HomeMy WebLinkAboutA138 Opponent written submittalsPaul D. Dewey Attorney at Law
1539 NW Vicksburg
Bend, Oregon 97701
(541)317-1993
fax (541) 383-3470
pdewev@bendcable.com
February 12, 2014
Ms. Karen Green
Deschutes County Hearings Officer
c/o Community Development Department
1 1 7 NW Lafayette Ave.
Bend, OR 97701
Re: Loyal Land, LLC, File No. DR -1.1.-8
Remand from Land Use .Board of Appeals
Dear Ms. Green:
I am writing on behalf of my client, Nunzie Gould, to present follow-up arguments after last
week's hearing.
Scope of remand.
It is not appropriate for the .Hearings Officer to reopen the record on remand. -it would also be
contrary to the County Code for the Applicant to raise new claims under DCC 22.36.020(A)(1)
and (2).
a. The Record should not be reopened.
As an initial matter, we do not believe that it is appropriate for the Hearings Officer to reopen the
Record in this case on remand.' LUBA in its decision did not require that the Recordbe opened
on remand. It only required a determination of whether the conditions of approval have been
substantially exercised ("each one" or "as a whole," depending on the Hearings Officer's
interpretation of the Code) and any failure to fully comply with each one is not the fault of the
Applicant. The Hearings Officer does not have the discretion herself to reopen the Record.
DCC 22.34.040(A) clearly provides:
"On remand, the hearings Body shall review those issues that .LUBA or the
Court of Appeals required to be addressed. in addition, the Board shall have the
discretion to reopen the record in instances in which it deems it to be
appropriate." (Emphasis added.)
'We have submitted additional evidence only because the Applicant is attempting to introduce new evidence.
February 12, 2014
Page 2
It is also only the Board whichhas discretion to allow a modification of a remanded application
under DCC 22.34..040(13).
DCC 22.34.040(C) then provides that if additionaltestimony is required to comply with the
remand, then parties may raise new, unresolved issues "that relate to new evidence directed
toward the issue on remand." Again.,. LUBA did notrequire that the record be reopened. What it
required was additional findings.. (Slip Op. 21, 25) Also, the issue of "substantially exercised'
and "fault" were briefed in the proceedings below. See, for example, AR -549-565.
b. Nev issues under DCC 22.36.010(1) and (2),
The Applicant should not be able to raise new claims under DCC 22.36.010(1.) (proposed use has
lawfully occurred) and. 22.36,01 op (substantial construction).
As explained above, DCC 22.34'.040(A)'limits what. the 1.l.eairngs Officer may hear on remand to
"those issues that 1 UBA or the Court of Appeals required to be addressed." LUBA only
required issues related to DCC 22.36.010(3) to be addressed. It is only the Board, pursuant to
DCC 22.34.040(B), that may permit` a modification of a remanded application.
Finally. DCC 22.34.040(C) merely provides that if additional testimony is required to comply
with the remand, "parties may raise new, unresolved issues that relate to new evidence directed
to the issue on remand." See our argument above as to why additional testimony is not required
here to comply with the remand.
The argument was raised at the hearing on February 4 that though DCC 22.34.040(A) and (B)
allow only the Board the discretion to expand remand issues, DCC 22.34.040(C) does not.
specifically mention the "Board" and thus it should be assumed that: the Hearings Officer can
address new issues. To the contrary, the provisions of DCC 22.34:.040 need to be read together.
Only the Board has the authority to reopen the Record (DCC 22..34.040(A)) and only if .it does so
could parties then "raise new, unresolved issues that relate to new evidezace directed toward the
issue on remand."
Even if additional testimony were required to comply with the LUBA remand, DCC
2236.010(A)(1) and (2) are not new; unresolvred,issues that relate to new evidence for whether
the conditions of approval were substantially exercised. They are not unresolved issues and they
don't relateto new evidence on theconditions of approval.
The Hearings Officer clearly rifled below:
"No use approved through the Thornburgh CMP has occurred, and no
construction was required by the CMP, Therefore, the hearings officer finds the
applicant must demonstrate the use has been initiated under Section (A)(3)."
(.Emphasis added.) (AR -77)
February 12, 2014
Page 3
The Hearings :Officer made determinations that no use has occurred, that (A)(2) regarding
construction was not applicable, and that the Applicant "must demonstrate the use has been
initiated under Section (A)(3)."
LUBA also expressly found that the decision in this case was whether "the destination resort that
was authorized by the CWIP was initiated" (Slip Op. 2) and stated that a destination resort "is the
use." (Slip Op. 13) It further held that since I)CC 22.36.020(A)(2) had not been raised on
appeal. that :LUBA would "therefore limit our consideration to petitioner's challenges to the
hearings officer's application of ,DCC 22.36.020(A)(3) and do not further consider whether the
hearings officer should have applied J)(C 22.36.020(A)(2):" (Slip Op. 14)
Furthermore, Loyal Land: inthe proceedings below expressly stated that its application "is
subject to the single approval criterion set forth in DCC 22.36.020" and then quoted the single
criterion of (A)(3). AR -181. That admission should be binding on the Applicant.
