HomeMy WebLinkAbout6-4-14 Opponent Submittals,1
I
j
Paul D. Dewey Attorney at Law
1539 NW Vicksburg
1
1 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-1l-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 ofDCC 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), affd, 256 Or App 520
(2013). LUBA, as affirmed by the Court of Appeals, made several significant determinations:
"[B]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
22.36.01O(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
officer will encounter difficulty in making those findings, but that is the only
potential route to a decision under DCC 22.36.020(A)(3) that the use approved by
the CMP approval -the Thornburgh Destination Resort -was initiated within the
two-year period required by DCC 22.36.01O(B)(l) 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
whole, have not been substantially exercised and that the Applicant is at fault for the failures to
fully exercise the individual conditions.
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 22.36.01O(B)(l) 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. 19) 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 Thornburgh'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 ofCMP 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 folly complied-with conditions ofapproval 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. I 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 ofthe 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.) (HO 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 CMP 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 ofORS 215.435(2) and DCC 18.113.030 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
has not been pursued for over four years. Approval of the FMP is crucial since 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 22.36.01 O(C)( 1) and two additional one-year
extensions under DCC 22.36.01 0(C)(2). A further two-year extension for a land use approval is
allowed under DCC 22.36.01O(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-l2-55, 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-l2-55). 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 18, 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.
I 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
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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 responsihle 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
ofthe 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 approval
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 L UBA'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 fmal 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 back, 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:
"[B]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
22.36.01O(B)(l) 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:
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June 4,2014
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"[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 FMP 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 of2006, was remanded by LUBA in May of2007
and then remanded on even further issues by the Oregon Court of Appeals in November of
2007? 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. 111) 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 NEP A 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 ("NEP A"). If Thornburgh had wanted to avoid NEP A
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 NEP A, 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 had 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 ....1 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." (HO 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 (,PGr), agreed to take the lead in financing the entire project. On June 6,
2007, Debtor executed the 'Investment Agreement' with Parker, Wilt and PGL
***
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.
I
Deschutes County Board of Commissioners
June 4,2014
Page 17
The Board should affirm the Hearings Officer's decision.
Very truly yours,
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 I
~Resort Company LLC). 1
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 1 7 compliance in a destination resort as long as it meets the
intent of the comprehensive plan. This infonnation 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 102006
Page 7 of 12 Pages l!1
E'lc I I
SCHWABE, WILLIAMSON & WYATT
ATTORNEYS AT LAW
PaC'o'/est Center 1211 SW 5th Ave., Suire 1900, Portland, OR 97204 [ Phone 503-222-9981 !Fax 503-796-2900 [ www.schwabe.com
PETER LNINGSTON
Admitted in Oregon and Washington
Direct Line: (503) 796-2892
E-Mail: plivingston@schwabe.com
May 2,2006
VIA E-MAIL LAURIE_CRAGHEAD@CO.DESCHUTES.OR.US
Laurie E. Craghead, Esq,
Assistant Legal Counsel
Deschutes County Legal Counsel
1130 NW Harriman Avenue
Bend, OR 97701
Re: Thornburgh Resort Company
Responses to Draft Findings
Our File No.: 112188/138798
Dear Laurie:
Thank you for forwarding the changes, including some additional conditions, suggested
by County counsel and staff to the draft findings submitted by Thornburgh in the last week of
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
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
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 the state water right
permit and an accounting of the full amount of mitigation, as
required under the water right, for that individual phase."
I
i
Comment: The proposed changes to this condition are intended to clarify the
requirement and employ wording more typically associated with water rights. The suggested
1 Portland, OR 503-222-9981 [ Salem, OR 503-399-7712 [ Bend, OR 541-749-4044
Seattle. WA 206-622-1711 I Vancouver, WA 360-894-7551 I Washington, DC 202-488-4302 1 133l PDX,'112188/:JIr'98/PLV1420255.:l
)
!
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,
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.
D\l Condition 12. Delete this condition.
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
manner"?) and could provide an opening for future land use challenges.
This issue is addressed in the last paragraph ofthe 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."
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.
PDXlI12188/lJ87981PLVI420255.l £'" \ 1 '34 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 DeC
18.113.050 A.14.
OiL 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 DCe standard.
Dl 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
ubstitute the following language, and delete Condition 28: "Lot size,Condition 27.
dth (front verage, off-street parking and setbacks, including solar setbacks, areIJ~LJ
pernn e as described in Applicant's Exhibit 8, B-24a in the Burden of Proof document, subject FI('J,~~ 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 strucnrres,
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
community." 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
PDXi112 i 88/: J8798ip:...rt: 4,20255.:
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 of20 foot frontage for a zero lot-line
subdivision.
''The Board concludes the Hearm s Officer erred in speaking of
road widths, which are not addressed by the County s su vision
ordinarlce, and in rejecting the frontage71ot width stmdards
suggested by Applicmt in Applicant's Exhibit 8, B-24a. In the
context of a planned development, such as a destination resort,
these starldards 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
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 ofthe resort."
Comment: This is consistent with the related finding under DCC 18.113.070 D.
{)l 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 lmd that is improved for recreational uses, such
as golf courses, hiking or nature trails or equestrim or bicycle
paths."
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.
Q\L Condition 38. Delete. This is now replaced by enlarged Condition 29.
PDx/llll iS8113&798IPLU1420255.1
Laurie E. Craghead, Esq.
May 2, 2006
Page 5
plUru
cc: Kameron DeLashmutt
R,c. l \~1
PDXlI1218S/138798fPLUI420255 I
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 ofhis
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. He 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 Clarno'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 1,2006
Page 4 of 7 Pages &.1
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 demonslrate 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 ofthe projecl (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
OR61 170) to include this southern access. According to thc MOD 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 granl 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 0 f lhe
record, and since the decision-making body for the NEP A 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 nolhing 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
provid i ng access to the northern (Pinnacle) portion of the property via a
connection to Eagl e Road and, ulti mately, Hwy 126. (See: serial number
ORG II 70). This right-of-way application also includes a road across federal lands
in sections 29 and 30 (T15S, RI2E) to provide 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
~., IS5
!i-i Exhibit ___~
Page ~_/_
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 NEP A 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
ab Ie to provide greater assurance of needed transportatiun access at the
Conceptual Master Plan stage 0 f a destination resort.
