HomeMy WebLinkAboutHearing - Rencher - Measure 49Deschutes County Board of Commissioners
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AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of December 2, 2009
Please see directions for completing this document on the next page.
DATE: October 12, 2009
FROM: Steven Griffin Legal 330 -4645
TITLE OF AGENDA ITEM:
Remand Hearing on application of Frank L. Rencher for a determination of whether he is entitled tc
relief under Ballot Measure 49, Section 5(3).
PUBLIC HEARING ON THIS DATE? Yes
BACKGROUND AND POLICY IMPLICATIONS:
Section 5(3) of Ballot Measure 49 allows a Measure 37 claimant who received a waiver of land use
regulations to continue and complete the use described in the waiver if the claimant obtained a "vested
right" on December 6, 2007 to complete that use.
Four recipients of Measure 37 waivers applied to the county for an administrative determination of
whether they have achieved a "vested right" under the law. The applications were referred to a hearings
officer who ruled that the applicants were not entitled to relief. Because Measure 49 states that such
local determinations are not "land use decisions" final county determinations on this issue proceed to
circuit court not the Land Use Board of Appeals.
In this case, the applicant petitioned the court to review the county's determination and partially
prevailed in that action. The trial court concluded that the county had misconstrued the applicable law,
vacated the decision, and remanded the matter to the county to be reconsidered under the correct legal
standard.
The proposed agenda item would be the county's reconsideration pursuant to the court's judgment.
The questions presented at hearing will include: (1) As of December 6, 2007, what is the total cost for
the applicant to "complete the use described in the waiver "? (2) As of December 6, 2007, how mi ch
had the applicant spent to complete the land use? (3) What is the nature of the expenditures? (4) Were
the expenditures reasonable, not adaptable to another permitted use, and otherwise incurred in go( d
faith? (5) Considering the expenditures and other legal factors, had the applicant achieved a coma ion
law vested right to continue and complete the land use?
FISCAL IMPLICATIONS:
The board's ultimate decision will have a negligible fiscal impact. Conducting the remand hearin.; will
potentially result in cost savings.
RECOMMENDATION & ACTION REQUESTED:
Hold a hearing and render a decision.
ATTENDANCE: Steven Griffin, Deschutes County, Assistant Legal Counsel;
Ed Fitch, Attorney for Claimant;
Frank L. Rencher, Claimant
DISTRIBUTION OF DOCUMENTS:
Deschutes County Legal Department
Community Development Department
DESCHUTES COUNTY LEGAL COUNSEL
STEVEN GRIFFIN
Assietat L- • :I Counsel
W33 45
TO: Board of County Commissioners Date: November 24, 2009
RE: Frank L. Rencher,
Remand Hearing
File No. 414 -022
This is a "legal staff report" for the public hearing to determine whether on
December 6, 2007 Frank L. Rencher had obtained a "common law vested right"
to complete the 8 lot residential subdivision tentatively approved by the county in
MA- 07 -09.
FACTS
Applicant Frank L. Rencher owns a 39 acre parcel of property in the
Redmond area. The applicant has proposed to subdivide the parcel into 8
residential lots of approximately 5 acres in size. The subdivision approval states
that a cul -de -sac type road must be constructed to serve the parcel. An
approximate map of the proposed development is attached to this staff report.
The Tots are to be served with a community well system and individual septic
systems.
Page 1 of 18, Legal Staff Report Re: Frank Rencher
This development was tentatively approved pursuant to two "Ballot
Measure 37 waivers." Originally, the applicant proposed to subdivide the parcel
into 21 residential Tots. That land use application was filed February 15, 2007.
Following a public hearing on May 1, 2007 the application was denied. On July
25, 2007 the applicant modified the proposal from a 21 lot subdivision to an 8 lot
subdivision. This board heard the matter and issued a decision tentatively
approving the 8 lot subdivision on November 13, 2007.
To facilitate this project the applicant entered into a contract with C. Corp,
a local developer. Applicant and C. Corp formed a limited liability company to
undertake the development. The contract between the two parties specified that
applicant would contribute the parcel of property to the project and C. Corp would
contribute funds and development expertise. The parties specified that the
proceeds of the sale of any subdivision lots would be split between the parties
based upon an agreed upon formula. The applicant was not obligated to
contribute any cash to the development or absorb any costs associated with the
development. He did, however, agree to obtain a loan secured by a lien on the
parcel of property, but which was otherwise a nonrecourse loan with respect to
him. Applicant retained title to the property.
