Jeff England just returned my call (He was in Mexico last week, hence the
tardiness of his reply). He said the fiber optic line is a US West facility.
He thought that it might be wise to also grant the easement to other
utilities in the area such as Cascade Natural Gas, P.P. & L., cable company,
and possibly the City of Redmond since utilities will need to be brought
into the site once its developed. Seems to me that this would have to be a
decided by the Redmond City Council.
While 1 had him on the phone, I asked him what was going on with the "Option
B" road network. Seems that after he presented the dedication, road plans
prepared by a consultant, etc. to the City Council, the mayor and one other
councilor voiced the opinion that the road layout should be designed to make
Canal Boulevard a through road in order to have one main north -south
arterial through the heart of the city. (This is rather ironic in that one
of Jeffs original layouts for the road re -alignments was very similar to
this Option B. It got the kibosh put on it due to the way it carved up the
County property).
As I understand it, the city will vacate the right-of-ways we dedicated to
the public in deed Vol. 1999 Pg. 35842. They will then purchase new right of
way from the new owners of the old fairgrounds property. The City will then
build the new roads.
Jeff said that no actual surveying (staking right-of-way, writing
descriptions, designing roads) has been done yet. The option B map is just
lines drawn on the map.
Mike
4V� ' INA REV ED
LE COUNSEL
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY MAN 21 ,
A Resolution Authorizing the Borrowing
of $800,000 by the Fairgrounds Construction * MARY Sic lUiHOLLOWCAUNT Y CLERK
Fund from Solid Waste Capital Projects Fund,
Providing for Repayment, and Directing the
County Treasurer to make Appropriate Entries.
RESOLUTION NO. 99-037
WHEREAS, it is necessary that the Fairgrounds Construction Fund borrow $800,000 to
cover project expenses until the sale of southerly portion of the old fairgrounds is closed; and
WHEREAS, the Solid Waste Capital Projects Fund has sufficient resources to make a
loan to the Fairgrounds Construction Fund in the amount of $800,000; now, therefore
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY, OREGON, as follows:
Section 1 That the Deschutes County Treasurer is hereby authorized to transfer EIGHT
HUNDRED THOUSAND DOLLARS ($800,000) from the Solid Waste Capital Projects Fund
(33) to the Fairgrounds Construction Fund (56), to be used for expenses for the constriction of
the new Deschutes County Fairgrounds.
Section 2. The principal of the loan, together with interest from the date of the loan until
repaid at five and one-half percent (5.5%) per annum, is to be repaid to the Solid Waste Capital
Projects Fund in the fiscal year 1999-2000, immediately upon receipt of sufficient cash within
the Fairgrounds Construction Fund to allow repayment
Section 3. That the Treasurer is hereby directed to make such entries in the records of the
County for the fiscal years 1998-99 and 1999-2000 as are necessary to reflect these transactions.
DATED this 26th day of May, 1999.
BOARD OF COUNTY COMMISSIONERS
OF DESSHUTE$ CVJXTY, OREGON
Chair
T: T. N. D ,
Recording Secretary 621M R. LUKE,
1-RESOUMON NO. 9M37 (0499)
ell qqq-
REVIEWED
O.
MEMORANDUM OF UNDERSTANDING p�
4i�, c,
Deschutes County, a political subdivision of the State of Oregon (County),`besc�tes
County Fair Board, a five -member board appointed pursuant to ORS 565.210 (Fair -
Deschutes County Fair Association, an Oregon nonprofit corporation (Association) grii, a
follows: :5
1. County shall loan $800,000 from its Solid Waste Capital Projects Fund to
Fairgrounds Construction Fund (the loan). The loan shall be charged interest at a rate of five and
one-half percent (5.5%) per annum from the date of the loan until repaid.
2. The Fairgrounds Construction Fund shall repay the loan and accrued interest prior
to the end of the 1999-2000 fiscal year.
3. The proceeds of the sale of the southerly portion of the old County fairgrounds
located westerly of Canal Boulevard in Redmond, Oregon, or other available funds, shall be used
to provide funds to the Fairgrounds Construction Fund to repay the loan and interest referred to
above.
4. The parties to this Memorandum of Understanding agree to the loan and
repayment of funds as set forth herein and will fully cooperate in the sale of the southerly portion
of the old fairgrounds and the repayment of the loan.
COUNTY:
Dated this _,.Z day ofr 1999
Dated this �_ day oft 1999
BOARD OF COUNTY C011SUSSIONERS OF
DESCHUTES COUNTY, OREGON
DESCHUTES COUNTY FAIR BOARD
NEIL AVIS, President
WILLIAM R. MAYFIELD, PWetary
Page 1 of 2 — MEMORANDUM OF UNDERSTANDING
ASSOCIATION: DESCHUTES COUNTY FAIR ASSOCIATION
Dated this day of ,1999
Page 2 of 2 — MEMORANDUM OF UNDERSTANDING
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SHEET
1 OF 1
VOL: CJ1999 PAGE: 663
RECORDED DOCUMENT
STATE OF OREGON
COUNTY OF DESCHUTES
I hereby certify that the attached instrument was
received and duly recorded in Deschutes County
records:
DATE AND TIME:
DOCUMENT TYPE:
Apr. 13, 1999; 12:44 p.m.
Agreement (CJ)
NUMBER OF PAGES: 4
MARY SUE PENHOLLOW
DESCHUTES COUNTY CLERK
OCJ1999-663 *Vol -Pap 04/21/1999 10:56:32
MICRO II,KAED
APR � a 199`j
r♦r�rw•.1� I��M
APK r, 11999
O lqqq - 44d
REVIEWED
LZ[.. C!'- JN UE
SISTERS AVENUE INTERGOVERNMENTAL AGREEMENT
THIS AGREEMENT made and entered into by and between the CITY OF REDMOND,
Oregon, a municipal corporation, hereinafter referred to as "City", and DESCHUTE& cc
COUNTY, a political subdivision of the State of Oregon, hereinafter referred to as, -,:;y
"County." cn ;;a
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Recitals C-$ rTi .�
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1. County owned or owns certain real property in the City of Redmond, Oregon, 5;� r--
commonly known as the old Deschutes County Fairgrounds (fairgrounds), generl
located South of Highland Avenue and West of Canal Boulevard. The County so d
approximately 15 acres of the fairgrounds to Fred Meyer Stores, Inc., by deed dated
December 30, 1998. The County used the proceeds of the Fred Meyer sale in the
development of the new Deschutes County Fair and Expo facilities currently raider
construction South of Airport Way in the City of Redmond, Oregon. The County
retained approximately 15 acres of the fairgrounds and intends to sell the retained
property and use the proceeds in the development of the new Deschutes County Fair
and Expo facilities.
