HomeMy WebLinkAboutItem 3: PH on Resolution Concerning Measure 37 Claim (Brown)
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UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Public Hearing and Possible Action: Brown Measure 37 Claim (M37 06-2)
Resolution 4905 Granting a Measure 37 Claim and Modifying a Provision of
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Chapter 9 of the Eugene Code, 1971 for Property Located on 12 Avenue
Between Charnelton and Lincoln Streets, Eugene, Oregon
(Assessor’s Map 17-03-31-42 TL 7100 – DMB Green, LLC)
Meeting Date: March 12, 2007 Agenda Item Number: 3
Department: Planning and Development Staff Contact: Heather O’Donnell
www.eugene-or.gov Contact Telephone Number: 682-5488
ISSUE STATEMENT
The Eugene City Council is scheduled to hold a public hearing on March 12, 2007, regarding a Measure
37 claim submitted by DMB Green LLC (Coreen Fuller, John Brown, Rick Duncan, Thomas Morgan
and Tamsin Morgan) for the alleged reduction in fair market value to their lot located on the south side
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of 12 Avenue, between Charnelton and Lincoln.
BACKGROUND
This Measure 37 claim seeks a waiver of the “new” floor area ratio (FAR) of 1.0, with a return to the
“old” FAR of .65. The new FAR was imposed by the Land Use Code Update (LUCU) in 2001. The
claimants have owned the property since 1994.
As detailed in the attached report and recommendation, the City Manager has concluded that the claim is
valid. In lieu of compensation, the City Manager has proposed a waiver of the current FAR of 1.0, and
re-imposition of the prior FAR of .65.
A copy of the Measure 37 claim, along with other 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 available for public inspection by contacting Heather O’Donnell, Associate Planner at
682-5488.
RELATED CITY POLICIES
Ordinance No. 20331, concerning real property compensation, is related to this claim.
COUNCIL OPTIONS
After receiving public testimony, the City Council may choose to:
1. Adopt the resolution which would waive the 1.0 FAR and re-impose the .65 FAR;
2. Determine that the claim is not valid and deny the claim; or
3. Determine that the claim is valid and that compensation should be paid, rather than a waiver granted.
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CITY MANAGER’S RECOMMENDATION
The City Manager recommends a waiver of the current FAR of 1.0, and a re-imposition of the prior FAR
of .65. In light of the council’s upcoming spring recess, the City Manager also recommends that council
take action following the public hearing by adoption of the proposed resolution.
SUGGESTED MOTION
Move to adopt Resolution No. 4905, a resolution granting a Measure 37 claim and modifying a
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provision of Chapter 9 of the Eugene Code, 1971 for property located on 12 Avenue between
Charnelton and Lincoln streets, Eugene, Oregon (Assessor’s Map 17-03-31-42 TL 7100 – DMB Green,
LLC).
ATTACHMENTS
A. City Manager’s Report and Recommendation
B. Proposed Resolution No. 4905
C. Correspondence received from the public related to this Measure 37 claim
FOR MORE INFORMATION
Staff Contact: Heather O’Donnell, Associate Planner
Telephone: 682-5488
Staff E-Mail: Heather.M.ODonnell@ci.eugene.or.us
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BALLOT MEASURE 37 (CHAPTER 1, OREGON LAWS 2005)
CLAIM FOR COMPENSATION
CITY OF EUGENE
REPORT AND RECOMMENDATION OF THE CITY MANAGER
NAME OF THE CLAIMANT: DMB Green, LLC
MAILING ADDRESS: 1260 Charnelton Street
Eugene, Oregon 97401
CLAIMANT’S REPRESENTATIVE: John Brown
101 East Broadway, Suite 101
Eugene, Oregon 97401
PROPERTY IDENTIFICATION: Lot 7100 of Assessor’s Map
17-03-31-42
ZONING:C-2/TD, Community Commercial
with the Transit Oriented
Development overlay zone
I. SUMMARY OF CLAIM
John Brown, a member of DMB Green, LLC (Claimant), submitted a claim on behalf of
DMB Green, LLC under Ballot Measure 37 for compensation for the alleged reduction in
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fair market value to the claimant’s lot located on the south side of 12 Avenue, between
Charnelton and Lincoln Streets. The lot is currently utilized as a parking area. Claimant
asserts that the Floor Area Ratio (FAR) provision within the /TD Transit Oriented
Development overlay zone, Eugene Code section 9.4530(3)(a) and Map 9.4510 restrict
the use of the property. Claimant contends that the FAR provisions, enacted after the
claimant acquired the property, have the effect of restricting the use and thereby
diminishing the fair market value of the property. Claimant asserts a $200,000 decline in
the value of the property but does not specifically articulate a request for compensation.
