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HomeMy WebLinkAboutA138 Applicant written submittalsTONKONTORPLLP ATTORNEYS David J. Petersen Admitted to practice in Oregon and California February 11, 2014 VIA E-MAIL (kevinh(a co.deschutes.or.us) Mr. Kevin Harrison Deschutes County Community Development Department 117 NW Lafayette Avenue Bend, OR 97701 Re: Loyal Land, LLC Declaratory Ruling Request County File No. DR -11-8 Remand from Land Use Board of Appeals Dear Mr. Harrison: 1600 Pioneer Tower 888 SW Fifth Avenue Portland, Oregon 97204 503.221.1440 503.802.2054 Fax: 503.972.3754 david.petersen@tonkon.com This letter provides supplemental analysis of the pending remand of the Thornburgh Resort Conceptual Master Plan on behalf of the applicant Loyal Land, LLC, and responds to the letter submitted at the hearing on February 4, 2014 by Mr. Paul Dewey on behalf of Ms. Nunzie Gould. 1. The CMP Has Been Initiated Under DCC 22.36.020.A.3. A. Substantial Exercise Ms. Gould argues that the "substantial exercise" component of DCC 22.36.020.A.3 requires findings that each and every condition of the CMP was substantially exercised before expiration of the CMP. While LUBA recognized this interpretation as a theoretical possibility, it also said that "[w]e do not agree with petitioner that DCC 22.36.020.A.3 requires that each of the [37] conditions of approval must have been 'substantially exercised' within the two-year period." (LUBA Decision, 20:14-17.) LUBA's rejection of this interpretation is sound. Given the complicated three-step nature of the destination resort approval process under DCC 18.113.040, it would be unreasonable to expect the process to be completed in two years, even without appeals. The Thornburgh Resort is a seven -phase project with an approved phasing plan expressly anticipating construction over 10 to 12 years, and with flexibility to react to market conditions or other factors beyond the applicant's control (AR 371, 393). Before anything in any phase can be constructed, there must be FMP approval for the entire project and then approval of a tentative plat, construction drawings and a fmal plat for that specific phase. Even if we make the highly unrealistic Mr. Kevin Harrison February 11, 2014 Page 2 assumptions that: (i) every application is submitted to the County on the very first day possible; (ii) no approval is ever appealed; (iii) construction drawings can be reviewed and approved by the County in 30 days, and final plats in 60 days; and (iv) construction necessary for final plat can be completed in 30 days; there is simply no way to "substantially exercise" every condition within two years of CMP approval.' The timeline for the first two phases alone would look like this: Day 1: Day 2: Day 32: Day 182: Day 203: Day 204: Day 234: Day 384: Day 405: Day 406: Day 436: Day 437: Day 466: Day 467: Day 497: Day 617: Day 638: Day 639: Day 669: Day 670: Day 699: Day 730: CMP approved FMP application filed FMP application deemed complete County approves FMP (150 day limit under ORS 215.427(1)) 21 -day appeals period expires, FMP Tentative plat application filed, Phase 1 Phase 1 tentative plat application deemed complete County approves tentative plat, Phase 1 21 -day appeals period expires, Phase 1 tentative plat Construction drawings filed, Phase 1 Construction drawings approved Final plat application filed, Phase 12 and tentative plat application filed, Phase 2 Construction completed, Phase 1 Phase 2 tentative plat deemed complete County approves final plat, Phase 1 County approves tentative plat, Phase 2 21 -day appeals period expires, Phase 2 tentative plat Construction drawings filed, Phase 2 Construction drawings approved Final plat application filed, Phase 2 Construction completed, Phase 2 County approves final plat, Phase 2 Extending this calendar onward for five more phases shows the folly in interpreting the DCC to require that each and every condition be substantially exercised within two years. Once the possibility of appeals is considered, Ms. Gould's interpretation becomes even more outlandish. Even though a CMP appeal would toll the two-year period, appeals of 1 Other unrealistic assumptions in this hypothetical include the lack of any incompleteness determinations, a static or always -improving economy, an unlimited supply of capital and no expectations or need for sales, visits to the resort, or return on investment of any kind during the entire buildout. 2 This assumes a construction bond is posted. T u oNToRP►, Mr. Kevin Harrison February 11, 2014 Page 3 subsequent required approvals would not. For example, in this case the tolling of the CMP due to appeals ended on December 9, 2009. (LUBA Decision, 10:13-15.) The FMP was not remanded to the County until August 17, 2010. (AR 94.) But, the CMP was not further tolled between December 9, 2009 and August 17, 2010, even though the applicant was effectively prohibited from pursuing the FMP further during that time by the lack of a remand. And, there can be no doubt that Ms. Gould would appeal any and all further approvals. It is patently unreasonable to attribute to the County an intention to create an approval process for destination resorts that: (i) cannot possibly be met in any realistic scenario; (ii) gives any opponent effective veto power over the proposal merely by appealing the FMP or any other subsequent approval; and (iii) directly contradicts the 10 to 12 -year phasing plan expressly approved by the County in the CMP. The better interpretation of the "substantial exercise" component is the "viewed as a whole" approach recommended by LUBA and evaluated in my letter of January 2, 2014. Under that approach, a finding of substantial exercise can be made even though some conditions "have not been substantially or fully exercised, or perhaps have not been exercised at all." (LUBA Decision, 20:17-22 (internal quotations omitted).) Here, 100% of the conditions that could have been exercised, have been fully exercised, and findings to that effect were not challenged on appeal. The remaining conditions do not detract from a finding of substantial exercise because: (a) substantial exercise "as a whole" has been established from the unchallenged findings from the 2012 County Order that 14.4 conditions have been fully complied with; (b) the remaining conditions have been fully complied with (and therefore also substantially exercised), as explained in Appendix 1 to my January 2, 2014 letter; and/or (c) the remaining conditions have been substantially exercised and the applicant is not at fault for failure to fully comply, again for the reasons explained in Appendix 1 and below. Ms. Gould's remaining arguments against the "viewed as a whole" approach to substantial exercise are without merit. First, she suggests that the non -exercise of 60% of the conditions is, as a matter of law, less than "some" of the conditions. "Some" is not defined by LUBA, and it is certainly a reasonable interpretation of the word to equate "some" to 60% of the conditions, especially given that the 40% that have been fully exercised are 100% of those that could possibly have been exercised by this point in the destination resort approval process. Second, Ms. Gould argues that LUBA held that all remaining land use permits had to be obtained before expiration of the CMP. A sentence in the LUBA Decision, taken in isolation, implies this conclusion. (LUBA Decision, 20:5-9.) However, at the time of the LUBA Decision in 2013, the expiration date for the CMP had already passed, and it is not disputed that the remaining land use approvals for the destination resort have not yet been obtained. Accordingly, if this was truly LUBA's holding, it would have reversed the County's decision rather than remanding for further proceedings since there would be no possible way to establish on remand that the required permits were obtained before CMP expiration. Also, this interpretation is squarely at odds with the remainder of LUBA's analysis of this issue, which expressly provides that "substantial exercise" can occur even though some conditions "have not been substantially or fully exercised, or perhaps have not been exercised at all." TONKO EYSNTORPw ATTORN Mr. Kevin Harrison February 11, 2014 Page 4 Third, Ms. Gould argues for some sort of hierarchy of importance in the conditions, and that the conditions that have been substantially exercised are somehow less important that the others. There is no basis for superimposing this kind of hierarchy on the conditions, in either the DCC or the CMP. Next, Ms. Gould criticizes the use of similar language to evaluate the substantial exercise of each condition in Appendix 1. As explained in my January 2, 2014 letter, substantial exercise occurs when a condition of approval is carried out "to a significant degree but not completely" (although full performance would also constitute