2. The County owns a parcel of real property located at 1421 South Highway 97 in
Redmond, Oregon, (extension property) which houses the offices of the Oregon State
University Extension Service and the Deschutes County Extension and 4-H County
Service District.
3. City controls the vacation of certain undeveloped dedicated public right of ways
which encumber the fairgrounds. The City has proposed the vacation of portions of
the right of ways on the fairgrounds subject to the realignment of certain existing
streets and the construction of certain streets (project). The City also proposes the
vacation of a portion of Canal Boulevard when the proposed realignments and new
streets are completed. In order to proceed with the project, City needs a portion of the
extension property, currently used for parking, along with a portion of the fairgrounds
to be dedicated as public right of ways.
NOW THEREFORE, it is hereby agreed by and between the parties as follows:
TERMS OF AGREEMENT:
CITY OBLIGATIONS
1. City shall, at its expense or at the expense of another exercising a land use permit,
cause to be constructed to City standards the project generally depicted on the map
attached hereto as Exhibit A to this agreement consisting of the westerly extension of
Sisters Avenues across Highway 97 and the fairgrounds along with the realignment of
Canal Boulevard, Eleventh and Ninth Streets as shown on the map. City shall, as a
project expense or as a result of dedication by others, acquire all needed right of ways
Page 1 - Sisters Avenue Intergovernmental Agreement
%\Zeus\sha edUgaf Cwtracts and AgreanentARoaMISTERS AVENUE [NMOOVERNMENTAL AOREEMENT.doc
located on real property not owned by the County. After the project is constructed,
City shall thereafter maintain the project as City streets.
2. City shall maintain and, from time to time, revise the project schedule and budgets.
City shall, subject to the non-availability of funds as provided in this agreement,
annually budget for the anticipated cost of the project and right of way acquisitions.
3. City shall replace and relocate the parking spaces lost on the extension property as a
result of the dedication of extension property for the Sisters Avenue extension
(replacement property). The replacement property shall be located on land that is
adjacent or convenient to the remaining extension property and shall have not less
than the number of parking spaces lost to the project. County shall receive an
adequate interest in the replacement property so that the extension property is not
devalued because of the replacement property. The City shall cause the parking
spaces on the replacement property to be constructed to a satisfactory paved parking
lot standard. City may, in lieu of replacing and relocating the parking, purchase the
extension property at it current fair market value to be determined by an appraisal to
be made at City's expense by an appraiser satisfactory to the parties.
4. City shall initiate the vacation of those portions of the right of ways no longer
necessary for public use when any portion of the project is approved and subject to a
land use permit which provides financial assurances satisfactory to the City that the
proposed portion of the project will be constructed, except that any portion of an
existing right of way need not be vacated until the project, or portion thereof, is
completed if the right of way is used by the public.
5. City shall review the zoning of the fairgrounds property in consideration of the City's
2020 Committee recommendations as soon as reasonably possible.
COUNTY OBLIGATIONS
1. County shall dedicate the right of way on the fairgrounds and the extension property
needed for the project at no cost to the City other than the cost of relocating and
replacing the extension property parking lost as a result of the project. If City elects
to purchase the extension property, County shall sell the property to the City at its fair
market value.
2. County shall assist the City with field surveying as directed by the City engineer to
establish right of ways for the project. County shall also make County staff available
to the City to provide technical assistance and to assist in the acquisition of needed
right of ways from other public entities and private persons.
3. County shall not sell its present interest (southerly portion) in the fairgrounds until the
dedication of the need right of ways is completed.
4. So long as the County owns the fairgrounds, the County shall allow the City and it
agents to enter upon the fairgrounds as is necessary to design and construct the
project.
Page 2 - Sisters Avenue Intergovernmental Agreement
\\Zeus\shared\LegaWontmcu and AgreementARoaMISTERS AVENUE PMRGOvERNMENTAL AGREEMENT.doc
GENERAL PROVISIONS
1. This agreement may be terminated by mutual agreement of the parties. This
agreement may also be terminated by any party if conditions arise which make the
project unfeasible due to unforeseeable circumstances. In the event of termination as
a result of unforeseeable circumstances, the terminating party shall give 60 days prior
written notice of termination. Any termination of this agreement shall not prejudice
any rights or obligations accrued to the parties prior to termination.
2. It is agreed by and between the parties that neither party is not carrying out a function
on behalf of the other party, and neither party has the right of direction or control of
the manner in which the other party delivers its obligations under this agreement, nor
does either party exercise any control over the activities of the other party.
3. Neither party is, by virtue of this agreement, a partner or joint venturer with the other
party in connection with activities carried out under this agreement, and neither party
shall have any obligation with respect to the other party's debts or any other liabilities
of each and every nature.
4. In the event sufficient funds shall not be appropriated for the payment of obligations
required to be paid under this agreement, and if party has no funds legally available
for payment of the obligations from other sources, then the party may terminate this
agreement in accordance with its terms.
COUNTY: Dated this 16 day of '1999.
ST:
Recording Secretary
CITY:
BOARD OF COUNTY COMMISSIONERS
Dated this 23rd day of February , 1999.
