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HomeMy WebLinkAboutBolken AppealDeschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Business Meeting of July 7, 2008 Please see directions for completing this document on the next page. DATE: June 19, 2008. FROM: Chris Bedsaul, Associate Planner CDD 383-6719 TITLE OF AGENDA ITEM: Consideration of signature of Order No. 2008-066 accepting or rejecting a review of the Hearings Officer's denial of a Common Law Vested Right in File No. DR -07-11 regarding a Measure 37 claim S- lot subdivision proposal for Olaf and Jannis Bolken. PUBLIC HEARING ON THIS DATE? NO BACKGROUND AND POLICY IMPLICATIONS: Olaf and Jannis Bolken received approval of a Measure 37 waiver of land use regulations in 2006 from Deschutes County and State of Oregon. The Bolken's submitted an application for a five (5) lot subdivision in the Exclusive Farm Use — Terrebonne subzone (EFU-TE) that was accepted as complete on September 24, 2007. The Hearings Officer conducted a public hearing and conditionally approved the Bolken's subdivision request on November 14, 2007. Ballot Measure 49 was approved by the voters on November 6, 2007 and became effective December 6, 2007. The County required all Measure 37 claimants to obtain a Declaratory Ruling by the County prior to proceeding with any further development after December 6, 2007. The Hearings Officer conducted a public hearing for the Bolken's DR -07-11 application on March 6, 2008. The Hearings Officer on May 27, 2008 denied the Bolken's qualification for a Common Law Vested Right to proceed with the subdivision. The appeal was filed in a timely manner. There are no policy implications in this application. FISCAL IMPLICATIONS: None RECOMMENDATION & ACTION REQUESTED: Staff recommends that the Board deny the request for a partial de novo hearing. ATTENDANCE: Chris Bedsaul DISTRIBUTION OF DOCUMENTS: Copy of Order to Chris Bedsaul ASAP so any notice of public hearing, if any may be sent out. June 19, 2008 Community Development Department Planning Division Building Safety Division Environmental Health Division 117 NW Lafayette Avenue Bend Oregon 97701-1925 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ MEMORANDUM To: Deschutes Board of County Commissioners From: Chris Bedsaul, Associate Planner Subject: Appeal of Hearings Officer Denial of a Common Law Vested Right of a 5 - lot subdivision for Olaf and Jannis Bolken, DR07-11/MA07-13 and TP07- 1000 BACKGROUND Olaf and Jannis Bolken received approval of a Measure 37 waiver of land use regulations from Deschutes County in Order No. 2006-157 recorded on November 7, 2006 and State of Oregon, Final Order for Claim No. M129491, dated December 4, 2006. The Bolken's originally submitted TP07-1000 and modified the application in MA - 07 -13 for a five (5) lot subdivision in the Exclusive Farm Use — Terrebonne subzone (EFU-TE). MA -07-13 was submitted on August 28, 2007 and accepted by the county as complete on September 24, 2007. The Hearings Officer conditionally approved MA -07- 13 on November 14, 2007. Ballot Measure 49 was approved by the voters on November 6, 2007 and became effective December 6, 2007. The County required all Measure 37 claimants to obtain a Declaratory Ruling by the County prior to proceeding with any further development after December 6, 2007. The Bolken's believed their development had commenced and elected to proceed with their previous subdivision approval under a Common Law Vested Right. A Declaratory Ruling (DR07-11) application was submitted by Olaf and Jannis Bolken on December 21, 2007 and accepted as complete on February 11, 2008. The Bolken's application requested a determination if a Common Law Vested Right has been established to continue the development of a five (5) lot subdivision previously approved under County CDD file MA -07-13. A public hearing was conducted by the Hearings Officer for DR07-11 on March 6, 2008. The Hearings Officer's decision, dated May 27, 2008, denied that a Common Law Vested Right has been established by the Bolken's. In summary, the Hearings Officer found that (1) the Bolken's do not have the right to complete the proposed subdivision by application of ORS 215.427(3) and (2) disagreed with the Bolken's to depart from the general rule that the cost of future dwellings should be included in the ratio test and (3) the Bolken's do not have a common law vested right in the approved subdivision MA-07-13/TP-07-1000 pursuant to Section 5(3) of Measure 49. Quality Services Performed with Pride The applicant's appeal asserts the Hearings Officer erred in (1) not accepting the "goalpost" statute in ORS 215.427(3), (2) concluding that any expenses incurred after June 15, 2007 were non -eligible and (3) the analysis of the criteria of common law vesting particularly in light of its reintroduction into the land use arena by reason of Measure 49. The applicant filed a timely appeal on June 10, 2008. The 150 -day decision period does not apply. REVIEW Except as set forth in DCC 22.28.030, when there is an appeal of a land use action and the Board of County Commissioners is the Hearings Body: A. The Board may on a case-by-case basis or by standing order for a class of cases decide at a public meeting that the decision of the lower Hearings Body of an individual land use action or a class of land use action decisions shall be the final decision of the County. B. If the Board of County Commissioners decides that the lower Hearings Body decision shall be the final decision of the County, then the Board shall not hear the appeal and the party appealing may continue the appeal as provided by law. In such a case, the County shall provide written notice of its decision to all parties. The decision on the land use application becomes final upon mailing of the Board's decision to decline review. C. The decision of the Board of County Commissioners not to hear a land use action appeal is entirely discretionary. D. In determining whether to hear an appeal, the Board of County Commissioners may consider only: 1. The record developed before the lower Hearings Body; 2. The notice of appeal; and 3. Recommendations of staff. RECOMMENDATION Staff recommends the Board deny the appeal and adopt the Hearings Officer's findings and decision, dated May 27, 2008, for DR -07-11, because: 1. The applicant/appellant received a full and fair hearing before the Hearings Officer. 2. There are no local policy interpretations involved in this matter. 3. The Hearings Officers decision is reasonable and defensible. REVIEWED LEGAL COUNSEL For Recording Stamp Only BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON An Order Denying Review of Hearings Officer's Decision in File no. DR -07-11 (A-08-10) * * ORDER NO. 2008-066 WHEREAS, Applicant Olaf and Jannis Bolken appealed the Deschutes County Hearings Officer's decision on application number DR -07-1 1; and WHEREAS, Section 22.32.027 of the Deschutes County Code allows the Board of County Commissioners (Board) discretion on whether to hear appeals of Hearings Officer's decisions; and WHEREAS, the 150 -day clock does not apply in a Common Law Vested Right determination; and WHEREAS, the Board has given due consideration as to whether to review this application on appeal; now, therefore, THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, HEREBY ORDERS as follows: Section 1. The Board, hereby, denies review of the applicant's appeal for Case Number DR -07-11 (A- 08-10) pursuant to Title 22 of the Deschutes County Code and other applicable provisions of the County land use ordinances. Dated this of , 2008 BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON DENNIS R. LUKE, CHAIR TAMMY MELTON, VICE CHAIR ATTEST: Recording Secretary MICHAEL M. DALY, COMMISSIONER PAGE 1 OF 1 - ORDER NO. 2008-066 BRYANT EMERSON & FITCH, LLP Attorneys at Law June 10, 2008 HAND DELIVERED Deschutes County Community Development Department 117 NW Lafayette Avenue Bend, OR 97701-1925 Re: Appeal Application of Olaf and Jannis Bolken - DR -07-11 Ladies/Gentlemen: Ronald L. Bryant * Craig P. Emerson Edward P. Fitch Steven D. Bryant Michael R. McLane Michael W. Flinn Lisa D.T. Klemp Alison M. Trimble Tony F. De Alicante * * Also admitted in Washington Enclosed please find the Appeal Application filed on behalf of Olaf and Jannis Bolken as referenced above, as well as a Notice of Appeal and Request for Partial De Novo Hearing, and our check in the amount of $1,821.00 to cover the required fee. Appellant is obtaining the CD containing the hearing and will have it transcribed. Appellant anticipates they will be able to file the transcript within ten (10) days. If you have any questions, please advise. Thank you. Very truly yours, Edward P. Fitch EPF/mcm Enclosures cc: Olaf and Jannis Bolken(w/encl.) G:\Clients\EPF\Bolken, OlafBolken,OlafDeschutes County Appeal Ltr.WPD(mcm) 888 S.W. Evergreen Ave. P.O. Box 457 Redmond, OR 97756-0103 (541) 548-2151 Fax (541) 548-1895 E-mail bef@redmond-lawyers.com 5C0°) n �00 J`la Community Development Department Planning Division 117 NW Lafayette Avenue, Bend, OR 97701-1925 (541) 388-6575 - Fax (541) 385-1764 http://www.deschutes.org/cdd APPEAL APPLICATION FEE: $1,821.00 EVERY NOTICE OF APPEAL SHALL INCLUDE: 1. A statement describing the specific reasons for the appeal. 