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2006-988-Order No. 2006-147 Recorded 11/1/2006DESCHUTES COUNTY OFFICIAL RECORDS NANCY BLANKENSHIP, COUNTY CLERK 1iJ VV r7 COMMISSIONERS' JOURNAL 11/012006 09:59:20 AM IIIIIIIII IIIIIIIIIIIIIIIIIII III 2006-988 Do not remove this page from original document. Deschutes County Clerk Certificate- Page If this instrument is being re-recorded, please complete the following statement, in accordance with ORS 205.244: Re-recorded to correct [give reason] previously recorded in Book or as Fee Number and Page DESCHUTES COUNTY OFFICIAL RECORDS RE NANCY BLANKENSHIP, COUNTY CLERK 206.71111 4-GA %OS L 11111111111111111111111111111111 NO FEE ~ 10 24 20 0050861288608711218189103 D-1137 Cntsl Stns23 BN 10/Z4/ Z006 04;12;51 PM This Is a no tss document BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON An Order Approving a Waiver of Land Use Regulations to Authorize Carl and Mary Wallace * ORDER NO. 2006-147 to Use the Subject Property as Allowed When They Acquired the Property WHEREAS, On November 2, 2004, the voters of the State of Oregon approved Ballot Measure 37 which added provisions to Oregon Revised Statutes (ORS) Chapter 197 to require, under certain circumstances, payment of just compensation to landowners if a government land use regulation reduces property value. In lieu of just compensation, Ballot Measure 37 authorizes the governing body of a local government to modify, remove or not apply the land use regulation, and WHEREAS, Carl and Mary Wallace made a timely demand for compensation under Measure 37 for a reduction in value to her property at 21825 and 21845 Bear Creek Rd., Bend, Oregon due to regulations which took effect after they acquired this property, and WHEREAS, Section 8 of Measure 37 authorizes the Board, as the governing body responsible for adoption and enforcement of County regulations, to not apply the identified land use regulation that restricts the owner's use and reduces the value of the property in lieu of payment of compensation; and WHEREAS, the Board has received the report and recommendation of the County Administrator as required by DCC 14.10.090; and WHEREAS, the Board has considered the Administrator's report and the evidence presented by the parties at a Board meeting as required by DCC 14.10.090; and WHEREAS, the Board makes the following findings of facts and conclusions; 1. On May 19, 2006, Carl and Mary Wallace filed a Measure 37 claim with the Community Development Department. 2. The property is located at 21825 and 21845 Bear Creek Rd., Bend, Oregon and is within Deschutes County. 3. The County Administrator has recommended that the zoning regulations for the subject property that were not already in effect until after April 20, 1963 not be enforced in lieu of payment of just compensation to Claimant. The Administrator's report is attached and incorporated by reference into this Order as Exhibit "A." 4. The Board concurs with the Administrator's report that Carl and Mary Wallace are the present owners of the subject property described in Exhibit "B," having acquired an interest in it and continuously owned it since April 20, 1963. The County finds and concludes as set forth below. The Board concurs with the Administrator's report that the current land use regulations, Multiple Use Agricultural (MUA-10), if applied to the subject property, would not permit a PACE 1 of 3- ORDER No. 2006-147 (10/23/06) TO STATE REGULATIONS WHICH WOULD OTHERWISE PRECLUDE THE PROPOSED LAND USE. THIS WAIVER APPLIES ONLY TO THE LOCAL REGULATIONS SPECIFIED ABOVE. DESCHUTES COUNTY LACKS THE AUTHORITY TO WAIVE ANY STATE REGULATIONS OR LAWS. STATE LAWS AND REGULATIONS MAY APPLY TO THE USE OF THE PROPERTY DESCRIBED HEREIN, AND A WAIVER OF SUCH LAWS AND REGULATIONS MUST BE SEPARATELY OBTAINED BY THE OWNERS FROM THE STATE OF OREGON. Section 7. This Order shall be recorded in the Deschutes County Deed Records together with portions from the deed or other instrument in Exhibits A and B sufficient to identify the subject property for recording purposes. lay DATED this of October, 2006. ATTEST: (~17~ rSo-pA- Recording Secretary BOARD OF COUNTY COMMISSIONERS OF DESCHU-'LF-S COUNTY, OREGON MICHAEL M. DALY, COMMISSIONER PACE 3 of 3- ORDER No. 2006-147 (10/23/06) Deschutes County Department of Administrative Services 1300 NW Wall St., Ste. 200, Bend, OR 97701-1947 (541) 388-6570 Fax (541) 385-3202 - www.deschutes.org TO: Board of County Commissioners From: David Kanner, County Administrator RE: Measure 37 Claim - Carl and Mary Wallace (Claimant) 21845 Bear Creek Rd., Bend, OR Introduction DATE: October 17, 2006 The County processed the initial Measure 37 claims using its brief claim form, evaluating the submission, and preparing this report and recommendation under DCC 14.10, the Measure 37 ordinance. The County's claims process recognizes that less precise evidence of value may be sufficient to evaluate claims, since there are currently no County funds available for payment of compensation. Also, the ordinance provides further opportunities for affected neighbors to present evidence and testimony at the Board meeting when these claims are considered. This report and recommendation is intended to be a summary and evaluation of evidence in the record. The report may be attached to the Board's Order which decides Measure 37 claims, as a factual basis for the Order. Any factual changes or additions to this report from testimony or other evidence can be made part of the Board's Order. Claimants and affected parties have the opportunity to rebut this Report and provide additional relevant evidence to the Board. Also, under the County's process, claimants