+DfFW-H; Mayen
Ran, y ovey, Counci
Georgig,.:'Jo" Wol
re8ident
Recorder , Deputy
Page 3 - Sisters Avenue Intergovernmental Agreemept
N ZeulsharedVLegar Contracts and AgreementARoaMISTERS AVENUE INTERGOVERNMENTAL AGREEMENT.doc
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FRED MEYER
PROPERTY
jREMAINING COUNTY
/ PROPERTY
PROPOSED ROAD EXTENSIONS
OR RE -ALIGNMENTS
FRED MYER PROPERTY AT THE OLD REDMOND FAIRGROUNDS
LOCATED IN SEC. 16 T15S R13E W.M. REDMOND OREGON
HUTES COUNTY ROAD DEPARTMENT ISCALEs 1" 400' DRAWN Po M.J.B. I DATES 1/1/0(
S.E. 27TH STREET, BEND, OR. 9770 , w o w SVV- ase. wn
SHEET
1 OF
E'S SCO
Legal Department
ADMINISTRATION BUILDING - 1130 NW HARRIMAN • BEND, OREGON 97701
FACSIMILE 8641-383-0496
VIA FACSIMILE AND FIRST CLASS MAIL
October 20, 1999
Edward P. Fitch
Bryant, Emerson & Fitch
PO Box 457
Redmond, OR 97756
Re: Southerly Portion of Old Fairgrounds
Richard L. Isham W 641-388-6626
Bruce W. White W 641-388-6693
Mark P. A►nherg 9P 641-330-4646
PI.F.ASF. RkFFR TO
FILL NU.: 3-709
Elton Gregory, Deschutes County Fair Association President, issued a request for proposals relating to
the old fairgrounds property ("property") in the fall of 1998. Randall C. Arnett responded to the
request on behalf of Randall C. Arnett, Nevelyn Arnett, John Arnett and Sheldon Arnett by unsigned
letter dated November 23, 1998, offering to purchase the R-5 portion of the old fairgrounds for
$863,000. The offer was accompanied with a standby letter of credit dated November 20, 1998, in the
amount of $86,300 issued by the Bank of the Cascades in favor of the Deschutes County Fair
Association. The expiration date of the letter of credit was January 31, 1999. The letter of credit was
not extended.
It is my understanding that Arnett Enterprises, LLC, is now the proposed buyer of the property. No
sales agreement or earnest money agreement was developed subsequent to receipt of the November 23,
1998, offer. The November 23, 1998, offer was never presented to or acted upon by the Board of
County Commissioners. Ron Bryant requested that I attend a meeting regarding the property on
March 3, 1999, in your offices. At the meeting, Ron Bryant and I disagreed on whether the unsigned
letter and expired letter of credit constituted a binding agreement to sell the property.
The City of Redmond and Deschutes County entered into the Sisters Avenue Intergovernmental
Agreement on February 23, 1999. That agreement has guided a number of County and City decisions
regarding the property. Although the County has substantially performed under the agreement, due to
changes in direction by the City, it appears that significant actions contemplated to be performed by
the City remain unaccomplished. In addition, significant actions taken by the County under the
agreement, including the dedication of new right-of-way, may now need to be reversed or modified.
These dedications were developed by the County to accomplish the realignment of Canal Boulevard
and the extension of Sisters Avenue. Deeds were prepared, signed by the Board of County
Commissioners and the Deschutes County Fair Association, and sent to the City. Those dedication
deeds were signed by the City and recorded with the Deschutes County Clerk on July 22, 1999.
Quality Services Performed with Pride
I":d\\,1rd 11. Pitch
October 20. 1990
Page 2
At a recent meeting on October 7, 1999, the County was given a map entitled Sisters Avenue
Extension/South Canal Boulevard Realignment, Option B. This option appears to reflect a proposal
advanced by you and reported in the May 25, 1999, issue of The Bulletin. The alignments in Option B
are at a substantial variance to the alignments that were previously dedicated and accepted by the City.
A substantial portion of the previously dedicated right-of-way will need to be vacated and significant
new right-of-way will be required to allow Option B alignments to be realized. In our recent
conversation, you indicated that it would be the City's responsibility to deal with the purchaser of the
property to adjust right-of-ways and easements on the property.
Prior to our conversation, I had spoken with Carl Dutli, City Attorney, regarding the issues raised by
the proposed change in right -of --way locations. I suggested, that in order to protect the City's fiscal
interests, that new right-of-way dedications be deeded to the City and the unneeded right-of-way be
vacated. In the alternative, I suggested that prior to any transfer of the property by the County and Fair
Association, that the City negotiate a cost for acquiring additional right-of-way needed to accomplish
the alignments contemplated in Option B. It is my understanding that the City was to propose rezoning
of a substantial portion of the property to commercial zoning. If acquisition costs for Option B
alignments are not for a liquidated amount, the City could conceivably end up spending huge sums at a
later date to acquire commercially zoned land needed for Option B right-of-ways.
This potential scenario concerned the Board of County Commissioners. After the meeting with the
City Council on October 7, 1999, Commission Chair Linda Swearingen telephoned Joe Hannan,
Redmond City Manager. She requested that the City Council approve a letter to the County at its next
council meeting directing that the County proceed with a sale of the property. If it is the Council's
desire that the County proceed, even though there are outstanding and unresolved issues and the future
costs of acquiring right-of-ways is unknown, the Council needs to make that position known to the
Board of County Commissioners. The requested letter has not yet been received.
I have advised the Board that prior to the sale of the property, a sale agreement will need to be agreed
upon by the County, Fair Association and the purchaser. No agreement has been presented to the Fair
Association or Board of County Commissioners for review at this time. A preliminary title report
relating to the property was previously furnished to you. I have set out below outstanding issues and
contingencies of which I am aware.
A number of issues were discussed at a June 4, 1999, meeting in your law offices. A copy of the
meeting minutes was previously faxed to you and Ron Bryant along with a June 8, 1999 memo
from Mike Berry, a County engineering associate, relating to the Carey Act issues identified by
Gary Jurgensen, First American Title Company, affecting the ability of the City to vest the full
width of the proposed Canal Boulevard vacation to the property. In conjunction with the proposed
vacation of Canal Boulevard, the City had requested the County's assistance in locating utilities in
the Canal Boulevard right-of-way. Mike Berry prepared and transmitted to Jeff England, City
Engineer, by memo dated July 20, 1999, utility easement descriptions relating to the vacation of
Canal Boulevard. You previously were faxed a copy of his memo on July 27, 1999. These
proposed easements affect the property because the easements fall, in part, outside of the right-of-
way of Canal Boulevard. The easements are for a fiberoptic cable, a guy anchor and existing
October 20, 1999
Page 3
overhead utility lines. It was proposed that the easement set forth in the July 20 memo be
preserved as an exception or reservation in a deed to the property. With the change in the proposed
street vacations and the alignment changes set forth in Option B, as proposed by the City, the
engineering work completed by the County does not properly reflect the apparent intentions of the
City and this work will need to be redone. Based on the June 4 meeting, the vacation of the old
portion of Canal Boulevard was to be initiated on June 8, 1999, by the City. The status of the
vacation and the existing utility encumbrances continues to be an unresolved issue. Gary
Jurgenson has suggested that it is more appropriate to grant specific easements to the affected
utilities. I plan to check with the City to determine the status of the proposed vacation in order to
determine how to proceed on this issue.