Case authority cited by Applicant.
The Applicant at the February 4 hearing. cited a number of cases for the proposition that
subsections (A)(1) and (2) should be considered on remand. The Oregon Supreme Court
decision. in Beck v. City .of Tillamook, 313 Or 1.48, 153 (1992), and Schatz v. City of Jacksonville,
113 Or App 675, 679 (1992), were cited by Applicant apparently for the proposition that the law
of the case doctrine does not apply to local proceedings following a remand and that a local
government is not precluded from making a different decision on remand. Furthermore.
Marquam Farms Corp. v. Multnomah Co., 32 Or LUBA 240, 252 (1996), was cited apparently
for the holding that a county is not bound by its earlier interpretation of its Code. Also cited was
Holland v. City of Cannon Beach, 34 Or LUBA 1, 6 (1998), which involved a case on remand
where it was argued that a city may not revisit a staff interpretation of applicability of a standard.
The propositions for which these cases are cited, however, miss the point in this case which is
interpretation of the Deschutes County Code. Issues are limited to what was remanded by
LUBA and the Hearings Officer. does not have authority to expand that.
There isno initiation of use by substantial construction.
Even if the Hearings Officer decides that DCC 22.36.010(2) may be addressed on .remand, the
Applicant has not established by substantial evidence that the use has been initiated by
substantial construction.
There is no dispute that the alleged "construction" of a road and a log structure was offsite. The
argument was made by the Applicant, though, that their construction is relevant because they are
related to conditions of approval. That argument inappropriately conflates (A)(2) and (A)(3).
Subsection (A)(2) on substantial construction is not about meeting conditions of approval.. The
language of DCC 22.36.:020(B) does not mention satisfying conditions of approval. Instead, it is
about whether the holder of a land use approval "has physically altered the land or structure or
change the use thereof." Building a road and log structure offsite is not physically altering the
land or structure or changing the use thereof that is the subject of the land use approval.
February 12, 2014
Page 4
In.. fact, there could not be a finding of "substantial construction" in this case where the Applicant
has not obtained the necessary permits even to initiate construction.
What has been done also does not constitute "a goodfaith effort to complete -the development."
It is further not sufficient in terms of "time, labor or money spent." The Applicant has not
presented evidence of the cost of construction of the destination resort to be able todetermine the
significance of any applicable construction cost An access road and a lodge built offsite don't
necessarily reflect a good faith effort "to complete the development." An access road can be
used to access a property for other uses, not just this proposed development. Also, a lodge built
offsite can be used at another site since it obviouslyy was intended to be. moved.
There is also not substantial evidence of time, labor or money "spent." As reflected by the
attached excerpts from the Thornburgh bankruptcy petition, claims for nonpayment have been
made by certain creditors.. Mr. Bere,'s affidavit of "expenditures occurred" does not take into
account that not all the expenditures incurred have been paid. See, for example, the listing of
approximately $.138,000 owed Edgewood Log :Structures in 2007. A mention in a bankr=uptcy
petition of sums owing is proof that not all expenditures incurred have in fact been paid, The
Bere affidavit isnot conclusive of what has been spent. Because the bankruptcy petition
indicates that not all.:claimed bills have been paid, it is necessary that the Applicant submit
itemized proof of all of the alleged payments.
The conditions of approval .have not beensubstantially exercised.
The Applicant argued at the hearing that compliance with DCC 22.36.020(A)(3) was achieved
because 100% of the conditions that could be satisfied were. The Code and CMP decision do
not contain such "could be" language and the premise of this argument which is that the
Applicant need not do anything .requiring more approval than what canbe done under the CMP
has already been rejected. by LUBA, based on the actual language of the CMP decision.
The Applicant's :argument about a three-step destination resort approval process as: meaning it
need not fulfill many of the conditions of approval is likewise misplaced. As LUBA has stated,
the language of the CMP decision is controlling here and it "effectively required the applicant to
secure these' additional permits within the two-year period." (Shp Op. 20) This is also
appropriate given the central role of the CMP in this land use approval process and the r-elatively
perfunctory role of the FMP and other applications.
The Applicant has not shown that it is not at fault.
The Applicant. argued that the assessment of its fault should distinguish between "comply" and
"perform." It asserted, without explaining, that "comply" means something less than "perform.."
The Code's actual language is that "any failure to fully comply with the conditions is not the
fault of the applicant." (Emphasis added:) There is no basis for Applicant's argument that full
compliance means something less than "full."
February 12, 2014
Page 5
Loyal Land also asserted that it was not at fault because it was waiting for BLM to determine
where wildlife mitigation should occur. Not only is no evidence cited for this proposition, but as
quoted by LUBA in its remand decision on the FMP. Gould v. Deschutes County, 59 Or LUBA
435, 447 (2009), the Thornburgh Wildlife Management Plan provided for the Cline Buttes
Recreation Area Plan to identify the locationfor wildlife mitigation. As explained by the BLM
in the attached news article on vandalism problems with the CBRAP, that plan was finalized in
2009, long before the expiration of the time period on November 8, 2011.