substantial exercise), and this must be evaluated based on the language of the condition — "what action was required to be done and by when." Almost every condition has either been substantially exercised or fully complied with based on application of this same test to similar facts, so it should not be surprising that similar language is used from condition to condition. Similar language does not make the analysis any less accurate. Next, she claims that "incurring expenditures" is not the same as "spending money." If she means to suggest that development debts have been incurred that have not been paid, this is meaningless semantics and the distinction is immaterial. Ms. Gould also blurs the line between "full compliance" and "full exercise" of the conditions. "Compliance" and "exercise" do not mean the same thing — a condition can be fully complied with even if it has not yet been fully exercised.3 Monetary expenditures are relied upon by the applicant not as proof of full exercise of the conditions, which is nowhere required by DCC 22.36.020, but as proof of substantial exercise; i.e., carrying out a condition "to a significant degree but not completely." Next, Ms. Gould attempts to attribute past statements of the applicant's legal counsel, made on behalf of a different client, to the applicant. With respect to the fault issue, she cites statements made by a partner of the applicant's legal counsel in a newspaper article commenting generally on bankruptcy issues. She also refers to a now -dismissed bar complaint against that partner brought by Mr. Jeff Parker, who is not affiliated with Loyal Land. No detailed response is necessary to these lines of argument except to say that they are both improper and irrelevant and should be disregarded. Also, the newspaper article is not in the record, and no explanation has been given for why this new evidence should be accepted, so the article is inadmissible. Finally, Ms. Gould attributes a sense of irony to the applicant for excusing nonperformance of certain conditions based on the absence of an approved FMP.. It is exponentially more ironic that Ms. Gould would make this argument, since she is almost single- handedly responsible for the slow pace of this project. It takes both chutzpah and an utter disconnect with economic reality to suggest that a developer should barge ahead full speed and brook no delays in pursuing all land use approvals, notwithstanding the virtual certainty of 3 For example, a condition that requires an intervening event to occur before action is allowed has been fully "complied with" if the intervening event has not yet occurred, but it is not fully "exercised" until the event occurs and the action is taken. To NTORPap Mr. Kevin Harrison February 11, 2014 Page 5 appeals at every stage, and that it should do this during its own bankruptcy and an economic recession and collapsing real estate market not seen since the 1930s. Even so, the applicant took significant risks to accelerate the time schedule — for example, it filed its FMP application on April 21, 2008, almost 19 months before all appeals of the CMP ended in December 2009. Also, as noted at the hearing, the applicant could not pursue the FMP between remand of the FMP on August 17, 2010 and mid-February 2011 because it needed BLM to approve the site for wildlife mitigation. Thus, even by Ms. Gould's logic, the window of opportunity to achieve all remaining land use approvals was, at best, nine months between February and November 2011, hardly enough time to achieve all of the remaining approvals necessary to complete the Thornburgh Resort, especially in light of the inevitable appeals. DCC 18.113.040. Accordingly, any delay in pursuing the remanded FMP is irrelevant, because the posture of this application would be no different than it is now even if the FMP remand had been initiated in February 20114 B. Failure to Fully Comply Is Not The Fault Of The Applicant Ms. Gould begins by characterizing LUBA as skeptical that the required findings about the fault of the applicant can be made on remand. Any skepticism on the part of LUBA is irrelevant -- if LUBA thought it impossible to make the required findings, it would have reversed rather than remanding. So the window is undeniably open to make the necessary findings to support the conclusion that any failure to fully comply with the conditions is not the fault of the applicant. Ms. Gould's remaining arguments regarding fault are unpersuasive. First, she overstates the time period during which the FMP remand could have been restarted. This was not one year and nine months. It was in fact only nine months at the most, as explained above — from BLM's approval of the wildlife mitigation site in February 2011 to expiration of the CMP in November 2011. Ms. Gould attributes all "fault" for the delay in pursuing the FMP remand to the applicant and none to herself or other factors. This is unreasonable. As noted above, restarting the FMP remand on the first day the applicant could, in February 2011, would have made no difference to the posture of this application — the holder of the CMP still would not have been able to obtain all the approvals needed to fully perform all 37 conditions before CMP expiration on November 18, 2011. In addition, many factors outside of the applicant's control excuse full compliance. These are discussed in detail in Appendix 1 to my January 2, 2014, but are summarized here: • Ms. Gould, by herself, caused over four years of delays between May 2006 and August 2010 with appeals of the CMP, the FMP, the BLM decision on the access road right -of - 4 At that time, the holder of the CMP was Thornburgh Resort Company, LLC ("TRC"). gm ToNKONTOPPup ATTORNEYS Mr. Kevin Harrison February 11, 2014 Page 6 way, the Department of Water Resources' approval of the project's water rights permit, and others. (See AR 320, fn 3.) But only her appeal of the CMP tolled expiration of the CMP. • BLM (a bureaucracy) took 28 months after FMP approval to approve the wildlife mitigation site, a necessary precursor to pursuing the FMP remand. • The 2008 collapses of Bear Stearns and Lehman Brothers and the related mortgage crisis caused an unprecedented economic calamity. This global crisis had severe negative impact on Central Oregon real estate, temporarily eliminating any market for the proposed resort as well as any potential capital sources needed to refinance existing debt, thus causing foreclosure and forcing TRC into bankruptcy. As to this last issue, Ms. Gould suggests that TRC's financial resources, established in 2006 when the CMP was first approved, should have been sufficient to weather the economic crisis. This argument reveals an astounding lack of understanding of the severity and reach of the economic collapse, suggesting somehow that assets and resources are static or that TRC's finances should somehow have been insulated from the effects of the crisis. Closely related to her misunderstanding of the economic crisis is her insistence that TRC should have proceeded full speed ahead, notwithstanding inevitable further appeals, an imminent foreclosure, its own bankruptcy, the temporary evaporation of a market for the resort and the complete disappearance of capital markets from which to obtain refinancing. These arguments are ludicrous and, frankly, detached from reality and should be dismissed. During the nine months from February to November 2011, when Ms. Gould believes TRC and Loyal Land could have obtained the FMP and all other necessary resort approvals, TRC was fighting for survival. (See generally TRC's January 17, 2012 bankruptcy disclosure statement, AR 314 et seq.) TRC's primary lender scheduled foreclosure on March 11, 2011, which was stayed by a bankruptcy petition that same day.5 (AR 325.) By the time the bankruptcy petition was filed, the value of TRC's land had been reduced from an appraised value sufficient to support a $46 million loan in early 2006 (AR 321) to $1.3 million as stated in TRC's bankruptcy schedules. (AR 325.) Loyal Land acquired the primary lender's note on about March 1, 2011. (AR 324.) Loyal Land filed a motion for relief from stay which was eventually granted and the foreclosure sale occurred on August 31, 2011. (AR 325-327.) It is entirely excusable that TRC did not also pursue the FMP remand during this time. Ms. Gould also suggests that Loyal's involvement in TRC's bankruptcy constitutes fault on the part of the applicant. However, the market collapse had already occurred and the foreclosure of TRC's interest in the project site was almost complete before Loyal Land acquired the bank's position a few days before the scheduled foreclosure sale in March 2011. (AR 324- 325.) Loyal Land did not contribute to TRC's financial troubles, it only reacted to them. All of the external factors justifying delay in restarting remand of the FMP had already occurred