HomeMy WebLinkAboutItem 6: Lane Plywood Measure 37 Claim
EUGENE CITY COUNCIL
AGENDA ITEM SUMMARY
c
Action: Lane Plywood Measure 37 Claim for Compensation (M37 05-1)
Meeting Date: June 26, 2006
Department: Planning and Development
www.eugene-or.gov
Agenda Item Number: 6
Staff Contact: Lydia McKinney
Contact Telephone Number: 682-5485
ISSUE STATEMENT
The Eugene City Council is scheduled to take action regarding the Measure 37 claim submitted by Lane
Plywood for the alleged reduction in fair market value to a number of lots located in Pioneer Resources
Business Park, located on the west side of Bertelsen Road, roughly bisected by 1st Avenue West.
BACKGROUND
On May 11,2006, the City Manager sent a memorandum to the council on Lane Plywood's Measure 37
claim, together with the manager's report and recommendation. On June 12,2006, the City Council
held a public hearing for this request. At that hearing, the applicant's representative, Donald Joe Willis,
provided testimony in favor of approval of the Lane Plywood Measure 37 claim. A letter of testimony
from Mr. Willis dated June 12, 2006, was entered into the record at the public hearing. Prior and
subsequent to the public hearing, the council also has received written and oral advice from the City
Attorney's Office.
A copy of the original Measure 37 claim and the amended Measure 37 claim, along with other non-
privileged documents and information related to the issues in the Measure 37 claim, are contained in a
notebook that has been placed in the Council Office. A copy of that notebook is also available for
public inspection by contacting Lydia McKinney.
RELATED CITY POLICIES
Ordinance No. 20331, concerning real property compensation, is related to this claim.
COUNCIL OPTIONS
The council may:
(1) Deny the claim in its entirety. Attached as Attachment A is a draft decision denying the claim.
Attachment A is a revised version of the City Manager's report that had been attached to the AIS for
the June 12 public hearing. As noted previously, the basis for a total denial of the claim would be
the lack of enforcement and the existence of a provision in the CC&R's that incorporates all existing
federal, state and local laws. In its letter submitted as part of the June 12 public hearing, Lane
LICMOl2006 Council Agendas1M0606261S0606266.doc
Plywood asserted that there has been "enforcement" as that term is used in Measure 37, and that
since Lane Plywood can change the CC&Rs, the provision in there does not justify denial. The
likely response from Lane Plywood to this option would be to file a lawsuit challenging the decision.
If Lane Plywood was successful, the City likely would be required to pay Lane Plywood's attorney
fees, in addition to any compensation awarded by the court.
(2) Pay compensation in the amount of the reduction in value. Lane Plywood asserts that such amount
is in the neighborhood of $5 million. If the council chooses this option, the City should obtain an
appraisal from a certified appraisal and then attempt to reach agreement with Lane Plywood on the
amount of compensation.
(3) Approve the waiver of regulations as requested by Lane Plywood - essentially all of the land use
code (Chapter 9 of the Eugene Code), a number of other provisions in the Eugene Code that are
incorporated by reference into chapter 9, and provisions in the Metro Plan and related documents.
(4) Approve a waiver of only those regulations that meet the criteria contained in Measure 37. Lane
Plywood did not identify which of the Eugene Code and Metro Plan provisions (totaling hundreds of
pages) Lane Plywood really believes qualify for compensation under Measure 37, i.e., Lane
Plywood did not identify which are "land use regulations," which "restrict the use of property,"
which "reduce the value," and which are not encompassed by one or more of the exemptions in
subsection (3) of Measure 37. The City Council could approve a waiver that would read as follows:
"The City shall not apply those provisions of Chapter 9 of the Eugene Code that (a) are "land use
regulations" as that term is defined by Measure 37; (b) "restrict the use" of property as that phrase is
used in Measure 37; (c) have the effect of reducing the fair market value of the property; and (d) do
not meet one of the exemptions contained in subsection (3) of Measure 37." Where provisions are
not applied under this waiver, the comparable provision in effect at the time Lane Plywood acquired
the lot would be applied. Attached as Attachment B is a draft decision to implement this option.