I fi nd that the applicant has not met their burden of proof on the secondary access road
for the Southem 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 ofthe resort. I also find that a
condition of approval that would allow the Applicant to prove up access at a laler 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 intu the
findmgs of the BLM or if an alternative route would better to protect the natural
resources ofthis 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.
2: 1 Ratio and Phasing
I find that the application is not consistent with OCC 18.113.060(0)(2) and (E)(2)
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-1.4J 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
designed with Ifor 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
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
Exhibit____~...~.~_
Page ::.. 0 -'-:2.___
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(0)(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 detennine 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 wifl be the basis for
future land use approvals.
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
,£)(.1 -. 1.,.. ,
Exhiblt~ ____.
Page ~)f~~~_
STATEMENT RE: THORNBURGH RESORT
February 1,2006
Bev Clarno
Under the issue of water I find that the applicants have shown that they can meet these
criteria clue to evidence given by the applicants at the hearing and because ofthc
applicant's final argument that they have acquired sufficient water rights that can be
converled 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
shov;'ll 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 BLM that shows that the road is a
public right of way. I also find that it is feasible for them to comply with the roads
standards for emergency vehicles with the condition of approval as proposed by staff.
My finding on thc issue of the northern access is that the applicants have ShOV¥11 that it is
feasible for the applicants to get that access based on the BLM 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 BLM access
grants, including approval allowing the road construction to county standards, at the time
of Final Master Plan application.
I find that the applicants have met the requirement to keep open space requirements 111
perpetuity based on the applicant's submission of the CC&R's, a condition that the open
space must be designated on the plat and their arguments regarding the necessity for
county approval for any changes to the open space as submitted.
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
the development of the resort and are not changed as the applicant indicates indicatcs on
its phasing charL Although the phasing map and phasing chart submitted by the applicant
do not match, both show that phasing and the 2 to 1 ratio is possible. This is because a
condition of approval can be included that requires the chart be altered to match the map
and because the chart showed that at final build out the 2 to 1 ratio is met. Thus, it is
merely a matter ofmoving the overnight lodging numbers around in the phases. It is not
necessary to show what type of housing units will meet the overnight lodging
requirement as long as they are designated on the tentative and final plats for each phase
and designated in the land use approval at the time of tentative plan approval.
The approval of the 2: I 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.
Exhibit ~. , .~
Page ~.. ~of _ 0/
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 ORS 197.522 requires local governments to approve an applicalion
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 I will support approval oftrus application with these
conditions and conditions as imposed by staff.
~)C.( !60
Exhibit __ =-___
Pa{7e~-0 'x' _
b ___. -
/ ,.
Perkins ICoie
,12.0 'N.:N C')u:~ Str~et, ier,th Fe-or
P"ort:!anc OR gn:';9~41z8
Ste:v:::n Pfeiffer
;H-.CNE,50 3·7 27·2000
~.lX~ 503,727.2222,:;1,;3 i 346-22.') j
eM ~,j_ 3?fi!-iffer@perX'f!S;':(,le ~om
March 6, 2012
VIA EMAIL Oc'olL Y
Ms. Karen Green, Hearings Officer
<:/0 Nick Lelack
Planning Director
Deschutes Coun~y COI!lID'.lnity Development Department
1 17 ;;W Lafayette
Bend, OR 97701
Re: Loyal Land, LLC Application for Declaratory Ruling Request (County File c'oIo. DR·
ll-S): Applicant's Second Open Record Period Submittal
Dear Ms. Green:
As you are av,are, this office represents Loyal Land, LLC (,'Applicant"), the applicant requesting
approval of a declaratory ruling application (County File :'>lo. DR-li-8) (" Application") that the
use associated \"'ith the Thornburgh Destination Resort conceptual master plan approval
("CMP") has been initiated. At the public hearing on February 7, 2012. the Hearings Officer
elected to hold the record open to allow parties to submit rebuttal argument and evidence thrOllgh
\larch 6, 2012, at 5:00pm, This letter constitutes Applicant's submitt$1 for this purpose and
before this deadline. Please place a copy of this letter in the official record.
In the space below, Applicant responds to a selection of arguments presented by opponents
during the first open record period. For the reasons explained below, the Hearings Oftker
should find that the opponents' contentions are not persuasive and do not rebut substantial
evidence presented by Applicant that the Application satisfies appiicable approval criteria.
Applicant wiii respond to remaining arguments in its final wntten argument
LUBA No 21)12-042
Page OO~ 97
~.b Karen Green, Officer
!'v\arcn 6. 2f) 1:2
Page .3
Application, and the AppEcatlOn r::quests a determination as to the status of nghts under the
Application. Second, it is disingenuous for ~fr DeLashmutt to contend chat Ms. DeLashmutt has
:Jot appeared ·.vhen she previously authorized him to act on her behalf in land use proceedings
related to the resort, a.'1d Mr DeLashmutt ha~ so appeared in these proceedings, Third, whether
!vis DeLaslli:nutt 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. IfMs, DeLashmutt has waived her right to appear and potentially object, it is her
decision, and she must deal with the con.s:::quences.
SeCc)nd, !'vir, Petersen contends in response to the Hearings Of5cer's $64,000 question, that 'vIr.
DeLasr.mutt has appeared to oppose the ApplicatIOn because Applicant's requesl at this time has
allegedly increased the risk of an unfavorable declaratory ruling. This contention is totally
hypocritical when it is Mr DeLashmun's opposi:ion that is causing the threat of denial in this
case Fu.rt.her, the contention is unfoll.'1ded because Applicant has substantially exercised the
conditions of approval of the CMP and thLiS init:,~teJ the resort use
F·Jr these reasons, the Hearings Officer should deny these contentions
C. Response to Letter from Paul Dewey (for ~unzie Gould),
In h15 letter dated February 21, 2012, Pa<ll Dewey raised a number of contentions on behalf of
opponent Kunzie Gould Applicant responds to tv,o such contentions belovli The Hearings
Officer ghould deny these contentions.