This new argument by Loyal Land that the FMP remand was somehow difficult to accomplish is
directly contrary to what Loyal Land argued in the proceedings below, that the FMP "remand is
limited to two minor issues that do not substantially impact most of the Hearings Officer's
findings and conclusions." AR -199.
Any problem with addressing the "minor" wildlife mitigation issue is more likely due to the fact
that Thornburgh stopped paying its consultant, identified as Tetra Tech. in Gould, 59 Or .l..,UBA
at 444, n.3. See the attached excerpt from the .List of. Creditors from the Thornburgh bankruptcy
petition, identifying Tetra Tech as a creditor owed over $145,000 for services in 2008 and 2009.
As reflected in the Bankruptcy Petition listing of creditors, nonpayment for services began in
2007-08. There is no proof that the actual financial problems of Thornburgh were not simply
that Thornburgh was not adequately capitalized in the first place.
Very truly yours.
PAUL DEWEY
PD:ao
cc: Client
David Petersen
of. (it ,..;,t1•u1'rrtt'tt+._a• .i.,...
Case 1.1-31897-tmb11 Doc 30 Filed 04/08/11
In re Thornburgh Resort Company. LLC
Debtor
ase No. 11-318.97-tmbl1
(if known)
SCHEDULE F - CREDITORS I-1OLD1,NG 'UNSECURED ONPRIORITY CLAIMS.
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Gary Mattox
5689 E. Quartz Mt. Rd.
Paradise Valley AZ 85253,
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145,430.58
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Coure d'Alene ID 83816
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X
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Group, LLC
2447 NW Canyon
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2009-2011
92,908.77
Ater Wynne LLP
1331 NW Lovejoy, Ste 900
Portland OR 97209
slta•t ::0 1 12 .otiitri.. .:.,n .:;cct,r;,; f.u; .. .
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in re Thornburgh Resort Company LLC
Debtor
(`ase .No. 11-31897-tmb11
(if known)
SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
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Hickman, Williams & Assocs,.
1201 SW Wall
Bend, OR 97702
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521 SW 6th St. Ste 100
Redmorid OR 97756
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1901 West 47th Place, #200
Westwood KS 66205
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X
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1201 SW Wall St. Ste. 100
Bend OR 97702
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Debtor
(rase No. 11-31897-tmb11
(if known)
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Trade Account 2008-2009
41,562.00
Golf Course PLannin.g'.LLC
20027 N 97th Place
Scottsdale AZ 85255
l((tt( \t NO
Trade Account 2008
22,631.25
Packowsi Heinritz Assoc
1801 1 Street Ste 100
Sacramento, CA 95814
:ux t.)t N I NO.
Trade Ac-rcount 2007
21,332:96
Black Helterline LLP 805 SW
Broadway ste 1900.Portland
OR 97205
:.t( c'rn \ t NO.
Contract Labor Services
2008-2009
20,000.00
Rick Nordin
24055 Dodds Rd.
Bend OR 97701
- ci dt vi NO,
Trade Account 2007
18483;24
Karnopp Peterson et al
1201 SW Wall St. Ste. 300
Bend OR 97702
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Case 11-31897-tmb11 Doc 30 Filed 04/08/11
In re Thornburgh Resort Company LLC
Debtor
( ase No. 11-31897-tmb11
(if known)
SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
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Precautionary listing
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Peerless Golf, Inc.
64682 Cook Ave #118
Bend OR 97701
1c't ()1 \I NO
Settlement 2007 '
X
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Kevin WarneriiHeimy Law
222 SW Columbia Ave.
Portland OR 97204
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99,000.00
Landscapes Unlimited
1201 Aries Drive.
Lincoln NE 68512
kc (. tit' N 1 No
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2007-2009
116.000.00
Bere Lindley
1537 West Center St.
Manteca., CA 95337
ACt t 1, NI NO
Unsecured Loans
924,229.00
Central Resort Company,
LLC, PO Box 264 Bend,Or
97702
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Multi -Print Viewer
America's New
Vandals ruin 10 years of effort - Cline Buttes trailhead damage "sad"
Bulletin, The (Bend, OR) - Thursday, January 10, 2013
Readability: >12 grade level (Lexile: 1340L)
Author: Dylan J. Darling, The Bulletin
Over one night last week vandals ran over, knocked down and stole the results of a decade of planning at a
trailhead for a new off-highway vehicle area at Cline Buttes.
Sometime between the afternoon of Jan. 3 and Jan. 4, the vandalscaused about $2,500 in damage to the North
Barr Trailhead off state Highway 126 between Redmond and Sisters, said Matt Able: He manages an interagency
program for off-highway vehicle use in the Deschutes and Oohoco national forests, as well as the Prineville District
of the Bureau of Land Management. The trailhead is on land overseen by the BLM at the north end. of the Cline
Buttes Recreation Area, in the middle of the triangle formed by the highways connecting. Bend, Redmond. and
Sisters.
"All that stuff: that was vandalized was less than a year old," Able said:.
Likely using a truck, the vandals ran over signs around the trailhead, splintering the wooden signposts, Able.seid.
