Loading...
HomeMy WebLinkAboutFinal Argument11 ATTORNEYS TONKONTORPLLP David J. Petersen Admitted to practice in Oregon and California June 25, 2014 VIA E-MAIL (kevinh(uco.deschutes.or.us) Ms. Tammy Bainey, Chair Mr. Alan Unger, Commissioner Mr. Tony DeBone, Commissioner Deschutes County Board of Commissioners 1300 NW Wall Street Bend, OR 97701 Re: Loyal Land, LLC Appeal County File No. A-14-1 Dear Commissioners: 1600 Pioneer Tower 888 SW Fifth Avenue Portland, Oregon 97204 503.221.1440 Direct Dial: 503.802.2054 Direct Fax: 503.972.3754 david.petersen@tonkon.com Enclosed with this letter is the applicant's final argument in this appeal. The evidence shows that the developers of the Thornburgh Resort have pursued this project at all times with full fervor, consistently acting in good faith to further the project in spite of tremendous adversity outside their control. In very short summary, the Hearings Officer made the correct interpretation of the DCC in her first decision in this matter. Her decision was consistent with the context of the DCC and properly balanced the County's competing interests in timely action on development and meaningful management of complex projects. On the other hand, the subsequent LUBA decision (which the Hearings Officer was compelled to follow in her second decision) badly misinterpreted the DCC and the conditions of approval, created an unworkable regulatory framework for development of destination resorts and violated State law and the Oregon and U.S. Constitutions. This Board now has its first opportunity to interpret the DCC provisions at issue in this case, and we recommend that the Board overturn the existing decision in favor of the Hearings Officer's first interpretation. In addition, we request that the Board also apply the LUBA interpretation, because even under that interpretation the evidence shows that the CMP has been initiated. Specifically, we request that the Board: 1. adopt the Hearings Officer's interpretation of DCC 22.36.020.A.3 from her initial decision on April 12, 2012 and find that the CMP has been initiated under that interpretation; Deschutes County Board of Commissioners June 25, 2014 Page 2 2. find that the CMP has also been initiated under LUBA's interpretation of DCC 22.36.020.A.3 because substantial evidence exists in the record showing that: (a) the applicant is in full compliance with all the conditions of approval and (b) the applicant has substantially exercised the conditions as a whole; and 3. find that even if the applicant is not in full compliance with any of the conditions of approval, the failure to fully comply is not the fault of the applicant. Thank you and please contact me if you have any questions or concerns. Sincerely David J. Petersen DJP/djp Enclosure cc (by e-mail, w/enc): Mr. Paul D. Dewey TricwipN TORP Lip Deschutes County Board of Commissioners June 25, 2014 Page 4 APPLICANT'S FINAL LEGAL ARGUMENT This constitutes the applicant's final argument in the above-referenced appeal. The Board should find that the Thornburgh Resort CMP has been initiated under DCC 22.36.020.A.3 for three separate and independent reasons. 1. The Board Should Adopt The Interpretation Of DCC 22.36.020.A.3 From The Hearings Officer's April 12, 2012 Decision. The Board is not bound to accept LUBA's interpretation of DCC 22.36.020.A.3 for the reasons explained in my letter of June 18, 2014. Instead, the Board can and should independently evaluate the language of DCC 22.36.020.A.3 and how it fits into the context of the three-step destination resort approval process under DCC Chapter 18.113. Fortunately, the Hearings Officer has already provided a thorough analysis that properly balances the County's competing interests in timely completion of projects and meaningful management of complex developments. In her decision of April 12, 2012, she states (pp. 20-21): [D]estination resort development occurs in three steps. The CMP is the first step. The only question before me in this declaratory ruling proceeding is whether the destination resort use allowed through the CMP approval has been initiated — not whether the applicant ultimately will be able to develop the resort. The applicant's ability to put into place all of the destination resort's components may well be relevant at the FMP and specific development steps. The remaining question raised by the parties under [DCC 22.36.020.A.3] is whether all or only some of the 38 conditions of approval in the board's decisions are relevant in determining whether the use approved through the CMP has been "initiated." The Hearings Officer finds the answer to that question is determined by both the language of the conditions of approval and their context within the three-step destination resort process. [DCC] Section 18.113.050 states that the CMP provides the "framework" for development of the destination resort. Section 18.113.040(B) states that in order to develop the destination resort the applicant must submit and obtain approval for the FMP "which incorporates all requirements of the County approval for the CMP" and demonstrates compliance with "all conditions of approval of the conditional use permit." Section 18.113.040(C) states "each element or development phase of the destination resort must receive additional approval through the required site plan approval or subdivision criteria," and must be in compliance with the FMP. TimivNToRPLLP Deschutes County Board of Commissioners June 25, 2014 Page 5 Consistent with the DR process context, the conditions of approval in the board's decisions specify different times for compliance — e.g. some before FMP approval, some before specific development approval, and some at all times — as shown in the following summary of conditions. She then identified 16 conditions as relevant to initiation of the CMP because they required compliance before FMP approval or concurrently with an FMP application; the rest were not relevant to CMP initiation. Ms. Gould had argued that all