2006-1027-Order No. 2006-149 Recorded 11/21/2006DESCHUTES COUNTY CLERKDS CJ 7006-1071
NANCY
COMMISSIONERS' JOURNAL
11/22/2006 08;56;36 AM
1111111111111111111111111111111 III
2006-1027
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
N
VIE 2006'1115;
NANCY D
COUNTY CLERKDS
LEGAREL C 1111111111111111111111111111111111111111111111111 NO FEE
0053032220010077 is40170174
11/21/2006 03:53;36 PM
D-M37 Cntei Stnm23 PO
This is a no fee document
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
An Order Determining Whether to Authorize a
Waiver of Land Use Regulations for James Miller * ORDER NO. 2006-149
to Use the Subject Property as Allowed When He
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, James Miller ("Claimant") made a timely demand for compensation under Measure 37 for
a reduction in value to property at 22200 Paulina Lake Rd., La Pine, Oregon due to regulations which took
effect after he 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 June 1, 2006, James Miller filed a Measure 37 claim with the Community Development
Department. Miller submitted the claim, not in a representative capacity, but as an individual,
alleging he was the property owner.
2. The property address is 22200 Paulina Lake Rd., La Pine, Oregon and is within Deschutes
County. More specifically, the property is described on Exhibit B, attached to this Order.
3. The County Administrator has recommended that the zoning regulations for the subject property
that were adopted in 1979 and thereafter continue to be enforced unless a reviewing court
determines Claimant to have established an interest in the property prior to 1979, in which case
and in lieu of payment of just compensation, certain regulations would not be enforced. 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 James Miller's only interest as it relates
to the property is by virtue of his being a general partner in LPP Resources, limited partnership,
and prior thereto, a shareholder in La Pine Pumice Company, the latter of which allegedly
PAGE 1 of 4- ORDER No. 2006-149 (10/30/06)
acquired an interest in the subject property described in Exhibit "B" by Lease and Option in
1969 and by title in 1980. The County finds and concludes as set forth below.
5. The Board concurs with the Administrator's report that the current land use regulations, Open
Space and Conservation (OS&C), if applied to the subject property, would not permit mining,
residential development or geothermal power development on the subject property. The current
regulation is a land use regulation which is not exempt from Measure 37 claims.
6. The Board concurs with the Administrator's report that an application for mining, residential
development or geothermal power development would be denied if the current zoning were
applied. Therefore, such an application to determine enforcement of the current zoning to the
Claimants' property would be futile.
On October 30, 2006, the date set for the Board to hear and consider the claim filed by Miller,
an attorney representing Miller and LPP Resources, LP appeared and requested that the claim
be amended by adding LPP Resources, LP as a property owner and claimant. The Board
received certain materials tendered by the attorney, conducted the public hearing and without
deciding whether to allow the claim to be amended as requested, continued the proceedings
until November 20 to allow any further information to be submitted for the record; now,
therefore,
THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, HEREBY
ORDERS as follows:
Section 1. The Board hereby determines, based on these findings, conclusions, and the Administrator's
report in Exhibit "A," that the claim is not eligible under DCC 14.10.100.
Section 2. The Board hereby determines as follows:
Claimant has no direct interest in the subject property described in Exhibit "B" as this property on
the date the claim was filed was owned by LPP Resources, LLP (LPP) in which Claimant is a
general partner. Prior to LPP acquiring the property, title thereto was held by La Pine Pumice
Company, in which Claimant was a shareholder. Prior to acquiring title in 1980 La Pine Pumice
Company had an interest, which consisted of a Lease and Option in four unpatented mining claims
of which the subject property was one of those properties.
2. If a reviewing court should decide that despite ownership of the property by LPP and previous to
LPP by La Pine Pumice Company, that Claimant, in his individual capacity, has an interest in the
subject property, then such interest first arose in October 1980 when title to the property was deeded
to La Pine Pumice Company. As such, the property would have been subject to PL-15, the County's
zoning regulations and implementing zoning map, adopted in November 1979 and thereby
prohibited the owner from mining, residential development and geothermal power development.