before 5 Notably, this. was only one month after an FMP remand even became possible when BLM finally approved the site for wildlife mitigation. TONKONTORPup ATCORNEYS Mr. Kevin Harrison February 11, 2014 Page 7 Loyal Land came on the scene. And, as discussed above, even if Loyal Land had restarted the remand as soon as it obtained title to the land on August 31, 2011, it could not possibly have obtained all the remaining approvals before the CMP expired in November 2011, so whether or not Loyal Land tried to do so is irrelevant. As it was, Loyal Land acted quickly upon obtaining title, filing the present application for initiation of the CMP only two months later on November 1, 2011. Lastly, Ms. Gould criticizes the argument that the applicant is justified in not fully complying with conditions that impose contingent obligations that do not yet exist 6 Stated another way, Ms. Gould believes the applicant should have violated the conditions and the DCC by performing actions required by the conditions before the necessary precursors allowing that performance had occurred. In many cases, the performance Ms. Gould thinks should have occurred is physical development of the subject property, which is expressly prohibited without the remaining destination resort approvals under DCC 18.113.040, condition #2 and the language of many of the individual conditions under consideration. It turns the DCC on its head to say that the applicant is at fault because it did not violate the conditions and the DCC. The better interpretation is that the applicant is justified in not performing conditions that could not yet legally be performed. There is substantial evidence in the record as to why the contingencies to performance were not yet met, and why that was not the applicant's fault, as explained above and in my January 2, 2014 letter. 2. The Hearings Officer May Consider Additional Bases For Approval Of The Application On Remand. The Hearings Officer should consider the entirety of DCC 22.36.020.A in deciding whether the CMP has been "initiated." DCC 22.36.020.A provides three possible bases to hold that the CMP has been initiated. In the original hearing, the applicant argued and the Hearings Officer agreed that the CMP was initiated under subpart (3). The parties did not address or consider at that time whether the CMP might also be initiated under subparts (1) or (2), as subpart (3) appeared the most on point. Upon review, however, LUBA interpreted subpart (3) differently than the parties or the Hearings Officer. LUBA also advised the parties and the County that, in its view, subpart (2) was really the more relevant. (LUBA Decision, pp. 13-14.) Ms. Gould now urges the Hearings Officer only to consider subpart (3), citing DCC 22.34.040. DCC 22.34.040 does not preclude consideration of subparts (1) and (2). DCC 22.34.040.A mandates that the Hearings Officer review any issues that LUBA or the Court of Appeals "required" be addressed on remand, but also allows broad discretion to consider other issues. Moreover, DCC 22.34.040.0 allows parties to raise new, unresolved issues relating to 6 She ignores the applicant's primary argument, which is that theseconditions have been fully complied with because the necessary precursors to any action have not yet occurred. The argument that full compliance is excused is only made in the alternative. ToNKoNTORPL, Mr. Kevin Harrison February 11, 2014 Page.8 new evidence directed to the "issue on remand," which in this case is whether the CMP has been "initiated." The ultimate issue is whether the CMP has been "initiated" and the answer to that question lies in the totality of DCC 22.36.020.A. LUBA has advised the County that subpart (2) is the most directly relevant and, in Ms. Gould's own words, "probably should have been applied here." It would be a strange result for LUBA to tell the parties and the County that subpart (2) should have been applied, then have the County decline to consider it on remand when it has the authority to do so, especially if it affects the ultimate result. As for Ms. Gould's suggestion that the applicant "waived" any arguments under subparts (1) and (2), based on DCC 22.34.040.C, that is not true. The application of subparts (1) and (2) was not an issue "resolved by the LUBA appeal," nor was it decided and "not appealed." DCC 22.34.040.C. This is because the parties never litigated subparts (1) or (2) in the original hearing due to the focus on subpart (3). As such, the Hearings Officer had no occasion to address them, and LUBA did not consider them let alone "resolve" them. Recently, the Hearings Officer brought to the parties' attention that it appears she did make a finding related to subpart (1)— specifically that "[nJo use approved through the Thornburgh CMP has occurred" (2012 County Decision, p. 18). Respectfully, the applicant can only conclude that such finding—which could not have been separately appealed even if the applicant had caught it—was made inadvertently because that issue was never raised or argued at the original hearing. In any event, the apparent finding on subpart (1) is not law of the case under the circumstances. See Poet v. Thompson, 208 Or App 442, 450 (2006) (explaining that "law of the case" doctrine is "somewhat amorphous" and its application "ultimately, prudential"; that it is meant to apply to legal conclusions rather than factual findings; and that it is intended to avoid "relitigation" of legal issues previously litigated). Regardless, the hearings officer clearly did not make any fmdings regarding subpart (2). (see 2012 County Decision, p. 18), so, at a minimum, the applicant is not precluded from arguing subpart (2). Finally, it must be remembered that the County has implicit authority to consider alternative grounds on remand, and it should do so in this case. As the Court of Appeals explained in Schatz v. City of Jacksonville, 113 Or App 675, 680-81 (1992): [P]etitioners' view that a remand by LUBA necessarily defines and limits the scope of a local government's inquiry in its subsequent proceedings misapprehends the relationship of the bodies and their functions. LUBA may require local governments to resolve certain questions before making a new decision; generally speaking, however, it cannot prevent them from considering other questions. The relationship is not like that of appellate and trial courts, where decisions are made within a single system that has defined and comparatively rigid preservation and procedural constraints. Conversely, LUBA's remand of a decision simply tells the locality that the basis for the decision is not affirmable; it does not TONKONTORPu.p Mr. Kevin Harrison February 11, 2014 Page 9 necessarily connote that alternative bases cannot exist and cannot be considered. See also Martin v. City of Dunes City, 45 Or LUBA 458, 479 (2003) (stating that city was not bound on remand to only consider the criteria that had been the basis of city's original decision on application but could also consider on remand criteria that it had not addressed in first decision because it had reached decision based on other criteria). For each of these reasons, the Hearings Officer should reopen the record and consider all three subparts of DCC 22.36.020.A. 3. The CMP Has Been Initiated Under DCC 22.36.020.A.2. Ms. Gould's arguments against initiation under DCC 22.36.020.A.2 contradict the language of DCC 22.36.020 and prior application of that code section to a destination resort. The language of DCC 22.36.020.B defining "substantial construction" contains no requirement that the construction have occurred on the land subject to the land use approval alleged to have been initiated. Indeed, such a distinction would not make sense. At its essence, the "substantial construction" definition in DCC 22.36.020.B seeks to identify whether the permit holder has done enough to show a commitment to the project and a good faith effort to complete the project. Whether that effort occurs on or off the land subject to the CMP has no bearing on nether or not the effort is sufficient, sincere or in good faith — funds spent on substantial construction are a commitment to the project just the same, whether spent on- or off-site. If anything, the permit holder's willingness to spend almost $7 million on offsite "substantial construction" while critical land use approvals are under appeal should increase the hearings officer's confidence in the applicant's commitment and good faith effort. Additionally, a significant percentage of the substantial construction effort was for uses on the land subject to the CMP. According to the Lindley affidavit of January 2, 2014, $72,000 was spent physically converting an on-site home to an office (an action that required no land use permits), and $1.45 million was spent on physical construction of a lodge intended for placement on-site. Mr. Lindley