must provide evidence that the desired use of the property, which may be allowed by a waiver of County regulations is feasible, i.e., not prevented by physical, utility or other development limitations of the site. Report and Recommendation - DCC 14.10.090 This is my report and recommendation on this Measure 37 claim received on May 19, 2006, when Measure 37 was in lawful effect. Claimants have paid the filing fee and submitted the County's official demand form. The property consists of two lots with approximately 25 acres in total. The current zoning is MUA-10. The Claimants' desired use is a subdivision and Claimants allege a reduction in value of Page 1 of 5 - Exhibit A - Order No. 2006-118 approximately $1,500,000 due to the inability to divide the property as desired. The following is an analysis of the evidence in the record on the elements of this Measure 37 claim. Current Owner - Carl and Mary Wallace are owners of both parcels comprising this claim: 18-12-01A, Tax lots 300 and 301 and located at 21825 and 21845 Bear Creek Rd. Claimants submitted a narrative statement explaining that they first acquired the subject property in 1956. There is no documented evidence of such date, as this apparently was the date they purchased the property through a land sale contract, which was not recorded and is presumably lost. At that time the property was part of a larger parcel, but over the years Claimants have sold several pieces, thus reducing the property to its present size. The first docemantation showing Claimants' interest in the property is a deed showing Claimants as grantees, dated April 20, 1963. Based upon the narrative statement submitted by Claimants, it appears there may have been a break in owneship, when Claimant Carl Wallace's parents obtained a bank loan on Claimants' behalf in 1963 and as security therefore were given a deed to the property. In 1968 Claimants constructed a dwelling on the property. Title to the property was reconveyed to Claimants by the parents in 1971. Claimants have demonstrated that while they may have transferred title, in reality the transfer was meant as security for a loan throughout this period, and thus Claimants continued to possess an interest in the property. The evidence shows that Carl and Mary Wallace first acquired the property in 1963, although portions of the original parcel have been partitioned and sold to others. They continue to possess an interest in the property. Owner Date of Acquisition - April 20, 1963 The date of acquisition by the current owner is the relevant date for Board consideration of waivers under section (8) of Measure 37. The compensation section of Measure 37, section (6), uses the acquisition date of a family member to determine the extent of reduction in value for compensation. Since the County has no funds budgeted for payment of compensation, waivers that are issued by the County are limited by section (8) of Measure 37 to County land use regulations that were adopted after the later acquisition date of the current owner. If a waiver is granted as to County land use regulations which were adopted after the current owner's acquisition date, no compensation is due, even if the prior family member held the property for many years. While this may seem inconsistent, the measure was, evidently, written to encourage waivers of local and state land use regulations. Page 2 of 5 - Exhibit A - Order No. 2006-118 The first date for which there is documentation showing Carl and Mary Wallace obtained an interest in the property is April 20, 1963. While they have asserted that their interest first arose in 1956 by way of a land sale contract, no proof of such transaction has been presented. The difference may be of no consequence, however, since both dates are prior to county zoning. With respect to an apparent break in ownership between 1963 and 1971, Claimants have adequately demonstrated that the essence of the transaction was an equitable mortgage and that they continuously possessed an interest in the property for purposes of Measure 37. Restrictive Regulation - MUA-10. Under the terms of the ordinance, the claimant must identify County land use regulations that prevent the claimant from using the property in a way that he or she otherwise could have used the property at the time the property was acquired, and thus reduce the value of the claimant's property. The Claimants have identified the MUA-10 zoning, and several specific provisions of the county's subdivision ordinance as reducing the value of their property by inhibiting development of a subdivision. All were adopted after the acquisition date of 1963. While the county would need to evaluate any land use application that may be submitted pursuant to regulations in effect at the time Claimants first acquired an interest in the property, it appears that in theory, based upon zoning in effect in 1963, that a subdivision of the property would have been allowed. Enforcement of County Regulation - futile DCC 14.10.040(G). Measure 37 requires that an ordinance which restricts the current owner's use be "enforced" against them. Claimants applied for and received approval of a minor partition in 2000. However, they have not have applied for a subdivision of the property resulting in the current zoning being enforced on the subject property. Claimants have not demonstrated that submitting an application for such a land division would be futile. However, this Report confirms that such an application for the desired subidivision would violate the current zoning and be denied. Therefore, the intent of DCC 14.10.040(G) has been met for this claim. Reduction in Value - $1,500,000 alleged on Claim Form The ordinance requires that the Claimant provide evidence of the amount of the claim in alleged reduction in the fair market value of the property resulting from the enforcement of the County's land use regulation. • Claimants have submitted evidence that domestic water is available for the desired subdivision. Page 3 of 5 - Exhibit A - Order No. 2006-118 • Claimants have submitted evidence that sanitary service is or would be feasible for the desired subdivision, as it was determined with respect to those portions of the property which were sold off in the past. • Claimants have not submitted an appraisal. Nor is there evidence of the diminution of value from just before and just after adoption of the county's restrictive land use regulations. Rather, the evidence as to the diminution consists of an opinion of value made by Claimant, which is based upon a simple analysis of the current assessed value of the property (land only) as compared with the average value of residential lots in a nearby subdivision Claimants' alleged reduction in value appears to be based upon the assumption that lots created by subdividing the property are fully marketable and useable by others for development. Referring to a recent Opinion of the Oregon Attorney General, rights obtained under Measure 37 are personal to the present property owner. Assuming an owner, having obtained the necessary "waivers" from the County and the State, could subdivide the property, future owners would, according to the Attorney General, be precluded from using the property in a manner inconsistent with land use regulations in effect at the time of the transfer. Thus, the amount of reduction in value asserted by the Claimants may be unreliable, if the resulting lots are unusable by future owners, based on their having to comply with zoning regulations in place when such future owners acquire the property. Assuming without deciding Claimants could have obtained approval of a subdivision of the property on the date they first acquired an interest in the property, but not under zoning restrictions adopted after Claimants' acquisition date, and the resulting lots are fully marketable and useable by future owners, then the value of Claimants' property for Measure 37 purposes would be reduced. Consistent with the County's procedural ordinance, Chapter 14.10, this report takes no position on whether a waiver obtained by a claimant and any resulting development approval are fully transferable with the property. Effect of County Waiver - Measure 37 clearly allows the County to waive its non exempt land use regulations only back to the date the current owners, not family members, acquired the property: "(8) Notwithstanding any other state statute or the availability of funds under subsection (10) of this act, in lieu of payment of just compensation under this act, the governing body responsible for enacting the land use regulation may modify, remove, or not to apply the land use regulation or land use regulations to allow the property owner to use the property for a use permitted at the time the owner acquired the Property." (emphasis added) 11(c) "Owner" is the present owner of the property, or any interest therein." Page 4 of 5 - Exhibit A - Order No. 2006-118 In this case, Carl and Mary Wallace have continuously owned an interest in the property since 1963. A claimant who receives a waiver must use the current process to seek the needed development permits based on the zoning in place at the time the current owners acquired the property. Except in a rare case, the current procedural requirements for handling permits are not regulations that reduce value. Therefore, the County's procedural regulations are not waived. Conclusion and Recommendation The present owner of the property has submitted a claim pursuant to Measure 37 which demonstrates eligibility for its use of the subject property based on nonexempt land use regulations in effect on April 20, 1963, the date when Claimants first acquired an interest in the property. There is evidence in the record that some additional development on the subject property would be feasible for available domestic water, sanitary waste disposal and road access. My recommendation is that the Board approve a waiver in the form of Order attached. This Order would have the effect of waiving the nonexempt County land use regulations which were not in effect until after April 20, 1963, to allow the Claimants to use the property in a manner permitted at the time theyr acquired the property. This waiver is not a development permit. By granting a waiver, the County does not commit itself to approving Claimants' desired subdivision. Cautionary Note on Measure 37 Claimants should understand that a decision by Deschutes County may not enable them to proceed with future development or construction unless the State of Oregon approves a waiver of applicable State land use regulations. Claimants who wish to obtain information relative to their "State" claims under Measure 37 are advised to contact the State Department of Land Conservation and Development and the Department of Administrative Services. Page 5 of 5 - Exhibit A - Order No. 2006-118 Parcel One of Partition Plat 2001-21, located in Government Lot 2 and the Southwest quarter of the Northeast quarter of Section 1, Township 18 South, Range 12 East of the Willamette Meridian, Deschutes County, Oregon. EXHIBIT B Parcel Two of Partition Plat 2001-21, located in Government Lot 2 and the Southwest quarter of the Northeast quarter of Section 1, Township 18 South, Range 12 East of the Willamette Meridian, Deschutes County, Oregon. EXHIBIT B