CITY MANAGER'S RECOMMENDATION
The City Manager recommends Option 4. In light of the uncertainties related to how the courts will (a)
interpret "enforcement" and (b) deal with the issue of CC&Rs, there is a substantial monetary risk with
Option 1. Given the acreage covered by Lane Plywood's Measure 37 claim and the location and
characteristics of the property (for example, not significant natural resource values worth preserving),
use of the City's limited financial resources to pay compensation does not appear warranted. Option 4
would give to Lane Plywood a waiver in lieu of compensation that is no broader than justified by
Measure 37.
SUGGESTED MOTION
Move to adopt Attachment B (Option 4).
ATTACHMENTS
A. Proposed decision denying Measure 37 claim.
B. Proposed decision approving a waiver of those portions of Chapter 9 that meet all of Measure 37's
criteria.
LICMOl2006 Council Agendas1M0606261S0606266.doc
FOR MORE INFORMATION
Staff Contact: Lydia McKinney
Telephone: 682-5485
Staff E-mail: lydia.s.mckinney@ci.eugene.or.us
Staff Contact:
Telephone:
Staff E-mail:
Glenn Klein
682-5080
glenn. klein@harrang.com
LICMOl2006 Council Agendas1M0606261S0606266.doc
Attachment A
Proposed Decision Denying Claim
CITY OF EUGENE
DECISION OF THE CITY COUNCIL
IN THE MATTER OF A BALLOT FINDINGS OF FACT, CONCLUSIONS OF
MEASURE 37 (CHAPTER 1, OREGON LAW AND ORDER DENYING CLAIM
LAWS 2005) CLAIM BY:
Lane Plywood, Inc.,
Claimant
NAME OF CLAIMANT: Lane Plywood, Inc.
MAILING ADDRESS: Donald Joe Willis, Esq.
Schwabe, Williamson & Wyatt
th
1211 SW 5 Avenue, Suite 1900
Portland, Oregon 97204
PROPERTY IDENTIFICATION: Lots 1, 2, 3, 5, 9, 11, 12, 15-23, 24, 26-33 of
Pioneer Resources Business Park in the City
of Eugene
INTRODUCTION AND PROCEDURAL BACKGROUND
On October 19, 2005, Lane Plywood, Inc. (LPI or claimant) submitted a claim under
Ballot Measure 37 for waiver of regulations or compensation for the alleged reduction in fair
market value to a number of lots located in Pioneer Resources Business Park. In its original
claim, LPI claimed that it intended to use the lots for “commercial development and for the
placement of billboards.” By letter dated March 17, 2006, LPI amended its claim to assert that it
intends to use the property for “all forms of industrial, commercial, residential, signage, and
mixed use, in addition to the commercial uses and placement of billboards described in the
original claim.” LPI claims that the value of its real property has been diminished in the range of
$5 million as a result of amendments to the Eugene Land Use Code and Eugene-Springfield
Metro Area Plan (Metro Plan). LPI essentially alleges that any land use provision enacted after
it acquired these lots has the effect of restricting use and thereby diminishing the fair market
value of the property, and so it seeks compensation or waiver of regulations under Measure 37.
Page 1 of 9
On June 12, 2006, the Eugene City Council (Council) conducted a hearing on Lane
Plywood’s claim. Claimant appeared before the Council through its attorney, Donald Joe Willis.
The Council considered the comments and arguments made by claimant. The Council has also
considered the claimant’s claim and amended claim and other documents submitted to the
Council for its consideration, including but not limited to the June 12, 2006, letter from LPI’s
attorney Donald Joe Willis (June 12, 2006 Willis letter) and an April 8, 2006 letter (with
attachments) from Joseph S. Schaefer.
Based on the foregoing documents, testimony, and arguments, the City Council makes
the following Findings of Fact, Opinion and Conclusions of Law, and DENIES LPI’s Measure
37 Claim.
FINDINGS OF FACT
1. LPI has asserted claims on 25 parcels of land (lots) within the Pioneer Resources
Business Park in the City of Eugene. These lots can be divided into two categories: (1) lots
owned continuously by LPI since at least 1980; and (2) lots previously owned and sold by LPI,
and then reacquired in 2005.