If a reviewing court should decide that despite ownership of the property by LPP and previous to
LPP by La Pine Pumice Company, that Claimant, in his individual capacity has an interest in the
subject property, that such interest first arose in 1969 by virtue of a Lease and Option over an
unpatented mining claim on the subject property obtained by La Pine Pumice Company, then until
October 1980 such interest was limited to conducting mining operations, and PL-15, the County's
zoning ordinance would have prohibited such use and the value of Claimant's interest would
thereby be diminished. Under these circumstances in lieu of compensation pursuant to Measure 37
the County elects to waive the County's zoning regulations to enable Claimant to use the property
only in such manner as he could have used the property in 1969, for a mining operation.
PAGE 2 of 4- ORDER No. 2006-149 (10/30/06)
4. If a reviewing court should decide that despite ownership of the property by LPP and previous to
LPP by La Pine Pumice Company, that Claimant in his individual capacity has an interest in the
subject property, that such interest first arose in 1969 by virtue of a Lease and Option over an
unpatented mining claim on the subject property obtained by La Pine Pumice Company, and that by
virtue of such Option, Claimant's interest was not limited to conducting mining operations, then the
County's zoning ordinance (PL-15)prohibited mining, residential development and geothermal
power development, and that such prohibition diminished the value of Claimant's interest. Under
these circumstances in lieu of compensation pursuant to Measure 37 the County elects to waive the
County's zoning regulations to enable Claimant to use the property for mining, residential
development and/or geothermal power development.
Section 3. The Claimant's request that the claim be amended to add LPP Resources, LP as an
additional claimant is not timely. The analysis of such an amended claim would require the County to examine
the circumstances under which LPP acquired ownership and whether such acquisition established a new
acquisition date or related back to the acquisition date of LaPine Pumice Company. Nothing contained in this
order is intended as denying any claim that LPP may have over the subject property. Moreover, the County has
not, by this order, determined whether County land use regulations have been applied to property owned by LPP
and have had the effect of reducing the value of LPP's interest in the property.
Section 4. To the extent that any law, order, deed, agreement or other legally enforceable public or
private requirement provides that the subject property may not be used without a permit, license, or other form
of authorization or consent, this order does not authorize the use of the subject property unless the Claimants
first obtain that permit, license, or other form of authorization or consent.
Section 5. A STATE OF OREGON WAIVER MAY BE REQUIRED FOR THE DEVELOPMENT OR
USE OF THE SUBJECT PROPERTY. ALTHOUGH THE COUNTY WILL ACCEPT AND PROCESS
SUBSEQUENT LAND USE APPLICATIONS ASSOCIATED WITH THE SUBJECT PROPERTY,
APPROVAL MAY NOT BE GRANTED WITHOUT A VALID WAIVER FROM THE STATE PERTAINING
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.
PACE 3 of 4- ORDER No. 2006-149 (10/30/06)
Section 6. 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.
DATED this '70 day of November, 2006.
BOARD OF COUNTY COMMISSIONERS
OF DESCHUJF-§ COUNTY, OREGON
R. L
ATTEST:
Recording Secretary
PAGE 4 of 4- ORDER No. 2006-149 (10/30/06)
BEV CEARNO. VICE CHAIR
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 - James Miller (Claimant)
22200 Paulina Lake Rd. La Pine, OR
Introduction
DATE: November 20, 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 are intended as 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 June 1, 2006, when
Measure 37 was in lawful effect. Claimant James Miller, acting in his individual capacity, has paid the
filing fee and submitted the County's official demand form. The property, described on the attached
exhibit, consists of a single tax lot with approximately 157 acres. The current zoning is Open Space and
Conservation (OS&C). The Claimant's desired use is pumice aggregate mining, a residential subdivision
Page 1 of 12 - Exhibit A - Order No. 2006-149
and the ability to produce geothermal power. Claimant alleges a reduction in value of approximately
$203,500,000 due to the inability to develop 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 - A title report submitted in support of this application and County records indicate that
title to the property is currently held by LPP Resources L.P. (herein "LPP"). LPP was formed in December
1988 by James Miller and Frederick Weber, Jr., as general partners, and LaPine Pumice Co., as limited
partner, the latter of which was formed by James Miller, William Murray and Helen Gossett in 1969. The
Claimant refers at various times to "LaPine Pumice Company," "LaPine Pumice Co." and "LaPine Pumice
Company, Inc." For purposes of this report all will be considered the same entity.