They stole the trailhead sign and five "one way" signs, he said, and shot an informational kiosk at least a dozen
times and a concrete outhouse four times. The shots appear to have come from a handgun.
The. Cline Buttes. Recreation Area was a decade in the making, he said, and the BLM finalized its plan in 20.09. The
directional signs went in late last spring and the trailhead sign was installed last summer.
The BLM is looking for information about who did the vandalism; OHV groups are considering putting out a reward.
"Ifs a crime against the community,not a crime against an individual," said Randy Drake, Oregonexecutive
director of the Pacific Northwest Four Wheel Drive Association, a nonprofit representing OHV users in Oregon,
Washington and Idaho.
The group and the Deschutes County 4 -Wheelers may also donate money to pay the cost of replacing the signs.,
said. Mona Drake, Randy Drake's wife. The couple is among the leaders of the club, which was involved in the
development of the Cline Buttes Recreational Area.
The area was: created to provide opportunities for different recreation groups, such as OHV users, mountain bikers
and horseback riders. The shiny new signs at the North Barr Trailhead were there to provide OHV users with
directions..
The agency and volunteers spent years planning the Cline Buttes Recreation Area and finding grants to help fund it.
Seeing the vandalism at the trailhead is deflating, said Molly Brown, field manager for the Bureau of Land
Management in Prineville.
"It has just been a very long road to get to this point and every dollar is so vital," Brown said.
Volunteers have also put in hundreds of hours to create the OHV trailsat the recreation area. There have been
around 10 weekend work parties with about 20 volunteers working eight hours each day, said Mona Drake. The
events drew volunteers from around the state, she added.
Other public land has had vandalism in recent years in Central Oregon — including the theft of 78 steel barrier
i posts in February 2012 at Mayfield Pond east of Bend and the running over and lighting ablaze of an outhouse in
httpAnfoweb.ne usbank w-search/wetinroweb
112
Paul D. Dewey Attomeyat.Law
1539 NW Vicksburg
Bend, Oregon 97701
(541) 317-1993
fax (541) 383-3470
pdewey@bendcablecom
February 14 2014
Ms, Karen Green
Deschutes County Hearings Officer
c/o Community Development Department
117 NW Lafayette Ave.
Bend, OR 97701
Re: Loyal Land, LLC, File No. DR -11-13
Remand from Land Ilse Board of Appeals
Dear Ms. Green:
As scheduled at the hearing on February 4,J am submitting the follOwing on behalf of Nunzie
Gould to respond on this date to the Applicant's latest letter to you on February 11,
Scop O of remand and opening of Retord.
The Applicant has been unclear and incOnsistent about the extent to which it is proposing that. the
Record be reopened. It does• not expressly request that the .Record be reopened in its January 2,
2014, letter to the County. However, it did attach to that letter as new evidence a County Staff
Report on a different case and an affidavit of Bere Lindley.
Assuming that Loyal Land was thus .attempting to reopen the Record, we submitted some
additional material of our own. However. Loyal Land in its letter of February 11, 2014, now
objects to our new evidence:
"[The newspaper article is not in the record."
But then it submits yet another Lindley affidavit, asserting it is "admissible as 'additional
testimony' ...required to comply with the remand." That is a baseless argument since the remand
was only on DCC 22.36.020(A)(3) and the Lindley affidavits were to establish. Loyal Land's new
claim under DCC 22.36.020(A)(2).
SQ presumably Loyal Land is seeking a reopening of the Record only for its DCC
22.36.020(A)(2) claim? To the contrary, Loyal Land at page 4 of its February 11 letter asserts
that its. monetary expenditures (originally presented to establish its (A)(2) claim) are proof of
substantial exercise of the conditions of approval under the (A)(3) claint
February 14, 2014
Page 2
Confusing -the• issues even ftu-ther, Loyal Land takes our arguments against (A)(2), namely that
"incurring expenditures" is not the same as "spending," and attacks them in the context of
(A)(3). Then it tries to use its (A)(2) evidence of expenditures to prove "substantial exercise of
canditions" under (A)(3).
Also regarding the issue of fault under (A)(3), the Applicant asserted as "fact" at the February 4
hearing that the cause of Thornburgh's failure to initiate the FMP remand was delays by BLM.
To respond to this assertion made at the hearing, we submitted evidence that the BLM decision
to be made as identified by LUBA was actually made in 2009, The Applicant now expounds on
its earlier assertion by stating as fact in its February 11 letter that I3LM approved the site for
wildlife mitigation in inid.February 2011. None of Loyal Land's assertions of fact on this matter
are supported by snbstantial,evidence in the Record.
To be clear, we are not proposing that the Record be reopened. We have submitted new
evidence only to counter Loyal Land's unclear attempts to reopen the Record, in case the
FleatingS Officer would approve such reopening. The bottom line is that no neW evidence should
be accepted since there has not been a showing that additional testimony is required to comply
with the remand arid since the flearing Officer lacks authority to do so under the County Code.
The destination resort use has not been initiated under DCC 22.36:020(A)(3).