the conditions were relevant (the interpretation subsequently adopted by LUBA), but the Hearings Officer found that argument "not persuasive" because DCC 22.36.020.A.3 applies to "the conditions" not "all conditions." (April 12, 2012 Decision, p. 23.) As she later characterized her own earlier decision, the other conditions "were not relevant to the initiation of [the CMP] primarily because the CMP approval decision specified times for compliance with these conditions that were after CMP approval." (March 17, 2014 Decision, p. 23.) The Hearings Officer then found that all 16 relevant conditions had been fully exercised. (April 12, 2012 Decision, p. 23.) This was a thoroughly sound approach. It furthered the County's goal expressed in DCC 22.36.020 to keep the project moving, because it required compliance with all conditions that could be complied with, within two years of CMP approval. It also honored the three-step process of DCC Chapter 18.113 and the complex nature of destination resort approval and mitigation of impacts, by not requiring that all conditions (and therefore the entire three-step process) be completed in two years. Instead, her decision allowed for implementation and review by the County over time, in keeping with the 10 to 12-year phasing plan approved by the Board in the CMP. This interpretation balanced these potentially competing goals in a way that harmonizes DCC 22.36.020 and DCC Chapter 18.113 and makes destination resorts and other complex projects workable and achievable. In comparison, the Hearings Officer's second decision was as faulty as her first decision was insightful. Stuck with LUBA's poor re-interpretation of DCC 22.36.020.A.3, she was forced to consider whether or not all 41 conditions of approval had been exercised (an interpretation she expressly rejected in her first decision). She first determined that: (a) the applicant fully exercised 19 conditions, and (b) condition 38 was substantially exercised and the failure to fully comply with condition 38 was not the applicant's fault. These two findings were not appealed and are therefore final, leaving 21 conditions at issue.1 Next, as to every one of these 21 conditions the Hearings Officer found that exercise of the condition was contingent upon an approved FMP or later land use approval, and therefore exercise could not permissibly occur, but the applicant was at fault for the non-occurrence of the Ms. Gould is incorrect that condition 28 still applies. That condition concerned implementation of a memorandum of understanding with the Oregon Department of Fish and Wildlife regarding the wildlife mitigation plan. It was deleted on remand of the CMP in 2008 and replaced with condition 38. See County Order 2008-151. Tictwi,ToRp.ip Deschutes County Board of Commissioners June 25, 2014 Page 6 contingency (i.e., the failure to achieve an approved FMP, tentative or final plat). Thus, the question of fault was applied not to the action ultimately required to fully exercise the condition (build visitor lodging, meet fire protection requirements, include language in deeds, etc.) but instead to an arbitrary preliminary step. This finding is faulty for five reasons. First, there is no support in the DCC for applying the "failure to fully comply is not the fault of the applicant" test to preliminary steps necessary before full exercise can occur. In fact, it directly contradicts DCC 22.36.020.A.3 by erroneously equating "compliance" with "exercise" as discussed below in Part 2. Second, it improperly focuses the fault analysis on near-term preliminary steps (i.e. the FMP remand) rather than the ultimate action required by the condition. This misdirection is unfair to the applicant because it is easier to find "fault" in failing to achieve what seems close at hand, even when the ultimate obligation is far out of reach. The correct question is not whether the applicant is at fault for not initiating the FMP remand. Instead, the correct question is (for example) whether the applicant is at fault for not building $4,000,000 (in 1984 dollars)2 worth of visitor lodging and recreational amenities within two years of CMP approval, as required by condition 33. Or stated another way, even if the FMP remand had been initiated, would the Hearings Officer have reached a different conclusion about full compliance with condition 33? If not, then any fault of the applicant in not initiating the FMP remand is exposed as irrelevant and it becomes unreasonable to conclude, based on the evidence, that the applicant's fault has prevented the action required by condition 33 from happening. Third, as to some of the conditions this finding required some outrageous linguistic gymnastics. It simply makes no sense, for example, to somehow convert a simple prohibition in condition 18 — "no development shall be allowed on slopes of 25% or more on the site"— into a condition with preliminary steps requiring affirmative action in order to be exercised. Conditions 16 (prohibition of temporary structures for longer than 18 months), 20 (prohibition of excessive density) and 34 (prohibition on disturbing native vegetation) have been similarly tortured. This finding also led to the contradictory conclusion that the applicant was required to construct improvements in order to comply with 15 conditions,3 even though DCC 22.36.020.A.3 expressly begins with the words "where construction is not required by the approval ..." Fourth, her interpretation extends the reach of conditions beyond that allowed by DCC 18.113.075, which permits conditions only to ensure satisfaction of the destination resort approval criteria of Chapter 18.113. Her approach effectively creates new approval criteria not stated in the DCC. In her first decision she recognized this problem, stating that "there was no condition of CMP approval requiring the filing of the FMP and therefore [such a condition] could not be 'substantially exercised.'" (April 12, 2012 Decision, p. 32.) 2 This is over $9 million in 2014 dollars. 