2. If the Board of County Commissioners is the Hearings Body, a request for review by the Board stating the reasons the Board should review the lower decision. 3. If the Board of County Commissioners is the Hearings Body and de novo review is desired, a request for denovo review by the Board, stating the reasons the Board should provide the de novo review as provided in Section 22.32.027 of Title 22. It is the responsibility of the Appellant to complete a Notice of Appeal as set forth in Chapter 22.32 of the County Code. The Notice of Appeal on the reverse side of this form must include the items listed above. Failure to complete all of the above may render an appeal invalid. Any additional comments should be included on the Notice of Appeal. Appellant's Name (print): Olaf and Jannis Bolken Phone: ( 541) 548-3328 Mailing Address: 9721 N. Hwy.. 97 City/State/Zip: Terrebonne, OR 97760 Land Use Application Being Appealed: Property Description: Township 14 Appellant's Signature: Hearings Officer decision dated May 30, 2008 on Declaratory Ruling Application Ranee 13 Section 09 Tax Lot 1400 EXCEPT AS PROVIDED IN SECTION 22.32.024, APPELLANT SHALL PROVIDE A COMPLETE TRANSCRIPT OF ANY HEARING APPEALED, FROM RECORDED MAGNETIC TAPES PROVIDED BY THE PLANNING DIVISION UPON REQUEST (THERE IS A $5.00 FEE FOR EACH MAGNETIC TAPE RECORD). APPELLANT SHALL SUBMIT THE TRANSCRIPT TO THE PLANNING DIVISION NO LATER THAN THE CLOSE OF THE DAY FIVE (5) DAYS PRIOR TO THE DATE SET FOR THE DE NOVO HEARING OR, FOR ON -THE -RECORD APPEALS, THE DATE SET FOR RECEIPT OF WRITTEN RECORDS. (over) 1/07 BEFORE THE BOARD OF COMMISSIONERS FOR DESCHUTES COUNTY In re: Vesting Application of ) DR -07-11 OLAF BOLKEN and JANNIS BOLKEN ) NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING NOTICE OF APPEAL Comes now, OLAF BOLKEN and JANNIS BOLKEN, and appeals the hearings officer's decision dated May 27, 2008, and mailed May 30, 2008, a copy of which is attached hereto as Exhibit A. The hearings officer erred in the following respects: 1. This subdivision is vested pursuant to the goalpost statute described in ORS 215.427(3). The hearings officer concluded that the goalpost statute only applies to approval of a land use application based upon the criteria in effect at the time the application was filed and does not extend to the development pursuant to that approval. The hearings officer is clearly wrong by the statutory language, the case law and in light of the interpretation and practice of local jurisdictions of the goalpost statute. Further, the hearings officer's interpretation of the goalpost statute, and his interpretation of DLCD v. Corey is in error. 2. This subdivision is vested under common law as provided for in subsection 5(3) of Measure 49. The hearings officer erred by concluding that any expenses incurred after June 15, 2007, were noneligible. The statute is clear that vesting activity could occur up through December 6, 2007. Moreover, that interpretation, not only reasonable given the language of Measure 49, but has been interpreted that way by numerous jurisdictions, developers, attorneys, etc. The issue here is not whether the applicant is absolutely correct in his interpretation that he had until December 6th to Page 1 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, us ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 engage in vesting activity. The question here is whether or not it was reasonable for the applicant to conclude that he had until December 6, 2007, to engage in vesting activity. The hearings officer also erred in his analysis of the criteria of the common law vesting particularly in light of its reintroduction into the land use arena by reason of Measure 49 in the analysis of the factual basis of this case. 3. Olaf and Jannis Bolken further request that the Board allow a partial de novo hearing. The purpose of that de novo hearing would be twofold. The first is to allow confirmation that these expenses were, in fact, incurred and when. The second is to provide factual support that the conclusion that the goalpost statute applied not only to approval of an application based upon the criteria in effect at the time the application is filed, but also the development thereunder. This factual basis will be in the form of affidavits from various planning directors and counsel based upon conversations with the Deschutes County Planning staff. I. STATUTORY VESTING The waivers issued by Deschutes County and the State of Oregon provided to the applicants a protected property interest in the waiver. Corey v. Department of Land Conservation and Development, 212 Or App 536, 159 P3d 327 (2008) citing Board of Regency of State Colleges v. Robb, 408 US 564, 577, 92 S. Ct. 2701, 33 L.Ed. 211d 548 (1972). The decision in Corey did not clearly define the scope of interest a Measure 37 claimant had in a waiver. A claimant's property interest in a Measure 37 waiver is akin to an inchoate interest or a statutory license. An inchoate interest is defined in Blacks Law Dictionary as "an interest in real estate which is not a present interest, but which may ripen into a vested estate, if not barred, extinguished, or divested." Page 2 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 This inchoate property interest was not transferable nor was it vested. However, this interest became a vested property right that was transferable upon the preparation and filing of a specific land use application consistent with all relevant land use standards; standards which took into account waivers of regulations as evidenced by orders issued by the State of Oregon and Deschutes County pursuant to ORS 197.352. The waiver right established by ORS 197.352(8) can also be described as a statutory license to proceed with a certain activity. For example, statutory licenses for the constructions of wharfs on navigable rivers has been described in a number of court cases. In Montgomery v. Shafer, 40 Or 245, 66 P 923 (1901), the Oregon Supreme Court noted that the right to construct a wharf pursuant to the statute (now ORS Chapter 780) constituted a license revocable at the pleasure of the legislature until acted upon. Once acted upon, however, the right for that license becomes vested. This propriety of this analysis was confirmed by the court in Port of Portland v. Reeder, et al, 203 Or 369, 288 P2d 324 (1965) and also cited in Brusco Towboat v. State Land Bd. , 284 Or 627, 589 P2d 712 (1978). By way of analogy, once the statutory license evidenced by waivers issued pursuant to ORS 197.352(8) has been exercised by the filing of a land use application, that statutory license which was permissive at first now becomes irrevocable and vested. The State of Oregon has maintained since the passage of Measure 37 that waivers are personal to the Measure 37 claimant. See, Opinion of the Attorney General, dated February24, 2005 (Rec. 273-280). However, the State has also recognized that once the property interest under a Measure 37 waiver becomes vested, it is transferable. See, Attorney General Opinion; See, Comments from the Attorney General to the Circuit Court in the case of Crook County v. All Electors, Crook County Circuit Court Case No. 08CV0015. In the Crook County case, the State Page 3 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 made the following representation to the Circuit Court: It is not really the State's position that a waiver is never transferable, but under existing law there are existing statutes governing nonconforming uses and under the Court's decision under the vested rights principle when the development of a nonconforming use has reached a certain stage, the property owner is said to have acquired a vested right to continue the development and subsequently put the use to its intended function. (APP -5) In that case, Judge Neilson agreed that once a waiver became vested, it was transferable. Prior to 1983, common law was the only avenue in which land use development could be vested to withstand subsequent changes in the law. To establish a vested interest in a nonconforming use under common law, a person must cause either substantial construction to be made thereon or incur substantial liabilities relating directly thereto prior to the effective date of the regulation making such use nonconforming. Yokley Zoning Law in Practice, 4t" Edition, pg. 15. In 1983, however, the