2. It is the County's understanding that your clients are unwilling to commit to go forward with the
offer to purchase of the property until portions of the property are rezoned to commercial zoning.
It is the County's understanding that the City is handling all zoning issues. It is also my
understanding that the City of Redmond Planning Commission has not yet formulated a
recommendation on the zoning for the property.
3. The City had reported to the County that it would be bidding the Sisters Avenue extension of Canal
Boulevard realignment project around June 30, 1999, and that bids would be received and reviewed
in the third week of July 1999. As a result of the changes in the proposed project reflected in
Option B, I need to check on the status of the project with the City. Jeff England was not at the
October 7th meeting and no update of the construction contract was discussed.
4. At the March 3, 1999, meeting with the Arnetts, Elton Gregory identified that $16,500 had been
expended to extend water and sewer from the Fred Meyer property to Lot 2, Redmond Town
Center. I understand from Ron Bryant that Elton Gregory's request for reimbursement of this
amount has been questioned by your client. Attached is a copy of the supplemental sale and
purchase agreement relating to the extension of the water line and sewer line, as required by the
City, along with the map showing the location of the utilities. The alternative to not extending the
water and sewer line would have been to delay the closing with Fred Meyer in order to eliminate
from the plat the property consisting of what is now Lot 2, Redmond Town Center. This would
have eliminated the need to extend water and sewer to the property. However, water and sewer
would ultimately have to be extended at a cost of approximately $77,000, according to an estimate
furnished to Elton Gregory. Additionally, the unplatted property may not be available for
development without the creation of the parcel through a subsequent subdivision approval. The
$16,500 cost incurred to extend the water line is a cost incurred that only benefits the parcel and is
to be reimbursed.
5. Carl Dutli contacted me with respect to a proposed guarantee relating to the proposed vesting of the
vacated Canal Boulevard. As was pointed out by Gary Jurgensen, the land underlying Canal
Boulevard is not vested in Central Oregon Irrigation District. The City requested, that in the event
an underlying fee owner of the property under the Central Oregon Irrigation District canal appeared
and claimed a portion of the vacated Canal Boulevard, that the County hold the City held harmless
from any such claim. Based on the net square footage of the fairgrounds property, taking into
l AkN'ard 11. Fitch
October 20, 1999
Page 4
consideration the dedications and vacations as currently existing and as originally proposed, the
square -foot price of the property is $1.09 per square foot, based on the appraisal. I responded to
Carl Dutli that if the County considered such a guarantee, it would only be for 10 years (the period
for adverse possession) and in an amount based on the square footage underlying the easterly
portion of the proposed vacation area of Canal Boulevard. This would result in an indemnity in the
amount of $50,628.71, as communicated in my September 2, 1999, letter to you. The discussion I
had with Carl Dutli was that a purchaser could liquidate a claim for rebate based on that square
footage amount, in which event there would be no surprises if someone showed up later claiming
an interest in the vacated portion of easterly Canal Boulevard. At the present time, it is unlikely
that the Board of County Commissioners will offer any guarantee or indemnity to the City or any
purchaser.
6. The sale and purchase agreement to Fred Meyer contained a building restriction on the property to
prohibit certain development that could compete directly with Fred Meyer. A copy of Fred
Meyer's proposed restriction was faxed to you for comment on September 21, 1999. Based on
your subsequent telephone message and letter, I contacted Fred Meyer regarding clarification.
Enclosed is a copy of my proposed change, and letter to Liala Aarness, counsel for Fred Meyer.
7. Lot 2, Redmond Town Center, was a reconveyance parcel arising from the sale of the northerly
portion of the old fairgrounds to Fred Meyer. The plat was recorded on April 29, 1999. The City
filed liens against the property for improvements and encumbered the property with a development
agreement. Prior to reconveyance, the County was able to clear those encumbrances from the title
and the property was deeded back to the County on August 30, 1999. Since the reconveyance
occurred after July 1, 1999, Lot 2, Redmond Town Center is taxable for the current year. Although
it is the County's expectation that those taxes will be paid by Fred Meyer, Fred Meyer's position
with respect to the taxes accrued to that parcel is not known at this time.
8. You had written me indicating that you intended to pursue extended coverage under an ALTA. title
insurance policy. I did discuss this with Gary Jurgensen. Although it may be possible, this area of
Redmond presents some survey uncertainties that may make it difficult or expensive for your
clients to obtain such a policy. Neither the surveyors in the County's engineering department or
Mick Tye, who developed the legal description of the parcels, have monumented the property. The
water rights have been removed from the property.
1 do not believe that Elton Gregory ever met with the Board for the purpose of obtaining the Board's
approval of the November 23, 1.998, offer. The Board of County Commissioners has been aware that
there was a proposed purchase of the property, but the proposal has never been presented to them. One
of the purposes of this letter is to outline all of the issues outstanding regarding this property. I have
scheduled a review of the proposed sale of the property with the Board of County Commissioners at its
November 3, 1999, County Board of Commissioners meeting.
I have set forth above all of the contingencies and issues of which I am aware. If there are other issues
or contingencies of which I am unaware, it would be greatly appreciated if you would identify the
other issues and contingencies so that if this transaction proceeds, all issues and contingencies can be
I"A\�ard 11. htch
October 20, 1999
Page S
taken care of at closing. Please get back to me by October 28, 1999, with any comments, issues or
contingencies not identified above.
inc
,
R'chard L. Isham
Legal Counsel
RLI: vmb
Enclosures
c: Ronald L. Bryant
Board of Commissioners
Elton Gregory
Carl Dutli
S:\Iegal\Miseellaneous\fairgrounds\Correspcmdence\Ed Filch re Amett Purchase.doc
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AMENDMENT TO REAL ESTATE PURCHASE
AND SALE AGREEMENT
'lflfS AMENDMENT TO REAL ESTATE PURCHASE AND SALE AGREEMENT
is ei..tered into this% "`' day of December, 1998, by DESCHUTE& COUNTY (the "County"),
DESCHUTES COUNTY FAIR ASSOCIATION (the "Association") and FRED MEYER
STORES, INC. ("Fred Meyer").
