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2014-408-Minutes for Meeting June 04,2014 Recorded 8/12/2014 DESCHUTES BLANKENSHIP, COUNTY CLERK 1��1 20 4'408 NANCY COMMISSIONERS' JOURNAL 08/12/2014 08;00'30 AM 11111111111111111111111111111 2014-408 '`�-E G � � il.� Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF BUSINESS MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, JUNE 4, 2014 Commissioners'Hearing Room-Administration Building- 1300 NW Wall St., Bend Present were Commissioners Tammy Baney, Anthony DeBone and Alan Unger. Also present were Tom Anderson, County Administrator; Dave Doyle and Laurie Craghead, County Counsel; Nick Lelack, Kevin Harrison and Peter Russell, Community Development; Wayne Lowry and Christina Partain, Finance; Chris Doty, Road Department; Sheriff Larry Blanton, Darryl Nakahira, Capt. Erik Utter, Sgt. Nathan Garibay and several other members of the Sheriff's Office; and approximately a dozen other citizens. Chair Baney opened the meeting at 10:02 a.m. 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT None was offered. 3. Before the Board was Consideration of Approval of Grant Applications for the Sheriff's Office. . Document No. 2014-328, the Annual Justice Assistance Grant (JAG) Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 1 of 24 Capt. Erik Utter said they identified three areas where this grant funding would be used. One would be an alarm system that helps them in areas where there are repeated crimes, but they can also partner with Victims' Assistance to help individuals who may be at risk. Another is an encryption program with some of their radios, which would help with surveillance communications. They would like to purchase another dual band radio for backup purposes, and for Search and Rescue work. This grant will help them round out their operational equipment. UNGER: Move approval of County Administrator signature of Document No. 2014-328.. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. . Document No. 2014-327, Pre-disaster Mitigation Plan Update Grant (FEMA/Oregon Emergency Management). Sgt. Nathan Garibay spoke about the current program, which is a requirement of FEMA to be eligible for funding. This affects the wildland fuels program and other mitigation efforts. The State of Oregon had a $250,000 amount set aside for this, and Deschutes County will be applying as a sub-applicant. There is a 25% match on this grant but this can be done in kind through staff work. They have to update this every five years, but best practice is to keep doing this on an ongoing basis. The strategy is to include all cities in the effort, and historically Sisters and La Pine have been involved. He anticipates the participation of the other cities as well. DEBONE: Move approval of County Administrator signature of Document No. 2014-327. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 2 of 24 4. Before the Board was Consideration of Board Signature of Document No. 2014-297, a Notice of Intent to Award Contract Letter for Janitorial Services for the Sheriffs Office. Lt. Daren McMaster and Darryl Nakahira explained the item. This comes after a bid process that included nine companies. Four companies made formal proposals. A board met to review the proposals, three interviews were done and the companies were scored based on certain criteria. Cascade Complete Cleaning Services currently cleans the Sheriff's Office and had the best bid for this work. They take care of the main Sheriff's Office and the employee portion of the Jail, the Terrebonne and Sisters sub-station, the automotive offices and Search and Rescue. UNGER: Move Board signature of the intent to award letter. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. 5. Before the Board was Consideration of Board Signature of Documents Related to the La Pine Land Conveyance Act of 2012, through the Bureau of Land Management. James Lewis stated this is a follow-up to the conveyance of patents addressed a couple of months ago. The patents were recorded and the County is to convey the properties to the various entities involved. He explained the various documents at this time. Commissioner DeBone said this was voted on by the federal legislature years ago but it has taken years to complete the process. This finalizes what was started many years ago. . Document No. 2014-294, Granting an Easement to Midstate Electric Cooperative, La Pine DEBONE: Move approval of Document No. 2014-294. UNGER: Second. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 3 of 24 VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. . Document No. 2014-251, a Bargain and Sale Deed to the City of La Pine UNGER: Move signature of Resolution No. 2014-251 DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. . Document No. 2014-259, a Bargain and Sale Deed to the La Pine Park and Recreation District DEBONE: Move approval of Document No. 2014-294. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. . Document No. 2014-264, a Bargain and Sale Deed to Midstate Electric Cooperative, La Pine UNGER: Move signature of Document No. 2014-264. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. 6. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-052, Adopting the Fiscal Year 2014-15 Fee Schedule for Deschutes County for 2014-15. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 4 of 24 Chair Baney opened the public hearing. Christina Partain gave an overview of the Resolution. All changes to the schedule were as discussed at the work session in April, and notice was properly provided. There has been no public input. Being no testimony, the hearing was closed. Commissioner Unger said that they attempt to keep up with inflation, with more frequent small raises rather than large ones. They need to keep up also with the cost of appeal fees. Commissioner DeBone stated that the Builder's Association, Bulletin Editorial Board and others to make sure the fees are appropriate. There were some changes in Health Department fees but these are due to changes in overall health care. All were carefully evaluated. Chair Baney noted that the Community Development Department is fee supported, so the appeal fees have to stay in line with this. They look at the actual cost of service and remain below those of other agencies. Commissioner Unger added that good service means timely service. DEBONE: Move approval of Document No. 2014-294. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 7. Before the Board was Consideration of Second Reading by Title Only, and Adoption, of Ordinance No. 2014-003, Amending Code regarding Presumptive Fines for Violations. Laurie Craghead noted that the first reading was over two weeks ago and can proceed. There is one change based on comments from the Commissioners. She added a new Whereas clause in the ordinance. The motion is to move second reading by title only of the Ordinance, including what was read by staff The effective date would be ninety days from now. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 5 of 24 Commissioner DeBone said the intention is for voluntary compliance. Ms. Craghead stated that this affects not just CDD but a few other departments. UNGER: Move second reading by title only and as ready by staff. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Chair Baney conducted the second reading by title only, amended. Y g Y Y� DEBONE: Move adoption as amended. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes Y es. 8. Before the Board was Consideration of Second Reading by Title Only, and Adoption, of Ordinance No. 2014-004, Amending Code regarding Fines to be Consistent with Oregon Revised Statute. Ms. Craghead said this is to be consistent with the other, and nothing has changed in this Ordinance. UNGER: Move second reading by title only. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Chair Baney conducted the second reading by title only. DEBONE: Move adoption. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 6 of 24 9. Before the Board was a Public Hearing and Consideration of First Reading by Title Only of Ordinance No. 2014-017, Amending Title 17, Changes to the County's Traffic Study Requirements. Chair Baney read the opening statement and declared the hearing open. The Commissioners had no conflicts of interest to disclose, and there were no challenges. Peter Russell provided an overview of the item. The changes are to make the standards and language consistent throughout and to comply with statute. This addresses situations where it is not felt that a study is appropriate, and gives discretion to the Road Engineer and others. Chair Baney stated that it can be costly to address this kind of thing, and should only be necessary when it is appropriate. Commissioner Unger appreciates them organizing Code to make it easier for the public to locate information. This is a floor and some things can be managed in other ways. Being no testimony offered, Chair Baney closed the hearing. UNGER: Move first reading by title only of Ordinance No. 2014-017. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Chair Baney conducted the first reading by title only. 10. Before the Board was a Public Hearing and Consideration of First Reading by Title Only of Ordinance No. 2014-001, Amending Title 18, Changes to the County's Traffic Study Requirements. Chair Baney opened the hearing. Being no testimony offered, she closed the hearing. DEBONE: Move first reading by title only of Ordinance No. 2014-001. UNGER: Second. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 7 of 24 VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Chair Baney conducted the first reading by title only. 11. Before the Board was Consideration of Board Signature of Documents No. 2014-286 and 2014-287, Farm and Forest Management Easements that were Required for a Medical Hardship Dwelling in the Exclusive Farm Use Zone. Laurie Craghead stated that this involved a temporary hardship dwelling which has since been removed, and these documents are required at this time to remove the easements. The reason for these documents is no longer there. The property owner asked to meet with staff at this time. When Ms. Craghead returned, she said she discussed this issue with the property owner and all is acceptable. The property owner nodded approval. UNGER: Move signature of Documents. No. 2014-286 and No. 2014-287. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. 12. Before the Board was a Public Hearing on the Appeal of the Hearings Officer's Decision on Application No. A-13-8, regarding Whether the Conceptual Master Plan Approval for Thornburgh Destination Resort Has Been Initiated. Chair Baney opened the public hearing at this time, and Kevin Harrison read the opening statement. This is a de novo hearing only on whether the applicant complied with a certain section of Code. Regarding ex parte contact, bias or conflicts of interest, the Commissioner declared none. No one challenged the Commissioners on this basis. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 8 of 24 Ms. Craghead said this is quasi judicial, and the process is to hear from the applicant, then from those who wish to testify. Any statements not made preclude not being able to bring this up on appeal or in Circuit Court. The Chair at her discretion can convey questions from others to the applicant or others who testify. The record could be left open if so desired. Mr. Harrison explained this has to do with whether the CMP has been initiated. If it has, there is no expiration date. If it has not been initiated, the applicant has no standing. He explained who the applicant and opponents are. He indicated the file is available for review. The Board's Order specified a de novo hearing only on the one criterion. There was a work session and the material was review, along with criterion and relative conditions of approval. He indicated what materials were included in this review. t s ev ew. He has the entire file available, and the LUBA record is available on line. He noted the materials that has been received since the appeal was filed until today. He also has a copy of the PowerPoint presentation that the applicant will do today. August 3, 2014 is the statutory deadline on this kind of proceeding. Chair Baney reminded the audience to fill out a testimony sheet today if they wish to talk. They won't go through the relevancy of whether a destination resort is feasible or desirable, but only will address the specific criterion that is on appeal. David Petersen, attorney, said he is representing the applicant, Loyal Land LLP. He provided some additional documents that he would refer to during the presentation. He also had a color-coded timeline map to include. He said the timeline is crucial. It is a complex project and has been around a long time. Chair Baney asked that his presentation take no longer than 30 minutes. He agreed. He referred to the presentation at this time. The Hearings Officer noted that there were ambiguities in the LUBA decision. The Board is not bound by this decision like the Hearings Officer is. The Board can interpret Code as appropriate, and can consider new evidence. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 9 of 24 There is a three-step process for destination resorts: CMP, FMP and individual site plan review for each phase. Code allows the CMP to be the framework for development. Many have been approved and developed under this process. The Hearings Officer's decision replaces the three-step process with the generic Code provision that it has to be approved within two years. The heart of the problem is that this is not consistent as a framework. Ms. Gould supports this because she wants to eliminate or prohibit any complex developments here. The CMP was applied for in 2005, appealed in 2006, final approval after LUBA in 2008, and additional trips including the Supreme Court, so there were over 1,000 days from the initial action. This cost over $2.2 million. The application was filed in 2008 right after the CMP was approved, and 19 to 20 months before the CMP became final. The FMP was approved, but there were two more years of appeals, and it was remanded back in 2010 regarding wildlife mitigation sites. Nothing could happen to this remand until 2011 when the BLM identified those. The Hearings Officer said she could not consider that date. Between the filing of application and the remand in 2010, it took well over two years, at a cost of$1.5 million. Other permits had to be obtained, at an additional cost of$1 million, plus the access road was built on BLM land. Ms. Gould unsuccessfully appealed two of these permits. Most land was acquired by foreclosure, and they filed an application to determine if the CMP was current. LUBA said it had expired retroactively. The Hearings Officer determined the CMP had been initiated, but that was appealed, then remanded back, and the Hearings Officer determined it had not been per LUBA. As is standard for the Board, there are two key elements of the test. Conditions of approval were substantially exercised, or any failure to do so was not the fault of the applicant. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 10 of 24 There were 41 conditions of approval. Some were added or replaced. The Hearings Officer found 19 were fully exercised. One is the wildlife mitigation condition. This leaves 21 conditions of approval. With respect to the fault of the applicant, the Hearings Officer said the conditions were contingent on later land use approval; these were conditions that were not yet addressed. This was done as a whole with a judgment being made on this basis. She could not reach the conclusion these were substantially exercised. There were three errors of the Hearings Officer. Many are not contingent conditions at all. Many are restated as descriptions for future action in the FMP or final conditions. This directly contradicts the three-step permit process squeezed into two years. This is essential undoing the entire process. The process has been applied many times in other extended projects. This directly contradicts the ten to twelve year phasing plan into two years. The second error is not supported by DCC 22.36.020.A.3. This does not talk about fault and contingencies Contrary to LUBA 2012-042, it is not the fault of the applicant that the contingency may not exist or cannot yet exist. This rewrites Chapter 18.113, the contingency has not yet occurred but has to do with the final approval or later land use approvals. This is not in the two- year window. It does not make sense if you are to follow the three-step process. It would then apply to all projects in which the two-year window is not possible for complicated projects. The Hearings Officer started the two-year time in 2009, but subsequent appeals caused an 849-day delay that she did not consider. The consequences of this decision compresses the work into two years, which makes all 2 years, makes complex multi-phased projects impossible. The applicant in effect has veto power, as they use the two-year time in appeals. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 11 of 24 Specific to Thornburgh, the applicant has to get approval if the project changes, but all this was to be done within two years and not in the ten to twelve year period. Stating that the applicant is at fault for not meeting timelines due to appeals. There was a delay in BLM identification of wildlife mitigation information, during which time the applicant could do nothing. This left less than nine months to do everything else. There were numerous appeals of decisions. The Hearings Officer said this can't be the applicant's fault. There were delays that took a lot of time. The overwhelming number of appeals were denied. The destination resort approval process is complex itself, and cannot be realistically handled within two years. However, the opponent has suggested that the applicants were not acting in good faith. They took significant risk in pursuing the project. Between the BLM requirements in February 2011 and the expiration in November 2011, this was all supposed to be handled. They were expected to take unreasonable risks, but even then the timeline was not possible. Most important was the great recession. The Hearings Officer found no causal link with this. She could not accept new evidence but there is substantial evidence of this. The Hearings Officer said there was no direct connection between the economy and Thornburgh's finances. An analyst concluded that this was a major factor. Between 2007-2011, the average prices at destination resorts dropped 79%, and sales dropped from 56 to 3. The market died. This project was not immune to this, and went from $50 million to $8 million drop in property value of the property. The note for the property was actually bought for $4 million after foreclosure. Even if they tried to pursue development during that time, the timeframe still did not fit. It is absurd to think they could have done this without a market for the product, no ability to refinance, etc. It is also not reasonable to say the applicant was not somewhat responsible for this not moving along. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 12 of 24 The Hearings Officer suggested that Jeff Parker had a financial interest. He does not. It was suggested that Loyal Land and Mr. Larsen brought it down, but he had not even heard of this project until 2011. There are a few additional errors. One is full compliances vs. fully exercised. The Hearings Officer called it performance, synonymous with compliance. All new road names have to be reviewed. So what does it mean to be fully compliant? The applicant had not obtained road name approval. All these conditions could not be exercised, but depended on further land use approvals that could not yet be obtained. It also says ANY failure makes them at fault. It is a one strike and you are out. The Hearings Officer found four conditions that were too prohibitive in nature. The Hearings Officer eliminated any mention of the word `substantial'. This is the ultimate exercise of a condition needing prerequisite acts that could not yet be done. The Hearings Officer said `substantially exercised' meant `fully exercised'. Some were determined more important than others, but this is not in Code. Under relentless pursuit, everything that could be performed at this point has been. The Hearings Officer's decision prioritized the general over the specific and cut the time short. There needs to be a better approach, In her first decision, they were okay. She changed her mind about conditions that could only be subsequent. She was forced by LUBA, but they had misinterpreted. The best approach is to harmonize code into a comprehensive and coherent whole and allows destination resorts to be subject to reasonable rules. This was the original Hearings Officer decision. Those conditions that can be exercise prior to FMP are the only ones that they should consider. He concluded that this has been a substantial injustice to the applicant. They need a sensible and balance interpretation of Code. His presentation concluded at 11:40 a.m. Paul Dewey, representing the opponent, provided a handout. He requested an opportunity to respond to the additional material. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 13 of 24 He said that appeals of this kind try to make issues appear as broad and precedence setting. This was a complete affirmance of LUBA and the Court of Appeals. They pointed out that this hinged on the wording of the CMP decision and how it was written with conditions of approval. They should not be addressing this because it does not have precedential value. LUBA said to avoid other problems, the County was to put certain words in the decision to make contingencies not binding. But in this particular case, regarding how the CMP was written, it was not a problem with Code but with the case. The history is why the conditions of a pp roval are so important. They are there because the applicant was not satisfying the conditions of the CMP. A major one was the wildlife plan.mitigation lan. These are not discreet elements. There g are linkages to the CMP and FMP. All of the subsequent approvals had to be necessarily involved with the CMP. Regarding Code sections, "conceptual" sounds vague. That is not how the Code works. The CMP has many pages of approvals. The FMP is to make sure it is consistent with the CMP. It is a framework in Code, but he feels it is the guts of the entire thing. This is not an override of the three-part process. There are unique facts to this case, one of them being fault. It comes down to the applicant not doing anything since the remand in 2010, claiming nothing could be done because they were waiting for BLM. They should have done this themselves. Assuming they had to wait for BLM in February 2011, they did not do anything with that. Still haven't applied for the final master plan. They claim the remand involves minor issues but this held them up. They should have shown good faith to move it forward. The Hearings Officer found that it was possible to get approval of the FMP on two phases if they had proceeded. He presented a timeline as well. There were various appeals and remands. There is a process if a permit needs an extension, and the applicant can apply for this. There were no extension here. The appeal of Hearings Officer's decision is an end-run on this. They should have known they could apply for extensions. They wanted the County to hold the extensions aside for a while. There were changes in ownership during this time. Chair Baney reminded all that today's meeting needs to end by 12:15 p.m. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 14 of 24 Mr. Dewey asked if the County should have to do more if the applicant has not availed itself when it could. He is conflicted about the liberal extension policies. This is ten years old and the transportation analysis and economic study are outdated. A party should have to avail itself of them. They can't blame this on the economy or the BLM or his client. The true issue is whether the applicant is at fault for all of this. It sounds often like his client is at fault for filing appeals. There were a number of times that LUBA and Court of Appeals ruled in her favor. Commissioner Dennis Luke voted against the CMP at the time because it was incomplete. Much was deferred to the conditions of approval. Commissioner Clarno said the 2 to 1 ratio information was inconsistent. Staff directed their attention to it. They found it difficult to arrive at a conclusion due to inconsistent and incomplete information. The Court of Appeals remanded back on the wildlife mitigation plan as not being complete. The applicant wanted this at the FMP level. This was not the fault of his client filing appeals. There were a number of arguments that the Hearings Officer made interpretations, but it was LUBA and Court of Appeals making them. The Hearings Officer the first time around said only the CMP was relevant. She was overruled. It is not appropriate that the Board could overturn this. LUBA decided that if there is any condition of approval not fully exercised, they have to determine fault. If it is not their fault, they are absolved. This is not logical. There is an argument that full resort construction is necessary in under two years. LUBA said that kind of characterization is not accurate. They have to substantially comply. The Hearings Officer put a lot of work into analyzing the conditions. They could have done a lot, even initiating a remand to advance the satisfaction of the CMP. Also mentioned by Loyal Land was that it will impair their ability to pursue a remand. When, from a policy perspective, they are to make sure this gets done in a timely manner. It is not appropriate that the applicant can avoid not doing anything to trigger other things. Ten years later they say they have initiated their use, but they still have not completed some of the basics of the CMP. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 15 of 24 This is not broad, and is in fact, specific. The Hearings Officer's decision was thorough. The principal determination of fault is clear; they did not initiate remand when they could have. They did not seek five years of extensions. There was substantial infighting and bankruptcy back to 2006. There was an incomplete application at the time. They spent a lot of money, but can still be at fault for not having a better CMP in the first place and pursuing it. Mr. Dewey's testimony concluded at 12:08 p.m. Mr. Peterson came forward for rebuttal. He said it is a question of the extension applications. An extension was granted in November 2011 for a year. However, the initial decision of the Hearings Officer said the original extension expired in December 2011. LUBA said in January 2013 that it expired in November 2011 instead. LUBA backdated in the e-mail. The concept of fault is crucial, not just an accidental mishap. This was an honest mistake, as they acted under the Hearings Officer's authority, which was changed by LUBA. They are trying to get back to the original CMP approval. Ms. Gould has a right to appeal, but those caused delays and expense, and uncertainty for the applicant and lenders. It does not mean the applicant should ignore those risks. LUBA and the Court of Appeals are not the governing bodies of Deschutes County, and the Board can decide what its Code means. Since 2006 when the CMP was first approved, there was only a nine-month period when this project was not under some kind of appeal. Half of that window was lost to the BLM appeal. They tried to move forward even when it was under appeal. They should not be punished for not doing this again. Even if they had done this then, it would not have satisfied the Hearings Officer, since she required approval of the FMP and subsequent actions that were not possible. The FMP may have been again appealed. Chair Baney said they requested an extension in November 1, 2011, and it was granted for a year. The Hearings Officer in April 2012 said the CMP expired on December 7, 2011. They filed for another extension then. In November 2013, LUBA said it was filed on November 18, so the time was shortened. The second extension was then late by 18 days so the applicant withdrew it. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 16 of 24 She said that on the basis of recession and complexities, the opportunity to discuss this had been removed. The applicant's attorneys at the time were different, and by virtue of LUBA, the second application was rendered untimely. Ms. Craghead said that LUBA made the decision regarding the backdating because the extension application was also appealed. The first was appealed as well. They appealed to the Board and not LUBA. Chair Baney asked if they should leave the record open. Ms. Craghead stated they can leave the record open regarding what was presented today, then a rebuttal period with no new evidence, and final rebuttal of the applicant. They need to mail out a decision no later than August 3, 2014. Chair Baney would like to have a work session with a matrix prior to deliberations. It was decided that all testimony needs to be submitted no later than 5 p.m. on June 25, 2014. • The first period for submittal ends at 5 p.m. on June 11. • Rebuttal from any party, with no new evidence, is 5 p.m. on June 18. • Final applicant rebuttal with no new evidence is 5 p.m. on June 25. • A work session will be held on June 30, with deliberations on July 2 at the regular business meeting. Commissioner DeBone stated that the CMP is a big checklist of items, anything that the community wants to know about, expired or not. This gets them into the FMP part. He was not a Commissioner then, but knows about the recession and financial issues. He wants to know the overall history. Chair Baney said they need to follow the process and how it would apply to this situation. Commissioner DeBone observed that some projects worked out well, but this one ran into issues. He wants to compare and figure out how this one went off track. Ms. Craghead stated that for individual projects, the Board has never accepted financial difficulties as an excuse for performance. Usually the Board would accept an extension. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 17 of 24 Chair Baney asked why the extension was denied. Mr. Harrison said that it never made it to the Board but was handled by staff. It was appealed. Chair Baney closed the oral part of the hearing at this time. Before the Board was Consideration of Approval of the Consent Agenda. Chair Baney said she has not yet been able to review the minutes of May 19. DEBONE: Move approval of the consent agenda except the minutes. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Consent Agenda Items 13. Board Signature of Document No. 2014-121, an Intergovernmental Agreement for Sheriff's Office Law Enforcement Services in the City of Sisters 14. Board Signature of Resolution No. 2014-079, Approving the Assignment and Transfer of the Cable Television Franchise Issued to Bend Cable Communications/Bendbraodband to Telephone and Data Systems, Inc. (dba TDS Baja) 15. Board Signature of Document No. 2014-295, a Quitclaim Deed for 600 Square Feet to the City of Bend 16. Board Signature of Order No. 2014-016, Canceling Uncollectible Personal Property Taxes 17. Approval of Minutes: • Business Meeting: May 19, 2014 • Work Session: May 19, 2014 CONVENED AS THE GOVERNING BODY OF THE SUNRIVER SERVICE DISTRICT 18. Before the Board was Consideration of Board Signature of Resolution No. 2014-050, Transferring Appropriations within the Operating Funds. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 18 of 24 Wayne Lowry said Sunriver Service District had asked for this routine budget adjustment. DEBONE: Move approval. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 19. Before the Board was Consideration of Board Signature of Document No. 2014-326, a Special Districts Insurance Services Form of Joinder to Trust Agreement. Dave Doyle explained the item, which has to do with insurance obtained by the Sunriver Service District. It is a clarification and housekeeping item. UNGER: Move signature of Document No. 2014-326. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes Y es. 20. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-058, Adopting the Fiscal Year 2014-15 Fee Schedule for the Sunriver Service District. Chair Baney opened the public hearing. Christina Partain said there have been no changes since the previous discussion. No testimony was offered, so the hearing was closed. UNGER: Move signature of Resolution No. 2014-058. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 19 of 24 CONVENED AS THE GOVERNING BODY OF THE BLACK BUTTE RANCH COUNTY SERVICE DISTRICT 21. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-053, Adopting the Fiscal Year 2014-15 Fee Schedule for the Black Butte Ranch County Service District. Chair Baney opened the public hearing. Ms. Partain said there were some changes but are as discussed at the April work session. Being no testimony offered, the hearing was closed. DEBONE: Move approval. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. CONVENED AS THE GOVERNING BODY OF THE COUNTYWIDE LAW ENFORCEMENT DISTRICT #1 22. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-055, Adopting the Fiscal Year 2014-15 Fee Schedule for the Countywide Law Enforcement District #1. Chair Baney opened the public hearing. Ms. Partain stated that there were requested changes but were discussed at the April work session. Being no testimony offered, the hearing was closed. UNGER: Move signature of Resolution No. 2014-055. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 20 of 24 CONVENED AS THE GOVERNING BODY OF THE RURAL LAW ENFORCEMENT DISTRICT #2 23. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-056, Adopting the Fiscal Year 2014-15 Fee Schedule for Rural Law Enforcement District #2 for 2014-15. Chair Baney opened the hearing at this time. Ms. Partain said there was one change to delete a fee, as disused at the April work session. Being no testimony offered, the hearing was closed. DEBONE: Move approval. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. CONVENED AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 24. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-054, Adopting the Fiscal Year 2014-15 Fee Schedule for the 9-1-1 County Service District for 2014-15. Chair Baney opened the public hearing, and Ms. Partain stated there were no requested changes by 9-1-1 to the fee schedule. Being no testimony offered, the hearing was closed. UNGER: Move signature of Resolution No. 2014-054. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 21 of 24 25. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District in the Amount of $35,056.06 (two weeks). DEBONE: Move approval. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. CONVENE AS THE GOVERNING BODY OF THE EXTENSION/4-H COUNTY SERVICE DISTRICT 26. Before the Board was a Public Hearing and Consideration of Board Signature of Resolution No. 2014-057, Adopting the Fiscal Year 2014-15 Fee Schedule for the Extension/4-H County Service District for 2014-15. Chair Baney opened the hearing. Ms. Pertain said they requested no changes to the fee schedule. Being no testimony offered, the hearing was closed. DEBONE: Move approval. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 27. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District in the Amount of$16,479.80 (two weeks). UNGER: Move approval, subject to review. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 22 of 24 RECONVENED AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 28. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for Deschutes County in the Amount of$1,057,928.04 (two weeks). DEBONE: Move approval. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 29. ADDITIONS TO THE AGENDA A. Before the Board was Consideration of Board Signature of Order No. 2014-014, Repealing Order No. 2012-017 and Authorizing Designated persons to Provide Custody and Secure Transport Services for Allegedly Mentally Ill Persons. Deanne Can said this repeals a previous Order and puts into place new designees under the new Director, Jane Smilie. UNGER: Move approval. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Yes. BANEY: Chair votes yes. DEBONE: Move approval of additional consent agenda items. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 23 of 24 Additional Consent Agenda Items B. Board Signature of a Letter Appointing Rick Root to the Deschutes County Bicycle and Pedestrian Advisory Committee, through June 30, 2015 C. Board Signature of Document No. 2014-330, an Addendum to a Real Estate Sale Agreement with Biogreen Sustainable Energy Co. D. Board Signature of Document No. 2014-324, the Annual Boating Safety and Law Enforcement Agreement between the Sheriff's Office and the State of Oregon Marine Board Being no other items brought before the Board, the meeting adjourned at 12:40 p.m. DATED this 61 Day of 2014 for the Deschutes County Board of Commissioner \it '( Tammy Bane y,y, Chair acef / / a Anthony DeBone, Vice Chair ATTEST: Cda", Alan Unger, Commissioner Recording Secretary Minutes of Board of Commissioners' Business Meeting Wednesday, June 4, 2014 Page 24 of 24 n ur / 0� t'l ►, Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org BUSINESS MEETING AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 10:00 A.M., WEDNESDAY, JUNE 4, 2014 Commissioners'Hearing Room-Administration Building- 1300 NW Wall St.,Bend 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT This is the time provided for individuals wishing to address the Board, at the Board's discretion, regarding issues that are not already on the agenda. Please complete a sign-up card(provided), and give the card to the Recording Secretary. Use the microphone and clearly state your name when the Board calls on you to speak. PLEASE NOTE: Citizen input regarding matters that are or have been the subject of a public hearing will NOT be included in the official record of that hearing. 3. CONSIDERATION of Approval of Grant Applications — Capt. Erik Utter and/or Sgt. Nathan Garibay, Sheriff's Office . Document No. 2014-328, the Annual Justice Assistance Grant (JAG) . Document No. 2014-327, Pre-disaster Mitigation Plan Update Grant (FEMA/Oregon Emergency Management) Suggested Action: Move Board approval of County Administrator signature of the grant applications. 4. CONSIDERATION of Board Signature of Document No. 2014-297, a Notice of Intent to Award Contract Letter for Janitorial Services for the Sheriff s Office —Darryl Nakahira and/or Lt. Deron McMaster, Sheriff's Office Suggested Action: Move signature of Document No. 2014-297. Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 1 of 11 5. CONSIDERATION of Board Signature of Documents Related to the La Pine Land Conveyance Act of 2012, through the Bureau of Land Management — James Lewis, Property & Facilities . Document No. 2014-294, Granting an Easement to Midstate Electric Cooperative, La Pine . Document No. 2014-251, a Bargain and Sale Deed to the City of La Pine . Document No. 2014-259, a Bargain and Sale Deed to the La Pine Park and Recreation District . Document No. 2014-264, a Bargain and Sale Deed to Midstate Electric Cooperative, La Pine Suggested Action: Move signature of documents. 6. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-052, Adopting the Fiscal Year 2014-15 Fee Schedule for Deschutes County for 2014-15 — Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-052. 7. CONSIDERATION of Second Reading by Title Only, and Adoption, of Ordinance No. 2014-003, Amending Code regarding Presumptive Fines for Violations —Laurie Craghead, County Counsel Suggested Actions: Move second reading by title only, and adoption, of Ordinance No. 2014-003. 8. CONSIDERATION of Second Reading by Title Only, and Adoption, of Ordinance No. 2014-004, Amending Code regarding Fines to be Consistent with Oregon Revised Statute —Laurie Craghead, County Counsel Suggested Actions: Move second reading by title only, and adoption, of Ordinance No. 2014-004. Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 2 of 11 9. A PUBLIC HEARING and Consideration of First Reading by Title Only of Ordinance No. 2014-017, Amending Title 17, Changes to the County's Traffic Study Requirements —Peter Russell, Community Development Suggested Actions: Open public hearing, take testimony, move first reading of Ordinance No. 2014-017, by title only. 10. A PUBLIC HEARING and Consideration of First Reading by Title Only of Ordinance No. 2014-001, Amending Title 18, Changes to the County's Traffic Study Requirements —Peter Russell, Community Development Suggested Actions: Open public hearing, take testimony, move first reading of Ordinance No. 2014-001, by title only. 11. CONSIDERATION of Board Signature of Documents No. 2014-286 and 2014-287, Farm and Forest Management Easements that were Required for a Medical Hardship Dwelling in the Exclusive Farm Use Zone —Paul Blikstad, Community Development Suggested Action: Move signature of Documents No. 2014-286 and 2014-287. 12. A PUBLIC HEARING on the Appeal of the Hearings Officer's Decision on Application No. A-13-8, regarding Whether the Conceptual Master Plan Approval for Thornburgh Destination Resort Has Been Initiated —Kevin Harrison, Community Development Suggested Actions: Open public hearing, take testimony, deliberate as appropriate. CONSENT AGENDA 13. Board Signature of Document No. 2014-121, an Intergovernmental Agreement for Sheriff's Office Law Enforcement Services in the City of Sisters 14. Board Signature of Resolution No. 2014-079, Approving the Assignment and Transfer of the Cable Television Franchise Issued to Bend Cable Communications/Bendbraodband to Telephone and Data Systems, Inc. (dba TDS Baja) Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 3 of 11 15. Board Signature of Document No. 2014-295, a Quitclaim Deed for 600 Square Feet to the City of Bend 16. Board Signature of Order No. 2014-016, Canceling Uncollectible Personal Property Taxes 17. Approval of Minutes: • Business Meeting: May 19, 2014 • 2014 Session: May 19, 20 Work Sess y , CONVENE AS THE GOVERNING BODY OF THE SUNRIVER SERVICE DISTRICT 18. CONSIDERATION of Board Signature of Resolution No. 2014-050, Transferring Appropriations within the Operating Funds — Wayne Lowry, Finance; Mike Gocke, Sunriver Service District Suggested Action: Move Board signature of Resolution No. 2014-058. 19. CONSIDERATION of Board Signature of Document No. 2014-326, a Special Districts Insurance Services Form of Joinder to Trust Agreement — Dave Doyle, County Counsel Suggested Action: Move Board signature of Document No. 2014-326. 20. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-058 g Ado tin the Fiscal Year 2014-15 Fee Schedule for the Sunriver Adopting Service District — Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-058. CONVENE AS THE GOVERNING BODY OF THE BLACK BUTTE RANCH COUNTY SERVICE DISTRICT 21. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-053, Adopting the Fiscal Year 2014-15 Fee Schedule for the Black Butte Ranch County Service District — Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-053. Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 4 of 11 CONVENE AS THE GOVERNING BODY OF THE COUNTYWIDE LAW ENFORCEMENT DISTRICT #1 22. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-055, Adopting the Fiscal Year 2014-15 Fee Schedule for the Countywide Law Enforcement District #1— Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-055. CONVENE AS THE GOVERNING BODY OF THE RURAL LAW ENFORCEMENT DISTRICT #2 23. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-056, Adopting the Fiscal Year 2014-15 Fee Schedule for Rural Law Enforcement District #2 for 2014-15 — Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-056. CONVENE AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 24. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-054, Adopting the Fiscal Year 2014-15 Fee Schedule for the 9-1-1 County Service District for 2014-15 — Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-054. 25. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District CONVENE AS THE GOVERNING BODY OF THE EXTENSION/4-H COUNTY SERVICE DISTRICT 26. A PUBLIC HEARING and Consideration of Board Signature of Resolution No. 2014-057, Adopting the Fiscal Year 2014-15 Fee Schedule for the Extension/4-H County Service District for 2014-15 — Christina Partain, Finance Suggested Actions: Open the public hearing and take testimony; move Board signature of Resolution No. 2014-057. Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 5 of 11 27. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District RECONVENE AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 28. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for Deschutes County 29. ADDITIONS TO THE AGENDA Deschutes County encourages persons with disabilities to participate in all programs and activities. This event/location is accessible to people with disabilities. If you need accommodations to make participation possible,please call(541) 388-6572, or send an e-mail to bonnie.baker@ deschutes.org. PLEASE NOTE: At any time during this meeting,an executive session could be called to address issues relating to ORS 192.660(2)(e),real property negotiations;ORS 192.660(2)(h),litigation;ORS 192.660(2)(d),labor negotiations; ORS 192.660(2)(b),personnel issues;or other executive session items. FUTURE MEETINGS: (Please note:Meeting dates and times are subject to change. All meetings take place in the Board of Commissioners'meeting rooms at 1300 NW Wall St., Bend, unless otherwise indicated. If you have questions regarding a meeting,please call 388-6572.) Monday, June 2 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, June 3 3:30 p.m. Local Public Safety Coordinating Council Meeting 5:00 p.m. Bend Chamber of Commerce Event Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 6 of 11 Wednesday, June 4 10:00 a.m. Board of Commissioners' Business Meeting 2:00 p.m. Joint Work Session with the La Pine City Council, La Pine City Hall Thursday, June 5 8:30 a.m. Performance Management &Department Update—Justice Court Monday, June 9 —Tuesday, June 10 Association of Oregon Counties' Spring Conference—Hood River Thursday, June 12 7:00 a.m. State of the Community—City/County—Chamber of Commerce—Riverhouse Monday, June 16 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) 4:00 p.m. Mobilization Ceremony, at Bend Elks Ball Field Wednesday, June 18 11:00 a.m. Oregon Youth Challenge Graduation—Fair/Expo, Redmond Monday, June 23 10:00 a.m. Board of Commissioners' Business Meeting—includes public hearings and adoption of budgets for fiscal year 2014-15 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, June 24 11:00 a.m. Annual Luncheon Meeting of Board of Commissioners with the Black Butte Ranch County Service District Board—Black Butte Ranch 1:00 p.m. Employee Benefits Advisory Committee Meeting Wednesday, June 25 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 7 of 11 Thursday, June 26 8:00 a.m. 9-1-1 Director Candidate Interviews—at 9-1-1 5:30 p.m. Joint Meeting of the Board of Commissioners and Planning Commission Friday, June 27 8:00 a.m. 9-1-1 Director Candidate Interviews—at 9-1-1 Monday, June 30 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, July 1 8:00 a.m. Sisters Chamber of Commerce Event—State of the City—Sisters 3:30 p.m. Local Public Safety Coordinating Council Meeting Wednesday, July 2 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) 5:30 p.m. Public Hearing on Central Oregon Irrigation District Text Amend (Canal Piping) Thursday, July 3 8:00 a.m. Joint Meeting of Board of Commissioners with Sisters City Council, City Hall 11:00 a.m. Performance Management & Department Update—Legal Counsel Monday, July 4 Most County offices will be closed to observe Independence Day Monday, July 7 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 8 of 11 Wednesday, July 9 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, July 21 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, July 22 1:00 p.m. Employee Benefits Advisory Committee Meeting Wednesday, July 23 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, July 28 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, August 4 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, August 5 3:30 p.m. Local Public Safety Coordinating Council Meeting Wednesday, August 6 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 9 of 11 Thursday, August 7 9:00 a.m. Performance Management & Department Update—9-1-1 County Service District Wednesday, August 13 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, August 18 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Wednesday, August 20 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, August 25 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Wednesday, August 27 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Thursday, August 28 9:00 a.m. Performance Management & Department Update—Sheriff's Office,Part I Tuesday, September 2 3:30 p.m. Local Public Safety Coordinating Council Meeting 5:00 p.m. County College Presentation Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 10 of 11 Wednesday, September 3 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Thursday, September 4 9:00 a.m. Performance Management & Department Update—Sheriff's Office, Part II Deschutes County encourages persons with disabilities to participate in all programs and activities. This event/location is accessible to people with disabilities. If you need accommodations to make participation possible,please call(541) 388-6572, or send an e-mail to bonnie.baker(a),deschutes.org. Board of Commissioners' Business Meeting Agenda Wednesday, June 4, 2014 Page 11 of 11 t -c c ct 0 0 ipos..\ 044 -< Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org ADDITION TO BUSINESS MEETING AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 10:00 A.M., WEDNESDAY, JUNE 4, 2014 Commissioners'Hearing Room-Administration Building- 1300 NW Wall St., Bend 1. CONSIDERATION of Board Signature of Order No. 2014-014, Repealing Order No. 2012-017 and Authorizing Designated persons to Provide Custody and Secure Transport Services for Allegedly Mentally Ill Persons —Scott Johnson and/or Jane Smilie, Health Services ADDITIONAL CONSENT AGENDA 2. Board Signature of a Letter Appointing Rick Root to the Deschutes County Bicycle and Pedestrian Advisory Committee, through June 30, 2015 3. Board Signature of Document No. 2014-330, an Addendum to a Real Estate Sale Agreement with Biogreen Sustainable Energy Co. 4. Board Signature of Document No. 2014-324, the Annual Boating Safety and Law Enforcement Agreement between the Sheriff's Office and the State of Oregon Marine Board N/ { BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest - ' A t r n b a r y)/c j Date y_ i t" Name D 4 J, 4 c+CLseiv Address S tiJ F eh- n v- /1..U0 V0 ck lati 4 O 1112,3 Ll Phone#s CO - `S E-mail address (lc, re 4-ci , Lon. c r >{ In Favor Neutral/Undecided 1 Opposed Submitting written documents as part of testimony? { Yes No �j�0-res �eoc BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest Date . Name Address Phone #s E-mail address In Favor Neutral/Undecided Opposed Submitting written documents as part of testimony? I -` 1 Yes No Bonnie Baker From: Kevin Harrison Sent: Tuesday, May 20, 2014 8:52 AM To: Bonnie Baker Cc: Laurie Craghead; Nick Lelack; Paul Dewey(pdewey @bendcable.com); david.petersen @tonkon.com Subject: Agenda request and related materials for A-14-1 (Loyal Land) Attachments: A141 Agenda_Request_Form.docx; M.BCC.A141.docx; CONDITIONS OF APPROVAL FOR CU.docx; A141.Notice of appeal.pdf; A138. Applicant's written submittals.pdf; A138. Opponents'written submittals.pdf; A138 DR118.pdf; LUBA No. 2012-042 (DR-11-8).pdf Bonnie: Please find attached an agenda request for a public hearing on June 4 at the Board Business Meeting along with the following attachments: • Cover memo and conditions of approval for CU-05-20 • Notice of appeal (A-14-1;Loyal Land) • Hearings Officer's decison (A-13-8; DR-11-8) • Applicant's written testimony for A-13-8 • Opponent's written testimony for A-13-8 • LUBA No. 2012-042 Please also reserve time for a Board work session on June 2. It will probably require at least one hour. Let me know if you have any questions. Thanks. Kevin Principal Planner 117 NW Lafayette Avenue Bend, OR 97701 (541) 385-1401 E-mail: kevinh(a)co.deschutes.or.us 1 -A-Es , .c)„ re---.\ Lti —k Community Development Department Planning Division Building Safety Division Environmental Soils Division c -,p ,. " r4M'ilfj a'�i/V3 rr'�i�r�' t 0x4"y P.O. Box 6005 117 NW Lafayette Avenue Bend, Oregon 97708-6005 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ MEMORANDUM To: Deschutes County Board of Commissioners From: Kevin Harrison, Principal Planner Date: May 20, 2014 Re: Appeal of Hearings Officer's decision; File no. A-14-1 The following is an outline and discussion of the key points associated with the Board's review of the Hearings Officer's decision on A-13-8. I. Nature of the Application A. The application under review is a declaratory ruling to determine whether the conceptual master plan (CMP)for Thornburgh Destination Resort has been "initiated". If it has, then there is no expiration date and the permit can be used in subsequent permits to develop the resort. If the CMP has not been initiated, then the approval has expired and the resort has no land use entitlements. II. Background/History A. The CMP (County file no. CU-05-20)was approved by the Board and, after a series of appeals became final on December 9, 2009. LUBA determined that the expiration date of the approval was November 18, 2011. B. The applicant, Loyal Land, LLC, filed a declaratory ruling (DR-11-8) on November 1, 2011, seeking a determination from the County as to whether the CMP has been initiated. On April 12, 2012, the Hearings Officer issued a decision that the CMP had been initiated. That decision was appealed to the Land Use Board of Appeals (LUBA). C. LUBA remanded the County approval (LUBA No. 2012-042) on January 8, 2013, finding that the Hearings Officer inappropriately considered only "relevant" conditions of approval instead of all conditions of approval of the CMP. D. Loyal Land submitted a request to the County on December 23, 2013 (A-13-8) to initiate a hearing on the remanded decision. A public hearing was held on February 4, 2014, and a decision was issued on March 18, 2014, finding that the CMP had not been initiated. Quality Services Performed with Pride E. Loyal Land submitted an appeal of the Hearings Officer's decision on March 31, 2014 (A-14-1); by Order No. 2014-010, the Board agreed to hear the appeal and a hearing has been scheduled for June 4, 2014. F. By Order No. 2014-010, the Board shall hear the appeal de novo only on the issue of whether the application complied with DCC 22.36.020(A)(3). III. Parties to the Proceedings A. Applicant/Appellant: Loyal Land, LLC, as represented by David Petersen of Tonkon Torp LLP. B. Opponent: Nunzie Gould, as represented by Paul Dewey. IV. The Record A. The record consists of the following: 1. The record for LUBA No. 2012-042 (DR-11-8). 2. The record for A-13-8. 3. All materials submitted for A-14-1. V. Scope and Focus of Hearing A. The hearing is de novo only on the issue on the issue of whether the application complied with DCC 22.36.020(A)(3). (Order No. 2014-010) B. DCC 22.36.020(A)(3) reads as follows: "For the purpose of DCC 22.36.020, development action under a land use approval described in DCC 22.36.010 has been `initiated' if it is determined that: Where construction is not required by the approval, the conditions of a permit or approval have been substantially exercised and any failure to fully comply with the conditions is not the fault of the applicant." C. In LUBA No. 2012-042, LUBA gave the following relevant instructions: 1. County must consider whether all of the 38 conditions of approval have been `substantially exercised'. 2. County can interpret this to apply to all 38 conditions individually or to the 38 conditions viewed as a whole. 3. For those conditions that have not been substantially exercised, failure to do so is not the fault of the applicant. 4. With respect to conditions of approval that provide `contingent or continuing obligations', the County may find that any failure on the applicant's part to comply with such conditions is not the applicant's fault because: a. The contingency that would trigger obligations under the condition does not and may never exist, or b. The applicant's failure to obtain any additional prerequisite land use approvals is not the applicant's fault. D. After consideration of LUBA No. 2012-042, the Hearings Officer found that the applicant did not initiate the resort before the CMP approval became void and made the following relevant findings: 1. Conditions of approval 3, 8, 9, 10, 11, 13, 14A, 14B, 15, 19, 22, 24, 30, 36 and 37 were found to be fully complied with in DR-11-8 and were not challenged in the appeal to LUBA and, thus, are not subject to further review. (Page 16 of Hearings Officer's Decision on Remand) Page 2 2. The applicant fully complied with conditions 1, 14E, 23 and 32. 3. The applicant substantially exercised condition 38. 4. Most of the CMP conditions of approval under consideration impose contingent obligations on the applicant that did not occur before the destination resort approval became void, and the applicant's failure to fully comply with those contingent obligations was the applicant's fault. a. The Hearings Officer describes the reasoning behind this determination on pages 27-31 of her Decision on Remand. b. The term "fault" is defined in the decision as "reasons for which the applicant was not responsible, including but not limited to, delay by a state or federal agency in issuing a required permit." (Page 16 of Hearings Officer's Decision on Remand) In summary, the applicant argues its failure to initiate the Final Master Plan (FMP) remand was due to four circumstances outside its control. BLM Approval of Wildlife Mitigation Plan. The Hearings Officer found that there was not substantial evidence in the record before her to determine that the applicant's failure to initiate the FMP remand was due to a delay in the BLM's approval of the wildlife mitigation plan. The Board may consider new evidence on this issue in their review. ii. TRC's Bankruptcy and Other Economic Considerations. The Hearings Office found there was no evidence in the record of a direct connection between the general economic downturn and Thornburgh's financial difficulties, which clearly predated the recession. The Hearings Officer also found that TRC and the applicant were partly and perhaps primarily responsible for TRC's inability to develop the resort within the initiation period. iii. Opponent's Appeals. The Hearings Officer agreed with the opponent that the opponent cannot reasonably be blamed for the applicant's delay in initiating the FMP remand. iv. Futility of Initiating FMP Remand. The Hearings Officer found that it would have been possible for TRC to obtain approval of the FMP and the tentative and final plats for the first two phases of the resort before November 11, 2011 (i.e., before the CMP became void). c. While securing approval of the FMP and tentative plat for the first two phases of the resort would not have constituted full compliance with all CMP conditions, it would have been full compliance with at least 9 of the remaining CMP conditions, and could have provided the foundation for a finding that the CMP conditions of approval, when viewed as a whole, were substantially exercised. 