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2007-499-Order No. 2007-087 Recorded 5/3/2007DESCHUTES COUNTY OFFICIAL RECORDS CJ 7007■499 NANCY BLANKENSHIP, COUNTY CLERK COMMISSIONERS' JOURNAL 05/03/2007 09:45:55 AM 1111111111111111111111111111111111 2007-4119 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 NOME 7 RE~,IE D NANCY BLANKENSHIP, COUNTY CLERK -A - NO FEE LEGAL C UNSEL IIIIIIIII I VIII VIII IIIIIIII I III III VIIIIIIIII III 00540951200100233570100i0i 05/02/2007 03:35:34 PM D-N37 Cntal Stn=7 BN This is a no fee document BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON An Order Approving a Waiver of Land Use Regulations to Authorize D. M. Stevenson Ranch, * ORDER NO. 2007-087 L LLC to Use the Subject Property as Allowed When It 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, D. M. Stevenson Ranch, LLC made a timely demand for compensation under Measure 37 for a reduction in value to its property at 21085 Knott Road, Bend, Oregon due to regulations which took effect after it 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; On November 30, 2006, D. M. Stevenson Ranch, LLC filed a Measure 37 claim with the Community Development Department. 2. The property is located at 21085 Knott Road, Bend, Oregon and is within Deschutes County. 3. The County Administrator has recommended that the regulations for the subject property that were not already in effect until after May 6, 2002, not be enforced in lieu of payment of just compensation to Claimants. 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 D. M. Stevenson Ranch, LLC is the present owner of the subject property described in Exhibit "B," having acquired an interest in it and continuously owned it since May 6, 2002. The County finds and concludes as set forth below. The Board concurs with the Administrator's report that certain provisions of the County's zoning and subdivision ordinances were adopted after the property was first acquired by a PAGE 1 of 3- ORDER No. 2007-087 (04/30/07) family member of the owner as that term is defined in ORS 197.352, and, if applied to the subject property, would not permit a subdivision of the subject property as desired. The current regulations are land use regulations which are not exempt from Measure 37 claims. 6. The Board concurs with the Administrator's report that an application for a subdivision of the subject property as described in the claimant's materials would be denied if the current regulations were applied. Therefore, such an application to determine enforcement of the current zoning to the Claimants' property would be futile. 7. The Board concurs with the Administrator's report that there is no evidence which demonstrates that the current procedural regulations have reduced the value of the subject property. The Board concurs with the Administrator's report that no evidence has been presented on which to conclude that subdivision of the property may be feasible. However, these matters can and would be evaluated in connection with a permit application. Despite the lack of a precise amount of reduction in value, the loss of the ability to subdivide the subject property would be a substantial amount of reduction in fair market value if the regulations at the time Claimants acquired the property allowed such a use; 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 eligible under DCC 14.10.100. Section 2. The Board hereby elects to not apply nonexempt County land use regulations, to the subject property described in Exhibit "B" in lieu of payment of just compensation under Ballot Measure 37. Claimant may apply for a use of the subject property consistent with the substantive land use regulations in effect at the time it first acquired the property. That land use shall be permitted if the subject property fully complies with all substantive land use regulations in effect on May 6, 2002. The Community Development Director is hereby authorized to determine the effects that any exempt land use regulations, as listed in ORS 197.352(3)(A)-(D), would have on Claimants' proposed use. As used in this section, "land use regulations" refer to those listed in ORS 197.352(11) (B). The Board does not waive current procedural regulations. Procedural regulations are those which set forth the system, method, or way of processing land use applications, such as the requirement to submit a certain form. Substantive land use regulations which are waived are those which regulate the actual use of the land, including those listed in ORS 197.352(11)(B), and including regulations such as minimum lot sizes, density restrictions, setbacks not protecting public safety, and height limits. The Board does not waive exempt regulations which include those described in ORS 197.352(3), but the provisions of ORS 197.352(3)(E) is subject to this Board's order as to dates of acquisition for D. M. Stevenson Ranch, LLC. Section 3. 