2. Lots 9, 15-24 and 26-33 have been continuously owned by LPI since various dates
between 1964 and 1980 and the present. The particular dates of acquisition (ownership) by LPI
are described in the chart below and are based on deed and title guaranty information submitted
by LPI, as well as information obtained from the Lane County Regional Land Information
Database (RLID).
Lot Number
Deeds Submitted by LPI and Information from Lane County Regional
Land Information Database (RLID)
LPI submitted a deed on this lot from Wendell P. Wick and Evelyn M. Wick
9
to LPI, recorded February 6, 1964
15
LPI submitted a deed, recorded on May 30, 1975, from Southern Pacific
Transportation Company to LPI. RLID confirms that LPI is the current owner
of this lot.
16 and 17 Same as lot 15
18
LPI submitted a deed, recorded on November 19, 1980, from Lane County to
LPI. RLID confirms that LPI is the current owner of this lot.
19 through 24 Same as lot 18
26
LPI submitted a deed, recorded on October 20, 1964, from Lane County to
LPI. LPI also submitted a deed, recorded on June 15, 1972, from C.J. Montag
and Sons to LPI. RLID confirms that LPI is the current owner of this lot.
Page 2 of 9
27
LPI submitted a deed, recorded on March 17, 1970, from C.J. Montag & Sons
to LPI. LPI also submitted a deed, recorded on June 15, 1972, from C.J.
Montag and Sons to LPI. RLID confirms that LPI is the current owner of this
lot.
28 through 30 Same as lot 18
31
LPI submitted a deed, recorded on May 30, 1975, from Southern Pacific
Transportation Company to LPI. LPI also submitted a deed, recorded on
November 19, 1980, from Lane County to LPI. RLID confirms that LPI is the
current owner of this lot.
32 and 33 Same as lot 31
In the chart above, where more than one deed is identified for one lot, the property at issue
generally was described by metes and bounds. Based on the title guarantees, it appears that some
portion of the lot was transferred by each listed deed (the lot numbers were assigned as part of
the subdivision and platting of the Pioneer Business Park that was finalized in 1998).
3. Lots 9, 15-24 and 26-33 were acquired before Eugene’s current Land Use Code, Chapter
9 of the Eugene Code, became effective on August 1, 2001, as well as other amendments to
Chapter 9 occurring after that date.
4. The following chart below summarizes the deeds and title guaranty information
submitted by LPI as well as information obtained from RLID about the ownership of lots 1, 2, 3,
5, 11 and 12.
Lot NumberDeeds Submitted by LPI and Information from Lane County Regional
Land Information Database (RLID)
1 LPI submitted deeds on this lot as follows:
- C.J. Montag and Sons to LPI, recorded May 16, 1972
- LPI to Edward J. King, Jr., et al., dated March 19, 2002
- Edward J. King, Jr., et al., to EJK Investments, LLC, dated
December 18, 2002
- EJK Investments, LLC, to LPI dated April 13, 2005
2 LPI submitted deeds on this lot as follows:
- Wendell P. Wick and Evelyn M. Wick to LPI, recorded February 6,
1964
- LPI to Edward J. King, Jr., et al., dated March 19, 2002
- Edward J. King, Jr., et al., to EJK Investments, LLC, dated
December 18, 2002
- EJK Investments, LLC, to LPI dated April 13, 2005
3 Same as lot 2
Page 3 of 9
5 LPI submitted deeds on this lot as follows:
- C.J. Montag and Sons to LPI, recorded May 16, 1972
- C.J. Montag and Sons to LPI, recorded June 15, 1972
- LPI to Edward J. King, Jr., et al., dated March 19, 2002
- Edward J. King, Jr., et al., to EJK Investments, LLC, dated
December 18, 2002
- EJK Investments, LLC, to LPI dated April 13, 2005
11 LPI submitted deeds on this lot as follows:
- Wendell P. Wick and Evelyn M. Wick to LPI, recorded February 6,
1964
RLID reflects the following transfers:
-LPI to Frontier Real Estate Holdings, Inc., dated May 14, 2001
-Frontier Real Estate Holdings, Inc. to LPI, dated May 23, 2001
-Deed from LPI to Edward J. King, Jr. Trust, dated March 19, 2002
-Deed from Edward J. King, Jr. Trust to EJK Investments, LLC, dated
December 18, 2002
-Deed from EJK Investments, LLC to LPI, dated April 13, 2005
12 LPI submitted deeds on this lot as follows:
-Indenture between Southern Pacific Company and LPI, recorded
September 14, 1956
-Deed from LPI to Edward J. King, Jr. Trust, dated March 19, 2002
-Deed from Edward J. King, Jr. Trust to EJK Investments, LLC,
dated December 18, 2002
-Warranty Deed from William S. Anderson, Trustee to Ander
Properties, LLC, recorded July 10, 2003
-Bargain & Sale Deed from EJK Investments, LLC, to LPI, dated
April 13, 2005
-Bargain & Sale Deed from William S. Anderson, Trustee to Ander
Properties, LLC, recorded September 26, 2005
-Warranty Deed from EJK Investments, LLC to LPI, recorded
February 15, 2006
-Quitclaim Deed from Edward J. King Jr., Trustee to LPI, recorded
February 15, 2006
5. Lots 1, 2, 3, 5 and 12 were first acquired by LPI between 1956 and 1972. LPI owned
these properties continuously until, on March 19, 2002, LPI transferred all of these properties to
the Edward J. King, Jr., Trust.
6. LPI first acquired Lot 11 in 1964. That lot was transferred to and held by Frontier Real
Estate Holdings, Inc., for nine days in May of 2001, before being transferred back to LPI.
7. Lots 1, 2, 3, 5 and 11 were then transferred by Edward J. King, Jr. Trust to EJK
Investments, LLC, on December 18, 2002. LPI reacquired lots 1, 2, 3, 5, 11 and (a portion of lot
12) on April 13, 2005
Page 4 of 9
8. Lot 12 also contains deeds to and from William S. Anderson, Trustee, and Ander
Properties, LLC, associated with a lease and option on the property dated October 2, 2002. LPI
did not provide the lease and option document(s). LPI ultimately reacquired complete title to lot
12 on February 16, 2006.
9. Lots 1, 2, 3, 5, 11 and 12 were not acquired before Eugene’s current Land Use Code,
Chapter 9 of the Eugene Code, became effective on August 1, 2001,
10. On January 14, 2005, Edward J. King, Jr. Trust (King) and Frontier Resources, LLC
(Frontier), executed a document entitled “Memorialization of Loan Agreement.” That document
states that King and Frontier verbally agreed that the March 19, 2002 conveyances of lots 1
through 3, and 10 through 12 from LPI to King were intended only for the purposes of securing a
portion of a loan made by King to Frontier. (Lot 5 was not included in the Memorialization of
Loan Agreement.) The same person, Greg Demers, owns a controlling interest in both Frontier
and LPI.
11. On April 13, 2005, King transferred lots 1, 2, 3, 5, 11 and (a portion of) 12 to LPI.
12. On October 19, 2005, LPI filed this Measure 37 claim.
13. King and Demers have been working together since at least 1997 to develop the property
that is the subject of this Measure 37 claim.
14. Based on the foregoing facts, it appears that the transfers from King to LPI on April 13,
2005 were made so that LPI could bring this Measure 37 claim, and to support an argument that
LPI owned the property prior to the enactment of Measure 37.
15. Consequently, the City rejects LPI’s assertion that the acquisition date for lots 1, 2, 3, 5,
11 and (a portion of) 12 should be the first date of acquisition.
16. The correct date of acquisition for lots 1, 2, 3, 5, 11 and (a portion of 12) is April 13,
2005, and the correct acquisition date for (the other portion of) lot 12 is February 26, 2006.
These dates are after the effective date of the City’s Land Use Code, August 1, 2001.
17. The City has not applied or enforced any of the provisions of Chapter 9 or the Metro Plan
with respect to LPI’s property since the passage of Measure 37.
18. In 1997 LPI applied for and was granted (in 1998) a subdivision approval for the property
that is the subject of this claim. The tentative plan approval (and ultimately final plat) was
consistent with LPIs subdivision application. LPI’s application limited the uses to which it
=
would put the property in the future to those allowed in an I-3 zone. LPIs application further
=
stated that, although the I-3 zone allowed uses permissible in both the I-2 and I-1 zones, it was
not going to put the land to any of the uses allowed in the I-1 zone. LPI has restricted itself from
using the property in a manner contrary to the subdivision approval.