3 Conditions 2, 4, 5, 12, 14C, 16, 17, 18, 20, 21, 29, 31, 33, 34 and 35. Triguipt,ToRpiip Deschutes County Board of Commissioners June 25, 2014 Page 7 Last and most importantly, the Hearings Officer's decision effectively requires that all conditions of approval of a CMP be completed — meaning achievement of all subsequent land use approvals and performance of the acts required by the conditions — within two years of final approval of the CMP, tolled only for appeals of the CMP. This would be so notwithstanding express Board approval of a longer phasing plan (10 to 12 years in the case of the Thornburgh Resort). It also ignores the effective veto power it gives any opponent willing to appeal a subsequent approval like the FMP or a tentative plat or site plan, since those appeals would not toll the CMP. This last error is perhaps the best example of the conundrum the Hearings Officer faced on remand. She recognized precisely this risk in her April 12, 2012 decision. In dismissing Ms. Gould's argument that applying DCC 22.36.020.A.3 to all the conditions would have no impact beyond this project, the Hearings Officer stated that: [Ms. Gould's] interpretation could result in the resort developer being unable to "initiate" the use until the entire development is completed — and within two years from the date of CMP approval. I cannot find any support for this scenario in Section 22.36.020 or the DR Zone provisions. (April 12, 2012 Decision, p. 23.) On remand, faced with LUBA's order requiring her to consider all the conditions, she was forced to set this objection aside. But her objection was sound: LUBA's approach is a wholly unworkable interpretation that would effectively require full project development in two years, thereby making project development impossible and rendering the three-step process of DCC Chapter 18.113 meaningless. It is simply unreasonable to conclude that this is how the County wants DCC 22.36.020.A.3 applied to destination resort CMPs. This Board should discard the Hearings Officer's second decision and instead re-adopt the Hearings Officer's initial interpretation -- that the only conditions that are relevant for CMP initiation under DCC 22.36.020.A.3 are those to be met prior to FMP approval or no later than filing a FMP application. The Hearings Officer found in her March 17, 2014 decision that all 16 of these conditions have been fully exercised. These findings were not appealed and are therefore final. If all the relevant conditions have been fully exercised, then there is no need to consider the fault of the applicant, and the conditions have necessarily also been substantially exercised. DCC 22.36.020.A.3 is met and the CMP has been initiated. 2. Even Using LUBA's Interpretation Of DCC 22.36.020.A.3, The CMP Has Been Initiated Because The Applicant Is In Full Compliance With All Conditions Of Approval. If the Board is instead inclined to accept the interpretation of DCC 22.36.020.A.3 from LUBA's January 8, 2013 decision, the Board still should fmd that the CMP has been initiated because the applicant is in full compliance with all remaining 21 conditions. My June 18, 2014 letter explains why "full compliance" with the conditions does not mean the same thing as "full exercise" and, because their meanings are so different, the applicant can be in full compliance TL TriqmpNToRPLip Deschutes County Board of Commissioners June 25, 2014 Page 8 with a condition even without exercising it. Appendix 1 to this letter shows that the applicant is in full compliance with all 21 conditions.4 The end result is that the applicant has either fully performed, or is in full compliance with, 40 of the 41 conditions of approval. Therefore, as to those 40 conditions, full compliance exists and there is no need to evaluate the applicant's fault. As to the 41st condition of approval, the Hearings Officer has already finally determined that the condition has been substantially exercised and the failure to fully comply is not the fault of the applicant. Consequently, even under LUBA's interpretation the second part of the DCC 22.36.020.A.3 test is met in full. 3. If The Applicant Is Not In Full Compliance With All Conditions Of Approval, Any Failure To Fully Comply Is Not The Fault Of The Applicant. Alternatively, if the Board accepts LUBA's interpretation but disagrees that full compliance exists with respect to any of the remaining 21 conditions, the failure to fully comply is not the fault of the applicant so DCC 22.36.020.A.3 is still met. The reasons for this (both global and as applied to individual conditions) were discussed extensively at the June 4 hearing and in prior submittals. However, it is important to re-emphasize that many factors, some unprecedented in our lifetimes and all outside of the applicant's control, have worked together to slow this project down. The evidence shows that, despite these challenges, the applicant and its predecessor have worked tirelessly and in good faith, sometimes taking significant development risks, to navigate those challenges and keep the project moving. The costs spent on permitting alone illustrate this point persuasively. As noted above, the Hearings Officer found that all 21 conditions at issue were contingent on subsequent land use approvals. In pursuit of those contingencies, the developers spent: (i) $1,024,016 on permits and approvals needed prior to filing the FMP application; (ii) $1,492,892 to apply for and defend the FMP after approval; and (iii) $364,999 towards the Phase A tentative plat, for a total of $2,883,907 on post-CMP permitting alone. (DeLashmutt affidavit, ¶ 19; timeline submitted at June 4, 2014 hearing.) Overall, the developers have spent over $9.8 million in pursuing those approvals and satisfying the conditions (Id.) Ms. Gould sees the applicant's fault behind every rock, but most of her argument focuses on the lack of initiation of the County FMP remand between remand of the FMP by LUBA in August 2010 and expiration