RECITALS
A. The County, the Association and Fred Meyer are parties to a Purchase and Sale
Agreement dated October 10, 1998as amendod by Addendum No.1 dated September 14,1998 (the
"Agreement")for the purchase of certain land In the County of Deschutes.
B. The Property as defined in the Agreement, together with certain other property
acquired by Fred Meyer and certain property owned by the ScUer under the Agreement, is the subj cot
of a subdivision application (Redmond Town Center. City of Redmond file no. SUB 98-09 (the
"Subdivision'j). The Subdivision application was approved by the Redmond Uibau Area Plauzuing
Commission on November 30, 1998, and all appeal periods with respect to the Subdivision have
expired. Fred Meyer's consultant is in the process of preparing the final plat ("Plat'] for approval
by the City of Redmond and by Deschutes County as required prior to recording of the Plat.
C. The Subdivision created a lot known as "Lot 2", described in the Subdivision,
consisting of approximately 52,238 square feet of land. It was the intention of the parties that Lot
2 would be retained by the County. In order to allow closing to occur prior to recording of the Plat,
tbo parties have agreed that the property comprising Lot 2 will be conveyed to Fred Meyer at closing
uuder the Agreement, provided that Fred Meyer agrees to reconvey Lot 2 to the County following
recording of the Subdivision plat.
D. Fred Moyer is obligated under tho conditions of the Subdivision to extend water and
sewer lines to the boundary )be of Lot 2. Fred Meyees engineer has estunated that the cost of such
vxteasiuns wM be $16,500. County, has agreed to reimburse Fred Meyer for this cost on the terms
described below.
B. County and Fred Meyer each aclmowWp that the conditions of the Subdivision
require that each party dedicate to the City certain publlo streets as described in the Subdivision
C.'1DATA�
approval, including the extension of Kalama Street. Such dedications will be shown on the final
Plat.
AGREEMENTS
Lot 2
1.1 Fred Meyer agrees, at Fred Meyer's cost, promptly to take all reasonable steps
necessary to obtain the final approvals of the Plat from the City of Redmond and from the Deschutes
County surveyor. Fred Meyer will diligently and continuously seek such approvals. Fred Meyer
has directed its engineering consultant (WRG Dosign) to submit the Plat to the City for approval no
later than January 11, 1998. The parties anticipate that review of the Plat by the City will take
approximately 24 weeks. Upon the City's approval, Fred Meyer will promptly sabmit the Plat to
the County surveyor for approval. The parties anticipate that review of the plat by the County will
take approadmately 4 weeks. Upon request from the Seller, Fred Meyer will provide status reports
regarding the progress of the final plat approval. The parties will cooperate in taking all reasonable
stops to expedite governmental review of the fiat, but the parties acknowledge that the timing of
such approvals cabmot be controlled by the parties.
1.2 Upon the roeording of the Plat Fred Moyer agrees to convey Lot 2 to the County and
the County agrees to accept Lot 2 from Fred Meyer.
1.3 The consideration for conveyaace of Lot 2 is $1.00 and other good and valuable
consideration.
1.4 Closing of the sale of Lot 2 shall occur within ten (10) days after the recording of the
Plat. Conveyance shall be by special warranty deed, subject to no encumbrances cheated or suffered
by Fred Meyer other than those in the deed of the Property from the Seller to Fred Meyer.
1.5 if Fred Meyer fails to diligently seek final approval of the Plat, or if Fred Meyer fails
to record the Plat within 10 days after find approval, and Fred Meyer fails to cure such default
promptly upon nodco from County, Pied Meyer shall be in default of its obligations hereunder. If
Fred Moyer so defaults and fails to cure, Fred Moyer shall, on demand from County, pay to County
the amount of $261,190, ><'apresenft the parties' agreed valuation of Lot 2 at $5.00 per square foot.
2. ' Utility =tensions. Fred Meyer, at the time Fred Meyer develops its proposed project on
the Property, sball extendwater and sewer lines to the border of Lot 2 to City ofRodmond standards,
p=numt to Plaw a!proved by the City of Redmond..,Tbc.County agraw to reimbureaFred Maher
for the vest of swh admdons, agmed by ft.patties tp be $16,500, on the earlier of (1) ft date that
County commys the ntopecty to any third party, or (2) the date that County obtains a building permit
for aay building improvements on tate property.
CMATAI btW -2-
F -(:1)r1 r -(:r r 1,( ,'I (: , 1 ,, I L ) 1 1. 1 ..1'. 1 , ), it) )t):.).) It it).7 {'. ll.' l)
3. General.
3.1 The provisions of this Amendment shall survive closing under the Agreement.
3.2 Except as otherwise provided herein, all of the other terms of the Agreement shall
remain in full force avid effect.
DESCHUTES
DESCHUTES COUNTY FAIR ASSOCIATION
FILED MYER STORES, INC.
By:
Its-
ts:
-3- -
3-
3. General.
3.1 The provisions of this Amendment shall survive closing under the Agreement.
3.2 Except as otherwise provided herein, all of the other terms of the Agreement shall
remain in full force and effect.
DESCHUTES COUNTY
By:
Its:
DESCHUTES COUNTY FAIR ASSOCIATION
ti By:
Its:
FRED MEYER STORES, INC.
By: �•
Its:
CWATA%WMrMS1 WMONDMDDMW. -3-
sl rl
IL "8"
SCALE
LOT 1
523,230. SF.