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 4. This Order is a waiver of a non-exempt County land use regulation from a property determined to be claim eligible as defined in DCC 14.10.020(0). 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. PAGE 2 of 3- ORDER No. 2007-087 (04/30/07) 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 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 eday of April, 2007. ATTEST: K~1~ ZXkA- Recording Secretary PAGE 3 of 3- ORDER No. 2007-087 (04/30/07) BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON 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.om TO: Board of County Commissioners DATE: April 30, 2007 From: David Kanner, County Administrator RE: Measure 37 Claim - D.M. Stevenson Ranch, LLC (Claimant) 21085 Knott Road, Bend, OR Introduction 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. Claimant and affected parties have the opportunity to rebut this Report and provide additional relevant evidence to the Board. Also, under the County's process, claimant 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 November 30, 2006, when Measure 37 was in lawful effect. Claimant has paid the filing fee and submitted the County's official demand form. The property consists of approximately 195 acres in four tax lots. The current zoning is EFU. The Claimant's desired use is to subdivide the property, currently restricted by County land use regulations. Claimant alleges a reduction in value of approximately $16,000,000 due to the inability to Page 1 of 6 - Exhibit A - Order No. 2007-087 subdivide as desired. The following is an analysis of the evidence in the record on the elements of this Measure 37 claim. Current Owner - D.M.Stevenson Ranch, LLC is the owner of the property comprising this claim: 18-12- 22, Tax lots 100, 2500, 2600, and 2700, located at 21085 Knott Road, Bend. Claimant submitted a copy of several warranty deeds, dated February 26, 1973 (TL 2500), March 20, 1970 (TL 2600), March 19, 1970 (TL 2700) and April 29, 1963 (TL 100), (collectively, the Property) showing as grantees: Paul R. and Jean S. Lafferty, husband and wife; Wallace E. and Priscilla B. Stevenson, husband and wife; Bruce M. and Mary H. Stevenson, husband and wife; Rees A. and Eloise M. Stevenson, husband and wife; Donald and Jean Stevenson, husband and wife and John C. and Elinor S. McGuire, husband and wife (collectively, Partners). These Partners conveyed their interest in the Property to a Washington limited partnership, D.M. Stevenson Ranch LP on July 25, 1986. This limited partnership conveyed the Property to the Claimant by warranty deed on May 6, 2002. The records indicate that Claimant has continuously owned the property up to the present. Claimant's managing member, Thomas Stevenson, stated in an affidavit, that the purpose of the conveyance by the Partners to the Washington limited partnership and later to the current owner was for estate planning purposes. There is no evidence in the record of the family relationship among the several sets of spouses comprising the above referenced Partners, except for the managing member's affidavit that he is related to all partners in some undefined way that allegedly meets the Measure 37 definition of "family member." Owner Date of Acquisition - May 6, 2002 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. The first date for which there is documentation Page 2 of 6 - Exhibit A - Order No. 2007-087 showing D. M. Stevenson Ranch, LLC, the current owner obtained an interest in the property is May 6, 2002. Restrictive Regulation - Zoning Regulations. 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 it otherwise could have used the property at the time the property was acquired, and thus reduce the value of the claimant's property. The Claimant has identified The EFU and Surface Mining Impact Area (SMIA) zones, the conditional use chapter and the Comprehensive Plan as it pertains to preservation of agricutural and open space as the specific regulations which have reduced the value of its property by prohibiting their ability to divide the property into smaller lots. Such requirements were adopted after prior to 2002 and would have the effect of restricting the subdivision of the property. While the county would need to evaluate any land use application that may be submitted pursuant to regulations in effect at the time Claimant first acquired an interest in the property, it appears that in theory, based upon regulations in effect in 2002, that the subdivision described in the claim would not have been permitted at that time. 