also testified that $788,000 was spent on the golf course. Of this sum, $58,116 was for demolition, clearing, grubbing and staking, which constitutes physical alteration of the subject site, and an additional $422,436 was spent on onsite professional activities in furtherance of the golf courses. (See February 10, 2014 Affidavit of Bere Lindley, enclosed.) Thus, even applying Ms. Gould's unjustified limitation to onsite activities, substantial construction has occurred. Other arguments by Ms. Gould directly contradict the precedent set in the VRE Decision and have no basis in the DCC. She argues that "[e]vidence of the cost of developing a 7 Like the first Lindley affidavit, the enclosed affidavit is admissible as "additional testimony ... required to comply with the remand" under DCC 22.34.040.C. TO KONTORPU.P Mr. Kevin Harrison February 11, 2014 Page 10 destination resort would be necessary to justify that any relevant expenditures should be considered sufficient." Ms. Gould implies that there was such a comparison in the VRE .Decision, but in fact no such comparison was made in that case, and none is required here. Similarly, she argues against inclusion of planning, design, permitting and similar "soft" costs in the evaluation of"substantial construction," but the VRE Decision expressly included such costs. Ms. Gould tries to distinguish the VRE Decision on the basis that the developer had a tentative plat and therefore construction was authorized, whereas no construction was yet authorized for this project. But the definition of "substantial construction" in DCC 22.36.020.B does not limit itself to "authorized construction." And, to the extent this distinction is material at all, it works in the applicant's favor because it shows increased tenacity, good faith and commitment to the project by finding ways to legally complete some construction and thereby advance the project along that much faster. Ms. Gould also argues that expenditures prior to approval of the CMP on April 15, 2008 do not count towards substantial construction. She raised this same timing issue in the prior proceedings and on appeal to LUBA with respect to evidence of satisfaction of the conditions of approval, and lost. (LUBA Decision, 23:13 — 24:6.) She may not relitigate this issue now. Lastly, Ms. Gould makes the same distinction discussed above regarding "expenditures incurred" vs. "money spent." For the same reasons as set forth above, this is unpersuasive. There is no justification for distinguishing between on- and off-site costs in evaluating substantial construction. There is no justification for excluding "soft" costs like planning, permitting, engineering and design. There is no obligation to compare the costs incurred with some estimation of overall project costs. In the VRE Decision, the applicant was not restricted in the construction it could accomplish, and still substantial construction was found to have occurred with expenditures 38 times less than the amount spent in this case. Accordingly, the definition of substantial construction is met and the CMP has been initiated under DCC 22.36.020.A.2. 4. The CMP Has Been Initiated Under DCC 22.36.020.A.1. The Hearings Officer is not prohibited from considering on remand whether or not the CMP has been initiated under DCC 22.36.020.A.1 because the use has lawfully occurred. An affirmative finding of initiation under A.1 should be made for the reasons explained in my January 2, 2014 letter. Ms. Gould argues that the use approved in the CMP is the completed destination resort. This interpretation impermissibly rewrites DCC 18.113.040 to elevate the importance of the CMP and diminish the other components of a destination resort permit, and turns what is clearly three parts of a single permit into three separate permits. It also would rewrite the CMP, which expressly approved a 10 to 12 -year phasing plan and adopted an express condition (#1) obligating the project to be developed in accordance with the approved plan. TcaspNTORPu.p Mr. Kevin Harrison February 11, 2014 Page 11 As shown above, for Ms. Gould's interpretation to be correct the Hearings Officer must conclude that the Board of County Commissioners intentionally created a regulatory system requiring destination resorts to be fully built in two years, meaning that no destination resort could ever successfully be completed in Deschutes County, even if it attracts no opposition and benefits from other highly unrealistic assumptions. This conclusion is ridiculous on its face. The only interpretation of DCC 22.36.020.A.1 that makes any logical sense in the context of the three-step destination resort approval process is that the CMP has been initiated upon filing of the application for the FMP. Thank you for your consideration of the issues discussed in this letter. Please contact me if you have any questions or concerns. Sincerely, David J. Petersen DJP/djp Enclosure cc (by e-mail, w/enclosure): Mr. Terry Larsen Mr. Paul Dewey, Law Offices of Paul Dewey TONIKONTORP� AFFIDAVIT OF BERE LINDLEY STATE OF CALIFORNIA ) ) ss. County of Sem 3c li ) I, Bere Lindley, being first duly sworn, depose and say: 1. I am a Certified Public Accountant licensed to practice in the State of Oregon and a Certified Management Accountant. 2. From late 2007 until about May 2009, I was the Chief Financial Officer (CFO) of Thornburgh Resort Company, LLC (TRC), the applicant and holder of a Conceptual Master Plan (CMP) approval from Deschutes County for the Thornburgh destination resort. I understand that Loyal Land, LLC is now the holder of TRC's interest in the CMP approval and owner of a majority of the resort site. 3. This affidavit supplements my affidavit of January 2, 2014, specifically with respect to expenses incurred for recreational amenities for the resort. 4. The resort project included three planned golf courses: a long course designed by Arnold Palmer and Ben Crenshaw (the "Palmer" course); a second long course designed by Tom Watson (the "Watson" course); and a par -3 short course (the "Tribute" course). 5. With respect to the Palmer course, TRC incurred costs of $58,116 for site demolition, clearing, grubbing and staking. This work constituted physical alteration of the land. 6. Also with respect to the Palmer course, TRC incurred $226,968 in architectural fees to Arnold Panner's company. A significant portion of the services provided by Palmer's company involved walking the site, measuring grades and determining the future layout and physical characteristics of the course. A reasonable estimate of the cost attributable to these on- site activities is one third of the total, or $74,899. AFFIDAVIT OF BERE LINDLEY FEBRUARY 10, 2014 7. Also with respect to the Palmer course, TRC incurred $101,843 for the services of a golf course design company run by Bill Coore and Ben Crenshaw. Mr. Coore spent a significant amount of time on site, measuring the existing land and laying out the future course. A reasonable estimate of the cost attributable to these on-site activities is two thirds of the total, or $68,235. 8. Also with respect to the Palmer course, TRC incurred $99,356 for the services of Landscapes Unlimited, a golf course construction company. This work was spent entirely on site, determining the landscaping plan for the course. 9. Also with respect to the Palmer Course, TRC incurred $194,533 for the services of Paul Price, an independent golf course consultant who assisted Mr. Coore and Landscapes Unlimited with onsite work. A reasonable estimate of the cost attributable to these on-site activities is one half of the total, or $97,267. 10. With respect to the Watson course, TRC incurred $145,359 for the services of Mr. Watson, who provided services similar to Arnold Palmer's company as to the Palmer course: walking the Watson course site, measuring grades and determining the future layout and physical characteristics of the course. A reasonable estimate of the cost attributable to these on-site activities is one half of the total, or $72,679. 11. Withrespect to the Tribute course, TRC incurred $20,000 for the services of Clive Clark, who provided services similar to Arnold Palmer's company as to the Palmer course: walking the Tribute course site, measuring grades and determining the future layout and physical characteristics of the course. A reasonable estimate of the cost attributable to these on-site activities is one half of the total, or $10,000. 12. In summary, TRC incurred costs of $58,116 for actual physical alteration of the land. As itemized above, TRC also incurred a total of $422,436 for architectural, engineering AFFIDAVIT OF BERE LINDLEY FEBRUARY 10, 2014 and landScaping professiOnalsonsite, includingwalking the land, taking measurements, and planning future grading and other improvements, as follows: Arnold Palmer $74,899: Coore/Crenshaw $68,235 Landscapes Unlimited $99,356 Paid Price: $97,267 Tom Watson $72,-679 CliVe Clark .