Oregon Legislature passed House Bill 2295, which included the provisions now codified under ORS 215.427(3), otherwise known as the "goalpost statute." The statute was intended to overturn the ruling in Gearhart v. Klamath County, 7 Or LUBA 27 (1982). Under this legislation, a person no longer has to cause either substantial construction or incur substantial liabilities in order to establish a vested interest in a particular use for that use to become nonconforming. To establish a vested use now, a person need only prepare and file an application for land use approval and meet all the substantive standards and criteria in effect at the time that application is filed. Since 1983, therefore, there have been two avenues to establish a vested property right in a particular use of property, one at common law and the other by statute. The Oregon State Bar Continuing Legal Education treatise on land use notes on page 12-18, the following: Page 4 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, OlafBolken,01aMppeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 It must be noted that the rules of the vested rights game have been changed somewhat by the enactment of ORS 215.428(3) (now 215.427(3)) and 227.178(3). These statutes provide that approval or denial of a land use application `shall be based upon the standards and criteria that were applicable at the time the application was first submitted.' An applicant now has a form of vested right to a particular use solely because an application has been made assuming, of course, the standards in effect at the time of the application can be met. See Kirpal Light Satsang v. Douglas County, 96 Or App 207, 772 P2d 944 on recon., 97 Or App 614, rev.denied 308 Or 382 (1989) The standards and criteria in effect at the time the land use application for a 5 -lot subdivision was applied for by the applicants included State regulations and County regulations not specifically waived. The regulations not waived included those types of subdivision requirements which addressed health and safety issues, such as access, road widths, pavement, utilities, fire hydrants and clear vision, etc. The standards and criteria in effect at the time of this application also included the waiver of certain land use regulations effected since 1969 at both the State and local levels. As this court noted in Davenport, supra the term "standards and criteria" in ORS 215.427(3) is not limited to provisions that may be characterized as approval criteria in a local comprehensive plan or land use regulation. The court noted, the role that the terms play in the two statutes (ORS 227.178(3) and ORS 215.427(3)) is to assure both proponents and opponents of an application that the substantive factors that are actually applied and that have a meaningful impact on the decision, permitting or denying an application would remain constant throughout the proceedings. In the present instance, the standards and criteria included the waivers that were issued by the State of Oregon and by Deschutes County. To be consistent with ORS 215.427(3), therefore, the application of those standards and criteria, including those waived, must remain constant throughout the proceeding and subsequent development. This constancy was even acknowledged by the Page 5 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,OlaMppeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 Department of Land Conservation and Development (DLCD) before the Land Use Board of Appeals wherein Richard Whitman on behalf of the DLCD noted "215.427(3) protects against changes in law." (APP -7) The basic premise of ORS 215.427(3), however, even as acknowledged by the State before LUBA, is that there must remain a constancy of application of the standards and criteria once a land use application is filed despite subsequent changes in the law. That constancy can only be maintained if this property right is deemed vested once an application is filed (assuming the application meets those standards). By operation of law, therefore, the applicants' protected property interest in his waiver, while perhaps at first an inchoate personal right or revocable license until exercised, became a vested property right or irrevocable license upon submittal of the application for land use approval. As a vested property right, that interest was transferable and could not be defeated by subsequent legislative amendments to any of the standards and criteria that were in effect at the time the application was submitted. (See DeMendoza v. Huffman, 334 Or 425, 51 P3d 1232 (2002) citing Phillips v. Washington Legal Foundation, 524 US 156, 118 S.Ct 1925, 141 L.Ed 2nd 174 (1998) wherein the court noted: "the evidence of a property interest is determined by reference to existing rules or understandings that stem from an independent source such as state law" Phillips at 164). In other words, a Measure 37 claimant has the same rights in a land use application as do non -Measure 37 claimants under ORS 215.427(3). A Measure 37 claimant cannot be treated any differently. Once the application is filed, it is vested by operation of law and cannot be divested as Page 6 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, us ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 that inchoate property interest has now been transformed into a vested property right'. The hearings officer in the present case committed error by concluding that the goalpost statute only requires a City or County to approve an application based upon the criteria in effect as of the date the application is filed. He concluded that the goalpost statute does not require a City or County to allow development pursuant to that approval. The hearings officer's decision on this point is in error for four basic reasons. First, it is inconsistent with the statutory scheme. Indeed, in ORS 197.835, the goalpost statute is reinforced. In subsection 10(a), LUBA is required to reverse a local government decision if the Board finds the local government avoided the requirements of the goalpost statute. Second, it is inconsistent with the case law. In Gagnier v. City of Gladstone, 38 LUBA 858, 2000 WL 33288036 (2000), the Land Use Board of Appeals held that the City of Gladstone was required to issue a building permit under the goalpost statute and apply the same standards and criteria that were applicable at the time the underlying variance application was submitted. Third, the practice of both Deschutes County and other jurisdictions in Central Oregon has been consistent with the Gagnier, supra, case. That is, if a person applies for a land use application, even if it is just the day before a change in the land use ordinances is enacted, that application is grandfathered in under the goalpost statute and, assuming it is approved consistent with those criteria, development is allowed to occur consistent with that application and approval. Fourth, the hearings officer's position does not make any sense. Why would anyone spend 1 It seems clear that a zoning ordinance which seeks summarily to terminate an existing use is unlikely to accomplish that end. The probable result in any state will be that the intended affect will be nullified by narrow construction or that the ordinance will be declared invalid because it is retroactive and because it destroys a vested right." Andersons American Law of Zoning, 4th Edition, pg. 499. Page 7 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, OlatBolken,OlaflAppeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON Sc FITCH, us ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 the time, energy and money to obtain a land use approval that could not be used. That is the result of his reasoning that the goalpost statute only follows through to the point of approval, and that approval cannot be used for any development. That position just does not make any sense. Opponents may argue that the wavier is not the basis for the standards and criteria set forth in ORS 215.427(3). The State is in error. In MacPherson, supra, the Supreme Court noted that "an action by a governing body to modify, remove, or not ...apply certain such regulations in specific situations ... is in effect an amendment of the land use regulations in those particulars. See MacPherson, supra, page 132. Opponents may argue that Measure 49 either amends or impliedly repeals ORS 215.427(3) insofar as the Measure appears to require a common law vesting. Such an interpretation would permit a subsequent legislative amendment to affect a current land use application that has already vested. Subsequent legislative amendments, however, cannot act as a defeasance of a vested property right or irrevocable license. (See DeMendoza, supra) Otherwise the State, at any time, could adopt legislation defeating vested rights