5. The Hearings Officer lacked authority to consider whether the applicant substantially exercised most of the conditions with which the applicant failed to fully comply because the noncompliance was the applicant's fault. 6. The term "substantially exercised", as used in the Hearings Officer's decision in DR-11-8, was not challenged in the appeal to LUBA and, thus, stands as described in that decision- i.e., performing or carrying out a condition of approval to a significant degree but not completely. (Page 24 of Hearings Officer's Decision on Remand) Page 3 7. When viewed as a whole, those conditions that were not fully complied with are more significant to the development of the resort than those conditions that were complied with. (Pages 45-47 of Hearings Officer's Decision on Remand) VI. Schedule/Attachments A. A public hearing is scheduled for June 4, 2014. A work session is scheduled for June 2, 2014. The applicant has granted an extension of the statutory review timeline to August 3, 2014. B. Attached are copies of: (1) the Notice of Appeal; (2) Hearings Office Decision on Remand (A-13-8/DR-11-8); (3)Applicant's and Opponent's written arguments and testimony on A-13-8; (4) LUBA No. 2012-042; and (5) the conditions of approval for the CMP, color-coded pursuant to the Hearings Officer's findings as to compliance. Page 4 CONDITIONS OF APPROVAL FOR CU-05-20, CONCEPTUAL MASTER PLAN FOR THORNBURGH RESORT 1. Approval is based upon the submitted plan. Any substantial change to the approved plan will require a new application. 2. All development in the resort shall require tentative plat approval through Title 17 of the County Code, the County Subdivision/Partition Ordinance, and/or Site Plan Review through Title 18 of the County Code, the Subdivision Ordinance (sic). 3. Applicant shall provide a signed grant of right-of-way from the U.S. Department of Interior— Bureau of Land Management for an access easement connection to U.S. Highway 126, prior to submission of a Final Master Plan application. 4. Subject to U.S. Department of the Interior— Bureau of Land Management (BLM) approval, any secondary emergency ingress/egress across the BLM-owned land or roadways shall be improved to a minimum width of 20 feet with an all-weather surface capable of supporting a 60,000-lb. fire vehicle. Emergency secondary resort access roads shall be improved before any Final Plat approval or issuance of a building permit, whichever comes first. 5. The developer shall design and construct the road system in accordance with Title 17 of the Deschutes County Code (DCC). Road improvement plans shall be approved by the Road Department prior to construction. 6. All easements of record or right-of-ways (sic) shall be shown on any final plat. 7. All new proposed road names must be reviewed and approved by the Property Address Coordinator prior to final plat approval. 8. Plan review and approval of water supply plans for phase 1 will be required by Oregon Department of Human Services-Drinking Water Program (DHS-DWP) prior to Final Master Plan approval. 9. Applicant shall designate the location of all utility lines and easements that burden the property on the FMP. 10. Applicant shall comply with all applicable requirements of state water law as administered by OWRD for obtaining a state water right permit and shall provide documentation of approval of its application for a water right permit prior to approval of the final master plan. Applicant shall provide, at the time of tentative plat/site plan review for each individual phase of the resort development, updated documentation of 1 the state water right permit and an accounting of the full amount of mitigation, as required under the water right, for that individual phase. 11. At the time of submission for Final Master Plan (FMP) approval, Applicant shall include ( ) pp a written plan for entering into cooperative agreements with owners of existing wells within a two-mile radius of Applicant's wells. The plan shall include a description of how Applicant will provide notice to affected well owners and of the terms and conditions of an option for well owners to enter into a written agreement with Applicant under which Applicant will provide indemnification to well owners in the event of actual well interference as a result of Applicants water use. The plan shall remain in effect for a period of five years following full water development by Applicant. Specific terms and conditions of the plan shall be developed in cooperation with County staff and the Oregon Water Resources Department. 12. Commercial, cultural, entertainment or accessory uses provided as part of the destination resort shall be contained within the development and shall not be oriented to public roadways. Commercial, cultural and entertainment uses allowed within the destination resort shall be incidental to the resort itself. As such, these ancillary uses shall be permitted only at a scale suited to serve visitors to the resort. Compliance with this requirement shall also be included as condition of FMP approval. 13. Applicant shall specify all recreational facilities within the proposed resort as part of final master plan submittal. 14. Applicant and its successors shall do the following to ensure that all open space used to assure the 50% open space requirement of Section 18.113.060(D)(1) is maintained in perpetuity: A. Applicant shall submit for approval, as part of the Final Master Plan, a delineation of the Open Space that is substantially similar to the area shown in the Open Space Plan submitted as Ex. 9, B-14 to the "Memorandum of Applicant, in response to public comments dated September 28, 2005, (sic) Open Space shall be used and maintained as ''open space areas" as that term is used in DCC 18.113.030(E). B. The CC&Rs, as modified and submitted to the County on December 20, 2005, shall be further revised such that, Section 3.4 retains the first two sentences, but the balance of 3.4 is replaced with the following: At all times, the Open Space shall be used and maintained as "open space areas." The foregoing sentence is a covenant and equitable servitude, which runs with the land in perpetuity and is for the benefit of all of the Property, each Owner, the Declarant, the Association, and the Golf Club. All of the foregoing entities shall have the right to enforce covenant and equitable servitude. This Section 3.4 may not be amended except if approved by an affirmative vote of all Owners, the Declarant, the Golf Club and the Association. C. All deeds conveying all or any part of the subject property shall include the following restriction: 2 it This property is part of the Thornburgh Resort and is subject to the provisions of the Final Master Plan for Thornburgh Resort and the Declaration of Covenants, Conditions and Restrictions of Thornburgh Resort. The Final Master Plan and the Declaration contain a delineation of open space areas that shall be maintained as open space areas in perpetuity. D. All open space areas shall be clearly delineated and labeled on the Final Plat. E. Any substantial change to the open space approved under this decision will require a new land use permit. 15. Applicant shall obtain an approved Water Pollution Control Facility (WPCF) permit (as described in DCC 18.113.070(L)) prior to application for Final Master Plan. 16. All temporary structures shall be limited to a maximum of 18 months on the resort site. 17. All development within the proposed resort shall meet all fire protection requirements of the Redmond Fire Department. Fire protection requirements shall include all minimum emergency ingress/egress roadway improvements. 18. No development shall be allowed on slopes of 25% or more on the site. 19. Applicant shall implement a "Wildfire/Natural Hazard Protection Plan" for the resort, as identified in Ex. 15, B-29 of the burden of proof statement. Prior to approval of the Final Master Plan and each subdivision and site plan, Applicant shall coordinate its evacuation plans through that development phase with the Deschutes County Sheriff's Office and the Redmond Fire Department. At the same time, Applicant shall also coordinate its plans for the movement of evacuees over major transportation routes with the Oregon State Police and the Oregon Department of Transportation. 20. The cumulative density of development at the end of any phase shall not exceed a maximum density of 0.72 dwelling units per acre (including residential dwelling units and excluding visitor-oriented overnight lodging). 21. Each phase of the development shall be constructed such that the number of overnight lodging units meets the 150 overnight lodging unit and 2:1 ratio of individually owned units to overnight lodging units standard set out in DCC 18.113.060(A)(1) and 18.113.060(D)(2). (Note: DCC 18.113.060(D)(2) subsequently amended to require 2.5:1 ratio) Individually owned units shall be considered visitor oriented lodging if they are available for overnight rental use by the general public for at least 45 weeks per calendar year through one or more central reservation and check-in services. As required by ORS 197.445(4)(b)(8), at least 50 units of overnight lodging must be constructed in the first phase of development, prior to closure of sale of individual lots or units (Source: Board Decision on Remand; Document No. 2008-151). 3 In addition to complying with the specific requirements of DCC 18.113.050(U) (sic), 1- 5, Applicant, its successors and assigns, shall at all times maintain (1) a registry of the individually owned units subject to deed restrictions under DCC 18.113.070(U)(2) (sic), requiring they are available for overnight lodging purposes: (2) an office in a location reasonably convenient to resort visitors as a reservation and check-in facility at the resort; and (3) a separate telephone reservation line and a website in the name of "Thornburgh Resort", to be used by members of the public to make reservations. As an alternative to or in addition to (3), Applicant may enter into an agreement with a firm (booking agent) that specializes in the rental or time-sharing of resort property, providing that Applicant will share the information in the registry required by(1) and cooperate with the booking agent to solicit reservations for available overnight lodging at the resort. If Applicant contracts with a booking agent, Applicant and the booking agent shall cooperate to ensure compliance with the requirements of DCC 18.113.070(U)(5), (sic) by filing a report on January 1 of each year with the Deschutes County Planning Division. (Staff note: All references should be to DCC 18.113.070(L), not .050 or (U)) 22. Applicant shall submit final covenants, conditions and restrictions to the county prior to Final Master Plan approval. The final covenants, conditions and restrictions adopted by the developer and amendments thereto shall conform in all material respects to this decision and the requirements of the DCC. 23. No permission to use or improve Barr Road as access to the Resort is given or implied by this decision. 24. Applicant shall complete annexation of the property in any area of development into Deschutes County Rural Fire Protection District No. 1 before commencing combustible construction in the area. 25. Applicant shall submit a detailed erosion control plan with the first Tentative Plat or Site Plan, whichever comes first. 26. Lot size, width (frontage), coverage, off-street parking and setbacks, including solar setbacks, are permitted as described in Applicant's Exhibit 8, B-24a in the Burden of Proof document, subject to review during the subdivision review process to confirm that there will be safe vehicle access to each lot. Compliance with the dimensional standards shall be confirmed during subdivision approval for each development phase. All multi-family units, commercial structures, and other resort facilities are exempted from meeting the solar setback standards. 27. Road width shall be consistent with the requirements set forth in the County's subdivision ordinance. DCC Chapter 17.36. 4 28. Applicant shall abide at all times with the MOU with BLM, dated September 28, 2005, regarding mitigation of impacts on surrounding federal lands, to include wildlife mitigation and long-range trail planning and construction of a public trail system. The mitigation plan adopted by Applicant in consultation with Tetra Tech, ODFW and the BLM shall be adopted and implemented throughout the life of the resort. 29. Applicant shall abide at all times with the MOU with ODOT, regarding required improvements and contributions to improvements on ODOT administered roadways (Agreement Number 22759, dated 10/10/05). 30. Applicant shall submit a detailed traffic circulation plan, delineating resort access roads, resort internal circulation roads and resort secondary emergency ingress/egress roads, prior to Final Master Plan approval. 31. All exterior lighting must comply with the Deschutes County Covered Outdoor Lighting Ordinance per Section 15.10 of Title 15 of the DCC. 32. No permission to install a helicopter landing zone (helipad) at the Resort is given or implied by this decision. 33. The Resort shall, in the first phase, provide for the following: A. At least 150 separate rentable units for visitor-oriented lodging. B. Visitor-oriented eating establishments for at least 100 persons and meeting rooms which provide eating (sic)for at least 100 persons. C. The aggregate cost of developing the overnight lodging facilities and the eating establishments and meeting rooms required in DCC 18.113.060(A)(1) and (2) shall be at least $2,000,000 (in 1984 dollars). D. At least$2,000,000 (in 1984 dollars) shall be spent on developed recreational facilities. E. The facilities and accommodations required by DCC 18.113.060 must be physically provided or financially assured pursuant to DCC 18.113.110 prior to closure of sales, rental or lease of any residential dwellings or lots. 34. Where construction disturbs native vegetation in open space areas that are to be retained in a substantially natural condition, Applicant shall restore the native vegetation. This requirement shall not apply to land that is improved for recreational uses, such as golf courses, hiking or nature trails or equestrian or bicycle paths. 35. The contract with the owners of units that will be used for overnight lodging by the general public shall contain language to the following effect: "[Unit Owner] shall make the unit available to [Thornburgh Resort/booking agent] for overnight rental use by the general public at least 45 weeks per calendar year through a central reservation and check-in service." 5 36. Applicant shall coordinate with the Sheriff's Office and its designated representative to address all public safety needs associated with the resort and the development process. 37. Applicant shall modify the Overnight and Density Calculations chart presented to the Board at the appeal hearing on December 20, 2005 by replacing it with the Overnight and Density Calculations chart included on page 25 in Applicant's final legal argument, dated January 3, 2006, as shown below. The 75 units of overnight lodging shown in the December 20, 2005 Overnight and Density Calculations table to be developed in Phase C will actually be developed in Phase B, for a total of 150 units in Phase B. The Overnight and Density Calculations table will be corrected to show the 50 hotel units will be developed in Phase D, where the Phasing Plan, attached to the Memorandum of Applicant in Response to Public Comments, Ex. 13, Revised B 1.8, al r eady shows the hotel will be developed. Additionally, the legend in the Phasing Plan will be corrected to show hotel and residential overnight lodging uses in Phase D. Applicant shall present the corrected Phasing Plan and Overnight and Density Calculations chart, consistent with this condition, during the Final Master Plan approval process. (Note: Referenced table omitted. This condition inadvertently numbered 36 in Board Decision on Remand, Document No. 2008-151) 38. Applicant shall demonstrate compliance with DCC 18.113.070(D) by submitting a wildlife mitigation plan to the County as part of its application for Final master plan approval. The County shall consider the wildlife mitigation plan at a public hearing with the same participatory rights as those allowed in the CMP approval hearing. (Note; This condition was numbered 37 in Board Decision on Remand, Document No. 2008-151) Conditions in red are those found to be fully complied with in DR-11-8 and not challenged at LUBA. These conditions are no longer subject to review. Conditions in blue are those found to be either fully complied with or substantially exercised in A-13-8. These conditions are subject to review under A-14-1. 6 1 BEFORE TT-IE LAND USE BOARD OF APPEALS 2 OF THE STATE OF OREGON 3 4 ANNUNZIATA GOULD, 5 Petitioner, �a, 6 ;- `-'Fri Prredf 7 vs. r�r_q 8 9 DESCHUTES COUNTY, 10 Respondent, ;: \ 11 12 and 13 14 LOYAL LAND, LLC, „ " 15 and KAMERON DELASIIMIJTT 16 Intervenors-Respondents. p \ � 17 18 LUBA No. 2012-042 19 20 FINAL OPINION 21 AND ORDER 22 23 Appeal from Deschutes County. 24 25 Paul D, Dewey, Bend, filed the petition for review and argued on behalf of petitioner. 26 27 No appearance by Deschutes County. 28 , 29 Seth J. King, Portland, filed a response brief and argued on behalf of intervenor- 30 respondent Loyal Land, LLC. With him on the brief were Steven L. Pfeiffer and Perkins 31 Coie, LLC. 32 33 David J. Petersen and Peter D. Mohr, Portland, represented intervenor-respondent 34 Kameron DeLashrutt. 35 36 . HOLSTI.JN, Board Member; BASSHAM, Board Chair; RYAN, Board Member, 37 participated in the decision. 38 39 REMANDED 01/08/2013 40 41 You are entitled to judicial review of this Order. Judicial review is governed by the 42 provisions of ORS 197.850. Page 1 � 1 1 Opinion by Holstun. 2 NATURE OF THE DECISION 3 Petitioner appeals a county decision that the destination resort that was authorized by 4 an April 15, 2008 conceptual master plan approval decision has been"initiated." 5 REPLY BRIEF 6 Petitioner moves for permission to file a reply brief to respond to arguments in the 7 intervenor-respondent's response brief that she failed to preserve one of the issues presented 8 in the petition for review. The motion is granted. 9 INTRODUCTION 10 This appeal is the latest in a number of appeals concerning the Thornburgh 11 Destination Resort to be sited on Exclusive Farm Use (EFU)-zoned land in Deschutes 12 County. As proposed, the Thornburgh Destination Resort would occupy approximately 13 1,970 acres. Thornburgh Resort Company, which is owned by Kameron and Lisa 14 DeLashmutt, was the applicant for conceptual master plan (CMP) approval and for final 15 master plan (FMP) approval for the Thornburgh Destination Resort. Thornburgh Resort 16 Company was the original owner of all but 160 of those 1,970 acres. The other 160 acres 17 were and still are owned by Agnes DeLashmutt (who is Kameron DeLashmutt's mother).' 18 The county's initial decision granting CMP approval was remanded by LUBA. The county 19 subsequently issued its second decision granting CMP approval on April 15, 2008. The 20 . county issued its first and only decision granting FMP approval on October 8, 2008. 21 The land use litigation concerning the CMP approval came to an end on December 9, 22 2009, when the Court of Appeals issued its appellate judgment in Gould v. Deschutes 23 County,,227 Or App 601, 206 Pad 1106 (2009). As a result of the Court of Appeals' ' The 1,970 acres include eight lots. At the time the land use litigation concerning the CMP approval concluded, Thornburgh Resort Company owned seven of those lots and Agnes DeLashmutt owned the eighth lot. Page 2 1 decision, the county's April 15, 2008 decision granting CMP approval for the Thornburgh 2 Destination Resort was affirmed. The land use litigation concerning the FMP approval came 3 to an end on February 24, 2010, when the Court of Appeals affirmed LUBA's September 9, 4 2009 decision that remanded the county's FMP decision. The county has taken no further 5 action on the FMP decision following LUBA's remand. 6 On September 4, 2011, through a foreclosure action, Loyal Land, LLC (Loyal Land) 7 took title to the seven lots formerly owned by Thornburgh Resort Company, but Loyal Land 8 did not take title to the 160 acre lot that is still owned by Agnes DeLashmutt. Under state 9 and local law, a permit like the county's April 15, 2008 CMP decision is "void" two years 10 after the permit decision becomes final unless the use authorized by the permit is "initiated 11 within that * * * period." OAR 660-033-0140(1); Deschutes County Code (DCC) 12 22.36.010(B)(1). In Deschutes C ou nt y, a declaratory ry rulin may be requested for, amon g 13 other things, "[d]etermining whether an approval has been initiated." DCC 22.40,010(A)(3). 14 In her first assignment of error, petitioner contends the county should not have accepted 15 Loyal Land's application for a declaratory ruling, or rendered a decision on that application, 16 because Loyal Land does not own all of the 1,970 acres that make up the approved 17 Thornburgh Destination Resort site. In her second assignment of error, petitioner contends 18 the county erred in finding the two-year time limit imposed by DCC 22.36.010(B)(1) applies 19 in place of the two-year time limit in OAR 660-033-0140(1).2 In her third through fifth 20 assignments of error, petitioner contends that even if the county correctly found that the two- 21 year time limit in DCC 22.36.010(B)(1) applies in place of the two-year time limit in OAR 22 660-033-0140(1), the county erroneously found that the use authorized by the April 15, 2008 23 CMP was initiated before the DCC 22.36.010(B)(1)two-year time limit expired. 2 As we explain later in this opinion, while there are similarities in the state and county two-year limitations,there also are differences. Page 3 1 FIRST ASSIGNMENT OF ERROR 2 DCC 22.08.010(B) sets out a general requirement that an application for land use 3 approval must "[b]e submitted by the property owner or a person who has written 4 authorization from the property owner * * *." However, for applications for declaratory 5 rulings, DCC 22.40.020(A) applies in place of DCC 22.08.010(B) and provides: 6 "DCC 22.08.010(B) notwithstanding, the following persons may initiate a 7 declaratory ruling under DCC 22.40: 8 "1. The owner of a property requesting a declaratory ruling relating to the 9 use of the owner's property; 10 "2. In cases where the request is to interpret a previously issued quasi- 11 judicial plan amendment, zone change or land use permit, the holder of 12 the permit; or 13 "3. In all cases arising under DCC 22.40.010, the Planning Director. 14 "No other person shall be entitled to initiate a declaratory ruling." 15 The hearings officer found that the application was properly submitted under DCC 16 22.40.020(A)(1). The hearings officer found that although Loyal Land does not own all of 17 the Thornburgh Destination Resort property, "where there are multiple owners the 18 application can be submitted by `a' property owner." Record 69. Petitioners challenge that 19 finding: 20 "It is * * * inappropriate for the Hearings Officer to effectively change the 21 Code language from. `the property owner' to `a property owner[.]"' Petition 22 for Review 9-10.3 23 . Because the first assignment of error presents a question regarding interpretation of DCC 24 22.40.020(A)(1), and the local government decision maker was the county hearings officer, 3 The parties argue at length regarding whether Loyal Land qualifies as the holder of the CMP permit and therefore is also authorized to submit the declaratory ruling application under 22,40.020(A)(2). The hearings officer found that the declaratory ruling application was authorized by both 22.40.020(A)(1) and (2). Because we agree with the hearings officer's interpretation of 22.40.020(A)(1),we need not and do not consider whether her interpretation of 22.40.020(A)(2)is correct. Page 4 • 1 not the board of county commissioners, the deferential standard of review set out at ORS 2 197.829(1) does not apply in this appeal. Gage v. City of Portland, 319 Or 308, 317, 877 3 P2d 1187 (1994); Tonquin Holdings, LLC v. Clackamas County, 247 Or App 719, 722-23, 4 270 P3d 397 (2012); Gould v, Deschutes County, 233 Or App 623, 629, 227 P3d 758 (2010). 5 Therefore, the applicable standard of review is whether the hearings officer "[i]mproperly 6 construed the applicable law,"within the meaning of ORS 197.835(9)(a)(D). 7 Because DCC 22.40.020(A)(1) authorizes applications for declaratory rulings from 8 "[tjhe owner of a property requesting a declaratory ruling relating to the use of the owner's 9 property" (emphasis added), DCC 22.40,020(A)(1) only expressly anticipates an application. 10 for a declaratory ruling by one property owner. DCC 22.40.020(A)(1) simply does not 11 anticipate or address the circumstance presented in this appeal—a declaratory ruling "relating 12 to the use of' eight lots, with seven lots owned by Loyal Land and one lot owed by Agnes 13 DeLashmutt. DCC 22.40.020(A)(1) is therefore ambiguous about whether a declaratory 14 ruling is possible where there are multiple property owners and, if so, whether all owners 15 must seek the declaratory ruling or whether any of the property owners may do so. See Mark 16 Latham Excavation, Inc, v, Deschutes County, 250 Or App 543, 555, 281 P3d 644 (2012) 17 (statutory silence may result in statutory ambiguity). 18 The issue of whether DCC 22.40.020(A)(1) is limited to properties where there is a 19 single owner and is simply inapplicable where there is more than one property owner does 20 not appear to have been an issue below, and we do not consider that issue further. The 21 parties' dispute is limited to whether in the circumstance presented in this appeal (where a 22 site is owned by two persons) "any" property owner may seek a declaratory ruling 23 concerning the Thornburgh Destination Resort property (the hearings officer's ruling), or 24 whether "all" property owners must seek the declaratory ruling (petitioner's position). We 25 limit our consideration to that question. Page 5 1 As we have already explained, DCC 22,40.020(A)(1) simply does not anticipate that 2 question and both petitioner's and the hearings officer's answers to that question are equally 3 plausible. Those answers are also both equally somewhat at odds with the actual language of 4 DCC 22.40.020(A)(1), since DCC 22.40.020(A)(1) assumes that there is only one owner (the 5 owner) and therefore does not expressly address whether "any" or "all" property owners 6 must join in the request where there are multiple owners. The hearings officer's 7 interpretation of DCC 22.40.020(A)(1) results in the declaratory ruling process being more 8 broadly available and the petitioner's interpretation narrows the availability of the 9 declaratory ruling process. 10 As we noted at the beginning of our discussion of this assignment of error, DCC 11 22.40.020(A) applies specifically to applications for declaratory rulings and expands 12 somewhat on the universe of persons who may generally seek land use approvals under DCC 13 22.08.010(5), to include permit holders in some circumstances and the planning director in 14 all the circumstances set out in DCC 22.40.010. In concluding under DCC 22.40.020(A)(1) 15 that Loyal Land could initiate this declaratory ruling request and that Agnes DeLashmutt 16 need not join in that request, the hearings officer cited DCC 22.40.020(A)'s broadening of 17 the potential universe of applicants as some contextual support for allowing any property 18 owner to do so, at least with respect to the property it owns, rather than requiring that all 19 property owners join in the application. That is not a great deal of contextual support, but it 20 is some support. Where the competing interpretations are equally plausible, as we find them 21 to be here, we believe that context is sufficient to allow us to conclude that the hearings 22 officer did not "[i]mproperly construe[] the applicable law," within the meaning of ORS Page 6 I _ 1 197.835(9)(a)(D) and that DCC 22.040.020(A) allows Loyal Land to seek a declaratory 2 ruling regarding the use of its property.4 3 The first assignment of error is denied. 4 SECOND ASSIGNMENT OF ERROR 5 OAR 660-033-0140 provides that a "discretionary decision * * * on agricultural or 6 forest land outside an urban growth boundary" is void two years from the date of the final 7 decision if the development action is not initiated in that period."5 The county's 2008 CMP 8 decision qualifies as a "discretionary decision * * * on agricultural * * * land[.]" In her 9 second assignment of error, petitioner argues the county should have applied OAR 660-033- 10 0140 rather than the similar, but different, permit expiration standards set out at DCC 11 22.36.010.6 A key difference between the rule and the county permit expiration standards is 12 that the county permit expiration standards expressly toll the running of the two year period 13 while there are pending land use appeals; OAR 660-033-0140 does not expressly do so. 14 The hearings officer found that because the county's comprehensive plan and land 15 use regulations have been acknowledged, DCC 22.36.010 applies in this case and OAR 660- 16 033-0140, which is part of the Land Conservation and Development Commission's 17 (LCDC's) administrative rule implementing Goal 3 (Agricultural Lands), does not apply. 18 Byrd v. Stringer, 295 Or 311, 318-19, 666 P2d 1332 (1983) ("[O]nce acknowledgment has 19 been achieved, land use decisions m u st be m eas ured not against the goals but a g ainst the 20 acknowledged plan and implementing ordinances."); Friends of Neabeck Hill v. City of 4 Kameron DeLashmutt and Thornburgh Resort Company requested that the hearings officer include a finding that the declaratory ruling in this case is not binding on them. The hearings officer declined to include such a finding, explaining that the effect if any of the declaratory ruling on the DeLaslunutts and Thomburgh Resort Company could be decided in the future, if necessary. Record 66. 5 The complete text of OAR 660-033-0140 is set out at Appendix A of this opinion. 6 The relevant text of DCC 22.36.010 is set out at Appendix 13 of this opinion. Page 7 1 Philomath, 139 Or App 39, 46, 911 P2d 350 (1996) (same). Petitioner contends Byrd is not 2 controlling here because OAR 660-033-0140 applies specifically to permits on agricultural 3 and forest land and DCC 22.36.010 is a generally applicable permit expiration provision that 4 is not specific to agricultural land. 5 OAR 660-033-0140 and DCC 22.36.010 while similar are also different, and in some 6 respects they are arguably inconsistent.? We reject petitioner's suggestion that there must be 7 something in the legislative record that specifically establishes that DCC 22.36.010 was 8 adopted to replace and fully implement OAR 660-033-0140. That kind of specificity is 9 rarely present in the legislative record. However, for purposes of this appeal, we accept 10 petitioner's apparent working premise that if there is no reason to believe that the county 11 adopted DCC 22.36,010 to elaborate on the permit expiration standards set out at OAR 660- 12 033-0140 and apply the county's more elaborate version of OAR 660-033-0140 in the 13 county's EFU zone and its other zoning districts as well, DCC 22.36,010 would not apply in 14 the EFU zone and OAR 660-033-0140 would continue to apply directly to EFU zoned lands 15 . despite the fact that DCC Chapter 22 is acknowledged. 16 Despite the differences between OAR 660-033-0140 and DCC 22.36.010, if the text 17 of OAR 660-033-0140 and DCC 22.36.010 set out at Appendix A and Appendix B is 18 compared, there can be no doubt that OAR 660-033-0140 was the model for DCC 22.36.010, 19 For example, OAR 660-033-0140(2) and DCC 22.36.010(C), which authorize one-year 20 extensions, arc nearly identical. OAR 660-033-0140(3), like DCC 22.36.010(D)(2), purports 21 to make a permit extension decision something other than a land use decision. OAR 660- , 22 033-0140(4) and DCC 22.36,010(C)(2), which authorize additional one-year extensions, are 'As discussed later in this opinion, OAR 660-033-0140 simply requires that the use authorized by a permit on EFU land must be"initiated" within two years; whereas DCC 22.36,020 elaborates considerably on what it means to"initiate." And, as noted above, DCC 22.36.010(E) includes an express tolling provision for land use appeals whereas OAR 660-033-0140 does not, Page 8 1 very similar. Intervenor-respondent argues `[g]iven the near verbatim incorporation of OAR 2 660-033-0140(2), (3) and (4) within DCC 22.36.010, it is reasonable to conclude the County 3 adopted these provisions to implement the state rule." Intervenor-Respondent's Brief 13. 4 We agree with intervenor-respondent. 5 Finally, DCC 22,36.010(A)(1) makes it sufficiently clear that the county adopted 6 DCC 22.36.010 to apply in all its zoning districts, including those that apply to agricultural 7 and forest lands.$ If LCDC or any other party believed the inconsistencies between DCC 8 22.36.010 and OAR 660-033-0140 are such that agricultural and forest lands should be , 9 excluded from application of DCC 22.36.010, and something closer to the wording of OAR 10 660-033-0140 substituted for agricultural and forest lands, the time to have required that 11 change was prior to acknowledgment. 12 The second assignment of error is denied. 13 THIRD ASSIGNMENT OF ERROR 14 DCC 22.36.010(E) provides that "[t]he [two-year] time period set forth in DCC 15 22.36.010(B) shall be tolled upon filing of an appeal to LUBA until all appeals are resolved." 16 As previously noted, OAR 660-033-0140 includes no such tolling language. Petitioner first 17 contends the hearings officer should have applied OAR 660-033-0140 instead of DCC 18 22.36.010 and therefore should not have tolled the running of the two-year time period when 19 . the April 15, 2008 CMP decision was appealed to LUBA on May 6, 2008. We concluded in 20 our discussion of the second assignment of error above that the hearings officer correctly "DCC 22,36,010(A)(1)provides: "Except as otherwise provided herein,DCC 22.36.010 shall apply to and describe the duration of all approvals of land use permits provided for under the Deschutes County Land Use Procedures Ordinance, the various zoning ordinances administered by Deschutes County and the subdivision/partition ordinance." Page 9 1 determined that the acknowledged DCC 22.36.010 time limit applies. We therefore reject 2 this part of the third assignment of error. 3 Petitioner also argues that if the hearings officer was correct in applying DCC 4 22.36.010 she nevertheless erred by tolling the running of the DCC 22.36.010(B)(1)two year 5 deadline for the 21 days between April 15, 2008, when the CMP decision became final, and 6 May 6, 2008, when the LUBA appeal was filed. Petitioner further contends the two-year 7 deadline should not have been tolled during the 21 days following LUBA's September 11, 8 2008 decision, before the appeal of LUBA's decision to the Court of Appeals was filed. 9 Petitioner contends that if the DCC 22.36.010(B)(1) two year deadline and the DCC 10 22.36.010(E)(1) tolling provision had been correctly applied, "[sjubtracting the 42 days from 11 December 7, 2011, the two-year period with tolling ended on October 26, 2011." Petition for 12 Review 17. 13 The hearings officer first concluded, and we agree, that the tolling required by DCC 14 22.36.010(E) began on May 6, 2008 (when the LUBA appeal was filed) and ended on 15 December 9, 2009 (when the Court of A pp eals entered its a pp ellate judgment). We agree 16 with the hearings officer that the 21 days between the date LUBA issued its decision on 17 September 11, 2008 and the date LUBA's decision was appealed to the Court of Appeals is 18 not deducted from the tolling period. DCC provides that the tolling begins when the LUBA -19 appeal was filed (May 6, 2008) and continues "until all appeals are resolved." In this ease 20 that date was December 9, 2009.9 The hearings officer then explained her calculation of the 21 tolling as follows; 9 The hearings officer explained: "* * * The Hearings Officer finds the language in [DCC]22.36.010(E)-tolling `until all appeals are resolved' - does not contemplate such deductions, hut rather sets the parameters of the tolling period from the filing of the first appeal to resolution of the last appeal,without interruption." Record 76 n 8. Page 10 1 "The LUBA appeal from the board's April 15, 2008 decision was filed on 2 May 6, 2008. LUBA's decision was appealed to the Court of Appeals and to 3 the Supreme Court which denied review in a decision dated October 7, 2009. 4 The Court of Appeals issued its appellate judgment on December 9, 2009, * * 5 6 «* * * * * * 7 "* * * Accordingly, 1 find all appeals were resolved on December 9, 2009, 8 and the tolled two-year period for initiation of the CMP approval expired on 9 December 7, 2011 - i.e., 581 (tolled) days after April 15, 2010." Record 76. 10 Although the hearings officer correctly calculated the separation between May 6, 11 2008 and December 9, 2009 (581 days), we do not understand how she arrived at December 12 7, 2011 as the date the two-year period expired with tolling. 13 On December 9, 2009, when the two-year period that had been tolled on May 6, 2008 14 began to run again, all that the hearings officer had to do was account for the 21 days of the 15 two-year period that already expired between April 15, 2008 and May 6, 2008. That can be 16 done by projecting forward by two years minus 21 days (739 days) or projecting forward by 17 two years from December 9, 2009 to December 9, 2011 and then subtracting 21 days. Either 18 way, the DCC 22.36.010(13)(1) two year deadline in this matter, as tolled by DCC 19 22.36.010(E), expired on November 18, 2011. 20 As far as we can tell, the difference between when the hearings officer believed the 21 DCC 22.36.010(B)(1) two year deadline expired (December 7, 2011), the date the petitioner 22 believes it expired (October 26, 2011) and the date it actually expired (November 18, 2011) 23 makes absolutely no difference in this appeal. Petitioner does not argue that anything 24 happened during the 40 days encompassed by those dates, much less anything of legal 25 significance.10 Because the hearings officer's calculation of the time limit expiration is 26 harmless error, it follows that the third assignment of error provides no basis for remand. 1° In fact, because the hearings officer appears to have only relied on actions that predated or were essentially contemporaneous with the April 15, 2008 CMP decision to conclude the proposal was initiated,the hearings officer's discussion of the DCC 22.36.010(E) tolling provision was entirely unnecessary for her Page 11 1 The third assignment of error is denied. 2 FOURTII ASSIGNMENT OF ERROR. 3 A. Introduction 4 As already noted, DCC 22.36.010(B)(1) provides that "a land use permit is void two 5 years after the date the discretionary decision becomes final if the use approved in the permit 6 is not initiated within that time period," Appendix B. DCC 22.36.020(A) sets out what must 7 be done to initiate a use: 8 "For the purposes of DCC 22.36.020, development action undertaken under a 9 land use approval described in DCC 22.36.010, has been `initiated' if it is 10 determined that: 11 "1. The proposed use has lawfully occurred; 12 "2. Substantial construction toward completion of the land use approval 13 has taken place; or 14 "3. Where construction is not required by the approval, the conditions of a 15 permit or approval have been substantially exercised and any failure to 16 fully comply with the conditions is not the fault of the applicant." 17 The hearings officer concluded that because "no construction was required by the CMP" 18 DCC 22.36.020(A)(3) applies in this case. Record 77. Petitioner does not assign error to that 19 aspect of the hearings officer's decision. As we explain in more detail below, the hearings 20 officer then proceeded to decide which of the 38 CMP decision conditions of approval she 21 believed were "relevant" under DCC 22.36.020(A)(3). She then concluded that all of the 15 22 CMP decision conditions of approval that she found to be relevant under DCC decision. However because we conclude under the fourth assignment of error that the hearings officer erroneously concluded that certain actions required under the CMP conditions of approval are irrelevant in making her decision regarding initiation, the date the DCC 22.36.010(8)(1)two year deadline actually expired may be important if this matter is taken up on remand. Page 12 1 22.36.020(A)(3) were fully exercised (which we understand to mean completely satisfied) 2 before, or contemporaneously with, the April 15, 2008 CMP approval decision. Record 91.11 3 Before turning to the parties' arguments, we note that the hearings officer almost 4 certainly misread DCC 22.36.020(A) in concluding that subsection (3) DCC 22.36.020(A) 5 applies in this case, rather than subsection (2), which would require substantial construction. 6 First, while subsection (3) of DCC 22.36.020(A) does say "{w]herc construction is not 7 required by the approval," land use permits rarely require construction. Rather, they almost 8 always authorize construction. The author of subsection (3) of DCC 22.36.020(A) almost 9 certainly intended that subsection (3) of DCC 22.36.020(A) would apply where no new 10 construction is required for the "use approved in the permit." An example would be a permit 11 that authorizes a change in use for an existing building. That is not the case here, since 12 construction is required for the "use approved in the" CMP decision—a destination resort. 13 And in any event, even if DCC 22.36.020(A)(2) is construed in context with DCC 14 22.36.020(A)(3) to limit application of DCC 22.36.020(A)(2) to cases where the permit 15 decision itself actually specifies and requires construction, the CMP decision includes at least 16 three conditions of approval that do require construction.12 11 Those conditions of approval include conditions 3, 8, 9, 10, 11, 13, 14A, 14B, 15, 19,22,24,30,36,and 37. The hearings officer found that the board of commissioner's decision to defer consideration of the adequacy of the applicant's wildlife mitigation plan until FMP approval rendered condition of approval 38 irrelevant in determining whether the use authorized by the GMT decision had been initiated with the two-year period required by DCC 22.36.010(3)(1), 12 Those conditions are set out below: "4. * * * Emergency secondary resort access roads shall be improved before any Final Plat approval or issuance of a building permit,whichever comes first. "5. The developer will design design and construct roads in accordance with Title 17 of the [DCC]. Road improvement plans shall be approved by the Road Department prior to construction." Record 462. "33. The resort shall, in the first phase,provide for the following: "A. At least 150 separate rentable units for visitor-oriented lodging. Page 13 � A 1 But the hearings officer and the parties have proceeded as though subsection (3) of 2 DCC 22.36.020(A) applies in this case. We therefore limit our consideration to petitioner's 3 challenges to the hearings officer's application of DCC 22.36.020(A)(3) and do not further 4 consider whether the hearings officer should have applied DCC 22.36.020(A)(2) instead of 5 DCC 22.36.020(A)(3) in this case. But as will become clear, the hearings officer had a great 6 deal of trouble applying DCC 22.36.020(A)(3) in this case. Some of those troubles are 7 directly attributable to the fact that the use approved by the April 15, 2008 CMP decision 8 does require construction and that construction in some cases requires additional permit 9 approvals that the applicant has had a great deal of difficulty securing and defending on 10 appeal. 11 B. Consideration of Conditions Beyond the Numbered Conditions 12 The county's initial CMP decision included 36 conditions of approval. Following 13 LUBA's remand, two more conditions of approval were added, for a total of 38 conditions of 14 approval,13 Under her first subassignment of error, petitioner argues the county erred by 15 limiting its consideration to these 38 conditions of approval. "13. Visitor-oriented eating establishments for at least 100 person and meeting rooms which provide eating for at least 100 persons.- "C. The aggregate cost of developing the overnight lodging facilities and the eating establishments and meeting rooms required by DCC 18.113.060(A)(1)and(2)shall at least$2,000,000(in 1984 dollars). "D. At least $2,000,000 (in 1984 dollars) shall be spent on developed recreational facilities. "D. The facilities and accommodations required by DCC 18.113.060 must be physically provided or financially assured pursuant to DCC 18.113.110 prior to closure of sales,rental or lease of any residential dwellings or lots." Record 466. !9 Actually condition 14 is broken down into five sub-conditions of approval making the total number of conditions depend on whether you count condition 14 as one condition or five conditions. Page 14 1 Petitioner argued below that the DCC 22.36.020(A)(3) language "conditions of 2 permit approval" requires the county to go beyond the 38 enumerated "conditions of 3 approval" to consider "elements of its [destination resort] proposal submitted to demonstrate 4 compliance [with relevant approval criteria] regardless of whether such compliance is 5 required through conditions of approval[.]" Record 77. If we understand petitioner 6 correctly, she argues that any plans or development components of the destination resort 7 proposal set out in the application that are necessary to demonstrate compliance with 8 applicable approval criteria must be subject to the DCC 22,36.020(A)(3) two-year initiation 9 standard without regard to whether that aspect of the proposal is the subject of one or more of 10 the enumerated 38 conditions of approval. The hearings officer rejected that argument: 11 "The plain language of the operative phrase -- `conditions of a peimit or 12 approval' -- includes within it the teii.ir `conditions of approval.' It does not 13 include terms such as `plans' or other development components." Record 78. 14 We agree with the hearings officer. Petitioner attempts to convert the already 15 complicated analysis required by DCC 22.36.020(A)(3) into an unworkable metaphysical 16 exercise of identifying additional "conditions" beyond the enumerated conditions of approval 17 that are stated as such. Like the hearings officer, we conclude the task of applying DCC 18 22.36.020(A)(3) is sufficiently onerous when it is limited to the enumerated conditions of 19 approval. DCC 22.36,020(A)(3) does not mandate the uncertain and subjective exercise of 20 finding unenumerated "condition of a permit or approval" based on the importance of 21 particular plans or development components in demonstrating compliance with relevant 22 approval criteria. 23 Petitioner's theory regarding the proper interpretation and application of DCC 24 22.36.020(A)(3) is based in large part on LUBA cases that have determined that a permit 25 approval may in some cases require that an applicant follow through on representations or 26 promises the applicant made in the application for the permit, without regard to whether such 27 follow through is expressly required in one of the enumerated permit conditions of approval. Page 15 1 Perry v. Yamhill County, 26 Or LLJBA 73, 87-88, aff'd 125 Or App 588, 865 P2d 1344 2 (1993); Wilson Park Neigh. Assoc. v. City of Portland, 27 Or LUBA 106, 123-24, rev'd and 3 remanded on other grounds 129 Or App 33, 877 P2d 1205 (1994); Friends of the Metolius v. 4 Jefferson County, 25 Or LUBA 411, 421, aff'd 123 Or App 256, 860 P2d 278, on recon 125 5 Or App 122, 866 P2d 463 (1993). But that principle has no bearing on the issue presented 6 under this subassignment of error. That issue is whether in considering whether "conditions 7 of a permit or approval have been substantially exercised" under DCC 22.36.020(A)(3) the 8 hearings officer is obligated to go beyond the 38 enumerated conditions of approval and treat 9 aspects of the proposal that are not included in one of those 38 enumerated conditions of 10 approval as "conditions of a permit or approval," within the meaning of DCC 11 22.36.020(A)(3). We agree with the hearings officer that she was not obligated to do so. 12 C. The Relevant Conditions of Approval 13 Petitioner's second subassignment of error addresses the heart of the parties' dispute. 14 In the first part of this subassignment of error, petitioner contends the hearings officer 15 erroneously limited her consideration to those conditions the hearings officer found to be 16 relevant. In the second part of this subassignment of error, petitioner contends the hearings 17 officer erroneously found that for conditions of approval that were fully satisfied at one time, 18 it does not matter that actions were subsequently taken that may mean the condition is no 19 longer fully satisfied. 20 1. Limiting Application of DCC 22.36.020(A)(3) to Relevant CMP 21 Conditions of Approval 22 We set out again for convenience of reference the relevant requirements of DCC 23 22.36.010(B)(1) and DCC 22.36.020(A)(3). Under DCC 22.36.020(A)(3), to initiate the 24 destination resort "use approved in the [CMP] permit"within the two-year period required by 25 DCC 22.36.010(B)(1): Page 16 1 "Where construction is not required by the approval, the conditions of a 2 permit or approval [must] have been substantially exercised and any failure 3 to fully comply with the conditions is not the fault of the applicant." 4 (Emphasis added.) 5 Simply stated, the parties' dispute whether the obligation to substantially exercise "the 6 conditions" applies to all 38 conditions or only to the 15 conditions that the hearings officer 7 found to be relevant. Also, the parties dispute whether the requirement that "any failure to 8 fully comply with the conditions [must not be] the fault of the applicant" applies to all of the 9 conditions of approval, or only to the conditions that the hearings officer found to be 10 relevant. 11 The hearings officer provided the following explanation for her position that the 12 "substantially exercised" and "not fault of the applicant" inquiries that are required by DCC 13 22.36.020(A)(3) are limited to the 15 conditions she found to be relevant: 14 "* * * The only question before me in this declaratory ruling proceeding is 15 whether the destination resort use allowed through the CMP approval has 16 . been initiated — not whether the applicant ultimately will be able to develop 17 the resort. The applicant's ability to put into place all of the destination 18 resort's components may well be relevant at the FMP and specific 19 development steps. 20 "The remaining question raised by the parties under [the language of DCC 21 22.36.020(A)(3)] is whether all or only some of the 38 conditions of approval 22 in the board's decisions are relevant in determining whether the use approved 23 . through the CMP has been `initiated.' The Ilearings Officer finds the answer 24 to that question is determined by both the language of the conditions of 25 approval and their context within the three-step destination resort process. 26 [DCC] 18.113.050 states the CMP provides the `framework' for development 27 of the destination resort. [llCC] 18.113.040(13) states that in order to develop 28 the destination resort the applicant must submit and obtain approval for the 29 FMP `which incorporates all requirements of the County approval for the 30 CMP' and demonstrates compliance with `all conditions of approval of the 31 conditional use permit.' [DCC] 18.113.040(C) states `each element or 32 development phase of the destination resort must receive additional approval 33 through the required site plan approval or subdivision criteria,' and must be in 34 compliance with the FMP. 35 "Consistent with the [destination resort] context, the conditions of approval in 36 the board's decisions specify different times for compliance — e.g., some • Page 17 1 before FMP approval, some before specific development approval, and some 2 at all times—as shown in the following summary of conditions," Record 79. 3 The hearings officer then proceeded to separate the 38 conditions of approval into nine 4 categories: (1) "Conditions To Be Met Prior to FMP Approval" (nine conditions); (2) 5 "Conditions To Be Met On or With Final Master Plan Submission" (six conditions); (3) 6 "Condition of FMP Approval" (one condition); (4) "Conditions to Be Met Before or With 7 First Phase of Development/First Tentative Plat and/or First Site Plan" (two conditions); (5) 8 . "Conditions to Be Met Before Final Plat Approval" (two conditions); (6) "Conditions to be 9 Met With/On Final Plat" (three conditions of approval); (7) "Conditions To Be Met Prior To 10 or With Construction" (two conditions); (8) "Conditions To Be Met With Each Development 11 Phase" (one condition); and (9) "Conditions To Be Met At All Times" (19 conditions). 12 Record 79-81. 13 In rejecting petitioner's contention that DCC 22.36.020(A)(3) requires that all 38 14 conditions of approval must be "substantially exercised," the hearings officer points out that 15 DCC 22.36.020(A)(3) refers to "the conditions" not "all conditions" and that petitioner's 16 interpretation would effectively require that the Thornburgh Destination Resort would have 17 to be fully constructed within two years after April 15, 2008 to avoid the CMP decision 18 becoming void under DCC 22.36.010(B)(1). The hearings officer avoided that result by 19 concluding that only those conditions that were required to be completed before FMP 20 approval were relevant in-applying DCC', 22.36.010(B)(1) and DCC 22.36.020(A)(3) to the 21 April 15, 2008 CMP decision: 22 "The hearings officer finds the relevant conditions of approval for the subject 23 initiation of use declaratory ruling are limited to those with which the CMP 24 required compliance before FMP approval. * * *." Record 82. 25 The hearings officer is correct that the text of DCC 22.36.020(A)(3) refers to "the 26 conditions" and does not refer to "all conditions." Of course it is also correct that DCC 27 . 22.36.020(A)(3) refers to "the conditions;" and does not refer to "relevant conditions." More Page 18 1 to the point, it does not refer to "conditions of approval that must be satisfied before FMP 2 approval." 3 We can appreciate that initiating a complicated project like the Thornburgh 4 Destination Resort by "substantially exercis[ing]" all 38 conditions of approval within two 5 years and demonstrating that any failures to "fully comply with the [38] conditions is not the 6 fault of the applicant" is an extremely difficult and perhaps practically impossible obligation 7 in this case, given the way the 38 conditions of approval are written. But that difficulty is 8 equally attributable to (1) the way DCC 22.36.020(A)(3) is written, and (2) the way the 38 9 conditions of approval are written. If the county had anticipated in its CMP decision that 10 some of the conditions of approval might be difficult or impossible to satisfy fully within two 11 years and therefore potentially cause the CMP decision to become void under DCC 12 22.36.010(B)(1),the county perhaps could have drafted those 38 conditions of CMP approval 13 as notices of future conditions of approval that would be attached to required future permits 14 and other approvals. And as we have already pointed out, it is highly likely that the county 15 should have applied DCC 22.36.020(A)(2) instead of DCC 22.36.020(A)(3), in which case 16 any problems with "substantially excrcis[ing]" the CMP conditions of approval would be 17 irrelevant, so long as the applicant was able to complete "[s]ubstantial construction toward 18 completion of the land use approval"within two years. 