Page 5 of 9
19. As part of the subdivision process, LPI voluntarily placed Covenants, Conditions and
Restrictions (CC&Rs) on the property. These CC&Rs restrict its uses of the property, even in
the absence of Chapter 9 of the Eugene Code and even in the absence of the Metro Plan.
20. The CC&Rs place substantial limitations on the uses of the property. Among other
provisions, the CC&R’s provide that all governmental enactments, ordinances and regulations
are deemed to be part of the CC&Rs, and to the extent that they conflict with any provision,
covenant, condition, or restriction of the CC&Rs, such conflicting governmental enactment,
ordinance and regulation shall control and the provision, covenant, condition or restriction in
conflict with the CC&Rs shall be deemed (a) amended to the extent necessary to bring it into
conformity with such enactment, ordinance and regulation while still preserving the intent and
spirit of the provision, covenant, condition or restriction; or (b) stricken if an amendment
conforming to the governmental enactment, ordinance or restriction is incapable of preserving
the intent and spirit of said provision, covenant, condition or restriction.
21. LPI has provided no appraisal or other documentation substantiating that any City “land
use regulation”, as that term is defined in Measure 37, has in any way reduced the value of its
property.
22. LPI has not made any showing that there has been a restriction on use of its property due
to any “land use regulation” as that term is defined in Measure 37.
23. Historic zoning, in place when LPI acquired various parcels, restricted the uses to which
the property could be put. LPI’s property historically has been zoned heavy industrial (I-3 and
M-3). LPI has not offered any evidence that the zoning or regulations today reduce the value or
restrict uses in any significant manner beyond what existed in the 1960s, 1970s and 1980s.
24. Previous uses of the LPI property have included demolition and sanitary landfills, log
ponds, a veneer plant, a plywood mill and a log yard. Because of the nature of these uses,
significant portions of the site are subject to methane off-gassing, soil/fill instability, and
subsidence.
OPINION AND CONCLUSIONS OF LAW
Measure 37 generally grants a property owner the right to compensation (or waiver at the
option of the government) for a regulation that existed as of the effective date of Measure 37
(December 2, 2004) if five substantive requirements are met. First, the regulation must
constitute a “land use regulation” as that term is defined by Measure 37. Second, the public
entity must have enforced the regulation in some manner. Third, the regulation must “restrict the
use” of private property. Fourth, the effect of the regulation must cause a reduction in the fair
market value of the property. And fifth, the regulation must not fall within one of Measure 37’s
five exemptions.
A. Ownership
Page 6 of 9
Ballot Measure 37 provides for relief from (waiver of) specific laws or payment of
compensation for (to) “owners” as that term is defined by the Measure. Ballot Measure 37,
Section 11(C) defines “owner” as “the present owner of the property, or any interest therein.”
LPI is the present owner of the property identified in the claim.
B. “Land use regulations”
Measure 37 requires compensation (or waiver) only for those regulations which
constitute “land use regulations” as that term is defined by Measure 37. Measure 37 and other
state land use laws define differently the phrase “land use regulations.” Measure 37 defines land
use regulation, with respect to local governments, as “local government comprehensive plans,
zoning ordinances, land division ordinances and transportation ordinances.” On the other hand,
ORS 197.015(11) defines land use regulation as “any local government zoning ordinance, land
division ordinance adopted under ORS 92.044 or 92.046 or similar general ordinance
establishing standards for implementing a comprehensive plan.” This difference between
Measure 37’s definition and the prior statutory definition – i.e., the omission in Measure 37 of
the language underlined above – is significant. Existing state law and Measure 37 both include
zoning ordinances and land division ordinances. Measure 37, however, does not include the
language “or similar general ordinance establishing standards for implementing a comprehensive
plan.” Because Measure 37 omits that language, while including the other language from ORS
197.015(11) relating to zoning ordinances and land division ordinances, a proper interpretation
of Measure 37 limits “land use regulation” to zoning ordinances and land division ordinances (in
addition to comprehensive plan provisions and transportation ordinances).