of the CMP in November 2011. In response, four things should be recognized. First, there is no condition of approval requiring the applicant to file the FMP remand within the life of the CMP. 4 With respect some conditions the Hearings Officer's errors would, if allowed to stand, also lead to violations of the applicant's federal and state constitutional rights by taking private property without just compensation. This is explained further in Appendix 1. TRkINI9N TORP Deschutes County Board of Commissioners June 25, 2014 Page 9 Second, there is abundant evidence in the record why the FMP remand was not initiated during this time — delay at the BLM, the Great Recession, unavailable financing, the virtual certainty of further appeals, the applicant's rights under state law and others. Third, even if the applicant had initiated remand of the FMP, there was simply not enough time to exercise all the conditions, especially in light of inevitable further appeals. The appeals of the CMP and FMP had taken 1,310 and 679 days respectively; there is no reason to think the FMP remand proceedings and subsequent appeals would take significantly less time. Fourth, this 15-month window existed only because the developer took the significant risk in the first place by filing the FMP application in April 2008 while the CMP was still under appeal. A more cautious developer would have waited until all CMP appeals were over in December 2009 (20 months later) to file that application, which would have delayed the FMP remand until after the CMP was already expired. The developer's appetite for risk may seem reckless to some, but it is not the kind of "fault" that DCC 22.36.020.A.3 seeks to ferret out. The kind of fault that is relevant here is unexcused delay, and the developers' behavior throughout has been the polar opposite. As the prior developer's former counsel, Peter Livingston, stated in his letter: Without exaggeration I can say that there was not one day in more than four years that [I] represented Thornburgh when Mr. DeLashmutt's relentless push on all fronts waivered. In my view, Thornburgh was not at fault in any way for failing to meet the deadlines that LUBA has found apply to the satisfaction of the conditions imposed in the CMP approval. And as Jon Peterson of Peterson Economics stated in his report after explaining how the resort market in Central Oregon was devastated by the Great Recession, making financing virtually unavailable: For [Thornburgh] to have redirected its efforts and pursued further permitting until market conditions warranted would have been ridiculous. The evidence has only one reasonable interpretation — that the applicant and its predecessor, in the face of incredible adversity, did everything it could do to advance this project, and therefore any failure to fully comply with any conditions of approval is not the fault of the applicant. 4. Under Any Interpretation, The Conditions Of Approval Have Been Substantially Exercised. Parts 1 through 3 of this letter focus on the second part of DCC 22.36.020.A.3 — that any failure to fully comply with the conditions is not the fault of the applicant. Under any analysis, the Board must also consider the first part - whether the conditions of approval have been TONKONTORPLLP Deschutes County Board of Commissioners June 25, 2014 Page 10 substantially exercised. The Hearings Officer found that substantial exercise means "performing or carrying out a condition to a significant degree but not completely" and is evaluated "as a whole" rather than condition by condition. (March 17, 2014 Decision, p. 46.) These findings were not challenged on appeal and are therefore final. This test is met under any of the three analyses set forth above. Under Part 1, only those conditions that could be exercised before FMP approval or concurrently with an FMP application are relevant. Here, every one of those conditions has been fully exercised. If full exercise exists, then substantial exercise also necessarily exists. Under Part 2, 40 of 41 conditions have either been fully exercised or are fully complied with, and the 41st condition has been substantially exercised. There is no condition for which substantial exercise was permissible, but has not yet occurred. When the applicant has either fully or substantially exercised every condition possible, and is in full compliance with the rest, substantial exercise of the conditions "as a whole" must necessarily exist. Under Part 3, substantial exercise still exists since every condition that could have been exercised by this point in the process, has been exercised. This is 20 of the 41 total conditions, just short of 50%. The applicant has incurred hard costs of almost $10 million to get to this point, including almost $4.7 million specifically for permitting, $2.4 million for recreational amenities, $1.5 million for planning/pre-development activities and has even built a $1.1 million access road on BLM property that cannot be re-purposed to another use. (DeLashmutt affidavit, ¶ 19.) The Hearings Officer erred in giving some conditions more weight than others in determining that substantial exercise exists, since nowhere is that interpretation supported by the DCC. But even if that error is ignored, the better conclusion from the evidence is that substantial exercise of the conditions "as a whole" has occurred given what the applicant has achieved in light of the obstacles it has faced. Regardless of how the Board reaches the conclusion that the second part of DCC 22.36.020.A.3 is met, the "substantial exercise" part is also met. Therefore, the CMP has been initiated. In summary, the applicant requests that the Board overturn the March 17, 2014 decision of the Hearings Officer and instead: 1. adopt the Hearings Officer's interpretation of DCC 22.36.020.A.3 from her initial decision on April 12, 2012 and find that the CMP has been initiated under that interpretation; 2. find that the CMP has also been initiated under LUBA's interpretation of DCC 22.36.020.A.3 because substantial evidence exists in the record showing 111 -FAWN TORP LLP Deschutes County Board of Commissioners June 25, 2014 Page 11 that: (a) the applicant is in full compliance with all the conditions of approval and (b) the applicant has substantially exercised the conditions as a whole; and 3. find that even if the applicant is not in full compliance with any of the conditions of approval, the failure to fully comply is not the fault of the applicant. 