Rather, Claimant requests that the FAR regulation be reduced back to the previous FAR.
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II. SUMMARY OF CITY MANAGER RECOMMENDATION
Based on the analysis set forth in Section III below, the City Manager has concluded that
the subject claim is valid. Since the City has no funds with which to pay compensation,
the City Manager is recommending a modification to the Floor Area Ratio (FAR) within
the /TD Transit Oriented Development overlay zone, Eugene Code section 9.4530(3)(a)
and Map 9.4510, to reduce the FAR from 1.0 to .65 (described further below).
Measure 37 generally grants a property owner the right to compensation (or waiver at the
option of the government) 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 against which the claim is made must have enacted a new regulation or
enforced a regulation that was in effect prior to the Measure 37 effective date (December
2, 2004). Third, the regulation must “restrict the use” of private property. Fourth, the
effect of the regulation must be to cause a reduction in the fair market value of the
property. Fifth, the regulation must not fall within one of Measure 37’s five exemptions.
As discussed below, the regulations that are the subject of this claim qualify as land use
regulations, were enacted prior to the Measure 37 effective date of December 2, 2004,
effectively restrict previously allowed uses on the property, and reduce the property’s fair
market value. Further, the regulations do not fall within one of Measure 37’s five
exemptions. Therefore, the claim is valid.
III. ANALYSIS OF CLAIM
A. Ownership.
Measure 37 provides for payment of compensation or relief from (waiver of) specific
regulations for “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.”
Based on the information submitted by the claimant (warranty deed 9480311) and
available in the Lane County Regional Land Information Database (RLID), the City
Manager concludes that the subject lot was acquired by DMB Green, LLC and, by
documentation thereof, recorded on November 16, 1994. The property is currently owned
by DMB Green, LLC. Mr. Brown, on behalf of DMB Green, LLC has also provided a
copy of the operating agreement for DMB Green, LLC, indicating that Mr. Brown is one
of several members with a percentage ownership interest in DMB Green, LLC.
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
defines land use regulation, with respect to local governments, as “local government
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comprehensive plans, zoning ordinances, land division ordinances and transportation
ordinances.”
The claimant contends that the Floor Area Ratio (FAR) within the /TD Transit Oriented
Development overlay zone, has been increased from .65 to 1.0 since the claimant
purchased the property, and that due to the increase, development is no longer feasible.
Although the specific Code citation is not mentioned in the claim, staff has determined
that the claim is based on section 9.4530 and Map 9.4510 of the Eugene Code, the /TD
Transit Oriented Development overlay zone. That zoning ordinance would qualify as a
“land use regulation” under the Measure 37 definition.
The FAR is defined per EC 9.0500 as:
Floor Area Ratio
“. The floor area of all buildings on a lot divided by the total lot
area. (See Figure 9.4530(3) Floor Area Ratio Calculation.)”
A FAR of .65 (the previous FAR designation for the subject property) means that the
total floor area of all buildings, divided by the lot area, must equal at least .65. A FAR of
1.0 (the current FAR designation for the subject property) means that the total floor area
of all buildings, must equal or exceed the lot area. As a simplified example, a property
can achieve 1.0 FAR by covering the entire lot area with a single story building, or the
same property can achieve 1.0 FAR by covering only half the lot area with a two-story
building. Map 9.4510 of the Eugene Code depicts which areas in the /TD overlay zone
are subject to which FAR. According to the Code as amended on February 26, 2001, by
Ordinance No. 20224, properties in the /TD overlay zone are currently subject to either
the 1.0 or the 2.0 FAR. Map 9.4510 currently shows the subject property within the 1.0
FAR area.