LPI includes as part of its claim most of Chapter 9 of the Eugene Code, other parts of the
Eugene Code that are incorporated by reference in provisions of Chapter 9, and the Metro Plan.
Measure 37 defines “land use regulation” to include comprehensive plans, and consequently, to
the extent that LPI’s claim is based on the Metro Plan, the claim meets this requirement.
Measure 37, however, does not define “land use regulation” to include all land use code or other
code provisions, but instead, only “zoning ordinances,” “land division ordinances” and
“transportation ordinances.” Most of the regulations in Chapter 9, as well as the other Eugene
Code provisions incorporated by reference into Chapter 9, do not constitute any of those types of
ordinances. To the extent that LPI’s claim is based on those parts of Chapter 9 or other Eugene
Code provisions, the claim lacks merit.
C. Enforcement.
Measure 37 states that a property owner has a claim if a public entity “enacts or enforces
enforcesenacted prior to the effective date
a new land use regulation or a land use regulation ”
of Measure 37. With very few exceptions, all of the provisions of Chapter 9 and other parts of
the Eugene Code and the Metro Plan were enacted prior to Measure 37. Therefore, the mere
adoption or existence of those provisions is not enough to give rise to a Measure 37 claim.
Instead, Measure 37 requires something more.
Measure 37 requires that some type of “enforcement” take place. Since that has not
happened, the claim must be denied.
Page 7 of 9
D. Restriction on use, reduction in value, LPI’s subdivision and CC&Rs.
A “land use regulation” gives rise to a Measure 37 claim only if the regulation would
“restrict the use” of private property and have the effect of reducing the fair market value of
property. LPI did not identify which of the more than 550 pages of Chapter 9, and which of the
other parts of the Eugene Code incorporated into Chapter 9, LPI asserts “restrict the use” of
property, and which “reduces the value” of property. To qualify as a valid claim, a provision
both
must restrict the use and reduce the value.
Even if provisions of Chapter 9 and other code provisions restricted the use and reduced
the value of some property within the City, there are three additional factors applicable to LPI’s
property which preclude a finding that LPI can meet these requirements: the historic zoning of
the property; the land use approval that LPI sought and obtained for the lots; and the CC&Rs
adopted for and recorded on all of the lots at issue in this Measure 37 claim.
LPI first asserted that it intends to use the subject lots for commercial development and
A
billboards. LPI later amended its claim to assert its intent to use these lots for all forms of
@A
industrial, commercial, residential, signage, and mixed use, in addition to the commercial uses
and placement of billboards described in the original claim. LPI asserts that it is restricted from
@
using the property for its intended uses by the Citys industrial zoning and by a number of
=A@A
other city land use regulations currently in effect.
@
Even if the City agreed to not apply or waive the regulations, the use and
A@A@
development of the properties would remain restricted by the subdivision approval sought and
obtained by LPI and the CC&Rs LPI voluntarily placed on the property. The CC&Rs are
limitations on LPI’s title to the property, and are not affected by Measure 37. These limitations
would exist regardless of any decision by the City Council to “not apply” or “waive” Eugene
land use regulations. Even if the City were to waive its entire Land Use Code (and Metro Plan),
the CC&Rs would still limit many of the uses which LPI alleges in its claim. Accordingly, there
is no diminution in value that LPI can attribute to the City of Eugene as opposed to its own
CC&Rs. LPI has asserted that it has the power to change the CC&Rs. Even if true, LPI has not
done so and a prospective purchaser would not pay an inflated price for a lot based on LPI’s
statement that it has the ability to change the CC&Rs.
Moreover, during the subdivision process, LPI asserted that a contract is established
between the subdivider (LPI) and the municipality (the City) once a tentative plan for
subdivision is approved. Just as the City must (in LPI’s view) be bound by the provisions in the
tentative approval, so must LPI be bound by the provisions that it voluntarily agreed to in the
subdivision process. Thus, LPI has, by its own voluntary actions, limited itself to I-3 and I-2
(but not I-1) uses on the land, as subdivided. Just as LPI asserted the City was bound by the
contractual nature of the tentative subdivision plan, so is LPI.