whether established by operation of statute or by common law. Opponents may also argue that OAR 660-401-0060 (DLCD's temporary administrative rule for Measure 49) also negates this statutory vesting. In that rule, the DLCD attempts to "expire" all Measure 37 waivers as of December 6, 2007. This rule suffers the same fate as Measure 49. That is, the statutory rights of an applicant in a land use application pursuant to ORS 215.427(3) cannot be extinguished by subsequent legislation. This principle was affirmed by Judge Richardson of the Court of Appeals in Sunburst II Homeowners Assoc. v. City of West Linn, 101 Or App 458, 720 P2d 1213 (1990). Therein, he noted that Page 8 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olat\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 Persons who file application before more restrictive legislation is adopted are entitled to have the earlier law applied to their applications. Otherwise, their rights under the pre-existing standards would be permanent nullified. Sunburst, supra at 461. Finally, this administrative rule is on appeal to the Court of Appeals in Wallbank v. Land Conservation and Development Commission, A137926. Opponents may argue that the County must follow the reasoning of the Land Use Board of Appeals in DLCD v. Jefferson County, LUBA 2007-177 (2008). There are several reasons why that should not be the case. First, that case is on appeal and it's validity is at issue. Second, the issue in DLCD v. Jefferson County was whether or not the death of a claimant affected the goalpost statute. While LUBA noted that it was a very close question, LUBA came to the conclusion that the goalpost statute and Measure 37 were in conflict. Neither of the parties to that case thought that to be the case. In fact, on appeal, the State acknowledged in oral argument to the Court of Appeals that the goalpost statute and Measure 37 are not in conflict. LUBA did not address Measure 49 as suggested by the hearings officer. On the contrary from the applicant's perspective, Measure 37 and the goalpost statute work in tandem quite well. Measure 37's task is to address an issue of compensation. It's principal purpose was not to address the continuing validity of substantive criteria in a land use application once that application is filed. The task of Measure 37 rights basically expires once a land use application is filed: then through the goalpost statute (statutory vesting in that waiver or that criteria) the Measure 37 right becomes vested or irrevocable pursuant to the provisions of the goalpost statute. Rather than being in conflict, they are actually in harmony with each other. Finally, there is a comprehensive statutory framework that supports reliance upon pre - Page 9 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 existing substantive criteria for land use applications as well as approvals issued thereunder. For example, as a general rule, tentative plans are binding upon the counties for the purposes of preparation and review of final plats. (See Deschutes County Code, Section 17.16.090(B)) This binding effect for applicants in the substantive criteria and approvals continues not only through the approval process but also through the development of the property. Such is the case here. The applicant's vested statutory rights in that application and the substantive criteria continue not only through the approval but also through development. B. Common Law Vesting The factor or guidelines relevant to a vested right analysis are: (1) The good faith of the property owner in making expenditures to lawfully develop his property in a given manner; (2) The amount of notice of any proposed re -zoning; (3) The amount of reliance on the prior zoning classification in purchasing the property and making expenditures to develop the property; (4) The extent to which the expenditures relate more to the nonconforming use than to the conforming use; (5) The extent of the nonconformity of the proposed use as compared to the uses allowed in the subsequent zoning ordinances; (6) Whether the expenditures made prior to the subsequent zoning regulation show that the property owner has gone beyond mere contemplated use and has committed the property to an actual use which would in fact have been made but for the passage of the new zoning regulation; (7) The ratio of the prior expenditures to the total cost of the proposed use. Polk County v. Martin, 292 Or 69 at 81, citing Cable & Hauck, "The Property Owner's Shield, Page 10 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, OlafBolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 supra. 1. Good Faith. In Polk County, supra the Supreme Court, in citing the Willamette Law Journal article noted that the good faith factor focuses on whether or not the owner made expenditures in good faith to lawfully develop the property. In the present case there was never any notice of rezoning. The statute referred by the legislature noted that an applicant had until December 5th to make expenditures to establish a common law vesting. Many local jurisdictions, as well as persons in the development community, interpreted Measure 49 in that respect (e.g., Crook County, Jefferson County). Deschutes staff, for example, facilitated expenditures and permits up through December 5th. Indeed, the legislature could have picked an earlier date as a cutoff date for consideration of investment activity which would contribute to the conclusion that a use has become vested. The legislature could have chosen the date of adjournment for the 2007 legislative session. The legislature could have picked the election date of November 6, 2007. Instead, the legislature affirmatively picked the effective date, i.e., December 6, 2007. The applicant certainly acted in good faith in relying upon that legislative choice in determining when investment in the use for purposes of determining a vested right would be cutoff. In reaction to this unusual language, many if not most, local jurisdictions determined that they would continue to process land use applications, permits, etc., up through the effective date of Measure 49. Indeed, many local governments specifically relied upon the December 6, 2007 date in which to determine the level of vesting. The State of Oregon has even weighed in and apparently has indicated the same. In the Page 11 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, ia.e ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 Measure 49 notices that were issued by the State, the State noted in its instruction sheet under vesting that Claimants who received a waiver prior to December 6, 2007, and begun development of the use described in the waiver may be able to continue and complete the use described in the waiver if they had done enough to create a common law vested right as of December 6., 2007. This language came from the Department which authored Measure 49. Attached to this memorandum is a copy of a hearings officer's decision from Yamhill County concerning a 50 -lot subdivision that that hearings officer deemed vested. In that decision, the hearings officer noted: As noted, Section 5(3) of Ballot Measure 49 allows development of sues, when the right to "complete" or "continue" development of those uses "vested" prior to December 6, 2007. This and other text and context in the measure supports a conclusion that the "good faith" of the applicant in attempting to "complete" or "vest" her use prior to that date was encouraged by the measure itself. As complex as the rest of M49 is, the "common law vested right * * * to complete and continue" is contained in a single sentence that twice refers to the effective date of the act. This reading supports a conclusion that applicant was given until December 6, 2007 to continue her efforts to complete, or at least "vest" her uses. The legislature could just as easily have used June 15 or some other date if it meant to discourage or prevent property owners from continuing expenditures and efforts to "vest" their sues up to and including the effective date of the Act. This hearings officer's conclusion is certainly much more reasonable in light of the language in Measure 49. Similarly„ Judge Alexander in the case of Campbell v. State of Oergon and Clackamas County, CV 07120049 noted: 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 Page 12 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, OlaflBolken,OlafAppeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 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. The hearings officer in the present case concluded that any expenditures after June 15th were inappropriate. The hearings officer's conclusion in the Deschutes County case was clearly in error. The issue in this case is not whether December 6th is absolutely the correct date. The issue here is, in light of all these indicators, could the claimant have believed they were proceeding in good faith up to December 6th. The answer is unequivocally "Yes." 2. Mere Preparation The factors or guidelines to determine a vested right are very broad, very flexible with the goal of determining whether or not an owner had taken appropriate steps to dedicate the property to a lawful use and has expended considerable monies toward that end. Further, the reference in the form "guidelines" to "mere preparation of the land" refers to a 1972 Washington County case wherein without any land use application or approval an owner merely went out and cleared some brush and trees and then later claimed he had built an airport. The case as we have here is 180 degrees removed from that fact scenario. 