19 Whatever the difficulties created by the language of DCC 22.36.020(A)(3) and the 20 wording of the 38 conditions, the hearings officer is not free to remove that difficulty by 21 rewriting DCC 22.36.020(A)(3). The hearings officer essentially rewrote DCC 22 22.36.020(A)(3), to add the bold language set out below: 23 "Where construction is not required by the approval, the conditions of a 24 permit or approval that must be satisfied before FMP approval have been 25 substantially exercised and any failure to fully comply with the conditions is 26 not the fault of the applicant." Page 19 1 Under ORS 174.010, the hearings officer is not entitled to add and subtract language from 2 DCC 22.36.020(A)(3). The simplest way to describe the hearings officer's error is that she 3 assumed that because other approvals would be required to fully comply with some of the 38 4 conditions of CMP approval those conditions of approval should not be treated as relevant 5 conditions of CMP approval under DCC 22.36.020(A)(3). However, whether it was 6 intentional or unintentional, by imposing conditions of approval that would require the 7 applicant first to secure additional land use permits,the city effectively required the applicant 8 to secure those additional permits within the two-year period imposed by DCC 9 22.36.010(B)(1) to avoid having the CMP permit become void. That result may be harsh in 10 this case, but it cannot be avoided by interpreting DCC 22.36.020(A)(3) to say something 11. that it does not say. ]2 On remand the hearings officer must consider whether all of the 38 conditions of 13 approval have been "substantially exercised," including those that required that the applicant 14 seek additional permits and approvals. We do not agree with petitioner that DCC 15 22.36.020(A)(3) requires that each of the 38 conditions of approval must have been 16 "substantially exercised" within the two-year period, although the county could probably 17 interpret DCC 22.36.020(A)(3) to impose that obligation. Because DCC 22.36.020(A)(3) is 18 ambiguous about whether each of the 38 conditions of approval must separately be 19 "substantially exercised," we conclude the hearings officer could interpret DCC 20 22.36.020(A)(3) to require only that the 38 conditions of approval, viewed as whole, have 21 been"substantially exercised,"even though some of those 38 conditions of approval have not 22 been "substantially" or "fully" "exercised," or perhaps have not been"exercised" at all. But 23 the hearings officer must be able to find both that the 38 conditions of approval, viewed as a 24 whole, have been substantially exercised and that for any of the 38 conditions of approval 25 . where there has been a failure to fully exercise the condition, the applicant is not at fault. Of 26 course the evidentiary record must also be such that it provides substantial evidence for such Page 20 1 findings. We suspect that the hearings officer will encounter difficulty in making those 2 findings, but that is the only potential route to a decision under DCC 22.36.020(A)(3) that the 3 use approved by the CMP approval—the Thornburgh Destination Resort—was initiated 4 within the two-year period required by DCC 22.36.010(B)(1) so that the April 15, 2008 CMP 5 decision is not void. 6 Finally with regard to the conditions that provide contingent or continuing 7 obligations, it may be sufficient for the hearings officer to find that failure to comply with 8 such conditions is not the fault of the applicant because the contingency that would trigger 9 obligations under the condition does not and may never exist.14 Similarly, for those 10 conditions that require the applicant first to seek additional land use approvals, the hearings 11 officer may be able to find that the applicant's failure to secure those additional land use 12 approvals is not the fault of the applicant. We express no position on whether such findings 13 are possible for any of those conditions of approval or whether the evidentiary record would 14 support such findings. But it is simply inaccurate for the hearings officer to say that the 15 applicant would necessarily have to completely construct the Thornburgh Destination Resort 16 to avoid having the April 15, 2008 CMP decision become void under DCC 22.36.010(B)(1) 17 and DCC 22.36.020(A)(3). All that would be required is for the hearings officer to find that 18 for any conditions of approval that are not fully exercised because the applicant failed to 19 secure additional permits that are necessary to fully comply with such conditions of approval, 20 that failure was not the applicant's fault. 21 The first part of the second subassignment of error is sustained. 14 As an example condition 1 provides in part that "[a]ny substantial change to the approved plan will require a new application." The parties apparently dispute whether there have been such changes. But if there have not been substantial changes to the approved plan, it likely would be sufficient for the hearings officer to find that condition 1 is fully satisfied because there has been and may never be any "substantial change to the approved plan," Page 21 1 2. Subsequent Events 2 Petitioner contends that while some CMP conditions of approval may have been fully 3 satisfied as some point in time, for several of those conditions subsequent events have 4 occurred such that those conditions are no longer satisfied. For example, petitioner contends 5 that the hearings officer found that some CMP conditions of approval were fully satisfied by 6 memoranda of understanding between•Thornburgh Resort Company and its affiliates with the 7 Bureau of Land Management, Oregon Department of Transportation and Department of State 8 Lands and water rights held by Thornburgh Resort Company. Petitioner contends that Loyal 9 Land has not yet established that it has any rights under the memoranda of understanding or 10 the water rights and for that reason the hearings officer should not have found that those 11 conditions were fully statisfied. 12 Petitioner identifies five conditions of approval: condition 3 (requiring grant of right- 13 of-way from the Bureau of Land Management (BLM) for access across BLM land; condition 14 8 (requiring Oregon Department of Human Services approval water supply plans); condition 15 11 (requiring written plan for cooperative agreements with owners of nearby wells); 16 condition 15 (requiring an approved Water Pollution Control Facility permit); and condition 17 30 (requiring a detailed traffic circulation plan).'$ However, all of these conditions of 18 approval require that they be satisfied prior application for FMP approval (conditions 3, 11, 19 15)or prior to FMP approval (conditions 8 and 30). The county hearings officer who granted 20 FMP approval found that all of these conditions had been fully satisfied before she granted 21 FMP approval, and we do not understand petitioner to dispute that all of those conditions 22 were fully satisfied according to their terms before the county granted FMP approval. 15 Petitioner also identifies condition 4, but that condition requires certain road improvements before final 4 p subdivision plat approval or before a building permit is issued. Record 462. The hearings officer did not find that condition 4 has been substantially or completely satisfied. Page 22 1 The hearings officer found that once a CMP condition of approval has been fully 2 satisfied, she was not required to consider subsequent events that may call into question 3 whether the current property owner has any rights under agreements that may have been 4 entered into or plans that may have been approved to satisfy those conditions. With the 5 caveat that Loyal Land will of course have to ultimately be successful in securing any rights 6 that may be necessary to construct the Thornburgh Destination Resort in conformance with 7 all applicable conditions of approval, we agree with the hearings officer that for purposes of 8 determining whether the Thornburgh Destination Resort was initiated under DCC 9 22.36.020(A)(3) within the time period required by DCC 22.36.010(B)(1), the hearings 10 officer is not required to consider events that postdate the dates CMP conditions of approval 11 were fully satisfied. 12 This part of the second subassignment of error is denied. 13 3. Conditions of Approval that were Satisfied before April 15,2008 14 Under the third part of her second subassignment of error, petitioner contends the 15 hearings officer erred in finding some of the CMP conditions of approval were fully satisfied 16 "within [the] time period" required by DCC 22.36.010(B)(1).16 Again, that time period 17 began on April 15, 2008 and ended on October 23,2011. 18 Petitioner contends that the actions that the hearings officer relied on to find that 19 • conditions of approval 3, 8, 9, 10, 11, 13, 14A, 14B, 15, 22 and 24 have been fully satisfied 20 pre-date the April 15, 2008 beginning of the two-year time period and the hearings officer 21 therefore erred in relying on those actions to find the conditions were fully satisfied "within 22 [the] time period"required by DCC 22.36.010(B)(1). 16 o al Land contends petitioner failed to preserve this issue for review by LUBA by adequately raising Y P p Y 1 Y T7 the issue below. For the reasons set out in petitioner's reply brief,we agree the issue was adequately preserved for review. Page 23 1 Although petitioner's argument may be textually plausible, we reject it. DCC 2 22.36.010(B)(1) simply does not anticipate that a condition of approval might be fully 3 satisfied before the condition is imposed. Where that is the case, we cannot think of any 4 reason why the enactors of DCC 22.36.010(B)(1) would have intended to require that those 5 actions be duplicated after the condition is imposed, and we decline to interpret DCC 6 22.36.010(13)(1)to impose such a pointless requirement. 7 Finally,petitioner points out that some of the documents the hearings officer relied on 8 to find that conditions of approval 19, 30, 36 and 37 are satisfied are undated. However, 9 petitioner does not further develop her arguments concerning those conditions and we do not 10 consider them further.17 She also points out the hearings officer improperly determined that 11 condition 38 concerning the wildlife mitigation plan is irrelevant in this proceeding. We 12 have already agreed with petitioner elsewhere that that finding by the hearings officer is in 13 error and petitioner's repetition of that argument here provides no additional basis for 14 remand. Under our resolution of the second subassignment of error, the hearings officer will 15 be required to find that the applicant is not at fault if condition 38 has not been fully satisfied. 16 This part of the second subassignment of error is denied, 17 The first part of the second subassignment of error is sustained. The remaining parts 18 of the second subassignment of error are denied. 19 The fourth assignment of error is sustained in part. 20 FIFTH ASSIGNMENT OF ERROR 21 In her fifth assignment of error, petitioner challenges the hearings officer's failure to 22 consider whether failure to fully comply with many of the CMP conditions of approval is not 23 the fault of the applicant. As we have already explained, the hearings officer found that 17 We also do not understand petitioner to dispute that those conditions were fully satisfied sometime before the county granted FMP approval on October 8,2008, Page 24 9 M 1 relevant conditions of approval have been fully satisfied and that she was not required under 2 DCC 22.36.020(A)(3) to consider, with regard to conditions she found to be irrelevant, 3 whether any failure to fully comply with such irrelevant conditions is not the fault of the 4 applicant. In sustaining the fourth assignment of error in part above, we agree with petitioner 5 that the hearings officer erred in concluding that many of the 38 conditions of approval are 6 irrelevant for purposes of DCC 22.36.020(A)(3). On remand, for any conditions that have 7 not been fully complied with during the two-year period, the hearings officer can conclude 8 that the CMP approval was initiated only if she finds, based on substantial evidence, that for 9 such conditions, the "failure to comply with the conditions is not the fault of the applicant." 10 Petitioner's fifth assignment of error adds nothing to our resolution of the fourth assignment 11 of error, and we do not consider it further. 12 The county's decision is remanded in accordance with our resolution of the fourth 13 assignment of error. 14 Page 25 A r 1 Appendix A 2 "660-033-0140 3 "Permit Expiration Dates 4 "(1) Except as provided for in section (5) of this rule, a discretionary 5 decision, except for a land division, made after the effective date of 6 this division approving a proposed development on agricultural or 7 forest land outside an urban growth boundary under ORS 215.010 to 8 215.293 and 215.317 to 215.438 or under county legislation or 9 regulation adopted pursuant thereto is void two years from the date of 10 the final decision if the development action is not initiated in that 11 period. 12 "(2) A county may grant one extension period of up to 12 months if: 13 "(a) An applicant makes a written request for an extension of the 14 development approval period; 15 "(h) The request is submitted to the county prior to the expiration of 16 the approval period; 17 "(c) The applicant states reasons that prevented the applicant from 18 beginning or continuing development within the approval 19 period; and 20 "(d) The county determines that the applicant was unable to begin 21 or continue development during the approval period for reasons 22 for which the applicant was not responsible. 23 "(3) Approval of an extension granted under this rule is an administrative 24 decision, is not a land use decision as described in ORS 197.015 and is 25 not subject to appeal as a land use decision. 26 "(4) Additional one-year extensions may be authorized where applicable 27 criteria for the decision have not changed. 28 (5)(a) If a permit is approved for a proposed residential development on 29 agricultural or forest land outside of an urban growth boundary, the 30 permit shall be valid for four years. 31 "(b) An extension of a permit described in subsection (5)(a) of this 32 rule shall be valid for two years. Page 26 1 "(6) For the purposes of section (5) of this rule, `residential development' 2 only includes the dwellings provided for under ORS 215.213(1)(q), (3) 3 and (4), 215.283(1)(p), 215.284, 215.705(1) to (3), 215.720, 215.740, 4 215.750 and 215.755(1) and (3)." 5 Page 27 1 2 Appendix B 3 4 "22,36.010. Expiration of Approval. 5 "A. Scope. 6 "1. Except as otherwise provided herein, DCC 22.36.010 shall 7 apply to and describe the duration o f all approvals of land use 8 . permits provided for under the Deschutes County Land Use 9 Procedures Ordinance, the various zoning ordinances 10 administered by Deschutes County and the 11 subdivision/partition ordinance, 12 «* * * * * 13 "B. Duration of Approvals. 14 "1. Except as otherwise provided under DCC 22.36.010 or under 15 applicable zoning ordinance provisions, a land use permit is 16 void two years after the date the discretionary decision 17 becomes final if the use approved in the permit is not initiated 18 within that time period. 19 * * * * * 20 " "4. The approval period for the following dwellings in the 21 Exclusive Farm Use and Forest Use Zones is for 4 years: 22 "a. Replacement dwelling 23 "b. Nonfarm dwelling 24 "c. Lot of record dwelling 25 "d. Large tract dwelling 26 "e. Template dwelling. 27 "C. Extensions. 28 "1. The Planning Director may grant one extension of up to one 29 year for a land use approval or a phase of a land use approval, 30 and two years for those dwellings listed in DCC Page 28 1 22,36.010(B)(4) above, regardless of whether the applicable 2 criteria have changed, if: 3 "a. An applicant makes a written request for an extension 4 of the development approval period; 5 "b. The request, along with the appropriate fcc, is 6 submitted to the County prior to the expiration of the 7 approval period; 8 "c. The applicant states reasons that prevented the 9 applicant from beginning or continuing development or 10 . meeting conditions of approval within the approval 11 period; and 12 "d. The County determines that the applicant was unable to 13 begin or continue development or meet conditions of 14 approval during the approval period for reasons for 15 which the applicant was not responsible, including, but 16 not limited to, delay by a state or federal agency in 17 issuing a required permit. 18 "2. Up to two additional one-year extensions, or two-year 19 extensions for those dwellings listed under DCC 20 22.36.010(B)(4) above, may be granted under the above 21 criteria by the Planning Director or the Planning Director's 22 designees where applicable criteria for the decision have not 23 changed. 24 "3. In addition to the extensions granted in DCC 22.36,010(C)(1), 25 one additional two-year extension for a land use approval or a 26 phase of a land use approval may be granted by the Planning 27 Director or the Planning Director's designee under the criteria d DCC 22 3 1 I for approvals issued rior to 28 listed under CC 6.0 0 C o ( )( ) prior June 8, 2011. This subsection does not apply for those 30 dwellings listed under DCC 22.36.010(B)(4) above. 31 "D. Procedures. 32 "1, A determination of whether a land use has been initiated shall 33 be processed as a declaratory ruling. 34 "2. Approval of an extension granted under DCC 22.36.010 is an 35 administrative decision, is not a land use decision described in 36 ORS 197.015 or Title 22 and is not subject to appeal as a land 37 use decision and shall be processed under DCC Title 22 as a Page 29 1 development action, except to the extent it is necessary to 2 determine whether the use has been initiated. 3 "E. Effect of Appeals. The time period set forth in DCC 22.36.010(B) 4 shall be tolled upon filing of an appeal to LUBA until all appeals are 5 resolved." Page 30 r Certificate of Mailing I hereby certify that I served the foregoing Final Opinion and Order for LUBA No, 2012-042 on January 8,2013,by mailing to said parties or their attorney a true copy thereof contained in a scaled envelope with postage prepaid addressed to said parties or their attorney as follows: David J. Petersen Tonkon Toip LLP 888 SW Fifth Avenue, Suite 1600 Portland, OR.97204 Laurie E. Craghead Assistant Legal Counsel, Deschutes County Counsel 1300 NW Wall Street Suite 200 Bend, OR 97701-1960 Paul D. Dewey Attorney at Law 1539 NW Vicksburg Ave Bend, OR 97701 Seth J. King Perkins Coie LLP 1120 NW Couch Street 10th Floor Portland, OR 97209 Dated this 8th day of January, 2013. r rte/ _Bur es ss Kristi Seyfried Para g _ - Executive Support Specialist I •TONKONTORPLLP ATTORNEYS 1600 Pioneer Tower 888 SW Fifth Avenue Parlland,Oregon 97204 503.221.14.40 David 3.Petersen 503.802.2054 Admitted to practice in Oregon and California Fax: 503.9723754 david.petersen @tonkon.com May 28,2014 VIA E-MAIL(kevinb@co.deschutes.or.us) Mr. Kevin Harrison Deschutes County Community Development Department 117 NW Lafayette Avenue Bend, OR 97701 Re: Loyal Land, LLC Appeal to Board of Commissioners County File No. A-14-1 Dear Mr. Harrison: Enclosed is transcription of the hearing on February 4,2014 in A-13-8. The transcript is provided as required by DCC 22.32.024. Thank you and please contact me if you have any questions or concerns. Sincere! David J.Petersen DJP/djp Enclosure 037117/00001/55697791/1 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN Good evening. My name is Karen Green, and I'm the Hearings Officer for this evening's hearing. We are here for one matter on the agenda, and this is remand from the Land Use Board of Appeals. Well,I'm not going to cite the original,original file numbers,but the LUBA number is 2012-042. The underlying land use decision that was remanded is DR-11-8. And as I understand it, a new appeal number, Kevin,was assigned to the remand request, and that's the A13-8. KEVIN That's correct. GREEN Okay. So the Land Use Board of Appeals on January 11, 2013 remanded my decision in DR-11-8, and by a letter dated,I think, January 2,the applicant(underline applicant)Loyal Land LLC requested that the remand be initiated, and so that's why we have a hearing tonight. Is that correct? KEVIN That's correct,except that the,the letter from Loyal Land designated David Petersen of Tonkon Tarp as the agent of record was received January 3,2014. GREEN January 3. Okay. KEVIN For purposes of, of capturing the statutory time line for a County decision, I think,I believe that January 3 is the correct start date. GREEN Okay. All right. And as I recall from the letter,there was a question about the relationship between Mr. Petersen and the underlying applicant, and you had asked for clarification of that through a letter that you had sent out on the 1st or 2nd of January. Okay. KEVIN That's correct. GREEN All right. And because,that date is important because the statute requires that a final decision be issued on the remand within 90 days of the date that the remand initiation request is filed. So that's, that was when the clock started. Okay. So before I hear from staff and the parties in this matter,what I want to do is just briefly go over the procedures that we follow for public land use hearings. There's a few little different spins on a remand hearing,and I'll talk about those in just a moment,but basically, the purpose of tonight's hearing is for me to consider the remand from the Land Use Board of Appeals. Transcription of Hearing on Thornburgh Remand A 13-8 P g P,h � ) Page 1 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN The order of proceedings will be as follows: I'll open the public hearing on remand;I'll ask for staff report from Kevin Harrison; and then I will hear from the applicant,and then from opponents,and under the statute and County's administrative or development procedures or . The only parties to this proceeding are those parties who appeared in the previous proceeding,which if I recall correctly is just Loyal Land, Thornburgh, the Thornburgh entity, and Miss Gould and her counsel. And remind me Paul,was Land Watch a party or was it just Nancy Gould. PAUL [Could not hear response] GREEN Just Miss Gould. Okay. All right. So the limitation established by statute and ordinances that only those parties are able to participate in the remand. So I'll hear from the applicant,from opponent,and that'll be it, and then I'll have a closing and any closing comments from staff. To give testimony as always,you need to be at a microphone. So what 1'11 do is when I invite you to come up and speak, I'll ask you to come to the table that's on your right, my left,where there's a microphone,and there's a sign-up sheet. And before you start to speak, if you please take a moment put your name and mailing address on the sign-up sheet, and then before you start speaking state your name and mailing address for the record. GREEN Oregon law requires me to make some disclosures,which seem a little odd in this case because the statute requires that I be the hearings officer who hears this matter, but I think just to be on the safe side, I'm going to go ahead and make these disclosures anyway. The first one is whether or not I've had any ex parte contacts, and that would be contacts between myself and any of the parties to this proceeding on the merits of the proceeding outside of the hearing, and I'll state at this time that I've had no ex parte contacts. My only contacts since my last decision was issued or have been with County planning staff to set the hearing and obtain copies of relevant parts of the records. I'm also required to disclose if I have taken any evidence outside of the hearing, such as at a site visit, and I'll state at this time, I have taken no evidence outside of the public hearing, and I have not visited the property in preparation for the remand hearing, and have not received any other type of evidence outside of the public hearing. Any party may challenge my qualifications to act as hearings officer in this matter, even though the statute requires that I be the hearings body to hear this on remand. If anyone believes that I cannot be impartial, I believe you still have the opportunity to challenge my qualifications to act as hearings officer on this remand, and I'll state at this time,I have no personal interest in the outcome,have not, and still do not. I believe that I can be impartial. Does anyone wish to challenge my qualifications to act as hearings officer on the remand? [slight pause] Okay,hearing none, I'll proceed. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 2 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN Unless I hear an objection,I'll rely on staffs, let's see,you've not done a staff report,so it'll be staffs oral presentation tonight to list the applicable criteria as well as obviously the Land Use Court of Appeals decision on remand listing the applicable criteria. On the remand,this will probably be a good time to turn to the remand procedures and the County's development procedures or ,which is in Chapter 22-34. This chapter sets out the procedures for a remand from the Land Use Board of Appeals or the Court of Appeals. As I mentioned earlier, one of the restrictions through these provisions is that the only parties to the remand are those parties to were those persons who were entities who were parties to the original hearing. The County has done another notice and we've set another hearing. GREEN The hearing procedures are those, the same as those that would be applicable to any other land use matter that is before me on hearing. Section 22-34-040 of these provisions basically kind of establishes the parameters of my review on remand. And let me just go over those. Paragraph A speaks to the issues that are subject to the remand and those are the issues that were required by LUBA to be addressed. So, the guiding document for that would be the LUBA decision itself. Paragraph B speaks to discretion is couched in terms of the Board, Board of County Commissioners. In previous remand matters, the County's hearings officers have concluded that although the language says for the Board,this discretionary provision also applies to hearings officers when the hearings officer is the entity reviewing the matter on remand. This gives the hearings body, in this case,the hearings officer the discretion to allow a modification of the application to address issues involved in the remand to the extent that any modifications would not constitute a new application. Paragraph C,which does not make a reference to the Board,specifically also allows the parties to submit additional evidence,additional testimony to the extent it is required to comply with the remand. And if I determine that additional or if I'm, I'm presented with evidence or argument that additional testimony is necessary for the remand,this provision authorizes the parties to raise new unresolved issues that relate to that new evidence,and that new evidence has to be directed toward the issue that LUBA remanded for. Any issues that were resolved by the LUBA appeal or were not appealed are not before me on the remand. Transcription of Hearing on Thornburgh Remand(A13-8) Page 3 of 33 i Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN Okay. So I think that's,that's basically the parameters. I know that the applicant has submitted an additional piece of evidence and an additional, I guess Pd call it a burden of proof statement. I don't know if Mr.Dewey's had an opportunity to review that,but one of the things that we'll need to talk about is whether and to what extent I should consider new evidence that's been submitted by the applicant as well as the applicant's argument. So I'd appreciate hearing from staff as well as from the parties on that issue. Okay,so back to my,my general opening remarks. The failure to address an issue in this proceeding with sufficient detail for me to understand and resolve it in my decision on remand may preclude an appeal on that issue should there be an appeal of my decision on remand. That's what we call the raise-it or waive-it rule. So any argument, any position that you want to take, any,any claim that you want to make in the remand proceeding needs to be made clearly enough so that I can understand it and address it in my decision. A similar issue or similar rule applies to proposed conditions of approval that's not really at issue in this case given the nature of the remand,but a similar issue applies to proposed conditions of approval, namely that any claim that the conditions of approval are unlawful, unconstitutional, or exceed the County's authority, need to be made °n n' �, t clear enough before me at this level for me to consider it and address it in my decision or you may also lose your opportunity to raise that same claim down the road in a civil action, for example, for damages. Okay. Any questions about the procedure that we're going to follow for the remand tonight, the remand hearing? Yes. DAVID You didn't indicate whether or not the applicant had the opportunity for rebuttal. GREEN Yes. I'm sorry. The applicant should have opportunity for rebuttal following the opponent's testimony. So thank you for bringing that up. Okay. Any other questions about procedure before we get started? Housekeeping matters—if you have a cell phone or a pager or anything that makes noise, rings, please turn it to the non-ring mode or turn it off. If you have to take or make a phone call during the hearing,hopefully you won't have to, but if you do,please take it out in the hall. Restrooms and drinking fountain are down the hall and to your right. Okay If there are no questions,further questions,I'll hear from staff. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 4 of 33 • Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 KEVIN Thank you. For the record,my name's Kevin Harrison with the Community Development Department,and I have not prepared a staff report. Just to help perhaps focus the discussion,the remand was based on the fourth assignment of error,which has to do with Deschutes County Code, Section 2236.020, subsection A3. And these are criteria that need to be addressed in order to determine that a land-use approval has been initiated. And what LUBA wrote in their decision was the hearings officer must be able to find both at the 38 conditions of approval viewed,viewed as a whole have been substantially exercised and that for any of the 38 conditions of approval where there has been a failure to fully exercise the condition,the applicant is not at fault. So, I'm,I'm here to answer any questions to help guide the process alone, but I don't have anything else to add to that,that direction. GREEN Okay. I do have one question I want to pose Kevin to you and to the parties. The LUBA decision looked at both the,the two sections of the initiation review,one of which has to do with substantial construction. Let me get the actual language out. Section 22-36-010,which sets the, the standard for determining if the development action has been initiated. The three criteria are [1] that the proposed use has lawfully occurred; [2] that substantial construction toward completion of the land use approval has taken place;or(3)where construction is not required by the approval, the conditions of the permit are approved and have been substantially exercised, and any failure to fully comply with the conditions is not the fault of the applicant. In the applicant's materials,the applicant argues, makes arguments under subsection 2,which is the substantial construction toward completion standard. My decision did not address that standard and specifically found that, that standard was not applicable. And as LUBA noted,that determination was not appealed, and LUBA proceeded to review my findings under subsection 3, which is the one that, that you just described,Kevin. However, on remand,the applicant has submitted argument and evidence related to subsection 2, and so a question that I would pose to you and to the parties is in the context of LUBA's remand and I consider evidence and argument under that subsection where I didn't consider or rejected that subsection as applicable in the original decision, and LUBA did not. That was not appealed, and LUBA did not overturn that or include that in any of the issues on remand. I think that I perhaps can include findings on that condition in the decision, but it may be superfluous or inappropriate under the circumstances. So do you have any thoughts on that? Kevin to start. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 5 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 KEVIN I have,I did review the Code section on hearing on remand,and I read the section to say that the hearings body, other than the Board of County Commissioners,will hear the remand on the record. The Board of County Commissioners has flexibility that's not granted to other hearings bodies to,at their discretion, take new evidence and testimony. So I,I read a distinction there between different hearing bodies. GREEN And I did not have time today to go back and find my previous decisions on remand where that issue came up, but I do recall that I read, I interpreted that more broadly than just the Board. So your position is that it just means the Board and that I don't have discretion to consider additional evidence even if it's related to or necessary for the issues on remand,that only the Board can do that. Yeah,the Board has to KEVIN Yeah,that's the way I read that. GREEN Okay. The reading is strictly to apply only to the Board. Okay. So generally, it's the County's position that I don't have the authority to consider additional evidence. If, if I do based on my previous decisions, what is your thinking on whether I can take evidence and argument on a, on a subsection that I didn't apply on remand, and that was not,that I did not apply in the original decision that is not a part of the remand? KEVIN Well,I,I don't think I can express a County position. I don't know that this has, this has come up at the staff level before. And,frankly,I can't recall a hearings officer decision that,that ruled on this matter, addressed this matter, so this is a, for me,this is a case of first impression of that Code of that GREEN Of that section? KEVIN Yeah. GREEN Okay. Anything else? Kevin? KEVIN No. GREEN All right. Okay. So I'll hear from the applicant. DAVID Is this on? Yes, it is. Great. • GREEN If you would just take a minute to sign in on the sign-up sheet before you start speaking. DAVID Actually, I already have. GREEN You already did. All right. Then just introduce yourself for the record. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 6 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID Great. Good evening. My name is David Petersen. I'm an attorney with Tonkon Torp in Portland. Our address is 888 SW 5th Avenue, Suite 1600, Portland,Oregon 97204. I'm here today representing the applicant,Loyal Land,LLC. And I'd like to start by touching on a point that Mr. Harrison just raised,which is what is the precisely the question here on remand? Mr. Harrison characterized it as specifically,the third prong of the three prong or the three ways in which a land use approval can be initiated. And I would submit that that's actually not the question or maybe an overly narrow statement of the question. I believe the question is really whether or not the conceptual master plan here has been initiated under sub, subsection A as a whole. And,as, as you know,there are essentially three prongs or three ways that, that can happen. The first is whether or not the use has lawfully occurred. The second is whether substantial construction has taken place. I'm paraphrasing. And then the third is this kind of long test where if construction is not required by the approval,the conditions have been substantially exercised and the failure to fully comply with the conditions is not the fault of the applicant. DAVID I'd intended to discuss those three prongs in kind of the order presented in my letter of January 2,but in light of the preliminary discussion, I feel I should probably address some threshold questions. I believe you said just a moment ago that you had expressly found that the substantial construction prong was not applicable in your initial decision in this matter. I would dispute that. I don't think there was any discussion in your initial decision about whether the first or second prongs applied. • I think the, the decision pretty much jumps right into the discussion of the third prong. Excuse me, and 1 think that was based in those ball park quite frankly on the application but, also on, .I think pretty much assumptions that were made by all parties and yourself as well,quite frankly, that, that the third prong was the only one that would apply here. GREEN Let me, let me just stop you for a second. DAVID Sure. GREEN I'm,I'm looking at page 18 of my declaratory ruling decision,which addresses these criteria. I think perhaps my, I did make a ruling on this at least that's certainly what I intended and that's how I read this beginning at the findings toward the top of the page. No use approved through the Thornburgh CMP has occurred, and no construction was required by the CMP. Therefore, there is also finds the applicant must demonstrate the uses initiate, initiate under subsection A3. So I think I, I certainly intended this and I think LUBA read this as well as I do now as saying 2 doesn't apply. And we're looking at 3 also. Transcription of Hearing on Thornburgh Remand(A13-8) Page 7 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID So as I believe you're probably relying on the phrase,no construction was required by the CMP. With specifically with respect to prong 2, and I am assuming that those kind of two clauses separated by commas kind of address clauses I and 2 in order. Clause I is the proposed use has lawfully occurred. GREEN Right. DAVID The decision says no use approved has occurred. Clause 2 is substantial construction toward completion of the land use approval has taken place. Your clause is no construction was required by the CMP. But whether or not construction was required is not, is not responsive to prong number 2. Prong number 2 only says substantial construction toward completion of the land use approval has taken place. It's entirely possible that substantial construction towards completion of the land use approval can take place whether or not it's required to have taken place. And that is in fact the situation in this particular case where substantial construction has taken place notwithstanding that it wasn't necessarily required by the CMP. So I guess I would dispute that. GREEN Okay. Assuming that, that I'm correct that and,and LUBA correctly characterized my decision as focusing only on 3,and there's a fairly extensive discussion in the LUBA decision about why 2 probably applied and why I probably should have applied 2 but I didn't, and there was no appeal on that and so they're going to move on to 3. Assuming that my remand is,is focused on my findings on, on clause 3, can I make findings on clause 2 in the context of the remand? And you know, I, you don't necessarily have to answer that right now. I guess that's, that's kind of the,the,the threshold question with respect to your evidence and argument about substantial construction. DAVID Well,I,part of to your question,I think it kind of presupposes the answer. If I'm understanding your question,you're saying if I'm limited to on remand to considering prong 3,can I make findings on prong 2? I would say if the predicate is true,then,then no, you can't, but I would dispute that, that, the issue on remand is in fact limited to prong 3. And a number of reasons why I would dispute that and I'd, I'd like to go into that in, in some detail if I may. GREEN So I guess for purposes of that, and that's fine,I want you to go ahead and make your record. I guess it's sort of in the nature of an offer of proof. If I can't consider this evidence, then I, then I may not be able to consider what you're going to put on the record, in which you've already put in the record. If I conclude that I can, I'll consider it. If I conclude that I can't,then I simply can't consider that additional evidence. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 8 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID Certainly,and so my,my intention today,and I anticipated this was going to be an issue,but I intended and I'm going to do this and make my presentation primarily on why you can consider these other two prongs. With respect to the third prong, I feel that the argument submitted in my letter is pretty much the argument. I don't want to take up too much of your time restating what I've written, so I'll probably pass over prong 3 and at least to my overall presentation except to maybe in broad terms. GREEN Okay. DAVID So I think the issue here about whether or not you can consider either prong 2 or prong 1 for that matter on remand because I've certainly referred to it in the shorthand as a question of the law in the case. And I think the seminal case on this issue is Beck v. City of Tillamook,which is a 1992 Supreme Court case and,if you're not familiar with the facts, l'll,I'Il briefly touch on them. In that case, GREEN What's the citation? DAVID It's 313 OR 148 (1992). GREEN Thanks. DAVID So in that case,there was an appeal to LUBA from I believe an approval, and the petitioners raised four particular assignments of error, four out of five actually,they had lost,in LUBA,they had lost in those four assignments of error. They didn't further appeal it to the Court of Appeals. It was returned to the County on remand. The County went through the remand process, at least I think it was a city in this case. The city went through the remand process. It went back up to LUBA and those same petitioners tried to raise the same four assignments of error again in the second LUI3A appeal. And what the Supreme Court said is,no,you can't do that because those issues were previously resolved;they were discussed; litigated if you will;resolved; and not further appealed to the Court of Appeals. And so that,the opportunity to pursue those claims any further was waived. Beck's not directly on point here because there really has been no discussion, no argument,no litigation,and I would contend really no decision with respect to either the first or the second prongs at any time. I think the applicant and pretty much everybody has assumed from the outset without really any significant discussion that this was a prong 3 case. Transcription of Hearing on Thornburgh Remand(A13-8) Page 9 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID There are many cases under Beck that kind of refine the principal. And I think some of the other ones are, are a little bit more helpful here. One would be Shatz v. City of Jacksonville, 113 Or App 675 (1992). In the Shatz case, the Court of Appeals talks about how the relationship between LUBA and the local government is really not the same as that, as an appellant in a trial court. It's a,it's a, it's a different relationship. And the language from that case that I think is particularly instructive here,the Court of Appeals says that a remand only tells the County that its ground for approval are not affirmable. It does not necessarily to note that the alternative bases cannot exist and cannot be considered. So in this edict,just because this had been remanded with,with the instructions that will maybe category three or other maybe wasn't the best choice and you really should have done it under prong 2, and you need to reconsider your decision,that does not mean that these additional bases can't be brought up. DAVID A similar case and the last one I'll touch on is specifically, as far as a case, is Martin v. City of Dune City,45 Or LUBA 458 (2003). In that case,the City of Dune City approved a partition based on a particular criterion. I'll call it a criterion X. LUBA overturned,remanded it back to the City, and the City permissibly reapproved the partition based on criterion Y which had not been previously evaluated. And what's particularly instructive about that case is that LUBA recognized that in the first,the first time the City heard the partition,they approved it based on criterion X. They really had no reason to go on Y. And I'll say that's very analogous to this situation. You approved this application based on prong 3. You really had no reason to go on to consider either prongs I or 2. It was sufficient to have approved it under prong 3. So the GREEN Remind me. Did the, did the applicant argue under clauses 1, 2 in the original DR burden of proof? DAVID No. GREEN Because it. Okay. So why would that not have been a waived argument? DAVID Well, I think that's, I think that kind of goes back to the good question of the assumption that all the parties were making. By parties, I'm including the County in that. GREEN Had you,had you made that argument in your application for a declaratory ruling,I'm assuming that the staff would have responded to it as would Miss Gould, and there would have been briefing on that question and on the question of substantial construction and evidence on it,which if I recall correctly there is none in the record until what you submitted with your remand burden of proof. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 10 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID Well, I think there's a distinction to be made between assumptions that may have been made that,that did not lead to,that eventually that resulted in these particular bases,alternative bases for approval never being really evaluated,explored, discussed,considered versus the kind of the line of reasoning under Beck,which is that, that are issues that are actually discussed, considered, and resolved,and then not further appealed that whatever stage in the process they,the claimant may choose to not appeal them. That's really kind of the distinction in this kind of this two sides of the cases that are interpreting Beck, On the one hand,you have the ones where issues are examined and resolved,not further appealed;those are waived. In this case,this is more like the City ofDunes. The situation that I mentioned in Shatz where it's really never even been thought about or talked about. And the land use process is different, and the relationship between LUBA and the County is different than we might be thinking in our heads about the relationship between a trial court and an appellate court where there's going to be much more strict restriction on that kind of raising new grounds for approval on remand. DAVID So I also want to talk about the,whether you,you can consider new evidence, which is a question you raised at the beginning. Well, I think that maybe before I talk about new evidence, I need to talk about changing the interpretation. So the first time around in your decision, your interpretation was that construction was not required by this approval and therefore prong 3 was the applicable prong to examine the application under. LUBA has certainly suggested rather strongly in its remand that perhaps a different prong should have been applied. Now, local governments are certainly are available. It's certainly available to local governments to change their interpretations,which approval criteria do and don't apply even during the course of an on-going proceeding. And the case that I've got for that is Holland v, City of Cannon Beach, 34 Or LUBA 1 (1998). In that case, the City of Cannon Beach had made a ruling on a subdivision application without saying anything either way on one of the listed criteria from the staff report. That led LUBA to remand it. On remand, the petitioner argued to the City that since I was last here,you evaluated another subdivision just like mine and decided that,that criterion did not apply to subdivisions of this type. And the City said,on remand,well we,we, it doesn't really matter what we said before. This criterion does in fact apply to subdivisions of your type, and LUBA upheld that decision. So the fundamental premise here, and LUBA in fact used the words fundamental premise, is that the City is free to change its mind on the applicable approval criteria even in the course of the same case as it was going up and down between LUBA. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 11 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID Another case is Marquam Farms v. Multnomah County,32 Or LUBA. 240(1996). In that one,there was two different applications. There had been a previous application for a nonconforming use. GREEN What was the case name again? DAVID Marquam. M-A-R-Q-U-A-M or Marquam Farms v. Multnomah County. In that case, the hearings officer had made a nonconforming use determination. Then in a subsequent application by the landowner for conditional use permit, the County was free to correct the prior misinterpretation of its own code. What it saw was a prior misinterpretation of its own ordinance, applying nonconforming use rules. So I think by analogy,you certainly have the opportunity and you've even been invited by LUBA to reconsider your application of only prong 3 and consider prong 2 and apply it to the application. GREEN You read that as an invitation to consider prong 2? DAVID Sure. I would read it as an invitation. GREEN I didn't read it that way. DAVID So I, I, I, I say all this, and I make this argument all because I'm leading up to the question of new evidence because we've submitted this,this affidavit. We're trying to establish substantial construction. And in that same Marquam Farms v. Multnomah County case that I cited to you, LUBA held in that case that if a county changes an interpretation of its ordinance, the applicant must be given a chance to present evidence and argument in responsive to the new standard. So if,hopefully,you agree with me that you can consider prong 2, that kind of necessarily triggers the right of the applicant to provide the evidence, and certainly the opponent as well to provide evidence that's responsive to that standard. And I think that DCC 22-34-040C is consistent with this,which I believe is as if additional testimony is required to comply with the remand, the parties may raise unresolved issues. There's nothing in that, that I think would prohibit the acceptance of new evidence. Now Mr. Harrison touched on the question,well, can the hearings officer do that versus the Board. I believe he was referring to clause A,which does specifically refer the Board, but certainly, but clause C doesn't say having any limitation on what entity authorizes the acceptance of new evidence. So,that's more or less the foundation by which I hope to establish that we can have the consideration of prong 2. DAVID I'd like to go into the evidence on prong 2, if I may. GREEN Okay. Again,understanding that I may conclude that I can't consider it. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 12 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID Certainly. Of course. So we have this affidavit from Mr. Lindley. He shows that over$6.8 million has been spent on construction to date. None of this is just generic, if you will, construction. The expenditures and the work that's been done has really has no value other than in furtherance of the proposed resort. There's been about$2.6 million spent on actual physical construction. There's$1.1 million to build the BLM access road,$1.4 million for off-site construction of the community center log lodge which is responsive to a particular condition of approval that requires a certain minimum amount of money spent on recreational amenities. Excuse me. I touched on this a little bit at the beginning. This is a maybe a somewhat unusual situation where even though the conditions of approval to the CMP prohibit development without further land use approvals,that's condition number 2 and also the Deschutes County Code provision that establishes the three-step process for a destination resort,there is the opportunity with this project to have done construction on land not subject to that, to the County's jurisdiction,namely the BLM property, and also the expense is pretty significant money on off-site work. The milling of this log lodge, essentially pre-assembly or pre-fabrication so it can be assembled on site. So we have the situation where significant amount of money, $6.8, almost$7 million has been spent on preconstruction and actual construction activities,which falls well within the definition of what substantial construction is. You look at the definition in DCC 22-36, Code 20B,and to find substantial construction is the alteration of land directly toward completion of the project, which demonstrates a good- faith effort to complete the development. I think you would be hard- pressed to argue that spending almost$7 million on things that otherwise of no use is not demonstrating a good-faith effort to complete this project. GREEN So, let,let me stop you there just for clarification. I've, I have, I've assumed and perhaps incorrectly that the work, land work that was done to which Mr. Lindley refers was done on the privately-owned property, and not on the BLM properties that. Was that not correct or was it on both? DAVID Well,the, a very minor physical bit of work was done on the property. There was a conversion of an existing house into an office. I believe Mr. Lindley says 70-odd thousand dollars was spent on that. So certainly a lion's share was not spent on the privately-owned property. It was spent on BLM of$1.1 million GREEN For the road, DAVID for the road,and $1.4 million off-site to mill this building. Transcription of Hearing on Thornburgh Remand(A13-8) Page 13 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN Okay. So I guess that just raises a question that I hadn't considered previously,which is whether the substantial construction has to occur on the subject property. It doesn't, it doesn't seem to limit it to,so limit it, but DAVID But I must admit I didn't consider that question either,but it doesn't say that in the Code. It says DAVID&GREEN [They say this in unison.] substantial construction per completion of the land use approval. GREEN Okay. DAVID I think it relates to kind of my point right at the outset about is it required versus did it occur. GREEN Uh huh. DAVID Now,it may not have been required,but it's occurred. GREEN So that,it seems that the key phrase is toward completion of the land use approval. DAVID Yes. And I,I think it's equally key phrase, if you will, is the definition and the focus on. I can,can paraphrase it. The full definition says that the alteration of the land is directed towards the completion and is sufficient in terms of time, labor,or money spent to demonstrate a good-faith effort to complete the development. GREEN This is 36? DAVID 22-36-020B. I think it was somewhat interesting about that definition is it talks about physically altering the land or structure for changing the use thereof,but interestingly in the Tetherow decision that I provided you, the Planning Department relied not just on what we all kind of think of as classic construction, physical alteration, but also pre- construction costs, if you will,design, engineering, and that kind of thing. And so that's where the $6.8 million number comes from here. And in addition,the $2.6 million spent on classic,physical construction, there's significant investment in planning and design and architecture working towards a tentative plat for the first phase,working on the final master plan. And those were considered in the Tetherow decision and should equally be considered here. DAVID So I'm going to move on to the third prong,the one that I don't think there's any dispute is available for review on this remand. So the first two or three times I read the LUBA decision,I, I, I felt like there was, saying that in your earlier decision,you'd really gone off the rails, if you will. And the more I thought about it,the more I,I came to the conclusion that really you more or less did what LUBA wanted you to do. You just used different terminology. And your decision talks about which conditions are relevant. And your relevance determination Transcription of Hearing on Thornburgh Remand(A 13-8) Page 14 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 depends on pretty much in large part on when they either had to be performed or what precursors there were before they could be performed. And that's very similar to what LUBA has said in terms of evaluating the conditions viewed as a whole as to whether they've been substantially exercised. LUBA did say that you can consider in determining whether viewed as a whole the condition has been substantially exercised,or it's possible to reach that conclusion even if some conditions have never been touched for that matter. And I don't want to go into the detail here because I think I do it rather well in my written materials, but if you look at the conditions that have been satisfied, it's almost 40 percent of the conditions but, more importantly I think, it's a 100 percent of the conditions that even could be performed. And so if a substantial exercise hasn't occurred when you've done. everything you could possibly do,then I'm,I'm having a hard time imagining when substantial exercise could occur at all. DAVID There's also,of course,the second half of the task which is the failure that fully comply is not the fault of the applicant. It's,it's, it's another side of the same coin. And as I explain in rather, in some detail in my appendix,all those conditions that haven't been fully satisfied, it's because the applicant isn't able to satisfy them. They're barred by the particular structure of the three-step destination resort process and by the delays that have resulted from appeals and the wording of the conditions. And I think if you look at the conditions in a whole, as a whole,they may make a lot of sense because they fit within the rubric of the three-step process. And I, and I think the,the ordinance,the Code provision that talks about the three-step process is really important to look at and maybe got some short shrift by the applicant the first time around, for that matter, and that's DCC 18.113.040. That's the,the title of it is Application Submission. It talks about how you get a permit for a destination resort. And what's interesting is the very first phrase in that Code section says, the authorization of a permit for a destination shall resort shall consist of three steps. A single permit that has three pieces,not three different permits. And so,what Loyal Land has essentially is one-third of a permit at this point because it doesn't have the final master plan. It doesn't have any site plan review for any portion of the site. And if you look at the conditions, they work the same way. There are certain things that could be done,but many of those things can't be done because those second and third pieces of the permit don't exist. They never existed. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 15 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 DAVID That's my last,my segue into my last point which is the application of the first prong of 22-34-020A,which is that the use has lawfully occurred. The County is the ultimate arbiter of what its Code means. That's ORS 197.829. There's certainly,there's limited exceptions when LUBA is not obligated to affirm a local government's interpretation of its land use regulations,none of which are applicable here. You know, LUBA talked in their opinion a little bit about what is the use, approved by the CMP. And they said the use is a destination resort. They only said that in the context of determining whether or not they thought construction was, whether or not construction was not required because they were considering the application specifically of prong 3, and they didn't actually ever resolve that question. So I think it's an open question to the County at this point to resolve exactly what that means. And I would submit that given the,the three-step structure of the, of the authorization of a permit for destination resort that really the use authorized by the CMP is nothing other than the right to file an a pp licatio n for a final master plan. And that's because as I mentioned it's consistent with the way the conditions are structured,you know,and that, and that use lawfully occurred on April 21, 2008, which is well before the conditional master, a conceptual master plan expired. DAVID And then lastly, I would say that alternatively,the use has also lawfully occurred because 100 percent of the conditions of the CMP that could be satisfied have been satisfied. And to hold that the use requires the applicant to do something more,this is at the same time prohibited by the structure of the County Code and the time that it has taken to resolve appeals on this matter really just wouldn't,would frankly be absurd. If the, when the applicant has satisfied 100 percent of the conditions and done everything it can possibly do before it gets the next approval that it doesn't yet have, its hard for me to understand how you could say anything other than the use has lawfully occurred as far as going to the next step. And that's the end,the end of my comments. GREEN While you were speaking, I was just refreshing my memory about what, how Title 18 defines use in 18-04-030. Alphabetically,down at the end, it's very quick. I'll read it to use. Use means the purpose for which land or a structure is designed,arranged, or intended or for which it is occupied or maintained. So it,your argument about the CMP, the three-part permit, it doesn't fit precisely within that definition, not as neatly as say a conditional use permit to operate a use like a hotel. I understand your argument. DAVID Yeah,and I guess my response would be that,that the definition of use is going to be applied in many,many,many contexts, and a destination resort is a very specific approval that has a very specific four-paragraph Code provision. And the specific would control over the general. I suspect that definition may be is older than the concept Transcription of Hearing on Thornburgh Remand(A 13-8) Page 16 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN Oh,I'm sure. DAVID of a destination resort and doesn't contemplate such a complicated GREEN Goes back to 1979, no doubt,the first design work that's probably, so. Yeah. It's one of many things that doesn't always fit exactly with more modem provisions. DAVID Yes. I suspect it didn't contemplate this kind of situation. GREEN Nope. DAVID Unless there's any other questions, I'll let Mr. Dewey have GREEN I don't have any at the moment. So thank you Mr. Petersen. DAVID Thank you. GREEN Okay. I'll hear from opponent. PAUL Good evening. Paul Dewey representing Nancy Gould. 1539 NW Vicksburg,Bend 97701. The first,and I won't repeat all that I've written in here as well, but our first issue is actually the scope of the remand because we too believe you ruled on page 18 and, in fact on the latter issue of whether or not the use has been initiated, you state very clearly, no use approved through thc Thornburgh CMP has occurred. And, and actually the LUBA a couple of times referred to the use as being the destination resort. So we believe that,well I'm getting ahead of myself. First,go back to whether or not we're even having addressing. GREEN Prongs 1 and 2. PAUL Prongs 1 and 2. I was reading the language of the Code more narrowly than you were suggesting,I guess more like Kevin was, and because the Code does shift terms. It's at that point, it refers to the hearings body and then it refers to the Board and under the, you know, classic PGE analysis. GREEN Right. Text in context to PAUL Because you're using different GREEN Right. And, and actually I need to,I need to step back and correct myself. As we were talking about this and I looked at that language again,I think my previous decisions related to the third piece of that scope,remand scope provision,not the part that refers to the Board which has to do with modifying,but the third part that has to do only with taking new evidence. And I think in the decisions that I'm recalling, I've said that because there's no reference to the Board or the hearings body in that third piece having to do with new evidence that as if the remand goes to the hearings officer, the hearings officer has authority to allow new evidence as opposed to what I said earlier,which was that the second piece having to do with modifying, it goes beyond Transcription of Hearing on Thornburgh Remand(A13-8) Page 17 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 the Board. So I think,I,I misspoke. What I meant to say was that I have interpreted the third piece having to do with allowing new evidence to come in to apply to any hearings body, not to the Board, because it doesn't refer to the Board specifically. So, sorry for any confusion. I think I just misspoke as to what I recalled from those previous decisions. PAUL And my response to that is that they're not unrelated—one and three. And in fact,see GREEN Right. They can be related. PAUL If additional testimony is required to comply with the remand, and I believe then, that is(a)on remand, the hearings body shall review those issues that include required to be,to be addressed. So we just disagree with what that interpretation is. GREEN Right. Right. So if the, if the scope if as Mr. Petersen argues, the scope includes all three pieces, all three prongs,then I would be able to, under the third piece of the remand, scope section having to do with new evidence, I would be authorized to allow new evidence if it was necessary to address the remand. If the scope of the remand is only prong 3, I would still have authority to allow new evidence if it's required to address the remand issues with respect to prong 3. HAUL Right. GREEN So those are kind of the two, the two options, but they all come back to the threshold question of how,how broad is the remand. PAUL Right. GREEN Mow broad are the issues on remand? PAUL Yeah. And GREEN So your position is that we're,we're focused on prong 3. PAUL Right. GREEN And reconsidering and redoing the findings PAUL Right. GREEN Making new findings on prong 3. PAUL I think,I think we are at this point. If this was at the Board level,then they obviously have discretion perhaps, although GREEN To allow a modification that would PAUL Right. GREEN Would that actually be a modification though? I'm not, I'm not sure what the Transcription of Hearing on Thornburgh Remand(A 134) Page 18 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4,2414 PAUL Well, I don't know in, in, and,you know,and again,I look at the language of your decision, and,and you did make determinations on these and they weren't appealed,and so I'm wondering whether under the law,the case even the Board GREEN That was,I guess that was my question to Mr. Petersen, and I even looked at those. PAUL Even the Board could do it. Yeah. GREEN Whether the Board could do it and it or it have their discretion. Yeah, and I don't know,and I guess I think of a modification on remand as something different from expanding the, the theories on the same use. I've,I've thought more of a modification as kind of a change in the use, but I haven't,I haven't given it that much thought here in the context of this case. PAUL Okay. Could I back up just a moment? You mentioned at the very beginning that Loyal Land had submitted an addition or supplemental burden of proof. GREEN I called it a burden of proof and that may be inaccurate. What I was referring to is there's a letter dated January 2 from Mr. Petersen to Nick Lelack. PAUL Yes. GREEN And then that had attached to it the affidavit of Mr. Lindley and, sorry, Appendix 1 to the letter to Mr. Lelack, also dated January 2,which I called a burden of proof because that's basically what it looks like. Is that a document that you've seen? PAUL Yes, that I've pulled the County website. It had a number of attachments here, your earlier decision GREEN Right. PAUL The LUBA decision and -GREEN Right. PAUL _ I just want to make sure that there wasn't something new. G REEN Something else. That's the, Appendix 1 is really the document that I was referring to. Mr. Petersen. DAVID Were you thinking of the January 3 letter which is really just an authorization from me to represent Loyal Land. GREEN Okay. And yes,there is an additional letter Mr. Petersen referred to that clarifies his,his relationship with Loyal Land in response to Kevin's January 2 letter asking who,who the applicant is and whether there's a match between the remand,requestor, and the applicant. But when I spoke about the burden of proof,I was talking about Appendix 1 to the Transcription of Hearing on Thornburgh Remand(A 13-8) Page 19 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 letter. Okay? PAUL Okay. But given that objection, I will briefly, and, and I do address A2, A l as well as A3 since you might rule that, that could be considered in. I would just like to emphasize that I believe that substantial construction,and it's defined in 22-36-020B really does mean the site not,not offsite. It states substantial construction has occurred when the holder of the land use approval has physically altered the land or structure or changed the use thereof. GREEN You're thinking the land means the land subject to the permit? PAUL Right. And which makes sense in terms of whether or not its use has been initiated by construction, and the use here is the destination resort, and actually in the VRE decision that the applicant refers to which is an administrative decision,they were talking about a final plat in the roads that were in the, in the,the final plat not off-site facilities that they might be constructed. GREEN So, but, as I was reading this,I was thinking it's kind of,it, it resembles in some respects of vesting standard,you know, a substantial construction to vest. PAUL The way it's being argued here is sounds GREEN And you're saying it's PAUL Sounds like vesting, but GREEN But vesting would be broader potentially because it could include other expenditures. There's not the,the language is a little different in common law vesting cases, I think, at least from recalling some of the cases I did under Measure 49. I don't think any of those involved off-site improvement, but I think, I've, I've interpreted homes, the homes test and so forth to be pretty broad. PAUL Right. GREEN In terms of, you know, the amount of expenditure and the level of expenditure based on the overall expenditure for the development, which could theoretically include off-site improvement. So you're saying you don't think off-site improvement expenses,either land clearing or milling, is the,is the case here. Milling for a building would count. It has to be construction on the site itself. PAUL Right. The, the initiation of use is of the,the permit. I mean there's no permit here to go on to BLM land and,and billed,you know. The permit we're looking at here and whether or not it's been initiated is that which allows construction on,on the site. That's what the conditional use permit,the final master plan, all of that is, is focused. And so whether or not there's Transcription of Hearing on Thornburgh Remand(A13-8) Page 20 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN There's a condition of approval specifically referring to the, the access through BLM land is, is part of what the applicant is required to do to make the destination resort work to get approval. So in that situation, since that's part of the approval itself would it not be reasonable to argue that expenditures,that certainly an expenditure toward the approval because it's part of the approval,part of the required approval. PAUL And, and that might be considered in,in terms of the conditions of approval GREEN Prong 3. PAUL Prong 3, but in the language of A2 and the definition of substantial construction,we don't believe that,that,that really,that really applies. And, we're all, you know, it's kind of difficult in this 90-day remand time period,but at the, you know,there's just no evidence here other than Mr. Lindley's affidavit of these summary statements about expenditures incurred of what was actually spent on what, and a lot of the expenditures here appear to be planning expenditures that were done. GREEN preparation PAUL Preparation for the application in the first place and the, again,the,the focus of the substantial construction prong is on an effort to complete the development. If, if all that one needs to do to satisfy the substantial construction test is expend all the money on an application, in the first place, that would, that would really defeat the whole purpose of this, of the, of the test because everyone could qualify because they spent money preparing an application, planning,but they then do the GREEN Well, it would still though come down to,to what's substantial. I mean, again,kind of thinking of the vesting cases,like I've probably looked at, I don't know,probably 8 or 9 or 10 maybe,where part of the expenditures presented as evidence of meeting the Holmes test included preparation expenses, some of which were not directly, sometimes would not be directly related to the proposal like a subdivision. It would something unrelated to that and others that were directly related to the proposal. And I've always assumed that those are relevant, but they may not be sufficient to be substantial,which are two different questions. Do you,do you get to count them? And then, if you do, are they significant enough to be substantial? � g PAUL Right. GREEN So you're saying you wouldn't even get to count them because of the reference to the land in this substantial construction definition. PAUL Yeah. Yeah. Physically altered the land or structure or change the use thereof, so no, I believe were arguing this. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 21 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN That language limits it to the,the land that's subject to the permit itself, and not land that's subject to a condition of the permit,such as the BLM land. PAUL Right. And construction or altering or changing the, the use thereof. Right. Let me see if there's anything else. And I don't think there's any dispute. They acknowledge that this was off,off site. I might briefly address A3. The applicant. First of all,the applicant states that viewed as a whole standard that LUBA raised, but if you'll look at LUBA's decision,it doesn't say,thou shalt use the,view it as a whole. It says, you could decide either each one should be substantially exercised, and so that's a decision,that's an open decision for you to make and GREEN That was the way I read it,that it was an alternative. PAUL Right. GREEN Analysis, a means of analysis under prong 3. PAUL And so we've made an argument for why it should be each,not viewed as a whole. Or in the alternative, if it's viewed as a whole,why that doesn't apply. GREEN Still doesn't work. PAUL Because so many, so few of the conditions have been satisfied,but even more importantly, the really significant conditions that are related to the advancement of the, of the,of the project,that is,you know,the final master that are based on the final master plan or tentative plan, the, the 50 units that come in, the$2 million that should be spent on something. What,what,what the applicant is focusing on are conditions as simple as correct a math error that was involved in the CMP or put on a map where certain lines are or show on a map where the open space is. If there's going to be an analysis of,of,viewed as a whole of the conditions of approval, there needs to be some way to give it to,to them. GREEN Uh huh. PAUL And the, and the bottom line here, and actually I might just go ahead and jump to, to the fault aspect of this is because the applicant so often relies on the fact that there was no final master plan approval, so it really couldn't do many of the things contained in the conditions of approval, but something we have often wondered is why the applicant didn't initiate remand proceedings on the,on the final master plan, that is after the Court of Appeals made their decision. I think it was in April of 2010. The two-year period here for the expiration of the permit didn't expire for another year and nine months. And now, and now we're four years later, and there's still no attempt or no initiation of remand. And this isn't something the County controls or, or my client, It's something completely under the control of the applicant to initiate remand proceedings. And so,we don't believe it's appropriate for the applicant Transcription of Hearing on Thornburgh Remand(A13-8) Page 22 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 to argue that they're somehow hamstrung or have been and are excused from performing all these conditions of approval because they didn't have a completed FMP,when it was within their power to initiate remand proceedings, but they've just let that,let that drift. That's, that's the fault of, of, of the applicant. PAUL The other argument that's often made in the applicant's materials is that the appeals that were tiled in this case made it impossible for them to do what they wanted to do within the two-year time period. But do recall that County Code actually tolls the running of the,of the two-year period for appeals until they're all resolved. And so the two-year period here ran for four or five years. I mean,they weren't prejudice at all by the appeals. GREEN Well, I,I believe that the evidence submitted by the applicant on that prong, and I believe it actually there was evidence to this effect in the original record although I'd have to look at it,has to do with economic conditions that occurred during that period of time. PAUL Oh,that's a,that's a separate issue, and I, I will address that as well. GREEN But it,but I think it goes to your point of, you know, if it's under the,the appeals were not under the control of the applicant fully. Those were under the control of your client to some extent, under the control of State entities that were determining when and how things were going to be processed, and time elapsed during that period of time, and economic conditions changed. Other conditions changed during that period of time. PAUL But they weren't,they, they didn't stop. If you look into the record when the conceptual master plan was on appeal, they went ahead with the application for the final master plan GREEN For the final. Right. PAUL approval. And they, and then they got the remand. The problem here again is with not the appeals,there is no stay of these proceedings. Things progressed as fast as they wanted to progress. And the fact is that once the remand happened on the FM, on the FMP, nothing,the, it just wasn't initiated again. GREEN Well,I, I understand your argument, I, I'm looking at the LUBA decision again today. I,I was struck by. Well,there was a term that was used, not with respect to the, the multi-pronged conditional use for destination resort process,but LUBA talked about some sort of metaphysical exercise. I think it had to do with what the LUBA just the conditions of approval or the representations that LUBA said no, those, those don't count. I, in reading this decision,as a whole,I felt like we were in a metaphysical exercise because of trying to fit the three prong or the three part conditional use or a destination resort approval process. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 23 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 To fit that within the,the requirement to include conditions of approval and the sort of construct that the County hearings officers have used since the earth cooled about laying out conditions of approval out into the future, you know,what happens now and what happens six months from now, and what happens a year from now,and then taking the language of the initiation standards in the County's Code and trying to fit those three things together, and they don't fit. And while I understand your point, I think LUBA also pointed out pretty clearly that it is, it's difficult to make this work. As probably what's intended by the County or by whoever drafted this, given how the decision was written, given how the conditions were written, given how the initiation provisions are written, and given this multi-stage process where you can have an appeal going on as was the case here, an appeal of the conceptual master plan, and then something going on with the final master plan,one of which is contingent on the other. I mean, it's just, it's like this,this sort of endless, you know,Rubick's cube of how do you get all these pieces to fit together in a timely way,not to mention what's going on as time is passing. The market may be changing. Economic conditions may be changing. It's, it's, it's not a simple whose fault is it. It's. I think LUBA made clear this is, there's a whole lot of factors that go into how these things are handled,multiple appeals, multiple stages that can be appealed. PAUL Right, but, but if the process isn't stopped during the appeals,and the process can move forward as it did GREEN Uh huh. PAUL That they, too much is being made of the appeals, and those appeals didn't stop anything. What stopped everything was the failure to initiate the remand on the FMP. That's what stopped everything, and, and they had plenty of time--a year and nine months—to do the FMP. GREEN What would,what would have been the PAUL And the results. There was also no,no extension request. GREEN What would have been the effect? Let, let's say they had done what you're proposing and gotten the FMP final approval? And then,we're in the initiation, the question of the initiation of the conditional or of the conceptual master plan,which if that's concluded, if the conclusion is that, that has expired,then there can't be any final master plan approval, because it's contingent on the conceptual master plan being approved. So would it not be prudent for an applicant to establish the validity of the conceptual master plan before,trying to get the final master plan approval? Transcription of Hearing on Thornburgh Remand(A13-8) Page 24 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 PAUL Oh, I,I wouldn't think so. I mean, and, and here,they certainly didn't think of doing that. They just, they just,you know,stopped. I mean, of all the other resorts that they just go on CMP,FMP,tentative,tentative with plat,final plat and then, and then there's no question about whether or not construction has been initiated or use has been initiated. And if there is, then, you know, there's next,usually,this argument about economic situation arises for extensions. That's where I've seen it mostly, and then that's what. If that had been necessary,that could have been done. GREEN Well, there were extensions applied for as I recall and granted. Were there,were there not a couple of extensions granted,and those were also appealed? PAUL No. Well. GREEN I recall at least one and the appeal of the extension was,was withdrawn. Wasn't there PAUL There was an extension granted administratively,and it was appealed. GREEN Right. PAUL It went to hearing. GREEN And then it was withdrawn? PAUL And eventually it was withdrawn. GREEN Right. Right. PAUL But,it,yeah. Yeah,so there GREEN It's a complex. I guess my point is it's a complex process. PAUL It is a complex process. GREEN Standing by itself. PAUL It is a complex process, but if you were. I don't know if this is in the record. I assume it, I don't know. I'll have to check,but,you know,the, the findings,a conceptual master plan was,was,the conditions of approval, as I understand,were,were drafted by the,by the applicant. And,and it, it, GREEN That's,that's not unusual. PAUL No. It's no un,unusual,but it's. I think LUBA's point is, is well-taken. The conditions of approval were drafted in this way. And if there was concern about that, then they should have been drafted in a, in a different way than they were. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 25 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN Had,had,had hearings officer Briggs known what was coming, she probably would have written them a different way. I think the way they were written was the way the hearings officer have written the conditions of approval since time in memorial laying out a chronological pathway [(?)someone coughed loudly] for what comes first,what comes second,and so forth. And, and obviously with respect to destination resorts,that it didn't, it doesn't work as well. That,that model doesn't work as well. PAUL On your point,is the economic,economic down turn,there's also one reason given in the applicant's materials for why this didn't happen,but if you look at the CM?,and we've cited the pages,this is some five or six pages of the findings of the County concern the financial ability of the applicant to build the resort,and. GREEN As of that time. PAUL Right. With,with,with,and it's substantial,and it's,and it's detailed. And so,you know,it's one thing if, if the economic GREEN That's,that's a different. I mean, the applicant has to show the ability, the financial ability to carry this out,but that's I think a separate question from whether the applicant would choose to based on economic conditions in terms whether it would pencil out or not. Those are,those are separate questions, and the fact that you just say we have the money to do this doesn't necessarily mean that the time is right to do it. I don't think one necessarily follows from the other. PAUL Yeah. Although,if, if one can just choose because of the, one's financial situation not to initiate a use because they don't,don't want to do it at that time. What's the point? GREEN Well,they run the,they run the risk. They run the risk that Loyal Land ran, which is that if they,you know, depending on how much they've done, they may find themselves in exactly the spot they're in now,which is trying to argue that they did enough under the circumstances. That's the risk they take. PAUL Right. GREEN That the y may not ha ve done enou g h in hindsight ht to initiate the use. PAUL I think everything else, I've, I've addressed in, in the written materials. GREEN Okay,which I look forward to reading and,obviously, haven't read yet. Okay. Let me see if the applicant has any oral rebuttal. DAVID I do. GREEN Okay. DAVID I'll be very brief. Transcription of Hearing on Thornburgh Remand(Al 3-8) Page 26 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4,2014 GREEN Okay. And then I'll hear from Kevin and then we'll talk about a,a post-hearing schedule. e again. So I always find rebuttals to be kind of longer DAVID David Petersen S g Y g than this list of bullet points,but that's how it kind of ends up happening. I would go on to repeat the request that we leave the record open to have the opportunity to respond to the memorandum we were provided. I want to make sure. This is the distinction I focus in my letter,but I do just want to highlight it for you, and that's the distinction between full compliance with the conditions and full performance of the conditions. The Code provision talks about,in the clause about fault talks about failure to fully comply. We make the point in our Appendix that in fact every condition has been fully complied with because to the extent that there was the opportunity for performance that has occurred and, in every other respect,the opportunity for performance is not available. So therefore,we're still in compliance because if you, if you performed the condition before it was permissible,that would, that would essentially be noncompliance. So I think that as a, as a threshold matter,there's really not even a need to evaluate fault,and we've certainly got into some questions about if evidence about fault, an argument about fault as a back-up plan, but I think the evidence is in the record certainly to make a finding that there has been full compliance with every condition,and fault does not need to be evaluated. DAVID The, the suggestion that the definition of substantial construction is limited to construction on the site. Well first off,I disagree with that for the reasons I made in my opening presentation,and I don't think that's what the Code provision says. I did forget to mention,however, that there was$800,000 roughly in golf course work,which is mentioned in Mr. Lindley's affidavit and some of that is land-clearing on the site as well. GREEN How much of it is? Do you know? DAVID That's a question I'd have to answer for you outside of these proceedings. I don't know the answer to that. And I believe you pointed out that the BLM road is required by the conditions. The lodge is also required by the conditions in a, in a generic sense. The condition requires them to spend,I believe GREEN Overnight lodging DAVID Yeah. $2 million in 1984 dollars on recreational amenities,which is going,that's probably is going to be a significantly larger number than $2 million today. So even without the planning costs, even though the Tetherow decision did in fact use planning costs towards the substantial construction determination,even if you carved them out, there's still going to be a substantial amount of money spent on classic construction activities. You touched briefly on the question of whether the vesting Transcription of Hearing on Thornburgh Remand(A13-8) Page 27 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 analysis under Holmes might be appropriate here. My recollection of Holmes, and it's been awhile,is that Holmes GREEN That's actually changed with the, I can't think the name of the case, but the Supreme Court modified Holmes in a case about a year ago. DAVID Yeah. Yeah. Yeah. My recollection is that applies a kind of a percentage test like GREEN Well, it, it does although it they've said don't, don't spend too much time on the percentage test. Look at all of the criterion overall. DAVID Well, I guess the point I would make here is the construction that's allowed by the conditions of the CMP is actually nothing. So, so any construction is going to, it's going to blow a percentage test out of the water because you're taking a percentage of zero. GREEN And,I guess that, this is question that's kind of floating around in my head which is to what extent does substantial construction have to be viewed in the context of what is permitted under the approval? DAVID Yeah. It does present a little bit of a logical merry-go-round, doesn't it? GREEN Yeah. There's a little conundrum because if you can't even move dirt on the site until you have final master plan potentially or something,how much is substantial? Is it substantial in the context of what you're permitted to do or is it substantial in some sort of broader context of what the overall cost would be? I mean, it's just one of these pieces that doesn't fit as neatly. DAVID Sure. I appreciate the conundrum, and I've, I've struggled with it somewhat myself. I guess that what I would say is this is a somewhat, well maybe I don't know how unusual it is,but the conditions do expressly contemplate construction off, off off site at a BLM road at the very minimum. So I think that's what happened GREEN Well, overall,that's a relatively small percentage of the overall construction for the resort, if you look at everything that has to be or is proposed to be constructed, it's a relatively small piece of it. DAVID Yes, although in absolute dollars, it's a significant amount of money. And in the Tetherow decision,there wasn't this percentage-of-the-pie approach. And I would also point out that it's pretty much everything that they could do, given the limitations of where they were. So you could certainly, you could say it's 100%of the construction that was available. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 28 of 33 ` • w Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN But again,this,this initiation of use, I think,also I would guess predates the destination resort provisions of the Code. So it was probably drafted with much simpler land-use approvals in mind,I would think, and,you know,Kevin,you may want to weigh in on that,but it's, it's again one of these pieces that doesn't,where the destination resort process and, and construct doesn't fit as neatly within some of these older provisions of the Code. DAVID The last thing I want to do is respond this question of why hasn't there been an FMP remand initiated by the applicant. I hope this is in the record but, it's,I suspect it is, but for a long time, it was impossible to request an FMP remand because kind of the central issue of the FMP remand,as I understand it, was where wildlife mitigation would occur. GREEN Uh huh. DAVID _ And that required BLM to make some decisions about where it could take place,and that didn't happen until mid-2011. And then the initiation application was filed on November 1,2011. So we're really talking about a,maybe there's a four to five month window in there where it even conceivably could have been,or would have made any sense whatsoever to request a remand. And then I also, I want to blunt the risk of minimizing the severity of the economic downturn that we're relying in part on for explaining why the project wasn't moved forward with the speed that maybe Mr. Dewey thinks we should have moved it forward with. I mean, those are some pretty scary numbers that I've provided in my brief in terms of really how this region suffered. And I'm,I'm sure there are developers and other businesses much more well- capitalized than Thornburgh Resort Company that didn't survive. So, you know,there's some pretty significant unprecedented,kind of economic damage that, you know, really cannot be blamed on the applicant. It's obviously a result of global factors and,you know,very complicated analyses that don't,that the applicant has no control over. That's,that's all I have. GREEN Okay. Thank you Mr. Petersen. DAVID Thank you. GREEN Okay. Kevin. KEVIN I don't have any specific comments except the relationship in the, between the timing of adoption,the destination resort ordinance,the initiation of the use section of the Code. I suspect that the destination resort ordinance came first early. GREEN Oh really. Okay. KEVIN Early '90s. GREEN Okay. Transcription of Hearing on Thornburgh Remand(A13-8) Page 29 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4,2014 KEVIN And it was driven by Eagle Crest to make use of the collate language. The initiation of use language I think came sometime later, GREEN Okay. KEVIN But I suspect that when this was written,because of the unique development process that's associated with destination resorts that this, there's probably some unintended consequences here as to how this procedure could relate or would relate to a destination resort. So that's GREEN So you're saying the initiation piece was prompted by issues that came up with respect to Eagle Crest and its phasing and KEVIN No. I think that the desire to put this initiation of use language in the Code was driven by a,a, the desire to,to have some means of vesting, if you will,with projects not, not related to destination resorts per se, GREEN Right. Okay. KEVIN But to more standard types of development projects. ti timing Okay,which was my assumption that I h ad the tlmi g o ff: KEVIN Yes. GREEN Okay. KEVIN And so I think we're dealing with some unintended consequences because the destination resort development process is different, so different than any other project that we normally say. GREEN Right. Okay. I, I don't, I doubt that there have been many initiation and use questions with respect to destination resorts, and I may be wrong about that. Have their been others besides Loyal Land and Thornburgh that you're aware of? KEVIN The VRE decision,that's GREEN That's KEVIN That's cited in this GREEN Okay. KEVIN In this record. GREEN That has an administrative approval based on that analysis. Any, any others besides VRE? KEVIN I can't think of any. GREEN Okay. Okay. All right. Anything else Kevin? KEVIN No. GREEN All right. I'm going to go ahead and close the oral testimony on remand and talk about the post-hearing schedule. Transcription of Hearing on Thornburgh Remand(A 13-8) Page 30 of 33 Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 20114 So we are approximately 30 days into the 90-day time frame, if I recall, if Pm doing the math correctly,just about exactly 30 days. I'm anticipating whatever decision I issue will be appealed by somebody. The Board may or may not hear it, but we need to at least allow enough time for the Board to have an opportunity to hear it. So help me with the math on that working back from the 90th day and the time frame for the Board,you know,to receive an appeal and set a,set a meeting at least to decide whether they're going to hear it or not. Would that be a 30-day process, do you think? I'm trying to figure out how much time I have between now and the bottom line to get something to the Board in the 12-day appeal period. KEVIN So if we rough the calculation right, 90 days is April 3rd. GREEN I think I figured it was April 2nd. Well, let's be conservative and say it's April 2nd. KEVIN I think the Board, if the Board had 30 days. GREEN After the appeal is filed. KEVIN Yes. GREEN Or after the 12th day. KEVIN Right. GREEN Okay. So then,we've got to add 30, got to add 12 to 30,that's 42 days back. So that leaves me only about 3 weeks to be on the safe side for the record to be opened and for me to write a decision. And I think I have to leave the record open at least 7 days by statute, and the applicant has 7 days for argument,so there's 2 weeks right there. So it's tight. KEVIN It's tight. GREEN It's very tight. Okay. All right. So in light of that,my usual 3-week, you know, opening evidence,rebuttal evidence period, and then a week for final argument we may not have time for. So what I'm thinking is I, I want to have at least a week in this initial. I want to have at least a week for you to be able to respond to Mr. Dewey's and for both staff and Mr. Petersen to be able to respond to Mr. Dewey's memorandum and for Mr. Dewey to review anything else in the record that, that he wants to. And speaking of the record,I'm assuming the record would include everything that came in, in the initial [somebody coughed and covered her voice] declaratory ruling. KEVIN DR-11? GREEN DR-11, whatever is, that record plus whatever has come in now. KEVIN I have the entire record sitting in my office. GREEN And is it. So here's the question about that. Should,are we, are we Transcription of Hearing on Thornburgh Remand(A 13-8) Page 31 of 33 • Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 looking at the LUBA record as the record? Is that,does that make sense to treat the LUBA record as the record of DR-11-8 and then the remand record would be everything that came in after that? Does that make sense since the LUBA record is already put together? Would we,would we lose anything if we use the LUBA record as the DR-11 record? Thoughts on that,Paul? [They all talk at once.] GREEN ^ All of you. DAVID Fine with me. GREEN Okay. All right. So then,so what I'm suggesting then is if we're going to use the LUBA record as the DR-11-8 record that it might be useful to refer to any documents out of that record by the LUBA number,by the page number. Does that make sense to be a little bit clearer? All right. So the record,I want to talk about the record will be the LUBA record of LUBA 2012-42 and DR-11-8. The remand record will be anything that came in after that up until the close of the record. So what I would like to do is have 7 days for general response to what's come in so far and then a shorter period for rebuttal. Let me look at the calendar here real quick. Okay. So if we look at the first round closing on the 1 lth,a week from today, and then go to the 14th for rebuttal of evidence that came in by the 11th, and then the 21st for final argument, and then I would need to get a decision out. DAVID What was the last one? 21st? GREEN The 21st for final argument, and obviously sooner would be better if, if you can get it in sooner, then I would have more time to,to write the decision. Paul? PAUL I have to be in, in court. My schedule is being critical for that Thursday and Tuesday in Eugene. GREEN Which,which Thursday and which Tuesday? PAUL Day after tomorrow and next Tuesday. GREEN Okay. PAUL Is there only way I can copy of that GREEN For the 12th? Sure. All right, so let's. What I want to do is to try to keep Friday as that, as the end of the rebuttal period, so that just leaves you with one day less for rebuttal on what came in on the first week because I've got to give you 7 days by statute. `Chat's,that's going to be pretty tight,but I, I think that's the only way we can do it within the time frame. Is that going to create too much of a headache for everybody? PAUL No, works for me. Transcription of Hearing on Thornburgh Remand(A13-8) Page 32 of 33 • Transcription of Hearing on Thornburgh Remand (A13-8) February 4, 2014 GREEN All right. So February 12 will be the first round. February 14 will be rebuttal,if any. And then February 21 would be final argument by the applicant and sooner is better. DAVID These are all 5 o'clock? GREEN 5 o'clock. Right. DAVID GREEN Just,just be sure that you get it in plenty of time in case the email system crashes or something else crazy happens. Okay. And then that would leave me about a week,that last week in February to get the decision out. I'll do my best to,to get it out by the 28th. Barring that, it would be the first week in March, and then we'll just have to try to cram as much into the 30 days remaining to allow the Board to. Actually Kevin,can the Board, could the Board go ahead and set a meeting on the appeal before an appeal's filed? Have they done that before? Knowing that an appeal is likely, they've just gone ahead and put it on the agenda, or will they wait until there's an actual appeal? KEVIN Well,they,typically,they wait until an actual appeal unless they want to call it up. GREEN Okay. Well. Think about that. So my goal would be to get a decision out on the 28th or, if that's not possible, that first week in March as early in that first week in March as possible. So, let's say I get it out on the 3rd, 12 days would take it out to the 15th, 14th let's say for appeal, so that would give the Board only about 2 weeks, 2 1/2 weeks to, to review it and decide if they want to hear it, which is tight but that's the best we can do. All right, so to review. First round of evidence closes at 5 p.m. on the 12th. Rebuttal 5 p.m. on the 14th. Final arguments on the 21st by 5 [p.m.] or earlier. And Mr_Petersen, if you do submit them earlier, please let me know or let Kevin know they're coming in earlier so Kevin can let me know that record is closed and I can get started on the decision. Okay. All right. So, any questions about process from now on? Okay. We're adjourned. Thank you. DAVID Thank you. 031117/00001/5506695v1 Transcription of Hearing on Thornbur gh Remand(A13-8) ) Page 33 of 33 ToNKONToRP puumi 1600 Pioneer Tower 888 SW FtittAvenue Potdand,Oregon 97204 503221.1440 David J.Petersen 503.802.2054 Admitted to practice in Oregon and California Fax: 503.9713754 david.peterscn@tonkon.com May 19,2014 VIA E-MAIL(kevinh(aico.deschutes.or.us} Mr.Kevin Harrison Deschutes County Community Development Department 117 NW Lafayette Avenue Bend,OR 97701 Re: Loyal Land,LLC Declaratory Ruling Request County File No.DR-11-8 Appeal to Board of Commissioners Dear Mr.Harrison: Enclosed are copies of the following documents to be placed into the record for this matter: 1. Memorandum"Impact of the Great Recession on the Resort/Second-Home Industry Nationwide and in Central Oregon" prepared by Peterson Economics dated May 12,2014; 2. Affidavit of Kameron DeLashmutt dated May 16,2014; 3. Affidavit of Terrence Larsen dated May 16,2014;and 4. Letter from Peter Livingston to the Board of County Commissioners dated May 13,2014. An original of the letter from Mr. Livingston should already have been delivered to your office. Originals of the other documents will be delivered to your office later this week by Mr.DeLashmutt. Thank you and please contact me if you have any questions or concerns. Sin erely, David J.Petersen DJP/dJp Enclosures cc(by e-mail,w/o encl.): Mr.Kameron DeLashmutt 9 PETERSON ECONOMICS MEMORANDUM IMPACTS OF THE GREAT RECESSION ON THE RESORT / SECOND- HOME INDUSTRY NATIONWIDE AND IN CENTRAL OREGON PREPARED FOR LOYAL LAND, LLC May 1 Z 2014 Project Number 427 I !. 106 MA011'r' L R:vE ANACOR7 is, 'rYA -5 r2?_I TEL •:3GO.588 9 30 I FAX 360 585 0570 MEMORANDUM IMPACTS OF THE GREAT RECESSION ON THE RESORT / SECOND- HOME INDUSTRY NATIONWIDE AND IN CENTRAL OREGON Peterson Economics was retained by Loyal Land,LLC in April 2014 to prepare this memorandum discussing impacts of the Great Recession and Financial Crisis on the resort/ second-home industry nationwide and in Central Oregon in particular,with a focus on impacts on the proposed Thornburgh Resort. This memorandum was prepared by Jon Peterson,President of Peterson Economics. MEMO OUTLINE This memorandum includes the following components: 1. A summary of Peterson Economics' relevant qualifications; 2. A summary of second-home/resort market trends nationwide over the past decade; and 3. A summary of market trends in Central Oregon and implications for the proposed Thornburgh Resort project. PETERSON ECONOMICS'QUALIFICATIONS Given our experience in the industry,specific experience in Central Oregon,and numerous assignments examining the proposed Thornburgh Resort between 2004 and 2008, Peterson Economics is uniquely qualified to comment on development potential and development parcel values at Thornburgh before, during,and after the Great Recession and real estate market crash. Peterson Economics was established in 2002 by Jon Peterson,a former principal at Economics Research Associates. Since that time,Peterson Economics has been retained to complete more than 420 market and financial analyses for proposed new communities,resorts, and golf courses,making the firm an industry leader across North America. These assignments have included over 100 relevant consulting assignments in the Pacific Northwest(most likely more than all of our competitors combined). Consulting assignments completed in Central Oregon have included: ■ Brasada Ranch: we completed the original market and financial analysis for Jeld- Wen in 2002,as well as a series of follow-up studies that helped guide overall market positioning. • Caldera Springs: we completed the original market and financial analysis for Lowe { Enterprises in 2004,as well as several follow-up studies. • Pronghorn: we completed a targeted market analysis for Pronghorn in 2004. PETERSON ECONOMICS 1 • Black Butte Ranch: we were retained by the Black Butte Ranch POA in 2007 to complete an evaluation of market and financial potential for a proposed annexation into the community(adding about 350 residential units). • Thornburgh: we completed a series of market and financial analyses for the proposed new Thornburgh resort between 2004 and 2008,as well as an economic benefit study. • Remington Ranch: in 2010 and 2011,serving as an expert witness,we completed a detailed analysis of historic and future potential for Remington Ranch,a failed, partially developed community near Redmond,which lost funding in 2007 due to the emerging financial crisis. • Pine Forest/Caldera Springs: in late 2013,we completed a market and financial analysis evaluating potential for a new resort community adjacent to Caldera Springs. • Other Proposed Resort/Second-Home Communities: between 2004 and 2013,we completed market and financial analyses for about ten other proposed new resorts or second-home communities in Central Oregon. • Primary Home Communities: in 2011 and 2012,we also completed targeted market and financial analyses for a client who purchased several existing,partially developed,primary home communities in the region,including McCall Landing in Bend and Ochoco Pointe in Prineville. Among other assignments,other notable experience in the Northwest includes: • Suncadia: we completed a series of comprehensive market and financial analyses for Suncadia,culminating in an exceptionally detailed market and financial analysis that largely served as the initial business plan for the new resort community. In total,we have completed in excess of 20 major assignments for Suncadia/Tumble Creek. • Other Upper Kittitas County Projects: we have completed over one dozen other assignments for major land owners completing new resorts or second-home communities in the region around Suncadia(Sapphire Skies,Plum Creek Timber, etc.). • Lake Chelan/Methow Valley: we have completed over one dozen market and financial analyses for proposed new resorts,hotels, and second-home communities in the region stretching from Wenatchee to the Methow Valley, including about 12 projects overlooking Lake Chelan. • Columbia Gorge: we have completed market and financial analyses for three proposed resort communities in the Gorge. • Northern Idaho/Montana: we have completed market and financial analyses for over 20 proposed new resorts and second-home communities,including several proposed large-scale golf resort communities. • Other Assignments: we have completed dozens of other relevant assignments in the Northwest, including numerous assignments in the San Juan Islands(with ongoing work for Rosario resort), several assignments on Vancouver Island,and a variety of assignments on the Washington and Oregon coasts. PETERSON ECONOMICS 2 Over the past four years,Peterson Economics has also served as an expert witness on three major resort/second-home community projects in the Pacific Northwest(Remington Ranch, Semiahrnoo,and a proposed resort in the Columbia Gorge)focused on retro-active valuations of resort development parcels, evaluating development parcel values before,during,and after the market crash. We have also served as an expert witness on similar retroactive resort-parcel valuation assignments in Michigan,New Jersey,Mississippi,California,and Mexico. INTRODUCTION The boom-and—bust cycle seen in the resort and second-home market over the last decade in large part followed a similar cycle in the overall residential housing market,though it was even more pronounced. The residential market experienced dramatic gains in the early 2000s, fueled in large part by an ever increasing capital base directed towards residential lending. The Subprime Mortgage industry,using sophisticated financial products,securitized mortgage obligations attracted more and more capital into the US residential housing market allowing promoters to package and sell vast amounts of US mortgages. To attract new customers, lenders routinely relaxed credit standards. This financial bubble fed from and off of the housing bubble. Although neither was sustainable, so long as home prices were rising the long term risks were masked. Once the residential market peaked in 2005,and then softened in 2006 it exposed some of the underlying risk of the Subprime industry. With that credit began to tighten. As subprime defaults rose real questions were raised as to the value of the mortgage paper. By late 2006 the market for collateralized mortgage obligations was very limited. In July 2007 when two large"Mortgage"funds managed by Bear Stearns collapsed it created shock waves throughout the financial community. Trillions of dollars of similar"Mortgage"securities sat on the books of banks and institutions around the world with questionable value and no liquidity. This lack of liquidity created the financial crisis which in turn led to the recession. As the residential housing market had boomed on the back of easy credit, it collapsed under the weight of no credit. Prices dropped. Defaults and foreclosures rose and values were further depressed. Similarly as the resort and second-home market had rose on the heels of the residential market it also dropped, often in much more severe fashion. This had dramatic and widespread impacts, including to the resort and second-home industry nationwide and in Central Oregon in particular,as discussed in more detail below. NATIONAL TRENDS IN RESORT / SECOND-HOME MARKETS Over the past decade,virtually all major U.S.-driven resort/second-home markets experienced the following distinct trends: • Market Boom: in 2004,2005,and 2006, market conditions soared in virtually all attractive resort destinations, with soaring prices and soaring sales volumes. This led to a surge in new and proposed new development,and a dramatic surge in underlying development parcel values. PETERSON ECONOMICS 3 • Market Softening: by early 2007,as credit began to tighten,market conditions began softening somewhat in most resort destinations. In general,second-home prices(for lots,homes,cabins,and condos)remained firm, but sales volumes began declining quickly. In 2007 it also became extremely difficult for new development projects to obtain financing,even if fully entitled and situated on premier sites in top- tier resort markets, and even if recording strong pre-sales. For example, in early 2007,a long-term client pre-sold 30 of 69 proposed ultra-high-end condos on a waterfront site on Maui,collecting non-refundable deposits averaging about$1 million each,but nevertheless failed to obtain financing to develop these condos,even after approaching more than 100 prospective lenders. In this type of environment, lack of entitlements and ongoing appeals became a major impediment for new projects seeking to attract financing. • Market Freeze: with the onset of the Great Recession and the Financial Crisis— recreation-property demand in most U.S.-driven resort markets largely evaporated by late 2008. The long-term impacts of this pullback varied greatly based in large part on the profile of owners when the market froze. In fairly stable,established markets (or resort communities)that saw minimal new development in the mid-2000s,the primary impact of the downturn was a rapid decrease in sales volumes,coupled with a modest decrease in sales prices(or values). However,the impact of the market freeze was very different in emerging/fast-growing second-home markets—like Central Oregon--that experienced massive development and sales in the mid-2000s. Dozens of second-home destinations around the western United States boomed in the early and mid-2000s,adding multiple new large-scale second-home/resort communities. Many of these came to market in 2004 and 2005,enjoying exceptional success by attracting large numbers of speculative buyers,hoping for even more price appreciation. Many new resort-style communities in these markets sold hundreds of lots during the market peak,with many purchased by speculators or others who simply could not hang on to properties in the long run. The majority of these buyers financed their purchases,often buying homesites with only five or ten percent down payments. Many also relied on low-interest five-year"balloon"mortgages. ■ Market Crash: when the market froze in late 2008,at first,perceived values drifted only moderately lower. However,within a year,a combination of factors(including reduced net worth,reduced income,other liabilities,and falling property values in both source markets and second-home markets)resulted in the"perfect storm"to create a self-perpetuating market crash,especially given the timing of five-year "balloon"mortgages on properties sold in 2004 and 2005. As more and more speculative properties reverted to bank ownership,banks dumped more and more inventory on the market,often reducing prices once every two weeks in an effort to unload inventory at any cost. Just as the belief in future inflation begets future inflation, the belief in falling prices spooked remaining buyers to remain on the sidelines,and falling prices persuaded more and more existing owners to simply take a credit"hit"and let their properties revert to bank ownership. By 2010,many lot owners who purchased homesites for$300,000 to$600,000(or more)in the mid- 2000s,but paid only five or ten percent down, could not justify continuing to pay PARSON ECONOMICS 4 l interest on huge loans. In the hardest hit major new second-home communities, average homesite values quickly fell by 70 to 95 percent. For example, lots that previously sold for$500,000 began selling for only$50,000 to$100,000(or even less in communities with structural issues leading to uncertain futures). • Market Stabilization: by 2011,market conditions began stabilizing in many areas, as improving economic conditions and market confidence encouraged new investors to scoop up discounted,distressed properties. In many areas,distressed sales comprised the vast majority of sales in 2010 and 2011,but represented only a small minority by 2013. • Market Recovery: with conditions in source markets(i.e., major metro areas) improving dramatically in 2013 and early 2014, many emerging second-home destinations and many relevant second-home communities are now enjoying significant appreciation,as inventories fall,home building starts back up, and long- term use-oriented buyers return to the market. However,in most cases around the western United States,underlying homesite values remain well below"replacement cost." For example, in many cases,premier golf-front,mountain-view,or lake-view homesites in top-notch communities(typically with$30 million to$75 million amenity packages, in established second-home destinations)that once sold for $500,000 or more are still available for only$75,000 to$175,000. Many of these communities also remain"flooded"with large inventories of standard interior homesites, often valued at only$10,000 to$50,000—far below prices necessary to justify this type of development from scratch. Home and cabin values also fell sharply in many of these new, large-scale resort-style communities. In most cases,home,cabin, ar condo values fell by 30 to 60 percent—much less than underlying lot values fell, but still enough to bring finished unit values down well below replacement cost. For example, in many cases,homes that were once valued around$1 million now sell for around $500,000. Such a home might now occupy a lot worth$100,000,but this house could cost about$700,000 to build from scratch. Until such units are cleared from inventories, lot demand will remain somewhat muted and new communities will find it difficult to market new units at prices high enough to justify development costs. The severe market downturn impacting individual property values and absorption within new large-scale master-planned resort-style communities in these emerging second-home destinations also had a very substantial negative impact on development parcel values,as well as the values of partially developed new communities. For example,in the aftermath of the market crash,it became common for attractive new partially developed communities—with substantial unsold inventory—to sell for a small fraction of prior values—often five to 15 percent of pre- crash values or"replacement cost." Thus, large new, partially developed communities(often 500 to 2,000 acres)featuring$30 million to$60 million in new amenities(golf courses, clubhouses, recreation centers,etc.)and often $30 million to $70 million in new infrastructure have been selling for as little as$2 million to$10 million, even when they have several hundred homesites or other residential units remaining to develop and sell. In most cases, infrastructure has already been developed to serve some of these remaining,unsold developer-owned PETERSON ECONOMICS 5 homesites or units,with remaining areas simply requiring extension of existing infrastructure(at lower cost than new development). With such exceptional values available,demand for undeveloped resort community parcels has remained quite weak over the past five years. TRENDS IN THE CENTRAL OREGON RESORT / SECOND-HOME MARKET Over the ast five decades, Oregon Central Ore has grown to become one of the largest and p >� most popular resort/second-home destinations in the western United States. During this time, development activity and market conditions have been through a series of booms and busts,but none were more pronounced than the boom/bust cycle of the past decade. In fact,Central Oregon witnessed one of the fiercest boom/bust cycles of any U.S.