First, Mr Dewey asserts a number of arguments under OAR Chapter 660-033-0 [40. However,
he wholly fails to respond to Applicant's contention, suppor:ed by LUBA's decision in Oregl)n
Natural De\'ert Association v Harney Councy. 42 Or LUBA 149 (2002), that acknowledged local
code provisions control over inconsistent proviSions of OAR 660 Division 033 For this reason
alone, the Hearings OfTicer should deny Mr. Dev,rey's contentions under this rule.
Second, .'vIr. Dewey contends that Applicant's pursuit of approval of the final master plan for the
resor': cannot establish a basis for determining that the use has been initiated. F'.lrther, Mr
Dev,;ey notes that LUBA remanded the County's approval of the final master plan. Mr. Dewey's
contention mIsses t!1e 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 t.~e conditions of the CMP have been satisfied and/or
substantially exercised, Althougl-: tUBA ha:.. remanded that decisivn, the remand is limited to
cwo minor issues that do not. substa..'1tiall), impact most of the Hearings Officer's findings a..'1d
conclusions
Fur these reasons, the Hearings Officer should deny these contentions.
LUBA No 2012-042
Page 00'99
Paul Dewey
From:
Sent:
To:
Cc:
Subject:
King, Seth J. (perkins Coie) <sking@perkinscoie.com>
Wednesday, July 03,20133:37 PM
Kevin Harrison (kevin.harrison@deschutes,org)
Laurie Craghead (Laurie.Craghead@deschutes,org); pdewey@bendcable,com;
kgreen@bendbroadband.com; Pfeiffer, Steven L. (Perkins Coie)
RE: A-12-3/E-11-56 (Loyal Land)
Kevin
As you are aware, this office represents Loyal Land LLC (Applicant'I the applicant before Deschutes County (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 'J (County File Nos E-11-56 and E-12-55), As a result of
the Withdrawal, effective immediately the proceedings for these rllllo applications should be ter:flInated 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 which has been remanded to the County by the
Land Use Board of Appeals.
Please confirm receipt of this message Finally fee! free to contact us With any questions Thank you for your
cooperation,
Seth J. King I Perkins Coie 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 [mailto:kgreen@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-1l-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 12th
, any hearing date after June 26 t would be consistent with the schedule we discussed at the February '1
Ilea ring. I think it is appropriate to send a new hearing notice.
We could set the continued hearing for July 30 th 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'l! 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 local appeal
Karen
1
From: Kevin Harrison [mailto:Kevin.Harrison@deschutes.org]
Sent: WednesdaYt June 26, 2013 9:40 AM
To: Karen Green (kgreen@bendbroadband.com)
cc: Paul Dewey (pdewey@bendcable.com); spfeiffer@perkinscoie.com
SUbject: A-12-3/E-ll-S6 (Loyal Land)
Karen: I am checking in to make sure that we are allan 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
BEFORE THE L:\:-;[) L'SE BO,ARD OF .-\PPEALS
UFr I IF STATE OF OREGO:-;
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Pr!!iliot?t'r
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Tf[\)R:-;BL'RGH RESORT CO\!PA~Y. LLC.
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18 "II i ICE Uf' .\PPELL\TE ]L'DG\rE~T
:::OIU, The' appdLl~e'jllJgme'n[ \\as filed on AprilS. :::010,
The appellale' ~l\U!l c!;,:cisior: in lhi:-i case' rquire's no c!1ange in our final opinion and
26
..,
\[ichael A. Holstun
Boad Chair
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Case 11-31897-tmb11 Doc 265
Gary Underwood Scharff, OSB No. 883031
(Lead Attorney)
Direct Dial: (503) 493-4353
Facsimile: (503) 512-8143
E-Mail: gs.@scharfflaw.com
Heather A. Brann, OSB No. 040495
Direct Dial:
Facsimile:
E-Mail: branns@earthlink.net
Law Office of Gary Underwood Scharff
1300 American Bank Building
621 S.W. Morrison Street
Portland, OR 97205
Attorneys for Debtor
UNITED STATES BANKRlJ'PTCY COURT
DISTRICT OF OREGON
In re Case No. 11-31897-trnbl1
Thornburgh Resort Company, LLC, ·DEBTOR~S·nlSCLOSURE STATE·MENt(.i£~.ARY 17, 2012)
Debtor
1. INTRODUCTION
On March 11,2011 ("Petition Date"), Thornburgh Resort Company, LLC ("TRC" or
"Debtorlf
) filed a voluntary petition forreliefunder Chapter II of Title 11 of the United
States Code (the "Bankruptcy Code"). On January 17,2012, Debtor filed its Chapter 11 Plan
(the "Plan") with the Bankruptcy Court. The Plan projects Debtor will pay all non-in..<;ider,
general unsecured creditors approximatelY33% of the allowed amounts of their respective
claims as compared to an estimated 10% under a Chapter 7 liquidation. A copy of the Plan is
attached hereto as Exhibit I.
Filed 01/17/12
Page 1 of19 -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 00314
~\(. ~
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additional financing. 4 In mid 2006 DeLashmutt and Chapman lent Debtor money pending
Chapman securing additional sources. Chapman insisted on taking control ofTRC to obtain
immediate funding. TRC's operating agreement was amended to give Chapman fmal control
over the project. Despite this change, Chapman produced no additional funding. Chapman
proposed selling his iuterest in Debtor to DeLashmutt.
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 Oroup Investments, LLC ("POI"), agreed to take
the lead role in financing the entire project. On June 6, 2007, Debtor executed the
"Investment Agreement" with Parker, Wilt and POI. On the same day Debtor also entered
into a redemption agreement (the "Redemption Agreement") with Chapman, Mattox and
Traditions. The agreements provided that some POI investment funds would be paid to
Traditions and Mattox, with substantial portions of the future profits due Traditions and
Mattox to be paid to POI. Further details of both sets of agreement follow.