3. All Expenditures are Attributable to the Development. Under current zoning the applicants could not partition this property. Under Measure 49, they could potentially get 1 additional parcel with a home. Neither of these potentially allowable uses would involve 99.9% of the expenditures incurred by applicant. These partitions would not require the road system. In fact, under Measure 49, the two parcels would have to be less than 2 acres in size and clustered adjacent to the road. These partitions would not involve the re -work of the irrigation system. None of these partitions would require the extensive survey work, engineering Page 13 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 work, laying out the 5 -lot subdivision. None of these partitions would require the level of work done for the land use applications in conjunction with this subdivision. There must be some element of common sense in this proceeding. No one would ask an engineer to draft up plans for a road system to serve 5 homes when all they could do is one parcel. No one in their right mind would engineer utility systems for 5 lots to achieve a partition for only one parcel. No one would drill wells and have septic system tests for 5 lots to achieve a partition of 1 more lot. 4. The Development as a Use of Land . When Measure 37 was adopted, the voters of Oregon approved a plan by which owners would either receive compensation or a waiver. The waiver is described in subsection 8 of ORS 197.352. Therein, governmental agencies are authorized to remove, modify or not apply offending land use regulations to allow the owner to use the land as they could have as of the date of their acquisition. This waiver would have been given as a form of compensation, rather than a cash amount. The State of Oregon has interpreted ORS 197.352(8) as allowing the State to authorize a use of the property such as described in the waivers in the present case. Those waivers authorize the claimants to develop the property into a residential subdivision with a density of approximately 5 parcels. That use is for the development of a 5 -lot subdivision for residential purposes. This use was then evidenced in the form of the land use application for the 5 -lot subdivision. It is a use allowed under current law, together with the amendments to those land use regulations exhibited in the waivers issued by Deschutes County and the State of Oregon. This use, then, that is a planned unit development, is a use authorized by both Deschutes County and the State of Page 14 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olai\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 Oregon. This use then can be preserved by vesting either under the statute (ORS 215.427(3)) or by reason of subsection (5)(3) of Measure 49, that is, establishing a common law vesting as of December 6, 2007. The claimants have satisfied this use and the vesting thereof under both avenues. This use of the property as a subdivision with streets, utilities, and residential parcels is, therefore, a use that can be vested by reason of either the statute or under common law. The cases cited by Central Oregon Land Watch are not particularly relevant. They concern subdivisions that were platted and not developed for decades. Platted but undeveloped subdivisions were under the court rulings in the 1970's deemed not to be continuing uses. In this case, the scope of the uses allowed under ORS 197.352(8) and preserved through 215.427(3) (which did not exist when the cases of Parks v. Tillamook Co. Comm./Spliid, 11 Or App 177, 501 P2d 85 (1972), or Columbia Hills v. LCDC, 50 Or App 483, 624 P2d 157 ((1981), is clear: it is the subdivision of 9 residential parcels with a road and utilities is vested. 5. Scope of Project The facts of this case shows that the owner articulated a defined and lawful use, to -wit: a S- lot subdivision with a road, water wells and septic systems. The owner expended over $33,000 which represents approximately 34% of the total project cost for the subdivision. All of these costs were made in reliance upon a final decision by Deschutes County which authorized this use as lawful. There is no question that even under a vested rights analysis, this owner is entitled to proceed with the development to its fruition. Opponents in these vesting applications have argued that the costs of homes should be included. The construction of homes is not part of this subdivision application. This subdivision Page 15 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 is to create lots which have the capability of having homes constructed on them. This concept of including the unknown price of homes comes from some discussion by Judge Tanzer in the case of Webber v. Clackamas County, 42 Or App 151, 600 P2d 448 (1979). However, in a subsequent case the Court of Appeals did not consider homes to be part of the ratio test. For example, in Cook v. Clackamas County, 50 Or App 75, 622 P2d 1107 (1981), the court evaluated the common law test in relation to some work done toward establishment of a mobile home park. In the Cook case, the court did not consider the cost of the mobile homes as part of the evaluation for the ratio test in establishing a vested right. Also, inclusion of cost of homes does not make sense in light of the history of Measure 37/Measure 49. Measure 37 was passed by the voters in November, 2004. A number of persons, including the claimants have filed written demands with the applicable governmental entities in 2005. However, there was an approximate 8 to 9 month period in which very little transpired under Measure 37 because of MacPherson, supra. As the Board knows, the Circuit Court in Marion County originally ruled Measure 37 to be unconstitutional. The State of Oregon did not process any claims during the time that was on appeal. Finally, in 2006, the Supreme Court overruled the Circuit Court and found Measure 37 to be constitutional. Because of that delay, there were very few, if any, subdivision in the State of Oregon that were approved under Measure 37 and under construction when the legislature considered Measure 49. By June, 2007, there were very few, if any, subdivisions in the State of Oregon where homes were under construction. It would be illogical to think that the legislature would provide a relief that was a sham. In other words, it would not be anticipated that the legislature could consider the cost of homes to be included in the common law vesting under Measure 37. One must remember that this vesting avenue under Section 5(3) of Page 16 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olaf\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, LLP p ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 Measure 49 is an unusual mixture of both statutory and common law principles. The statute was written in a form that if a person had done enough to obtain a form of common law vesting by the effective date, the Measure 37 claimant would be entitled to that relief for compensation. It would not be appropriate to find that the legislature wrote this with the intent that no one could qualify for this relief. Based upon the circumstances "on the ground" in Oregon in June, 2007, it would be an appropriate conclusion to find that those persons who in reliance and in compliance with the law had expended a considerable amount of money to pursue a qualified development under Measure 37 would be entitled to retain the benefit of that right as opposed to those who merely received waivers and did not take any action to pursue development thereunder. Finally, what cost is used? Opponents set one figure. The cost of homes could be as low as $100,000 (double wide manufactured homes). This practical element undermines a blanket figure for inclusion of the cost of homes. However, even with the inclusion of the cost of homes, this development is vested as the investment to December 6th was $33,393. There is approximately $396,091 of the project cost including homes (e.g., expenses incurred to