-driven second-home market in history over the past decade. Between 2000 and 2007,the region commonly topped national charts for fastest growing population,fastest appreciation, and most spectacular second-home sales;however,between 2008 and 2010,it also topped many charts for fastest depreciation, fastest decline in sales,and fastest surge in regional unemployment rates. Between 2000 and 2011,the following major resorts were developed in Central Oregon: 1. The Ranch at the Canyons(started development in 2001); 2. Pronghorn(started development in 2002 g ( p 2002); 3. Brasada Ranch (started development in early 2005); 4. Caldera Springs(started development in late 2005);and 5. Tetherow(started development in late 2006). Remington Ranch,a massive proposed new resort community, also started development in late 2006; however, it ceased development within one year when it lost its primary funding source— due to the emerging fi nancial crisis--and has been entangled in legal battles since. During the exceptional market environment of 2005 and 2006,Pronghorn,Brasada Ranch,and Caldera Springs all achieved record-breaking pricing and absorption,opening the door to strong developer profits if demand could be sustained. However, illustrating the severity of this market collapse,by 2010, only Caldera Springs remained profitable(i.e.,cash flow positive,with sales revenues to date exceeding development costs to date). For the proposed Thornburgh Resort,the most relevant existing resort communities in Central Oregon include Pronghorn,Brasada Ranch, and Caldera Springs. These communities all came to market in the early to mid-2000s,featuring extensive amenity packages including golf, and offering a variety of high-end real estate products appealing to recreation-oriented buyers. Tetherow,the Ranch at the Canyons,Sunriver/Crosswater,Black Butte Ranch,Eagle Crest, Aspen Lakes, and Cascade Meadow Ranch are also notable secondary comparables. However, these are somewhat less relevant due to age(all but Tetherow are older),market positioning, or location(Tetherow's location in Bend allows it to appeal to a different segment of the market). Tables 1 through 7 provide a comprehensive summary of these top relevant resort-style communities. This includes a summary of their sites, locations, amenities, real estate products, pricing,and absorption, including comparisons of peak market conditions to market conditions by late 2011. PETERSON ECONOMICS 6 Ts w d °° . NI r co r• n „. ri ,S W m w w n i 0 co Ilini rd 0 o [ w o g '2 .4 C. 5 c c 5 = C 0 G cn A F e B E E o f A E e 8 O N N N 4 V't O V'S N Y1 V'Y fira Z "EL. w 74 © e .�? to CO 4 as as al a co — CI) v7 - o M u� C in 0 rn °Z - - a ot 1F, N N N 7y a N N —4 w en W P yy .n O H L o Oct. c? O O OT up N O FD @ 1�. F (%1 , 'p .--. R N'. ..-. m Op M� M CC to Q U Lei 6.2 rn C F v u .2 2 . n ,t, u a 4t e o w a a.' ° Z w u 2 w 3 z " Q �' 41 OI '�' v u x c 3 ' 3 w c o o a. 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Table 4 SUMMARY OF TOTAL CUSTOM HOMESITE SALES AT TOP RELEVANT EXISTING COMMUNITIES (INCLUDING DEVELOPER SALES AND RESALES) Property Name 2005 2006 2007 2008 2009 2010 2011" Pronghorn Annual Sales 66 27 20 13 12 4 5 Average(Mean)Price $630,000 $622.000 $638,000_ $527.000 $132.000 $272,000 $,86,800 Total Volume $41,580,000 $16,794,000 $12,760,000 $6,851,000 $1,584,000 $1,088,000 $434,000 Rrasada Ranch** Annual Sales 201 102 23 13 15 38 32 Average(Mean)Price 5325.000 $325,000 $348.000 $335.000 $174,000 $77,600_ $64,600 Total Volume $65,325,000 $33,150,000 $8,004,000 $4,355,000 $2,610,000 $2,948,800 $2,067,200 Caldera Springs Annual Sales 203 37 28 14 3 26 26 Average(Mean)Price $339,900 $360,300 $366,000 $351,000 $199,000 5145.600 $127,300 Total Volume $68,999,700 $13,331,100 $10,248,000 $4,914,000 $597,000 $3,785,600 $3,309,800 Tetherow Annual Sales N.A. N.A. 29 28 3 0 7 Average(Mean)Price N.A. N.,A. $584,700 $551,200 $483,000 Nei $214.000 Total Volume N.A. N.A. $16,956,300 $15,453,200 $1,449,000 0 $1,498,000 The Canyons Annual Sales 8 4 3 0 0 0 1 Average(Mean)Price $1,176.000 $1,031,300 $1,300,000 N.A. NSA- N A. $285,000 Total Volume $9,408,000 $4,125,200 $3,900,000 $0 $0 $0 $285,000 Total Sales 478 170 103 68 33 68 71 Average Price(Mean) $387,683 $396,472 $503,576 $464,312 $189,091 $115,035 $106,958 Total Volume $185,312,700 $67,400,300 $51,868,300 $31,573,200 $6,240,000 $7,822,400 $7,594,000 'Recorded from January through late December- "*Sales exclude two homesites sold at auction in 2011. Source:Peterson Economics,AmeriTitle,MLS,and individual communities. I a o o e a qq oN�I ono I o u I A d 2 0 0 2 � 'a8 e a 0 u vi an E .22. o x g 3 01 pp •d V � fi .-i cd tl by 5A " to (A t3....a 'S p 3 p O ,i q s N d B . a U _ t o �, Vf 4'1 69 K 0 0 0 0. v. LI- 0 i F. .+G 2 kl al V © 0d) g O tel 'Cr' r- r,; 0 •.µ i C 4, rn to CA to yi Ln a d $ 2 O 0 O 0 w 0 O CC N 00 N + F;" AC C) L1. 4.0 6nrf fei Vf 69 to, .--. 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C fl " eV crs O 0 0 W LT4 A c L., Q" v v) al ki V % -1 A O E a or 0.� A Z E A 121 U E-- r u. 1 in. d 0 1 1 As depicted,Central Oregon's 11 relevant resort-style communities: • Range in size from about 360 to 4,000 acres(averaging about 1,350 acres); • Typically include extensive amenities,including golf courses,clubhouses,recreation centers,pools,trails,and other amenities; and • Typically include 400 to nearly 1,800 residential units(though one includes only 24 homesites and one includes more than 4,200 total units). All are within five to 45 minutes of either Bend or Sisters, and most are within 30 minutes of these upscale service hubs. Newer resorts such as Pronghorn,Brasada Ranch,and Tetherow occupy open sites,typically dotted with junipers rather than prime forested sites like Sunriver or Black Butte Ranch. While Tetherow is located on the outskirts of Bend,Pronghorn and Brasada Ranch are both about 30 minutes away from Bend. Due to a wide variety of factors—ranging from strong macroeconomic conditions,to excitement surrounding new resort development,to the real estate bubble itself—Central Oregon enjoyed a remarkable real estate boom in the mid-2000s. Between 2000 and 2005,many of Central Oregon's resorts saw typical homesite prices double,transactions increase,and sales volumes soar. New resort communities like Pronghorn,Brasada Ranch,and Caldera Springs were the prime beneficiaries of this boom. By 2005, Central Oregon had clearly entered into a "market frenzy,"where buyers were literally lining up to buy homesites priced as high as $500,000 at resorts like Brasada Ranch,often in hopes of further appreciation. As shown on Table 3,the region's five newest resort-style communities--Pronghorn, Brasada Ranch,Caldera Springs,Tetherow, and The Ranch at the Canyons--sold an average of about 55.7 developer homesites per year from 2005 to 2007. Brasada Ranch and Caldera Springs both initiated sales in 2005 and sold more than 200 developer-owned lots and units (each)in their first year of sales—apparently setting new records for the State of Oregon. If these resorts had continued to enjoy even modest success selling developer homesites and units at such prices, they could have potentially generated strong developer profits in the late 2000s, despite high initial development costs. However, absorption rates began to cool in 2006 before declining precipitously in 2007, with price appreciation outpacing the amount most prospective buyers were willing to pay. In 2007,sales of developer-owned homesites and units within Pronghorn, Brasada Ranch, and Caldera Springs dropped to rates of only about ten properties per year—a decrease of more than 95 percent at Brasada Ranch and Caldera Springs from initial levels. As shown on Table 4, the average(mean)price of a homesite sold within Central Oregon's five newest resort communities had climbed higher than$500,000 by 2007(pulled up by high prices at Pronghorn and Tetherow and a few$1 million-plus sales at The Ranch at the Canyons). As shown on Table 5, peak pricing for interior homesites ranged from$200,000 to$650,000,and peak pricing for golf-front /premium homesites ranged from $320,000 to $1.35 million. By 2008,the resort real estate market in Central Oregon had degenerated from a frenzy into a freeze,with transactions plummeting. Price declines finally followed suit. Annual homesite sales volumes(including developer properties and resales)at Pronghorn,Brasada PETERSON EcoNOM1cs 7 Ranch,Caldera Springs,Tetherow, and The Ranch at the Canyons dropped another 39 percent from 2007 to 2008. Then,as the market entered into a deep slide,homesite sales volumes dropped another 80 percent from 2008 to 2009. Moreover,this was accompanied by a catastrophic drop in average(mean)hornesite sales prices,from about$464,300 in 2008 to only $189,100 in 2009. This brought average homesite sales prices well below the mark needed for most new resorts to simply break-even on resort development costs,curtailing developers' desire and ability to continue chasing prices downward with additional price reductions. While 2009 can be characterized as a steep market slide,2010 represented a market collapse. Driven downward by the large number of bank-owned distressed homesites hitting the market,average(mean)homesite sales prices within the region's five new resort communities in 2010 fell to only about$109,700,compared to$464,300 in 2008. This represented a price decrease of about 76 percent in only two years. However,these low prices finally caught the attention of bargain hunters. In 2010,sales volumes were up about 30 percent from 2009. However,most of these sales were occurring at"pennies on the dollar"relative to original sales prices. During this market slide and subsequent market collapse,developers at Pronghorn, Brasada Ranch,Caldera Springs,Tetherow,and The Ranch at the Canyons were typically unwilling to compete with bank-owned properties. This resulted in a situation where most bank- owned homesites and units were priced at less than half the price of typical developer listings and perhaps 75 percent the price of non-distressed resales. For example,at Brasada Ranch, it became common for developer homesites priced at$200,000 or$300,000 to sit adjacent to identical bank-owned homesites asking$50,000 or$100,000. As a result of the influence of low-priced resale properties(typically either short sales or foreclosures),developer sales came to a near standstill by mid-2008. In fact,from 2008 to 2011,the developer sales pace at Central Oregon's five newest resort communities averaged a dismal three homesites per resort per year— despite remaining developer inventory of more than 850 homesites. To a large extent,the market collapse of 2010 represented a"nasty echo"of the sales success enjoyed at major sales launches in 2005,when a high percentage of buyers opted for low down payment five-year balloon mortgages. As these came due in 2010—without good options to sell,negotiate terms,or refinance---many homesites reverted to lenders,who subsequently priced them as low as 10 to 20 cents on the dollar(relative to initial pricing) in order to unload them quickly. Making matters worse,during this transition,most lenders refused to pay club dues and homeowners' association fees,thus exacerbating club operating shortfalls. Prices within Central Oregon's new resorts slid another seven percent on average in 2011, with average homesite sales prices dropping to about$127,000 at Caldera Springs, $86,800 at Pronghorn, $65,000 at Brasada Ranch, and$285,000 at The Ranch at the Canyons. Interior homesite prices within the region's five newest resorts ranged from a mere$25,000 to $200,000,while golf-front/premium homesite prices ranged from$55,000 to$285,000. However,prime west-side resorts(including Black Butte Ranch,Aspen Lakes,and Sunriver) continued to support much higher values on average, and numerous indicators suggest that the market may have hit bottom, with a significant recovery likely within the next several years. PETERSON ECONOMICS 8 Sales volumes held fairly steady in 2011,with fewer distressed listings available to spur demand. Fortunately,however,inventories also declined notably in most Central Oregon resorts in 2011. With demand from Central Oregon's major source markets(Portland, Seattle,and San Francisco metro areas)recovering strongly and the supply of distressed inventory largely gone, Central Oregon's resort communities enjoyed a very strong recovery over the past two years. This recovery gained strength in 2013 and 2014 year-to-date. For example,average lot sales prices at Brasada Ranch surged 56 percent between 2011 and 2013,and lot sales volumes surged 109 percent. Thus,resort real estate values and overall market conditions in Central Oregon appear to be well into a broad-based recovery. To some extent,price appreciation will almost certainly be tempered by releases of existing unsold developer inventory and"shadow inventory"(lots or homes individual owners wish to sell, but have held off the market waiting for conditions to improve). These future releases could add about 500 to 750 lots and a much more limited number of built units to the market over the next several years. However, in a stronger market, given the size of the Central Oregon marketplace,this might represent a two-to four-year supply of new inventory. Moreover,beyond this,other potential additions to supply will likely be limited until prices have experienced a notable recovery. CONCLUSIONS Clearly,the resort/second-home industry was directly and very significantly impacted by trends in the national economy and credit markets in particular. The industry experienced a massive boom in the mid-2000s, followed by a freeze and severe collapse in the late 2000s. As a result of its location,stage,and number of new large-scale communities,Central Oregon experienced one of the fiercest boom-and-bust cycles of any markets,with direct implications for Thornburgh's development parcel value and the ability to obtain funding before,during, and after the market crash. Although local market conditions remained fairly strong in 2006 and early 2007,credit began contracting with funding uncertain in 2006 and 2007 prior to the market crash. A local example of these trends comes from Remington Ranch,a proposed new large-scale destination resort near Redmond. Remington Ranch received full entitlements in late 2006 and began construction in November 2006, funded through several sources(including bank financing, developer assets,and a Founders program). Initial development efforts were proceeding successfully until March 2007,when Bank of the Cascades informed Remington Ranch that it no longer had the capability of funding the Phase 1 construction loan. However,Columbia River Bank then authorized an$8 million increase in its existing credit line, enabling construction to continue. Additional funds were also reportedly raised through a Charter program. However, additional funds were needed to move forward,and Columbia River Bank was unable to provide sufficient funding alone. As such, in late summer 2007,Remington Ranch, LLC ordered its contractors to cease construction and has been seeking construction financing since that time. Following this,Remington Ranch reportedly refunded all lot reservation-holders. PETERSON ECONOMICS 9 Remington Ranch is just one example of how the financial crisis was impacting the Central Oregon resort industry prior to the recession. Thornburgh was also experiencing challenges in obtaining funding from early 2006 onward. In that environment,Thornburgh's ongoing land use appeals and resultant delays further increased uncertainty,reducing lenders willingness to provide project financing no matter how great the project is. Following the onset of the Great Recession and the financial crisis,Central Oregon's resort real estate market froze,and then eventually collapsed,as more and more properties reverted to lenders,who dumped large inventories on the market and continuously reduced prices until eventually finding a bottom. As shown in Table 4,average lot sales prices at the area's most relevant resorts --which peaked in 2007 at$503,576--had dropped to$106,958 by 2011. Absorption of developer homesites in top relevant communities also fell from an average of about 56 sales per year before the crash,to only three sales per year during the crash(2008 through 2011). As a result,financing sources were effectively eliminated. Furthermore, tremendous uncertainty existed at the time over what type of products the market would be interested in,and when that would be. Developers couldn't be certain that the products they had planned in the heyday would be of interest following the collapse, or when. Even if a developer was financially able to move forward with additional entitlements, planning and permitting actions, in the middle of that environment,anything they did would likely be a waste of time, and money. By 2011 Thornburgh was on the edge of bankruptcy,fighting for survival. For it to have redirected its efforts and pursued further permitting until market conditions warranted would have been ridiculous. Although Central Oregon's resort industry has seen much recovery since then,until sales prices increase substantially capital sources are unlikely to invest,which will limit development for at least the short term. PETERSON ECONOMlcs 10 `y A AFFIDAVIT OF IWOO:11S 11$1.4%41Y1171'T orAT2 OF O tEGO 7 ss, Coup ofX*Pcbutes I.IC rron DeLashmutt,,being first duly Mor ,depose and say°the.following information;that:I have knowledge.of: 1. I was the co-founde..rof Thornburei Resort Coxpxt aat y, LLC(TRC)developer of the.Thornburgh Resort from 2004 until Loyal Land,LLLC foreti ised on the resort property owned by TRC in August 2011. In late 2003 I:entered into a contract to buy land owned by nay Grandparents,Everett and Eva Thornburgh,and began the initial planning process. I consulted legal counsel about the cost and time required for entitlements and was advised to budget $500,000 and schedule 1.8 months for the CMP/FMP. 2. In June 2004,I farmed TRC with David Chapman and assigned the contract to the company. From then until June 2007,we were TRC's co-managers. In June 2007 I became TRC's sole manager,and I am still TRC's sole manager today. In my role as manager of TRC,I am familiar with:a)all expenditures incurred by TRC in connection with the project,b)all actions taken by TRC to obtain funding,c)all entitlement efforts,land use actions,and appeals, and;d)how entitlement delays,the financial crisis and the Great Recession impacted TRC. 3. In August 2004,TRC retained Schwabe,Williamson and Wyatt as legal counsel, plus numerous consultants needed for the CMP and FMP. Per earlier advice I expected it to cost about$500,000 to achieve a final,approved FMP,but to be safe TRC budgeted$600,000. On February 18,2005,TRC submitted its CMP application. It quickly became apparent that Ms. Gould intended to object to nearly everything regarding the project,and as a result the administrative record for the CMP became huge and time consuming. The record for the first Affidavit of Kameron DeLashmutt Page 1 CMP'appeal to LIMA was well-over 5,000 pis.: Because of the size of the record and several record objections from .Gibld,-retlordpreparation took:tieatly a year(rather than the 21 days. required by LUBA rule),and when County staff didn't baste time to prepare the record,TRC's counsel did. Once the tectird°,v.as finally,Senled,LUBA took about five months rather than the statutorily-mired 77 days:to issue an-o nioon. Overall,the LUBA appeal of the CMP took nearly one still year,collim Witit.LU. ;APh ding the County's decision with respect tp all but 3 of Ms. Gould's 36 overall neistts°terror.. 4. LUBA's CM:P decision was followed by an unsuccessful appeal to the Court of Appeals(COA). After the remand finally made back to the County,Ms.Gould again appealed to LUBA,and then again to the,COA. When she did not prevail at either LUBA or the COA, Ms.Gould asked the COA to reconsider. After reconsideration was denied,Ms.Gould appealed to the Oregon Supreme Court,Which refused to hear her appeal. TRC finally received"final" approval of the CMP on December 9.2.009,five years after filing,at a cost of$2,269,095 most of which was spent defending four years of appeals. Except for increased cost and time,Ms. Gould's appeals had little,if any,discernible effect on the project. 5. Prior to being able to submit the FMP application TRC needed to complete numerous items to meet conditions of approval. To this end we pursued at substantial cost, applied for and received the following permits and approvals,a)Water Pollution Control Facility permit issued on February 14,2007 at a cost of$154,846.91,b)ODFW Water Rights Permit, issued on March.22,2007,that along with water rights cost$239,984,which included defending and settling the protest and appeal of our permit,c)Annexation into the Redmond Fire Department on May 10t,2007,d)DHS Drinking Water Permit on May 21, 2007 at a cost of $100,089,e)Right of Way with the BLM issued on July 16,2007, which was subsequently Affidavit of Kameron DeLaShmutt Page 2 I . appealed( in , aby ,sue 'defended,and en built,at a total.cost of$1.104,1:81, oiJ� l ttaP a to400 OPPibodwii40111 awl ODFW`an April 4,200 '011 Jtkign.V.: 1,2007,TRC:"Stibinitted its application for FMP,which V41,1 kk resubmitted Apt ,2008 OM via,apProved by the County on October 8.2008$then appealed by 1 Altauld'tir> UBA an Ithe COA:numerous times,with‘a final order by remanding lt'OttektOt e eOttlAY o August 16 {2010,slightly over three years after the initial !! ,application. The e of t application it on appeal was$1, 94$ 1 The remand ha§notyetbeen initiated. 'Itthe.FiviP' emandisinitiated and the FMP re-approved,Ms. Gould will 400,0 tainly appeal further,meaning it will likely take another 18 months to 2 years to complete tlie 'MP. TRC"s cost of permitting the CMI'and FMP to date is$4,310,152, nearly$4,000,000'over budget(not counting the cost to Knish the FMP or the tentative Plat)and far in excess of the 1.8;months allocated to do.so,In addition to those costs,TRC'also spent $364,999 preparing'its Phase A Tentative Plat,which comprises 27 pages of engineered drawings. 'T'he-extensive permitting costs and delays had severe ramifications,which were like a snowball:the further TRC proceeded the larger the issues became. 7. Throughout all land use applications by TRC I pushed as hard as I could to complete them. For example,TRC filed its first FMP on August 11,2007,over two years before TRC eventually received final approval of the CMP in 2009. The CMP was still on appeal at this time and the County held the F1vIP application pending the outcome of the CMP appeals. 8. The reason I pushed ahead on the FMP,notwithstanding the risk that the CMP approval would be overturned thereby rendering the FMP application moot,was to assist TRC's financing efforts with Sterling Bank(discussed below). However,filing the application for the FMP before the CMP appeals were complete created logistical issues with the County. On January 30,2008,TRC's counsel had a phone conversation with Ruth Wahl and Laurie Craghead Affidavit of Kameron DeLashmutt Page 3 . 3 of the C,regard ng the best Manner in,which to proceed as quxckJy impossible. The,Comity felt that TRC'had junaped:the gun in filing the FMP when it did. To alle*c the County's concertts,TRC agreed to further extensions of the 150 day clock fora'deeision on the Fly"and the pittica ibilitlyagreed';to a schedule of how to proceed. After the first Ceuta of the front LUBA On April 1,2008,the County asked that TRC termi nate,the o ri gin a1FMP application and resubmit it. ,TRC did so with the new submittal filed on April,21,2008,,nearly.I9inoritbs prior to the eventual final approval of the CMP in December 2009. The,resubmitted FMP application Was immediately deemed complete and the hearing schedule: This approach was highly unusual and carried significant risk that the CMP would not be approved had TRC proceeded in a more typical manner it would have waited until after the CMP was,final to file the FMP application after December 9,2009. Thus,only by taking significant risks to accelerate the process was TRC ableto obtain a remand of the FMP in August 2010. Had it instead waited an additional 19 months to file the FMP application,and otherwise Ms.Goulds appeals of the Fluff proceeded on the same schedule, the FMP would not have been remanded until March 2012 four months after the CMP expired in November 2011. 9. Beginning in 2006,TRC was looking for additional funding. Despite strong early interest in the project including over 500 unit purchase reservations,TRC"s financing efforts were hampered by the delays and the conflict within the entitlement process. TRC had discussions with dozens of potential lenders. The status of the entitlements was a constant issue. Because of the constant appeals TRC wasn't able to conclude finding. As a result Mr.Chapman. and I were personally lending TRC substantial sums. 10. In late 2006 I began negotiations with Parker Group Investments,LLC('P01)and Mr.Jeff Parker regarding possible financing. Through early 20071 was trying to finalize an agreement with PGI. As that progressed,in April 2007 PG1 lent TRC$1 million. Then in June Affidavit of Kameron DeLashmutt Page 4 .001'TRC and PI exeeufi d agreemetits`whefe FG1 to:lend e$10> .dir ctly, } ran`ge�, e 1 of about$20 r illio and ritovisk gua"au e for e1 iit lend As:a a t othe nevi afio tgbo een F andIA early 2 48ssons With gtet1.n$ regar'ding'the$201V 1r-bridge 'tterinig 9pigIclY gave Winces it • would prs ide 0M bridge loan and expressed nIerst in:;provid ng development funding, customer'lot loan"and mortgage ftnxibig.,IRC ti toodt loarr_v generally:based on 60%of the project's appraised value,a typical 014 t for land loans rielt tune.. 12. On August 30,2007, 19 days after t FMPk application s filed,Sterling issued a Letter of.Interest to provide a$15 million'loan. ,T knew the reduction in credit from $20M to$15M was going to cause a:cash crisis in the near term for TRC,and was hopeful that once the appraisal was completed the value would be'sttch that Sterling would increase the loan amount_ On September 19,2007 the appraisal Was completed:(attached Exhibit 1)showing a value of$50 million. Even though it had provided assurances fhr$20M,Sterling would not increase the loan as requested. Sterling was concerned about the deteriorating economy and its portfolio exposure to development lands. On October 12,'2007,Sterling issued a commitment letter for the$15 million loan,which was only 36%of the appraised value(compared to 60% Loan to Value ratios that were common earlier in 2001). 13. On November$,2007 the Bend Bulletin ran an article with the headline "Thornburgh Runs into Hurdle",and"Developers must show resort won't have negative impact on wildlife." That caused Sterling great concern and it had a new appraisal prepared on November 15,2007 establishing a value of$36,520,000(a decrease of 29%in just one month). As a result,Sterling reduced the loan amount to$10,956,000(30%of the new value)which was far short of TRC's needs. This reduction eliminated all interest reserves and after paying items due at closing TRC had little cash on hand with substantial operating expenses. Over the course Affidavit of Kameron DeLashrnutt Page 5 iI li i of:about 7.tnontlts`fitia n Aprii to Noventi 2QO7 the loan.;! gene from a$20 Million lean assurance Wit&miif io s`more possible IR otjer creel, ilil es,to a$15,,million commitment,to an$11 Million loan: - 1a_ With the economy deteriorating rapidly and no other options TRCc closed the loan on November 19,2007. At closing TRC had a.$9 trillion badget.shortfall,little operating capital,no imexestreservetand substantialtxpenses as it ras in the middle of numerous land use actions.This included processing the CMI'MIAMI With the County and defending it in several appeals,and pulling re-s ibt uttingthe FMP application and defending it con appeal,, From November 2:007 oriwa 'd TRC contacted hundreds of parties regarding additional funding, but with the country in&glacial crisis and the economyin fieefall,no additional funding was available, 15. Prior to closing the Sterling loan there were no conflicts between PGI and TRC, but beginning in early 2008,the cash shortfall following closing created substantial conflicts between TRC and PGI. In later 2008,through 2009 and on,PGI had discussions soliciting investors to finance PGrs purchase of the Sterling loan so PGI could foreclose on TRC. In early 2010 a PGI affiliate contracted to purchase the Sterling loan. In October 2010 Sterling Bank issued a notice of intent to foreclose on the Thornburgh property on March 3,2011. 16. Parker was still trying to line up the capital to finance his purchase of the note, and around February 15,2011,l learned he had asked Mr.Terry Larsen to finance his acquisition of the loan from Sterling. In late February 2011,I spoke to Mr.Larsen a couple of times,but nothing came of those discussions, At the same time,in the event the foreclosure sale was going forward I'd been preparing for TRC to file bankruptcy to obtain a stay from the sale. In early March 2011,I talked to Mr.Parker and was trying to reach Sterling to find out what they were doing. On March 3,2011 I learned Sterling had postponed the sale date for a week to March 10, Affidavit of Kameron DeLashm . _ .. ... �. _ Page_ _. .. i . 2411 That`ate? Arta.fulcdi tcYs`, '.tition and obtaineda,stay from forettlostne, also l ott � 'oto sen,(through his,coinpan Loyd. LLC)• thatpnrclials e h �y Loyal quietly filed a motion fur relief 1 ro m stay�: the bankrupts mart so a to l'' - oreclosure: 17. .A a costly d 1 i t l(cost to TRC wasnver$.500,0Q0)1110 motion for relicf'fxtml reutited foreclosed oh' ugust 30,2011, During the trial Loyal tegifiea tl a rt'it needed relief from stay was so that the buyer at the foreclosure sale could start the lhei $ust 1a,2011.(vne year after remand),. I undtsp©d drat"tle one-year deadline 114.0130, ouotY's,position,although the County later backed.away from that position and a&cecl tliat tl:Ktevia,5 no deadline to initiate the FMP remand. Howeverr:the County's initial position vast material driver behind the aggressive effort by.Loyal Land,TIC to quickly:get,relief from stay. 18. The primary issueronremand of the FMP was the location of lands to be utilized. for wildlife.mitig tion. The remand order required that the BLM advise TRC.as to potential locations for wildlife mitigation on BLM land. However,BLM could not provide that information until it completed its Cline Buttes Area Recreation Plan_ Despite BLM's promises that the Plan would be completed much earlier,BLM did not in fact advise TRC of potential wildlife mitigation;sites until February 23,2011 at the earliest,six months after the FMP was remanded and Only nine months before the CMP was due to expire. 19. I can state without hesitation that at all times from the inception of the company until the foreclosure sale in August 2011,I did everything possible,given the circumstances,to push the Thornburgh Resort along as fast as possible,taking significant risks that many other developers would not take at extreme cost,in furtherance of the project. This included;costs of the CMP,filing for FMP approval and defending it on numerous appeals,even while the CMP Affidavit of Kameron DeLashmutt Page 7 was still 6i NOWT.doing significant onsite constructions,which included`tonstmeting the BLM ROW to meet secondary access requirements,investing substantial semis w the resorts *creational'amenittes,which included;hiring world clam golf designers An l4 Palmeri lien and TOM`t atson to desi route.and then be ` construction activities on their golf G�risbnw�'t "� �, l'� courses($895,244),annd,construction of a log lodge that would be.resorts Community center ( ,23 �`�$ $1,451- 3tl ,preparing the Phase A Tentative Plat,even be�ara hang n, l�t extensive pre-development planning,including extensive engineering load:.,stuctiesandpg for the resorts sustainable energy plan,including solar and alternative.energy sources In total, { TRC spent$9,331,402 on permitting and entitlements($4,675,151),resort amenities ($2,394,193),on construction($1,205,127),and planning/pre-development activities Ii ($1,556,931),all in furtherance of developing and building the Thornburgh Resort This nearly $10 million excludes land acquisition,finance costs,sales and marketing costs,and General and Admb3istrative.costs,which combined,were several times more. 20. During TRC's stewardship of this project,from inception to foreclosure,we encountered adversity unlike anything seen before. Challenges that were completely outside of its control. TRC was subjected to an unprecedented number of complex,detailed and exhaustive appeals. During which the national and local economy came crashing down around TRC, causing all sources of financing to vanish,almost completely eliminating the market for TRC's products and creating significant uncertainty about the proper path for project.development. TRC invested tens of millions of dollars in the Thornburgh Resort,and in spite of the incredible challenges,took extraordinary steps to expedite the projects development. Not only could TRC not have moved things along any faster,in retrospect its surprising TRC accomplished so much despite such immense obstacles. Affidavit of Kameron Del,ashmutt Page 8 a a •R it ry - -b1C 0,k- ON d f . } t 1 f 1 ■ } Affidavit of Kameraaa l) !.ashmutt Page 9 05/18/2014 13:18 FAX 11001 AFFIDAVIT OF TERRENCE LARSEN STATE OF CALIFORNIA ) County of eemi, ) 1,'Terrence Larsen,being first duly sworn,depose and say the following information that I have knowledge of: 1. I am the sole member of Loyal Land,LLC(Loyal),which is the owner of the real property known as the Thornburgh Resort. Loyal was organized in the state of Oregon on March 7,2011. Loyal is the applicant for a declaratory ruling that the Thornburgh Resort CMP has been initiated,which is currently on appeal to the Deschutes County Board of County Commissioners. This affidavit is being presented in support of this appeal, 2. I first became aware of the Thornburgh project in January 2011 when I was introduced to Jeff Parker in Palm Springs,CA, Mr.Parker was at the Tradition Golf Clubhouse, where I am a member. He was sitting with other members whom 1 know, At the time I was introduced to Mr.Parker,he was discussing the Thornburgh project and what Mr,Parker saw as the opportunities for it. Prior to that meeting I bad never met nor spoken to Mr.Parker,nor had I ever heard of or had any involvement in or with the Thornburgh project. Following that introduction I had further discussions regarding the project both with Mr.Parker and others. From Mr.Parker 1 learned that:(a)he was aware of a company which held a contract with Sterling Bank for the purchase of the Note secured by the trust deed on the Thornburgh property; (b)Sterling had scheduled a trustee's sale for March,3,2011;and(c)if the sale took place then Mr.Parker's interest in the Note would be lost. Mr.Parker proposed that I finance his purchase of the Note prior to the foreclosure sale, AFFIDAVIT OF TERRRENCE LARSEN 05/18/2014 13:18 FAX i ' )002 3. After speaking to a few other acquaintances about the project,I decided to visit the property,which was probably sometime in February 2011. 1 also spoke to Kameron DeLasbmutt about the project a couple of times in February 2011. Nothing came of those discussions. In early March 2011,I agreed to purchase the interest held in the Sterling Note and trust deed for$4 million, At that point the trustee's sale was still scheduled for March 3,2011, so to give more time to complete the transaction,the sale was postponed for one week. The transfer documents were completed and the trustee's sale was ready to move forward on March 10,2011,but TRC filed for bankruptcy protection that morning which automatically stayed the sale. 4. Around the time of TRC's bankruptcy filing,I understood the FMP for the project had been remanded to the County on August 17,2010,and had received advice that the remand had to be initiated within one year,by August 2011. It also was my initial understanding that Loyal needed to own the property in order to initiate that remand. Because the August 2011 deadline was only five months away,Loyal could not afford to wait long to complete the trustee's sale,so we filed a motion for relief from stay in the Thornburgh Resort Company(TRC) bankruptcy. During the trial on our motion it became apparent that there was in fact no such one-year deadline under Oregon law,and that the applicant could initiate the remand whenever it determined it to be appropriate. 5. Following Loyal's purchase of the Note,Loyal's interests and those of TRC were often opposite which led to extensive legal actions by all parties. On August 30,2011,the trustee's sale occurred and Loyal obtained title to the real property interests in the project of TRC and Parker Group Investments,LLC(a Parker entity). After protracted negotiations,in December 2013 Loyal entered into a settlement agreement with TRC and Mr.DeLashmutt resolving their various disputes_ AFFIDAVIT OF TERRRENCE LARSEN 05/18/2014 13:17 FAX 0009 6. In summary,I can state without exaggeration that (a)neither I nor Loyal had any involvement with Jeff Parker or the Thornburgh project before January 2011 when I met Mr. Parker in Palm Springs,nor did I or Loyal play any role whatsoever in the financial difficulties that TRC had before that time;(b)Sterling Bank had issued its notice of default and scheduled the trustee's sale of its trust deed on the Thornburgh property prior to any involvement by Loyal or me;and(c)it was my understanding that if Loyal did not purchase Sterling's interest,then Sterling would have proceeded with the trustee's sale on or about March 3,2011 (subject to any stay arising out of TRC's bankruptcy). / 11 I OA P - Terrence Larsen State of California ) County of 4 /UM/ ) On May ft ,2014 before me, r'M kovq I 1 _ ,a Notary Public in and for the State,personally appeared Terrence Larsen who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity,and that by his signature on the instrument the person,or the entity upon behalf of which the person acted,executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature /6141 TONI ITu Now_,,.c<aw M 037117l00001/5541016v2 ` "'" 1. %•AyL>b,nr►�i� lrl AFFIDAVIT OF TERRRENCE LARSEN B L A C K H E L T E R L I N E LLP A T T K1 R N C T 9 A H D C D I J N E L U R U A T LAW PETER LIINGSTON DIRECT DIAL: (503)417-2153 E-mail: pl@bhlaw.cam Admitted In Bar-Oregon and Warhinglon May 13,2014 Board of County Commissioners Deschutes County 1300 N.W.Wall Street,2ad Floor Bend,OR 97701 Reference: Thornburgh Resort A-13-8,DR 11-8 Dear Commissioners: I am writing in support of the appellant in this proceeding. Kameron DeLashmutt,the principal of Thornburgh Resort Company ("Thornburgh")retained my former law firm, Schwabe,Williamson&Wyatt,PC("Schwabe"), in 2004 to represent him in the land use process associated with the application for a destination resort("Thornburgh Resort")in the County. Until Schwabe resigned as counsel for Thornburgh in 2010,I worked closely with Mr.DeLashmutt as Thornburgh's principal land use counsel. During the period that Schwabe represented Thornburgh,we prepared and filed two applications,one for a conceptual master plan("CMP")in 2005 and one for a final master plan("FMP")in 2007(revised 2008). There were two lengthy,tumultuous hearings before a hearings officer,Anne Corcoran Briggs,and one more before the Board on the CMP application. There was another lengthy,only slightly less tumultuous hearing before Hearings Officer Briggs on the FMP application. The County's CMP decision of approval, including findings,was approximately 100 pages long. The record in the CMP application file was well over 5,000 pages long. i Start irg in January 2006,there were fo ur appe als to LUBA associated with the two applications,which led to three appeals to the Oregon Court of Appeals and one appeal to the Oregon Supreme Court. The great majority of the issues raised in these appeals were decided in Thornburgh's favor. Nevertheless,the size of the files on appeal and the complexity of the issues in two of the appeals resulted in unusual,costly delays. For example,because of numerous objections filed by opponents to both the original record and the subsequent,first n05 SflU HWCST 000400AT• 001TEM 1400 • PORVLAND oRE0DM 9112o5•aasy L 503.224.Rb5D r SO3.224.6140 wWW.gMLAW.coM Board of County Commissioners May 13,2014—Page 2 supplemental record,it took almost a year,instead of the usual 21 days,before the record in the first CMP proceeding was settled and briefing to LUBA could begin. LUBA,in turn,required about five months,instead of the usual 11 weeks,to issue an opinion. There was at least one ongoing appeal during the entire time between the County's CMP approval in January 2006 and the Court of Appeals' third opinion,which remanded the FMP to LUBA in February 2010.1 Consequently,there was not a single moment during those four years(January 2006 to February 2010)when Thornburgh and Schwabe were not in some doubt about how the applications would or could progress. Because,in its first CMP opinion,the Court of Appeals interpreted the law applicable to phased developments more strictly than Thornburgh(or LUBA)had expected,it was necessary on remand for Thornburgh to do detailed wildlife and fish studies that were challenged in every possible way by opponents. The Bureau of Land Management("BLM") assured Thornburgh that it could mitigate for environmental impacts on BLM land as soon as the Cline Buttes Recreation Area Plan("CBRAP")was completed. Unfortunately,the BLM's estimate of the likely CBRAP completion date was several years off-target,which meant that even when the FMP application was approved by Hearings Officer Briggs in 2009,Thornburgh could not identify exactly where wildlife mitigation would occur. Consequently,first LUBA and then the Court of Appeals found that,despite its best efforts,Thornburgh still had not met the requirements of DCC 18.113.070(D). When I ceased work for Thornburgh in February 2010,the CBRAP still was not completed.2 Thomburgh was the first destination resort applicant in the region to trigger the steadfast,determined opposition it encountered. While the opponents certainly were not at fault in exercising their legal rights to object and raise new issues,that does not mean Thornburgh was at fault in failing to anticipate the great expense and long delays that ensued. In my experience, the appeals process associated with a development application typically takes about a year, including remands and even subsequent appeals,although two appeals of the same application are rare. In Thornburgh's ease,the appeals process associated with the CMP alone took from January 2006 to October 2009. The FMP process,from application to remand by the Court of Appeals,took from August 2007 to February 2010. While Hearings Officer Green is correct that the FMP process is normally simpler and less time-consuming than the CMP process,this just was not true in Thornburgh's case. This FMP application,like the CMP application,was not normal. The one issue deferred from the CMP to the FMP--wildlife mitigation—could not be resolved even after almost three years,due to the delays associated with the BLM's late adoption of the CBRAP. Given the opposition Thornburgh has encountered and the difficulty inherent in 'LUBA then remanded to the County in August 2010. 2 This should have been clear from the record to the hearings officer,Karen H.Green. Board of County Commissioners May 13,2014—Page 3 preparing land use applications of the magnitude of the CMP and FMP applications,with so many criteria to meet,so many findings to prepare,so much evidence to supply and so many opportunities for objection,there is good reason to believe that every time period established by statute or ordinance will be fully used in the future,as in the past,and,more likely than not,will have to be extended. The unusually long delays that resulted from the strong local opposition and opponents' appeals made_potential investors anxious and triggered conflicts between existing investors,which in turn made it virtually impossible for Thornburgh to attract new investors. The unprecedented decline and ultimate national collapse of the real estate market,began in July 2006,not 2008,as stated by Hearings Officer Green,with matters growing increasingly and alarmingly worse in 2007.3 These economic events turned what might have been a major headache for a developer(strong development resistance from neighbors)under normal circumstances into a financial catastrophe. Thornburgh Resort was not the only destination resort development in the area to suffer. In Crook County,development of the Remington Resort halted in 2006;after the general plan for the Crossing Trails resort was approved in December 2008,the project was shelved.4 Pronghorn and Brasada Ranch also faced extraordinary difficulties,which still linger. All of these resorts were represented by competent counsel and had experienced developers. Many other resort developments around the country have met the same fate. "Fault"is a subjective standard,but it is generally defined as a moral weakness or failing,a mistake,a misdemeanor,.a responsibility for wrongdoing or failure. In this case,the "fault"found by Hearings Officer Green in Thornburgh's case is apparently the failure to meet a schedule that could not be met. Mr.DeLashmutt and Thornburgh pushed the project forward as hard as anyone conceivably could have. For example,even while the CMP was on appeal, Thornburgh began the FMP application process,taking the substantial financial risk that if the CMP decision were remanded again,it would jeopardize any FM?approval that might have been obtained. Thornburgh pushed forward with the FMP application knowing that--as it turned out—the BLM might be inaccurate in stating a completion date for the CBRAP. Without exaggeration,I can say that there was not one day in the more than four years that Schwabe represented Thornburgh when Mr.DeLashmutt's relentless push on all fronts to complete the project waivered. In my view,Thornburgh was not at fault in any way for failing to meet the 'See: The Financial Crisis Inquiry Report,Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States,Official Government Edition(2011),pp.4,17,22-24, 187-88, 203-04,212-15,221,226,233-35. In recognition of the economic situation,Crook County increased the amount of time available for extensions to 12 years.See Crook County Code 18.04.080 and 18.160.070. Board of County Commissioners May 13,2014 Page 4 deadlines that LUBA has found apply to the satisfaction of the conditions imposed in the CMP approval. Please include my letter in the record of this local appeal proceeding. 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M vi ..0 L5:1- -- Co .O V oCl � � � LL = CO " s o LI- r∎l L q,f o v a u _p »p t N .� ZZ E C 13 t3 Q .Q c O N c -� 0 13 II C p _ co s -_ 4) > p do u .O c o N 0 V Q u L 1/1 i... .� OI— N • Q J 4+- Z h- a .... 1— -o P-4 • • • d;; V) 7 +-I-� N U U n a CU bi .0 •O CD O 4ej L x v) as a co _c a o a E u E co co oO O CL 4J UU cn U U CO >► i„ a 4- a a ca a 'o U U -0 4 .L u U = O O Q 0 co 0 +.' c -0 a a� a O bO a +-' ,� C U U +� .> 4- 4- 4 - O V) 0 ( a 'b0 O -0 O U •� a 0 N U c cu O a 4..+ a) E U o _ O on .1J CO CD C bA +-1 (U o a a) u a o u i a U - "O C L p CO C 7) c _O Cl.) V a + L ;r, 00 — L a a a © a-C crs V v) a }+ .4 +-+ Q 4.,j o CU v o co o .....(1) CO L m C J U '- CII lD C >- an a,) O» Co N C L � a "' a al +� a, o a v a U 73 U +' cn ui._ " L vi a p RECItIV!9,1/4.104_ • L A N D WATC H ,.wAJ 414)r3Q%)44dwatch.C«, 6 LLIVERED BY: June 3, 2014 Board of Commissioners Deschutes County 1300 NW Wall St. Bend, OR 97701 Re: Remand Hearing on File No. DR-11-8; Loyal Land LLC Dear Board of County Commissioners: I am writing on behalf of Central Oregon LandWatch in opposition to the Loyal Land remand argument in support of its claim of initiation of use of the Thornburgh Destination Resort. This case squarely presents an example of why we have rules that provide for the expiration of permits. The approval criteria for a Conceptual Master Plan (CMP) require proof of a developer's wherewithal to develop the proposed resort, traffic studies to predict traffic impacts over the next two decades and infrastructure needs and other information regarding impacts of a resort. Most of the information on which the Thornburgh Resort CMP was based is 10 years old and outdated. Economic, traffic and other conditions have changed over the past decade. The original developer, Thornburgh, filed for bankruptcy and there has been no showing that Loyal Land can carry out the development or has the water and other permits that were required of Thornburgh, The Resort CMP approval expired in November of 2011 and Loyal Land was at fault for not seeking an extension of the CMP approval and for not initiating a remand of the Final Master Plan (FMP). Please inform me of any decisions on this matter. Thank you for this opportunity to testify. Very truly yours, 5F.tTC) — Gail Snyder, Program Director www.centraloregonlandwatch.org 0 Deschutes County Board of Commissioners Thornburgh Resort Appeal June 4,2014 File No.A-14-1 Applicant's Exhibits Submitted at Hearing 1. Self-Contained Appraisal Report, September 19, 2007 2. "Thornburgh Runs Into Hurdle," Bend Bulletin,November 8,2007 3. Self-Contained Appraisal Report,November 15, 2007 4. Conditions of Approval,Thornburgh Resort Final Master Plan, October 8, 2008 037117/00001/5583307v1 ____--- ---c) 0 1 I SELF-CONTAINED APPRAISAL REPORT 1,982 Acres of FEU Zoned Land with Destination Resort overlay Located Along Cline Falls Road,Redmond,Oregon Date of Value—September 19,2007 Prepared For. Kenneth Davis Sterling Savings Hank 312 SE Stone Mill Drive,Suite 135 Vancouver,WA 98684 Prepared 9r. Jeremy L.Cowan j Dana L.Bratton,MAI Bratton Appraisal Group LLC 25 NW Hawthorne Avenue Bend,Oregon 97701 __—.... 0 rr„AP`R7't I.\'RP 4i 557rt71r aN..t:t giti September 21,2007 25 NV Ilarvthnmc Ave, Kenneth Davis !Scud Ctrrgnn 97701 Sterling Savings Batik 463!. � ,i.,: r 312 SE Stone Mill(rive.Suite 135 Vancouver,WA 98684 RE: Valuation of 1,982 Acres of Destination Resort Land Located Along Cline Dana iir.nno.M.i1 Falls Road.Redmond,Oregon. Mice Cab,,1.141 'vein)Cowan A r,hr,i Mar Mr.Davis: NRnn-y(aahrn,S!t\ r;reg„r,lr.ncs Enclosed is the self-contained appraisal repots of the property identified above. The Mtchc4 Psvnr purpose of this appraisal is to estimate the market value of the"fee simple estate"of Obor.h 5chlnter the subject property, in light of market conditions in effect on September 19. 2007. Sle%An 5,ni h The intended use of this appraisal is to assist lending representatives with Sterling ticnit Thomas t1:■rc-rrnnrr. Savings Bank in regard to utilization of the subject property as collateral for a real woods lrmr- estate secured loan. A physical inspection of the property was made on September 19,2007_ The subject property consists of a 1.982 acre parcel of FF1.1 zoned land with a"Destination Riaort Overtly"covering 1,970 acres. The site has been described within the body of this report_ This appraisal has been written to conform with the Uniform Standards of Professional Appraisal Practice (USPAP) set forth by the Appraisal Standards Board of the Appraisal Foundation and adopted by the State of Oregon, and is consistent with requirements of Section 323.4 of Title Xl of the Federal Financial Institution's Reform. Recovery and Enforcement Act of 1989(fIRREA). This appraisal is intended to be oilfired in all federally related transactions_ All factors believed to have an impact on the market value of this property have been analyzed and it is our opinion that the current market value of the `fee simple e5Yare" of this property is Fifty Million Dollars($50,000,000).1' Photographs of the subject property are contained in the addenda of this report. Thank you for this opportunity to be of service. Sincerely. r11tn-' q 14.∎ tirnri 34 1 3119 1233 fta: '41.3119.h,; Jeremy L.Cowan.......�_,..... Dana L.Uratton.MAl Slate Certified Appraiser#C-000889 State Certified Appraiser#C-000021 'This value in based on the extraotdlnesy assumption that die subject property will receive Final Master Plan approval on or before January IS.SOO& in its carnal:"an is"addition we believe thra market u}v!v.brannna PPraisal.r.r,.n partircipanta would pu,ctprsr die.property Cur 55n,000.Oe0 avruming that the m eitknwnis me in peace. Please see the Special Issues section of this report for fisher info nrdti(m. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS PROPERTY LOCATION ON 1,982 acres near Cline Falls Road,Redmond Oregon TAX ACCOUNT# 15 12 00 — 5000, 5001, 5002 7700(1) and 7700(2), 7701,7800,7801.7900 and 8000 OWNERS OF RECORD Thornburgh Resort Company,LLC Parker Group Investments,LLC,ct al LAND AREA 1,982 Acres IMPROVEMENTS There are two wood frame residential structures and several outbuildings. No value has been placed on the structural improvements. ZONING EFU-3 with"Destination Resort Overlay" HIGHEST AND BEST USE As Is The I lighest and (lest use of the subject property "as is"is to hold the property and pursue entitlements and approvals to construct a destination resort. VALUE ESTIMATE 550,000,000* DATE OF INSPECTION September 19,2007 DATE OF REPORT September 21,2007 ESTATE VAIAIEI) Fee Simple Estate TYPE OF DOCUMENT ,Sell CnntairredApprai.sal Report APPRAISERS Jeremy L.Cowan State Certified Appraiser#C-000889 Dana I..Bratton,MAI State Certified Appraiser#C-000021 25 NW Hawthorne Ave.,Bend,Oregon 97701 "This value is based ou the extraordinary assumption that the subject property will receive Final Master Plan approval WV or before January 15.2008. In its cum:nt"as is"condition,w.e heltcvc that market participants would purchase the pruperty Inc 550.000.000 assuming that the sntittements arc in place- Please see the Special IsSueS Section of this report lot further information. 1,LI N;(,ainthalskaad_19$2Acratl.nnd I -- ._ ._ _Iry_._ 0 .. l PRELIMINARY DATA PROPERTY LOCATION The subject property is identified as Deschutes County Assessor's Map# 15 12 00 tax lots 5000, 5001, 5002, 7700(1), 7700(2), 7701, 7800. 7801. 7900, and 8000. Deschutes County. Oregon. A reduced copy of the Deschutes County Assessor's tax map highlighting the location and configuration of the 1 subject property is sett forth below: b s u t :, w 12.- „n ..-. .- .. SEE MAP k ,.•: SEE SEE MAP 2 "T X " 24 - ' ,,,Y• - SEE MAP n '... � �r.,.... 16 'IS Z4 .m. 2-3 --- SEE MAP �,. '2.6, _ .' �". ,. 2 4 ` ''; : y, SEE MA �'� SEC MAP' H,SEE .;:a- 22 23 • -91• s II ,• ea L-4 Mn ,;/E MAP SEE MA -� SEE iMAP • 78,,;... m Y• PS 25t. { 1 • L ,. l'' tl. r-1 ;:_I KF - ... ._-. -.C..1---•,I SE 33 i 3a 3'a ... -. ..'� ' ' i r° 1 sea.M2'�5 w, J 'L — PUti C]inef,IkIM.,i 14E24,,,,,I and S v Thornburgh runs into hurdle I The Bulletin Q -r1-4111L JhotburghRm0 � r aps 126 , Curie Buttes a::' -,� x1 m ♦E. 97 Greg CMOS!The BWletir Thornburgh runs into hurdle negative t n ne Developers must show resort won't g e impact on wildlife By Cindy Powers ! The Bulletin Published: November 08. 