The enactment of Measure 49 extinguished the Measure 37 waivers, but
the applicant contended that he was permitted to complete the approved land
use under Ballot Measure 49, section 5(3), i.e. he had obtained a "common law
vested right" to complete the project. Applicant filed a local declaratory ruling
application seeking a declaration that he had obtained a common law vested
Page 2 of 18, Legal Staff Report Re: Frank Rencher
right to complete the project. A hearing was held and a county hearings officer
issued a decision adverse to the petitioner. The matter was ultimately reviewed
by the circuit court which held that the county had erred. The court vacated the
hearings officer's decision and remanded the matter to the county for it to
reconsider the application in Tight of the rules of law announced in the previous
decision. This is the hearing on remand.
ISSUES PRESENTED
Issue 1. May a land owner obtain a common law vested right to
complete a land use when the land owner entered into a development agreement
with a developer and the developer, not the land owner, assumes the financial
risk and the land owner retains title to property for purposes of utilizing Measure
37 waivers?
Recommended Answer. To obtain a common law vested right the land owner
must personally incur substantial expense.
Issue 2. As of December 6, 2007, how much had the applicant spent
to complete the land use? What was the nature of the expenditures? Were the
expenditures reasonable and otherwise incurred in good faith? In other words,
what are the total allowable expenses which should be included in determining
the "Holmes ratio" 1?
Recommended Answer.
If counsel's observations concerning exclusion of certain expenses
1 The Holmes ratio is contained in the Oregon Supreme Court decision in Clackamas County v.
Holmes, 265 Or 193, 508 P2d 190 (1973) which is explained in the "Discussion" section below.
Page 3 of 18, Legal Staff Report Re: Frank Rencher
because they can be adapted to uses permitted under Measure 49 are well taken
then the board should approve $11,319.19 in expenses.
Alternatively, if counsel's observations concerning exclusion of certain
expenses because they can be adapted to uses permitted under Measure 49 are
not well taken then the board should approve $70,302.72 in expenses.
Issue 3. As of December 6, 2007 what was the total project cost?
Taking the total project cost figure what is the corresponding "Holmes ratio ?"
Recommended Answer.
Find that the applicant has not satisfied his burden to establish a
reasonable total project cost and reject the application for a common law vested
right on that basis alone.
Alternatively, find that the total project cost is approximately $1.3 million.
The corresponding Holmes ratio would be between .8% and 5.0%
Issue 4. Considering the "Holmes ratio" derived from the figures
obtained in Issues 2 and 3, and the other legal factors, do these applicants have
a "vested right" to complete the proposed project?
Recommended Answer.
Find that the applicant has not obtained a common law vested right for
one of several reasons: (1) the applicant's lack of personal financial investment
and risk precludes such a finding; (2) the applicant did not sustain his burden to
prove total project cost with sufficient particularity; or (3) the Holmes ratio and
other legal factors preclude a finding of a common law vested right.
Page 4 of 18, Legal Staff Report Re: Frank Rencher
DISCUSSION
Legal Standard Vested Rights
The right of a landowner to continue and complete a land use in spite of a
change in the law which would make the and use unlawful is known as a
"common law vested right." The Oregon Supreme Court in Clackamas County v.
Holmes, articulated several "factors" which decision makers should consider in
determining whether a developer has achieved a common law vested right to
complete a land use rendered unlawful by a change in law.
The Holmes factors are:
(1) The ratio of expenditures incurred to the total cost of the project;
(2) The good faith of the landowner;
(3) Whether or not [the landowner] had notice of any proposed zoning
or amendatory zoning before starting his improvements;
(4) The type of expenditures, i.e., whether the expenditures have any
relation to the completed project or could apply to various other
uses of the land;
(5) The kind of project, the location and ultimate cost; and
(6) Whether the acts of the landowner rise beyond mere contemplated
use or preparation, such as leveling of land, boring test holes, or
preliminary negotiations with contractors or architects).
Clackamas County v. Holmes, 265 Or at 197 -99.
Much of the "vested rights" discussion centers on the "Holmes ratio" of
expenses incurred in good faith to total project cost. No particular ratio is
determinative. Not all Holmes factors apply in every case and the weight to be
afforded any factor varies depending on the particular circumstances of each
Page 5 of 18, Legal Staff Report Re: Frank Rencher
case. Union Oil Co v. Board of Co. Comm. of Clackamas Co., 81 Or App 1, 8,
724 P2d 341 (1986). The vested rights determination is a case -by -case factual
exercise. See Holmes, 265 Or at 197.
Issue # 1. May a land owner obtain a common law vested right to complete
a land use when the land owner entered into a development agreement with
a developer and the developer, not the land owner, assumes the financial
risk and the land owner retains title to property for purposes of utilizing
Measure 37 waivers?