Claimant's attorney submitted documentation showing LaPine Pumice Company contributed the
subject property to LPP in exchange for partnership interests. County deed records include a special
warrant deed transferring title to the property from LaPine Pumice Company to LPP Resources LP in
December 1988.
Claimant asserts that he has a controlling interest in the subject property. However, the limited
partnership agreement for LPP lists both Claimant and Frederick Weber, Jr. as general partners, which
together exercise authority over the property. Neither LPP nor Frederick Weber are parties to this
proceeding" and no evidence has been submitted showing that Claimant alone controls LPP property.
Likewise, with respect to Claimant's interest in LaPine Pumice Company, when, according to Claimant's
attorney, it was dissolved in 1988, corporate shares of stock were exchanged for partnership units in the
newly formed limited partnership. Claimant received 3,360 units out of a total of 11,790, or 28.5%, which
is less than a majority or controlling interest. Because the definition of "owner' contained in Measure 37
On October 30, 2006 the date set for the Board to hear and consider the claim filed by Miller, an attorney
representing Miller and LPP appeared and requested that the claim be amended by adding LPP Resources,
LP as a property owner and claimant. Because the determination of any claim submitted by LPP requires
consideration and analysis of the nature of LPP's interest and whether such interest first arose in 1988 or
must be considered to have arisen in 1969, the requested amendment to Miller's claim should be denied
and LPP be permitted to file a separate claim. Claimant asserts that patent applications were filed in 1961,
however, no documentation of such filing and the patent process which followed were submitted.
Claimant asserts that the subject property interest originated with a Lease and Option, dated
1969 in a mineral placer claim over property owned by the US Government. Claimant has
submitted a copy thereof, together with unrecorded Amendments Nos. 1 and 2 to Lease and
Option, dated November 6, 1973 and April 27, 1979, respectively, from Clare Williamson to La
Pine Pumice Company.
Page 2 of 12 - Exhibit A - Order No. 2006-149
includes "any interest" in the subject property, a controlling interest in an entity which is in title to the
property may not be necessary, so long as the Claimant has some recognized interest in the property, not
merely an interest in the entity. Claimant's interest lies in a limited partnership, as general partner and/or
a corporation as a shareholder.
According to County deed records the property was the subject of a Mineral Patent, dated July 3,
1980 and granted to Clare Williamson. Clare Williamson conveyed her interest in the property by bargain
and sale deed to La Pine Pumice Company on October 31, 1980. When a bargain and sale deed is used
to convey property, it does not include any warranty that the grantor is conveying fee title. Rather, this
form of deed conveys whatever interest in the property the grantor had or may later acquire, which in this
case was a mineral patent. While the County has not succeeded in collecting relevant US Government
records concerning the original placer mining claim, one may infer that Clare Williamson had an
unpatented placer mining claim from prior to 1969 until July 1980. Provided the claim was located and
recorded in compliance with federal and state law, until a patent is issued, a claimant (for a mining claim)
has a possessory interest in the federal land for purposes of mineral development. Unless the claim is
successfully challenged, upon application from the claimant, a federal patent would issue. Once a patent
is issued by the federal government the grantee obtains fee ownership in the property. Thus, at some
unknown time Clare Williamson had a possessory interest in the property which was owned by the US
Government. This possessory interest was converted to fee title in 1980 by virtue of the federal patent.
Staff has uncovered an undated article from the Bend Bulletin that discusses the subject property
and three others, which were the subject of a dispute brought by the US Forest Service over the validity
of the mining claims. According to the article, Ms. Williamson was unsuccessful in establishing the
validity of her claims to three parcels, but was successful as to the fourth, the subject parcel. As noted,
the U. S. Government conveyed this parcel by patent to Ms. Williamson in 1980, and she in turn
conveyed her interest to the LaPine Pumice Company.
Claimant asserts that Claimant and certain unnamed "associated partners" have "controlled" the
property since 1969. Claimant's theory is that Claimant was a shareholder in a corporation, which
acquired an unrecorded, Lease and Option to an unpatented placer mining claim, dated 1969. As
indicated above, an unpatented mining claim would constitute a possessory interest in property. This
corporation in 1988 transferred title to LPP, in which Claimant was a general partner.