2007 5:00AM PST hap://www.bcndbulletin_com/apps/pbes.dlt/article?A11 /20071108/NEWSOI/711080446(2 of 7)11/8/2007 7;45:39 AM Thornburgh runs into hurdle The Bulletin Q Q Win A Free HP Laptop fron! bentlbulletin.com 11 Get a 3 month E-Edition mist ption `Just $24 CLICK HERE The Oregon Court of Appeals ruled Wednesday that developers of a proposed destination resort near Tumalo need a concrete plan, subject to public review, showing it will not negatively impact wildlife. The decision stems from an appeal filed by neighbors opposing Thornburgh Resort, a proposed destination resort on 2,000 acres along the Cline Falls Highway between Bend and Redmond expected to have 950 homes and three golf courses. Deschutes County commissioners gave initial approval to the resort in February 2006. The ruling isn't expected to stop the development. Thornburgh partner Kameron DeLashmutt said Wednesday that the ruling--along with an earlier decision by the Oregon Land Use Board of Appeals will serve as guides about what changes they need to make before seeking final approval from Deschutes County. "We're thrilled it is the step that we have been waiting on and it gives us the path to finish the issues with LUBA and get our final master plan and move on,"DeLashmutt said. Wednesday's decision was the result of an appeal of a May ruling by the Oregon Land Use Board of Appeals. LUBA found the resort's initial application lacking in four areas, but took no issue with Thornburgh's approach to mitigating its impact on wildlife. To address the wildlife concerns, Thornburgh developers had entered into an agreement with the Oregon Department of Fish and Wildlife and the Bureau of Land Management. The agreement requires Thornburgh to conduct a wildlife impact study and complete a wildlife mitigation plan showing that"any negative impact on fish and wildlife resources will be completely mitigated so that there is no net loss or httpf/www.bendbulletin.com/apps/pbcs.d11/article?AID/20071 I08/NEWSO1/7l 1080446(3 of 7)11/8/2007 7:45:39 AM Thornburgh runs into hurdle 1 The Bulletin 0 Q net degradation of the resource." But the study and the plan were never completed. When Thornburgh's application came before the county, it only included statements that the developers had identified a wildlife management area and. were "working with"ODFW and BLM. Resort opponents Nunzie Gould and Steve Munson, who live in Tumalo, appealed LUBBA's finding that the agreement was adequate to address wildlife mitigation concerns under Oregon law. On Wednesday, the appeals court found that Thornburgh's initial application was flawed because it failed to include a mitigation plan. "First,the county's findings were inadequate to establish the necessary and likely content of any wildlife impact mitigation plan," the ruling states. "Without knowing the specifics of any required mitigation measures, there can be no effective evaluation of whether the project's effects on fish and wildlife resources will be `completely mitigated ..."' Gould referred questions to her Bend attorney, Paul Dewey, and Munson could not be reached for comment. Reactions to decision But lawyers for both sides said they were happy with the decision. "We're very pleased with the court's decision because it really doesn't do anything to slow down the project," said Portland lawyer Peter Livingston, who represents DeLashrnutt's partner, California developer David Chapman. Dewey said Wednesday that the key issue for Gould was ensuring that the public gets a chance to see the mitigation plan and comment on it before final approval of the destination resort. "It's important not only for this case in the wildlife mitigation area but as a precedent for other counties that LUBA and other counties will have to keep their eye on the ball," Dewey said. "And the ball is the public's right to comment on this stuff." Now the developers will need to revise the resort's application to comply with the rulings before putting it back before the county. Livingston said his clients will conduct the wildlife impact study, revise their application and ask commissioners for another review. While they say it won't slow them down, the appeal has been one more hurdle along a path to approval that has been anything but smooth. http://www.bendbulietin.corn/apps/pbcs.dillarticle?A11.Y/2007 1 1 08/NEWS01/711080446(4 017)1 1/8/2007 7:45:39 AM Thornburgh runs into hurdle I The Bulletin Q Q In November 2005, a Deschutes County hearings officer rejected the Thornburgh proposal, saying it failed to show it could obtain enough water to supply the resort. That decision was overturned by commissioners in 2006, in a 2-1 decision, with then-Commissioner Bev Clarno and current Commissioner Mike Daly voting to grant land use approval. Daly could not be reached for comment Wednesday. Commissioner Dennis Luke,who opposed the resort, said he.could not comment on an issue that will be reviewed by the board in the future. Commissioner Tammy Baney had not been elected to her position when the Thornburgh Resort was approved. The initial approval came with a list of conditions developers would have to meet before commissioners would grant final approval to the developer's master plan. Gould and Munson appealed the commissioners' decision to LUBA. The appeal listed problems associated with increased traffic, insufficient water, the resort's impact on wildlife and the number of overnight lodging units that developers must build. In May, LUBA found inconsistencies in the application and ruled that Thornburgh developers did not adequately address road issues or how the resort would maintain the required ratio of homes to overnight lodging under destination resort rules. But LUBA rejected more than two dozen issues raised in the appeal. In August,Gould and Munson asked the Oregon Court of Appeals to review that decision. Livingston said that his clients will now make the necessary changes to their final master plan and ask county commissioners for one last review. Once the county receives the request for review, it has 90 days to make a ruling, said Deschutes County Legal Counsel Laurie Craghead. Cindy Powers can be reached at 617-7812 or cpowers @bendbulletin.com. print email Terms of Use • Privacy Policy •Contact Us • Comments/Questions? http://www.bendbulletin.com/apps/pbcs.dll/articic?Alik/20071 l08/NEWS01/711080446(5 of 7)11/8/2007 7:45:39 AM 0 SELF-CONTAINED APPRAISAL REPORT 1,826 Acres of EFU Zoned Land with Destination Resort Overlay Located Along Cline Falls Road,Redmond,Oregon Date of Value—November 15, 2007 Prepared For: Kenneth Davis Sterling Savings Bank 312 SE Stone Mill Drive, Suite 135 Vancouver,WA 98684 Prepared By: Jeremy L. Cowan Dana L. Bratton, MAI Bratton Appraisal Group LLC 25 NW Hawthorne Avenue Bend,Oregon 97701 a 0 V1.-1-ON_ -I'I'R .11 i , EXPERTS IN REAL Ls-ma ANALYSIS November 19, 2007 25 NW 1l.awthorne Ave. Bend,Oregon 97701 Kenneth Davis 465 NW Elm Ave.,sic 103 Sterling Savings Bank Redmond.Oregon 97716 312 SE Stone Mill Drive, Suite 135 Vancouver, WA 98684 Dana Bratton.MA1 Mike Cuba,MA1 Jeremy Cowan RE: Valuation of 1,826 Acres of Destination Resort Land Cal Gahcrt Located Along Cline Falls Road, Redmond, Oregon. Nancy Gabert,SRA Gregory Jones Michele Payne Deborah Schluter Dear Mr. Davis: Susan Smith Scott Thomas Marie-France Enclosed is the self-contained appraisal report of the property woods Jones identified above. The purpose of this appraisal is to estimate the market value of the "fee simple estate" of the subject property, in light of market conditions in effect on November 15, 2007. The intended use of this appraisal is to assist lending representatives with Sterling Savings Bank in regard to utilization of the subject property as collateral for a real estate secured loan. A physical inspection of the property was made on September 19, 2007. The subject property consists of a 1,826 acre parcel of EFU zoned land with a "Destination Resort Overlay." The site has been described within the body of this report. This appraisal has been written to conform with the Uniform Standards of Professional Appraisal Practice (USPAP) set forth by the Appraisal Standards Board of the Appraisal Foundation and adopted by the State of Oregon, and is consistent with requirements of Section 323.4 of Title XI of the Federal Financial Institution's Reform, Recovery and Enforcement Act of 1989 fens 541.389.2233 (FIRREA)_ This appraisal is intended to be utilized in all. fevc 541.389.6677 federally related transactions. Radrnonrd_541.548.2233 •bee: 341 548.8206 All factors believed to have an impact on the market value of this property have been analyzed and it is our opinion that the news..brattona ppraisal.com Kenneth Davis Page 2 November 19, 2007 hypothetical market value of the fee simple estate of the subject property, in light of market conditions in effect on November 15, 2007, is Forty-Five Million Six Hundred Fifty Thousand Dollars($45,650,000).* A current "as is" value, in light of market conditions in effect on November 15, 2007 is estimated to be Thirty-Six Million Five Hundred Twenty Thousand Dollars ($36,520,000)_ Photographs of the subject property are contained in the addenda of this report. Thank you for this opportunity to be of service. Sincerely, "n (14 li,r J Jeremy L. Cowan State Certified Appraiser#C-000889 -t.4k/(4 / Dana L. Bratton, MAT State Certified Appraiser#C-000021 *This value is based on the hypothetical condition that the subject property has received Final Master Plan approval as of November 15,2007. Please see the Special Issues section of this report for further information. 0 0 • 1 V. DECISION: '- • 1 For the reasons set out above;the hearings officer condudee that the proposal.satisfies all applicable criteria, or that it is feasible to satisfy the criteria through the implementation of '? conditions of approval. Accordingly, M 07-2/MA 1381 are approved, subject to the following Ti conditions. To prgvidel consistency among the tladsioris, the itearbngs:officer retains the i il wmerical-listings included-in the BOCC's CMP decision, noting by the word"satisfied'those ' . r.•• conditions that no longer apply. v 1 1. Approval is based upon the submitted plan. My substantial cl rise to the 4 ' approved plan will require a new iapplication. ( 2. Ail development in the"resort shall require tentative plat approval through Tills 17 I �' • of the f ointy.Code,-the-county Subdivirsion/Pailltlon Ordinance,and/or Site Plan ,. • ' ' • Revibw through Title 18 of the County Code,0*Subdivision Ordinance. . - ` Z. Satisfied. . - l i•4. Subject.to US Department of the.Interiar-Bureau of Land Management (�M) approval,any secondary emergency ingress/egress across the BLM-owned land. across ' of roadways.shall te-improved to-a•ndirimum width_of 29 feet with all-weather . . ' surface'capable of supporting a 80,O00-b. Ore vehicle. Emergency secondary . resort access roads shall be.Im before any Final Plat approval or issuance �, of a building Permit,whichever comes fit.' - ' 5. The developer vie design and conslrtiet the road system in accordance with DCC j i ' .Te le.17.. Road Improvement plans shag be approved by.the Road Department prior to conatriidion.. - .f i r _ ' B. All easements of record or right-of-ways shell be shown on any final plat.Plans • u i shall be approved by the Road Departriient prior to construction.. ,, . • 1. • "'All new proposed road names must.be reviewed and approved by the Property . Address Coordinator prior to-final plat approval. 1 1: S: ' Satisfied. . - . - 9., Satisfied. I - 10. . Applicant shall provide, at the time of tentative.ptat/site plan review for each 1 1 i.",:, individual.phase of the.resod development,updated for the '4. 1 wafer right permit.and Ito a untk�of the fun arnount of Mitigation,as sepal r. I ' '=rnider the water-.tight,•for that individual,phase: • -: -4 -4- .i 4 it.- Satisfied. • ii. • 12. Commerclal, ailturil;entertainment or accessory Uses provided as part-of the i ' • 'destination resort shall be contained wiffiin the development and-shalt not pe • oriented to public roadways. Convnenaial, c furaf and entertainment uses ; i u • allowed within the destination resort shall be incidental to the resort itself. As :x • such, these ancillary uses shalt be-permitted,only tit'%"scale suited to serve 1p- • LUBA�D08-203 i •L.: 00036 1 . . . . i ■ 0 . . . i . . . , ' • • 1 . •. • . • • . • • 1 11 I 4 • I i . . . . . • • . , i : • 1 • . . • 1 visors to the resort. Compliance with this requirement shall also bif trickled as a condition of FMP approval. . • . , .;• !.• I 1 . . , . . - . . 13: - SatiSfied; : ' •• ' . „ . • . • .. . .: . . • . • .. * • , . ...! 14. Applicant and it.sirocessors shall do the following to ensure that all open 1103 • ' . 'Med to assure the 50%open space requirement of.Section 10.1.13.060(D) ;IS . . . . . • ' maintained Inperpetuity: - . . , . 1 . . • , . ..: • . . , .. .... _ , • • . z ; - • . 1 B. Satisfied, . • . . .: ... ! . . . ; •• * ' ' C ..!:An deedi conveyirig al or any part of the_ebt3je"ct pronerty shell Include ; -; . . ., .• • , 'tehfollOWfrig restriction:• • • ' , ... - . • . .!. , . This property is part of the Thornburgh Resort and is'alibied to the . . . ; .. . . . , . provisions of the Final Master Plan for Thornburgh Resort and the . . . . , Declaration of Povananta,'Conditions and Restriction of Thornburgh • : ' 1 • • • . * , • • • ''• Resod. The final MarderPlan and the Declaration runtaina dalirtatitiori ... !. • of oPen spice areile-that shall be,nialiibill*I as open space ireas In 1 • . i i • . . 1 . • . „. •.; . • , . ,. .. D. ' -All Open space areas,shall.be+dearly'deltrieeted and labeled on the ' • 1' 1 • Final Plat. I ! i„ ,, , . • • ; .• ••_ ; , • • — • ' ' ---!! ' . . • 'it MY sinhslantial change to the open space approved under this decision 1 1 • . ,!..” will require a new land use pennt . , . I . - . . . . . . 15 SatisfIed. . • • _ . . . . 18. Ali temporary structures shelf be limited to a maximum 0(18 months on the resort . . . site. , „ .• . . . . . . . .,. I , ! • . . . . . 17. All development within the proposed resort shall meet all,lire protection requirements of the Redmond Fire Department. Flre proteCtion•requirements • • 1 , . : • shall Include all minimum ememency ingress/egress roadway improvements. • ,T,. .. • 18. No development shall be allowed on slopes of 25%or mom on the sile. . . . . . . . .. • . . 19: Applicant Shall imPlement a WicifieThatural Hazard ProtadiOn' Plate for the . •• • resort,aa Identified'in Fdr..15,B-29 of the CUP laird*of proof statement.Prior • • I !1• to approval of each subdivision and site PierCAppliesirg Shall Coordinate,its • evacuation plans through that development phase with the Desdiutes.County • . , Sheriff's Office and the Redmond Re Department- At the same time,Applicant Shall. also coordinate Its plane for the Movement of evacuees over major — 1 • transportaffon routes with the Oregon§tate ponce i3nd the Oregon Department of i . .• i • . . . ,. . . . , . . .• . -. . . . •. ., . . - .• • , , • ; • . . . , . . . ; : :-• . . ''' : • ' - .. . • . • . M07 2.MA-OS-S 27 .. • • ; ' • • - . ! . . . • LUBA#2009-303 00037 . . • • -,'. . . ' . . . . . .. . 0 0 . 1 . 1 • -. .20: The cumulative'density of the development at the end of any phase shall not exceed a maximum density of 0.72 dwemig units per acre(Including residential dwelling units and excluding visitor-oriented overnight lodging)..- 21. Each phase of the development shall be constructed such that the number of • • overnight lodging units meets the 150 overnight lodging.unit and 2:1 ratio of i ':Indlvldualiy owned Units to overnight lodging tstlt•standards set aril in DCC i 18.113.080 (A) (1) and 18.113.080 (D) (2). 'Individually owned units shall be considered visitor oriented lodging if they are available for overnight rental use by i , the general pubic for at least 46 weeks per calendar year thuough one or more - r 7 central reservation and check-in services. As required by ORS 187.445(4)(b) - . '. •.• (B).at least 50 units of overnight lousing roust he constructed in the fast phase of development,prior to the.cipeure of sale of Incur dual lots or units. f r`' :tn'addition to comptying with the specific requirements of D.CC 18.i 13.070(U),1- . . w )1, 6,Applicant,its successors and assigns,shall at all times maintain(1)a registry ' of the Individually owned units subject to deed restriction under-DCC 18.113.070 • T' (U)(2).requiring they-be available for overnight lodging purposes,(2)an office inti -' - a location reasonable convenient to resort visitors'as a reservation and cheek-in' facilht at-the resort;and(3)a separaterielephone reservation line and website in • • the name of'Thornburgh Resort',lobe,used trymembexs'of the pubic to make . . . ..reservations. .As an�alternative to or In additlen a(3),Applicant may enter its .• . an agreement wth:�a firm(booking agent)that specializes in the rental of lime- i . sharing,of reeod•properh, Pre is that Apt will share the information in• ttte:registry required-by (1) and''cooperate with the locating.agent to solicit ' reservations for available overnight lodging at'the resort. If Applicant contracts - - - .. with a bealdng•agent;Appicant and the bookingegent shall cooperate to ensure 3;• compliance with the requirements of DCC 18.113.070(U)(5),by g a report on . January 1 of each year wf tr the Deschutes County Planning Division. 22-. The finial covenants, conditionrs and restrictions adopted by the developer and• . `' amendments thereto shall conform in all material respects to this.decision and• :i.:... •- the requirements of the BCC.,• :r ' ,..,23.- .No pennissilon to use or'improve-Barr Road as,access to the Resort IS given or . .&.mplirA by this decision.• . t:;; • 24. Satisfied. I-: 25_ . . Applicant-shall submit a detailed erosion control plan with the first Tentative Plat or Site plan,whichever comes first: ' • - 28. Lot size,•width (frontage), coverage, off-street parking and'Setbacks. includng. . solar setbacks,we permitted as described in Applicants Exhlolt 8,B-24a B-24 In the • Burden of Proof document, subject to review during fine,subdivision approval . . .process to confirm that there will be safe vehicle access to each lot.Compliance •- • .with'the dimensional standards shell be carslirmed during subdivision approval for l units,cornmercial Structures,end other . - resort are exempted from meeting the solar setback standards. 1. 4;:' - M . . M-07-2;, A-0e- • :,� ..- 2 -. . _ i 4 4:: LUBA#2]08.2O3 w •i ' 00038 • I 0 0 1 , _.._.........._. , . . , • . • , . . .. . • . " 1 • . . . . , • . .. • . . • . , •- ' 27: Road width shall be consistent With the requirements eat forth in the County's - subdivision ordirtance,•1?Ce Chapter 17.36. . ,, - • . , . .. . 28. See cons:Mons#38 and if39.' . • - 29: • Applicant'shall abide at all limes with the,MOu with ODOT,regarding required - i , • . - . ,-- ' •'improrrnents and Contributions to Improvements-,on' ODOT administered . : -• . '.. ., . reed wayaernt Number 22759,dated 10t10/05). . • • 6 • . . . . , . . . ' . . . . . .,. i • . . . . . . . . . . • . . ' • - ' ''-' ' 31- • 'WI exterior lighting must oonVily with the•Deactiutes County Covered Outdoor . . .:. - ,-• '. '.' . -' lighting Ordinance per-Seaton 15.10 of Title 15 af.the DCC. ' ! 32 No permission to install helicopter larxling zone palipad)-at_the Resort is given Or ... c implied by 110 decision. _. . • . 1 ..,-.. -- • • •- • ' ... . .. ,. , . . . .. • , ' -.•33. The Resort shall,in the first phase,provide for the following:r----• ••••• t I . . . . . • •- -• -• - , A.'. At least 150 ispaiate,rentable units for.vlskor-oriented lodging. . . . , . . '-'• . ' ,' ' ' S.' Vistfo1-oriented eating astablishinenta for aLleast 100 persons and ... I "' " ' -- ' ' ".•." meet rOOms willenprovicleeetlng far at leas1100persons. . .. •. . .• .; .- -• :••• •'C.'• -. The aggregate oast of developinalhe..ovenight bdoing faclitles '. •-..•' • .. ' • 1' and the.eating eitablshmonts and'meeting-mans required in• . . - ' .'- '' • I ,'' DCQ-10.113,0863.(A).,(i)and( ) shaft be Vt leasti2,00.0,000 Cm . . . • ' . • • — . - • :" .-• , -•.D. ' ' 'At least$2;000.006,(In i54.84 dollars)8114'be Vent en developed . . . . . • : • '' '' • E; The fikinitibe and eSsrenniuclations required by DC0 181113.060 • • • - ' ritual be physically provided or financialy• assured pursuant to • . . DCC 18,113.110 prior:to closure of-sales,-rental or lease Of any L . . residential dwellings a'(oft:., :, , :... • . '• ..- . . . . . . . . . . -. .... • . . , ,. • 34. Where.construction disturbs native vegetation In open Spate areas that are.to be retained in a substandally natural.condilion,•Applicant-shall restore the native' '; • ' , •-. -•'' vegetation. This requirement shall not.apply to land that Is-Improved for . recreational uses,such as golf courses, hiking or nature trek or ocitibeidan or bicycle paths. . . . . , . 35. The contract with the minors of units that will be used for overnight lodging by • ' . . . . ' the flenerai public shall contain language WU* blowing effect"(Unit Over] ' shall make the unit available to[Thornburgh Resortfbooldng agent]for overnight . rental use by the general public at least 46 weeks per calendar year Ihrough a • . • . • ' .' • :central reservation isid chedc-In service.' ... . ... . '. •36_ , --.Applcart 'shill coordinate with the Sheriffe..0thce and its designated ' • .. . : . ' 'representaffie to addiess,all public safety needs associated with-the resort and • - the developmeqd process . . . . . . .. . .. . . . 37. Satisfied; • " .' - " ' , . .•. . . . , .. • . . ' • . • . .. . • ' JVII*411P--- --29• . .. ' ,.. , . • M-07-2;IVIA-08-6 - • ..• •. ., . . . ' . . LUBA 92008-293- . • . . . • . . ' 00036) . . . . . . . . , . • -. . . . . , . . ., . . • . ' . 4) 0 . 1. • . . . . Hi • • 38. Ttte applicant shall abide by the April 2008 Wife Mitigation.Plan. the August • 2008 Supplement,and agreements with the DLM and ODFW for management of �, off site mitigation efforts. Corrsiitent with the Ian,the iC�nf shall submit an /� 7 . annual report to the county detailing mitigation.adrvitiea'that have occurred over .M1 the previous year.The mitigation measures include removal of existing wells on - the subject property,and coordination with ODFW to model stem temperatures in Whychus Creek. ,, 39.- The applicant she provide funding to complete a'conservation project by_the v T vae Siatere Irrigation'District•to rector; 108•arre-Feet-of. stream water to , . mitigate Pdte tiel increase in stream .t�►peraturea h.WhychUs Creak. The" , applicant shall Pro •vide a_Gopy of an agreement with the Irrigation district detallhn' I j F, funding agreement prior to the nPletfan of Pit A I. I 1 Dated tilts S°'day of October:20413_ V r Mailed th1day of October.2008. i a -....42NILL' Anne Coraoran�:Img1�fiGer • • - 'THIS DECISION IS FINAL UNLESS APPEAI..ED IN ACGORDANct W1Ttt THE PROVISIONS OF DcC TITLE V. " ' t:ti • 'i.., . i • . . $b• s LUBA#2008:203 k aon40 • ti Document Reproduces Poorly (Archived) I iiiiiiiiii HA In II I 01111111 HU NI tr. 1 .. , i*1'41 ii, [1: i,,,, . 11 . ) 1 II ;t I ., , p k. kit,Fir Cr,k I- m11111 '','''''''' "'''''''''''I Cv II I ' ' oit .1 o: , [ tt ; IS f 1. I ' i ...., , ...,. ':''''' i I : ..;,,1' . si t g ss IS : 111 ; W : ' " - . 41 1 ,,,, ■., : 1'• ' I l'i „., . I , • , I -, 's .1,. .,.. .. ,r4,N L :, -;, „ , :1 I I- pi ':°,0. istp. I d jji ',,s 1 . ,L ! r ' lt . I , : 0 M F:''I''''II., : ' 0 . :: ,', { I II , 1 I It 4 • 1 1 'I Li 1 Is ss.,tylt. . 9 1: s' t 1 11 : 4 1 g 1.4 '''' 1.7 i o , 1 . 4 . i ' ,4. ., • : . ...,, C g •i' , 4' 1,111 1 ,, 1 ' ' . ,, 1 ,, . , , ., , I ss . I ..! ) : '' • 7 ''l • . I 0 . 'i4'. *: l' 0 1` II i 4 , ,,- -...1....-4 *' John Kahlie From: John Kahlie Sent Wednesday,June 04,2014 9:27 AM To: 'david.peterson @tonkon_com' Cc: kameron @bendcable.com Subject Thornburgh Resort Hi David, In response to our conversation regarding the Thornburgh Resort development,we are providing you with the following information. Please feel free to forward this email to Deschutes County in support of your Application for initiation of the CMP. Our firm, Hickman Williams&Associates,represented Thornburgh Resort Company, LLC in the development of applications for the Conceptual Master Plan, Final Master Plan and Tentative Plans for the Phase A development starting in the fall of 2004 and continuing well into 2008. All work performed by Hickman,Williams&Associates on the original submitted applications was in accordance with the requirements of Title 17 of the Deschutes County Code. Work performed by us included;road design for both horizontal and vertical alignment,width,and cross section. All design work,including the roads,was based on a detailed aerial topography flown to two foot contour intervals. Additionally,a color coded"slope analysis"was produced by us and used to help insure that no site development was proposed on slopes greater than 25%. Please let me know if you need anything else, John John Kahlie, Principal HY•/A Engineers • Planners •Surveyors Hickman, Williams &Associates, Inc. 62930 0.B.Riley Road,Suite 100•Bend,OR 97701 p541.389.9351 c541.480.86801541.388.5418 johnkt8 hwa-inc.orq 716-6Z iyAnlofirtbn1 rdeve/2 1 Paul D. Dewey Attorney at Law 1539 NW Vicksburg Bend,Oregon 97701 (541)420-8455 pdewey;a bendcable.com June 4, 2014 Deschutes County Board of Commissioners 1300 NW Wall St. Bend, OR 97701 Re: Loyal Land,LLC File No. DR-11-8 Remand from Land Use Board of Appeals and Oregon Court of Appeals Dear Commissioners: I am writing on behalf of Nunzie Gould in opposition to the Applicant's attempt in these remand proceedings to obtain a determination that there has been an initiation of use of the Thornburgh Destination Resort Conceptual Master Plan("CMP"). These remand proceedings concern the application of DCC 22.36.020(A)(3) which requires that "the conditions of a permit or approval have been substantially exercised and any failure to fully comply with the conditions is not the fault of the applicant." The Applicant must prove two things: 1)the conditions of approval must have been substantially exercised and 2)any failure to fully comply with the conditions must not be the fault of the Applicant. This case is on remand from a decision of the Land Use Board of Appeals("LUBA"), Gould v. Deschutes County, Or LUBA (Case No. 2012-042)(2013), aff'd, 256 Or App 520 (2013). LUBA,as affirmed by the Court of Appeals, made several significant determinations: "JBly imposing conditions of approval that would require the applicant first to secure additional land use permits, the [county] effectively required the applicant to secure those additional permits within the two-year period imposed by DCC 22.36.010(B)(1)to avoid having the CMP permit become void. That result may be harsh in this case, but it cannot be avoided by interpreting DCC 22.36.020(A)(3)to say something that it does not say. On remand the hearings officer must consider whether all of the 38 conditions of approval have been `substantially exercised,' including those that require that the applicant seek additional permits and approvals..._[T]he hearings officer must be able to find both that the 38 conditions of approval, viewed as a whole,have been substantially exercised and that for any of the 38 conditions of approval where there has been a failure to fully exercise the condition,the applicant is not at fault. Of course the evidentiary record must also be such that it provides substantial evidence for such findings. We suspect that the hearings Deschutes County Board of Commissioners June 4, 2014 Page 2 9 1 officer will encounter difficulty in making those findings, but that is the only W potential route to a decision under DCC 22.36.020(A)(3)that the use approved by 1 the CMP approval—the Thornburgh Destination Resort—was initiated within the J two-year period required by DCC 22.36.010(B)(1) so that the April 15, 2008 CMP decision is not void." (Italics original; underline emphasis added.) (Slip Op.,pp. 20-21) On remand,the Hearings Officer determined that the 38 conditions of approval, viewed as a i whole,have not been substantially exercised and that the Applicant is at fault for the failures to fully exercise the individual conditions. i 1 i A. The conditions of approval were not substantially exercised. The Applicant's appeal to the Board asserts that the Hearings Officer made a number of errors with regard to her determination that the conditions of approval were not substantially exercised. These arguments by Loyal Land are without merit. 1. This is not a case involving Code language conflicts or potential problems for future destination resort approvals. Loyal Land's primary argument against the determination that the conditions of approval have not been substantially exercised appears to be that if the exercise of additional land use permits is required then there will be inconsistent Code interpretations and practical problems with approval of other destination resorts. Loyal Land made the argument that this case has broader implications than just the particular facts of Thornburgh obviously to try to get the Board to hear its appeal, but the argument is baseless. Loyal Land even argues that the Hearings Officer's decision"entirely undermines the three-step process for destination resort approval under DCC Chapter 18.113." Loyal Land's assertion that the interpretation by the Hearings Officer somehow creates inconsistencies with the County's destination resort code and difficulties for potential approval of other destination resorts is wrong. As pointed out by LUBA in its decision,the wording of the Board's Thornburgh CMP approval is what required subsequent land use approvals to satisfy the CMP conditions of approval. LUBA stated: "[W]hether it was intentional or unintentional, by imposing conditions of approval that would require the applicant first to secure additional land use permits,the [county] effectively required the applicant to secure those additional permits within the two-year period imposed by DCC 22.36.010(B)(1)to avoid having the CMP permit become void. The result may be harsh in this case, but it cannot be avoided by interpreting DCC 22.36.020(A)(3)to say something that it does not say." (Slip Op.,p. 20) Deschutes County Board of Commissioners June 4, 2014 Page 3 LUBA and the Court of Appeals have already ruled on this issue and determined that the CMP decision's conditions of approval require securing additional land use permits. The Hearings Officer followed this direction. The County's three-step process for destination resorts is also not undermined. LUBA made clear that this situation could easily be avoided in the future, saying the County could draft "conditions of CMP approval as notices of future conditions of approval that would be attached to required future permits and other approvals." (Slip Op., p. 1.9) There is no problem with the Deschutes County Code that requires fixing or that would inhibit approvals of future destination resorts. Any problem with this case involves the drafting of this particular CMP decision and its conditions of approval. Furthermore, if Thornburgh did not like the County's CMP conditions of approval, it was incumbent upon it to object to or appeal them. But the reality is that Thomburgh's attorneys did the draft findings for the Board's decision and extensively drafted/modified the conditions. See the attached May 2, 2006, letter from Thornburgh's attorneys on how the conditions of approval should be drafted. (See Ex. 1,attached excerpts of CMP Record, at 133-137) If there is any problem with these conditions,it is the Applicant's fault. Also, as pointed out by Commissioner Luke in his vote against CMP approval,the Applicant here opted to proceed with an incomplete/inconsistent application that relied on completion of conditions of approval. (Ex. 1 at 111, 151 and 157) The Applicant even chose to defer compliance with CMP wildlife criteria to the FMP. Given such deferrals to conditions of approval, it was entirely appropriate for the CMP decision to require further land use approvals. Finally, Loyal Land makes the extreme argument that"full resort construction in two years" would be required under the Hearings Officer decision. That is another issue already resolved in LUBA's decision. LUBA stated that"it is simply inaccurate" to say that the Applicant would have to completely construct the resort. (Slip Op.,p. 21) 2. The Hearings Officer correctly determined that the conditions of approval were not substantially exercised as a whole. LUBA ruled that the County could interpret its Code to mean that all of the 38 conditions of approval have been individually substantially exercised or that the 38 conditions of approval have been substantially exercised as a whole. (Slip Op,p. 20) The Hearings Officer decided it would be most appropriate to determine whether the 38 conditions of approval were substantially exercised as a whole. She then determined that the conditions of approval were not substantially exercised as a whole,ruling: "For the foregoing reasons, the Hearings Officer finds I cannot conclude the CMP conditions of approval were `substantially exercised' —i.e.,exercised to a significant degree—when `viewed as a whole' based solely on an evaluation of the 15 fully complied-with conditions of approval and portions thereof. That is because only eight of those conditions required significant action by the applicant Deschutes County Board of Commissioners June 4, 2014 Page 4 relative to the overall destination resort development. Therefore, I find that my determination of whether the 38 conditions of approval have been `substantially exercised' when `viewed as a whole' must include an evaluation of all the remaining conditions of approval and portions thereof. As discussed in the findings above, I have found four additional conditions were fully complied with —Conditions 1, 14E,23 and 32. 1 find these conditions also did not require significant action by the applicant. Two require new land use approvals if the approved CMP or open space are changed. The other two simply put the applicant on notice of what was not approved by the CMP. Based on the discussion above, the Hearings Officer finds a majority of the 19 conditions of approval and portions thereof with which I have found the applicant fully complied -- 11 conditions or portions thereof—did not require significant action relative to the overall destination resort development. The condition the applicant`substantially exercised' —Condition 38 -did require the applicant to take significant action consisting of submitting the wildlife mitigation plan with its application for FMP approval and demonstrating compliance with the destination resort wildlife protection provisions. The Hearings Officer finds the remaining 22 conditions of approval and portions thereof with which the applicant either failed to fully comply with or did not `substantially exercise' required the majority of significant actions necessary to develop the Thornburgh Destination Resort--i.e., securing subdivision plat and site plan approval and constructing the resort elements and amenities. For that reason,I find that when `viewed as a whole' the CMP conditions of approval have not been `substantially exercised.' Therefore I find the use permitted by the CMP approval—the Thornburgh Destination Resort—was not initiated before the CMP approval became void." (Original italics.) (1-10 Decision,pp. 46-47) Loyal Land in its appeal to the Board argues that there is no support in the DCC for the Hearings Officer's interpretation that certain conditions of approval should be given more weight than others in determining whether the conditions of approval "as a whole"have been substantially exercised. To the contrary, as explained above by the Hearings Officer, it is entirely consistent with LUBA's"viewed as a whole"test to assess the content of each condition of approval to determine what is most important. The assessment of whether the conditions of approval have been substantially exercised"as a whole"has to be done by looking at what they accomplish as a whole. As the Hearings Officer explained, conditions that merely require map notations are insignificant compared with conditions involving substantive action for development of the resort including site plan approvals and construction of resort facilities: "The applicant also argues there is no basis in the code or the C MP to support the notion of a hierarchy of importance in determining whether the conditions have been `substantially exercised' when `viewed as a whole.' As discussed in the findings above,the Hearings Officer has found the term `substantially exercised' means `performing or carrying out a condition of approval to a significant degree Deschutes County Board of Commissioners June 4, 2014 Page 5 but not completely' (emphasis added.) That interpretation was not challenged on appeal. I find it is as appropriate to apply that interpretation to the CMP conditions viewed as a whole as it is to apply it to individual conditions. In other words, I find the appropriate analysis under the `viewed as a whole' approach requires me to determine whether the destination resort approval conditions as a whole have been exercised to a significant degree, and that determination necessarily requires an evaluation of the significance of each condition relative to the overall development. The Hearings Officer agrees with opponent that not all of the 15 conditions of approval and portions thereof that were fully complied with during the two-year CMP initiation period are significant in relation to the overall destination resort development. I find that seven of these conditions or portions thereof (Conditions 9, 13, 14A, 14B, 22, 36 and 37)require only notations on the FMP, revisions to and filing of CC&Rs, modification of a density chart, and coordination with the Sheriff." (Original emphasis.) (HO Decision,p. 46) 3. There is substantial evidence to support the Hearings Officer's decision. The only argument by Loyal Land that the Hearings Officer's decision is not supported by substantial evidence is that"significant progress occurred on the project"and"the applicant had performed 100%of the non-contingent conditions." To the contrary, the evidence is overwhelming that significant progress did not occur. Significant progress could not occur without an FMP and final plats to allow development. See the Hearings Officer's detailed analysis of the conditions of the approval at pages 25-26 and 31- 44. Further,the"non-contingent conditions" are not determinative here. It is the conditions of approval linked to the FMP and actually getting some development done on the site that are critical. 4. This case does not involve a violation of ORS 215.435(2)which allows an applicant to initiate a remand. Loyal Land argues that an interpretation of the CMP decision that requires that the FMP be approved constitutes a violation of ORS 215.435(2)and DCC 18A 13.030 because it would force Loyal Land to initiate a remand. This argument does not have merit. First, this interpretation that the CMP decision requires that the FMP be concluded is not only the Hearings Officer's but is also of LUBA and the Court of Appeals. As the argument that somehow an applicant's control over when a remand is initiated is being violated,this argument was not raised in earlier appeals and thus it is waived. Even if not waived, the argument would not change the analysis and the court where they emphasized that the way the CMP decision was drafted determined their result. Deschutes County Board of Commissioners June 4, 2014 Page 6 Also,as explained below,the Applicant helped draft the CMP decision. It also deferred CMP approval criteria to the FMP. Accordingly,it should be estopped from arguing that it has a problem that it itself created. Finally,there is nothing in ORS 215.435(2)(a)that creates a"right"not to have to initiate a remand. Ultimately, Loyal Land is not being forced to initiate the remand anyway. As there is no "right"to a destination resort, it is entirely Loyal Land's prerogative not to pursue the FMP remand,as it has in fact done here so far. There would just be the determination that there has not been an initiation of use of the CMP. B. The Applicant is at fault for its failure to fully comply with the conditions of approval. Loyal Land's appeal should be denied where it was at fault for not initiating the FMP remand or seeking an extension of the CMP, where its attack on the Hearings Officer's decision is actually against rulings already made by LUBA and the Court of Appeals, and where it has not sustained its burden of proof that it is not at fault. Loyal. Land has the burden of proof that it was not at fault for its failure to fully comply with any CMP condition of approval. As reflected in Loyal Land's appeal and in the other materials it has filed, it attempts to displace its blame onto the BLM,the economic recession, my client and even the County. The Hearings Officer concluded: "The applicant has the burden of demonstrating its failure to fully comply with Condition 2 was not its fault. The applicant argued its delay in initiating the FMP remand and obtaining final FMP and subsequent approvals was the fault of the BLM(for its delay in approving the wildlife mitigation plan), of opponent (for filing appeals),of the recession (for forcing TRC into bankruptcy), and in effect of the county(for creating a lengthy destination resort approval process and requiring that the entire process be completed within two years). The Hearings Officer has found the applicant's nonperformance cannot be excused for these reasons. And I have found the record supports opponent's claim that TRC and the applicant were at fault for this failure because they were responsible to a considerable degree for TRC's financial crisis,bankruptcy filing and loss of most resort property to foreclosure." (HO Decision,p. 31) 1. The Applicant is at fault for not initiating the FMP remand. At the heart of the Applicant's failure to satisfy the conditions of approval is the undisputed fact that the Final Master Plan ("FMP") 2010 remand from LUBA and the Oregon Court of Appeals i has not been pursued for over four years. Approval of the FMP is cruc ial since c so many of the CMP conditions of approval are dependent on it. Probably the biggest question is whether it was Loyal Land's fault for not initiating the remand. It could not be more clear that it was entirely Loyal Land's fault. It was in complete control of • Deschutes County Board of Commissioners June 4,2014 Page 7 initiating the remand by statute and by DCC 22.34.030. My client could not stop initiation of the remand, and the County did not stop the remand initiation. The Hearings Officer found: "I find it would have been possible for TRC to obtain approval of the final FMP and the tentative and final plats for the first two phases of the Thornburgh Destination Resort before November 11, 2011. Securing those approvals would not have constituted full compliance with all CMP conditions because, as discussed in the findings below, several conditions require action related to resort construction. Nevertheless, it would have been full compliance with at least 9 of the remaining CMP conditions requiring actions contingent on final plat approval, It also could have provided the foundation for a finding that the CMP conditions of approval `viewed as a whole' were substantially exercised given the significance of obtaining CMP and FMP approval and tentative and final plat approval for the first two development phases." (Footnote omitted.) (Original emphasis.) (HO Decision,p. 31) The Hearings Officer ultimately concluded: "I find the applicant was responsible for its delay in initiating the FMP remand and obtaining final FMP and additional approvals during the initiation period." (HO Decision, p. 33) Loyal Land claims it had to wait until the BLM told it where it could do wildlife mitigation required by the FMP. That is not the case, as explained below, but for the sake of argument let's assume that Loyal Land is correct that not until February 23, 2011,did it know where to do the wildlife mitigation. That was a full nine months before the CMP was due to expire. If Loyal Land had promptly initiated the remand proceedings but had not been able to finalize the FMP, that would have been one thing,but Loyal Land did not even initiate the FMP remand. If Loyal Land had initiated the FMP remand but the County was slow or there was an appeal,they would have had an argument here for why they were not at fault. But where Loyal Land did not even initiate the remand,an action over which they were entirely in control, they are entirely at fault. To excuse why they did not initiate the remand, Loyal Land argues that the economy was bad. Well even if the economy is bad, a developer still has to do what it needs to do to keep its permit effective. Also, from how Loyal Land has described it,there was not much to the FMP remand anyway, Loyal Land argued to the Hearings Officer that the FMP remand issues are "minor," saying that the FMP"remand is limited to two minor issues." (Ex. 2, LUBA Rec. 199) It was not as if the FMP required a large development investment. Loyal Land could have initiated the FMP remand but did not do so, which is entirely its fault. Deschutes County Board of Commissioners June 4, 2014 Page 8 2. The Applicant is at fault for not seeking extensions of the CMP approval. Even assuming that economic conditions were relevant to Loyal Land's decision not to timely pursue the FMP remand, what happens when a developer in Deschutes County needs more time to pursue a development because of changed economic conditions? What have other destination resort developers done, such as Tetherow? The clear county procedure is to ask for an extension. The Code allows a one-year extension under DCC 22.36.010(C)(1)and two additional one-year extensions under DCC 22.36.010(C)(2). A further two-year extension for a land use approval is allowed under DCC 22.36.010(C)(3) for approvals issued prior to June 8, 2011. The Thornburgh CMP approval was issued before June 8, 2011. Though Loyal Land applied for extensions in E-11-56 and E-12-55, it asked the County to place those applications on hold pending the determination of its initiation of use application. Rather than get extensions to pursue the FMP approval, Loyal Land chose only to ask for an initiation of use determination. Ultimately, after the Oregon Court of Appeals completely affirmed the LUBA decision against Loyal Land, Loyal Land officially withdrew the two pending applications requesting extensions of the CMP. See the attached email correspondence from Loyal Land's attorney to Kevin Harrison in which the attorney stated: "Please be advised that the Applicant hereby withdraws the two pending applications requesting extensions of the Thornburgh Destination Resort Conceptual Master Plan("CMP") (County File Nos. E-11-56 and E-12-55). As a result of the withdrawal, effectively immediately,the proceedings for these two applications should be terminated,and no further action should be required by the County or the Applicant." (Ex. 3) Where Loyal Land chose not to avail itself of the County extension provisions, it can hardly argue that it did not have enough time to complete the FMP procedure or that it was not at fault in pursuing it. From the Court of Appeals FMP remand appellate judgment on April 8, 2010,1 to the end of the two-year period on November 1.8, 2011, Loyal Land had one year and seven months to initiate the remand. Four more years of extensions on the CMP would have given them five years and seven months to do the FMP. Even if you assume that Loyal Land could not have initiated the remand until the BLM ostensibly told it where wildlife mitigation could be on February 23, 2011,Loyal Land had four years and nine months to do the FMP. But because Loyal Land chose not to get extensions, it had only nine months. But that nine months was still enough time to at least initiate the FMP remand. Loyal Land claims that the triggering date for the FMP remand was August 17,2010,when LUBA issued a Notice of Appellate Judgment. See this Notice of Appellate Judgment as Ex.4. As explained by the Hearings Officer in her earlier decision at LUBA Rec.76,there is no legal significance to this"Notice." In fact,it was triggered here only because I pursued payment of costs against Loyal Land because we had prevailed at LUBA. The actual legal triggering when Loyal Land could initiate the remand occurred with the Oregon Court of Appeals appellate judgment. Deschutes County Board of Commissioners June 4, 2014 Page 9 3. The Hearings Officer correctly followed the directions of LUBA and the Oregon Court of Appeals. Loyal Land in its appeal to the Board criticizes the Hearings Officer for allegedly misinterpreting the Deschutes County Code. What Loyal Land neglects to point out is that the Hearings Officer was following the direction and interpretations of LUBA and the Oregon Court of Appeals. It is very telling that Loyal Land in its appeal of the Hearings Officer's decision does not discuss or cite to any determinations by LUBA and the Court of Appeals. The Applicant also ignores that the Hearings Officer did an extensive interpretive analysis of the Code. a. Loyal Land is responsible for"any failure"consistent with LUBA's decision. Loyal Land asserts that the Hearings Officer erred in determining that DCC 22.36.020(A)(3) requires that any failure to fully comply with the conditions is not the fault of the applicant"and that it means that the Applicant must show it is not at fault for all failures. Actually,the Hearings Officer was merely following the decision of LUBA: "[T]he hearings officer must be able to find both that the 38 conditions of approval, viewed as a whole,have been substantially exercised and that for any of the 38 conditions of approval where there has been a failure to fully exercise the condition,the applicant is not at fault" (Italics original; underline emphasis added.) (Slip Op.,p. 20) Since the language of the Code requires that"any" failure to comply with the conditions must be shown not to be the fault of the Applicant, LUBA interpreted, as affirmed by the Oregon Court of Appeals,that any condition not substantially exercised must be assessed for whether or not the Applicant was at fault. Without any basis in the language of the Code or LUBA's decision,the Applicant argues in its appeal to the Board that if any noncompliance with a condition of approval is shown to be not the fault of the Applicant,then the Applicant is absolved of all fault for any other failure to substantially exercise other conditions of approval. That would be an absurd result and interpretation of the Code. Even if an applicant were clearly at fault for not substantially exercising dozens of conditions of approval, it would be excused, under Loyal Land's interpretation of the Code, if it was not at fault for meeting "any"one condition. The Hearings Officer in her decision, at pages 31-32,gives a thorough review of the Code language of"any failure"consistent with LUBA's decision. b. Loyal Land's"compliance"versus "exercise" distinction is meritless. Loyal Land also argues that the Hearings Officer improperly required that conditions of a pp roval be``exercised"rather than just"complied"with in her assessment of fault. That is not correct where the Hearings Officer applied the standards consistent with LUBA's direction. Deschutes County Board of Commissioners June 4,2014 Page 10 As an example of its argument, Loyal Land asserts that it"complied" with condition#7 that requires road name approval before final plat approval. Since Loyal Land has not attempted to name roads before filing for final plat approval(because it has never filed for any final plat approval), it argues that it is in"compliance." Loyal Land also generally argues that it should not be at fault for any non-occurrence of a contingent condition. That is, if a condition requires something to be done when the FMP or a final plat is done, the Applicant can avoid fault for not doing something simply by not getting the FMP or final plat approvals in the first place. What Loyal Land ignores is that the Hearings Officer was following what LUBA and the Oregon Court of Appeals already determined,that the County's CMP approval required substantially "exercising"the conditions and for any conditions that are not, then the Applicant must not be at fault for"any failure to fully comply with the conditions.". A developer does not initiate a use by just sitting hack,not moving forward with a development and claiming that since it was not doing anything that the conditions of approval that are premised on something being done are "complied"with. The underlying premise for the determination of the initiation of use based on conditions of approval is that the conditions of approval are being satisfied. A developer cannot sit back and claim that it has initiated a use and complied with conditions of approval by doing so little that the conditions of approval are never triggered. LUBA ruled: "[H]y imposing conditions of approval that would require the applicant first to secure additional land use permits,the [county] effectively required the applicant to secure those additional permits within the two-year period imposed by DCC 22.36.010(B)(1) to avoid having the CMP permit become void. That result may be harsh in this case,but it cannot be avoided by interpreting DCC 22.36.020(A)(3)to say something that it does not say. (Emphasis added.) (Slip Op.,p. 20) Despite this language, Loyal Land contends that the Hearings Officer further erred in holding that Loyal Land must show that it is not Loyal Land's fault that further land use approvals required by the conditions of approval were not obtained. Loyal Land characterizes the conditions of approval as imposing"contingent obligations"and argues that it should not be at fault for the non-occurrence of a contingency. What Loyal Land refers to as a"contingency," however,is actually the approval of an FMP or final plat. Loyal Land is merely rearguing an issue already rejected by LUBA and the Court of Appeals. The Hearings Officer ruled in her earlier decision that only conditions of approval"relevant"to the CMP are to be assessed,not conditions addressing the FMP and final plats. LUBA and the Court ruled against that interpretation. Again, the Hearings Officer in her most recent decision that is being reviewed here was merely following the direction of LUBA which provides: Deschutes County Board of Commissioners June 4, 2014 Page I I "[F]or those conditions that require the applicant first to seek additional land use approvals, the hearings officer may be able to find that the applicant's failure to secure those additional land use approvals is not the fault of the applicant....All that would be required is for the hearings officer to find that for any conditions of approval that are not fully exercised because the applicant failed to secure additional permits that are necessary to fully comply with such conditions of approval,that failure was not the applicant's fault." (Emphasis added.) (Slip Op., p. 21) The Hearings Officer complied with LUBA's direction and held that Loyal Land did not show that it was not Loyal Land's fault that further land use approvals required by the conditions of approval were not obtained. 4. Loyal Land has not presented substantial evidence to establish that it is not at fault for not fully complying with the conditions of approval. Loyal Land in its appeal asserts that there is not substantial evidence in the record to show that the Applicant was at fault for not fully complying with the conditions of approval. This is an incorrect statement of the burden of proof. The burden of proof is actually on the Applicant to prove that it is not at fault for any failure to fully comply with a condition of approval. Furthermore,the record is clear that the Applicant has not established by substantial evidence that it is not at fault. a. The Applicant incorrectly blames appeals for its problems and has not established that it is not at fault for submitting an incomplete, inconsistent and inadequate CMP application in the first place. Much criticism by the Applicant is directed toward my client,Nunzie Gould, for appealing the County's CMP approval. As found by the Hearings Officer, however, this criticism is unfounded: "I agree with opponent that she cannot reasonably be blamed for the applicant's delay in initiating the FMP remand and obtaining final FM?approval. Destination resort proposals are complex, involve large land areas, and require permits from several public agencies. Consequently, they are very likely to generate intense public interest, controversy and appeals." (HO Decision, p. 29) Our land use system is premised on Goal 1 public participation and the right to file comments and appeals. The blaming of my client's (and others')appeals as causing delay in meeting the two-year permit cancellation deadline is particularly incorrect given that DCC 22.36.010(E)tolls the running of the two-year period while any appeal is pending. If anything, the appeals allowed more time for completion of the project since the County permitted the Applicant to move ahead on the FMP Deschutes County Board of Commissioners June 4, 2014 Page 12 even while the CMP appeal was pending. The Applicant filed for the FMP and worked on it while the CMP was being considered. Further,the Record clearly shows that the Applicant rushed ahead with an incomplete application that ended up being rejected by the Hearings Officer in November 2005 and, after approval by the Board on a 2-1 vote in May of 2006, was remanded by LUBA in May of 2007 and then remanded on even further issues by the Oregon Court of Appeals in November of 2007.2 When appellate bodies repeatedly rule against an application, it is hardly the fault of an appellant to have filed the appeals. The fault lies with the Applicant for filing an inadequate application in the first place. Even Commissioner Dennis Luke, an ardent supporter of destination resort development in the County, voted against the initial CMP. Commissioner Luke voted against approval of the CMP in 2006 based on"the incompleteness of the application." He said that"by accepting it as it was presented, standards were lowered." (Ex. 1, p. 11 1) He added that "the information was short of what has been required of other applicants." The Board Minutes report his statement: "This lowered the standards, and he hopes that future applications are a lot more complete than this one was." (Ex. 1,p. 151) Commissioner Luke focused on the lack of BLM approval for northern and southern access roads. He noted that approvals were subject to NEPA review. He also found that the Applicant had not shown how the 2:1 ratio of individually-owned residential units to visitor-oriented overnight lodging would be achieved. He concluded: "Staff is obligated to determine if future land use approvals are consistent with the Conceptual Master Plan. There is insufficient specificity in the phasing and 2:1 ratio proposal for the Board and staff to determine if a future Final Master Plan will be consistent with the Conceptual Master Plan. I find that it is not the Board's obligation to create conditions that would determine the applicant's phasing plan. It is the applicant's burden of proof to create a detailed Conceptual Master Plan that will be the basis for future land use approvals." (Ex. 1, p. 157) Commissioner Clarno, who voted to approve the CMP, also did not have kind words for the application: "The approval of the 2:1 ratio was most difficult to arrive at simply because the applicant submitted inconsistent information,which was pointed out by the opponents, and applicants failed to see their error until staff directed the applicant's attention to it. The applicants did not admit to the error until their final argument. 