A. Substantial exercise.
The Applicant begins its argument regarding satisfaction of the conditions of approval by
charaeteriZing our argument as DCC 22.36.020(A)(3) 'requiring" that each condition be
substantially exercised. 1 -laving set up this straw man, Loyal Land then quotes "LUBA as
rejecting thatintetpretation. As we clearly said in our written rebuttal and in our testimony of
February 4, LUBA said that the County ''could" decide either Nvay and we presented arguments
as to why it Nvould be more consistent or lOgical" to interpret the Code to Mean the analysis
should be for each condition rather than as a whole."
Loyal Land in its February 11 letter then proceeds to argue that an interpretation of each
zonation would be unreasonable because the destination resort approval process could not be
concluded in two ram Loral Land is improperly trying to interpret the language of DCC
2236 020(A)(3) not by the rules of statutory construction that examine the Code language, but
instead by whether an interpretation would allow the use of a destination resort under this
partiettlar CMP decision, Ina because the conditions of approval for the CMP were drafted in a
way that makes it.diffrcult for Loyal Land to oatnpiy does not mean that the Code Shona he
iintr4Preted ina war that would facilitate thedevelopment. As LUBA explained in its do*ion,
the <Code language cannot be amended by interpretation jUst so the Applkatit's titUaticatan be
solved.
Loyal Land then go tiroh.aneiensM analysis asto how it would allegedly be impossible
to "substantially exereite" each condition in its case. Again, Loyal Land is attempting to:
interprettode latigunp by how Loyal Land could comply with its oWn particular destination
February 14, 2014
Page 3
resort decision. Code .interpretation should be done based on the language of the Code, not on
how it might be applied in a particular land use application.
The hypothetical timeline presented by Loyal Land is contrived. For example, the FIV1p
application here was filed before the CMP was approved. (AR -63) There is also no basis for a
wait of 150 days otn. an .approval of a tentative plat. Further, Loyal Land ignores that Thornburgh
could have, but did not, make a timely request for extensions from the County.
Loyal Land then shifts from arguing an interpretation of (A)(3) to an interpretation of the
approval process for destination resorts (Loyal Feb. 11 letter, p. 3), and argues for a'viewed as a
whole" approach based on how its destination resort could comply with that standard; Again, it
is irrelevant to. an interpretation of (.A)(3) as to how a particular land use application could be
made.
Shifting to an argument that it would meet the "viewed as a whole test, Loyal Land argues that
the non -exercise of 60% of the conditions is reasonable to equate to substantial exercise of the
conditions "viewed as a whole." It further argues against our assertion that the content or
meaningfulness of the conditions beexamined in assessing a "viewed as a whore" approach.
Loyal Land, though, does not explain why such a hierarchy of importance is not relevant, Loyal
Land asserts: that there isno basis for superimposing this kind of hierarchy on the conditions, in
either the DCC or the CMP. however,as pointed out by LURA. in its derision; the ClVIP
decision contemplated the satisfaction of the FMP, the tentative plat and the final plat and most
of the conditions were based on those approvals. "fhe conditions as a whole involve substantial
steps toward completion of the destination resort and it does not make sense, when;the
conditions .asa whole are considered, to equate: a simple map with the development of overnight
units and recreation facilities at the resort.
Loyal Land'sapparent argument that the test of "viewed as a whole" is simply :a.counting of how
many conditions of approval have been substantially exercised is a very rnarros reading of the
concept. When the conditions are "viewedas a whole," they need to be examined for what each
contains. Some, forexample, include significant multiple :subparts. Others are just requirenments
for a simple tnnath correction, Any assessment of the conditions of approval as "viewed as a
whole would need to examine the conditions for what they contain. Particularly signd'ie t
conditions, for example, include Condition of Approval 33, which provides;
"Thee ResQrt. Shall., in :the first phase, provide for the following:
A, At:least 150 separate rentable units for visitor -oriented lodging..
B. Visitor -oriented eating establishments for at least 1.00 .persons and
meeting rooms which provide eatingfor at least 100 persons.
C. The aggregate cost of developing the overnight lodging facilities
and the eating establishments and meeting rooms required stn DCC
18.113.O6.0(A)(1) and (2) shall be at least $2,000,000 (in 1984
dollars).
February 14, 2014
Page 4
D. At least S2,000,000 (in 1984 dollars) Shall be .spent on developed
recreational facilities.
E, Ti: facilities and accommodations required by DCC 18.113.060
must be physically provided or financially assured pursuant to
DCC 18.113.110 prior to closure of sales, rental or lease of any
-residential dwellings or lots."
Condition 21 provides, in part:
"-Each phase of the development shall be constructed such that the number of
overnight lodging units meets the 150 overnight lodging unit and 2:1 ratio of
individually owned units to overnight lodging UnitS....”
Condition 10 provides., in part:
"Applicant shall provide, at the time of tentative plat/site plan review for each
indivicitral 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."
As noted in the earlier proceedings, Iya11 Land does not Control these mitigation credits and in
fact the mitigation once obtained by Thornburgh has been INithdrawri.