037117/00001/5638279v 1 L TngtINLyNTORPup Appendix 1 to June 25, 2014 letter to Kevin Harrison Deschutes County Appeal A-14-1 It has already been finally determined that the applicant has fully complied with conditions 1, 3, 8, 9, 10, 11, 13, 14A, 14B, 14E, 15, 19, 22, 23, 24, 30, 32, 36 and 37, and has substantially exercised condition 38. Condition 28 was deleted upon an earlier remand. Accordingly, this Appendix analyzes only the remaining 21 conditions of approval that are within the scope of this appeal: 2, 4, 5, 6, 7, 12, 14C, 14D, 16, 17, 18, 20, 21, 25, 26, 27, 29, 31, 33, 34 and 35. 2. All development in the resort shall require tentative plat approval through Title 17 of the County Code, the County Subdivision/Partition Ordinance, and/or Site Plan Review through Title 18 of the County Code, the Subdivision Ordinance (sic). This condition restates DCC 18.113.040(C): Site Plan Review which is the third step of the three-step destination resort approval process requiring that before the applicant begins any development it must first obtain tentative plat approval or site plan approval in accordance with the applicable Title of the DCC, either 17 or 18. Non-compliance with this condition would be to develop (i.e., construct) resort improvements without site plan or tentative plat approval. If the applicant was not in full compliance, it would be not only in violation of the condition but also DCC 18.113.040.C, but there has been no code enforcement action or other allegation of non-compliance with 18.113.040.C. Thus, no action contrary to the condition has occurred, so the applicant is and always has been in full compliance. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to construct at least the first two phases of the resort, within the two-year life of the CMP. This is improper for several reasons: • Since this condition essentially restates DCC 18.113.040.0 and that code section does not create an obligation for the applicant to take those actions, the condition should not be interpreted contrary to the code section. • To interpret the condition to require construction goes against the conclusion that 22.36.020.A.3 applies to this initiation request, which is predicated on the statement that "no construction is required by the approval." • Nothing in the DCC, the CMP or the condition attaches any specific relevance to the first two phases as opposed to all seven phases approved for the resort. • The assumptions built into the Hearings Officers conclusion that even two phases could be built within two years (March 17, 2014 Decision, pp. 30-31) are absurd. To agree with her timeline for even the first two phases requires one to believe that all applications are filed on the first day possible, are never found to be incomplete and are processed in less than the 150 days allotted; that multi-million dollar construction of any phase could be completed in 30 days; and 1 that no approval was ever appealed (see applicant's Notice of Appeal, pp. 5-6.) All of these assumptions are belied by the actual history of this project. Lastly, all preliminary work in furtherance of this condition has occurred in full compliance with Titles 17 and 18. This is shown by the draft tentative plat submitted at the June 4, 2014 hearing, the Lindley affidavits, the road construction drawings submitted June 10 and the email from John Kahlie submitted with the applicant's letter of June 11, 2014. 4. Subject to U.S. Department of the Interior — Bureau of Land Management (BLM) approval, any secondary emergency ingress/egress across the BLM-owned land or roadways shall be improved to a minimum width of 20 feet with an all-weather surface capable of supporting a 60,000-lb. fire vehicle. Emergency secondary resort access roads shall be improved before any Final Plat approval or issuance of a building permit whichever comes first. The condition requires construction of an access road before approval of either a final plat or a building permit. This condition has been both fully complied with and fully exercised since the road has been built. This is shown by the Bere Lindley affidavits in evidence (and which the Hearings Officer refused to consider, but are available to the Board in this de novo review), and the photographs and road construction drawings submitted by the applicant on June 10 and June 11, 2014. 5. The developer shall design and construct the road system in accordance with Title 17 of the Deschutes County Code (DCC). Road improvement plans shall be approved by the Road Department prior to construction. There is no evidence in the record that the applicant has designed and constructed roads in violation of DCC Title 17 or that it has done so without approval of the County Road Department. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, and (b) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. All preliminary work in furtherance of this condition has occurred in full compliance with Title 17. This is shown by the draft tentative plat submitted at the June 4, 2014 hearing, the Lindley affidavits, the road construction drawings submitted June 10 and the email from John Kahlie submitted with the applicant's letter of June 11, 2014. 2 6. All easements of record or right-of-ways (sic) shall be shown on any final plat. There is no evidence in the record that the applicant has failed to show any easements or rights of way on any final plat. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C to be in a position to file at least a final plat, within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that the condition restates code requirements, but there has been no action against the applicant for noncompliance with the DCC. 7. All new proposed road names must be reviewed and approved by the Property Address Coordinator prior to final plat approval. There is no evidence in the record that the applicant has obtained approval of a final plat without first having proposed road names reviewed and approved by the Property Address Coordinator. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C through and including final plat approval, within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that the condition restates code requirements, but there has been no action against the applicant for noncompliance with the DCC. 12. Commercial, cultural, entertainment or accessory uses provided as part of the destination resort shall be contained within the development and shall not be oriented to public roadways. Commercial, cultural and entertainment uses allowed within the destination resort shall be incidental to the resort itself. As such, these ancillary uses shall be permitted only at a scale suited to serve visitors to the resort. Compliance with this requirement shall also be included as condition of FMP approval. There is no evidence in the record that the applicant has provided or designed any commercial, cultural, entertainment or accessory uses that violate the requirements of this condition. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these 3 amenities on the applicant than required by the corresponding approval criterion in DCC 18.113.070.Q, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. All preliminary work in furtherance of this condition has occurred in full compliance with the condition, as shown by the draft tentative plat submitted at the June 4, 2014 hearing. The recreational amenities plan from the CMP, submitted with the applicants June 11, 2014 letter, shows a budget in excess of $125 million for these amenities, so it is completely unrealistic for the Hearings Officer to have concluded that these amenities could have been built for the first two phases within two years of CMP approval, along with all the other actions required in that same time frame to complete those phases. 14C. All deeds conveying all or any part of the subject property shall include the following restriction: "This property is part of the Thornburgh Resort and is subject to the provisions of the Final Master Plan for Thornburgh Resort and the Declaration of Covenants, Conditions and Restrictions of Thornburgh Resort. The Final Master Plan and the Declaration contain a delineation of open space areas that shall be maintained as open space areas in perpetuity." There is no evidence in the record that the applicant has conveyed any of the property subject to the CMP by a deed that did not include the required statement. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to reach a point where property in the project is conveyed to consumers, all within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, and (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criterion, which is a violation of state law and DCC 18.113.075. This interpretation also violates the U.S. and Oregon Constitutions because it identifies, as a contingency to performance of the condition, an obligation to convey the applicants property. Requiring the applicant to convey its property in order to satisfy the requirements of the CMP is a taking of the applicant's property without just compensation and also in violation of the constitutional requirements that a condition of approval have a nexus with, and be roughly proportional to, the impact the condition seeks to mitigate. 4 14D. All open space areas shall be clearly delineated and labeled on the Final Plat. There is no evidence in the record that the applicant has failed to show any open space areas on any final plat. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C to be in a position to file at least a final plat, within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that the condition restates code requirements, but there has been no action against the applicant for noncompliance with the DCC. 16. All temporary structures shall be limited to a maximum of 18 months on the resort site. There is no evidence in the record that the applicant has allowed any temporary structure to remain on the property for more than 18 months. Thus, the applicant is and always has been in full compliance with the condition. For the reasons explained in the applicant's June 25, 2014 letter, the Hearings Officer has improperly converted a wholly prohibitive condition into one requiring affirmative acts. Also, by falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that the condition restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, and that it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criterion (18.113.070.S), which is a violation of state law and DCC 18.113.075. 17. All development within the proposed resort shall meet all fire protection requirements of the Redmond Fire Department. Fire protection requirements shall include all minimum emergency ingress/egress roadway improvements. There is no evidence in the record that the applicant has designed or built any improvements in violation of Redmond Fire Department fire protection requirements, and the improvement plans for the BLM access road show that it meets all such requirements. To the contrary, the record shows that the Redmond Fire Department approved all development plans in the CMP and FMP. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 5 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, and (b) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. 