Redemption Agreement with Chapman parties
Under the Redemption Agreement, Debtor redeemed the Traditions and Mattox
membership interests in exchange for a promissory note providing for four payments by TRC
of $2.5 million each, with additional payments to be made once additional conditions had
been met and development activities were underway. Debtor made the first two ofthe four
payments but defaulted on the next two. In 2009 Traditions and Mattox filed an arbitration
4 Fighting appeals, at times on different applications in separate courts, strained
TRC's resources. Chapman's sources of development funding were hesitant to commit
without final land use approvals. In early 2006 DeLashmutt received from the resort finance
division of a large Utah Bank preliminary approval, and an indication of imminent funding,
ofa $46 million loan to TRC. Before receipt affinal approval, Kevin Warner filed suit
against DeLashmutt, Chapman and Debtor claiming damages of$101.9 million. Although
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 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
Page 00321
Case 11-31897-tmb11 Doc 265 Filed 01/17/12
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claim against TRC seeking damages of$5 million. The arbitration took place in February,
2010. The arbitrator, Richard Spier, issued his award (the "Arbitration Award"). He held
that the promissory note was unenforceable; that collection of the unpaid $5 million was
barred; that the $5 million Debtor distributed in the first two payments were improper and
should be returned to Debtor; and that Debtor was entitled to its attorney fees. Debtor 110\V
holds a judgment against Traditions in respect ofthe arbitration award for $2.4 million plus
attorney fees and 9% interest, which remains unpaid to Debtor.5
Investment Agreement with Parker parties
Under the Investment Agreement PGI lent Debtor $ 10 million immediately, and
committed to arrange for an additional bridge loan (the "Bridge Loan") of approximately $20
million, but in no event less than $15 million, also to be funded in 2007. Wilt and Parker
also agreed to personally guarantee a development loan of approximately $60 million. PGI
agreed to subordinate its $10 million loan to that development loan. POI began negotiations
with Sterling Savings Bank ("Sterling") to fund the Bridge Loan.
In mid-2007 Sterling reduced the amount of the proposed Bridge Loan to $15 million
and issued a binding Letter of Commitment for $15 million. A month later it further reduced
the loan to $11 million, eliminating, among other things, all interest reserves. Debtor faced a
deadline to close the purchase ofthe Thornburghs' property in three weeks_ In reliance on
PGl's assurance to Debtor that it would raise or provide at least the additional $4 million
needed to meet the minimum $15 million of the Bridge Loan, Debtor agreed to the
transaction. PGI borrowed the $1 I million from Sterling (the "Loan") and delivered those
funds to Debtor under a pass-through arrangement. Debtor in turn provided Sterling a trust
deed on the Property as partial security for the Loan. As additional collateral Sterling took a
$7.2 million cash fund of an entity owned and controlled by Parker. Parker and POI failed to
5 Documents relating to the Traditions Judgment, including the Arbitration Award,
are attached hereto as Exhibit
Page 9 of19 -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 00322
Case 11-31897 -tmb 11 Doc 265 Filed 01 f1 7/12
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provide the promIsed minimum $4 million shortfall on the Bridge Loan, leaving Debtor with
inadequate cash and a sharply limited ability to proceed with the Resort development.
In or about February 2008, despite provisions in the Investment Agreement to the
contrary, Parker and Sterling arranged for Sterling to disburse to Parker without Debtor's
knowledge or permission the $7.2 million collateral fund held by Sterling. At the time of that
disbursement Parker failed to reduce the Loan balance by the amount of this disbursement,
and failed [Q provide replacement collateraL This left the Property exposed as the sole
security for the Loan. 6
By early 2008 POI bad 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. In August 2009 PGI declared TRC in default
and sent notice of intent to foreclose on the Debtor's property. Debtor denied it was in
default In December 2009 the PGr foreclosure was halted and the parties initiated an
arbitration proceeding to resolve differences under the Investment Agreement Parker
continued to try to raise money to fund a PGl acquisition of the Loan, including approaches
to Debtor's founder investors. Parker was unable to close funding transactions and purchase
the Loan. Sterling declared a default on the Loan and issued a notice of a 20 i 0 foreclosure
sale.
In early 20 I 0 Parker entered into an agreement with Sterling to purchase the Loan at
a steep discount. Because Sterling would not sell the Loan directly to PGI, the borrower,
Parker created Central Oregon Investment Holdings, LLC ("COIH") to serve as purchaser.
6 Debtor's lack of funds made servicmg the Loan increasingly difficult. Debtor
considered PGI to have breached the Investment Agreement in numerous respects from early
2008 onward. PGI has alleged in response thal Debtor breached the agreement in mid-200S
by failing to make an interest payment. Debtor contends its inability to make that payment
was the result ofPGI 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
(503) 493-4353
LUBA No. 2012·042
E)(. 5 Page 00323
Case 11-31897-tmb11 Doc 265 Filed 01/17/12
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in mid-20lO Parker's broker seeking investor(s) to fund the Loan acquisition, Guardian
Investment Real Estate, located an interested potential lender, Infinity CapitaL With
arbitration approaching, Parker and DeLashmutt agreed to resolve their disagreements under
the terms set forth in a Letter of Intent, followed by a definitive "'Buyout Agreement" signed
on December 15,2010.
In that agreement Parker aild DeLashmutt, and their respective partners and
development entities, including Debtor, agreed to terminate the Investment Agreement and
nullify all related documents. They also exchanged mutual and complete general releases of
all claims relating to the Investment Agreement and the Property, development of the Resort,
and other dealings among them relating to Debtor as of that date. The termination and
mutual release provisions became effective "upon the execution of this Agreement." A copy
of the fully-executed Buy Out Agreement is attached hereto as Exhibit _ and is incorporated
into this Disclosure Statement by this reference. 7 Infinity thereafter complained that Parker
failed to provide infomlation he bad promised, which Infinity needed to complete its due
diligence. Parker refused to provide further materials and withdrew from the transaction with
Infinity to pursue other investors.
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 COIH, the entity controlled
by ParkeL 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 in the value created by Larsen's disposition of
the Property after acquiring it at foreclosure. In a single transaction on or about March I,
2011, Larsen paid $4 million to Sterling and the Loan was transferred from Sterling to COlli,
1 Page 5 of the BuyoutAgreement contains both the mutual release (Section 4) and
the tennination of the Investment Agreement/nullification of related documents (Section 2).