2 As discussed below,by that time the developer was experiencing financial difficulties and infighting among investors had already begun. Deschutes County Board of Commissioners June 4,2014 Page 13 As this was my first goal 8 destination resort application I found it difficult to arrive at a final determination on the issues due to the applicant's incomplete and inconsistent submittals. Because ORS 197.522 requires local governments to approve an application if appropriate conditions of approval can be drafted, therefore I must approve this application, with these conditions and other conditions as may be suggested by staff." (Emphasis added.) (Ex. 1, pp. 159-160) These observations by the Board of County Commissioners of an incomplete CMP application were then borne out by the rulings of LUBA and the Oregon Court of Appeals against the CMP approval. b. Loyal Land incorrectly blames the BLM for not identifying wildlife mitigation sooner and has not established that it is not at fault in more promptly pursuing wildlife mitigation. Though the Oregon Court of Appeals remanded the FMP decision in its appellate judgment of April 8, 2010, Loyal Land argues that it could not initiate the remand at the County until the BLM informed Loyal. Land where wildlife mitigation could occur on February 23, 2011.. The Applicant's excuse that it is BLM's fault for any delay in pursuing the FMP remand is not valid for several reasons. Twice the Applicant's wildlife mitigation plan was found to be inadequate. The Oregon Court of Appeals ruled that there was not a sufficient description of the particulars of the wildlife impact mitigation plan in Gould v. Deschutes County, 216 Or App 150, 159-160 (2007). Following a remand, once again the details were found lacking in the LUBA decision of Gould v. Deschutes County, 59 Or LUBA 435,453-454(2009). That the Applicant twice did an inadequate wildlife mitigation plan is not BLM's fault. It is the Applicant's responsibility and fault. Second, it was the Applicant's choice to pursue its wildlife mitigation obligations on BLM land and risk the kind of delays that are often associated with federal agency decisions subject to the National Environmental Policy Act("NEPA"). If Thornburgh had wanted to avoid NEPA delays, it should have pursued wildlife mitigation on land with other ownerships (County, Oregon Department of State lands or private) or at least on other BLM land where there was not such an involved process as the Cline Butte Recreation Area Plan. Furthermore,just as Commissioner Luke criticized Thornburgh for not obtaining BLM access approval before submitting its destination resort application and instead only later pursuing BLM access subject to NEPA, Thornburgh is again at fault for not lining up any needed wildlife mitigation on BLM land before filing for the CMP. Once again, Thornburgh started the destination resort CMP process before arranging all the necessary elements ahead of time. Deschutes County Board of Commissioners June 4, 2014 Page 14 c. Loyal Land incorrectly claims it only had nine months and thus not enough time to pursue the FMP and has not established that it is not at fault in failing to pursue the FMP. As explained above, Loyal Land could have pursued extensions and had a total of over five years of time to pursue the FMP. It simply decided not to do so. Loyal Land also criticizes the Hearings Officer's review of a hypothetical timeline which Loyal Land bad presented. It is totally inappropriate for Loyal Land to criticize the Hearings Officer's critique of its hypothetical timeline. If elements of its hypothetical timeline were"absurd,"then Loyal Land should not have included them in the timeline in the first place. d. Loyal Land incorrectly blames the economic recession for its difficulties and has not established that it is not at fault for being under-capitalized and consumed by investor infighting. The Hearings Officer determined that the Applicant could not excuse its failure to fully comply with the conditions of approval on the basis of the economic downturn and concluded that it was responsible for that failure: "The Hearings Officer agrees with opponent there is no evidence in the record of a direct connection between the general economic downturn which began in 2008 and Thornburgh's financial difficulties which the record indicates clearly predated the recession....I find the debtor's statement is evidence supporting opponent's claim that the conflict between TRC and its investors/lenders— including the applicant and its owners Parker and Larsen—contributed significantly to TRC's financial difficulties. Therefore, I find this is substantial evidence that TRC and the applicant were partly and perhaps primarily responsible for TRC's inability to develop the destination resort within the initiation period." (110 Decision, p. 29) The Hearings Officer further found: "The Hearings Officer finds the debtor's statement shows the relationship between TRC, its investors/lenders,and the applicant was fraught with conflict and ultimately spawned federal and state court litigation and bar complaints." (HO Decision,p. 28) Loyal Land argues that the Hearings Officer erred in referring to"Parker" as an"owner." That distinction is irrelevant where the Hearings Officer was pointing out the conflict between TRC and its"investors/lenders,"which Parker definitely was. The Thornburgh debtor's statement describes Mr. Parker's involvement and association with Mr. Larsen: "In or about February 2011 Parker persuaded Terrence Larsen(`Larsen') to make an offer to Sterling for the Loan, to be channeled to Sterling through • Deschutes County Board of Commissioners June 4, 2014 Page 15 COIH, the entity controlled by Parker. When Larsen offered$4 million, Sterling agreed to sell the Loan and related documents. Prior to the purchase of the Loan, Larsen and Parker entered into a Memorandum of Understanding whereby Larsen and Parker agreed that Larsen would provide to Parker a 50%participating interest and the value created by Larsen's disposition of the Property after acquiring it at foreclosure. * * * On March 7, 2011 Larsen formed his own new entity, Loyal Land, LLC (`Loyal'), and transferred the Loan to Loyal. Loyal proceeded toward consummation of the foreclosure sale. 6.1.1.4. Larsen and Loyal Land Legal Claims. Larsen and Loyal are not parties to the Buyout Agreement and participated in the wrongful conduct against Debtor." (Ex. 5, LUBA Rec. 324-325, 331) Loyal Land's attempt to connect the economic recession with its failure to initiate the destination resort as a way to avoid a determination of fault actually shows its fault. As pointed out above, an economic argument may be relevant for a request for an extension but it does not provide for an excuse from fault and the determination of whether or not there has been an initiation of use. That is particularly the case where the Applicant did not avail itself of the ability to get an extension. Furthermore,the Hearings Officer also relied upon the undisputed fact that there was extensive conflict between the owners and investors in the resort. (HO Decision,pp. 28-29) This conflict preceded the economic recession. The Thornburgh bankruptcy documents state: "In early 2006 Jeff Parker, a Portland developer(`Parker'),approached TRC, expressing interest in acquiring resort land. When Chapman asked to be bought out, DeLashmutt invited Parker to consider taking a financial role in the project. Parker, his partner, Bill Wilt, and their entity, Parker Group Investments, LLC (`PGI'), agreed to take the lead in financing the entire project. On June 6, 2007, Debtor executed the `Investment Agreement' with Parker, Wilt and PGI. * * * Under the Investment Agreement PGI lent Debtor$10 million immediately, and committed to arrange for an additional bridge loan,...of approximately$20 million,but in no event less than$15 million, also to be funded in 2007. ...Parker and PGI failed to provide the promised minimum $4 shortfall on the Bridge Loan,leaving Debtor with inadequate cash and a sharply limited ability to proceed with the resort development. Deschutes County Board of Commissioners June 4,2014 Page 16 * * * By early 2008, PGI had effectively ceased raising funds to complete the Bridge Loan. PGI began thwarting Debtors efforts to raise capital while trying to raise funds on its own account to allow the Parker entities to purchase the Loan and foreclose on Debtor. Tensions between Parker and DeLashmutt increased." (Ex. 5, LUBA Rec. 321-323) The Thornburgh bankruptcy documents show numerous accounts incurred in 2006 and 2007 that were not being paid. (Ex. 6) e. Loyal Land incorrectly blames the County for causing delays and other problems and has not established that it is not at fault for its own delays and legal strategies. There is no basis for Loyal Land's assignment of fault to the County for causing any delays or problems in this case. For example, it blames the County for being slow in putting together the original CMP Record(and blames opponents for filing Record objections), but omits the fact that Thornburgh filed extensive objections that delayed the process. 5. Loyal Land is not excused from fault because it made expensive expenditures. Loyal land suggests that its expenditures for such things as a log lodge and a paved road are relevant to the issue of fault,but Loyal Land fails to connect those expenditures with its decisions not to initiate the FMP remand and seek an extension of the CMP permit. Those expenditures should also have waited until there was an FMP and plat approval. C. Conclusion. Loyal Land's appeal should be rejected where it attempts to raise issues already resolved by LUBA and the Court of Appeals. LUBA predicted that it would be difficult for there to be findings that the Applicant was not at fault in complying with the conditions(Slip Op., p. 21), and it was correct. The failures to initiate the FMP remand and even to get extensions of the CMP to obtain the FMP and plats are entirely Loyal Land's fault. It is also entirely appropriate not to try to keep afloat an obviously outdated permit based on 10- year-old financial, traffic and other data and where the original applicant is bankrupt. Deschutes County Board of Commissioners June 4, 2014 Page 17 The Board should affirm the Hearings Officer's decision. Very truly yours, r PAUL DEWEY _ PD:ao Enclosures cc: Client David Petersen I agree with Legal Counsel, and think that the Order as drafted would get a decision fairly quickly, probably out of Circuit Court. I'd like to leave it to the Court, not County Commissioners, to decide whether corporate law is in conflict with. Measure 37. So we need some kind of motion. PILLIOD: Could I make a suggestion? A motion from the Board directing staff to modify the proposed Order to indicate that rather than a date of acquisition for the Kim and Sally Ward claim of 1994, the date the LLC was formed, that their interest and their claim's acquisition date would be the date they acquired title to the property in 1977. Separately, as to the LLC, and to the other members of the LLC, their date of acquisition should be the 1994 date. We could prepare that for signature next Monday. CLARNO: That's my motion. DALY: Second. VOTE: DALY: Yes. CLARNO: Aye. LUKE: Chair votes no. (Split vote.) 4. Before the Board was Consideration of Signature of Document No. 2006- 151, Findings and Decision on File !No. CU-05-20 (Applicant: Thornburgh Resort Company LLC). Laurie Craghead stated that since the draft was submitted, some typographical changes have been made. Also, a clarification of the .72 density being the maximum throughout the resort has been added. In addition, the issue of lot frontage came before the Hearings Officer. This does not require Chapter 17 compliance in a destination resort as long as it meets the intent of the comprehensive plan. This information was not submitted for the Board to consider, but were include dint the Hearings Officer's findings, and are justifiable to add from Legal Counsel's point of view. Commissioner Luke said that as he pointed out at the original hearing, he felt this would be approved. However, he had a problem with how the hearing was handled and the incompleteness of the application. That was the reason he voted no. He felt that by accepting it as it was presented, standards were lowered. Minutes of Board of Commissioners' Meeting Monday, May 10 2006 Page 7 of 12 Pages l l Ec. I C ' 's., SCHWABE,WILLIAMSON & WYATT ,?'S ': & A T T O R N E Y S A T L A W - a� � J fir. Pacviest Center 12'1 SW 5th Ave.,Suite 1900,Portland,OR 972041 Phone 503-222-9981 I Fax 503-796.29001 www.schwabe.wm y� F �S _.' r,' PETERLIVINGSTON Admitted in Oregon and Washington ,-.- .r Direct Line:(503)796-2892 - E-Mail:plivingston@schwabe.corn y r ✓r -,-...-1:', 1,,,: May 2, 2006 a', _.--$7,` VIA E-MAIL LAURIE_CRAGHEAD@CO.DESCHUTES.OR-US ' ti'`' 1' Laurie E. Craghead, Esq. :' Assistant Legal Counsel ,. . Deschutes County Legal Counsel `:-' 1130 NW Harriman Avenue --. .:.; Bend, OR 97701 S , Re: Thornburgh Resort Company i- =;. Responses to Draft Findings Our File No-: 112188/138798 :'''' Dear L aurie: --'1",-....--F--;:'k.::=f :: Thank you for forwarding the changes, including some additional conditions, suggested ,."--.7--",: by County counsel and staff to the draft findings submitted by Thornburgh in the last week of _ -,; '-i--rte March- As we discussed on Friday, April 28,2006, after reviewing these changes,Thornburgh ` Resort Company would like to suggest additional modifications to certain conditions and to ";`N, related findings, as follows: ,;,.: Condition 10- Substitute the following language: ' "Applicant shall comply with all applicable requirements of state -.- water law as administered by OWRD for obtaining a state water y ' . right permit and shall provide documentation of approval of its application for a water right permit prior to approval of the final , ...‘ -..,,-,-,:,,, 6c--•_: master plan. Applicant shall provide, at the time of tentative ,:i plat/site plan review for each individual phase of the resort development, updated documentation of the state water right `'•-= "' permit and an accounting of the full amount of mitigation, as x : �: required under the water right, for that individual phase." Comment: The proposed changes to this condition are intended to clarify the - ''" requirement and employ wording more typically associated with water rights. The suggested =. "� c Portland,OR 5173-222-9981 I Salem,OR 5033994712 I Bend,OR 541-749-41044 Seattle,WA 206-622-1711 I Vancouver,WA 360-894-7551 I Washington,DC 202-488-4302 i ek I 11 PD7U112138;:3S'9 VPLU1420255.: Laurie E. Craghead, Esq. May 2, 2006 Page 2 revisions are not intended to change the meaning of the underlying requirements for the Applicant to comply with state law, obtain a state water right for the project, and provide updating information to the County. The wording of the first sentence is changed to clarify that Applicant must comply with"all applicable requirements of state law"and obtain approval of its water right application prior to approval of the Final Master Plan. These changes avoid confusion over what constitutes "appropriate and current"water regulations as described in the original wording, and provide a timeframe in which the Applicant must secure approval of the water right application. Only minor editing changes are proposed for the second sentence. Condition 11. Add one word, "approval,"to the first sentence, as shown below (in bold): "At the time of submission for Final Master Plan(FMP) approval, �V Applicant shall include a written plan for entering into cooperative agreements with owners of existing wells within a two-mile radius of Applicant's wells." Comment: This change is suggested as technically appropriate. rof Condition 12. Delete this condition. q Comment: The requirement that"all portions of the proposed resort must be managed and operated in an integrated manner"is too vague to be enforceable(what is"integrated 4 manner"?) and could provide an opening for future land use challenges. This issue is addressed in the last paragraph of the findings under DCC 18.113.060 D.2., which say: "The Board finds, however, that there is no requirement that all of the improvements in a destination resort be owned and managed by a single entity. A destination resort is defined by the development constraints imposed through the conceptual master planning process and subsequent land use reviews,the management of the overnight lodging, and the investment in amenities that make the resort attractive to visitors." (AL Condition 20. Add the following: "Prior to approval of the Final Master Plan and each subdivision and site plan, Applicant shall coordinate its evacuation plans through that development phase with the Deschutes County Sheriffs Office and the Redmond Fire Department. At the same time,Applicant shall also coordinate its plans for the movement of evacuees over major transportation routes with the Oregon State Police and the Oregon Department of Transportation." Comment: We are suggesting this change because the condition,as written, seems to create some vagueness about what is required. This could provide an opportunity for a successful appeal on the grounds that the condition lacks teeth. Ex t ( 34 1 PI M 1 12188f t 38798/P1-1/1420255.1 I Laurie E. Craghead,Esq. May 2, 2006 Page 3 We also suggest a reference to this condition at the end of the finding under DCC 18.113.050 A.14. [)tC Condition 21. Replace with the following: "The cumulative density of the development at the end of any phase shall not exceed a maximum density of 0.72 dwelling units per acre (including residential dwelling units and excluding visitor-oriented overnight lodging)." Comment: This condition as written is either self-contradictory or redundant(or both). We believe the revised condition is consistent with Applicant's proposal, and it should satisfy those at the County who prefer a lower level of development at build out than the DCC standard. t- Condition 23. Change the word"complete"to"final"in the first sentence. Comment: As we discussed, this is consistent with the word"final" in the second k sentence. Condition 27. ubstitute the following language, and delete Condition 28: "Lot size, dth(front.•--, .verage,off-street parking and setbacks,including solar setbacks,are n perms-e• as described in.Applicant's Exhibit 8,B-24a in the Burden of Proof document, subject ✓�f!4-'f' to review during the subdivision approval process to confirm that there will be safe vehicle access to each lot. Compliance with the dimensional standards shall be confirmed during subdivision approval for each development phase. All multi-family units, commercial structures, and other resort facilities are exempted from meeting the solar setback standards." Amend the findings as follows: Under DCC 18.113.060 G., under"Lot Frontage,"keep the first paragraph and substitute the following for the second paragraph: "The Deschutes County Comprehensive Plan("DCCP")23.20.030 states that the Chosen Alternative for development in the County is to emphasize restricting sprawl. DCCP 23.20.040 E. states, as a housing goal, "the need for flexibility in housing styles and costs so as to provide adequate homes for all segments of the commtut Y DCCP 23.24.030(3)specifically says,with respect to residential/recreational development,"Cluster or planned development offers significant savings to the developer because of reduced roadway,utility and construction costs." "One way to implement the comprehensive plan objectives and to protect open space is through small lots and zero lot line development, such as the row houses proposed by Applicant, which could have a minimum average lot width of 25 feet. As explained in DCCP 23.24.010, the primary duty and focus of the County comprehensive plan is to guide development in the rural areas of the County. The DCC,which focuses on development Solicr Ex. l 3 PDX.112:88/;389S,t!u^;iC255.: e Laurie E. Craghead,Esq. May 2, 2006 Page 4 { outside of urban growth boundaries,does not contemplate row house development as part of the normal subdivision process. However, the Bend Code, at Section 16.050,provides a useful analogy, allowing a minimum of 20 foot frontage for a zero lot-line subdivision. 1( o,..� "The Board concludes the Hearings Officer erred in speaking of road dd widths,which are not addressed by Coup yt s subdivision ?/i V n " ordinance, and in rejecting the frontage/lot width standards (CO suggested by Applicant in Applicant's Exhibit 8,B-24a. In the context of a planned development, such as a destination resort, ■1-• these standards are more consistent with the DCCP than the \ , applicable subdivision standard,DCC 17.36.180." Comment: A 50-foot width frontage requirement is inconsistent with row house development,which would have to be very short from front to back to compensate for the 1J 1 unusual width. (Most row houses are between 15 and 25 feet wide.) By imposing a 50-foot width/frontage requirement from the subdivision ordinance(DCC 17.36.180),the Hearings Officer effectively barred the development of the row houses proposed by Applicant(Types G and H). However, it is not clear that she intended to do so, since she did not say more than that the subdivision standards should apply. She also did not explain why she believed row house development is inconsistent with safe access. The Board should not allow what appears to have been inadvertence to preclude development that is common, attractive and consistent with County policy on density. Condition 29. Add the following sentence: "The mitigation plan adopted by Applicant in consultation with Tetra Tech, ODFW and the BLM shall be adopted and implemented throughout the life of the resort." Comment: This is consistent with the related finding under DCC 18.113.070 D. UL,_ Condition 35. Substitute the following language: "Where construction disturbs native vegetation in open space areas that are to be retained in a substantially natural condition, Applicant shall restore the native vegetation. This requirement shall not apply to land that is improved for recreational uses,such as golf courses,hiking or nature trails or equestrian or bicycle paths." 3 , Comment: The revised condition clarifies that land improved for recreational uses, where native vegetation is"disturbed,"does not have to be replanted with native vegetation. 0" Condition 38. Delete. This is now replaced by enlarged Condition 29. y1 1 i a PDX i 12181133798JPLU142o255-i Laurie E. Craghead, Esq. May 2,2006 Page 5 /17/7V tru y yours, ' Peter , ivingston pli:lru cc: Kameron DeLashmutt p 1 I � I I 1 Y I 1 I { Box t t zZ PDX/I 12188/t 387981M/1420255.1 1 Commissioner Luke disclosed that members of the DeLashmutt family were at a meeting of the Fair Board that he attended, but that he did not discuss this issue with them. Commissioners Clarno and Daly said that they also attended the dinner, along with at least 100 others, but did not speak with the DeLashmutts. Commissioner Luke read a prepared statement to the audience. (A copy of his statement is attached as Exhibit A.) Commissioner Daly said he disagrees with Commissioner Luke's statement, since this is a conceptual master plan. He added that there has been extensive discussion regarding access and there is a great deal of time between conceptual master plan and final master plan, and feels all of these issues can be addressed during that time period. H.e then read a prepared statement (a copy of which is attached as Exhibit B). Commissioner Clarno read a prepared statement to the audience. (A copy of this statement is attached as Exhibit C.) Commissioner Luke said the Board wants to thank staff for all of their work on this. In regard to Commissioner Claim's statement, he stated that he agrees that the information was short of what has been required by other applicants. This lowered the standards, and he hopes that future applications are a lot more complete than this one was. Catherine Morrow said that Commissioner Daly referred to conditions as proposed by staff, and Commissioner Clarno asked for more specificity regarding overnight accommodations. She asked if staff should draft the conditions that Commissioner Clarno suggested. She added that staff needs direction to draft the findings and conditions regarding that issue. Staff and the applicant will be working together to draft the findings, but the Board has final approval of the document. Commissioner Clarno emphasized that she wants to see the 2:1 ratio consistent throughout the development process. Ms. Craghead added that a determination needs to be made as to whether the overnight accommodations can be moved to a different phase later, as long as the ratio is kept at 2:1. Minutes of Board of Commissioners' Meeting Wednesday, February 1, 200( Page 4 of 7 Pages Ex. 1 ■"r" Decision on Thornburgh First on the issue of having mitigation credits in hand before approval is granted for the conceptual master plan. I agree with the reasoning brought forth by the Central Oregon Irrigation District and the Oregon Water Resources Staff that this requirement would result is unnecessary water speculation and the moving of water rights before they were needed. I believe that the applicant, or any applicant, needs only to demonstrate that it is feasible to get the mitigation credits that would be necessary for the project at the conceptual master plan stage. The mitigation credits would have to be obtained before final approval of each phase. Access Roads; 1. The primary access road for the Southern phase of the project (Tribute) is the Cline Falls Highway. That is adequately documented in the proposal. The possible secondary access road for the Southern phase of the project is identified in the proposal but there is nothing in the record that identifies the current condition of the road, if it can be brought up to County standards, or if it is suitable for emergency vehicle or evacuation traffic. The record indicates that the Applicant has amended its right-of-way application with the BLM (serial number ORG1 170) to include this southern access. According to the MOU between the Applicant and the BLM, dated 28 September 2005, Thornburgh may use this roadway up to the resort boundary in Section 29, "...in its current condition and configuration." The applicant has not provided any evidence as to what the current condition and configuration is; there is no evidence that this road meets any county standard at this time. There is no evidence to suggest that the Applicant, absent a grant of right-of-way from the BLM, can make any needed improvements to this road. The outcome of the right-of-way application is subject to NEPA review. Since the criteria for this review are not part of the record, and since the decision-making body for the NEPA review is other than the county, it is entirely speculative at this point whether approval will be granted. 2. The applicant has stated that this is one project broken into two parts, the Northern(Pinnacle) and Southern (Tribute). While the applicant has identified. possible access roads for the Northern part of the development, there is nothing in the file that shows that final agreements have been reached on these roads. 3. The BLM is in the process of reviewing right-of-way application for the roads providing access to the northern(Pinnacle)portion of the property via a connection to Eagle Road and, ultimately, Hwy 126. (See: serial number ORG l 170). T i s right-of-way application also includes a road across federal lands in sections 29 and 30(T155, R12E) to p rovide a connection between the northern and southern portions of the property. These connections are integral to the development of the resort as they provide primary access to the northern (Pinnacle)portion of the property, emergency secondary access and needed linkages between the southern (Tribute) and northern (Pinnacle) portions of the C.x t 1 5 5 Exhibit __ m Page — of • property. Additionally, the Applicant's traffic analysis relies on these roads being in place. Again, the outcome of the right-of-way application is subject to NEPA review. As stated above, since the criteria for this review are not part of the record, and since the decision-making body for the NEPA review is outside of the county, it is entirely speculative as to whether this Applicant can obtain the needed approvals. It is the expectation of the Board that an Applicant would be able to provide greater assurance of needed transportation access at the Conceptual Master Plan stage of a destination resort. I find that the applicant has not met their burden of proof on the secondary access road for the Southern portion of the resort. I also find that they have not met their burden of proof on the main access road for the Northern portion of the resort. I also find that a condition of approval that would allow the Applicant to prove up access at a later stage would be speculative and represent a deferred decision. Until the NEPA process is completed, there is no way of knowing if the proposed roads would even fit into the findings of the BLM or if an alternative route would better to protect the natural resources of this area. Prior applications for resorts have had the grants of right of way in place at the time of Conceptual Master Plan. I find that having agreements in place as part of the Conceptual Master Plan is necessary to establish the feasibility for the development to use these roads. a j 2:1 Ratio and Phasing I find that the application is not consistent with DCC 18.113.060(D)(2) and (E)(21 because the applicant has failed to show how the 2:1 ratio of individually owned residential units to visitor-oriented overnight lodging will be achieved. The applicant submitted a Corrected Table of Overnight and Density Calculations for the Conceptual Master Plan (RM Ex.2, A-1.4) and the Phasing Map (RM Ex.13, B-1.8) that shows 150 overnight units that will consist of 50 cottages that will be built in the Tribute that will be a designed with /for lockoffs. According to the Applicant, these 50 cottages could accommodate 150 overnights. The Applicant also states that, in later phases, "It is likely that these Phase A buildings will be modified so that the lockoffs will not be used on a long term basis. Thus these will only account for 50 overnights." However, in the Table l the Applicant does not subtract these lost 100 overnight units and, thus, the 2:1 ratio is not maintained. Since the Board does not know how, if or where these units could be replaced, the Board finds the applicant has not met their burden in showing consistency with this criterion. Additionally, the Table shows 25 hotel units in Phase F and 25 hotel units in Phase G, but the Phasing Plan Map (Revised B-1.8) shows no hotel in those phases. The 475 units, which are supposedly overnight units, apparently consist of 50 hotel rooms, 150 overnight units contained in 50 cottages and then another unidentified 275 units. According to the Table, the 50 hotel rooms are to be built in the last two phases of the resort (Phases F and G) in the Pinnacle Area and in the southwest corner of the Tribute along Barr Road. The maps, though, show all the hotel rooms in the Pinnacle. Because Ex_ t IJ(r E x r,i bi' _.,.__... -- Page c f '- of the apparent confusion in the Applicant's materials, i find that the Applicant has failed to meet the 2'1 lodging ratio. The phasing criterion of 18.113.060(D)(2) states that if the resort is to be developed in phases, each phase shall be as described in the Conceptual Master Plan (CMP). The applicant has failed to provide a phasing plan and map that will allow the Board and staff to review the final master plan to determine consistency with the CMP. As described above, the phasing plan table does not show in which phase the units to replace the 100 overnights would be and the hotel units shown in the table are not consistent with the phasing map. Staff is obligated to determine if future land use approvals are consistent with the Conceptual Master Plan. There is insufficient specificity in the phasing and 2:1 ratio proposal for the Board and staff to determine if a future Final Master Plan will be consistent with the Conceptual Master Plan. I find that it is not the Board's obligation to create conditions that would determine the applicant's phasing plan. It is the applicant's burden of proof to create a detailed Conceptual Master Plan that will be the basis for land use approvals. future pp .s The applicant also submitted in its final argument a revised Table that changes the phases for the various overnight lodging units. The Board finds that the table is new evidence that was not allowed by the agreed upon schedule and, therefore, cannot be considered. Dennis R. Luke Deschutes County Commissioner I-k . l Exhibit Page - if STATEMENT RE: THORNBURGH RESORT February 1, 2006 Boy Clamo Under thc issue of water I find that the applicants have shown that they can meet these criteria due to evidence given by the applicants at the hearing and because of the applicant's final argument that they have acquired sufficient water rights that can be converted to sufficient mitigation credits to develop and maintain this resort. The feasibility is attainable by the condition of approval as proposed by staff. My findings on the southern temporary emergency access are that the applicants have shown that they have the necessary access grant from the BLM_ The evidence for this is the 1979 letter in the record to the Bennetts from the ELM that shows that the road is a public right of way. I also find that it is feasible for them to comply with thc roads standards for emergency vehicles with the condition of approval as proposed by staff. ? My finding on the issue of the northern access is that the applicants have shown that it is I feasible for the applicants to get that access based on the ELM letter stating that the access appears to be reasonable and will balance the BLM goals for public lands. However it is feasible only with the condition that they must submit all ELM access grants, including approval allowing the road construction to county standards, at the time 1 of Final Master Plan application. t I find that the applicants have met the requirement to keep open space requirements in perpetuity based on the applicant's submission of the CC&R's, a condition that the open space must be designated on (he plat and their arguments regarding the necessity for county approval for any changes to the open space as submitted. t I find that, with the conditions proposed by staff, that the applicants can meet the 2 to 1 ratio in each phase cumulatively with all previous phases. This ratio is feasible if a a condition is imposed whereby the initial 150 lockout units in phase A remain throughout l the development of the resort and are not changed as the applicant indicates indicates on i its phasing chart. Although the phasing map and phasing chart submitted by the applicant l do not match,both show that phasing and the 2 to 1 ratio is possible. This is because a J condition of approval can be included that requires the chart be altered to match the map i and because the chart showed that at final build out the 2 to 1 ratio is met. Thus, it is merely a matter of moving the overnight lodging numbers around in the phases. It is not necessary to show what type of housing units will meet the overnight lodging j requirement as long as they are designated on the tentative and final plats for each phase i and designated in the land use approval at the time of tentative plan approval. The approval of the 2:1 ratio was most difficult to arrive at simply because the applicant l submitted inconsistent information, which was pointed out by the opponents, and applicants failed to see their error until staff directed the applicant's attention to it. The _ q applicants did not admit to the error until their final argument. Zx I .J .7 1 i Exhibit - Page ' of ' As this was my first goal 8 destination resort application I found it difficult to arrive at a final determination on the issues due to the applicants incomplete and inconsistent submittals. Because OR.S 197.522 requires local governments to approve an application if appropriate conditions of approval can be drafted,therefore I must approve this application, with these conditions and other conditions as may be suggested by staff.. Therefore as stated above F will support approval of this application with these conditions and conditions as imposed by staff. t=x. 60 Exhibit Page Q S , • ki Perkins ] Cole ;tr.:et,term F.co, Forv3na OR S"z�a-4 x8 3revcr.L Pfeiffer =-c.lt.5c3.7x7.aocu S u : .ax 503 s^.aaxt 3Jti-32•;1 3?iciPron`r'p_rk,esu:le:nm a S 1 l.larch 6.2012 VIA EMAIL ONLY Ms.Karen Cirreen,Hearings Officer c.io Nick Lelack Planning Director Deschutes County Community Dekelupntenr Department I I7 NW Lafayette Fiend,OR 97701 Re: Loyal Land,LLC.'Application for Declaratory Ruling Request(County File 1o.DR- 11-8): Applicant's Second Open Record Period Submittal Dear Nis Green: As y:'u are aware,this office represents Loyal C and LLC("Applicant"),the applicant requesting approval of a declaratory ruling application(County File No DR-I 1-8)("Application")t;tat the use associated with the Thornburgh Destination Resort conceptual master plan approval has been initiated. At.the public hearing on February 7,2012.the Eearings Officer sleeted to hold the record open to allow parties to submit rebuttal argument and evidence through March h,2017.;at S:OOpm. This letter constitutes Applicant's submittal for this purpose and before this deadline. Please place a copy of this letter in the official record. 5 In the space below,Applicant responds to a selection of argument~presented by opponents during the first open record period. For the reasons explained below,the Hearing,Officer should find that the opponents'contentions are not persuasive and do not rebut substantial. evidence presented by Applicant that the Application satisfies applicable approval criteria. Applicant will respond to remaining arguments in its final written argument a.. . .: 3' i r,- ,.. /.-. i s . .,...r. U^.•..3, = n:.D ;D'I v.., ,O1• ....� • . i. .',I/ i. ..a.:j ;1V J _�- .in -]. ._ _. Y-.fir ..I -...-...., w .Y'.1 �. ) . Perkins:me a' LUBA No 2012-042 rage 0G1 " 6 !.t_, Karen Green,Hearings Officer March 6.2013 Page 3 Appilcation,and the Application requests a determination as to the status of rights under the Application. Second, it is disingenuous for Mr DeLashrnutt to contend that Ms.DeLashmutt has not appeared when she previously authorized him to act on her behalf in land use proceedings related to the resort,and Mr DeLashmurt has so appeared in these proceedings, Third,whether Ms DeLashrr_utt has appeared or not in these proceedings is irrelevant:The County's obligation only extends to providing a right to participate and the County has provided that right in this matter. If Ms.De[.ashmun has waived her right to appear and potentially object,it is her decision,and she must deal with the consequences. Second,Mr. Petersen contends in response to the Hearings Officer's 564,001)question,that Mr. De Lashmutt her appeared to oppose the Application because Applicant's request at this time has allegedly increased the risk of an unfavorable declaratory ruling. This contention is totally hypocritical when it is Mr Del.,asitmutt's opposition that is causing the threat of denial in this case Further,the contention is unfounded because Applicant has substantially exercised the conditions;of approval of the CMP and th,;s initiated the resort use For these reasons,the Hearings Off cer should deny these contentions C. Response to Letter from Paul Dewey (for Vunxie Gould). Ir his letter dated February 21, 0 i 2.Paul Dewey raised a number of contentions on behalf of opponent Nunr_ie Could Applicant responds to two such contentions below The Hearings Officer should deny these contentions. First,Mr Dewey asserts a number of arguments under OAR Chapter 660-033-0 1401. However, he wholly fails to respond to Applicant's contention,supported by LUBA's decision m Oregon arural Desert,'L sociation v Harney County,42 Or LUBA 149(2002),that acknowledged local code provisions control over inconsistent provisions of OAR 660 Division 033 For this reason alone,the ILeariugs Officer should deny Mr.Dewey's contentions under this rule. Second,Mr. Dewey contends that Applicants pursuit of approval of the final master plan for the resort cannot establish a basis for determining that the use has been initiated, Further,Mr. Dewey notes that LUBA remanded the County's approval of the final master plan. Mr.Dewey's contention misses the point. Applicant offered this information for historical perspective and to establish that the County Hearings Officer has previously.determined(in considering the final master plan application)that many of the conditions of the CMP have been satisfied and'or substantially exercised. .A1thou tF 1 UB:\has remanded that decision,the remand is limited to two minor issues that do not substantially impact most of the Hearings Officer's findings and conclusions. For these reasons,the Hearings Officer should deny these contentions. -tit's-osl i LE -a 235145n LUBA No 2012-042 Page 00,99 L--aC Z Paul Dewey From: King, Seth J. (Perkins Coie) asking @perkinscoie.com> Sent: Wednesday, July 03, 2013 3:37 PM To: Kevin Harrison (kevin.harrison @deschutes.org) Cc: Laurie Craghead (Laurie.Craghead @deschutes.org); pdewey @bendcable.com; kgreen@bendbroadband.com; Pfeiffer, Steven L. (Perkins Cole) Subject: RE: A-12-3/E-11-56(Loyal Land) Kevin. As you are aware: this office represents Loyal Land LLC l Applicant i. the applicant before Deschutes County i County ; in this and related matters pertaining to the Thornburgh Destination Resort Please be advised that the Applicant hereby withdraws the two pending applications requesting extensions of the Thornburgh Destination Resort Conceptual Master Plan ;'CMP') (County File Nos E-11-56 and E-12-55). As a result of the withdrawal, effective immediately the proceedings for these two applications snouid be terminated and no further action should be required by the County or the Applicant. This request does not pertain to or affect the status of the Applicants request for a declaratory ruling that the use associated with the CMP has been initiated (County File No DR-11-6; which has been remanded to the County by the Land Use Board of Appeals. Please confirm receipt of this message. Finally feel free to contact us with any questions Thank you for your cooperation. Seth J. King I Perkins Coie LLP PHONE. 503./27.2024 From: Pfeiffer, Steven L. (Perkins Cole) Sent: Wednesday, June 26, 2013 3:52 PM To: King, Seth J. (Perkins Cole) Subject: RN: A-12-3/E-11-56 (Loyal Land) From: Karen Green [mailto:kgreenC bendbroadband.com] Sent: Wednesday, June 26, 2013 11:49 AM To: 'Kevin Harrison' Cc: 'Paul Dewey'; Pfeiffer, Steven L. (Perkins Coie) Subject: RE: A-12-3/E-11-56 (Loyal Land) Kevin; My notes indicate I planned to set a continued hearing date at least two weeks following the Court of Appeals decision.And as Paul Dewey noted in the e-mail he sent this morning, I decided not to require briefing on the issue of whether/how the LUBA decision applies to the extension criteria. Since the Court of Appeals' appellate mandate was issued on June 12", any hearing date after June 26" would be consistent with the schedule we discussed at the February hearing. I think it is appropriate to send a new hearing notice. We could set the continued hearing for July 30" if that is acceptable for everyone. That date works for me(I'll be away from July 4-13) and apparently also works for Paul. We'll need to find out if that date is acceptable for Stephen Pfeiffer, The applicant also needs to advise whether it will agree to a further extension of the 150-day period to accommodate the continued hearing, post-hearing evidence and argument periods, and possible local appeal Karen Ek- 3, 10'1 From: Kevin Harrison [mailto:Kevin.Harriacjarldeschutes.orq] Sent: Wednesday,June 26, 2013 9:40 AM To: Karen Green (kgreen(abendbroadband.com) Cc; Paul Dewey(pdewevObendcable.com); spfeiffer aGerkinscoie.corn Subject: A-12-3/E-11-56(Loyal Land) Karen: I am checking in to make sure that we are all on the same page with respect to the proceedings on the referenced appeal. As you recall,we held a hearing on February 5, 2013 and continued the hearing to allow for the Court of Appeals to rule on LUBA No. 2012-042. The Court of Appeals has issued their decision (See:A153486); Loyal Land has extended the 150-day time limit through July 30, 2013. According to my notes, both parties need to provide a memorandum to you on the question of the extent the LUBA decision analysis applies to the extension criteria. Staff has already provided its memo on this question. I can't recall if the hearing on February 5th was actually continued to July 30 or if we were going to set some other hearing date and give new notice. I think it would be helpful to review the hearing schedule and, if necessary, briefing schedule so that we don't miss something. I have copied the parties on this email and invite comments so that we all have a common understanding of the process going forward. Thanks for your help on this. Kevin Principal Planner 117 NW Lafayette Avenue Bend,OR 97701 (541)385-1401 E-mail:kevinh @co.deschutes.or.us IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department and IRS regulations, we inform you that, unless expressly indicated otherwise, any federal tax advice contained in this communication (including any attachments)is not intended or written by Perkins Coie LLP to be used, and cannot be used by the taxpayer, for the purpose of(i)avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code or(ii) promoting, marketing or recommending to another party any transaction or matter addressed herein (or any attachments). NOTICE: This communication may contain privileged or other confidential information. If you have received it in error, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you 2 k- '3, p 2 BEFORE If IE LAND LSE BOARD OF APPEALS OF I I IF STATE OF OREGON ANNLNZIA-lA (i0111), Peniiont:r S DI:St:I it_1 ES CO( 11) Respondent and 14 11 1 )RNBLR(111 RESOR I COMPANY, LI.C. 15 hwervenHr-Resitunden( LI B A 2()(/8s3).; •71i •• ,-,, • fAt "1" 1 )I ICE Of' APPEL_ I F., JI:DGMENT `-) Th.L' Court of Appeal-; itd on opinion in (1r)L,Lil Deychure.i Colintt CA A143430. 2.c..) on I-ehr;.:ar:, 24. 2010. rhe appelLueiud2rnent ‘‘as filcd on April 8. 2010. 21 The appellate court Jeckion in thi.; case r,:.-quires no cane in our final opinion and " order dated September c). 2 )(.19. Dated this Ls; 26 / 28 7"-- 4 /.■ 7 / Michael A_ Flolstun BoarJ Chair Page Ek• I a / 1 Case 11-31897-tmbll Doc 265 Filed 01/17/12 1 I Gary Underwood Scharff,OSB No 883031 (Lead Attorney) 2 Direct Dial: (503)493-4353 Facsimile: (503)512-8143 3 E-Mail: gs.r'scharfflaw.com Heather A.Brann,OSB No.040495 4 Direct Dial: Facsimile: 5 E-Mail: branns@eazthlink_net Law Office of Gary Underwood Scharff 6 1300 American Bank Building 621 S.W. Morrison Street 7 Portland,OR 97205 8 Attorneys for Debtor 9 10 it I I UNITED STATES BANKRUPTCY COURT 12 DISTRICT OF OREGON 13 In re Case No. 11-31897-trnbl l ( 14 Thornburgh Resort Company,LLC, DEBTQR`.S. II LQS.URE STATEMENT.(JA.NC'CARY 17,2012) 15 Debtor 16 17 1, INTRODUCTION 18 On March 11,2011 ("Petition Date"),Thornburgh Resort Company,LIC("TRC"or 19 "Debtor")filed a voluntary petition for relief under Chapter 11 of Title 11 of the United 1 20 States Code(the"Bankruptcy Code"). On January 17, 2012,Debtor filed its Chapter 11 Plan F 21 (the"Plan")with the Bankruptcy Court. The Plan projects Debtor will pay all non-insider, 22 general unsecured creditors approximately.335%of the allowed amounts of their respective 23 claims as compared to an estimated 10% under a Chapter 7 liquidation. A copy of the Plan is 24 attached hereto as Exhibit 1. 25 26 Page 1 of 19- DEBTOR'S DISCLOSURE STATEMENT(JANUARY 17,2012) Law Office of Gary Underwood Scharff 621 S.W.Morrison Street Suite 1300 Portland,OR 97205 Ex A (503)493-4353 LUBA Na.2012-042 Page 00314 ji if Case 11-31897-tmbl 1 Doc 265 Filed 01/17112 1 additional financing.4 In mid 2006 DeLashmutt and Chapman lent Debtor money pending 2 Chapman securing additional sources_ Chapman insisted on taking control of'TRC to obtain 3 immediate funding. T1tC's operating agreement was amended to give Chapman final control 4 over the project. Despite this change,Chapman produced no additional funding. Chapman 5 proposed selling his interest in Debtor to DeLashmutt. 6 In early 2006 Jeff Parker,a Portland developer("Parker"),approached TRC, 7 expressing interest in acquiring resort land. When Chapman asked to be bought out, 8 De.Lashmutt invited Parker to consider taking a financial role in the project. Parker,his 9 partner,Bill Wilt,and their entity, Parker Group Investments, LLC PGI" agreed to take P ty, p (�� ). �e 10 the lead role in financing the entire project On June 6,2007,Debtor executed the 11 "Investment Agreement"with Parker, Wilt and P01. On the same day Debtor also entered 12 into a redemption agreement(the"Redemption Agreement")with Chapman,Mattox and 13 Traditions. The agreements provided that some PG1 investment funds would be paid to 14 Traditions and Mattox,with substantial portions of the future profits due Traditions and 15 Mattox to be paid to PGI. Further details of both sets of agreement follow. 16 Redemption Agreement with Chapman parties { 17 Under the Redemption Agreement,Debtor redeemed the Traditions and Mattox 18 membership interests in exchange for a promissory note providing for four payments by TRC 19 of$2.5 million each,with additional payments to be made once additional conditions had 20 been met and development activities were underway_ Debtor made the first two of the four 21 payments but defaulted on the next two. In 2009 Traditions and Mattox filed an arbitration 22 `Fighting appeals,at times on different applications in separate courts,strained 23 TRC's resources. Chapman's sources of development funding were hesitant to commit without final land use approvals. In early 2006 DeLashrutt received from the resort finance 24 division of a large Utah Bank preliminary approval,and an indication of imminent funding, of a$46 million loan to TRC_ Before receipt of final approval,Kevin Warner filed suit 25 against DeLashmutt,Chapman and Debtor claiming damages of$101.9 million. Although 26 the suit eventually settled for a small nuisance value amount,its filing ended the transaction with the lender. Other lenders had similar responses to the Warner suit Page 8(11'19- DEBTOR'S DISCLOSURE STATEMENT(JANUARY 17,2012) Law Office of Gary Underwood Scharff 621 S.W.Morrison Street Suite 1300 Portland,OR 97205 (503)493-4353 LUBA No.2012-042 Page 00321 EY 6 Case 11-3189 7-tmb11 Doc 265 Filed 01/17/12 1 claim against TRC seeking damages of$5 million. The arbitration took place in February, 2 2010 The arbitrator,Richard Spier,issued his award(the"Arbitration Award"). He held 3 that the promissory note was unenforceable;that collection of the unpaid$5 million was 4 barred;that the$5 million Debtor distributed in the first two payments were improper and 5 should be returned to Debtor;and that Debtor was entitled to its attorney fees. Debtor now 6 holds a judgment against Traditions in respect of the arbitration award for$2.4 million plus 7 attorney fees and 9%interest,which remains unpaid to Debtor.5 8 Investment Agreement with Parker parties 9 Under the Investment Agreement PGI lent Debtor$10 million immediately,and 10 committed to arrange for an additional bridge loan(the"Bridge Loan")of approximately$20 11 million,but in no event less than$15 million,also to be funded in 2007. Wilt and Parker 12 also agreed to personally guarantee a development loan of approximately$60 million. PGI 13 agreed to subordinate its$10 million loan to that development loan_ PGI began negotiations 14 with Sterling Savings Bank("Sterling")to fund the Bridge Loan_ 15 In mid-2007 Sterling reduced the amount of the proposed Bridge Loan to$15 million 16 and issued a binding Letter of Commitment for$15 million. A month later it further reduced 17 the loan to$11 million,eliminating,among other things,all interest reserves, Debtor faced a 18 deadline to close the purchase of the Thornburghs' property in three weeks_ In reliance on 19 PGI's assurance to Debtor that it would raise or provide at least the additional$4 million 20 needed to meet the minimum$15 million of the Bridge Loan,Debtor agreed to the 21 transaction. PGI borrowed the$11 million from Sterling(the "Loan")and delivered those 22 funds to Debtor under a pass-through arrangement. Debtor in turn provided Sterling a bust 23 deed on the Property as partial security for the Loan. As additional collateral Sterling took a 24 $7.2 million cash fund of an entity owned and controlled by Parker. Parker and PGI failed to 25 5 Documents relating to the Traditions Judgment,including the Arbitration Award, 26 are attached hereto as Exhibit Page 9 of 19- DEBTOR'S DISCLOSURE STATEMENT(JANUARY 17, 2012) Law Office of Gary Underwood Scharff 62l S.W.Morrison Street Suite 1300 Portland,OR 97205 (503)493-4353 { LUBA No.2012-042 EX. 6 Page 00322 ll Case 1 1-31 897-tmb11 Doc 265 Filed 01/17/12 I provide the promised minimum$4 million shortfall on the Bridge Loan, leaving Debtor with 2 inadequate cash and a sharply limited ability to proceed with the Resort development.. 1 3 In or about February 2008,despite provisions in the Investment Agreement to the 4 contrary,Parker and Sterling arranged for Sterling to disburse to Parker without Debtor's 5 knowledge or permission the$7.2 million collateral fund held by Sterling. At the time of that 6 disbursement Parker failed to reduce the Loan balance by the amount of this disbursement, 7 and failed to provide replacement collateral. This left the Property exposed as the sole 8 security for the Loan 6 9 By early 2008 PGI bad effectively ceased raising funds to complete the Bridge Loan. 10 PG1 began thwarting Debtors efforts to raise capital while trying to raise funds on its own I I account to allow the Parker entities to purchase the Loan and foreclose on Debtor. Tensions 12 between Parker and DeLashmutt increased. In August 2009 PGI declared TRC in default i 13 and sent notice of intent to foreclose on the Debtor's property. Debtor denied it was in 14 default. In December 2009 the PGI foreclosure was halted and the parties initiated an 15 arbitration proceeding to resolve differences under the Investment Agreement. Parker 16 continued to try to raise money to fund a PGI acquisition of the Loan,including approaches 17 to Debtor's founder investors. Parker was unable to close funding transactions and purchase 18 the Loan. Sterling declared a default on the Loan and issued a notice of a 2010 foreclosure 19 sale. 20 In early 2010 Parker entered into an agreement with Sterling to purchase the Loan at 21 a steep discount. Because Sterling would not sell the Loan directly to P01,the borrower, 22 Parker created Central Oregon Investment Holdings,LLC("COIH")to serve as purchaser. 23 24 6 Debtor's lack of funds made servicing the Loan increasingly difficult. Debtor considered PGI to have breached the Investment Agreement in numerous respects from early 25 2008 onward. PG1 has alleged in response that Debtor breached the agreement in mid-2008 by failing to make an interest payment. Debtor contends its inability to make that payment 26 was the result of PGI breaches. Page 10 of 19 - DEBTOR'S DISCLOSURE STATEMENT(JANUARY 17,2012) Law Office of Gary Underwood Scharff 621 S.W.Morrison Street Suite 1300 Portland,OR 97205 (S03)493-4353 LUBA No.2012-042 t)e 6 Page 00323 { Case 11-31897-tmbl1 Doc 265 Filed 01117/12 1 in mid-2010 Parker's broker seeking investor(s)to fund the Loan acquisition,Guardian 2 investment Real Estate, located an interested potential lender, Infinity Capital. With 3 arbitration approaching,Parker and DeLaslunutt agreed to resolve their disagreements under 4 the terms set forth in a Letter of Intent, followed by a definitive"Buyout Agreement"signed 5 on December 15,2010. 1 1 6 In that agreement Parker and DeLashmutt,and their respective partners and 7 development entities,including Debtor,agreed to terminate the Investment Agreement and 8 nullify all related documents. They also exchanged mutual and complete general releases of 9 all claims relating to the Investment Agreement and the Property,development of the Resort, 10 and other dealings among them relating to Debtor as of that date. The termination and 11 mutual release provisions became effective"upon the execution of this Agreement." A copy 12 of the fully-executed Buy Out Agreement is attached hereto as Exhibit_and is incorporated I 13 into this Disclosure Statement by this reference] Infinity thereafter complained that Parker 3 14 failed to provide information he had promised, which Infinity needed to complete its due 15 diligence_ Parker refused to provide further materials and withdrew from the transaction with a 16 Infinity to pursue other investors. 17 In or about February 2011 Parker persuaded Terrence Larsen("Larsen")to make an 18 offer to Sterling for the I.oan,to be channeled to Sterling through COIH, the entity controlled 19 by Parker When Larsen offered$4 million,Sterling agreed to sell the Loan and related 20 documents. Prior to the purchase of the Loan, Larsen and Parker entered into a 21 Memorandum of Understanding whereby Larsen and Parker agreed that Larsen would 22 provide to Parker a 50%participating interest in the value created by Larsen's disposition of 23 the Property after acquiring it at foreclosure. In a single transaction on or about.March 1, 24 2011,Larsen paid$4 million to Sterling and the Loan was transferred from Sterling to COIH, 25 —.. 'Page 5 of the Uuyout.Agreement contains both the mutual release(Section 4)and 26 the termination of the Investment Agreement/nullification of related documents(Section 2). Page II of 19- DEBTOR'S DISCLOSURE STATEMENT(JANUARY 17,2012) Law office of Gary Underwood Scharff 621 S.N.Morrison Street Suite 1300 Portland,OR 97205 (503)493-4353 LUBA No.2012-042 GK 6 Page 00324 11 Case 11-31897-tmb11 Doc 265 Filed 01/17112 I then from COIN to Larsen. In Debtor's view,during that transaction the Loan was cancelled 2 when Parker in effect simultaneously held both the duty to pay the Loan (as POD and the 3 right to receive repayment of the Loan(as COII-C). On March 7,2011, Larsen formed his 4 Own new entity, Loyal Land,LLC("Loyal"), and transferred the loan to Loyal. Loyal 5 proceeded toward consummation of the foreclosure sale. 6 Shortly before the sale of the Property was to occur on March 1 I,201 I, Debtor filed 1 7 its petition seeking Chapter 11 bankruptcy protection to preserve its opportunity to realize on 8 its Resort development efforts,and utilize that enhanced Property value to pay its creditors. 9 Both Loyal and Debtor regarded the value of the Property as dependent upon completion of 10 the Resort development effort. In filings with the Court,including a declaration of Parker I tiled on behalf of Loyal,valued the Property without development at approximately$1.3 12 million,as high-desert scrubland, Debtor believes that with all development rights and assets 13 in place,the Property could be worth much more,as much as$40-50 million. Debtor and 14 parties sympathetic to Debtor,including DeLashmutt,believe Debtor and other parties 15 sympathetic to Debtor own or control various items of real and personal property beyond the 16 reach of Loyal,that are vital to completing the development and realizing that larger value, 17 whether the owner is Loyal or some other party. 18 5. SIGNIFICANT POST-PETITION EVENTS 19 5.1 Retention of Chapter 11 Counsel. Debtor obtained authorization from the 20 court to employ the Law Office of Gary U. Scharff as Debtor's Chapter 1 I counsel. 