DISCUSSION
Measure 49 provides, in part,
A claimant that filed a claim under ORS 197.352 [Measure 37] on
or before the date of adjournment sine die of the 2007 regular
session of the Seventy -fourth Legislative Assembly is entitled to
just compensation as provided in:
* * *
(3) A waiver issued before the effective date of this
2007 Act to the extent that the claimant's use of the
property complies with the waiver and the claimant
has a common law vested right on the effective date
of this 2007 Act to complete and continue the use
described in the waiver.
The text of Measure 49 provides that the "claimant" must have a common law
vested right "to complete and continue the use described in the waiver." In this
case, the "claimant" has entered into a contract with a developer. The contract
provides that the developer and applicant will form an entity to develop the property
(REN Development, LLC). The applicant is under no obligation to contribute any
funds to the entity. Applicant's contribution per the contract was making the property
available to the developer for this project. Funds were to come from the developer
and through a loan that, with respect to the applicant, is a nonrecourse loan. As will
Page 6 of 18, Legal Staff Report Re: Frank Rencher
be discussed below, all of the development expenses were incurred either by the
developer or the entity created pursuant to the contract.
In the case of Bowerman v. State, Clackamas County Circuit Court Case
number CV0712049 the court held that a similar arrangement was fatal to the
landowner's claim of a vested right. In this case, title to the property remains in the
applicant's name for two reasons only, (1) "To secure payment" from the developer;
and (2) "for the purpose of developing the property under Measure 37." (Rec 87).
The claimant did take out a loan for $75,000.00 to "help pay for expenses
associated with this development." (Rec 76). This loan is an insufficient basis to
sustain the claim of a vested right for three reasons:
1. The contract between the developer and the applicant states that the
development loan obtained to facilitate the development "will be a
nonrecourse loan as to the Owner." (Rec 87). The record is does not state
whether or not the loan referred to in the affidavit is a nonrecourse loan or
not. In any case, the applicant was not required to incur personal liability for
such a loan and his decision to do so is a voluntary assumption of financial
risk and should not be considered in the vested rights calculus.
2. There is no evidence from which the board can perform its function of
independently verifying the nature, extent, and reasonableness of the
expenses to which the funds were put. As will be discussed below a
substantial amount of the claimed expenses are not eligible to be included in
the vested rights calculus. Even if the loaned funds may be considered, the
applicant has failed to sustain his burden of proof to establish the nature of
Page 7 of 18, Legal Staff Report Re: Frank Rencher
the expenses, their connection to the development, and their reasonableness
3. As will be discussed below, a financial exposure of $75,000.00 is
insufficient to establish a common law vested right.
RECOMMENDATION
Rule that the applicant's lack of personal exposure to loss precludes a vested
rights finding.
Issue 2. As of December 6, 2007, how much had the applicants spent to
complete the land use? What was the nature of the expenditures? Were
the expenditures reasonable and otherwise incurred in good faith? In other
words, what are the total allowable expenses which should be included in
determining the "Holmes ratio "?
Discussion
The following is a line -by -line analysis of the applicants' claimed expenses.
Each expense is detailed, discussed, and then counsel makes a recommendation
regarding the total amount which should be allowed. Previously, the hearings officer
had allowed a total of $28,800.00 in expenses. As discussed in the introduction
above, the hearings officer disallowed any expenses incurred after June 15, 2007.
The trial court ordered the county to "reassess" post -June 15, 2007 expenditures.
The court did not make a specific determination as to each claimed expense. This is
a task for the board.
In determining whether to allow or disallow an expense, the board should
consider such factors as:
(1) the good faith of the property owner;
(2) whether the claimed expense is sufficiently linked to the approved
development;
(3) whether the claimed expense is reasonable; and
Page 8 of 18, Legal Staff Report Re: Frank Rencher
(4) whether the expenditures could apply to various other uses of the
land.
The main factor that complicates this issue is the fact that the proposed
development here went through several iterations prior to ultimate approval. The
first proposal was a 21 -lot subdivision, which application was denied and
appealed. Much of the engineering, legal, and consulting work was related to
that much larger development.
Ultimately, the applicant presented and the board approved an 8 lot
subdivision. The board has previously found that expenses related to a prior,
failed land use application are not qualified expenses unless the evidence
sufficiently links the expenses to the approved development.
The following is a discussion of the expenses:
Road Construction Fees $51,680.00
Background. Applicant subrriitted two invoices from Davison Construction, both
dated December 5, 2007 totaling $51,680.00. The invoices appear to be for the
partial construction of the roads designed to serve the subdivision. In the initial
public hearing in this matter the hearings officer concluded that the work performed
so far could be adapted to the three -lot partition permitted under Ballot Measure
49.