Page 11 ofl9 -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
t:.1£ . 6 Page 00324
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then from COlli to Larsen, In Debtor's view, during that transaction the Loan was cancelled
when Parker in effect simullaneously held both the duty to pay the Loan (as PGn and the
right to receive repayment of the Loan (as CO ll-I), 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.
Shortly before the sale of the Property was to occur on March 1 1, 201 1, Debtor filed
its petition seeking Chapter II bankruptcy protection to preserve its opportunity to realize on
its Resort development efforts, and utilize that enhanced Property value to pay its creditors.
Both Loyal and Debtor regarded the value of the Property as dependent upon completion of
the Resort development effort. In filings with the Court, including a declaration of Parker
filed on behalf of Loyal, valued the Property without development at approximately $1.3
million, as high-desert scrubland, Debtor believes that with all development rights and assets
in piace, the Property could be worth much more, as much as $40-50 million, Debtor and
parties sympathetic to Debtor, including DeLashmutt, believe Debtor and other parties
sympathetic to Debtor own or control various items of real and personal property beyond the
reach of Loyal, that are vital to completing the development and realizing that larger value,
whether the owner is Loyal or some other party.
5. SIGNIFICANT POST-PETITION EVENTS
5.1 Retention of Chapter IJ Counsel. Debtor obtained authorization from the
court to employ the Law Office of Gary U. Scharff as Debtor's Chapter II counseL
5.2 The Loyal Motion For Relief From Stay. On March 22, 20 II, Loyal filed a
Motion for Relief from Stay ("MFR") asking the Bankruptcy Court to release the Property
from the supervision and control of the Court to allow Loyal to proceed with its foreclosure
sale. Loyal took the position for purposes of the MFR that the Buyout Agreement was not
effective, and Debtor, holding numerous claims against Parker, PGI and Loyal in the absence
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
6 . .5 Page 00325
2
.J.
4
5
6
7
8
9
10
II
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Case 11-31897-tmb11 Doc 265 Filed 01/17/12
interference in business relationships and other theories occurring during the period
following December 15,2010. Those claims are asserted in the Deschutes County Lawsuit.
..·17~¥....,"Qf,~~ru~¥~.~.fr.i& ~~!m~~&~~..De.bJ:~'¥si.g.QiAcan.t..lo..,,,~s.
relating to the Property being stripped from Debtor based upon Larsen, in wTongful collusion
with Parker Group entitics, acquiring the Loan from Sterling and purporting to have rights to
foreclose.
6.1.1.4. 1arsen and Loyal Land Legal Claims. Larsen and Loyal are not parties
to the Buyout Agreement and participated in the wrongful conduct against Debtor described
in paragraph 6.1.1.3, above. Certain of those claims, of undetermined value at this time, are
asserted in the Deschutes County Lawsuit. Additional claims against these defendants will
be brought in that case.
6.1.1.5. Stcrling Legal claims. Sterling is not a party to the Buyout Agreement
and participated in wrongful conduct against Debtor in late 2007, early 2008 and afterwards,
as well as the more recent conduct described in paragraph 6.1. 1.3, above, preceding the filing
of Debtor's bankruptcy petition. Debtor anticipates amending its complaint in the Deschutes
County lawsuit to assert these claims in that case. These claims are of undetermined value at
this time.
6.1.1.6 Central Electric Cooperative (CEC) Suit. Prior to Debtor acquiring the
Thomburghs' property, title to that property was held by Trail Crossing Trust, the
Thomburghs' trust ("'Trust"). Central Electric Cooperative ("CEC") rebuilt high-voltage
electric transmission towers on the property without County pennission, pursuant to alleged
rights under Measures 37 and 49. Debtor believes CEC had no such right to rebuild those
structures, which potentially limited the use of the property and reduced its development
value. As Debtor was under contract to acquire the property and needed to rectify the CEC
misconduct to preserve value in the development, it covered the costs of the Trust litigation
challenging the CEe conduct. Those attorney fees and costs are estimated at approximately
Page 18 of19 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
E'k:.5 Page 00331
B 6F'(Official Form 6F) (12/07) 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
State the name, mailing address, including zip code, and last four digits ofany account number, ofall 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. Ifa 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." Do not disclose the child's name. See, II U.S.c. § 112 and Fed.
R. Bankr. P. lOO7(m). Do not include claims listed in Schedules D and E. 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 ofcreditors, and complete Schedule H -Codebtors. Ifa joint petition is filed, state whether the husband, wife, both ofthem, 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." Ifthe claim is unliquidated, place an "X" in the column labeled "Unliquidated."
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 ..
o Check this box if debtor has no creditors holding unsecured claims to report on this Schedule F
CREDITOR'S NAME,
MAILING ADDRESS
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.)
DATE CLAIM WAS
INCURRED AND
CONSIDERATION FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
E
Z
UJ o z
E= z
8
AMOUNT OF
CLAIM
ACCOUNT NO. none Buyout contract
12/15/2010 x x x 3,000,000.00Parker Group Investments
15250 Blankenship Rd, #200
West Linn OR 97068
ACCOlill.'T NO. none Professional services
2008-2010
1,366,324.00Schwabe Williamson & Wyatt
i 1211 SW 5th Ave #1900
Portland OR 97204
ACCOUNT NO. none
Kameron Delashmutt
244 7 NW Canyon
Redmond OR 97756
Guaranteed payments
2008-2011
506,584.34
ACCOUNT NO. none
David Chapman
78505 Old Avenue 52
la Quinta CA 92252
lease Contract:Subject to
Setoff from arbitration
recoupment 2007-2011 x x 375,000.00
~continuation sheets attached
Subtotal'"
Total,..
(lise 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.)
$ 5,247,908.34
$
L...-_____-'
r Case 11-31897 -tmb11 Doc 30 Filed 04/08/11B 6F (Official Fonn 6F) (12/07) • Cont.
I
!
~
I In re Thornburgh Resort Company, LLC Case No. 11-31897-tmb11
Debtor (if known)
SCHEDULE F -CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
(Continuation Sheet)
I
I
!
I
I
!
!
I
!
I
~
!
!
I
;.