12.01 ACRES
AW
15.65'
S67'07'49"W
�_ 60`49'
S89'40'1 5"W 366.34' /
—' S89'40' 15'W
20' PWLE
._- .-- 56.51 '
^� N S89'40'15"W 213.70' $67'07'49"W
20.00' 15.65
N89'40'15"E 446.56'
LOT 2
52.237. SF
1 19 ACRES
PSSE
k ('WI.E rL
0
NA9'40'1' '"[ jR
--
31.7f' ,.NORTH
" �1► PW1.F
4 79'
o PSSF
p
O� k P"F
,�
rn
�
N89'40'15"E 4
�^,
10.39' 22.36'
12.26'
DETAIL "E"
NO SCALE
15.65'
S67'07'49"W
�_ 60`49'
S89'40'1 5"W 366.34' /
—' S89'40' 15'W
20' PWLE
._- .-- 56.51 '
^� N S89'40'15"W 213.70' $67'07'49"W
20.00' 15.65
N89'40'15"E 446.56'
LOT 2
52.237. SF
1 19 ACRES
PSSE
k ('WI.E rL
0
06'09'16"
R
924.93
L
99.35
CN
NO2'44'10
99.30
N89'39'32"E
30' PSSE _
do PWLE
N89'39'32*E
S
� O
?p 94.36• 101.42'
�• �3� S89'39'32
c
• � 91.54'
�AL
a Awn crtwo �A
D 2629'24"
0 AM.00
N89'39'32"E
81.49'
176.85'
30.
7
0 A&� �� -< Legal Department
ADMINISTRATION BUILDING - 1130 NW HARRIMAN - BEND, OREGON 97701
FACSIMILE 5641-383-0496
Richard L. !sham 5 641-388-6625
October 19, 1999 Bruce W. White fit' 641-388-6693
Mark P. Amberg 5 541-330-4645
PLEASE REFER TO
FILE N(").: 3-709
VIA FACSIMILE (5031797-5623 AND FIRST CLASS MAIL
Laila Aarnas, Corporate Attorney
Fred Meyer Stores, Inc.
PO Box 42121
Portland, OR 97242.
Re: Restrictive Covenant Agreement
As I indicated in my previous voice mail message, Ed Fitch, on behalf of Arnett Enterprises,
LLC, who is the successor to an offer to purchase the southerly portion of the Deschutes County
Fairgrounds, has requested clarification of the restrictive covenant. When the restrictive
covenant was proposed, I had asked for clarification to assure that the intent was to limit "big
box" operations which compete directly in the grocery and general merchandise categories. I
was informed that my understanding of the proposed restrictive covenant was correct.
As you can see, Ed's letter raises th
clarified. I have proposed a markup
would be greatly appreciated if you
meets with your approval.
Ty,
L. Isham
ounsel
RLI:vmb
Enclosure
c: Ed Fitch
David Green
e same question and requests that the language be further
of the restrictive covenant proposed by David Green. It
and David would review this proposal and indicate if it
Quality Services Performed with Pride
1� RYA NT
EMERSON
& FITCH
Attorneys at Law
September 23, 1999
RICHARD L. ISHAM
LEGAL COUNSEL
DESCHUTE,S COUNTY
1130 NW HARRWAN
BEND OR 97701
RM Arnett Fairgrounds Purchase
Dear Rick:
SEP 2 9 1999
UESCHUTES CO LES CoUtSEL
Vd%%.Ild 11. Pitch
(;C(JttIcy j. (;okcy
siccrn 1). Rryanl
GIC};ur), 11. Colvin
This will confirm the voice mail I left you regarding the deed restriction on the fairgrounds
property. We would like some clarification that the phrase "... general merchandise retailing
operation containing 25,000 sq. ft. or more ..." refers to one store operation not multiple
stores in a mall setting. It is my understanding that you will be able to confirm this matter and
have it clarified when the restriction is recorded.
Thank you.
Very truly yours,
Edward P. Fitch
EPP:lr
cc: Arnett Enterprises, LLC
888 West Evergreen Avenue P.O. Box 457 Redmond. OR 97756.0108 (541) 548.2151
Fax (541)'548-1895 E-mail bef0empnet.com
T -2T2 P.03/02 F-521
l or"IM requested by
and
after rocordatton return to:
David Green, Fsq.
Stoel Rives u-*
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
FOR VALUE RECEIVER, and in consideration of certain mutual promises and agr mettts in
connection with the conveyance of certain real property to the Grantee named in this Restrictive Covenant
Agreement (the" regime "), the undersigned DESCHU'i`ES COUN'T'Y, a political sabillmoa of the
State of Orogon, for itself and as Estee of ORSC'IILIM COUNTY FAIR ASSOCIATION, and
DESCHUUS COUNWFAIRASSOCIATION, INC., au Oregan noniroiitcorpomdon(individual)y
and collectively referred to herein as 'GM *) covenaru with and to FIiRD I FY R STORES, INC,,
a Delaware corporation ("Onnls�"} , with respect to certain real property of Grantor described below,
as follows:
Grantor covenants and agrees with Qranteetto part of the property described on the
attached Exhibit "A" (the NftmWI which Knot sold to Qrantce, shall be leased,
subleased. operated or otherwise usdd for it grocery store, supormarket, food market or
general merchandise retailing operation containing 25,000 sq. ft. or more of grass building
arca. Such restrictions will be appurtenant to the real property previously conveyed by
Qratuo o Fred Meyer Stores, Inc. by did retarded on December 31, 1998 as Insautnent
No. 98.5 54, Official Records of Deschutes Conary, Oregon (the ""). ;Such
restrictions ill tun with the land, and will be binding on and inure to the benefit of any
subdivisions o partitions thereof, but Grantor will have liability or resgonsibUity to
Grantee To cafe sych restrictions against any subsequent owneror ttserof the Parcels (but
Grantee, ttud its ssors and assigns, a3 owner of the Property. or nay subdivision
thereof, will have c right to enforce the restrictions in accordance with applicable law
governing onform= at of covenants and resvietions).
Both parties agreeacknowledge (and by acceptmc of any deed to a Parech the buyer
of a Parcel shall coat
vely be deemed to agree and acknowledge) as follows: (i) the
restrictions on the P
Is are an essential part of this transaction, and (ti) the restrictions
are fair and reasonable
assure all owners of the ftoperty and of the Parcels of their
expected benefits and
a orderly. and beneficial ,40velopmem -of ;;he Property and the
Parcels, but not to con
I competition (recoaW2bg tbat*a relevant'tompetitive market
consists not ofthe
andthePamelsbutofthecommewialt*mUmad.minDewbutes
County. Oregon).