date divided by 3 homes x $100,000 + subdivision costs. This results in a 8.4% ratio. Note: There are two existing homes on the parcel. DATED this /8 day of June, 2008. Respectfully submitted EDWARD P. FITCH, OSB 78202 Of Attorneys for Applicant Bryant, Emerson & Fitch, LLP P.O. Box 457, Redmond, OR 97756 Telephone: (541) 548-2151;Facsimile: (541) 548-1895 Efitch@redmond-lawyers.com Page 17 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF\Bolken, Olat\Bolken,Olat\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, u.P ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 Attachments (1) Hearings Officer decision (2) Gagnier v. City of Gladstone (3) ORS 197.835 (4) Deschutes County Code Section 17.16.090 (5) Affidavit of Edward P. Fitch (6) Affidavit of Jim Hendryx (7) Affidavit of Bill Zelenka (8) Shown Decision (9) Hudspeth Decision Page 18 - NOTICE OF APPEAL AND REQUEST FOR PARTIAL DE NOVO HEARING G:\Clients\EPF'Bolken, Olat\Bolken,Olaf\Appeal to BOC.6.9.08.wpd(mcm) BRYANT, EMERSON & FITCH, us ATTORNEYS AT LAW 888 S.W. EVERGREEN AVENUE P.O. BOX 457 REDMOND, OREGON 97756-0103 TELEPHONE (541) 548-2151 FAX (541) 548-1895 DECISION OF TUE DESCHUTES COUNTY HEARINGS OFFICER FILE NUMBER: APPLICANT/ OWNER: AGENT: REQUEST: DR -07-11 Olaf and Jannis Bolken 9721 North Highway 97 Terrebonne OR 97760 Ed Fitch Bryant Emerson & Fitch, LLP PO Box 457 Redmond OR 97756 An application for a Declaratory Ruling to determine whether the applicant has a common law vested right to continue the development of a five -lot subdivision approved under County CDD files MA -07-13 and TP -07-1000. HEARING DATE: March 6, 2008 STAFF CONTACT: Chris Bedsaul, Associate Planner I. STANDARDS AND APPLICABLE CRITERIA: Ballot Measure 49 (House Bill 3540), Oregon Revised Statutes Chapters 195, 197 Title 18, the Deschutes County Zoning Ordinance, oldie Deschutes County Code. II. BASIC FINDINGS: A. LOCATION: The subject property has an assigned. address of 9721 North Highway 97 and on County Assessor's Map 14-13-09, as tax lot 1400. B. ZONING: The subject property is zoned Exclusive Farm Use-Terrebonne Subzone (EFUTE). The property is designated agriculture by the Deschutes County Comprehensive Plan. C. PROPOSAL: The application submitted is for a determination under Ballot Measure 49 whether there is a common law vested right to continue development of the subdivision, consisting of five (5) platted lots, each lot eligible for a dwelling, approved under TP -07-1000 and MA -07-13. D. SITE DESCRIPTION: The subject property is 31.40 acres in size and is located west of Highway 97. The southern property boundary is adjacent to the DR -07-11 Bolken 1 Terrebonne Unincorporated Community zone boundary. The property contains two (2) existing single-family dwellings, two (2) farm accessory barns, shed and detached garage with ground cover consisting of irrigated livestock pasture, native vegetation, native grasses and juniper trees. The property contains 27 acres of irrigation and is within the Central Oregon Irrigation District. E. PUBLIC AGENCY COMMENTS: The Department of Land Conservation and Development (DLCD) received the county's notice of a Declaratory Ruling application for the above -referenced subdivision. DLCD responded in a letter dated February 20, 2008 which discussed the department's view of the inapplicability of ORS 215.427(3), and a statement on common law vested rights. F. PUBLIC COMMENTS: The Planning Division sent notice of the proposed Declaratory Ruling application (hearing) to all property owners within 750 feet of the subject property. Staff did not receive any responses. At the hearing on March 6, 2008, no other parties appeared to testily on the proposal other than the applicant. G. LOT OF RECORD: The subject property is a lot of record by previous issuance of development permits (see B11443, B16873, S19649 and S52078). IFI. REVIEW PERIOD: This Declaratory Ruling application was submitted on December 18, 2007 and an "Incomplete Application" letter, dated January 17, 2008 was moiled to the applicant. The applicant provided supplemental information as requested and the application was accepted as complete on February 11, 2008. I. CO1VIMUNITY DEVELOPMENT DEPARTMENT PERMITS: The applicant submitted costs associated with the proposed development. Staff has summarized these costs in the following tables: TABLE 1: Applicant Listed Measure 37 Related Expenses PRIOR to June 15.4 2007 Date of Payment Preliminary. Development Cost Item Identification Payment Made To Expense Paid May 30, 2006 Deschutes County Filing Fee Deschutes County $500.00 May 30, 2006 Title Search Western Title $200.00 TOTAL PAYMENT $700.00 TABLE 2: Applicant Listed Non -Construction Type and/or Preliminary Project Expenses PRIOR to June 15, 2007 DR -07-11 Bolken 2 Date of Payment Preliminary Development Cost Item Identification Payment Made To Expense Paid January 16, 2007 Steel Culvert — No verified use identified for project Swift Steel $203.95 January 27, 2007 Fill Dirt — No verified use identified for project Dewey Dirt Works $125.00 April 20, 2007 Attorney Fee Ed Fitch $50.00 April 25, 2007 Planner Fee Heidi Kennedy $778.50 May 3, 2007 Title Search Western Title $150.00 May 17, 2007 Surveyor Jeff Kern $2,000.00 May 8, 2007 to June 22, 2007/***July 16, 2007 and July 31, 2007 Surveyor for research, field survey for monuments and topography and prepare tentative plat. Note: Staff Jeff Kern $2,905.00 believes that this work was completed prior to June 15, 2007. TOTAL PAYMENT 86,212.45 TABLE 3: Applicant Listed Preliminary Subdivision Development Preparation Expenses AFTER June 15, 2007 and PRIOR to November 7, 2007 Date of Payment Preliminary Development Cost Item Identification Payment Made To Expense Paid June 26, 2007 Subdivision Filing Fee Deschutes County $2,885.00 July 31, 2007 Planner Fee Heidi Kennedy $337.50 July 31, 2007 Surveyor JeffKem $905.00 DR -07-11 Bolken August 24, 2007 Attorney Fee Ed Fitch $56.25 August 28, 2007 Subdivision Hearing Fee (Modification of Application) Deschutes County $520.00 September 17,2007 Surveyor Fee Jeff Kern $967.00 October 2, 2007 Attorney Fee Ed Fitch $303.75 October 24, 2007 Well Drilling & Casing Abbas Well Drilling $8,424.00 October 28, 2007 Rock and dirt moving Dewy Dirt Works $240.00 November 5, 2007 Access approach to Highway 97 Note: Applicant indicates that the work was completed in 1g week in October Knife River Paving $7,152.62 TOTAL PAYMENT $ 21,791.12 TABLE 4: Subdivision Development Expenses Paid AFTER November 7, 2007 and PRIOR to December 6, 2007 Date of Payment Preliminary Development Cost Item Identification Payment Made To Expense Paid November 30, 2007 Attorney Fee Ed Fitch $113.70 December 1, 2007 Surveyor Fee for work completed between 11-17 and 11-28-2007 JeffKern $2,277.00 TOTAL PAYMENT $ 2,390.00 DR -07-11 Bolken 4 TABLE 5: Subdivision Development Expenses Paid AFTER December 6, 2007 Date of Payment Preliminary Development Cost Item Identification Payment Made To Expense Paid January 3, 2008 Planner Fee Heidi Kennedy $262.50 January 22, 2008 Engineering Fee Central Electric Coop $500.00 January 28, 2008 Attorney Fee Ed Fitch $58.75 TOTAL PAYMENT $821.25 TABLE 6: ESTIMATED Subdivision Development Expenses Remaining AFTER December 6, 2007 and Final Plat Approval Development Cost Item Identiification Estimated Unpaid Development Costs Engineering -Road Construction $412.50 Engineering -Road Construction $3,995.00 Construction of Road $39,410.00 Well Installation $8,500.00 Central Electric Utility Installation $9,275.00 Qwest Telephone Utility Installation $2,988.00* * Note: No detailed written cost estimate from Qwest was included with the application exhibits. Total Estimated Development Cost Remaining AFTER December 6, 2007 864,580.50 DR -07-11 Bolken 5 J. APPLICANT INFORMATION: The applicant received a Measure 37 waiver from the State of Oregon for Claim No. M129491 on December 4, 2006. This approval was preceded by a similar approval from the Deschutes County Board of Commissioners in Order No. 2006- 157, issued November 6, 2006. Based on these waivers, the applicant conducted various site preparation work and filed applications to permit a dwelling in conjunction with farm use on five (5) lots to be created by a subdivision pursuant to MA-07-13/TP-07-1000. These applications were approved and mailed on November 14, 2007. III. FINDINGS OF FACT AND CONCLUSIONS OF LAW: A. Legal Background - Measure 49 and Vested Rights Recently, Hearings Officer Anne Corcoran Briggs has issued decisions in several declaratory rulings applying the provisions of Measure 49 and common law vested rights. In these decisions, the Hearings Officer describes the legal context for determining vested rights under Measure 49. I agree with this legal analysis and quote it verbatim here: "Legal Principles 1. Measure 37. Measure 37 was approved by the Oregon voters in 2004. Measure 37, which is codified in state law at ORS 197.352(2005), created a cause of action whereby property owners/claimants could obtain compensation or waivers from land use regulations that were adopted after the claimants acquired their property if the regulations reduced their property values. Claims were submitted to local governments and to the state, which evaluated the claims and, for the most part, approved waivers to the devaluing regulations. Once property owners received waivers from the county and/or state, the property owners applied for land development approvals that effectuated developments permitted under the waivers. Between December 2004 (the date Measure 37 became effective) and December 2007 (the date Measure 49 became effective), processing of the Measure 37 c aims was interrupted by appeals. As a result, many Measure 37 claims lapsed, or were not finalized in a land use decision on the Measure 37 land use application.' 