$10 000 TOTAL $422,436 'Consequently; :a total of:$480,552 ($422,436 + $58,116) wat ineuttett Ottisite for golf eottrse development 13, Attached hereto is an excerpt from. the TRC Job Ledger Report for the month of March2009 showing the above expenditurea. I have identified the relevant: entries by hand: State: cif California :County of ggsli.J0441,4M4i .OnFebritary , 2014, before .R,(A,•01 ,a:NotatyPublie in .' and for the State of personally. appeared:116re Liinatey; who proved to on the basis of satisfactory evidenee to belhepersonvhose:nanic is.snbseilhettAo. the. AtithihinStruthent;and: acknowledged to me executed the same in: his: authorized papaetty, nodthat:by:his, signature on the instrument theperson, or the entity upon behalf of -which the person acted, ieXeCuted theinstrutrierit. I _certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true .and correct WITNESS thy hand and official seal. Signature il311.11100001/527.62701 AFFIDAVIT OF BERE LINDLEY FEBRUARY 10, 2014 Vony00160#1932708.: San Joaqun • ri.:01UNTOLI County Tomot,Ex lieska 111015. 9110109 at 16:67:13.20 Page:1 of 2 'Thornburgh Resort Company, LLC Job Ledger Report For the Period From.Mar 1, 2009 to Mar 34, 2009 Filler Criteria Includes: 1) IDs from 701.to 799. Report order le by ID, Report le whiled Including Balance Forward and$ummadsed by Job, Pima. Job ID Job Description Phase ID Phase Description Net OMR 701 • Palmer Golf Course 02013 Layout/Staking - Eng 432.61 02220 Site Demolition 20,000.00 02230 Slle Clearing 6,166.00 02231 Clearing / Ortlbbrng 31,617.47 20200 Misc. - Cons:Oing 194,533.2 -- 20450 Misc. - Land Planner 18,391.81 20600 Misc. - Engineer 99,358.00. 20000 . Misc. - Architect _ 228,808.02, '-'• 701 Total 597,364.86• 4'i;II PN,n.I e..4,1G1 SC j.P5 1.1n �1 •rte. , %}.,4 f1. P•1 (nut r•- 701.01 Palmer Golf Course - 20600 Misc.-Architect 1,425.00. 701-01 Total 1,426.00 701-03 Palmer Comfort Ole. 20600 Mfsa. - Architect 875.00 701-03 Total 076.00 702 Coore-CrenehaW Got 20600 Misc. • Architect 101,842.79 ^ C,r'FZ, /C_reit y 1! a% v i 702 Total 101,842.79 703 Tribute Golf Practice 2.0200 Misc. -Consulting 1,470.31 20450 Misc. - Lend Plennor 1,600.00 20600 Misc. -Architect 20,000.00 -.}"'^. `C . C 1 q r 703 Total 22,970.31 704 Tribute Clubhouse 20200 Miso. - Consulting 9,975,00 20800 Misc. - Architect 17,800.01 704 Total 27,776.01 705 Tribute Community 0 20200 Misc. - Consulting 260.00 20460 Misc. • Land Planner 2,000.00 Maros 8118:67:40.94 Page:1 oft Thornburgh Resort Company, LLC Job Ledger Report For the Period From Mar 1, 2009 to Mar 31, 2009 Filter Criteria Inckldes:1)1Ds from 808 to 897. Report order Is by ID. Report la printed IsdudIng Betimes Forward end Bummsrized by Job, Phase. ' Job ID Job Desarlptlon Phase ID Phase Description Net DRICR 801-01 Wall 1 20200 Misc. -Consulting 851.00 801.01 Total 861,00 811 Bennett House 01110 Summery of Work 256,416.43 01880 Reconstruction 18,1.04.71 02220 Site Demolition 22,118.63 09310 Ceramic Tile 12,195.00 10000 Toilet, BaBo-Laundry 4,476,09 11420 Food Cooking Equip 3,514.40 '12490' Window Treatment 1,200.55 16090 Restoration and Rep 10,377.00 811 Total , 328;412:81 812 Odin Fails Lodge 02001 and 20200 Mlso. - Consulting 1,080.00 20450 Misc.- Lend Planner 037.60 812 Total 2,017.60 813 Tribute Really Office 20950 MSC, Lend Planner 1,000.00 813 Total 1,000.00 851 Watson Gott Course 20450 Mtsd. • Land Planner 1,256.0( 20500 Mise. - Engineer 2,147:58'''. . •: wa�SO/l 20800 Misc. -Architect 145,358.81 '^'`.':`:; 861. Total 148,788.18 ' 896' Log Lodge 01110 Summery of Work 1,435.007.11 20200 Misc. - Consulting 8.231.00 20500 Miso. - Engineer 7,000.00 890 Total 1,481,238.11 TONKONTOJPILP ATTORNEYS David I. Petersen Admitted to practice in Orrogon and California February 14, 201,4 VIA. E-MAIL (kevinh.(a co deschutes onus). Mr. Kevin Harrison= Deschutes County Community Dcv'elopmt Department 117 NW Lafayette Avenue Bend, OR 97701 Re: Loyal Land, LLC Declaratory Ruling Request County File No. DR -11-8 from Land Use Board of Appeals Dear Mr. Harrison: This Teter provides the applicant's rebuttal to the letter dated February 12, 2014 from Paul Dewey; 1600:PIoneerTower • $88;SW FifthAVenue. porttand, 0r2gori 97204 503.221.1440 503.802.2054 Fax 503:972 375:4 david.petersen@tonkon,com BLM did not approve the Cline Buttes Recreation Area .Planiin 2009. Approval oldie Plan was actually a series o steps, including at least three decisiens.rt made on August 20, 2010. Those dceisions;and other public information about the Flan can be found Here: httn //www.l lm gov/or/districts/prineville/:planslcl'inebuttesl. The foregoing" information is offered to rebut Ms. Gould's inaccurate evidence on approval of the Plan. However, approval oldie Plan, by itself, is irrelevant because approval of the Plan is not the same thing as implementing management actions under the Plan;. -One of the management actions to be intplemcnted under the Plan was identification of wildlife mitigation areas for the Thornburgh Resort. Enclosed with this letter is an e-mail to K neron DcLashinutt, principal ofThornhurgh Resort Company,; LLC, from. VLM wildlife. biologist Bill Dean on February 23, 2011. It attaches .a drat letter frottrBLM to Mr. DeLashmutt that identifies three potential areas for wildlifelnitigation the Maston, Dry Canyon and Deep Canyon areas. This Makes clear that the .final mitigation site had not been identified prior to February , 2011, consistent with the arguments Made in my previous correspondence, and therefore any initiation of the FlVIP remand prior to that date was impossible The enclosed e-mail and attached letter are admissible as: "additional testimony ...,: required to comply with the remand" under DCC. 22.34.040.C. Mr. KoVn,T3arrison February 14, 2014. Pogo 2 Thank you for your consideration of the issues discussed in this letter. Please contact we aye any questions or concerns. - Original Message. From wdean,@blm..gov fmalto.wdean@.b1rn,gov) Sent Wednesday, February 23, 20118:49 AM To` Kameron DeLasltrnuitt Cc: rnmbrowh@blrn.gov Subject Mitigation Ie, 'K,arnerot attached is a. draft cleari clear enough for your: heeds. Sorry this has Thanks, bd 0'04 tachO ...... ............ en so ong file:l(ar,>=ieron.1 ing BEM's support for offstie mitigation. Please take a look and see if it is ut hopefully this describes fully the needs. eLashrnutt ltr doc:) 1 Kanieron DeLashmutt ........ .......................... 117 N Lafayette Bend, QR 97701 Dear Kumeron` Iters letter into update fou on our Clinel3uttes rtion #lea ®: communica• te our int ntions for coordrnating wi dlife mitigation nee Thornbgbes mitigation actions must ® pt es, must be comp`Ieted befor B1,M rnustt co e lete cultural., idcd and e ®lea 1� itigatron As included consists:of. Resort riitzl hazardo rs parrngentseveral r gemont�a.cti�?iis T hornb` s rtj ay conduct mrtigatron ateci throued e BL v1 P e reatm06.1-0:&yes disturb tiactivities can occur For otany and nIdlrfe clearances toe sure that lens trve e applrc� Underssection 11 agreed to akin ample e t g wi dlifemitigation lotine as an.rarea fox conducting the nitigation ce of des fid, non rnotorrze l trail system, s r created rails, other ccess control neasures, vegeta on management ail • �s0rt LLC 3VildIifi Mitigation Plan , ril ®latining Depart nent, dentificd severa ac mpleincnte?d on BLM adr mastered lands '.i'l ant bq thinning your Junipers ,800 acres , mid water supplies (guzz%rs} IOU7, the Mas'ton Area is apriorityfor Wildlife It •acres of BLM administered lands and would be a suitable area r i i iburgh.. on a ionssuch es juniper thinning Sonne of the.Maston are, is a priority for cls treatrnents;due to it being adjacent to homed,. so we are planning treatments for next year. Therefore, only a portion (approximately acres) of the Maston area is available for your mitigation needs (see Map 1). Additionally; we have completedsome are planning to implement some trail and access (fencing) management actions in the Maston area in 2011 and. 2012. The areas around Dry Canyon and DeepCanyon south of Highway,126 are also a priority for wildlife. and could be available for Thorpburgh's mitigation (see Map 1), especially for juniper thinning. The Maston, Dry Canyon and Deep. Canyon areas. would also be suitable areas for other nntigations Eike weed tnanagen 'entiltait developinent and removal, and fence and aceess management, Weed trealn ents could. sometimes be incorporated i to juniper thinning areas, however we do not currently have a goodiinventory of weed Iem areas and will need to work together to identify priority weed speoies, problem areas ataad reatment methods. There are two existing wildlife watering;,Tsites (guz (CBRA) that are currently :available for hornburg maintaining (see Map 1). It is important for us to -meet soon and talk about Work. Please feel free to contact .ine ,you have an Plan. � fiButtes Recreation Area sort LLC to I tadopt" and begin futurerplans acid begin coordinating our formation regarding our CBRA• Sincerely, Molly M. Brown, f i Field Manager, Desc' 05.6:.G ence\2008 Corr\Thornburgh MQU ltr.doc, TNToiu? ATTORNEYSON p David J. Petersen . Admitted to practice in Oregon nfld California February 21., 2014 VIA E MAI s. (kevinh{ co.deschutes onus) Ivlr Kevin=:garrison Deschutes County Community Development I)epartinent 117 NW -Lafayette Avenue Bend, OR 97701. Liyal Land, LLC Declaratory Ruling ktequest Cbi i y dile No Dft 1.1 $ : . ROAtand fram. Land Ilse Board of A pp$al Dear. Mr. Harrison: 1600 PiorteerTower 888SW Fittb y0106: Portland.,Dtpgen 97204 50301:71440 503.802.2054 Fax 503,972 375:4 david,petersen@u tonkortcom This, letter provides ElieppIkaiit's. ficial argument in the above -referenced remand. 