Opinion. The board has two options to resolve this issue:
Option 1. Disallow expenses because, as found by the hearings officer,
"While there could be site configurations that do not require a road
such as the one conceived and apparently partially built for the
proposed 8 -lot subdivision, there is no evidence which
demonstrates that the road cannot be used to serve the three lots
that Measure 49 would likely allow... The staff's site visit indicates
that only a partial gravel road existed at the time of the site visit.
No permanent road is in place." In other words, this road is
adaptable to a use permitted under Ballot Measure 49 and is
Page 9 of 18, Legal Staff Report Re: Frank Rencher
therefore not a qualified vesting expense."
(Rec 13).
Option 2. Allow $51,680.00 in road expenses.
Engineering Fees $53,932.95
Background. Applicant has submitted a claim to allow $53,932.95 in engineering
expenses. The hearings officer rejected all such expenses because,
"The applicants modified their prior application through MA -07 -09
on July 25, 2007.... All the invoices prior to July 25, 2007 are
attributed to work done in relation to TP -07 -991 or A- 07 -08.
Furthermore, the invoices show significant charges for work in
preparation and planning for the mass grading and site clearing
activities related to the road. These expenditures cannot be
considered for the ratio test because that preparation can be
converted to supporting permitted uses under Measure 49."
(Rec 15).
Opinion. Again there are two options to resolve the issue:
Option 1. Disallow all engineering expenses for the reasons outlined by the
hearings officer.
Option 2. Allow $7050.58 in post -July 25, 2007 engineering expenses. If some
engineering expenses are to be considered, only post -July 25, 2007 expenses
should be considered. Based upon the evidence presented the board cannot
determine which pre -July 25, 2007 expenses are attributable to the failed land use
applications.
In the summary of expenses the applicant claimed $16,840.41 in post -July 25,
2007 expenses. That summary was based upon the inclusion of an invoice dated
December 5, 2007 and an invoice dated November 20, 2007. Counsel has been
unable to locate those two invoices and therefore recommends disallowing those
claimed expenses.
Legal Fees $11,047.69
Background. Applicants have submitted invoices for $11,047.69 in legal costs.
Not all costs appear to be sufficiently linked to the development to be included in
the common law vested rights calculus. Additionally, it is difficult, if not impossible,
Page 10 of 18, Legal Staff Report Re: Frank Rencher
to determine whether or not claimed expenses were incurred in pursuit of the
successful or the failed land use application.
At a minimum, the following claimed expenses should be questioned:
Date Charge Discussion
October 20, 2005 $400.00 Legal charges related to "transferability
litigation" are not sufficiently linked to the
proposed development.
December 7, 2006 $173.50 Charges relating to "reviewing addendum,"
— February 15, etc appear to be linked to the formation of the
2007 business entity which undertook the
development and are not qualified expenses.
April 17, 2007 $112.50
April 25, 2007
May 1, 2007
July 2, 2007
July 12, 2007
July 19, 2007
July 24, 2007
$146.25
$900.00
$225.00
$800.00
Legal charges to "Review memo with C.
Corp" are not sufficiently linked to the
development. Unclear what "memo" relates
to and what purpose C. Corp review had to do
with development.
Conference with C. Corp. not adequately
documented, purpose of conference not
specified.
Conference with J. Arnett. Unclear the topic
of the conference and what linked said
conference to the project.
Finalize appeal. Costs associated with failed
land use applications generally not qualified
vesting expenses.
Two conferences with DLCD. Unclear the
purpose of the conference and whether the
conference related to the failed or successful
land use application.
$90.00 "Finalize reconsideration." Appears to be
linked to failed land use application.
$520.00 This is the fee to modify the subdivision
application from a 21 lot subdivision to an 8
lot subdivision. Counsel accounted for the
Page 11 of 18, Legal Staff Report Re: Frank Rencher
subdivision application fee.
December 6, 2007 $1071.25 Post December 6, 2007 costs not qualified
to January 10, expenses.
2008
Opinion. Allow $6,609.19 in legal expenses pursuant to chart above.
Project Management, C. Corp. $16,000.00
Background. Applicants have four invoices from C. Corp for "project
management" fees. It is unclear what, if any, services were provided in exchange
for such a fee, whether the fee has been paid, or whether it was reasonable. In
any case, C. Corp was obligated to provide project management services without
cash payment.