Page 3 of 12 - Exhibit A - Order No. 2006-149
Measure 37 defines "owner" very broadly as the owner of property or any interest therein. In this
case Claimant asserts an interest in property dating from before a federal patent was issued. So the
County must determine whether Measure 37 was intended to recognize as an interest in property, mere
possessory interests, or, as in this case a Lease and Option.
There are several additional concerns with this claim.
DCC 14.10.040 requires a title report naming all persons with legal, equitable and security
interests in the property. In addition, if the property is not in the exclusive fee ownership of the Claimant,
then the county may require that the Claimant has the consent to proceed with the claim on behalf of the
other owners. In this case, Claimant has submitted a title report and another document from LPP
purportedly authorizing Claimant to proceed with this claim.
DCC 14.10.040 also provides that when a claim concerns application or enforcement of County
regulations in effect prior to Claimant's acquisition of the property, a title report, including title history,
must be provided. Claimant indicates this property is owned by LPP, having acquired it in 1988 from La
Pine Pumice Company, which, according to Claimant, traces its ownership to a deed in 1980 and before
that, a Lease and Option, dated 1969. The record includes several relevant deeds and the Lease and
Option.
Based upon what has been submitted, it appears that Claimant is the general partner in a limited
partnership which is in title to the subject property. As the documentation on the limited partnership
declares, "The General Partners shall be subject to all the restrictions and limitations of partners in a
partnership without limited partners and, in addition, without the prior consent of the Limited partners, the
General Partners shall not:... possess Partnership property...." (Emphasis added). Since LPP is a distinct
legal entity, which holds title, Claimant's interest in LPP is not equivalent to an interest in the subject
property. Even if such interest were determined to be sufficient, LPP's interest in the property did not
occur until 1988, when LPP acquired the property from La Pine Pumice Company. Claimant has
furnished evidence showing that he and at least two others established the LaPine Pumice Company in
1969.
Claimant's position appears to be that for purposes of his Measure 37 claim the County should
disregard the fact that LPP holds title to the property and that Claimant's interest was confined to his
Page 4 of 12 - Exhibit A - Order No. 2006-149
partnership interest, and prior to that his interest was as a shareholder in a corporation, which, actually
held title.
The County has on two previous occasions determined that a shareholder in a closely held
corporation should be considered as having an interest in property of the corporation (Leason/Pine Ridge
Ranch Co, and Ward/Kim Ward LLC). These two cases are distinguishable insofar as the property was
originally acquired by the individuals and transferred for "estate planning purposes" to a corporation. The
Board has therefore decided that when a person who owns property as an individual, transfers title to a
corporation and becomes a shareholder or managing member (of an LLC), they continue to retain a
property interest as that term is used in Measure 37. From a legal perspective, the motivation for doing so
and the prior ownership should not make any difference, because a corporation or LLC is a distinct legal
entity. In any event the Board may wish to distinguish this matter for the reasons stated above, that the
property interest here was first acquired, not by Claimant as an individual, but by the La Pine Pumice
Company in which Claimant was one of several shareholders, and later transferred to LPP in which
Claimant was one of two general partners.
Even if Claimant's interests as corporate shareholder and later as general partner were
determined to be sufficient interests in property under Measure 37, La Pine Pumice Company's interest
was, at best a lease and option in a mining claim, which is a possessory interest that did not ripen to fee
interest until a patent was issued by the US government to Clare Williamson in 1980 and which required
exercise of the purchase option, which occurred in October of 1980.
Since the County cannot determine whether the nature of these interests is sufficient to qualify as
an ownership interest under Measure 37, the order should reflect alternative interpretations. In other
words, while the County may deny the sufficiency of Claimant's interest, the decision should acknowledge
that a reviewing court may determine that Claimant's asserted interest in the property is sufficient and as
a result provide some remedy under Measure 37.
Owner Date of Acquisition -
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
Page 5 of 12 - Exhibit A - Order No. 2006-149
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.