-THIS a�st�Z� e.T1aN sero Il >•loT
t --t tan ; r wt v t_mi p 1 cd
ON -IWC- eUrp*vbap phnce;-('s t PR:ovip6p
No ONE RL''�t1 S-rar`H usL-o
aroGftlry , ok 'tea Sm.C:S
O R 6 avv Lro'i4L v" 6r�'C y+^.t� v d t S16 is T a �rcUS
i S t e oo SFr-. 5 foss S ti ld t m A'9'& A,
Randall C. Arnett
2650 S.W. 41st. Street
Redmond Oregon 97756
Home Phone 1-541-923-1322
November 23, 1998
Elton Gregory
Deschutes County Fairgrounds
3800 S.W. Airport Way
Redmond Oregon 97756
Please accept my proposal for the R-5 propery south of highland avenue and east of 11th street. The proposal
price is $863,000.00 payable as outlined in the `request for Proposal' letter. The offer is on behalf of Randall C.
Arnett, Nevelyn Arnett, John Arnett and Sheldon Arnett.
Sincerely,
Randall C. Arnett
n(a
Banikof the Cascades
Main Office
Irrevocable Standby Letter of Credit Number 221
Issue Date: November 20, 1998
Beneficiary: Deschutes County Fair Association
3800 S.W. Airport Way
Redmond, OR 97756
Gentlemen:
We. hereby establish this Irrevocable Standby Letter of Credit Number 221 in your favor for Eighty
Six Thousand Three Hundred and no/ 100 U.S. Dollars ($86,300.00) for the account cd' Randy
Arnett and John Arnett.
We, warrant to you tllat your draft drawnunder this Irrevocable Standby Letter of Credit will be duly
honored upon presentation of your drafts drawn on us at 1100 N.W. Wall Street, herd, Oregon on
or before the expiration date as set forth below.
This Irrevocable Standby Letter of Credit expires at the close of business on January 31, 1999.
T'o the cx-tend hereto, this credit is subject to the "Uniform Custon.ers and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. S00."
BANK OF THE CASCADES
ORY WTON
SENIOR VICE PRESIDENT
CHIEF FINANCIAL OFFICER
Central Oregon's Home -Town Bank.
1100 N.W. Wall Street 0 P.O. Box 369 0 Bend, Oregon 97709-0369 0 Phone (503) 385-6200 ■ FAX (503) 382-8780
REQUEST FOR PROPOSALS
SALE OF REAL ESTATE AT OLD DESCHUTES FAIRGROUNDS
PROPERTY SOUTH OF HIGHLAND AVENUE AND EAST OF 117" STREET
Sealed proposals will be received at the New Deschutes County Fairgrounds
Administration Building, 3800 S.W. Airport Way, Redmond Oregon, 97756 on, but not later
than 1:00 P.M., November 25, 1998, at which time all proposals for above mentioned
property will be publicly opened. All proposals must be hand delivered by bidding party,
or designated representative, and will be accepted by only such means. All proposals are
to be addressed to the attention of Mr. Elton Gregory, President of Deschutes County Fair
Association, and must meet the following requirements in their entirety:
1. The minimum acceptable bid shall be no less than the 1996 appraisal value
of $863,000 as appraised by D. L Bratton. A full copy of the 1996 appraisal
may be obtained by calling Mr. Elton Gregory at (541) 548-3720 to make
arrangements.
2. A cashier check or irrevocable letter from a bank of the United Stated of
America equal to ten percent (10%) of the proposal amount must accompany
each proposal as earnest money. The earnest money of the successful
bidder will be credited towards the purchase price. Unsuccessful bidders
shall have their earnest money returned within thirty (30) days from opening
of bid proposals.
3. The remaining balance of the successful bidder will be due twenty-four (24)
hours after the closing of the Fred Meyer property sales agreement,
excluding any weekend or holiday. Closing of the Fred Meyer property
sales contract is scheduled for January 12, 1999.
4. Suocessful bidder shall have the first writ of refusal should the -Fred Meyer
contract not be consummated.
5. if the Fred Meyer transaction should fail, successful bidder of the property
within the scope of this proposal may request, without penalty, termination
of this agreement, made upon the real estate south of Highland Avenue and
east of 11"' Street, within five (5) calendar days of the failed Fred Meyer
contract.
Attached for reference is the site description as stated in the 1996 D. L. Bratton appraisal
Also attached is a map of the site. Any and all questions concerning this proposal are to
be directed solely to Elton Gregory at (541) 548-3720 or via fax at (541) 548-3310.
Signed,
Elton Gregory
DCFA President
SITE DESCRIPTION
BY D.L. BRATTON APPRAISAL SERVICES
SALE OF REAL ESTATE AT OLD DESCHUTES FAIRGROUNDS
PROPERTY SOUTH OF HIGHLAND AVENUE AND EAST OF 11 T" STREET
In appraising any type of property, an appraiser describes and analyzes the site. A "Site
Description' is a detailed listing of factual data concerning the subject land. Items
considered in this section of the report include locational, physical, zoning and utility
amenities of the land. The data collected in the "Site Description" is used in determining
the highest and best use of the site as if vacant, and in estimating a land value. A detailed
description of the site is contained in the following paragraphs.
LOCATION: The specific property analyzed can be described as the Deschutes County
fairgrounds site which can be described as 30.26 acres of land owned by Deschutes
County and controlled by the Deschutes County Board, as well as 4.90 acres of City of
Redmond land described as platted streets that have not been vacated. Graphics of the
fairgrounds have been included in the addenda of the report to assist the reader of this
document in visualizing the location, configuration and access amenities impacting the
subject property. The site has good visibility from U.S. Highway 97 and Highland Avenue,
both considered to.be commercial arterial roads in this section of Redmond.
The acreage is located within the South of Redmond commercial district, which is
considered to be the fastest growing commercial district of Redmond. Roads provide good
access to area shopping as well as the Redmond Industrial Park and Roberts Field
(Redmond Airport). City officials are currently investigating a plan to route through traffic
away from U.S. Highway 97 to an "eastside bypass" or "alternate route' along the eastern
side of the community. This route will utilize the existing Airport Way and provide on and
off ramps on Sisters Avenue (Odom Medo Way). in addition, the property will connect
with U.S. Highway 97 through the Yew Avenue Intersection. Presently, U.S. highway 97
is the major north -south commercial arterial road channeling traffic through the Central
Oregon area. Department of Transportation highway traffic count numbers note that traffic
counts in the immediate vicinity of the subject property near 12,000 vehicles per day.
Trends within the subject neighborhood are for continued development of commercial use
properties, and the analyst notes upon inspection of the area several properties were
listed for sale as potential development sites.