Opinion. Disallow all expenses for the reasons explained above. Moreover, the
written agreement between REN Development and C. Corp. does not provide for
cash fees to be paid to C. Corp for project management. Pursuant to the
Addendum to Operating Agreement C. Corp is contractually bound to provide such
services without any periodic payment. (Rec 87; Sec 5(B)(iii)). These fees, even if
paid, should not be allowed vesting expenses.
Encore Properties/ Kristi Weigant $1,260.00
Background. Applicant claimed $1,020.00 in expenses from Encore Properties
and $240.00 in expenses from Kristi Weigant. Three invoices were submitted.
The invoices listed an hourly rate and a total of hours billed per invoice period.
There was no description of services performed.
Opinion. Disallow expenses because they are not sufficiently linked to the
development. There is no evidence to determine what, if any, work the consultants
performed relative to the project, whether the charges were reasonable, whether
the charges were attributable to the approved application or a rejected application,
or whether or not any of the work could be adapted to a use permitted under Ballot
Measure 49.
Septic Feasibility Fees (Deschutes County) $4,120.00
Background. Applicant submitted documentation for fees related to county
septic feasibility testing for Tots 1 through 8 of the approved subdivision. The
fees were submitted on December 5, 2007. The evaluation was conducted on
December 12, 2007 with approval on December 13, 2007. (See attached).
Page 12 of 18, Legal Staff Report Re: Frank Rencher
Opinion. Disallow because work performed after December 6, 2007.
Excavation $1,050.00
Background. Applicant submitted an invoice for $1,050.00 for "Consultation and
8 sets of test holes layed out and dug for Deschutes County septic feasibility
study."
Opinion. Allow $1,050.00 in excavation costs.
COID Fees $1,178.55
Background. Applicants submitted an invoice from COID for "Base" and "O &M"
for a total of $1,126.00 and $52.55 in interest. (Rec 204).
Opinion. Disallow expenses because they are not sufficiently linked to the
development. The costs are accounted for in the "County Application/ Review
Fees" section of the development costs. From appearances the charges appear
to be the sort that would have been incurred regardless of whether or not the
applicant pursued the development. If they are not such fees, their link to the
development should be established.
Deschutes County Road Dept. $250.00
Background. Applicants submitted a receipt for a $250.00 fee to Deschutes
County Road Dept.
Opinion. Allow $250.00 fee.
Other Fees $3,460.00
Background. Applicants claimed a fee to Deschutes County for $3,410.00 and
$50.00 to the Secretary of State.
Opinion. Disallow $50.00 fee to Secretary of State as an expense related to
entity formation. Allow $3,410.00 application fee. The $3,410.00 fee was to
pursue a subdivision application that ultimately failed. However, in order to
obtain any kind subdivision approval the applicant would have had to submit
such a fee. Therefore, even if the applicant had started the process with an 8 -lot
subdivision he would have incurred the $3,410.00 fee.
RECOMMENDATION
OPTION 1. If counsel's observations concerning exclusion of certain
Page 13 of 18, Legal Staff Report Re: Frank Rencher
expenses because they can be adapted to uses permitted under Measure 49 are
well taken then the board should approve $11,319.19 in expenses calculated as
follows:
Legal Fees $6,609.19
Excavation $1,050.00
Road Dept Fee $ 250.00
Other fees $3,410.00
TOTAL $11,319.19
OPTION 2. If counsel's observations concerning exclusion of certain
expenses because they can be adapted to uses permitted under Measure 49 are
not well taken then the board should approve $11,319.19 in expenses calculated
as follows:
Road Expenses $51,932.95
Engineering Fees $7,050.58
Legal Fees $6,609.19
Excavation $1,050.00
Road Dept Fee $ 250.00
Other fees $3,410.00
TOTAL $70,302.72
Issue # 3. As of December 6, 2007 what was the total project cost and
corresponding Holmes ratio?
DISCUSSION
On this record the question of total project cost is difficult to answer.