CREDITOR'S NAME, DATE CLAIM WAS E-o AMOUNT OF
MAILING ADDRESS INCURRED AND ~ UJ
Eo
UJ CLAIM
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.1
CONSIDERAnON FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
o z
~ z
8
« o
:3
CI
::i z
::J
E
::J
0..
r/J a
ACCOCNT NO. none Lease Contract Subject to
Setoff from arbitration Gary Mattox recoupment 2007-2011 x x 375,000.00
5689 E. Quartz Mt Rd.
Paradise Valley AZ 85253
ACCOL'NT NO. none Trade account 2008-2009
Tetra Tech EC, Inc 145,430.58
Lynn Sharp
Dept 1644
ACCOu"NT NO. none Trade account 2007
Edgewood Log StructuresUd
PO Box 1030
Coure d'Alene 1083816
x 138,097.41
ACCOL"NT NO. none Unsecured loan, payment
made 2008-2011
Genesis Development x 180,456.18
Group, LLC
244 7 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~continuation sheets attached
to Schedule of Creditors Holding Unsecured
Nonpriority Claims
Subtotal"
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.)
$
931,892.94
$
'--_____....1
B 6F '(Official Form 6F) (12107) 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)
I
!
I
!
!
!,
I
I
I
i
f
I ~
!
~ ~
!,,,,,
CREDITOR'S NAME,
MAILING ADDRESS
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.)
DATE CLAIM WAS
INCURRED AND
CONSIDERATION FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
AMOUNT OF
CLAIM
ACCOUNT NO.
Moss-Adams LLP
805 SW Broadway Ste 1200
Portland OR 97205
Trade Account 2009-2011
91,445.11
ACCOUNT NO.
Hickman, Williams & Assocs,
1201 SWWall
Bend, OR 97702
Trade Account 2008-2009
x 90,693.31
ACCOUNT NO.
Newton Consultants, Inc.
521 SW 6th st. Ste 100
Redmond OR 97756
Trade Account 2008-2009
79,837.65
ACCOlJNT NO.
Tom Watson Design Ltd.
1901 West 47th Place, #200
Westwood KS 66205
2007-2008
75,000.00
ACCOIJl'.l NO.
Bussard Williams
1201 SW Wall St. Ste. 100
Bend OR 97702
Trade Account 2008-2009
X 47,587.48
Sheet no._2 _ of~continuation sheets attached
to Schedule ofCreditors Holding Unsecured
Nonpriority Claims
Subtotal"
Total"
(Use only on last page ofthe completed Schedule F.)
$
384,563.55
S
(Report also on Summary of Schedules and, if applicable on the Statistical
Summary of Certain Liabilities and Related Data.) '--____--1
Case 11-31897 -tmb11 Doc 30 Filed 04/08/11B 6F'(Official Fonn 6F) (12107) -Cont.
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,
MAILING ADDRESS
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.)
ACCOl..rNT />iO.
Golf Course PLanning LLC
20027 N 97th Place
Scottsdale AZ 85255
ACCOlJNT NO.
Packowsi Heinritz Assoc
1801 I Street Ste 100
Sacramento, CA 95814
ACCOUNT NO.
Black Helterline LLP 805 SW
Broadway ste 1900 Portland
OR 97205
ACCOUNT/>iO.
Rick Nordin
24055 Dodds Rd.
Bend OR 97701
ACCOL'NT />iO.
Karnopp Peterson et al
1201 SW Wall St. Ste. 300
Bend OR 97702
c:.::: o
E
CIl
[JJ o o
'-'
Sheet no._3_ of~continuation sheets attached
to Schedule of Creditors Holding Unsecured
Nonpriority Claims
DATE CLAIM WAS
INCURRED AND
CONSIDERATION FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
Trade Account 2008-2009
Trade Account 2008
Trade Account 2007
Contract Labor Services
2008-2009
Trade Account 2007
E
~ o z
1= z o
C,)
Subtotal'"
Total'"
(Use only on last page of the completed Schedule F.)
(Report also on Summary of Schedules and, ifapplicable on the Statistical
Summary of Certain Liabilities and Related Data.)
S
S
AMOUNT OF
CLAIM
41,562.00
22,631.25
21,332.96
20,000.00
18,483.24
124,009.45
L..-____-l
Case 11-31897-tmb11 Doc 30 Filed 04/08/11B 6F'(Official Form 6F) (12/07) Cont.
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,
MAILING ADDRESS
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.)
ACCOUNT NO.
Peterkin and Assodates
222 NW Irving Ave
Bend OR 97701
ACCOUNT NO.
WRG Design Inc.
5415 SW Westgate Dr.
Portland OR 97221
ACCOu'NT NO.
Central Oregon Irrigation
1055 SW lake Rd.
Redmond OR 97756
ACCOlJNT NO.
Sidley Austin llP
PO Box 0642
Chicago III 60690
ACCOIJllH NO.
Interface Engineering
708 SW 3rd St.
Portland OR 97204
Sheet no._4 _ of~continuation sheets attached
to Schedule of Creditors Holding Unsecured
Nonpriority Claims
DATE CLAIM WAS
INCURRED AND
CONSIDERATION FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
Trade Account 2010
Trade Account 2009
Trade Account 2008-2010
Trade Account 2009
Trade Account 2008
f
~ o z
E= z o u
o
IJ.l
f
c3
5 o::s z::;
Subtotal"
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.)
$
AMOUNT OF
CLAIM
17,500.00
16,307.47
11,436.17
10,345.08
10,133.02
65,721.74
$
'---____.....1
Case 11-31897-tmb11 Doc 30 Filed 04/08/11B 6f' (Official fOl1D 6f) (12/07) -Cont.