1- Substantial r ence Gage All Three Subsections: of DGC 22,36 s Tindings That The (awl, Has Been Initiated Under 020.A. A. Tlie hutta Ipas Seen ted' . Oetwe Coristrucdon .Is Not,ReyuiredBy Th•e GMP, The Condtlibns,t' v� ecn ubslantally:�Exerer,edAndAnyFailure_:ToFilly comply Wtth he Couditio s Is. Not he Fault gn.7 u ppltoonI (i) Consttn.d#ori is not xequired, by the= CMP: The CMP doe,4. iot requite constt ction, iil fact,:donstrtiction of resort improvements on the land subject to the CMP Is expressly prohibited by condition of approval #2, Construction the soope of condition #2 was liossible and in fact has occurred as. discussed below in part :B,. but t was not required by the C (11) The con thtions >have been substatitially exercised, The applicant'sletter of January 2, 2014 explains whys finding thatthe conditions have been substantially.exercised "as a whole" is appropriate based solely on prior unappealed findings of compliance withWine of the conditions (and which constitute 100% of the conditions that could possibly have been complied: with prior to issuance of a final FMP) Furthermore, to the extent any ,condition. bas not been fully complied with, it has been Mr. Kevin Harrison Febru .ry21, 2014 Page,2 •sub tantially exercised (ie , carriOd out "to a significant degree but not completely",) as explained sn Appendix l to the January 2, 2014 letter (`"Appendix 1'"). 4e applic nmQn ant's interpretation o:..:',,'!,,,..,',,.,,,." f the "substantial exercie" aspect of t cites r o legal authority other than her own �iriterpretation • of the DCC:': `The arpplteant4oes got dispute drat CUBA left the door open to interpret ..'.„::,'':' 1!!.f:!;tatl exeroise"` as s Gonad suggesta, brit Itis also3Frue that LOBA devoted extensive- tiscussionras to why that: wouhl of berme befit app, oach 10 the redsnns explaineclin prior; correspondence, tlae far better apioac is tc� evaluateuhstatttal exercise "as a whole;" where substantial exercise can exist e %en fihou Borne condz i� "hake not`been ub tont ally•or fully exercised, or perhaps�have not Beene t of eel atDe'eisac�r�,.20 17-22 (internal quotations omitted) ) Although all the evidence discussed in Appelidt 1. iS relevant, the Lindley affidavits to particular deu onatratti ihy the °eon ht iiis hav lieeri.;;ubstantial1y exercised 1VIr Lindley estabhshes'.from firsthand lcnovvledge that after approval ;01#:CMP, TRC incurred expeziditures of almost $ 7 million towards compliance with tlte condxtic ns of approval F0r example,. the $t.86 million ffor entitlenients, the•$787 000 for golf courses, the;$2 63 mlhon for construction and:the $1 54 million. forotherp1anning costs (see Lindley January 2, 20014 affidavit, paragraph 4) all contrlbuted�F part, to substantial exercise of condition #33 regarding visitor amenities, Collectively; fhe expend�;turesi entl ed in detail•in Mr Zii dley4s affidavits show sulzstantial e-xercis,:-:,i- e of nac5 t of fine condillons in7lt,*41110t91,i517,192,iJ3,,24 30, 335tsxnsrorelify o sggat almost $7 m`i11ion spent ori compliance witl% conditions is, not substantial exeolse ofth�ase conditions, either iiicividtially or as a whole; ierience aric IVTr. Lindley testified t until aboutrMay.2009, u gat no u.tt„ icertse. ias irsth No: evidence challengng'th'se applicable in the Iand use Contex qualifications sufficient;. goes ion ASI'S With no basis mfact or ed or 1 is testirrioiiy This 4.:$3-,141.se got and was C 1~ C) `of �i'RC fromlate 2007 and knowledge of ali„ expenditures of TRC durang that t ine catlons'has been. submitted; Also,, foundation is .not iter or not .the Hearings Officer fmds.Mr Lindley's itto be given his testimony, lint its admissilz1ity, The absurd res410:Aat WOuld substantial eicereise Dint b oV�r t theCountyhas con oicivaly e newer be rr eta Nei destiriatio t of all the ,conditions of that l Dari Tuts ou14s int ore ton of retation requires a c *iclusion that' of destination resorts tlat Dan • ,npproval f a GMP to full words CMP appeals), even with • rnterpr`tatten:ef.1DCC 1 4 1 tli M Ct utrary to M ,Coald's Matra; the applicant does noY argue tl afi lis proposed �.pplte�i yo;this�a�xeu , L$ icaiit � carr y gigues at s... Gou1d'sxtiterpretaton woildlalce aciestrnationtresort in Descliates County iposslble Tile Thornburgh protect only tiro '44es; an excellent llustrat lzn oft a unreasonableness i f her interpretation • z As.noted ;bove,revattztisindings not challenged on:appeal lave.already establishedthat some of thee conditions have been frilly complied with, See •Appendix 1 ct KfJNTORPup ,-ra �s .............. . . . Mr. Kevin;Harrison February 21, 2014 Page 3 numerous. tughly unrealt ttc assumptions as 14/1. iri the applzeant's leiter, of February 11, 2014, This interpretatro s wou1d also likely .1ealr that every existing destination resort m Deseehutee County was f ni hed illegally Md., it would r quire the absurd eouelusion that the County co1setously approved. a 1042 year phasangplan,3 and imposed condition #1 prohibiting deviators from that pl ui without a new appl anon, rn. direct violation of the PCC because it did not require full completion of the entre proj'eet in. years. r e ample, essly• to interpret ine only xnterpretatron.thatFits within ilio DCC is the oue-recon mended by L9BA t • hat substantial exercise of the eondttons can oGou;:': le" en thoogh some codins "haveiot een substantiallyor lolly exercisedor peraps have not been exer."cised at a114 And, the substantial .evidence in the record leads to Manly one eonolnaicln, that substantial exert e has: oceurredv:' failure:to. f lxeant y i?V1th the eon ditzoiis is not e,faultaf the Eve„ry condition las been fully; eotnred nth, as explained m my:rieed to evaluate fart AIternatively, t y the extent any cord on, bas not been IWy, complied with„Appendix 1 explains why the failure to fully comply is not the ar It o, the applicant evidence for this abseneeFoffatilt;extsts on two. levels, Frxst� there atefaotors oomrpon to all conditions that explain the applicant's lack of fault In fully complying with all of the conditions of approval Second, there are; tntlivxMduahzed factors hspee fie to each on[itioU absolving the appl cant of fault for fh lure tb fully comply:' Ms. Gould rn her final, rebuttal foouses solely on the "blanket";macro-economic factors that explain the applicant's lack of fault. She..has identified neither evidence riot legal: Mr. Kevin Harrison February 21, 2014 Page 4 perceptages Ther market fox real estate vanished, ourees of paprtal, erueial ` o refinancing_ of TKC`s loads that became necessary in pari dpe t9:, -›-, o FIs oxo ld's appeals, evaporatedt although the l eadlriao gralabin:1:.::00-11,, ts of the crisis occurred in 2No -: no eeonbki 19,9risp ernp:::0na • nov► here :the ecopoi�riy was worsening n ,the inert#hs atrct years lead ng p 19 Bear nris' ooll se in_Mard 2Q188- For example, Sterling $alk overthe 0140 e of a t rriortths20 7 edueed.its financing eonnnitment to TRC*orn $2O rnillion to $15 : lion t $11 to llron. (AR X22;) The storm, p ends were gathering, from both econorrite uneexlarn attd the un crtal ny to tiie protect f orti,' Oould's manyappeals, The eonclu k i o tie deuce In rcco d that tlae econcnuccrisis precipitated TRC's bankruptcy isunmstakahfe Ms Got ld also dramatically understaltes her role 1n the iein se 0rTl C n tk e CMP alone sloe fined I,tfBA appeals, 4 appeals to the Court of Appeals,, and 1 petition with the upreme. Lours (AR 320) Elie also'filed. appeals t4 the Board. of County Co mi inners, actin nis native appeals o f $LM and Oregon Department of Water R,eso roes approvals, id appeals of he XMP to both CUBA and•the Court of Appeals: ,(03,744 As . roar4lt . the. final appj ov 1 of fbe QV: alone to4 nearly five years, consumed thousands:tif hoCirs of legal and expert coirsultattt`time and generated:over ten thousand pages of documents Bits klte • overwhelming majority of her. .msigu tents of error were :refected incl. none ofEher'appeals have rest .ted tri material ;changes to the proieet, The permitting of this