18. No development shall be allowed on slopes of 25% or more on the site. There is no evidence in the record that the applicant has engaged in any development on a slope with a 25% or steeper grade. To the contrary, the developer had a detailed aerial survey and slope analysis undertaken and carefully planned the entire resort so that there was no development in areas with 25% or steeper slopes. As a result there is no development shown or planned on slopes >25% on the CMP, the FMP, or the Tentative Plat (see e-mail from John Kahlie submitted with the June 11, 2014 letter). Thus, the applicant is and always has been in full compliance with the condition. For the reasons explained in the applicant's June 25, 2014 letter, the Hearings Officer has improperly converted a wholly prohibitive condition into one requiring affirmative acts. Also, by falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C and engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criterion in DCC 18.113.070.H, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. 20. The cumulative density of development at the end of any phase shall not exceed a maximum density of 0.72 dwelling units per acre (including residential dwelling units and excluding visitor-oriented overnight lodging). There is no evidence in the record that the applicant has completed any phase of development with density exceeding the designated maximum. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these 6 amenities on the applicant than required by the corresponding approval criterion in DCC 18.113.060.F, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. All preliminary work in furtherance of this condition has occurred in full compliance with the condition, as shown by the draft tentative plat submitted at the June 4, 2014 hearing. The plat shows a density for Phase A of .405 dwelling units per acre (front page shows gross area of 790 acres and total lots of 320) which is far less than allowed. 21. Each phase of the development shall be constructed such that the number of overnight lodging units meets the 150 overnight lodging unit and 2:1 ratio of individually owned units to overnight lodging units standard set out in DCC 18.113.060(A)(1) and 18.113.060(D)(2). Individually owned units shall be considered visitor oriented lodging if they are available for overnight rental use by the general public for at least 45 weeks per calendar year through one or more central reservation and check-in services. As required by ORS 197.445(4)(b)(B), at least 50 units of overnight lodging must be constructed in the first phase of development, prior to closure of sale of individual lots or units.' In addition to complying with the specific requirements of DCC 18.113.050(U), 1-5, Applicant, its successors and assigns, shall at all times maintain (1) a registry of the individually owned units subject to deed restrictions under DCC 18.113.070(U)(2), requiring they are available for overnight lodging purposes: (2) an office in a location reasonably convenient to resort visitors as a reservation and check-in facility at the resort; and (3) a separate telephone reservation line and a website in the name of "Thornburgh Resort", to be used by members of the public to make reservations. As an alternative to or in addition to (3), Applicant may enter into an agreement with a firm (booking agent) that specializes in the rental or time-sharing of resort property, providing that Applicant will share the information in the registry required by (1) and cooperate with the booking agent to solicit reservations for available overnight lodging at the resort. If Applicant contracts with a booking agent, Applicant and the booking agent shall cooperate to ensure compliance with the requirements of DCC 18.113.070(U)(5) by filing a report on January 1 of each year with the Deschutes County Planning Division. (Staff note: All references should be to DCC 18.113.050(L), not (U).) There is no evidence in the record that the applicant has constructed any phase of the development with overnight lodging units that violate these requirements. Without any existing lodging units, the requirements of the second paragraph are not yet triggered. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 1 The last sentence of this paragraph was added by the Board on remand in Order No. 2008-151. 7 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criterion in DCC 18.113.050 and .060, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. 25. Applicant shall submit a detailed erosion control plan with the first Tentative Plat or Site Plan, whichever comes first. There is no evidence in the record that the applicant has submitted either a tentative plat or site plan review application without an erosion control plan. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C (i.e., approval of a FMP which is necessary before a tentative plat or site plan review application can be filed) within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that the condition restates code requirements, but there has been no action against the applicant for noncompliance with the DCC. 26. Lot size, width (frontage), coverage, off-street parking and setbacks, including solar setbacks, are permitted as described in Applicant's Exhibit 8, B-24a in the Burden of Proof document, subject to review during the subdivision review process to confirm that there will be safe vehicle access to each lot. Compliance with the dimensional standards shall be confirmed during subdivision approval for each development phase. All multi-family units, commercial structures, and other resort facilities are exempted from meeting the solar setback standards. There is no evidence in the record that the applicant has requested subdivision approval for any phase that is not consistent with the cited Exhibit. To the contrary, the FMP plans and the draft Phase A tentative plat comply with the Exhibit in all respects. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.B and C and to reach at least the subdivision approval stage, all within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, and (b) it imposes more 8 obligations with respect to these amenities on the applicant than required by the corresponding approval criterion in DCC 18.113.060.G, which is a violation of state law and DCC 18.113.075. 