The documentation concerning Claimant's interest in the subject property consists of the
following:
• Lease and Option between Claire Williamson and LaPine Pumice Company, dated May
7, 1969.
• Amendment No.1 to Lease and Option, dated 1973 between Clare Williamson and
LaPine Pumice Company.
• Amendment No. 2 to Lease and Option, dated 1979 between Clare Williamson and
LaPine Pumice Company.
• Mineral Patent from US Government to Clare Williamson, dated, July 3, 1980. Prior to
this date, no recorded have been submitted.
• Bargain and Sale Deed from Clare Williamson to La Pine Pumice Company, dated
October 31, 1980.
• Special Warranty Deed from LaPine Pumice Company to LPP Resources, limited
partnership dated December 27, 1988.
• Corrected Special Warranty Deed, dated January 24, 1989 from LaPine Pumice
Company to LPP Resources, limited partnership.
Assuming that Claimant's interest as a shareholder in a corporation, and later as general partner
in a limited partnership are sufficient to constitute an interest in property held by these entities, then
Claimant's acquisition date of full title would be October 31, 1980. If such indirect interests are insufficient
for Measure 37 purposes, then Claimant has no recognized interest in the subject property.
Assuming that Claimant has an interest in the property as that term is used in Measure 37,
despite being a partner and shareholder in certain entities that actually held title, Claimant's interest prior
to 1980 is, at best, a lease and option to purchase an interest in property located on Federal Land. While
the County believes this interest is insufficient under Measure 37 to qualify as ownership, if a reviewing
Page 6 of 12 - Exhibit A - Order No. 2006-149
court should determine that it is sufficient, then there is evidence to conclude that Claimant acquired a
possessory interest over the property in 1969.
Restrictive Regulation - OS & C
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.
Claimant has identified PL-5, the first zoning ordinance, adopted in 1971, and which Claimant
correctly notes, did not apply to the subject property, as it was not identified on the County's first zoning
map. Later the County by Board Order, dated June 20, 1973 and recorded at Vol 17, page 98, amended
the zoning map to zone "all of the private land not presently zoned lying within the Deschutes National
Forest boundaries in Deschutes County" as "A-1-T, Exclusive Agricultural with Transitional Standards."
Those standards restricted development of private land located within the Deschutes National Forest to
Planned Unit Development with a minimum parcel size of 40 acres. Claimant asserts that this was an
agricultural zone and that it would have allowed single family dwellings in subdivisions with 5-acre
minimum lots sizes, or as small as 2 % acres if a Class II subdivision. Claimant then asserts that such
regulations would not have applied to an interest in property established in 1969 and thus one-acre lots
(limited by soil permeability for septic) would have been approved. The effect of the County's 1973 Order
is unclear. First, staff has not been able to locate any map with which it might have been associated.
However, more significantly, the Order by its terms was limited to private property in the conventional
sense located within federal land and thus, would not have applied to the subject property at all, since the
property title was then held by the US Government. Thus, it appears that despite claimant's possessory
interest for mining purposes, the property was still owned by the Federal government and therefore not
subject to county zoning under PL-5 or the Board Order of June 20, 1973.
Claimant also discusses PL-15, the County's 1979 zoning ordinance, which included adoption of
a new zoning map, adopted on November 1, 1979. Claimant asserts that the subject property was not
identified on the 1979 zoning map and thus continued its Forest Al-40 designation, which, according to
Claimant, would still have allowed one-acre single family residential dwellings as under the 1971 zoning
ordinance. This is incorrect. The County actually adopted zoning maps to implement PL-15 on November
1, 1979. The 1979 zoning map, #31A, established the Open Space and Conservation (OS&C) zone over
Page 7 of 12 - Exhibit A - Order No. 2006-149
the subject property. Such designation would have restricted development of the property for residential
purposes, although without a development application, the County is not prepared to assess by how
much. PL-15 contained provisions which might have allowed an applicant to demonstrate that a use
lawfully existing prior to adoption should qualify as a nonconforming use and thus be permitted to
continue. Thus, notwithstanding that a person might establish a legal preexisting use as nonconforming,
the 1979 zoning ordinance substantially limited development activities on the subject property.