Because the FAR provisions of the /TD Transit Oriented Development overlay zone
require a minimum amount of floor area on a lot for development to occur, the effect of
the regulations are to disallow the construction of a building meeting the previously
permitted .65 FAR.
C. E nactment/Enforcement.
Measure 37 states that a property owner has a claim if a public entity “enacts or enforces
a new land use regulation or enforces a land use regulation enacted prior to the effective
date” of Measure 37. The provisions in Chapter 9 of the Eugene Code which the owner
alleges has reduced the property value of the subject lot are EC 9.4530(3) and Map
9.4510, enacted on February 26, 2001. Following the passage of Measure 37, the City
has not formally applied this provision to the Claimant’s property but has indicated that
any development application must comply with that provision.
D. Restriction on use, reduction in value.
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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. The specific regulations which the claimant states have restricted use of the
property are EC 9.4530(3) and Map 9.4510 from the /TD Transit Oriented Development
overlay zone. These regulations generally restrict the amount of floor area that can be
constructed on a property by implementing a minimum FAR.
Claimant did not submit an appraisal. However, Claimant asserts that the difference in
cost of construction versus value of the property is approximately $200,000.00. This
number is based on Claimant’s cost estimates around construction in compliance with the
1.0 FAR. City staff do not have sufficient evidence to conclude that the reduction in
value of the property is equal to $200,000.00. However, based on staff’s conversations
with an independent and licensed appraiser, the City Manager concludes that there is a
reduction in value. According to appraiser, the fair market value of a relatively small-
size lot will be less with a minimum FAR of 1.0 than it would be with an FAR of .65.
The appraiser indicated that for larger lots, or lots in different locations (for example,
outside the downtown core), such a reduction in value may not occur. But for this lot, it
was his opinion that there is a reduction in value.
E. Exemptions.
Finally, a Measure 37 claim is not valid to the extent that one or more of the challenged
land use regulations fall within one of the five exemptions under the Measure.
Regulations adopted to protect the public health and safety, prevent nuisances, or comply
with federal law 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.
This claim is not subject to any of the five exemptions.
IV. CONCLUSION AND RECOMMENDATION
Based on the analysis above, the City Manager has determined that the subject Measure
37 claim is valid. In lieu of compensation the City Manager is recommending approval
of a modification of the FAR regulation, EC 9.4530(3) and Map 9.4510 to allow
Claimant to develop the subject property as permitted under previous regulations.
Specifically, it is recommended that the FAR regulation be modified from 1.0 FAR to .65
FAR for the subject property. (It should be noted that, since no formal development
application has been filed, the City has not conducted an exhaustive evaluation of all the
regulations that may apply at the time the owner applies for a building permit. The
additional regulations that will apply at that time are typical of new construction and
development on the lot would be subject to all other applicable provisions.)
Because the City Manager is recommending that the Council grant a waiver, and the
Code requires a public hearing before the Council decides whether to grant a waiver, this
claim has been scheduled for a public hearing on March 12, 2007.
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ATTACHMENT B
RESOLUTION NO. 4905
A RESOLUTION GRANTING A MEASURE 37 CLAIM AND
MODIFYING A PROVISION OF CHAPTER 9 OF THE
EUGENE CODE, 1971 FOR PROPERTY LOCATED ON
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12 AVENUE BETWEEN CHARNELTON AND LINCOLN
STREETS, EUGENE, OREGON (ASSESSOR’S MAP 17-03-
31-42 TL 7100 – DMB Green, LLC).
The City Council of the City of Eugene finds that:
A.
John Brown, a member of DMB Green, LLC (“Claimant”), submitted a claim on
its behalf to the City seeking compensation or a waiver of regulations under Ballot Measure 37.