Applicant has submitted a one and one -half page "Construction Budget." (Rec
194 -95). The budget is as follows:
Page 14 of 18, Legal Staff Report Re: Frank Rencher
i' ` 0 el L ?7� t1'Y?• ``
Equipment Mobilization
Clearing & Grubbing
Trucking, Rock import
Trucking, Export
Road Grading
CufvertslRoad •Crossings
Roadbase, Rock
Roadways, A/C
Pedestrian Path
Utility Trench, Conduit, Vaults
Septic Feasabitities•
Pacific Power
Qwest
BendBroadband
$ 5,500.00
$ 7,500.00
$ 24,300.00
$ 7,200.00
6,500.00
$ 12,000.00
$ 33,600.00
$ 63,266.00
$ 17,000.00
176,866,00
$ 68,600.00
$ 4,120.00
$ 22,800.00
$ 3,500.00
$ 3,500.00
$ 102,420.00
=s zz,{ �,, �'� 3'i.• ~,�j��s, J"r•t � *� �`•,LC -� Aj:Y r f`"�1'i�.'=�;
- Vaults, Pumps
Irrigation Piping
Storm Water Detention
$ 47, 500.00
$ 27, 500.60
$ 25, 000.00
$ 1.00,000.00
{
k.• y] �i 5,c41T r`5p 9.2 aQ�R /�"!y �.y��(K � +sj���rar prc� °'"i w��,3s�. rx�f. Y2� 1�i�k �o`?ti:
.. i. '`.�.. r. �� ...i``= �,Ti..'T, -A+• .,.�la G•.� �,.Sii f,I ai .!4 . -�Yt . ��. .Y i��,
Project Administration
Legal Fees
$
40,000.00
10,500.00
50,500.00
Engineering
County Application /Review Fees
$ 60,000.00
$ 35,000.00
$ 95,000.00
1P 0#G-
Off -Site Improvements, 5th Street
Page 15 of 18, Legal Staff Report Re: Frank Rencher
$ 20.,000.00
$ 20,000.00
Entry MOrium.nt Boulevard $ 11,500.00
.00
Common Area, Trail system so.oav_o0
$ 304 .00
Counsel has been unable to locate evidence which describes the method
used to arrive at these estimated figures or the sources of the estimates. It is
counsel's view that the board is not able to perform its function of verifying these
figures, determining whether they are reasonable, and determining whether
these planned expenses could be adapted to other permitted uses. The budget
is presented to the board in very much a "take- it -or- leave -it" fashion.
Accordingly, there are three options for the board to resolve this issue:
Option 1. Find that the applicant has not satisfied his burden to establish a
reasonable total project cost and reject the application for a common law vested
right on that basis alone.
Option 2. Find that the applicant had a full and fair opportunity to establish total
project cost at the initial hearing and his challenge to the hearings officer's finding
on that issue was not successful. Accordingly the board would find that the total
project cost found by the hearings officer, $2,393,000.00 is binding.
Option 3. Accept the applicant's figures. If this is the case, then total project cost
would be as follows:
Page 16 of 18, Legal Staff Report Re: Frank Rencher
$592,833.96 + 8 homes @ 100,000.00 per home2 = $1,392,833.96.
RECOMMENDATION
Holmes ratio Option 1: N /A. Finding that applicant did not sustain
burden of proof.
Holmes ratio Option 2: .4% (1:211) or 2.9% (1:34)
Holmes ratio Option 3: .8% (1:13) or 5.0% (1:19.8)
Holmes ratio accepting applicant's figure on both total project cost and
incurred expenses: 10.3% (1:9.67).
Issue # 4. Considering the "Holmes ratio" derived from the figures
obtained in issues 2 and 3, and the other legal factors, do these applicants
have a "vested right" to complete the proposed project?
DISCUSSION
The supreme court has stated that the "ratio" of incurred to total costs is
only one factor to be considered in determining a "vested right:"
Other factors which should be taken into consideration are the good
faith of the landowner, whether or not he had notice of any
proposed zoning or amendatory zoning before starting his
improvements, the type of expenditures, i.e., whether the
expenditures have any relation to the completed project or could
apply to various other uses of the land, the kind of project, the
location and ultimate cost. Also, the acts of the landowner should
rise beyond mere contemplated use or preparation, such as
leveling of land, boring test holes, or preliminary negotiations with
contractors or architects. * * * "
Clackamas County v. Holmes, 265 Or 193, 197 -99, 508 P2d 190 (1973).
All of these other factors enable the board to determine whether or not the
applicants have made "substantial" progress (within the meaning of the law)
2 There is evidence in the record to substantiate this figure and it has been a figure accepted in
Page 17 of 18, Legal Staff Report Re: Frank Rencher
towards completion of this now unlawful land use.
RECOMMENDATION
Unless the board is inclined to accept all of the applicant's figures on
incurred costs, project budget, and cost of homes, the Holmes ratio developed
above is not sufficient to establish a common law vested right to complete the
development. Fundamentally the vested rights doctrine is an evaluation of
whether or not it is fair under the law to halt an in- progress development based
upon a sudden change in the law. In this case, prior to even commencing the
development process the applicant took substantial measures to mitigate the
applicant's financial risk. Based upon the evidence submitted it appears as if the
outer limits of the applicant's personal financial exposure is $75,000.00, a figure
insufficient to support a common law vested right.