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. Claimant has not demonstrated that submitting an application for mining, subdivision, and
geothermal development would be futile. More specifically, Claimant has not demonstrated that under the
terms of the 1979 zoning ordinance, surface mining of the property, other than maintenance or
continuation of a non-conforming use, would be prohibited. (See: ESEE Findings and Decision for
Surface Mining Site No. 433). This Report confirms that an application for a residential subdivision or a
geothermal power generation facility 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 - $203,500,000 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 Claimant's property resulting from the enforcement of the County's land use
regulation.
Since the nature of Claimant's interest has changed over time, it is necessary to determine
whether the value of such interest at different points in time has been diminished by the adoption or
enforcement of county land use regulations.
With respect to interests that may have existed prior to 1980 (the date that LaPine Pumice
acquired its deeded interest), Claimant through a corporation appears to have possessed a Lease and
Option over an unpatented mining claim. Accepting (without agreeing) Claimant's version of the rights
contained in the Lease and Option, Claimant had a right to mine pumice on the subject property and, if a
patent was issued, an option to purchase the property from the patentee. The prospect that the US
Government would in the future issue a patent to the person holding the unpatented claim and that
Claimant (through its corporation) could exercise its purchase option, does not mean that Claimant's
Page 8 of 12 - Exhibit A - Order No. 2006-149
interest as it (may have) existed prior to 1980 carried with it the ability to undertake other uses, such as
residential development. Thus, all that Claimant could do prior to acquiring title was to mine pumice.
As a result of the County's 1979 zoning ordinance, the establishment of the OS&C zoning and its
rendering Claimant's mining use nonconforming, Claimant could no longer mine pumice in an unrestricted
way. Claimant's ability to mine pumice was substantially restricted and the value of such interest although
not precisely established, would have been negatively affected. If Claimant satisfies all other conditions
necessary for a valid Measure 37 claim, then the County should grant Claimant a waiver from the
County's zoning ordinance to permit Claimant to use the property as he could have used the property
from 1969 until 1979, to mine pumice.
Claimant has asserted that his interest in the property has been diminished based upon his
inability to legally develop the property as a residential subdivision. Prior to obtaining fee title to the
property (through the LaPine Pumice Company) in 1980, Claimant had an insufficient interest in the
property to develop a residential subdivision or a geothermal power plant. In other words, prior to 1980,
Claimant's company's interest in the property would not have allowed residential or geothermal
development.
In terms of evidence of diminished value for residential development, Claimant has submitted no
evidence that domestic water is available or that sanitary service is or would be feasible. Claimant has 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 in
value consists of a calculation based upon the property's current FMV prepared by the County Assessor,
divided by 157 acres and multiplied by $80,000 per lot, as if 157 units could be place on that many acres.
Claimant offers no evidence to support the assumed unit price. As this property is located within the
Newberry National Volcanic Monument at an approximate elevation of 6500 feet, access, particularly in
the winter would likely make any home sites available only for seasonal use. Since the slopes of the
caldera are quite steep, adequate stability for home sites might not enable the numbers of home sites
Claimant desires. Finally, access across federal land for such use would need to be established.
Claimant's 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
Page 9 of 12 - Exhibit A - Order No. 2006-149
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 Claimant 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 that Claimant's interest in the property is determined to be legally
sufficient under Measure 37 such that he could have obtained approval of a subdivision of the property
based upon Claimant's interest in the property in 1969, but not under 1979 zoning, 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 by some uncertain amount. Consistent with the County Code, 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.
Claimant has asserted that his interest in the property has also been diminished based upon his
inability to legally develop a geothermal power plant. Again, assuming that Claimant had a Measure 37
"interest" in property and could have legally developed a geothermal plant based upon the 1969 Lease
and Option over an unpatented mining claim, that County zoning regulations adopted after date prevent
such use, and that Claimant's interest in the property (attenuated by the corporation and limited
partnership) is sufficient under Measure 37, then the value of Claimant's interest has been diminished.
Since Claimant's limited possessory interest in the property prior to 1980 (pursuant to the Lease
and Option) would not have allowed Claimant to develop either a residential subdivision or a geothermal
power plant, and those uses were restricted by OS&C zoning adopted in November 1979, Claimant
cannot through Measure 37 avoid application of those County regulations.