pr�z� ect, which may be the most heav•ily contested land tise action. in the h1st of Oregon; has been tune consuming and c tly, fax excees. ding all estimates TRC had recetvcd from its professional advisors (.R 320) This extrernel =high level of obstruction hada severe effort on 1 R s fi•nan•c•ial conditions As the economy worsened, financing source became hesitant without final Land use approvals, causing snowball effect BAR 321.) .Rn. light. of these zt1?paets.1VIs� Gonld cannot be absol cd of lame; and the applicant ca rt it t•ie faulted fox any lack of fttl cornphance with the coz dations efore °e p ralioti ofthe. CSP : tuts: Gould also attempts to implicate: Lo ll ;Land. in the ecoiitigli woes of `IB.0 but 1,4.0.a 440$ not 404,14,44i$: out. Herreliance on the role of 1Vk Parker is pantie arty euryons ::Rai. . her counsel's letter of February 4, 2014 she :drew attention to Parker1,eeause.af l is ,no=disinissed.b: complaint against the Tonko4 Torp .law f [ran Slie baS o v: oh ged laiet cs $ug est1nng that whatever role Parker had in the downfall of TRS- hnnld be imputed to f ,oy d Lattd4 However, hex 1iage long citation from TRC's ban1 ptcy tset tie sta emerst establishes, at most, that in February 2011 Parker rade Mr Toxxy .I,ax en ftheiuijmnehtt©reclnsute texlin B ax's note aiid the possib hty that Sterling would sell the n9f and ilial L r0en aegttlr d the property Parker would e4 -iiia share of any profit 13 t4) The disputed haat . remains that L y a dts first involvernerrt with TRC was Larse i`spui lase ,tedtng' note 6n. oar about : aril 1, 201.:1'Y'teti days lhefcire the scheduled fu e 10 25 There is rip evi4enee that tiutil Parker made :Larsei aware if �rling's p ding foreel isnre:.1ess tlj a mond befere the:sale, either T arsen or .Low .and;had any k'no dg • 4 or' :rale ill, . TR;C`s ecortomte prablenis Othes n e:facts,, it. aan l :ar'dly lie said that'Larsen: of Loyal Land lad any�preeip Sting 01:0 14 Theo demise.. • Mr. Kevin Harrison February 21, 2014 Page 5 1V1ir. Parlor hiznse1f, is far from blameless, His misdeeds are outlined. in detail in the (1is41osare•statement (AR 321=325) and iniclude his breaches of substantial financial cominittnents to TRC,: but none of those'misdeed are relevant fQ the culpa it ty of oyal. and,'• whtoh is "the ola t,•made by Ms Could. Many of Parker's acttai s, along with terltt%g Batik's refusal tv fully fad itsloan ccmmttment, began to la#e 2t?0 as the cctxnom vvas siting tov ards collaapae 4 J1 of these external factors were slg#�fican ;contributxn aetors to TR `s. eco aotxito'demise for w hick the a tpl cant is not at fault, a fid nothing ni DCC 2 36.Q20 A. 3 exeludes: constderattoti of#hese faetp rs in evaluating the apphea t'srf uit bs ial e a.:.• Mende supports rndin s that the 1001 847 tlot o. faalt orf lure to fully cpniply with anys of "approval for-,toiaoy reasons That e'Videnee exists at -a level that, ,apphes to all condit onstqualiy, and also at level apeeifie to tae h;unghvidual. Goiatitttpn To the extent that fault needs tc be attributed: anywhere, it is attrlbtitableto a combination of external faotots outside the :control of the applicant and its predecessor,, lncl ldj' in no sMalLpart the 0ctiOnS-Of Is. Gould $ The GAP �Zas $een Iniijated Beoause Sielisit nl ul Gon Place.* Althouhoonstruct.on was not requited by the CiR, sal place Ther ,inctley ai'ftdevtts provide unrefuted evidence; of exI tovtads constructtorof: p alect Harison stad at, tl�e Fel V.RE Deoi tots isthe only prat r decision in the County applying 3D destinatton resod, and -that decision is squarely"in support'offi`'"`" construction has: tak h.. place here rstanttal enc" tags tukon Iles keit torhas taken . ly s7 rntll oii hca.ng that the A2foA onslruot es of near X 4, 2014 36 020 at substatti Ms. Gould argues without authority for a harrow interpretattort Qf the definition of "substantial oonstructipii" in DCC 22;36 020 Given that the t rzly a ailab1e.authoti#y supports the applicant's interpretation of this subsection,Ms Gould creates ggrounds for dist ngutsl iitg the VRB Decision In, truth, the VRA Deo stpn cansrders planning, design "arid suriilar "soft" costs in evaluating substantial constriction aad nowhere4, does it say that it is cfoiu so o nlybocause actual physical; q�nsite oonsttuetioti #vas late, perforin d And nowhere dee the V=RB Decision require a comparison of costs in erred to estimated tot 1 trojcet costs, nor does it hint that a di ff erent; ti#erpretatipn of " substanti`a1 constt cttc�n" should 1 applied to. inti atttiia pf a CI+ IP as opposed to a tentative; plat: The oa y reasonable li iding in 1i fit of the appl cable :authority and; the evidence is that :substantial eoi strnetton has to en place ;arid is: sof .lent to establish that the CMP has been initiated. An spite ofall that, fro 1200$ to2010 .L'RCcontin ed to defend Ms 'Gould's;appeals in multiple jurisfietions, obtained County approval of the CMP,filed for and received County approval Of the FMP and: then defetkled;her appeals of the FMP. 5 14.8*.Gould' suggests that the VRE Deeiston should be excluded as new evidence The V1ZE'Decision is legal authority establishing precedent in Deschutes County; as such it is not "evidence." 1946pNTOFtPup Mr Kevin Han soxi 'February 21, 2014 Page 6 C The C Hari Been lril�tluttedcrtuse Thi Proposed Use Has Lawfulty 4ecurr�e. p ity suppazting a iiidtng ofliutiat on under DCC pant's prior cs rrespondenee d t .not restated Here s pliretation Pf subsethon A 1 is direetly in ; rt permitilrlg pre ess expressly greated by the County in .try is .t�ls �ou'l�l� po�'the a�rphoa�it� wha ut'gtkes to reyvrite tihe�CC, p�ogosing :art ititezpretafion a t;C 1 13M40 lh t would create atnelhing Qther,tlxan the three-step. . destination resp pernutUh probers that is plainly: set forth in tliat section •She dis msses the FMP and latex tetitatwe plan as inor ftertl auglits that an be a pia ed mirusterlally While ministerial approval( theoxetie lly possibly her ehsmissai of the itriportance nrid complexity bf later approvals in the destination tesort prnce�a is nowhere suppcirted by the D;Cd It is also belied by the 22. izonths, it took to resolve her prior appeals of the PI P; to LUJ3A and the Court• of Appeals in this casco the ce t tli t fuer multi year. appeals will follow if a revised• FM'P and any later approvals are rat ted The cc�nsetions,egatdiugst�stantitral eexcise of the conchti.''‘,:ons and eonsis erations necessary to rtiterpret,DXC 2 6 020.A,1 largely overlsp, Iii bolii cases, the interpretations pr✓aposed by Ms. Ua 4 are &nip perly iarxow and at odds with the DCC, the Thornburgh phas1ng plan, the pondttios of the CMP and Common sepse Just as substarttal exercise underT C i 22 36,020 A�3 eanribt reasonably re u e £all exercise of 11 tie conditions: oI` the CIDP within two years, °DCC 22{36,020 1 cannot reasonably require=that rile entire: F resort b built v thtrr tv o years The far better intetpretatiorx isthat the; use au hortzed rn the CMP 1awfylly oo pq.. ,d:upon appkca r in far a FMP The 1 tuitugs Olee$houldElcerciseerInherent Authority ToConsider BoilH DCC22C20.A2aA .3i 0 n. • It 's: iasleen pre tins coo aiid t :consider SCC.. anti or k `c ouU be to corm cerinust reecrnsrder whether or-noti the Thauthr�ties •s. aCings O,ff o� liar fine ttiherertt aUthonty on Pt &2: ass we11, rid that the prude .t ei ereise of :that: . Ms Crould s pAs tion tl tit the Hearings dicer does not have this d14erdtion is based .:',0):00 1.t on her propose : i#iterp3reta "( of the lod ge of DCC 22 j34 040, She focuses exclusively nit the seeot d aeitten f D iC 22 04fl As that the ai3d has dtsbre on to . reopext•he recall inn reed ?�1othg in thr.;aeirtenoe iztales th................................ Also, she gnox;es the r terpla °o the itst s t xic of'sitt beetion A, d subsecti n C Thellrst •sentence bf subsection. A establishes that the heap gs bo&y (Inthis ease the II066gs•Officer)' mt st reeiew those issues that LUBA required to be addressed alt remand The issue on remand. Mr. Kevin Harrison February 21, 2014 Page 7 here is whether or not the CMP has been initiated= under DCC 22.3'6.020..A, which includes subsections A.1 and A*:.2, but even if the.scope of the "required'." temand is more narrow; subsection A does not prohibit considerations of other issues. And, subsection'C allows additionaltestitnony if;necessary to cotnplywith'the remand, but does not luriit the acceptance of that additionaltestimony to only the Board,• Simply pit, the DCG is not as;clear as Ms. Gould suggests, nor:' is rt asnarrow.. Read comprehensively DCG 22 34 040 provides both the opportunity and the justi cationsfor the. Hearings Officer to exercise her authoty to consider additional bases for initiation, uindeir UCC 22 36,020; A 1 grid A.2, anal to considear additional testimony that is relevant to; those 'ssues Ms Gould has cited no :authority other than her•owe strained interpretation .of the ]SCC as to why the 1=earings Oft'icer should not .do so. Thio the contrary, exercising :that discretion to consider subsections :A.1.and A. 2 and related evidence would be consistent with existing law under Sehdtz v 'city of acksonvalleand related cases, and also With the LURA Decision. IYTs. Gould M:ischaracterizes The Record And The Applicant's Arguments On Numerous Occasions,.. The letter of February 14 frons IVIS Goulds` counsel contains numerous additional statements; not diScUSSed above, that are worthy oa point: by port respone The applicant seeks to reopen:he. record {p.:1): False The applicant does not seek a general reopening of the record. Rather, the additional evidence offered by the applicant is admissible .fora specific; purpose . to.. comply with the remand,pursuant to DCC 22.34.040. C. he applicant did not previously argue that inonetar y expenditures are relevant to DGC 22 36 020. 