27. Road width shall be consistent with the requirements set forth in the County's subdivision ordinance. DCC Chapter 17.36. There is no evidence in the record that the applicant has requested subdivision approval for any phase that proposes road widths inconsistent with DCC Chapter 17.36. To the contrary, the FMP plans and the draft Phase A tentative plat comply with Chapter 17.36 in all respects. (See Kahlie e-mail attached to June 11, 2014 letter.) Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C and to reach at least the subdivision approval stage, all within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, and (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criterion in DCC 18.113.060.G, which is a violation of state law and DCC 18.113.075. 29. Applicant shall abide at all times with the MOU with ODOT, regarding required improvements and contributions to improvements on ODOT administered roadways (Agreement Number 22759, dated 10/10/05). There is no evidence in the record that the applicant has breached the MOU, To the contrary, the only available evidence shows that the applicant is in full compliance with the MOU (see Bob Bryant e-mail submitted with June 11, 2014 letter) and that the turn lane improvements required by the MOU have been built (see photos with June 11, 2014 letter). Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C within the two-year life of the CMP. This is an unreasonable reading of the condition since nothing in the MOU makes any further approvals mandatory in order to remain in compliance with the MOU. 31. All exterior lighting must comply with the Deschutes County Covered Outdoor Lighting Ordinance per Section 15.10 of Title 15 of the DCC. There is no evidence in the record that the applicant has constructed any outdoor lighting that does not comply with the covered outdoor lighting ordinance. Thus, the applicant is and always has been in full compliance with the condition. 9 By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criterion in DCC Chapter 15.10, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. 33. The Resort shall, in the first phase, provide for the following: A. At least 150 separate rentable units for visitor-oriented lodging. B. Visitor-oriented eating establishments for at least 100 persons and meeting rooms which provide eating (sic) for at least 100 persons. C. The aggregate cost of developing the overnight lodging facilities and the eating establishments and meeting rooms required in DCC 18.113.060(A)(1) and (2) shall be at least $2,000,000 (in 1984 dollars). D. At least $2,000,000 (in 1984 dollars) shall be spent on developed recreational facilities. E. The facilities and accommodations required by DCC 18.113.060 must be physically provided or financially assured pursuant to DCC 18.113.110 prior to closure of sales, rental or lease of any residential dwellings or lots. There is no evidence in the record that the applicant has constructed the first phase of the resort without the required amenities. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criteria in DCC Chapter 18.113, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. 34. Where construction disturbs native vegetation in open space areas that are to be retained in a substantially natural condition, Applicant shall restore the native vegetation. This requirement shall not apply to land that is improved for recreational uses, such as golf courses, hiking or nature trails or equestrian or bicycle paths. 10 There is no evidence in the record that the applicant has disturbed any native vegetation. Thus, the applicant is and always has been in full compliance with the condition. For the reasons explained in the applicant's June 25, 2014 letter, the Hearings Officer has improperly converted a wholly prohibitive condition into one requiring affirmative acts. Also, by falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C and engage in construction within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criteria in DCC Chapter 18.113, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. 35. The contract with the owners of units that will be used for overnight lodging by the general public shall contain language to the following effect: "[Unit Owner] shall make the unit available to [Thornburgh Resort/booking agent] for overnight rental use by the general public at least 45 weeks per calendar year through a central reservation and check-in service." There is no evidence in the record that the applicant has constructed or sold any units to be used for overnight lodging, so there is no "owner to contract with. Thus, the applicant is and always has been in full compliance with the condition. By falsely equating compliance with exercise, the Hearings Officer interpreted this condition to require the applicant to affirmatively obtain further land use approvals under DCC 18.113.040.6 and C, and to engage in construction and sale of units within the two-year life of the CMP. This analysis is faulty and improper for many of the reasons stated above with respect to condition 2, including that: (a) it restates code requirements, but there has been no action against the applicant for noncompliance with the DCC, (b) it imposes more obligations with respect to these amenities on the applicant than required by the corresponding approval criteria in DCC Chapter 18.113, which is a violation of state law and DCC 18.113.075; and (c) it obligates the applicant to demonstrate construction to meet a standard for initiation (DCC 22.36.020.A.3) that explicitly applies only when no construction is required. To the extent the Hearings Officer's analysis imposes an affirmative obligation of the applicant to sell its property, it is unconstitutional for the same reasons as stated with respect to condition 14C. 037117/00001/5644744v1 11