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, DATE CLAIM WAS Ea AMOUNT OF
MAILING ADDRESS INCURRED AND Z
~
~
Ea
~ CLAIM
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
CONSIDERATION FOR
CLAIM.
o z
1=
-<a
:3
E
::J
Q...
fI'}
(See instructions above. I IF CLAIM IS SUBJECT TO
SETOFF, SO STATE. 8 v
CY
:J
5
i5
ACCOL~TNO. Trade Account 2008
Elcon Associates, Inc. 9,621.13
12670 SW Barnes Rd.
Portland OR 97229
ACCOu~Tr.;O. Trade Account 2008
Group Mackenzie, Inc. 8,501.20
PO Box 14310
Portland OR 97293
ACC01J~T NO. Trade Account 2008
7,750.00Paladino & Company
110 Union St. Ste 400
Seattle WA 98101-2028
ACCOlJ~T NO. Trade Account 2009-2010
x 6,654.00Eisenhower and Carlson
1201 Pacific Ave Ste 1200
Tacoma WA 98402
ACCOUNT NO. Trade Account 2008
6,100.00MAl Denver
383 Inverness Parkway, Ste
Englewood CO 80112
Sheet no._5_ of~continuation sheets attached
to Schedule of Creditors Holding Unsecured
Nonpriority Claims
Subtotal~
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.)
$
38,626.33
$
L...-_____....I
· Case 11-31897 -tmb11 Doc 30 Filed 04/08/11B 6F (Official Form 6F) (12/07) • ConI.
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,
MAILING ADDRESS
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.)
ACCOlTNT NO.
Linda L. Swearingen
4022 SW Wickiup
Redmond OR 97756
ACCOUNT NO.
Guidon, Inc.
1220 SW Morrison St. Ste
425 Portland OR 97205
ACCOUNT NO. 0101
US Bank Visa
PO Box 79048
S1. loius MO 63179-0408
ACCOIJNT NO.
GMA, Inc.
2700 Newport Blvd Ste 1
Newport Beach CA 92663
ACCOUNT NO.
Apropos Confidential
2701 NW 13th S1.
Redmond OR 97756
0::: o
5
"'I
Cl o u
Sheet no._6_ of~continuation sheets attached
to Schedule ofCteditors Holding Unsecured
Nonpriority Claims
DATE CLAIM WAS
INCURRED AND
CONSIDERAnON FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
Trade Account 2008
Trade Account 2007
Trade Account 2008
Trade Account 2008
Trade Account 2009-2010
E
Z
"'I o z
1= z o
C)
Subtotal"
Total"
(lise only on last page of the com pIe red Schedule F.)
(Report also on Summary ofSchedules and, ifapplicable on the Statistical
Summary of Certain Liabilities and Related Data.)
$
AMOUNT OF
CLAIM
5,570.00
5,425.00
5,395.46
3,750.00
2,936.00
23,076.46
$
~-------I
B 6F · (Official Form 6F) (12/07) -Con!. Case 11-31897 -trnb11 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,
MAILING ADDRESS
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.J
ACCOUNT NO.
Roemer, Hamik &Nethery
45-025 Manitou Dr.
Indian Wells CA 92210
ACCOUNT NO.
Brown and Caldwell, Inc.
PO Box 45208
San Francisco CA 94145-020
ACCOlJNT NO.
Motschenbacher & Blattner
117 SW Taylor Ste 200
Portland OR 97204
ACCOUNT NO.
Oregon DEQ
811 SW 6th Avenue
Portland OR 97204
ACCOl:"NT NO.
Air Systems Inc.
675 SE 9th
Bend OR 97702
Sheet no._7 _ of~continuation sheets attached
to Schedule of Creditors Holding Unsecured
Nonpriority Claims
DATE CLAIM WAS
INCURRED AND
CONSIDERAnON FOR
CLAIM.
IF CLAIM IS SUBJECT TO
SETOFF, SO STATE.
Professional Services
2006
Trade Account 2007
Trade Account 2010
Governmental 2009-2010
Trade Account 2006
E
Z
Ul v z
1= z o v
x
Subtotal»$
AMOUNT OF
CLAIM
2,726.00
2,129.38
2,113.00
1,885.00
1,800.00
10,653.38
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 • Case 11-31897-tmb11 Doc 30 Filed 04/08/11 B 6F ,Official Form 6F)( 12107) -Cont.
In re Thornburgh Resort Company LLC Case No. 11-31897-trnb11
Debtor (if known)
SCHEDULE F -CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
(Continuation Sheet)
CREDITOR'S NAME,
MAILING ADDRESS
INCLCDING ZIP CODE,
AND ACCOUNT NUMBER
(See instructions above.)
0:: o
~
UJ o o
C,.i
DATE CLAIM WAS
INCURRED AND
CONSIDERATION FOR
CLAIM.
IF CLAIM IS SCBJECT TO
SETOFF, SO STATE.
f
Z
UJ o z
E=
6
C,.i
AMOUNT OF
CLAIM
ACCOL"NTNO. 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, CA91110-0850
ACCOtJNT 1'<0. Trade Account 2006
Bend Fire Protection, Inc. 1,600.00
PO Box 8567
Bend OR 97708
ACCOUNT NO.
Smart Solutions, LLC
2525 NE Twin Knolls Dr. # A
Bend OR 97701
Trade Account 2009-2010
1,585.17
ACCOUNT NO. Utility
TMobile 890.94
PO Box 790047
St. Louism MO 63179
Sheet no._8 _ of~~ continuation sheets attached
to Schedule of Creditors Holding Unsecured
Nonpriority Claims
Subtotal'"
Total'"
(Use only on last page ofthe completed Schedule F.)
(Report also on Summary of Schedules and, if applicable on the Statistical
Summary of Certain Liabilities and Related Data.)
$
$
7,439.03
'---____.....1
2005
THORNBURGH DESTINATION RESORT eMP AND FMP TIMELINES
1119
CMP
HO
Denial
2006
5110
CMP
Approval
by Board
2007
5114
CMP
LUBA
Remand
2008
4115
CMP
Board
Approval
2009
9/9
LUBA
Remand
ofFMP
2010
4/8
Court
Remand
ofFMP
2011
2/23
BLM
Wildlife
Notice
2012
11118
1-yr
possible
extension
ofCMP
2013
11118
1-yr
possible
extension
ofCMP
2014
11118
1-yr
possible
extension
ofCMP
2015 2016
11118
2-yr
possible
extension
period for
CMP
8111
Filing
forFMP
4/21
Amended
FMP
12/9
CMP
becomes
final
11118
End of
2-yr
CMP
Permit
Period
1117
Court
CMP
Remand
10/8
HOFMP
Approval
Paul Dewey
From: King, Seth J. (Perkins Coie) <sking@perkinscoie .com>
Sent: Wednesday, July 03,2013337 PM
To: Kevin Harrison (kevin harrison@deschutesorg)
Cc: Laurie Craghead (Laurie.Craghead@deschutes .org); pdewey@bendcablecom;
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 LLC (' Applican t") the applicant before Deschutes County ("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 1 (County Fil e Nos E-11-56 and E-12 -55 l As a result of
the withdrawal effectIVe Immediately , the proceedings for these two appliea ons sho Id be terminated , and no further
action should be required by the County or the Applicant
This request does not pertain to or affect tne status of the Applicant s request for a declaratory ruling that the use
associated with the CMP has been initiated (County File No DR-11-8 1 which has been remanded to the County by the
Land Use Board of Appeals. .