Claimant alleged that the Floor Area Ratio (FAR) provision within the /TD Transit Oriented
Development overlay zone of 1.0 as set forth in EC Section 9.4530(3)(a) and Map 9.4510
(established by LUCU), restricts the use of its property and diminished the fair market value of
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the property located on the south side of 12 Avenue between Charnelton and Lincoln Streets
(the “lot”). The lot is currently utilized as a parking area.
B.
As required by EC 2.085 the City Manager has caused an investigation of the
claim to be made, has determined the claim to be valid, and has submitted to the Council a
Report and Recommendation that the current FAR of 1.0 required by EC 9.4530(3)(a) be
waived, and the prior FAR of .65 be re-imposed.
C.
Considering the City Manager’s recommendation and conclusion as to the validity
of the claim, and the lack of City funds with which to pay compensation to DMB Green, LLC,
the City Council finds the public interest will be best served by waiving or modifying the current
FAR requirement of EC 9.4530(3)(a) as hereinafter set forth.
Resolution - 1
NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a
Municipal Corporation of the State of Oregon, as follows:
Section 1.
Based on the above findings, which are adopted herein, and the analysis
contained in the Report and Recommendation of the City Manager, the City Council hereby
modifies the following land use regulation contained in the Eugene Code, 1971, for the property
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owned by DMB Green, LLC, located on 12 Avenue between Charnelton and Lincoln Streets,
Eugene, Oregon, Assessor’s Map 17-03-31-42, Tax Lot 7100:
Authorized modification to the FAR requirement of EC 9.4530(3)(a):
The current 1.0 floor area ratio (FAR) requirement of EC 9.4530(3)(a) is waived, and a
.65 FAR is re-imposed for the subject property.
Section 2.
A copy of this Resolution shall be forwarded to DMB Green, LLC at 1260
Charnelton Street, Eugene, Oregon 97401, to its representative John Brown, 101 East Broadway,
Suite 101, Eugene, Oregon 97401, to the City’s Planning & Development Department, and a
copy shall be recorded with the Lane County Records Department .
Section 3.
This Resolution shall become effective immediately upon its adoption.
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The foregoing Resolution adopted the 12 day of March, 2007.
_______________________________________
City Recorder
Resolution - 2
ATTACHMENT C
E-mailed Public Correspondence
From: ANSLOW Gordon (SMTP)
Sent: Wednesday, October 25, 2006 3:26 PM
To: O'DONNELL Heather M
Subject: Duncan Measure 37 claim
Dear Ms. ODonnell,
I am writing in support of Rich Duncan’s claim, regarding Tax Lot # 7100, Map
#17 03 31 42. This is an unusual claim, in that the general pattern of such claims is to
wish to put the property to more use than is currently possible, and thus file a claim to
compel the City to allow that higher level of use. In this case, the request is to have to
meet the Floor Area Ratio (FAR) which previously applied (.65) versus the current FAR
requirement of 1.0. The property is in C-2 Zone, and is within the Transit Oriented
Development (TD) Overlay Area.
Our office was contacted by Rich about a year ago, concerning their desire to
develop this lot to house the Duncan & Brown offices. We performed a feasibility study,
which presented several possible schemes that could be pursued, which would both meet
their needs, and comply with all the requirements of the Zoning Ordinance (ZO). The lot
has 7482 sq. ft., and thus is required to have a building of the same gross area (including
credits for covered front porch and Enhanced Pedestrian Area) built on it. As the
requirement of the business for office space is considerably less than this figure, it was
thought that some of the area might be devoted initially to apartments (outright allowable
in C-2, on upper floors), as a means to “soak up” some of the area. A building with 3300
sq. ft. of parking and 3 apartments at 1200 sq. ft. each would require 13 parking spaces,
which can be reduced by 25%, to arrive at 10 parking spaces. Note that if the apartment
space was converted to office use, at current parking ratios, this would require an
additional 8 parking spaces. 10 spaces already takes up almost all of the alley frontage
with the most efficient right angle parking; to get to 18 would require the entire first floor
in parking, which invokes new problems under the ZO. The option of going to
underground parking is extremely expensive, and for the small amount of spaces
required, would be sufficient to render the project economically unfeasible.