PHYSICAL: As stated, the subject property consists of 30.26 acres of land owned by
Deschutes County Fairgrounds and 4.90 acres of land owned by the City of Redmond
(streets and alleys). It is a large rectangular shaped property with a triangular comer at
the south end. Direct access is via Highland Avenue along the north boundary and I Vh
Street along the western boundary. Both of these asphalt paved roads are constructed
to city standards and include concrete curbs and gutters, sidewalks and overhead street
lighting. A large entry gate is located at the a Street entrance to the fairgrounds at the
intersection of 9t' Street and Highland Avenue (see maps). The Old Dallas-Califomia
-2-
Highway (old Highway 97) borders the eastern side of the site and channels traffic onto
7 t Street with a secondary access off of 7 "street and Juniper Avenue. This is a
secondary arterial road channeling local traffic into the Redmond service district. The Old
Dalles-California Highway is separated from U.S. Highway 97 by the Pilot Butte Canal,
which is a major geographical barrier running from south to north through this
neighborhood. The existence of this large canal reduces east -west traffic flow; however,
it does not eliminate visibility factors from the existing U.S. Highway 97 to the subject
property.
Site topography can be described as relatively level grade with existing streets and no
extensive excavation work is anticipated. Soil conditions can be described as a sandy
loam soil with a lava rock base. The depth of the lava rock base is unknown; however,
analysis of excavation work on nearby properties notes that sufficient top soil is available
for development purposes. The majority of native vegetation has been removed from the
property for the development of the Deschutes County Fairgrounds structures. A large
number of deciduous trees have been installed by the Fair Board over the years, and
these have matured to a height of 30'-40'. A large amount of landscape area consisting
primarily of established lawns are noted throughout the property. All landscape areas are
irrigated with surface water irrigation rights provided by the Central Oregon Irrigation
District. The property is reported to have 31.31 acres of irrigation water rights.
Examination of Federal Emergency Management Agency flood hazard boundary maps
reveals that none of the subject property Is located within an established flood/mud slide
hazard zone. The property provides territorial views of the surrounding neighborhood, as
well as unrestricted views of the Central Oregon Cascade Mountains.
ZONING: 14.64 acres of the subject site is zoned C-2 (central business district -
commercial). This property is located north of Kalama Avenue. The City of Redmond
zoning ordinance reports that the purpose of this district is to provide for high density
multiple family developments in locations close to shopping, service, transportation or
public open space, and in appropriate locations to provide a transitional use area between
residential areas and other less restrictive districts. The professional and office uses are
Included conditionally to enhance the function of this district In transitional areas and to
encourage this transition in a more residential character. The zoning ordinance notes that
permitted uses include a wide variety of residential type properties; however, conditional
uses include items such as a hospital, nursing home, home for the aged, medical or dental
clinic, professional offices, planned unit development district or neighborhood commercial
district. With this conditional use allowed, it is likely that a wide variety of commercial
uses could exist on the subject property.
Some discussion has been given in regard to a possible zone change from R-5 to C-2 for.
the southem half of the Deschutes County Fairgrounds. It is likely that this could occur;
however, conversations with Bob Quitmeyer, the Redmond City Planner, have stated that
this process has not been started.
4.90 acres of land located within the fenced fairground compound is owned by the City of
-3-
Redmond. This is currently considered platted streets such as Indian Avenue, Juniper
Avenue, 81' Street, Yh Street and 10"' Street, as well as a variety of dedicated alleys (see
graphics). It is anticipated that the majority of this land could be vacated and ownership
transferred to the Deschutes County Fairgrounds. This has not occurred as of the date
of the appraisal. The majority of this land (4.68 acres) is located within the commercially
zoned portion of the fairgrounds property. No adverse easements, restrictions or
encroachments were noted upon inspection of the subject property. Examination of title
documents failed to uncover any deed restrictions limiting development potential.
The subject property is currently developed as the Deschutes County Fairgrounds
improvements. This includes a wide variety of low cost agricultural oriented buildings (hog
barns, sheep pens, etc.), a large rodeo ground with covered grandstand and lawn areas.
The development of a county fairgrounds is not included within the permitted or conditional
uses within the C-2 or R-5 zones, and it is noted that this property as improved is allowed
to remain within this neighborhood through pre-existing use clauses within the current
zoning ordinance. If the property were vacant as of the date of the appraisal, it is not likely
that it would be suitable for fairground development.
UTIU71ES: City of Redmond water and sewer lines serve the subject property and include
and 8" sewer line running along the eastern boundary of the property and serving the
northwestern comer of the site. Other utilities include a 12" iron water line running along
Highland Avenue, a 6" steel water line running north and south along 11"' Street and a 6"
PVC water line paralleling 11"' Street approximately 200' into the property. Sewer and
water lines, in their existing state, are sufficient to meet the current property needs and
can be extended to serve future development on this site at reasonable cost.
Other utilities available in the area include overhead electric power, telephone, television
cable and natural gas. Roadways surrounding the property are asphalt paved and city
streets such as Highland Avenue and 11" Street include a concrete curb, gutter and
sidewalk. The Old Dalles-California Highway does not have concrete curbs. Also,
overhead lighting is located throughout the area and traffic control lights are installed at
major intersections to monitor traffic. Maintenance on all public and private utilities, as
well as roads, are completed by appropriate municipal or private crews.
IMPROVEMENTS: As stated, the property is improved with the Deschutes County
Fairgrounds buildingstimprovements. This consists of 22 buildings used in conjunction
with the operation of the fairgrounds. The majority of the buildings are used during one
week of the year to house livestock In conjunction with the Deschutes County Fair. Some
of the buildings are used for small conferences and the fairground grandstand is used on
a limited basis for concerts or special speakers. Improvements are being maintained;
however are not considered to be the highest and best use of the subject property (see
Highest and Best Use section). It is the analyst's opinion that many improvements can be
dismantled relatively quickly and materials salvaged for relocation. Improvements are
described in more detail in the following section of the appraisal.
52
CONCLUSION: In conclusion, the locational, physical, zoning, utility and improvement
amenities of the subject property have been examined. After an examination of these
items, it is concluded that the subject site is suitable for development. Future development
should take into account zoning as it currently exists on this property.
-5-
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