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
Page 10 of 12 - Exhibit A - Order No. 2006-149
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."
In this case, James Miller has presented a case showing what he believes to be a continuous interest in
the property since 1969. This interest is based upon numerous assumptions about how Measure 37 is to
be interpreted. Unless these assumptions are correct, however, the County believes that Claimant is not
entitled to the remedies available under Measure 37.
Conclusion and Recommendation
Corporate ownership The Claimant has not demonstrated eligibility for remedies he has
requested under Measure 37. From 1980 until 1988, title to the property was held by a corporation in
which Claimant was a minority shareholder. Ownership of the corporate property appears to have been
transferred to a limited partnership in which Claimant is a general partner with less than half of the
controlling interest. Unless the definition of owner under Measure 37 is broad enough to include interests
in entities that hold title to the property, Claimant is not an owner.
2. Possessory interest Prior to 1980, Claimant (through the LaPine Pumice Company) had no
interest in the property, because title to the property was held by the US Government until 1980 when a
patent was issued and title was later transferred to the La Pine Pumice Company. If Claimant is
determined to have an interest in property for Measure 37 purposes, notwithstanding the corporation and
limited partnership arrangements referred to in No. 1 above, then Claimant's interest in the property
would have first arisen on October 31, 1980, the date of the Bargain and Sale deed from Clare
Williamson to LaPine Pumice Company. This acquisition date would not permit Claimant to circumvent
the requirements of PL-15, the zoning ordinance or Map 31-A, which established OS&C zoning over the
property. Claimant would not be allowed to develop a residential subdivision or geothermal power plant.
Claimant may submit an application for nonconforming use of the property for mining purposes. Nothing
in this report should be construed as a commitment by the County that such application would be
approved.
3. If a court should decide that Claimant has an interest in property (as defined by Measure 37) by
virtue of the 1969 Lease and Option, and if a court should also decide that Claimant has an interest in
property notwithstanding the corporation and limited partnership interests, then Claimant's acquisition
Page 11 of 12 - Exhibit A - Order No. 2006-149
date will be 1969. Provided further, that since Claimant's possessory interest was limited to a mining
operation, Claimant may continue such mining operation without regard to County land use regulations
made applicable to this property in 1979. As Claimant's interest prior to 1980 (even through a
corporation) would not have allowed Claimant to develop the property for residential and geothermal
development purposes, and Claimant's possessory interest did not evolve to fee title until October, 1980,
Claimant does not qualify for a waiver to allow such residential and geothermal development. Such uses
are subject to land use regulations in place when Claimant's ownership interest might have allowed such
uses, which occurred in 1980. However, by that time PL-15 was in effect and would not have permitted
them.
4. If a court should decide that Claimant has an interest in the subject property by virtue of the 1969
Lease and Option, and, despite the ownership by the corporation and limited partnership, Claimant has
an interest in property, then Claimant's acquisition date would be 1969. Even though Claimant's rights
from 1969 until 1980 were limited to pumice mining, a Court may decide such interest is such that all
County zoning regulations adopted in 1979, including those restricting residential and geothermal
development are vulnerable under Measure 37. Under such circumstances, the County would elect to
waive such regulations in lieu of paying damages.
My recommendation is that the Board approve a waiver in the form of Order attached. This Order
would have the effect of denying a waiver of County land use regulations unless a reviewing court should
determine that Claimant had a sufficient interest in the subject property for Measure 37 purposes
notwithstanding that title was held by a corporation and a limited partnership, in each of which Claimant
held an ownership interest, and further that a Lease and Option in an unpatented mining claim is a
sufficient interest in property to qualify under Measure 37 as an owner.
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 12 of 12 - Exhibit A - Order No. 2006-149
EXHIBIT B
Willamette Meridian, Oregon. Township 21 South, Range
13 East, Section 30, Lots 3, 4, 5, 7, 9 and the W1/2SE1/4SW1/4,
as shown on the supplemental plat of said-township, accepted
January 22, 1963 and consists of 157.47, as more particularly
described in Patent No. 35-80-0006 dated the third clay of July,
1980. Said patent recorded in deed records, Deschutes County,
Oregon.
Order No. 2006- NJ, Miller