Alternatively, if the board accepts the applicant's recommended figures
with respect to incurred costs and total project cost and further finds that the
applicant's lack of personal financial risk is not a barrier to a vested right finding,
then the board should consider granting the application.
cc: Mark Pilliod
Dave Kanner
Bonnie Baker
previous vested rights cases.
Page 18 of 18, Legal Staff Report Re: Frank Rencher
Board of County Commissioners of Deschutes County, Oregon
Frank L. Rencher, Application for a Declaration of Common Law Vested Right, hearing on remand
Decision Worksheet
Issue 1.
May a and owner obtain a common law vested right to complete a land use when the land owner entered into a
development agreement with a developer and the developer, not the land owner, assumes the financial risk and the
land owner retains title to property for purposes of utilizing Measure 37 waivers?
Yes
Issue 2. Incurred Expenses
No
Ex • ense
Claimed
Recommended
A • • roved
Road Construction
$51,680.00
$0.00 or $51,680.00
Engineering Fees
$53,932.95
0.00 or $7,050.58
Legal Fees
$11,047.69
$6,609.19
Project Management, C Corp
$16,000.00
$0.00
Encore Properties
$1,260.00
$0.00
Septic Feasibility Fees
$4,120.00
$0.00
Excavation
$1,050.00
$1,050.00
COID Fees
$1,178.55
$0.00
Road Dept.
$250.00
$250.00
Other Fees
$3,460.00
$3,410.00
Total
$143,979.19
$11,319.19 or
$70,302.72
Issue 3. Total project cost & ratio
• Total project cost (applicant)= (8 homes X $100,000) + 592.833.67= $1,392,833.96.
o Applicant recommended ratio: 10.3%
• Total project cost. Counsel suggests applicant's evidence concerning project cost is insufficient anc should
be fatal to the application.
• Alternatively, accepting applicant figures, total project cost = (8 homes X $100,000) + 592,833.67 =
$1,392,833.96
o Counsel recommended ratio: 2.9% to 5.0%
Issue 4 Other Holmes Factors
"Other factors which should be taken into consideration are the good faith of the landowner,
whether or not he had notice of any proposed zoning or amendatory zoning before starting his
improvements, the type of expenditures, i.e., whether the expenditures have any relation to the
completed project or could apply to various other uses of the land, the kind of project, the location
and ultimate cost. Also, the acts of the landowner should rise beyond mere contemplated use or
preparation, such as leveling of land, boring test holes, or preliminary negotiations with contractors
or architects."
For
• Land owner proceeded in good faith.
Against (counsel recommendation)
• Preparation/ nature of expenses/ type of expenditures/ kind of project
o Road can be adapted to Measure 49 partition;
o Applicant subject to limited financial risk.
Timothy P. Alexander
Senior Judge
State of Oregon
RECEIVED
JUN 05 nI0a, ORf 700.7
Department of Justice
Trial Division
IN THE CIRCUIT COURT OF THE STATE OF OREGON
FOR THE COUNTY OF CLACKAMAS
W. LEIGH CAMPBELL, CEILLE W.
CAMPBELL, AND DONALD B
BOWERMAN, No. CV07120048
Plaintiffs,
v.
STATE OF OREGON,
Defendant.
W. LEIGH CAMPBELL, CEILLE W.
CAMPBELL, AND DONALD B.
BOWERMAN,
CLACKAMAS COUNTY,
Plaintiffs,
v.
Defendant.
OPINION OF THE COURT
No. CV07120049
This comes before the court for trial on Count One, Declaratory Judgment. After reviewing the
evidence and considering the written and oral presentations of counsel, I find as follows:
1. The Measure 37 . waivers tendered by the County and the State are personal to
plaintiffs, not Gordon Root;
2. The development contract is binding on all parties and is contained in the original
written agreement;
3. Attempts to modify the agreement to provide evidence for this case is too late to be
effective;
4. Plaintiffs have not actually spent any money to develop the property.
Therefore, pursuant to the relevant case law, Plaintiffs have not sufficiently vested in order to
satisfy the language and intent of Measure 49. I find in favor of Defendants and against Plaintiff
on Count One, and decline to issue declaratory judgment in favor of Plaintiffs.