2. Measure 49.2 On June 15, 2007, the Oregon Legislative Assembly referred Measure 49 to the voters. Measure 49 was billed as a "modification" to Measure 37, but in fact severely circumscribes both the nature and extent of development that can be I Measure 37 claims that were pending or on appeal as of the effective date of Measure 49 are now moot. Frank v. Department ofLand Coaervatio►n and Development, Or App _ (CA A134704, January 23, 2008). 2 Measure 49 is now codified at ORS 197300 et. seq. However, because much of the discussion pertaining to Measures 37 and 49 refer to the Measure text rather than the statutory provisions, I refer to the text oldie measures in this decision. DR -07-11 Bolken 6 approved under Measure 37 waivers. For instance, Measure 49 allows only limited residential development on land that was otherwise available for any number of lots and activities. In addition, Measure 49 requires that the waivers granted under Measure 37 be re-evaluated by DLCD. DLCD must decide whether the estimated loss in value asserted in the initial Measure 37 c aims is supported by a uniform methodology for calculating loss in value. In addition, the Department must work with property owners to determine whether the claimants will receive an "express" waiver, which permits the development of up to three parcels and three new dwelling units on property held by the claimants, or whether the claimants are entitled to develop up to ten dwelling units on ten new lots. It is generally understood that few, if any, of the claimants will be entitled to develop ten dwelling units. For those property owners who received Measure 37 waivers and who have a "common law vested right" to develop as of December 6, 2007, development may continue under the Measure 37 waivers and the claimants need not receive a supplemental approval under Measure 49. See Measure 49, Section 5(3). 3. ORS 215.130(5). This statute allows property owners to continue legally established nonconforming uses and structures on properties, so long as the uses and structures are not altered or abandoned. Further, ORS 215.130(5) permits changes in ownership and occupancy without forfeiting the right to the nonconforming use. 4. ORS 215.427 (Goalpost rule) ORS 215.427(3)(a) provides: "If the application was complete when first submitted or the applicant submits the requested additional information within 180 days of the date the application was first submitted and the county has a comprehensive plan and land use regulations acknowledged under ORS 197.251, approval or denial Alan be based upon the standards and criteria that were applicable at the time the application was first submitted." The type of vesting provided for in ORS 215.427(3Xa) is known as "an early vesting rule." Its purpose is to establish a bright line standard from the onset, so that the parties to a land use application understand which applicable approval standards will govern the review of the application. In DLCD v. Jefferson County (Burk), _ Or LUBA _ (LUBA No. 2007-177, January 24, 2008), appeal pending _ Or App _ (2008), LUBA held that the provisions and limitations of Measures 37 and 49 supersede ORS 215.427(3)(a), where an applicant dies prior to a decision on a Measure 37 land use application. Under the reasoning in Burk, 3 ORS 215.130(5) provides, in relevant part The lawful use of any building, structure or land at the time of the enactment or amendment of any zoning ordinance or regulation maybe continued. * * * A change of ownership or occupancy shall be permitted " DR -07-11 Bolken 7 only the claimant/applicant has the right to proceed with a Measure 37 land use application, because Measure 37 rights are personal to the claimant.4 5. Common Law Vested Rights. "Vested rights" refers to the equitable principle that a party has the right to develop property notwithstanding the adoption of more restrictive land use regulations, if the party demonstrates that it has commenced the development in good faith.5 In Clackamas County v. Holmes, 265 Or 193, 508 P2d 190 (1973XHolmes), the Oregon Supreme Court identified factors to be considered when analyzing expenditures made in reliance on an assumed development approval to decide (after the fact) whether a project has vested. The Court adopted a requirement that includes consideration of the ratio of expenditures incurred to the total costs of the project, but also included consideration of other factors. The Court held: "We believe that the ratio test should be only one of the factors to be considered. 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 types 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 * * *." Holmes, 265 Or at 198-99. Over the years, the Holmes analysis has been refined somewhat. In Union Oil Co. v. Board of Co. Comm. of Clack. Co., 81 Or App 1, 724 P2d 341 (1986), the Oregon Court of Appeals held that not all Holmes factors will come into play in all cases, and that when they do, different weight may be accorded to those factors. In addition: a. Where a development includes both a land division and the development of dwellings, the ratio test must include costs related to both. Webber v. Clackamas County, 42 Or App 151,155 n 2, 600 P2d 448 (1979). b. The ratio test should not include the property purchase price unless there is evidence that the buyer/developer paid a premium to develop the site for the particular use it now seeks to vest. Union Oil Co. v. Board of Co. Comm. of Clack Co., 81 Or App at 7. c. Costs must be incurred based on lawful permits. DLCD v. Curry County, 19 Or LUBA 237 (1990) (holding that costs incurred after Supreme Court overturned county approval are not to be considered in vesting analysis); 4 The circumstances here are different than the facts in Burk. In Burp the claimant died before the county approved his tentative subdivision plan. Here, the applicant is still living. s The Oregon Court of Appeals has described "vested rights" as "inchoate nonconforming uses." See Fountain Village Dev. Co. v. Multnomah County,176 Or App 2I3, 221, 31 Pad 458 (2001). DR -07-11 Bolken 8 Lung v. Marion County, 21 Or LURA 302 (1991)(expenditures incurred to develop landscaping business cannot be included because they were incurred without land use approvals); Crone v. Clackamas County, 21 Or LUBA 1992 (1991)(expenses incurred to partition parcel could not be considered where applicant had not applied for partition approval.) d. Site preparation, engineering fees, and attorney fees incurred in obtaining development approvals are allowable expenses to consider under the ratio test. Cook v Clackamas County, 50 Or App 75, 84, 622 P2d 1107 (1981). e. By themselves, land use approval and building permits for a development do not create a vested right to develop that particular use. Twin Rocks Watseco Defense Committee v. Sheets, 15 Or App 445 (1973); Columbia Hills Development Co. v. Land Conservation and Development Commission, 50 Or App 483, 624 P2d 157 (1981); and Mason v. Mountain River Estates, Inc., 73 Or App 334, 698 P2d 529 (1985).6 £ Expenditures that commit the property to the particular use contemplated by the developer may be included in the ratio analysis. Conversely, expenditures that can be applied to other allowed uses may not be considered to be directed toward the purported vested right. Eklund v. Clackamas County, 36 Or App 73, 583 P2d 567 (1978xdeveloper allowed to include costs to develop water system on site, because the water system was directly related to residential subdivision, and not to the agricultural uses of the property allowed by the zoning); Webber v. Clackamas County, 42 Or App at 155 (where water system could be used to serve 5 -acre parcels, applicant could not include costs incurred to install the water system to serve one-half acre lots.)" B. Application of Vested Rights rules to the Facts of this Application 1. Applicability of ORS 215.427(3) In a letter dated February 19, 2008, the applicant argues that "[t]he waivers issued by Deschutes County and the State of Oregon provided to Olaf Bolken a protected property interest in the waiver." Based on this assertion, the applicant further argues that ORS 215.427(3) vests the right, memorialized in DLCD's Measure 37 claim approval, to complete the proposed five lot subdivision. 