E. Exemptions.
Page 8 of 9
Finally, a Measure 37 claim is not valid to the extent that one or more of the regulations
falls within one of the five exemptions under the Measure. As noted above, LPI does not specify
what parts of Chapter 9 or other Eugene Code provisions LPI believes really qualify under
Measure 37. Many provisions of Chapter 9 and other parts of the Eugene Code serve to protect
the public health and safety, or prevent nuisances. Such provisions fall within Measure 37’s
exemptions, and are particularly relevant to LPI’s claim given the past uses of the property and
current issues associated with methane off-gassing, soil/fill instability and subsidence. To the
extent that regulations serve to protect public health and safety and/or prevent nuisances, then the
regulations are exempt under Measure 37, even if they otherwise constitute “land use
regulations” that “restrict the use” and “reduce the fair market value” of property.
CONCLUSION: ORDER DENYING CLAIM
Based on the findings of fact and conclusions of law above, the City has determined that
LPI’s claim is invalid and is therefore DENIED.
00147853.DOC;1
Page 9 of 9
Attachment B
Proposed Decision Approving Waiver
CITY OF EUGENE
DECISION OF THE CITY COUNCIL
IN THE MATTER OF A BALLOT FINDINGS OF FACT AND DECISION
MEASURE 37 (CHAPTER 1, OREGON APPROVING WAIVER
LAWS 2005) CLAIM BY:
Lane Plywood, Inc.,
Claimant
NAME OF CLAIMANT: Lane Plywood, Inc.
MAILING ADDRESS: Donald Joe Willis, Esq.
Schwabe, Williamson & Wyatt
th
1211 SW 5 Avenue, Suite 1900
Portland, Oregon 97204
PROPERTY IDENTIFICATION: Lots 1, 2, 3, 5, 9, 11, 12, 15-23, 24, 26-33 of
Pioneer Resources Business Park in the City
of Eugene
INTRODUCTION AND PROCEDURAL BACKGROUND
On October 19, 2005, Lane Plywood, Inc. (LPI or claimant) submitted a claim under
Ballot Measure 37 for waiver of regulations or compensation for the alleged reduction in fair
market value to a number of lots located in Pioneer Resources Business Park. In its original
claim, LPI claimed that it intended to use the lots for “commercial development and for the
placement of billboards.” By letter dated March 17, 2006, LPI amended its claim to assert that it
intends to use the property for “all forms of industrial, commercial, residential, signage, and
mixed use, in addition to the commercial uses and placement of billboards described in the
original claim.” LPI claims that the value of its real property has been diminished in the range of
$5 million as a result of amendments to the Eugene Land Use Code and Eugene-Springfield
Metro Area Plan (Metro Plan). LPI essentially alleges that any land use provision, and any
provision incorporated into chapter 9 of the Eugene Code, enacted after it acquired these lots has
the effect of restricting use and thereby diminishing the fair market value of the property, and so
it seeks compensation or waiver of regulations under Measure 37.
Page 1 of 4
On June 12, 2006, the Eugene City Council (Council) conducted a hearing on Lane
Plywood’s claim. Claimant appeared before the Council through its attorney, Donald Joe Willis.
The Council considered the comments and arguments made by claimant. The Council has also
considered the claimant’s claim and amended claim and other documents submitted to the
Council for its consideration, including but not limited to the June 12, 2006, letter from LPI’s
attorney Donald Joe Willis (June 12, 2006 Willis letter) and an April 8, 2006 letter (with
attachments) from Joseph S. Schaefer.
Based on the foregoing documents, testimony, and arguments, the City Council makes
the following Findings of Fact, Opinion and Conclusions of Law, and approves a waiver of those
regulations that meet Measure 37’s requirements.
FINDINGS OF FACT
1. LPI has asserted claims on 25 parcels of land (lots) within the Pioneer Resources
Business Park in the City of Eugene. These lots consist of two categories: (1) lots owned
continuously by LPI since at least 1980; and (2) lots previously owned and sold by LPI, and then
reacquired in 2005.
2. Lots 9, 15-24 and 26-33 have been continuously owned by LPI since various dates
between 1964 and 1980 and the present.