3 tp 1, la. tparagraph) Faise . The relcvartce of monetary expenditures to the •findings required by DCC 22.30 020,A 3 is set forth throughout Appendix 1 to the applicant's letter of January 2;704, Ta :IttSt one of numerous examples; Appendix 1 states err the top .of p a e• 3. hat: Substantial ;sums have been spent on preparing a tentative plat application for the first: phaseandother permitting in anticipation of a final approved FMp This performance equates to full compliance [with condition #2] Ms. Goulddid not prev nsly argue: that monetary expenditures' are relevant to DGC 22.36.020.A.3 (p.: ,first paragraph, also p. 4, lastparagraph); False. Ms, Gould's counsel made thisargument in his letter ofFetruary 4, p. 8, third paragraph, He also recognizes in that paragraph that the applicant "repeatedly" relies on expenditures to show substantial exercise in Appendix 1. There Ai no substantial evidence in the record that the wildlife mitigation site was not approved by 81,11/1 until February 2011(p 2 second paragraph; also p. 5, third paragraph and OR s NTORPue Mr. Kevin Harrison February 21, 2014 Page p 6; second para. Th) This :evidence was submitted with the applicant's rebuttal of February 14, and is admissible for the reasons stated therein. Thor -e is Q b z s to a,.s ume TSA d . fQr the Goan ro approve_ 4 tentative plat fp 3, f ast paragraph) The County bas 150 days to app dove att land use permit, 0.0 215 421(1). Given::the nwear vertainty f an appeal it is reason ble to' some that.theCounty would not deviate frorrr its r guiar-practl e jc�f to ing the dull atillo{tet :me,. n the otlien and, Ks. Gould does riot challenge the assumptions the aapiicapt's hypothetical timeline that are in her favor; but are xn fact highly unrealistic (such as the absence of any appeals),,nor does she acl�riowledge that the t.,. line only illustrates thecalendar for411." drat.two phosesofa project excpress1y approved .for severe phases. •�he piont:s h pa tteq. M/1 4o is it`rol vant because PResappliedfOt an FMP before rh ,,CMJ' waa fna1 ,% f rpt part g aph), Fillpg ftbr FMP before the CMP appeal was resolved was a risky strategy, we i that the 1'MP application would. be invalid if the CMP was chatigO or the CMP approvait dvettuurned s, As it turned out, the 2007 F'MP application was withdrawn ati4 new appiicatiotiAWOL April 21 2008 six days after the CMP was approved: Regardless of what happened in this particular case, it la not reasonable to assume that the County enacted a three#-ste i destination resort process where it Would be possible to complete a resort only iftheapplicant i tach case wa•a w•illing to file applieations;for subsequent approvals before t1t ;prror.approVal was final. File applteant doto of explti n why a hierarchy of the itnpoi.tance of iindividual conditions is not relevant (pp ,3--4), that the bCC nowhere requires an:evaluation Oft relative importance of'ind`zvidi al conditions it is not iricumberit on the applicant to explain why such a. test should not be •applied 1t. is ifigiiittbent upon Nis., Gotild to explain why such a test should be:applied, and she has: not di ne so nor liar=.site cited ainy authority for her assertion.. LUBiN 7Wewe as wboto" tett is limited to only those condat otns bf approval not dependent on approval of all rretnainfng land use approvals (p 4, fifth. paragraph): Ms Oauld cites to footnote :1.4 of the LUI3A Decision for thus proposition ;Footnote 14 reads, iu its;. entirety. = . As an exaxnple condition l pr aidea. tti part tlta t qajny substantial change to the approved lan, will require a. new apptication " The patties ap=parently dispute wl ether there -have leen sueli changes. Butff thezre have not been aubstan a1 ehannes to the approved p1a13, it W. - be s ffrclent for the hearing officer to find *400400 '1 is fufly Satisfied bee*ise there leas beef : and.tr ay nova be "ally " Adistantial, otagt to h a ptroved plan. 6 TRC did :014 iliito46,1544 because of time overwhelni ng ea lytespotise to th=e resort proposal Within a fevr months after approvalnfthe CMP in 2006 Tgaliad more than: 550;re ervations;representinig potent*al sales of $ 5a in llioii from potential inwers,ln 26 states and China.. (AR 319) Ta11914TOMip Mr. Kevin Harrison February 21, 2014 Page 9 Nothing -in this footnote can be fairly construed to stand for the proposition that Ms.,' Gould assigns to its Further, the sentence" to which the footnote: is attached speaks to "conditions that provide contingent or continuing obligations" (LUBA Deets' ion, 21:6-9), Which can.include an obligation contingent on obtaining a, future land use approoval. LURA unposed no limitation requiring that substantial exercise "viewed" as a whole be evaluated only as to certain conditioi and not othors. :< " 4 rematzdedsolely far further; findings on fault �p 4, .,�i, fth p c ragraphj. This makes seose. ;:B9413!6,-;60' th substantial exercise and an absence of fault are:•necessary eleinertts o iinitiation under T C 22 6 020.A 3 rf CUBA cieterrriiried, as a matter of law, that substantial exorcise of "the: conditions is "impossible because each one had to be filly exorcised before: expiration of the CMP (as Ms Gould argues), then •f ridings as to the faultissue Would be a. meaningless exercise. The existence of a remand justifies the "viewed as a whole" approach to substantial exercise.. The FMP`rernand could lia've been restarted as .of February 24, 2a111•5, ourth paragraplil False,: T,U 3A..renaanided the FMP back to the. County on August 17, 2 ;10. (AR 96,) Septe nber 9, 2009 is an irrelevant date; it is the date 'of LUBAys original decision on the• FMP appeal which Ms. could subsequently appealed to the Court of Appeals (CUBA Decision, 3 4 ). Nowhere does page: AR' 76 of the record support the ;conclusion that the FMP. remand was completed on February 24, 2010 — that page exclusively discusses dates ,related'to Ms.. Could's appeal of'the CMP for.purposes oftollingthe. CMP. , As noted elsewhere, the FMP. actually could not have "been restarted until February .23, 2011 Oiven that the Sterling foreclosure sale was scheduled 16: days later on. Mareby 11, 20:11;, leading TRC to file for bankruptcy protection the same day (AR 314), TRC cannot be blamed for not mediately restarting the FMP. And, even had it don0 $o, it would not .have 01:14 ged the posture of thiS application given the pending expiration ofthe CMP' in November 2011, the tinieneeded to get a decision and the certainty of another appeal "by Ms. Gould, 411 appeals tolled .expiration of the CSP (p, 5, fifth paragraph, also p. "6, first paragraph and. 8, second paragraph): False. The only appeals that tolled expiration of the CMP were the CMP appeals, which ended on December 9, 2009. (LUBA Decision, 10:1-3-15). The subsequent appeal of the PMP, and all other appeals by Ms. Gould (past or future), did not and would not toll expiration the CMP. This makes it impossible for this or any other destination resort to be completed within the two-year time frame. There is no evidence that expenditures on thisproject exceed thecosts of substantial construction in the VRE Decision by almost 38 times (p. 10, second paragraph): False. Mr. Lindley's affidavits establish total expenditures in furtherance of substantial construction of $6,815,926, which is about 37.3 times the $182,582 found to constitute substantial construction in the VRE Decision. 'O TORPL, Mr. Levin Harrison Vei ruary 21, 2014 Wage 10 X.,, the r aSous, set forth rri this letter; to the appl earit's idol,*ire Otidenee ;and at the 2014 heal , substtral evidence ex stsio ftnd`that t ai he CMI €d alt Q 1:3020..4.1.; .A.2 and A- 3.. The applicant res i ffeor exec rse her Jam* authority to-eollsider,allThrees ree:0rd arid; `the addrttonal tes ttiony .d ere4 th i the -CMP bas been. in'rttated Lind t all three a been initiated eet1y requests that rbsetr� s the upj Ort ofso some of sxi secti i s, David .1 Petersen Tezr"Larsei r P u1'Devvey Law ,tffices of Paul Dewe