Please confirm receipt of thiS message Finally fee l free to contact us with any questions Thank you for your
cooperation ,
Seth J . King I Perkins Coie LLP
PHON E 503 .72 7 .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-1l-56 (Loyal Land)
From: Karen Green [mailto:kgreen@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-1l-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 i n 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 n th, any hearing date after June 26 th would be consIstent w i th 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 l h if that is acceptable for everyone . That date works for me (I'll be away
from July 4-13) and apparent ly 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 loca l appeal.
Karen
E. Uses pennitted 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 for development of golf course fairways and greens, hiling 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 pennitted 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 ofDCC 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 pennit for a destination resort shall consist of three steps.
A Conceptual Master Plan and Conditional Use Pennit 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 pennit under DCC Title 22, shall be subject
to DCC 18 .128.0lO, 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 fma1 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
pennit. 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 ofDCC 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 conunercial
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 conunon area. Areas
designated as "open space," "buffer area," or "conunon area" should be clearly illustrated and
labeled as such;
II. 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 ;
J. Landscape management corridors;
J. Wildlife.
2. A traffic study which addresses (1) 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;
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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;
II . 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, conunercial, golf courses and irrigated conunon areas;
b . Availability of water for estimated demands at the destination resort, including (1)
identification of the proposed source; (2) identification of all available infonnation 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 conunonly
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 ofDCC 18 .113.050, 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 46S. This plan shall include
stonn and melt water erosion control to be implemented during all phases of construction and
pennanent 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 conunon areas within each phase will
be established and will be maintained in perpetuity;
IS. A survey of housing availability for employees based upon income level and conunuting 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;
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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 ISO-unit minimum and 2 and
one-half to I ratio set forth in Dee J S.113 .060(D)(2). The mechanism shall meet the requirements
of Dee IS.I13.060(L);
22. If the proposed destination resort is in a SMIA combining zone, Dee IS.56 shall be addressed;
23. If the proposed destination resort is in an LM combining zone, Dee IS .S4 shall be addressed;
24. A survey of historic and cultural resources inventoried on an acknowledged GoalS 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 Dee Title IS .
(Ord . 2013-00S §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 eMP the following
minimum requirements:
I. At least ISO 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 :
1. 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;
11. 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 IS .I13.060(A)(l)(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 : I accommodation ratio required by Dee IS.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
IS.113.060(A)( I)(b), then the required ISO 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
Dee IS.I13.060(A)(3) shall be spent on developed recreational facilities.
5. The facilities and accommodations required by Dee IS.113.060(A)(2) through (4) must be
constructed or financially assured pursuant to Dee IS.113 .11 0 prior to closure of sales, rental or
lease of any residential dwellings or lots or as allowed by Dee IS .113.060(A)(l).
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 eMP demonstrates that
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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 ofDCC 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 .113.060 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:
1. 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 project average of
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:
1. 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;
111. One hundred fifty feet for above-grade development other than that listed m 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 18.113 .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;
I . 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 ofDCC 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
ofDCC 18.128 .
L. The overnight lodging criteria shall be met, including the ISO-unit minimum and the 2-1 /2 to I ratio set
forth in DCC 18.113.060(D)(2).
I . Failure of the approved destination resort to comply with the requirements in DCC
l8.113 .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 ofDCC 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 docwnenting 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 I, docwnenting all of the following as of December 31 of the
previous year :
Chapter 18.113 (07 /2013)
a. The minimwn of 150 pennanent units of overnight lodging have been constructed or that the
resort is not yet required to have constructed the 150 units;
b. The nwnber of individually-owned residential platted lots and the nwnber of overnight-lodging
units ;
c. The ratio between the individually-owned residential platted lots and the overnight lodging
units ;
d. The following infonnation on each individually-owned residential unit counted as overnight
lodging.
I. Who the owner or owners have been over the last year;
11. How many nights out of the year the unit was available for rent;
111. 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 infonnation 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 infonnation on any
required overn ight 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. Des ignation on the plat of any individually-owned units that are going to be counted as
overnight lodging;
11. 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 696.0 I 0;
111. 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
696.010 ;
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 .0 I 0, 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.
e. The economic analysis demonstrates that:
I. 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. Tills
shall be accomplished by either :
I . 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 recorrunendations 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 proj ect.
H. 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.
I. 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 fire will be provided on the
site to serve the proposed development.
1. 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 ofORS 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,
berms, 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:
I . 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 IS months and will be subject to all use and site plan standards of
DCC Title IS.
T. The open space management plan is sufficient to protect in perpetuity identified open space values.
(Ord . 2007-5 §2, 2007; Ord. 92-032 §I, 1992; Ord . 92-004 §13 , 1992)
18.113.075. Imposition of Conditions.
The standards made applicable by DCC IS .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 detennined 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 IS.I13.0S0, 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, stonn 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 :
1. A description of measures taken , with copies of deed restrictions, CC&R's and rental contracts, to
implement the requirements ofDCC IS .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 IS .113.
L. The status of all required off-site roadway improvements.
M . Methods to be employed for managing automobile traffic demand .
Chapter IS .113 (07/2013)
N . A copy of a WPCF pennit issued by DEQ consistent with the requirements ofDCC 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 pennit. 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 18.113 .120 shall be recorded with the property records of the tract
on which the destination resort is sited .
(Ord . 2007-005 §2, 2007)
Chapter 18 .113 (07/2013)