Yet another example of a significantoondition is Condition:., 'kvitich,providesz
"All development in the resort shall require tentative plat approval through Title
17 of the County Cod; the County Subdivision/Partition Ordinance, andlor 8ite
Plan Review through Title 18 of the County -Code, the Subdivision Ordinance."
Loyal Land further .asserts.that WBA did not mean what it said (that all remaining land use
permits had to be obtained before expiration of the CMP) andthat if it had meant that it would
have reversed the COunty. As proof of:that interpretation, Loyal Land pointout that LUBA
seemed -to suggest that substantial eXerciSe could oour eN,en if some conditions had not been
.substantially exercised. The conditions LUBA was talking about, though, were tiot the ones
based. on approval of all remaining land use perinits, but rather only the ones involving a
contingency such as a change to the approved plan. (lip 0p. 24, n. 14)
The .ffindarnental reason for a remand instead of a reversal is that the Hearings Ofcer needed to
make more findings on fault (Slip Op. 20-21)
LoyalLandsnext three paragraphs under this sextionaddressing whether ,or. not he conditions
of approval are substantially .exeroised actually -shift to a discussion of "incurring ependitures"
and pending money," .which we raised in opposition to Loyal. Land's arguments concerning.
construction under subsection. (A)(2). Once again, the Applicant is conflating its.discussion of
February 14, 2014
Page 5
"monetary expenditures" under subsection (A)(2) with proof of substantial exercise under
(A)(3).
The last three paragraphs address issues of fault and will be addressed below under the heading
which actually does address fault.
13. The Applicant has failed to show that its failure to satisfy the conditions of approval
was not its fault.
Loyal .Land objects to our Citation to LUBA's decision which expressed skepticism that the
Healing Officer could make findings- absolving Loyal Land of fault for any failure to fully
comply with the conditions of approval. •Loyal Land argues that if LUBA thought it was
impossible to make the required findingsit would have reversed rather than remanded. LUBA's
language speaks for itself Loyal Land has the opportunity on remand to establish it is not at
fault, if there is substantial evidence.
Regarding the Applicant's failure to initiate the PMP remand, the Applicant argues that we have
overstated the time period during which the FMP remand could have started, The Applicant
claims that there were only nine months from BLM's approval of the wildlife mitigation site in
February 2011 to expiration of the CMP in November 2011, but it presents no evidence in
support. As. LUBA clearly stated, any findings must be based on substantial evidence.
Loyal Land then accuses. Ms, Gould of being the reason for the delay in the Applicant being able
to pursue the FMP remand, This is acuriouS accusation since Ms. Gould did nothing regarding
the FMP remand. Loyal Land does not explain how she influenced the Applicant's decision not
to initiate the FMP remand one way or the other. Loyal Land also has the wrong date for the
remand which was actually September 9, 2009. The Court of Appeals affirmed on February 24,
2010, which is when the remand could begin. Loyal Land claims that the ,notice of appellate
judgment issued by LUBA on August 11, 2010; is the earliest it could initiate a remand, but the
Hearings Officer has already determined that the operative date is the Court of Appeals
judgment. (AR -76)
Loyal Land also accuses M. Gould as being "almost single-handedly responsible for the slow
pace of this project." Loyal Land adds that Ms. Gould, "by herself," caused over four years of
delay between May 2006 and August 2010 with appeals. This accusation ignores the fact that
the appeals tolled the running of the two-year period, so that the two-year period did not run until
all appeals were resolved. It also ignores the fact that LUBA upheld Ms. Gould's appeal of the
original CMP and that the Oregon Court of Appeals further upheld her appeal to that court
Additionally, LUBA upheld Ms. Gould's appeal of the FMP and the Court of Appeals affirmed
LUBA's decision.
Loyal Land's argument regarding fault is interesting, blaming Ms. Gould for filing appeals rather
than acknowledging its own fault in failing to ,conwly with the law in the first place. Had LUBA
and the Court .of Appeals ruled against Ms. Gould on all issues, that would have been one thing,
but the fact is that the Applicant is .completely at fault for preparing an inadequate CMP and an
adequate FMP. If Loyal Land is claiming that the appeals are the reason for the failure to initiate
February 14, 2014
Page 6
use ofthe destination resort then it is plainly at fault sir= it was repeatedly held to have done an
inadequate job of preparing its land use applications. (Note again that the Applicant wasnot
held up by any appeals since it pursued the RAP even before the CMP was approved.
Thornburgh .applied for the FMP on August 11, 2007. The CMP Was approved on April 15,
2008.)
Again on page 6 of its February 11 letter, Loyal Land asserts: "BLM (a bureaucracy) took 28
months after FMP approval to appmve the wildlife mitigation site a necessary precursor to
pursuing the. FMP remand." Once again, there is absolutely no evidence in the .Record that it
took 28 months or that it was BLM that caused the delayIt is far more likely that the delay was
caused by the Applicant's failure to pay the hil1s. for its wildlife experts, discussed below)
Repeatedly, Loyal Land asserts that the 2008 collapse of the economy excuses Applicant from a
.determination of fault. However, there is no evidence of any direct connection between the
economic problems and Thornburgh's financial difficulties. To the extent our new evidence may
be submitted, it shows that Thornburgh stopped paying its bilis before 208. The existing
evidence M the Record, quoted below, shows that Thomburgh's financial problems preceded the
2008 eCottontic, situation.