6 Twin Rocks and Columbia Hills were decided prior to the adoption of ORS 215.427 and its predecessor statute, ORS 215.428. Mason was based on local code provisions that were adopted in 1980, also prior to the adoption of the goalpost statute. Therefore, it is not clear whether those holdings have the same prededential value in light of the goalpost statutes. See Kirpal Light Santsang v. Douglas County, 18 Or LURA 651(1990) on remandfrom Court of Appeals, 96 Or App 207, 772 P2d 944 (1989)(based on ORS 215.428, an application to construct a boarding school and associated buildings submitted seven days before the standards changed must be reviewed against the standards in place at the time the applies was submitted, and not against the later -adopted conditional use standards.) DR -07-11 Bolken On May 8, 2008, the Oregon Supreme Court conclusively dismissed this same argument in Corey v. DLCD,_ Or (S0554995, May 8, 2008): The Court stated: In the end, we hold only that plaintiffs' contention that Measure 49 does not affect the rights of persons who already have obtained Measure 37 waivers is incorrect. In fact, Measure 49 by its terms deprives Measure 37 waivers -- and all orders disposing of Measure 37 claims -- of any continuing viability, with a single exception that does not apply to plaintiffs' claim. Thus, after December 6, 2007 (the effective date of Measure 49), the final order at issue in the present case had no legal effect. Like the DLCD order discussed in Corey, the applicant's Measure 37 waivers from DLCD and the Deschutes County Board of Commissioners have no legal effect. These waivers themselves cannot constitute "standards and criteria" under ORS 215.427(3). Therefore, I find that the applicant does not have the right to complete the proposed subdivision by application of ORS 215.427(3). 2. Common Law Vested Right Section 5 of Measure 49 provides the exclusive means for completing development pursuant to waivers granted under Measure 37. Section 5(3) of Measure 49 states: 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. As discussed above, the determination of a vested right requires the application of the method identified in Clackamas County v. Holmes and subsequent vested rights cases. Consistent with the Hearings Officer's decisions in DR -07-12, DR -07-14 and DR -07-15, I find that qualifying expenditures made prior to June 15, 2007 may be considered in comparing the ratio of expenditures to total costs of the project under the test described in Holmes. In considering these costs, staff has recommended, and I agree, that the $700 Measure 37 filing fees identified in Table 1 above, should not be included because they are not directly related to application for the proposed five lot subdivision. I find that all the expenditures identified in Table 2 above, totaling $6212.45 are reasonably attributable to site preparation and planning related to the proposed subdivision. These are the only costs that may be considered in the ratio analysis. The applicant asserts that expenditures through December 6, 2007 must be considered for the ratio test. Mr. Bolken submitted written testimony on February 28, 2008, which in part addresses the question of whether he was acting in good faith. He states, and I have no reason to doubt the veracity of his statements, that he was unaware that Measure 49 had been referred to DR -07-11 Bolken 10 the voters on June 15, 2007. He further states and implies that the county should have notified him to stop work on his proposed subdivision after Measure 49 was referred to the voters. On the topic of good faith, I concur with the Hearings Officer's decision in DR -07-12.7 I would only add that one of the components of the analysis described in Holmes is the question of when the claimant may have received "notice" of a proposed change in land use rules. In a typical vested rights case, a city or county proposes to amend the zoning or development code in a way that limits the use of lands under certain zoning classifications. If a county proposes such a legislative change today, it is required to provide notice under ORS 215.503 to potentially effected property owners. This type of notice is one which would be properly recognized under Holmes. Development and expenditures made after the date of such notice can reasonably be considered at the risk of the property owner and "bad faith" actions in an equitable claim because the owner was presumptively aware that applicable regulations were about to change. Notice in the context of Measure 49 is different than the typical case, because HB 3540 was an act of the Oregon Legislature referring the proposal to the voters. Neither the state nor Deschutes County were under any affirmative legal duty to notify potentially effected property owners that their previously approved Measure 37 waivers might be effected. On the issue of total development costs, the applicant argues that the cost of the houses that would eventually be built in the proposed subdivision should not be included. The applicant sites Cooky. Clackamas County, 50 Or App 75 (1981), for the proposition that the cost of proposed homes should not be included. However, in Cook, the development for which a vested right was sought was a mobile home park — not a subdivision in which permanent homes would be built. The court in Cook was not reviewing the trial court decision de novo, and therefore, the reasons the trial court decided not to include the costs attributed to the mobile homes which would be located in the park are not disclosed. However, it is reasonable to infer that since mobile homes in a park are not generally a fixed asset legally attached to the land (as is a fee simple single family home), and that the park owners do not generally own the mobile homes in a park, that those costs could be excluded. For these reasons, I disagree with the applicant and see no reason to depart from the general rule identified in Webber v. Clackamas County, 42 Or App 151, 155 (1979) that the cost of future dwellings should be included in the ratio test. In a March 4, 2008 letter, the applicant estimated that the total cost of completing the five lot subdivision, including three new dwellings would be $697,974.07. The record shows eligible expenditures of $6,212.45. Using these estimates, the ratio of expenditures to total costs is DR -07-12, note 9 — "The legislative assembly adopted HB 3540, which referred Measure 49 to the voters on June 15, 2007. The referral was widely known, and was sufficient to putt the holders of waivers on notice that a decision to proceed with development was at the claimants' own risk. 1 reject the applicants' assertion that at the earliest, the county should establish December 6, 2007 (the date Measure 49 became effective) as the cut-off date, because the applicant reasonably expected the measure to be challenged during the interim between voter approval and its effective date, and the applicants reasonably relied on advice from their attorney, Oregonians in Action and others that December 6, 2007 was the good faith "cut off" date. The case law on this, while relatively scant, leads to the conclusion that a developer does not have a good faith belief that a use is lawful if a court or legislative action, such as a referendum, has concluded otherwise. DLCD v. Curry County, 19 Or LUBA 237 (1990); see also County ofKauai v. Pacific Standard Life Insurance Company, 65 Haw 318, 653 P2d 766 (1982xfiling of petition to refer a development proposal to the voters is sufficient notice to the developer that further development is not in good faith.)" DR -07-11 11 Bolken approximately 1:112. The ratio in Holmes was approximately 1:14. A ratio of 1:112 is not sufficient to demonstrate a vested right to continue the proposed subdivision. IV. DECISION For the reasons set forth above, I find that the applicant does not have a common law vested right in the approved subdivision MA-07-13/TP-07-1000 pursuant to Section 5(3) of Measure 49. The applicant may not develop the proposed lots and does not have the right convey any inchoate Measure 37 interest that he may have to third parties. DATED this 2 % day of May, 2008 MAILED this day of May, 2008 Kenneth D. Helm, Hearings Officer THIS DECISION IS FINAL WITHIN 12 DAYS OF MAILING UNLESS APPEALED TO THE BOARD OF COUNTY COMMISSIONERS DR -07-11 Bolken 12