2 1 5.2 The Loyal Motion For Relief From Stay. On March 22,201 I,Loyal filed a 22 Motion for Relief from Stay("MFR")asking the Bankruptcy Court to release the Property 23 from the supervision and control of the Court to allow Loyal to proceed with its foreclosure 24 sale. Loyal took the position for purposes of the MFR that the Buyout Agreement was not 25 effective,and Debtor, holding numerous claims against Parker,PG1 and Loyal in the absence 26 of the Buy Out Agreement,responded to the MFR on grounds other than enforcement of Page 12 of 19- DEBTOR'S DISCLOSURE STATEMENT(JANUARY 17,2012) Law Office of Gary Underwood Scharff 621 S.W.Morrison Street Suite 1300 Portland,OR 97205 (503)493-4353 LUBA No.2012-042 5 Page 00325 • Case 11-31897-tmbl l Doc 265 Filed 01/17/12 1 interference in business relationships and other theories occurring during the period 2 following December 15, 2010. Those claims are asserted in the Deschutes County Lawsuit. cat: Basra liasd,value• tt:s ta,Mav.:wxthaya,warsed,lo..I at r,'.s.sigaii.f ara..losses 4 relating to the Property being stripped from Debtor based upon Larsen,in wrongful collusion 5 with Parker Group entities, acquiring the Loan from Sterling and purporting to have rights to 6 foreclose. 7 6.1.1.4. Larsen and Loyal Land Legal Claims. Larsen and Loyal are not parties 8 to the Buyout Agreement and participated in the wrongful conduct against Debtor described 9 in paragraph 6.1.1.3,above. Certain of those claims,of undetermined value at this time, are 10 asserted in the Deschutes County Lawsuit. Additional claims against these defendants will. 11 be brought in that case. 12 6.1.1.5. Sterling Legal claims, Sterling is riot a party to the Buyout Agreement 13 and participated in wrongful conduct against Debtor in late 2007,early 2008 and afterwards, 14 as well as the more recent conduct described in paragraph 6.1,1.3,above,preceding the filing 15 of Debtor's bankruptcy petition. Debtor anticipates amending its complaint in the Deschutes 16 County lawsuit to assert these claims in that case. These claims are of undetermined value at 17 this time. 18 6.1.1.6. Central Electric Cooperative(CEC)Suit. Prior to Debtor acquiring the 19 Thornburghs' property,title to that property was held by Trail Crossing Trust, the 20 Thornburghs'trust("Trust") Central Electric Cooperative ("CEC")rebuilt high-voltage 21 electric transmission towers on the property without County permission,pursuant to alleged 22 rights under Measures 37 and 49. Debtor believes CEC had no such right to rebuild those 23 structures,which potentially limited the use of the property and reduced its development 24 value. As Debtor was under contract to acquire the property and needed to rectify the CEC 25 misconduct to preserve value in the development, it covered the costs of the Trust litigation 26 challenging the CEC conduct. Those attorney fees and costs are estimated at approximately Page 18 of 19- DEBTOR'S DISCLOSC IRE STATEMENT(JANUARY 17,2012) Law Office of Gary Underwood Scharff 621 S.W.Morrison Street Suite 1300 Portland,OR 97205 (503)493-4353 LUBA No.2012-042 Ek 6 Page 00331 B 6F'Official Form 6F)(12/071 Case 11-31897-tmb11 Doc 30 Filed 04/08/11 in re Thornburgh Resort Company, LLC , Case No. 11-31897-tmb11 e�) btor (if known) SCHEDULE F- CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS State the name,mailing address,including zip code,and last four digits of any account number,of all entities holding unsecured claims without priority against the debtor or the property of the debtor,as of the date of filing of the petition. The complete account number of any account the debtor has with the creditor is useful to the trustee and the creditor and may be provided if the debtor chooses to do so. If a minor child is a creditor,state the child's initials and the name and address of the child's parent or guardian,such as"A.B.,a minor child,by John Doe,guardian."Du not disclose the child's name.See, I I U.S.C.§112 and Fed. R.Bankr.P. 1007(m). Do not include claims listed in Schedules D and L. If all creditors will not fit on this page,use the continuation sheet provided. If any entity other than a spouse in a joint case may be jointly liable on a claim,place an"X"in the column labeled"Codebtor,"include the entity on the appropriate schedule of creditors,and complete Schedule H-Codebtors. If a joint petition is Fled,state whether the husband,wife,both of them,or the marital community may be liable on each claim by placing an"H,""W,""J,"or"C"in the column labeled"Husband,Wife,Joint,or Community." If the claim is contingent,place an"X"in the column labeled"Contingent." If the claim is unliquidated,place an"X"in the column labeled"tlnliquidated." If the claim is disputed,place an"X"in the column labeled"Disputed." (You may need to place an"X"in more than one of these three columns.) Report the total of all claims listed on this schedule in the box labeled"Total"on the last sheet of the completed schedule.Report this total also on the Summary of Schedules and,if the debtor is an individual with primarily consumer debts,report this total also on the Statistical Summary of Certain Liabilities and Related Data.. ❑ Check this box if debtor has no creditors holding unsecured claims to report on this Schedule F. tzi CREDITOR'S NAME, 3 DATE CLAIM WAS Fr AMOUNT OF MAILING ADDRESS 0 z INCURRED AND z E- CLAIM INCLUDING ZIP CODE, E- Ca E- CONSIDERATION FOR „:c Q AND ACCOUNT NUMBER u..7 < CLAIM. j CO 10 i$ee instructions above.} 0 O IF CLAIM IS SUBJECT TO 2 d c) SETOFF,SO STATE. D i ACCOUNT No. none Buy out contract • 12/15/2010 Parker Group Investments X X X 3,000,000.00 15250 Blankenship Rd,#200 West Linn OR 97068 ACCOUNT NO. none Professional services 2008-2010 Schwabe Williamson&Wyatt 1,366,324.00 1211 SW 5th Ave#1900 Portland OR 97204 ACCOUNT NO. none Guaranteed payments 2008-2011 Kameron DeLashmutt 506,584.34 2447 NW Canyon Redmond OR 97756 ACCOUNT NO. none Lease Contract:Subject to Setoff from arbitration David Chapman recoupment 2007-2011 X X 375,000.00 78505 Old Avenue 52 La Quinta CA 92252 Subtotal* $ 5,247,908.34 12 continuation sheets attached Total* $ (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable,on the Statistical Summary of Certain Liabilities and Related Data.) Ex 6, P• I 8 6F Official Form 6F)(12/07)-Cont, Case 11-31897-tmbll Doc 30 Filed 04/08/11 In re Thornburgh Resort Company, LLC Case No. 11-31897-tmb11 Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) I � � { CREDITOR'S NAME, x E> DATE CLAIM WAS [✓ q AMOUNT OF MAILING ADDRESS F ' 0 z INCURRED AND w H CLAIM p'p INCLUDING ZIP CODE, CONSIDERATION FOR z < AND ACCOUNT NUMBER Ca ¢ — 2 CLAIM. l✓ 5 FA (See instructions above.) O O IF CLAIM IS SUBJECT TO Z d Q :I�' SETOFF,SO STATE. o ACCOUNT NO. none Lease Contract:Subject to Gary Mattox Setoff from arbitration X X 375,000.00 5689 E. Quartz Mt Rd. recoupment 2007-2011 Paradise Valley AZ 85253 ACCOUNT NO. none Trade account 2008-2009 Tetra Tech EC, Inc 145,430.58 Lynn Sharp Dept 1644 ACCOUNT NO. none Trade account 2007 Edgewood Log StructuresLtd X 138,097.41 PO Box 1030 Coure d'Alene ID 83816 ACCOUNT NO. none Unsecured loan, payment Genesis Development made 2008-2011 X 180,456.18 Group, LLC 2447 NW Canyon ACCOUNT NO. none Trade account 2009-2011 Ater Wynne LLP 92,908.77 1331 NW Lovejoy, Ste 900 Portland OR 97209 Sheet no. 1 of 12 continuation sheets attached Subtotal)- $ to Schedule of Creditors Holding Unsecured 931,892.94 Nonpriority Claims l'otall► $ (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilities and Related Data.) { B 600fficial Form 6F)(12/07)-Cont. Case 11-31897-tmb11 Doc 30 Filed 04/08/11 in re Thornburgh Resort Company LLC , Case No. 11-31897-trnbll Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRJORITY CLAIMS (Continuation Sheet) CREDITOR'S NAME, H DATE CLAIM WAS F- p AMOUNT OF MAILING ADDRESS C 0 z INCURRED AND z Q CLAIM LiJ INCLUDING ZIP CODE, CONSIDERATION FOR Q AND ACCOUNT NUMBER CI CLAIM. I— 5 A iSee instructions above., - O IF CLAIM IS SUBJECT TO z 0' SETOFF,SO STATE. Ca [� J ACCOUNT NO. Trade Account 2009-2011 Moss-Adams LLP 91,445.11 805 SW Broadway Ste 1200 Portland OR 97205 ACCOUNT NO. Trade Account 2008-2009 Hickman,Williams&Assocs, X 90,693.31 1201 SW Wall Bend,OR 97702 ACCOUNT NO. Trade Account 2008-2009 6 ' Newton Consultants, Inc. 79,837.65 521 SW 6th St. Ste 100 Redmond OR 97756 ACCOUNT NO. 2007-2008 Tom Watson Design Ltd. 75,000.00 1901 West 47th Place,#200 Westwood KS 66205 ACCOUNT NO. Trade Account 2008-2009 Bussard Williams X 47,587.48 1201 SW Wall St.Ste. 100 Bend OR 97702 Sheet no. 2 of 12 continuation sheets attached Subtotal) S to Schedule of Creditors Holding Unsecured 384,563.55 Nonpriority Claims Total) S (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilitica and Related Data.) Et (a, P3 B 6F.(Official Form 6F)(12/07)-Cont. Case 11-31897-tmbll Doc 30 Filed 04/08/11 In re Thornburgh Resort Company LLC Case No. 11-31897-tmb11 Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) ua CREDITOR'S NAME, a `--" DATE CLAIM WAS F- p AMOUNT OF MAILING,ADDRESS ' O INCURRED AND F� Q CLAIM INCLUDING ZIP CODE, F- CONSIDERATION FOR AND ACCOUNT NUMBER 2 CLAIM. 1✓ 5 CCI See instructions abovc_t O [i] 0 IF CLAIM IS SUBJECT TO Z a SETOFF,SO STATE. U p ACCOUNT No. Trade Account 2008-2009 Golf Course PLanning LLC 41,562.00 20027 N 97th Place Scottsdale AZ 85255 ACCOUNT NO Trade Account 2008 Packowsi Heinritz Assoc 22,631.25 18011 Street Ste 100 Sacramento,CA 95814 ACCOUNT NO. Trade Account 2007 Black Helterline LLP 805 SW 21,332.96 Broadway ste 1900 Portland OR 97205 ACCOUNT NO. Contract Labor Services 2008-2009 Rick Nordin 20,000.00 24055 Dodds Rd. Bend OR 97701 ACCOUNT NO, Trade Account 2007 Karnopp Peterson et al 18,483.24 1201 SW Wall St.Ste.300 Bend OR 97702 Sheet no. 3 of 12 continuation sheets attached Subtotal* S to Schedule of Creditors Holding Unsecured 124,009,45 Nonpriority Claims Total* S (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilities and Related Data.) B 6F(Official Form 6F)(1107)-Cont. Case 11-31897-tmbll Doc 30 Filed 04/08/11 In re Thornburgh Resort Company LLC , Case No. 11-31897-tmb11 Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) w CREDITOR'S NAME, F DATE CLAIM WAS F. q AMOUNT OF INCLUDING ADDRESS CODE, Q CON INCURR IDERALTION FOR Z Cw7 CLAIM AND ACCOUNT NUMBER n < CLAIM. r51 (Sec:instructions above.) O cn © IF CLAIM IS SUBJECT TO Z SETOFF,SO STATE. ACCOUNT NO. Trade Account 2010 Peterkin and Associates 17,500.00 222 NW Irving Ave Bend OR 97701 ACCOUNT NO. _ Trade Account 2009 WRG Design Inc. 16,307.7 5415 SW Westgate Dr. Portland OR 97221 ACCOUNT NO. Trade Account 2008-2010 Central Oregon Irrigation 11,436.17 1055 SW Lake Rd. Redmond OR 97756 ACCOUNT NO. Trade Account 2009 Sidley Austin LLP 10,345.08 PO Box 0642 "• Chicago ILL 60690 ) ACCOUNT NO. Trade Account 2008 Interface Engineering 10,133.02 708 SW 3rd St. Portland OR 97204 Sheet no. 4 of "12 continuation sheets attached Subtotal, $ to Schedule of Creditors Holding Unsecured 65,721.74 Nonprioriry Claims Total, $ Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilities and Related Data.) " I s 6F(Official Form 6F)(12/07)-Cont. Case 11-31897-tmb11 Doc 30 Filed 04/08/11 In re Thornburgh Resort Company LLC Case No. 11-31897-tmb11 Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) CREDITOR'S NAME, , F- DATE CLAIM WAS (- Q AMOUNT OF MAILING ADDRESS C ' O z INCURRED AND F Q CLAIM INCLUDING ZIP CODE, F- CONSIDERATION FOR 0 AND ACCOUNT NUMBER O m O CLAIM. p O [See instructions above.[ v, O IF CLAIM IS SUBJECT TO Z O 5 L., SETOFF,SO STATE. ACCOUNT NO. r T Ode Account 2008 Elcon Associates, Inc_ 9,621.13 12670 SW Barnes Rd. Portland OR 97229 ACCOUNT NO. Trade Account 2008 u Gro p Mackenzie,Ma nz e, Inc. 8,501.20 PO Box 14310 Portland OR 97293 ACCOUNT NO. Trade Account 2008 Paladino&Company 7,750.00 110 Union St.Ste 400 Seattle WA 98101-2028 ACCOUNT NO. Trade Account 2009-2010 Eisenhower and Carlson X 6,654.00 1201 Pacific Ave Ste 1200 Tacoma WA 98402 ACCOUNT NO. Trade Account 2008 MAI Denver 6,100.00 383 Inverness Parkway, Ste Englewood CO 80112 Sheet no. 5 of 12 continuation sheets attached Subtotal) $ to Schedule of Creditors Holding Unsecured 38,62633 Nonpriority Claims Total) $ (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilities and Related Data.) EU 6F(Official Form 6F) 12107)-Cont. Case 11-31897-tmbll Doc 30 Filed 04/08/11 B in re Thornburgh Resort Company LLC , Case No 11-31897-tmb1 1 Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) Gil CREDITOR'S NAME, — DATE CLAIM WAS F q AMOUNT OF MAILING ADDRESS FO O Z INCURRED AND LL CLAIM cs INCLUDING ZIP CODE, w CONSIDERATION FOR 0 n AND ACCOUNT NUMBER 0 CLAIM. r 5 (See instructions above.) E1.5 ^ CG IF CLAIM IS SUBJECT TO Z O ❑ SETOFF,SO STATE. ACCOLN-r NO Trade Account 2008 Linda L.Swearingen 5,570.00 4022 SW Wickiup Redmond OR 97756 ACCOUNT NO. Trade Account 2007 Guidon, Inc. 5,425,00 1220 SW Morrison St. Ste 425 Portland OR 97205 ACCOUNT N0.0101 Trade Account 2008 US Bank Visa 5,395.46 PO Box 79048 St. Loius MO 63179-0408 ACCOUNT NO. Trade Account 2008 GMA, Inc. 3,750.00 2700 Newport Blvd Ste 1 Newport Beach CA 92663 ACCOUNT NO, Trade Account 2009-2010 - Apropos Confidential 2,936.00 2701 NW 13th St. Redmond OR 97756 Sheet no. 6 of 12 continuation sheets attached Subtotal) S to Schedule of Creditors Holding Unsecured 23,076.46 Nonpriority Claims 7 ota1)- S (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilities and Related Data.) gx l,, ,P 7 B 6F•(Official Form 6F)(l2 07)-cunt. Case 11-31897-tmb11 Doc 30 Filed 04/08/11 In re Thornburgh Resort Company LLC , Case Na, 11-31897-tmb11 Debtor (if known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) W CREDITOR's NAME, DATE CLAIM WAS F... AMOUNT OF MAILING ADDRESS 0 0 c INCURRED AND w F 0 CLAIM INCLUDING ZIP CODE, a CONSIDERATION FOR Z Q AND ACCOUNT NUMBER d 0 CLAIM. F- 5 tin See instructions above. cr 0 IF CLAIM IS SUBJECT TO Z a p SETOFF,SO STATE. ACCOUNT NO. Professional Services 2006 Roemer,Hamik&Nethery X 2,726.00 45-025 Manitou Dr. Indian Wells CA 92210 ACCOUNT NO. Trade Account 2007 Brown and Caldwell, Inc. 2,129.38 PO Box 45208 San Francisco CA 94145-020 ACCOUNT NO. Trade Account 2010 Motschenbacher&Blattner 2,113.00 117 SW Taylor Ste 200 Portland OR 97204 ACCOUNT NO, Governmental 2009-2010 Oregon DEQ 1,885.00 811 SW 6th Avenue Portland OR 97204 } ACCOUNT NO. Trade Account 2006 Air Systems Inc. 1,800.00 675 SE 9th Bend OR 97702 Sheet no. 7 of 12 continuation sheets attached Subtotal* $ to Schedule of Creditors Holding Unsecured 10,653.38 Nonpriority Claims Total* $ (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,it applicable on the Statistical Summary of Certain Liabilities and Related Data.) [k. �� Q • a OF{official Form 6F)(12/(T)-Cont. Case 11-31897-tmb11 Doc 30 Filed 04/08/11 In re Thornburgh Resort Company LLC , Case No. 11-31897-tmb11 Debtor (it known) SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS (Continuation Sheet) • rrc7 CREDITOR'S OR'S NAME, } DATE CLAIM WAS F- p AMOUNT OF MAILING ADDRESS O O Z INCURRED AND z Q CLAIM INCLUDING ZIP CODE, w r= CONSIDERATION FOR < AND ACCOUNT NUMBER o O 7 CLAIM. (see instructions above., rn O IF CLAIM IS SUBJECT TO CY 8 SETOFF,SO STATE. p ACCOUNT No. Lease Account 2009 Ikon Financial Services PO 1,691.34 Box 650073 Dallas TX 75265-0073 ACCOUNT No_ Lease Account 2009 Ikon Office Solutions 1,671.58 PO Box 31001-0850 Pasadena, CA91 1 1 0-0850 ACCOUNT NO. Trade Account 2006 Bend Fire Protection, Inc. 1,600.00 PO Box 8567 Bend OR 97708 ACCOUNT NO. Trade Account 2009-2010 Smart Solutions, LLC 1,585.17 2525 NE Twin Knolls Dr.#A Bend OR 97701 ACCOUNT NO. Utility T Mobile 890.94 PO Box 790047 St. Louism MO 63179 Sheet no. 8 of 12 continuation sheets attached Subtotal). $ to Schedule of Creditors Holding Unsecured 7,439.03 Nonpriority Claims Total). $ (Use only on last page of the completed Schedule F.) (Report also on Summary of Schedules and,if applicable on the Statistical Summary of Certain Liabilities and Related Data.) Fit G., 0,�( flh , -I 0 N a' oa v cc w an o � '' v� � U W ty z _. __ . . _ 0 g R ti c Ow iT• a) o a. 00 .Ui � �" d e °a �a o 0 F `, 0 v, . p c ao o ,.. 0. 0. c , a �° 'o ._ � 2 O NNg4 — w `,' vaa, MI a ° f P4 ° z w a� W a, "Q. Cr, ...(3-. a x axo _2 rx 7-11 b O. g c 03d E a O 0 d d F o � a" Gd4 � , a"Li: U u N a" U ° — 1 711 b o ° o' o o — o,W d p in 4, a+ O .E 0 NI~ L.) m Paul Dewey From: King, Seth J. (Perkins Coie) masking @perkinscoie.com> Sent: Wednesday, July 03, 2013 3:37 PM To: Kevin Harrison (kevin.harrison @deschutes.org) Cc: Laurie Craghead (Laurie.Craghead @deschutes.org), pdewey @bendcable.com, kgreen @bendbroadband.com; Pfeiffer, Steven L. (Perkins Coie) Subject: RE: A-12-3/E-11-56 (Loyal Land) Kevin As you are aware this office represents Loyal Land C.LC , Applicant the appl,car t ue*o,e Deschutes County C u ty in this and related matters pertaining to the Thornburgh Destination Resort Please be advised that the Applicant hereby withdraws the two pending applications requesting extensions of the Thornburgh Destination Resort Conceptual Master Plan (-CMP'r (County File Nos E-11-56 and E-12.551 As a result of the withdrawal effective immediately. the proceedings for these two applications should be terminated and no further action should be required by the County or the Applicant This request does not pertain to or affect the status of the Applicant s request for a declaratory ruling that the use associated with the CMP has been initiated (County Fie No DR-11-8 v"ich nas deer remanded to the County oy the Land Use Board of Appeals. Please confirm receipt of this message Finally feel free to contact us wttr any questions Thank you for your cooperation Seth J. King I Perkins Cole LLP PHONE: 503.727.2024 From: Pfeiffer, Steven L. (Perkins Coie) Sent: Wednesday, June 26, 2013 3:52 PM To: King, Seth J. (Perkins Coie) Subject: FW: A-12-3/E-11-56 (Loyal Land) From: Karen Green [rnailto:kgreentd'tieneibroadband,com] Sent: Wednesday, June 26, 2013 11:49 AM To: 'Kevin Harrison' Cc: 'Paul Dewey'; Pfeiffer, Steven L. (Perkins Cole) Subject: RE: A-12-3/E-11-56 (Loyal Land) Kevin, My notes indicate I planned to set a continued hearing date at least two weeks following the Court of Appeals decision And as Paul Dewey noted in the e-mail he cent this morning, I decided not to require briefing on the issue of whether/how the LUBA decision applies to the extension criteria Since.' the Court of Appeals' appellate mandate was issued on June 12`x, any hearing date after June 26 would be consistent with the schedule we discussed at the February nearing. I think it is appropriate to send a new hearing notice We could set the continued hearing for July ON if that is acceptable for everyone That date works for me (I'll be away from July 4-13) and apparently also works for Paul. We'll need to find out if that date is acceptable for Stephen Pfeiffer The applicant also needs to advise whether it will agree to a further extension of the ISO day period to accommodate the continued hearing, post-hearing evidence and argument periods and possible inr.a, appeal. Karen E. Uses permitted in open space areas generally include only those uses that,except as specified herein,do not alter the existing or natural landscape of the proposed open space areas. No improvements, development or other alteration of the natural or existing landscape shall be allowed in open space areas, except as necessary fbr development of golf course fairways and greens, hiking and bike trails, lakes and ponds and primitive picnic facilities including park benches and picnic tables. Where farming activities would be consistent with identified preexisting open space uses, irrigation equipment and associated pumping facilities shall be allowed. F. Facilities necessary for public safety and utility service within the destination resort. G. Other similar uses permitted in the underlying zone consistent with the purposes of DCC 18.113.030. H. Accessory Uses in Destination Resorts: 1. The following accessory uses shall be permitted provided they are ancillary to the destination resort and consistent with the purposes of DCC 18.113 and Goal 8: a. Transportation-related facilities excluding airports; b. Emergency medical facilities; c. Storage structures and areas; d. Kennels as a service for resort visitors only; e. Recycling and garbage collection facilities; f. Other similar accessory uses consistent with the purposes of DCC 18.113 and Goal 8. (Ord.92-004§13, 1992) 18.113.040. Application Submission. The authorization of a permit for a destination resort shall consist of three steps. A. Conceptual Master Plan and Conditional Use Permit for Destination Resort. A conceptual master plan (CMP) shall be submitted which addresses all requirements established in DCC 18.113.040. The CMP application shall be processed as if it were a conditional use permit under DCC Title 22,shall be subject to DCC 18.128.010, 18.128.020 and 18.128.030 and shall be reviewed for compliance with the standards and criteria set forth in DCC 18.113. B. Final Master Plan. The applicant shall prepare a final master plan (FMP) which incorporates all requirements of the County approval for the CMP. The Planning Director shall review the FMP to determine if it complies with the approved CMP and all conditions of approval of the conditional use permit. The Planning Director shall have the authority to approve, deny or return the FMP to the applicant for additional information. When interpretations of the Planning Director involve issues which are discretionary,the FMP approval shall be treated as a land use permit in accordance with DCC Title 22. C. Site Plan Review. Each element or development phase of the destination resort must receive additional approval through the required site plan review(DCC 18.124)or subdivision process(DCC Title 17). In addition to findings satisfying the site plan or subdivision criteria, findings shall be made that the specific development proposal complies with the standards and criteria of DCC 18.113 and the FMP. (Ord. 92-004 §13, 1992) 18.113.050. Requirements for Conditional Use Permit and Conceptual Master Plan Applications. The CMP provides the framework for development of the destination resort and is intended to ensure that the destination resort meets the requirements of DCC 18.113. The CMP application shall include the following information: A. Illustrations and graphics to scale,identifying: 1. The location and total number of acres to be developed as a planned destination resort; 2. The subject area and all land uses adjacent to the subject area; 3. The topographic character of the site; Chapter 18.113 (07/2013) 4. Types and general location of proposed development uses, including residential and commercial uses; 5. Major geographic features; 6. Proposed methods of access to the development, identifying the main vehicular circulation system within the resort and an indication of whether streets will be public or private; 7. Major pedestrian,equestrian and bicycle trail systems; 8. Important natural features of the site, including habitat of threatened or endangered species, streams,rivers,wetlands and riparian vegetation within 200 feet of streams,rivers and wetlands. 9. All uses proposed within landscape management corridors identified by the comprehensive plan or zoning ordinance. 10. The location and number of acres reserved as open space, buffer area, or common area. Areas designated as "open space," "buffer area," or "common area" should be clearly illustrated and labeled as such; 11. All proposed recreational amenities; 12. Proposed overall density. B. Further information as follows: 1. A description of the natural characteristics of the site and surrounding areas, including a description of resources and the effect of the destination resort on the resources; methods employed to mitigate adverse impacts on resources; analysis of how the overall values of the natural features of the site will be preserved, enhanced or utilized in the design concept for the destination resort; and a proposed resource protection plan to ensure that important natural features will be protected and maintained. Factors to be addressed include: a. Compatibility of soil composition for proposed development(s)and potential erosion hazard; b. Geology,including areas of potential instability; c. Slope and general topography; d. Areas subject to flooding; e. Other hazards or development constraints; f. Vegetation; g. Water areas,including streams,lakes,ponds and wetlands; h. Important natural features; i. Landscape management corridors; j. Wildlife. 2. A traffic study which addresses(I) impacts on affected County,city and state road systems and(2) transportation improvements necessary to mitigate any such impacts. The study shall be submitted to the affected road authority (either the County Department of Public Works or the Oregon Department of Transportation,or both)at the same time as the conceptual master plan and shall be prepared by a licensed traffic engineer to the minimum standards of the road authorities. 3. A description of how the proposed destination resort will satisfy the standards and criteria of DCC 18.113.060 and 18.113.070; 4. Design guidelines and development standards defining visual and aesthetic parameters for: a. Building character; b. Landscape character; c. Preservation of existing topography and vegetation; d. Siting of buildings;and e. Proposed standards for minimum lot area, width, frontage, lot coverage, setbacks and building heights. 5. An open space management plan which includes: a. An explanation of how the open space management plan meets the minimum standards of DCC 18.113 for each phase of the development; b. An inventory of the important natural features identified in the open space areas and any other open space and natural values present in the open space; Chapter 18.I 13 (07/2013) c. A set of management prescriptions that will operate to maintain and conserve in perpetuity any identified important natural features and other natural or open space values present in the open space; d. Deed restrictions that will assure that the open space areas are maintained as open space in perpetuity. 6. An explanation of public use of facilities and amenities on the site. 7. A description of the proposed method of providing all utility systems, including the location and sizing of the utility systems; 8. A description of the proposed order and schedule for phasing, if any, of all development including an explanation of when facilities will be provided and how they will be secured if not completed prior to closure of sale of individual lots or units; 9. An explanation of how the destination resort has been sited or designed to avoid or minimize adverse effects or conflicts on adjacent lands. The application shall identify the surrounding uses and potential conflicts between the destination resort and adjacent uses within 660 feet of the boundaries of the parcel or parcels upon which the resort is to be developed. The application shall explain how any proposed buffer area will avoid or minimize adverse effects or conflicts; 10. A description of the proposed method for providing emergency medical facilities and services and public safety facilities and services including fire and police protection; 11. A study prepared by a hydrologist, engineering geologist or similar professional certified in the State of Oregon describing: a. An estimate of water demands for the destination resort at maximum buildout, including a breakdown of estimated demand by category of consumption, including but not limited to residential,commercial,golf courses and irrigated common areas; b. Availability of water for estimated demands at the destination resort, including (1) identification of the proposed source; (2) identification of all available information on ground and surface waters relevant to the determination of adequacy of water supply for the destination resort; (3) identification of the area that may be measurably impacted by the water used by the destination resort (water impact area) and an analysis supporting the delineation of the impact area;and(4)a statistically valid sampling of domestic and other wells within the impact area; c. A water conservation plan including an analysis of available measures which are commonly used to reduce water consumption. This shall include a justification of the chosen water conservation plan. The water conservation plan shall include a wastewater disposal plan utilizing beneficial use of reclaimed water to the maximum extent practicable. For the purposes of DCC 18.1 13.050,beneficial uses shall include,but are not limited to: i. Irrigation of golf courses and greenways; ii. Establishment of artificial wetlands for wildlife habitation. 12. An erosion control plan for all disturbed land, as required by ORS 468. This plan shall include storm and melt water erosion control to be implemented during all phases of construction and permanent facilities or practices for the continuing treatment of these waters. This plan shall also explain how the water shall be used for beneficial use or why it cannot be used as such; 13. A description of proposed sewage disposal methods; 14. Wildfire prevention,control and evacuation plans; 15. A description of interim development including temporary structures related to sales and development; 16. Plans for owners'associations and related transition of responsibilities and transfer of property; 17. A description of the methods of ensuring that all facilities and common areas within each phase will be established and will be maintained in perpetuity; 18. A survey of housing availability for employees based upon income level and commuting distance; 19. An economic impact and feasibility analysis of the proposed development prepared by a qualified professional economist(s)or financial analyst(s)shall be provided which includes: a. An analysis which addresses the economic viability of the proposed development; Chapter I8.113 (07/2013) b. Fiscal impacts of the project including changes in employment, increased tax revenue,demands for new or increased levels of public services, housing for employees and the effects of loss of resource lands during the life of the project. 20. A solid waste management plan; 21. A description of the mechanism to be used to ensure that the destination resort provides an adequate supply of overnight lodging units to maintain compliance with the 150-unit minimum and 2 and one-half to 1 ratio set forth in DCC 18.113.060(D)(2). The mechanism shall meet the requirements of DCC 18.113.060(L); 22. If the proposed destination resort is in a SMIA combining zone,DCC 18.56 shall be addressed; 23. If the proposed destination resort is in an LM combining zone,DCC 18.84 shall be addressed; 24. A survey of historic and cultural resources inventoried on an acknowledged Goal 5 inventory; 25. Other information as may reasonably be required by the Planning Director to address the effect of the proposed development as related to the requirements of DCC Title 18. (Ord.2013-008 §2,Ord.2007-005 §2,2007;Ord. 92-004§13, 1992) 18.113.060. Standards for Destination Resorts. The following standards shall govern consideration of destination resorts: A. The destination resort shall, in the first phase,provide for and include as part of the CMI'the following minimum requirements: I. At least 150 separate rentable units for visitor-oriented overnight lodging as follows: a. The first 50 overnight lodging units must be constructed prior to the closure of sales, rental or lease of any residential dwellings or lots. b. The resort may elect to phase in the remaining 100 overnight lodging units as follows: i. At least 50 of the remaining 100 required overnight lodging units shall be constructed or guaranteed through surety bonding or equivalent financial assurance within 5 years of the closure of sale of individual lots or units,and; ii. The remaining 50 required overnight lodging units shall be constructed or guaranteed through surety bonding or equivalent financial assurance within 10 years of the closure of sale of individual lots or units. iii. If the developer of a resort guarantees a portion of the overnight lodging units required under subsection 18.113.060(A)(1)(b)through surety bonding or other equivalent financial assurance, the overnight lodging units must be constructed within 4 years of the date of execution of the surety bond or other equivalent financial assurance. iv. The 2:1 accommodation ratio required by DCC 18.113.060(D)(2) must be maintained at all times. c. If a resort does not chose to phase the overnight lodging units as described in 18.113.060(A)(1)(b),then the required 150 units of overnight lodging must be constructed prior to the closure of sales,rental or lease of any residential dwellings or lots. 2. Visitor-oriented eating establishments for at least 100 persons and meeting rooms which provide seating for at least 100 persons. 3. The aggregate cost of developing the overnight lodging facilities, developed recreational facilities, and the eating establishments and meeting rooms shall be at least$7,000,000(in 1993 dollars). 4. At least $ 2,333,333 of the $7,000,000 (in 1993 dollars) total minimum investment required by DCC 18.113.060(A)(3)shall be spent on developed recreational facilities. 5. The facilities and accommodations required by DCC 18.113.060(A)(2) through (4) must be constructed or financially assured pursuant to DCC 18.1 13.1 10 prior to closure of sales, rental or lease of any residential dwellings or lots or as allowed by DCC 18.113.060(A)(1). B. All destination resorts shall have a minimum of 160 contiguous acres of land. Acreage split by public roads or rivers or streams shall count toward the acreage limit,provided that the CMP demonstrates that Chapter 18.113 (07/2013) the isolated acreage will be operated or managed in a manner that will be integral to the remainder of the resort. C. All destination resorts shall have direct access onto a state or County arterial or collector roadway, as designated by the Comprehensive Plan. D. A destination resort shall,cumulatively and for each phase,meet the following minimum requirements: I. The resort shall have a minimum of 50 percent of the total acreage of the development dedicated to permanent open space,excluding yards,streets and parking areas. Portions of individual residential lots and landscape area requirements for developed recreational facilities, visitor-oriented accommodations or multi-family or commercial uses established by DCC 18.124.070 shall not be considered open space; 2. Individually-owned residential units that do not meet the definition of overnight lodging in DCC 18.04.030 shall not exceed two and one-half such units for each unit of visitor-oriented overnight lodging. Individually-owned units shall be considered visitor-oriented lodging if they are available for overnight rental use by the general public for at least 38 weeks per calendar year through one or more central reservation and check-in service(s)operated by the destination resort or by a real estate property manager,as defined in ORS 696.010. a. The ratio applies to destination resorts which were previously approved under a different standard. E. Phasing. A destination resort authorized pursuant to DCC 18.113.060 may be developed in phases. If a proposed resort is to be developed in phases, each phase shall be as described in the CMP. Each individual phase shall meet the following requirements: I. Each phase, together with previously completed phases, if any, shall be capable of operating in a manner consistent with the intent and purpose of DCC 18.113 and Goal 8. 2. The first phase and each subsequent phase of the destination resort shall cumulatively meet the minimum requirements of DCC 18.1 13.060 and DCC 18.113.070. 3. Each phase may include two or more distinct noncontiguous areas within the destination resort. F. Destination resorts shall not exceed a density of one and one-half dwelling units per acre including residential dwelling units and excluding visitor-oriented overnight lodging. G. Dimensional Standards: I. The minimum lot area, width, lot coverage, frontage and yard requirements and building heights otherwise applying to structures in underlying zones and the provisions of DCC 18.116 relating to solar access shall not apply within a destination resort. These standards shall be determined by the Planning Director or Hearings Body at the time of the CMP. In determining these standards, the Planning Director or Hearings Body shall find that the minimum specified in the CMP are adequate to satisfy the intent of the comprehensive plan relating to solar access, fire protection, vehicle access, visual management within landscape management corridors and to protect resources identified by LCDC Goal 5 which are identified in the Comprehensive Plan. At a minimum,a 100- foot setback shall be maintained from all streams and rivers. Rimrock setbacks shall be as provided in DCC Title 18. No lot for a single-family residence shall exceed an overall roject average of p g 22,000 square feet in size. 2. Exterior setbacks. a. Except as otherwise specified herein, all development (including structures, site-obscuring fences of over three feet in height and changes to the natural topography of the land) shall be setback from exterior property lines as follows: i. Three hundred fifty feet for commercial development including all associated parking areas; ii. Two hundred fifty feet for multi-family development and visitor-oriented accommodations (except for single-family residences)including all associated parking areas; iii. One hundred fifty feet for above-grade development other than that listed in DCC 18.113.060(G)(2)(a)(i)and(ii); iv. One hundred feet for roads; Chapter 18.113 (07/2013) v. Fifty feet for golf courses;and vi. Fifty feet for jogging trails and bike paths where they abut private developed lots and no setback for where they abut public roads and public lands. b. Notwithstanding DCC 18.113.060(G)(2)(a)(iii),above-grade development other than that listed in DCC 18.113.060(G)(2)(a)(i)and(ii) shall be set back 250 feet in circumstances where state highways coincide with exterior property lines. c. The setbacks of DCC 18.1.13.060 shall not apply to entry roadways and signs. H. Floodplain requirements. The floodplain zone (FP) requirements of DCC 18.96 shall apply to all developed portions of a destination resort in an FP Zone in addition to any applicable criteria of DCC 18.113. Except for floodplain areas which have been granted an exception to LCDC goals 3 and 4, floodplain zones shall not be considered part of a destination resort when determining compliance with the following standards; 1. One hundred sixty acre minimum site; 2. Density of development; 3. Open space requirements. A conservation easement as described in DCC Title 18 shall be conveyed to the County for all areas within a floodplain which are part of a destination resort. I. The Landscape Management Combining Zone (LM) requirements of DCC 18.84 shall apply to destination resorts where applicable. J. Excavation, grading and fill and removal within the bed and banks of a stream or river or in a wetland shall be a separate conditional use subject to all pertinent requirements of DCC,Title 18. K. Time-share units not included in the overnight lodging calculations shall be subject to approval under the conditional use criteria set forth in DCC 18.128. Time-share units identified as part of the destination resort's overnight lodging units shall not be subject to the time-share conditional use criteria of DCC 18.128. L. The overnight lodging criteria shall be met, including the 150-unit minimum and the 2-1/2 to 1 ratio set forth in DCC 18.113.060(D)(2). 1. Failure of the approved destination resort to comply with the requirements in DCC 18.113.060(L)(2) through (6) will result in the County declining to accept or process any further land use actions associated with any part of the resort and the County shall not issue any permits associated with any lots or site plans on any part of the resort until proof is provided to the County of compliance with those conditions. 2. Each resort shall compile,and maintain,in perpetuity,a registry of all overnight lodging units. a. The list shall identify each individually-owned unit that is counted as overnight lodging. b. At all times, at least one entity shall be responsible for maintaining the registry and fulfilling the reporting requirements of DCC 18.113.060(L)(2)through(6). c. Initially,the resort management shall be responsible for compiling and maintaining the registry. d. As a resort develops, the developer shall transfer responsibility for maintaining the registry to the homeowner association(s). The terms and timing of this transfer shall be specified in the Conditions,Covenants&Restrictions(CC&Rs). e. Resort management shall notify the County prior to assigning the registry to a homeowner association. f. Each resort shall maintain records documenting its rental program related to overnight lodging units at a convenient location in Deschutes County,with those records accessible to the County upon 72 hour notice from the County. g. As used in this section, "resort management" includes, but is not limited to, the applicant and the applicant's heirs,successors in interest,assignees other than a home owners association. 3. An annual report shall be submitted to the Planning Division by the resort management or home owners association(s) each February 1, documenting all of the following as of December 31 of the previous year: Chapter 18.113 (07/2013) a. The minimum of 150 permanent units of overnight lodging have been constructed or that the resort is not yet required to have constructed the 150 units; b. The number of individually-owned residential platted lots and the number of overnight-lodging units; c. The ratio between the individually-owned residential platted lots and the overnight lodging units; d. The following information on each individually-owned residential unit counted as overnight lodging. i. Who the owner or owners have been over the last year; ii. How many nights out of the year the unit was available for rent; iii. How many nights out of the year the unit was rented out as an overnight lodging facility under DCC 18.113; iv. Documentation showing that these units were available for rental as required. e. This information shall be public record subject to ORS 192.502(17). 4. To facilitate rental to the general public of the overnight lodging units, each resort shall set up and maintain in perpetuity a telephone reservation system.. 5. Any outside property managers renting required overnight lodging units shall be required to cooperate with the provisions of this code and to annually provide rental information on any required overnight lodging units they represent to the central office as described in DCC 18.113.060(L)(2)and(3). 6. Before approval of each final plat,all the following shall be provided: a- Documentation demonstrating compliance with the 2-1/2 to I ratio as defined in DCC 18.113.060(D)(2); b. Documentation on all individually-owned residential units counted as overnight lodging, including all of the following: i. Designation on the plat of any individually-owned units that are going to be counted as overnight lodging; ii. Deed restrictions requiring the individually-owned residential units designated as overnight lodging units to be available for rental at least 38 weeks each year through a central reservation and check-in service operated by the resort or by a real estate property manager, as defined in ORS 696.010; iii. An irrevocable provision in the resort Conditions, Covenants and Restrictions ("CC&RS) requiring the individually-owned residential units designated as overnight lodging units to be available for rental at least 38 weeks each year through a central reservation and check- in service operated by the resort or by a real estate property manager, as defined in ORS 696.0 10; iv. A provision in the resort CC&R's that all property owners within the resort recognize that failure to meet the conditions in DCC 18.113.060(L)(6)(b)(iii) is a violation of Deschutes County Code and subject to code enforcement proceedings by the County; v. Inclusion of language in any rental contract between the owner of an individually-owned residential unit designated as an overnight lodging unit and any central reservation and check-in service or real estate property manager requiring that such unit be available for rental at least 38 weeks each year through a central reservation and check-in service operated by the resort or by a real estate property manager,as defined in ORS 696.010,and that failure to meet the conditions in DCC 18.113.060(L)(6)(b)(v) is a violation of Deschutes County Code and subject to code enforcement proceedings by the County. (Ord.2013-008§2,2013;Ord.2007-05 §2,2007;Ord.92-004§13, 1992) Chapter 18.113 (07/2013) 18.113.070. Approval Criteria. In order to approve a destination resort, the Planning Director or Hearings Body shall find from substantial evidence in the record that: A. The subject proposal is a destination resort as defined in DCC 18.040.030. B. All standards established by DCC 18.113.060 are or will be met. C. The economic analysis demonstrates that: 1. The necessary financial resources are available for the applicant to undertake the development consistent with the minimum investment requirements established by DCC 18.113. 2. Appropriate assurance has been submitted by lending institutions or other financial entities that the developer has or can reasonably obtain adequate financial support for the proposal once approved. 3. The destination resort will provide a substantial financial contribution which positively benefits the local economy throughout the life of the entire project, considering changes in employment, demands for new or increased levels of public service,housing for employees and the effects of loss of resource land. 4. The natural amenities of the site considered together with the identified developed recreation facilities to be provided with the resort, will constitute a primary attraction to visitors, based on the economic feasibility analysis. D. Any negative impact on fish and wildlife resources will be completely mitigated so that there is no net loss or net degradation of the resource. E. Important natural features, including but not limited to significant wetlands, riparian habitat, and landscape management corridors will be maintained_ Riparian vegetation within 100 feet of streams, rivers and significant wetlands will be maintained. Alterations to important natural features, including placement of structures,is allowed so long as the overall values of the feature are maintained. F. The development will not force a significant change in accepted farm or forest practices or significantly increase the cost of accepted farm or forest practices on surrounding lands devoted to farm or forest use. G. Destination resort developments that significantly affect a transportation facility shall assure that the development is consistent with the identified function,capacity and level of service of the facility. This shall be accomplished by either: 1. Limiting the development to be consistent with the planned function, capacity and level of service of the transportation facility; 2. Providing transportation facilities adequate to support the proposed development consistent with Oregon Administrative Rules chapter 660,Division 12;or 3. Altering land use densities, design requirements or using other methods to reduce demand for automobile travel and to meet travel needs through other modes. A destination resort significantly affects a transportation facility if it would result in levels of travel or access that are inconsistent with the functional classification of a facility or would reduce the level of service of the facility below the minimum acceptable level identified in the relevant transportation system plan. a. Where the option of providing transportation facilities is chosen, the applicant shall be required to improve impacted roads to the full standards of the affected authority as a condition of approval. Timing of such improvements shall be based upon the timing of the impacts created by the development as determined by the traffic study or the recommendations of the affected road authority. b. Access within the project shall be adequate to serve the project in a safe and efficient manner for each phase of the project. FL The development will not create the potential for natural hazards identified in the County Comprehensive Plan. No structure will be located on slopes exceeding 25 percent. A wildfire management plan will be implemented to ensure that wildfire hazards are minimized to the greatest extent practical and allow for safe evacuation. With the exception of the slope restriction of DCC 18.113.070,which shall apply to destination resorts in forest zones,wildfire management of destination Chapter 18.113 (07/2013) resorts in forest zones shall be subject to the requirements of DCC 18.40.070, where applicable, as to each individual structure and dwelling. L Adequate public safety protection will be available through existing fire districts or will be provided onsite according to the specification of the state fire marshal. If the resort is located outside of an existing fire district the developer will provide for staffed structural fire protection services. Adequate public facilities to provide for necessary safety services such as police and tire will be provided on the site to serve the proposed development. J. Streams and drainage. Unless otherwise agreed to in writing by the adjoining property owner(s), existing natural drainages on the site will not be changed in any manner which interferes with drainage patterns on adjoining property. All surface water drainage changes created by the development will be contained on site in a manner which meets all standards of the Oregon State Department of Environmental Quality (DEQ). The erosion control plan for the subject development will meet all standards of ORS 468. K. Adequate water will be available for all proposed uses at the destination resort, based upon the water study and a proposed water conservation plan. Water use will not reduce the availability of water in the water impact areas identified in the water study considering existing uses and potential development previously approved in the affected area. Water sources shall not include any perched water table. Water shall only be taken from the regional aquifer. Where a perched water table is pierced to access the regional aquifer,the well must be sealed off from the perched water table. L. The wastewater disposal plan includes beneficial use to the maximum extent practicable. Approval of the CMP shall be conditioned on applicant's making application to DEQ for a Water Pollution Control Facility (WPCF) permit consistent with such an approved wastewater disposal plan. Approval shall also be conditioned upon applicant's compliance with applicable Oregon Administrative Rules regarding beneficial use of waste water, as determined by DEQ. Applicant shall receive approval of a WPCF permit consistent with this provision prior to applying for approval for its Final Master Plan under DCC 18.113. M. The resort will mitigate any demands it creates on publicly-owned recreational facilities on public lands in the surrounding area. N. Site improvements will be located and designed to avoid or minimize adverse effects of the resort on the surrounding land uses. Measures to accomplish this may include establishment and maintenance of buffers between the resort and adjacent land uses, including natural vegetation and appropriate fences, beims, landscaped areas and similar types of buffers;and setback of structures and other developments from adjacent land uses. O. The resort will be served by an on-site sewage system approved by DEQ and a water system approved by the Oregon State Health Division except where connection to an existing public sewer or water system is allowed by the County Comprehensive Plan,such service will be provided to the resort. P. The destination resort will not alter the character of the surrounding area in a manner that substantially limits,impairs or prevents permitted or conditional uses of surrounding properties. Q. Commercial,cultural, entertainment or accessory uses provided as part of the destination resort will be contained within the development and will not be oriented to public highways adjacent to the property. Commercial, cultural and entertainment uses allowed within the destination resort will be incidental to the resort itself. As such,these ancillary uses will be permitted only at a scale suited to serve visitors to the resort. The commercial uses permitted in the destination resort will be limited in type, location, number, dimensions and scale(both individually and cumulatively) to that necessary to serve the needs of resort visitors.A commercial use is necessary to serve the needs of visitors if: 1. Its primary purpose is to provide goods or services that are typically provided to overnight or other short-term visitors to the resort,or the use is necessary for operation,maintenance or promotion of the destination resort;and 2. The use is oriented to the resort and is located away from or screened from highways or other major through roadways. Chapter 18.113 (07/2013) R. A plan exists to ensure a transfer of common areas, facilities such as sewer, water, streets and responsibility for police and fire protection to owners'associations or similar groups if contemplated. If such transfer is not contemplated, the owner or responsible party shall be clearly designated. Adequate open space, facility maintenance and police and fire protection shall be ensured in perpetuity in a manner acceptable to the County. S. Temporary structures will not be allowed unless approved as part of the CMP. Temporary structures will not be allowed for more than 18 months and will be subject to all use and site plan standards of DCC Title 18. T. The open space management plan is sufficient to protect in perpetuity identified open space values. (Ord.2007-5 §2,2007; Ord.92-032 §1, 1992;Ord.92-004§13, 1992) 18.113.075. Imposition of Conditions. The standards made applicable by DCC 18.113 may be met by the imposition of conditions calculated to insure that the standard will be met. (Ord.92-004 §13, 1992) 18.113.080. Procedure for Modification of a Conceptual Master Plan. Any substantial change, as determined by the Planning Director, proposed to an approved CMP shall be reviewed in the same manner as the original CMP. An insubstantial change may be approved by the Planning Director. Substantial change to an approved CMP, as used in DCC 18.113.080, means an alteration in the type, scale, location, phasing or other characteristic of the proposed development such that findings of fact on which the original approval was based would be materially affected. (Ord.92-004§13, 1992) 18.113.090. Requirements for Final Master Plan. It shall be the responsibility of the applicant to provide a Final Master Plan(FMP) which includes text and graphics explaining and illustrating: A. The use, location, size and design of all important natural features, open space, buffer areas and common areas; B. The use and general location of all buildings, other than residential dwellings and the proposed density of residential development by location; C. Preliminary location of all sewer, water, storm drainage and other utility facilities and materials, and specifications and installation methods for water and waste water systems; D. Location and widths of all roads,streets,parking,pedestrian ways,equestrian trails and bike paths; E. Methods to be employed to buffer and mitigate potential adverse impacts on adjacent resource uses and property; F. Building elevations of visitor-oriented accommodations, recreational facilities and commercial services sufficient to demonstrate the architectural character of the proposed development; G. A description of all commercial uses including approximate size and floor area; H. The location of or distance to any emergency medical facilities and public safety facilities; I. When a phase includes a residential subdivision, a general layout of the subdivision shall include the number of lots, minimum and maximum lot sizes, and approximate location of roadways shall be included: J. A description of measures taken, with copies of deed restrictions, CC&R's and rental contracts, to implement the requirements of DCC 18.113.060(L). K. A description of measures taken, with copies of deed restrictions and a final management plan, to implement the open space management plan required by DCC 18.113. L. The status of all required ofd site roadway improvements. M. Methods to be employed for managing automobile traffic demand. Chapter 18.113 (07/2013) N. A copy of a WPCF permit issued by DEQ consistent with the requirements of DCC 18.113.070(L). (Ord.2007-005 §2,2007;Ord.92-004§13, 1992) 18.113.100. Procedure for Approval of Final Master Plan. A. The FMP shall be submitted in a form approved by the County Planning Director consistent with DCC Title 22 for a development permit. The Planning Director shall review the FMP and if the Planning Director finds that all standards of the CMP have been met, the FMP shall be approved in writing without notice. If approval the FMP involves the exercise of discretion, the FMP shall be treated as a land use action and notice shall be provided in accordance with DCC Title 22; B. If the Planning Director finds evidence in the FMP of a substantial change from the CMP,the Planning Director shall advise the applicant to submit an application for modification or amendment of the CMP. (Ord.92-004§13, 1992) 18.113.110. Provision of Streets,Utilities,Developed Recreational Facilities and Visitor-Oriented Accommodations. A. The Planning Director or Hearings Body shall find that all streets, utilities, developed recreational facilities and visitor-oriented accommodations required by the FMP are physically provided or are guaranteed through surety bonding or substantial financial assurances approved by the County prior to closure of sale of individual lots or units. B. Financial assurance or bonding to assure completion of streets and utilities, developed recreational facilities and visitor-oriented accommodations in the FMP shall be required pursuant to the security requirements for site plan review and subdivision review established by the Deschutes County Code. (Ord.92-004§13, 1992;Ord.92-003 §1, 1992) 18.113.120. Conservation Easement to Protect Resource Site. A. If a tract to be used as a destination resort contains a resource site designated for protection in an acknowledged comprehensive plan pursuant to open spaces, scenic and historic areas and natural resource goals, that tract of land shall preserve the resource site by conservation easement sufficient to protect the resource values of the resource site in accordance with ORS 271.715 to 271.795. B. A conservation easement under DCC 18.1 13.120 shall be recorded with the properly records of the tract on which the destination resort is sited. (Ord.2007-005 §2,2007) Chapter 18.113 (07/2013) `,