Loyal Land asserts that the Applicant is not at fault because "TRC was fight* for survival"
during 2011. The reason Thornburgh was fighting for survival is because Loyal Land was trying
to take it over.
Loyal Land carefully tries to avoid responsibility for the extensive history of the undermining of
the Thornburgh Resort and the infighting in the takeover of the Thornburgh Resort property. It
concludes:
"Loyalt.ariddidno.t contribute to TRC's. financial troubles,. it only reacted to
them." (Empbas'is added.),
Loyal Land also asserts that Mr. Parker is "not affiliated" with Loyal Land. The Record simply
does not support that lack of association between Mr. Parker arid Mr. Larsen (Loyal Land) and
does not: support such an innocent interpretation of the role of Loyal Land in the downfall of
Thornburgh.
Papers in the bankruptcy proceeding clearly lay out the connection of Mt Parker and Mr.
Larsen/Loyal Land and the roles they played in bringing down the Thornburgh Resort:
"In early 2006 JeffParker, a Portland developer (`Parker'), approached
TRC, expressing interest in acqtliring resort land. When Chapman asked to be
1 Once again, we recognizethat we are referring to evidence that the Hearings Officer may decide is not relevant if
the Record is not reopened. We also reognize that the evidence we have submitted coneents. Loyai Land's
assertion that subsection (A)(2) regarding construction is apptioble.. Given that Loyal Landis arguing that its
construction expenditures are relevant todetermining whether the conditions of approval have been substantially
exereised, we are simply.using that sarrte evidence of expenditures to Show the Applicant's fault in not satisfying the
conditions of approval..
February 14, 2014.
Page 7
bought out, DeLashmutt invited Parker to consider taking a financial role in the
project. Parker, his partner, Bill Wilt, and their entity, Parker Group Investments,
LLC ('`PGI'); agreed to take the lead role in financing the entire project. On June
6, 2007, Debtor executed the 'Investment Agreement' with Parker, Witt and PGI.
Under the Investment Agreement PGI lent Debtor .$10 million
immediately, andcommitted 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 trillion loan to that development loan. PGI began negotiations with Sterling
Savings Bank ('Sterli'ng') to fund the Bridge Loan....As additional collateral
Sterling took a $7.2 million cash fund of an entity owned and controlled by
Parker. Parker and PGI failed to provide the promised minimum $4 million
shortfall on. the Bridge Loan, leaving. Debtor with inadequate cash and a sharply
limited ability to proceed with the resort development.
In or about February 200$,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 to provide replacement
Collateral. This left the Property exposed as tho sole security for the Loan:
By early 2008, PGI had effectively ceased raising funds to complete the
Bridge Loan, P01 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 early 2010 Parker entered into an :agreement With Sterling to purchase
the Loan at a steep discount. Because Sterling would not sell the loan directly to
PCrI, the borrower, Parker created Central Oregon Investment Holdings, LLC
('COSI') to serve as purchaser.
* * *
'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 CQIH,
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
Pater agreed that Larsen would provide to Parker a 50%: participating .interest in
February 14, 2014
Page 8
the value created by. Larsen's disposition of the Property after acquiring it at
foreclosure.
On March 7, 2011 Larsen formed his own nevv entity, Loyal Land, LLC
CLoyarl, and transferred the loan to Loyal. Loyal proceeded toward
consununation of the foreclosure sale.
6.1.1.4. Larsen andLoyal Land Leol Claims. Larsen and Loyal arc hot
parties to the Buyout Agreement and participated in the wrongful conduct against
Debtor?
1rbgWsproblems clearly preceded the 2008 economic collapse..
At page 4 of it February 1.1 letter, Loyal Land asserts -that it "takes bothchutzpalt•and an utter
disconnect With.ftoitorniettality 'to:Suggest. that a developer should barge ahead.fullspeed and
brook no delays in pursuing all land use approvals, notwithstanding the..Virtnal i.tertainty .of
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." It is not "chutzpah"that
there is a twolearlimit during which a use needs to be initiated; it is.simply What the Code
TP(Inkeg. A developer• is not excused from compliance just because there are appeals. That is,
why the 'Code provides: that .the running of the two-year period is tolled until, all appeals. are:
;resolved. That the Applicant 'lacked adequate financing is its own fault If ecortomic.-downturns.
exctiSe compliancevith the tsvo-yearveriod, then there would be no meaning to it, Again;
Thomburgh's pro.blerns.-preceded. theeconomic downturn, The relevant forum for a claim of
economic hardship -is an application for an extension of time from the County, not the two-year
expiration period.
Consideratidn.ofl)CC. 22.36,020(A4(t). and. (2) is :inappropriate.
Loyal Land Mils letter of February 11 states that DCC 22:34.040(A) "Wows broad discretion -to
consider other issues.' Any such diseretion, however, is limited to the Board. .