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 have applied for a subdivision resulting in the current zoning being enforced on the subject property. Claimant has demonstrated that submitting an application for such a subdivision would be futile. This Report confirms that such an application for the desired subdivision would violate the current requirements and be denied. Therefore, the intent of DCC 14.10.040(G) has been met for this claim. Reduction in Value - $16,000,000 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. • Claimant has asserted that a land division would be approved. • Claimant's property is located along Knott Road so access may not be an issue. • Other public utilities may be available to the property. Page 3 of 6 - Exhibit A - Order No. 2007-087 • Claimant has not submitted an appraisal, or opinions from real estate professionals in an attempt to show the diminution in value based upon limitations on land division of the property. The managing member has provided a personal opinion of value if the property were developed as compared with the current assessed value. 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 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. If Claimant could have obtained approval of a subdivision of the property on the date the Claimant or a "family member" first acquired an interest in the property, but not under zoning restrictions adopted later, and the resulting lots are fully marketable and useable by future owners, then the value of the 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." In this case, D.M. Stevenson Ranch, LLC has continuously owned an interest in the property since 2002. A claimant who receives a waiver must use the current process to seek the needed permits based on the Page 4 of 6 - Exhibit A - Order No. 2007-087 zoning in place at the time the current owner 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. Measure 37 exempts regulations which were enacted prior to the acquisition date of the owner or a family member of the owner. The definition of family member includes a "legal entity owned by any one or combination of these family members." Since the series of family members in this definition is limited to the traditional members, i.e., father, mother, sister, brother, etc., it is unclear whether one business entity, D.M. Stevenson Ranch, LP can be a family member of a different business entity, D.M Stevenson Ranch, LLC or that either can be considered a family member of a disparate group of married couples, i.e., the Partners. In other words, for purposes of relating back to regulations adopted while a family member held the property, it is unclear whether the above-listed Partners can claim that they are family members of D. M. Stevenson Ranch, LP or D.M.Stevenson Ranch LLC. We assume that one legal entity that preceeds another legal entity by way of merger somehow satisfies this requirement, but the definition is not clear. 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 May 6, 2002, the date when Claimant first acquired an interest in the property. There is evidence in the record that a land division of the subject property would be feasible. My recommendation is that the Board approve a waiver in the form of Order attached. The decision is based upon the assumption that one the original Partners who formed D.M. Stevenson Ranch LP and later D.M.Stevenson Ranch LLC would be considered a family member, as defined in the measure. This Order would have the effect of waiving the nonexempt County land use regulations which were not in effect until after May 6, 2002, to allow the Claimant to use the property in a manner permitted at the time Claimant acquired the property. This waiver is not a development permit. By granting a waiver, the County does not commit itself to approving Claimant's desired development. Cautionary Note on Measure 37 Claimant 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 Page 5 of 6 - Exhibit A - Order No. 2007-087 37 are advised to contact the State Department of Land Conservation and Development and the Department of Administrative Services. Page 6 of 6 - Exhibit A - Order No. 2007-087 EXHIBIT B Parcel 1 Lot (5) STEVENSON RANCH, Deschutes County, Oregon Parcel II The Northwest quarter of the Southeast quarter (NW-1/4 SR-114) of Section Twenty-two (22), Township Eighteen (18) South, Range Twelve (12) EWM, MCCEPT the East half of the Fast half. (Also known as Tax Lot 2500.) Parcel III The East Half of the East Half of the Northwest Quarter of the Southeast Quarter of Section Twenty-two (22), Township Eighteen (18) South, Range Twelve (12) East, of the Willamette Meridian. (Also known as Tax Lot 2600.) Parcel IV A tract of land located in the Northeast Quarter of the South- east Quarter (NE-1/4 SE-114) of Section Twenty-Two (22), Town- ship Eighteen (18) South, Range Twelve (12) East of the Willa- mette Meridian, Deschutes County, Oregon, more particularly described as the west 330 feet of the following tract: Beginning at a point whence the East one quarter corner of said Section 22 bears North 89' 53' 16" East, 654.68 feet; thence South 00' 13' 59" West, 665.31 feet; thence North 89. 54' 40" West, 660.00 feet; thence North 00. 13' 59" East, 662.99 feet; thence North 89' 53' 16" East, 660.00 feet to the point of beginning.