As I indicated at the end of trial, in the event that Plaintiffs successfully persuade an appellate
court that I am mistaken on the above issue, I will make additional findings based on the
evidence presented to avoid the need for a new trial. In view of the opinion in Clackamas
County v. Holmes, 265 Or 193,508 P2d 190(1973), I make the following determinations as to
each of the factors:
1. RATIO
Developer has spent $1,295,869. The total cost of building approximately 40 homes on the
available lots and completing the infrastructure already contemplated is a minimum of
$30,000,000. I arrived at that figure after concluding from the evidence that the type of homes
that can reasonably be built on these Tots will cost over $750,000 including the materials and
labor for the house, the driveway, the landscaping, the well, and the cost of the development
attributable to each lot. Even if the land sells for $150,000, as contended by Plaintiffs, the sale
price of the average home in the development will be $900,000. It does not make economic
sense for Mr. Root to agree to sell the lots for that amount, since he would lose money,
therefore it is more likely that the lots will be held until the market improves and the parties
can make a fair profit. I am also convinced that prospective buyers for a home in this area with
1 % acres of land and similar Tots on all sides will be able and willing to spend more than
$900,000. For purposes of the Holmes analysis, the ratio is 1/23. Plaintiffs have not vested.
2. GOOD FAITH
Plaintiffs have acted in good faith. Anyone who claims to be able to predict the outcome of a
vote on a ballot measure in Oregon should buy a Megabucks ticket. It was reasonable for
plaintiffs to continue with development until Measure 49 actually became law.
3. ADVANCE NOTICE
See 2 above. If anything, the statement attributed to a key member of the legislature would
have induced plaintiffs to continue preliminary work on the site even if measure 49 should pass.
4.NATURE OF EXPENDITURES
The evidence weighs against Plaintiffs on this point. The work done to level the property and
begin the erosion control and rock base for certain roads can be used for three homes. Given
the removal of the drain tiles, it is unlikely that the land can be used for livestock, but it could
be sold as large homesites.
5.NATURE OF THE DEVELOPMENT
Plantiffs have identified use of the land for residential homes, and the early efforts have been
for that purpose. Holmes is satisfied on this issue.
6.MERE CONTEMPLATION
Plaintiffs have demonstrated a clear intent to develop a residential subdivision, and the steps
taken are beyond the mere contemplation identified in Holmes.
If called upon to make the determination of the totality of the circumstances, I would still find
that Plaintiffs have not vested under Measure 49. Defendants would still be prevailing parties.
Defendants may elect which party will submit a partial judgment for consideration.
June 3, 2008
Timothy P. Alexander
Senior Judge
5.00 AC
REN DEVELOPMENT, LLC
P.O. BOX 638
REDMOND, OREGON 97756
PH. NO. 541.923.0777
CONTACT, AARON CURTIS
LOT NO. OF:
TOWNSHIP 14, RANGE 13, SECTION 27
TAX LOT 801
5245 NE 5TH STREET
REDMOND, OREGON 97756
SITE. EVALUATION. FIELD INSPECTION FORM Page :1 of 2
Site Evaluation # / a35V9 ' Date:/2. /2,0 7 Evaluator: Garth O. Cook, RENs
Township: /V Range: /3 Section: . 270`tj Tax Lot: 2TQ: %' Parcel Size:
Subdivision: Block: Lot: Proposed Parcel:
This site. is Approved (Peak.desigmflow of 4S'6.PD ) Denied
s t m rov : p • . For Drainfields Only
Initial �i .Swr D +-Min. Size %' "Max. Depth /4 'f in. Dep ►'
Replacement �� �� " 4.- Min. Size/ � Max. Depth /9" Min. Depth 22-:-
Tank Size / pS'ar, tc-A14/0775 Pressurized Drainline Orifice Spacing . (feet]
(Two- coi%parbnent 1500 gallon tank equivalency required for pump usage
when tank is connected to a building sewer or receives ejection pump wastes).
For Bottomless Sandfilters: Maximum Countersinking On Container Upslope Sides:
Initial System: Replacement System:
Special Conditions:
W1otes for Approved Systems:
. A lined sandfilter alternative is a DEQ approved.ATT system .
2. Capping fill systems are generally not allowed to be installed Oct- April.
.Rt3. If a pump is needed, then submit a pump selection curve.and obain a.sewage pump
electrical permit at time of septic permit application. For lift pumps select a pump with
a 5-10 GPM rating. For pressurized systems submit Hydraulic Design Criteria.
4t4. For sandfilters submit top -view and cross - sectional view container drawings showing all components,
TEST PIT OBSERVATIONS
1
2
3
4
5
DEPTH
TEXTURE
- COLOR
NOTES
0— ti
SL
O- _ __I1
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0— ti
SL
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01.01.07 GDC
SrrE EVALUATION FIELD INSPECTION FORM
SITE EVALUATION DRAWING
Site Evaluation #/c72-35,9 Applo
Drawing Scale: 3c9;
01.01.07 GDC
'' -30
fm
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