Loyal Land then.argues -that DCC 22.34:040(c) allows parties to raise "new, unresolvedissues
teloting to itew eAdertee.direeted..to the issue on remand." As stated above, the issue on remand
was clearly only DCC 22,36:920(A)(3)., Loyal Lanctstates that it. would he$trange fur the
County to dec1ine to considersubpart (A)(2) 00 remand when it has the authority to do so and
when LUBA said that that section Should have been applied in the first place Again,
;Land is ignoring the County' Codeprovisions on what is to be considered on remml arid is
further ignoring that LUBA expressly did not addressOCC 22•36,020(A)(2) and limited its
consideration solely to subsection (A)(3.),
February 14, 2014
Page 9
We have already addressed the arguments and citations of authority by Loyal Land regarding the
County's ability to consider other issues. As we stated in our previous submittal, it is the County
Code, not these cases or arguments, that arecontrolling in this case. It is also inappropriate for
Loyal Land to be assuming: a position on remand that. is :inconsistent with its position taken in the
proceedings below. In those proceedings below, Loyal Land made it very clear that only DCC
22.36.020(A)(3) could be pursued here.
The destination resort use has not been initiated under DCC 22.36.020(A)(2).
Loyal Land argues that the requirement of "substantial construction" contains no requirement
that the construction have occurred on the. land .subject to the landuse approval. That argument
ignores the plain language of the Code, that 'substantial const'ruotiort" has occurred. when the
holder of a land use approval "has physically altered the land or structure or changed theuse
thereof" Loyal Landalso attempts to reduce the meaning of subsection (A)(2) and reduce it to
whether the permit holder has "done enough to -show a commitment to the project in a good faith
effort to complete the -project." That isnot the language of Me Code. The Code does not simply
call for a "good faith. effort.:"
Loyal Land also attempts to reopen the Record :again :to provide for a new Lindley affidavit to:.
assert "onsite professional activities in furtherance ofthe golf courses." This evidence is not
only inadmissible, but it is based on complete speculation by CPA Lindley from California as to
what amount of the costs are attributable to onsite activities. Without any basis infact or
experience, Mr. Lindley makes "a reasonabierestimate of the cost attributable to these onsite
activities."
There is also no basis for the claim that a certain percentage of costs are associated with onsite
work. Materials we submitted .on February 12 show that substantial amounts of the claimed
expenditures were in fact not made, listing most of the "golf course".accounts listed by Mr.
Lindley as having substantial claims. The affidavits . of Mr. Lindley also do not establish that
whatever expenditures were trade actually restdted in work on the ground. There is no evidence
that the allegedconversion of a house into an office occurredor that alleged golf course
development work occurred or, if itdid, what it was. No foundationis given for why an
accountant in California can attest toanything being done on the site. Sinceno land use permits
had been obtained to do any of this destination resort. work (though expressly required by
Condition of Approval 2), there is no basis to assume any legitimate work has been done on the
site.
Loyal Land is also incorrect in its February 11 letter in asserting that the VRE decision. supports
its position that planning, design •and other "soft" costs .can be considered toward "substantial
construction." To the extent the VRE staff decision is persuasive here, it should .be noted that
such planning, design and other "soft" costs were related to onsite construction that was done.
Loyal Land further attempts to characterize our criticism of these "soft" non -construction costs
as being a challenge to "expenditures prior to approval of the CMP." Loyal Land asserts that
LUBA dented our argument that suchwork before the conditions of approval should not be
considered. The argument is made that we cannot relitigate this issue now. To the contrary, we
February 14, 2014
Page 10
are taiSing this argument in the context. of whether or not there has been Substanfial construction.
Expenditures on planning during the preparation of the CMP application are not properly
considered construction,costs. Once again, the Applieant attempts to conflate arguments and
evidence applicable to conditions of approkral and 4prily them to the (A)(2) language regarding
substantial construction.
Finally, Loyal Land asserts that its expenditures are 38 times more than the expenditures in
VRE.. Not only is there not adequate evidence of the expenditures; but this evidence is, also
inadmissible. Furthermore, the VRE decision considered a final plat whereas here it is the
entirety Of a destination resort that is to be considered in any determination of whether the
amount of construction iS "substantial."
The use has notlawfully oecnrred itnder!DCC 22.64070(A)(1).
Loyal Land completely ignores the Hearings Officer's and LU13A's determinations that the use
to have been initiated here is a destination resort. Loyal Land also inappropriately argues that
such an interpretation would'elevate the importance of the CMP and diminish other components
of a destination resort permit." A simple reading Of the provisions of DCC 18.113.040 shows
that the CMP is the absolutely critical decision in approval of a destination resort. There are
over tight pages of requirements for a CMP, which involves a conditional use process. In
contrast, the approval of an RV can be a simple ministerial decision by staff, as can approval of
tentative plats.
Loyal Land's final, argument in its February 11 letter attempts to relitigate what :LUBA has
already rejected, namely that "the CMP has been initiated upon filing, of the application for the
FMF'."
Very truly yours,
PAUL DEWEY
PD:ao
cc: Client
David Petersen