3. Lots 1, 2, 3, 5 and 12 were first acquired by LPI between 1956 and 1972. LPI owned
these properties continuously until, on March 19, 2002, LPI transferred all of these properties to
the Edward J. King, Jr., Trust.
4. LPI first acquired Lot 11 in 1964. That lot was transferred to and held by Frontier Real
Estate Holdings, Inc., for nine days in May of 2001, before being transferred back to LPI.
5. Lots 1, 2, 3, 5 and 11 were then transferred by Edward J. King, Jr. Trust to EJK
Investments, LLC, on December 18, 2002. LPI reacquired lots 1, 2, 3, 5, 11 and (a portion of lot
12) on April 13, 2005.
6. Lot 12 also contains deeds to and from William S. Anderson, Trustee, and Ander
Properties, LLC, associated with a lease and option on the property dated October 2, 2002. LPI
did not provide the lease and option document(s). LPI ultimately reacquired complete title to lot
12 on February 16, 2006.
7. On January 14, 2005, Edward J. King, Jr. Trust (King) and Frontier Resources, LLC
(Frontier), executed a document entitled “Memorialization of Loan Agreement.” That document
states that King and Frontier verbally agreed that the March 19, 2002 conveyances of lots 1
through 3, and 10 through 12 from LPI to King were intended only for the purposes of securing a
portion of a loan made by King to Frontier. (Lot 5 was not included in the Memorialization of
Loan Agreement.) The same person, Greg Demers (Demers), owns a controlling interest in both
Frontier and LPI.
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8. On April 13, 2005, King transferred lots 1, 2, 3, 5, 11 and (a portion of) 12 to LPI.
9. On October 19, 2005, LPI filed this Measure 37 claim.
10. King and Demers have been working together since at least 1997 to develop the property
that is the subject of this Measure 37 claim.
11. LPI has asserted that as a result of new land use regulations, its property has diminished
in value in the range of $5 million.
DECISION
Measure 37 generally grants a property owner the right to compensation (or waiver at the
option of the government) for a regulation that existed as of the effective date of Measure 37
(December 2, 2004) if five substantive requirements are met. First, the regulation must
constitute a “land use regulation” as that term is defined by Measure 37. Second, the public
entity must have enforced the regulation in some manner. Third, the regulation must “restrict the
use” of private property. Fourth, the effect of the regulation must cause a reduction in the fair
market value of the property. And fifth, the regulation must not fall within one of Measure 37’s
five exemptions.
As noted previously, LPI’s claim includes virtually all provisions of chapter 9 of the
Eugene Code, as well as other parts of the Eugene Code that are incorporated by reference into
chapter 9. In addition, LPI’s claim includes the Metro Plan and related documents. LPI did not
identify which of those hundreds of pages of code or plan provisions meet any of the tests noted
in the preceding paragraph. Nor did LPI offer any comparison of the provisions that govern
today versus the comparable provisions that were in effect when LPI acquired its various lots.
However, the actual zoning that is in place today (I-3) is more restrictive than the zoning that
was in place at the time that LPI acquired many of the lots (M-3). The Council concludes that
LPI’s property likely would be more valuable if LPI could use the property for a greater variety
of uses than is permitted under the I-3 zoning (or under the CC&Rs that are attached to the
property).
In light of the findings and conclusions noted above, the absence of funds to pay
compensation, and the location and characteristics of the property (for example, an absence of
significant natural resources worth preserving), the City Council orders as follows:
The City shall not apply those provisions of (a) chapter 9 of the Eugene Code, (b)
other chapters of the Eugene Code that are incorporated by reference into chapter
9, or (c) the Metro Plan, to the extent that the provisions were adopted after LPI
acquired the lot at issue, and:
(1)the provision is a “land use regulation” as defined by Measure 37;
(2)the provision “restricts the use” of the lot as that phrase is used in Measure
37;
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(3)the provision has the effect of reducing the fair market value of the lot;
and
(4)the provision does not meet any of the exemptions contained in subsection
(3) of Measure 37.
Where a regulation is not applied, the comparable regulation that was in effect at
the time that LPI acquired the lot shall govern.
Approved by the City Council this ___ day of ____, 2006.
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