With these minimums, and taking all the relief available in the ZO, we studied the
mass of the building that would be required to meet these area requirements, under the
1.0 FAR. The result is a building that, while honoring minimum setbacks similar to those
on adjoining single family properties, otherwise occupies the entire lot footprint, and rises
two stories for the entire footprint, including building over the parking area. (The latter
being attractive to transients, in our experience.) An option is to go to a three story
building, which would allow the building to pull back somewhat from the “ram it to the
limit” setbacks, but the height would then be 50% greater. Our opinion, voiced to Rich,
was that to build either of these building scenarios, while technically legal, in fact
outright compliant with the ZO, would be a disservice to the character of the
neighborhood. The streetscape of West 12th Street, between Lincoln and Charnelton, is
characterized by very large street trees, and some of the nicest single family housing
stock in the west downtown area. We expressed our hesitation to foist such a building on
this streetscape.
To the degree that we could legally build right to the property line on all four
sides, this could be construed to be a self-imposed hardship. However, we think the real
hardship is visited upon the neighborhood which would be affected by this building,
driven as it is by the ZO requirements. We are well aware of the reasons for the FAR
requirements, and as a general matter support the effort to densify the downtown, and to
allow it to reach a critical mass of development which will allow public transportation to
be viable. However in the present case, we believe a legitimate argument can be made
for the reduction of the FAR to the prior requirement.
In our experience, which is considerable in the area of infilling new buildings into
existing neighborhoods, the degree of difficulty in meeting all the disparate (and often
contradictory) requirements of the ZO increases almost exponentially as the site in
question becomes smaller and smaller. If we honor near minimum residential setback
requirements (which allow there to be windows on these exterior walls, by the way),
almost 1/3 of the lot area is taken up by setbacks, leaving 2/3 of the lot area to carry all
the FAR-driven building area. If you were to double the width of this lot, and look at the
same percentage figure, it drops to 22% of the lot area in these setbacks. It gets easier to
meet the FAR as the site gets larger.
We have been advocating for some time to the Planning Department (and anyone else
who will listen to us) that some recognition of the particular problems of applying all the
ZO requirements to the common small lot sizes in the urban core should be taken. It is
noteworthy that the illustrations contained in the rear of the ZO frequently depict
development sites much larger than most of the 4000 to 10,000 sq. ft. lots that are the
norm in the area surrounding downtown. These restrictions have one kind of affect when
applied to a two acre site; it is quite different when they are applied to a 7000 sq. ft. site.
We understand that it is likely the relief requested by Rich Duncan will be granted. I
wanted to go on record as saying that contrary to this being some sort of loss for the City,
it is exactly the opposite. A building much more appropriate to the immediate
neighborhood will result, while still representing a significant increase in office space and
living units than is currently the case. (The site is currently a surface parking lot, all
asphalt, with no trees. The resulting development will preserve the large trees in the
parkstrip, add significant new landscaping and additional trees, as well as providing
further opportunities to live and work in the urban core area, which is the whole point of
the TD overlay area.
Thanks for taking note of our opinion on this. Please call if you have any questions.
Regards,
Gordon Anslow
Anslow & DeGeneault, Inc
Mayor Piercy
City Councilors
Dennis Taylor
By C':"CEIVED
MANAGER
MAR '1 lOOl
Re: BM 37 Claim Explanations
Mayor Piercy & Members of the Council;
In support of my testimony on the claim of DMB Green for the vacant lot on West 12th
Avenue I wish to provide a brief explanation of our claim and an example of what we are
trying to accomplish.
We wish to develop our site located on West 12th between Chamelton and Lincoln streets
with a structure that would conform to the 0.65:1 floor area ratio (or FAR) that was in
place when we purchased the site in 1994. The current requirement is to build a building
with a 1: 1 FAR.
The lot we own is currently a parking lot, with most spaces rented by an adjacent
property owner. We wish to develop the site with a mixed-use building that would
include ground floor offices and second level housing. The building will be appropriate
for the small lot and will fit the character of the neighborhood.
The lot has 56 feet of frontage on the south side of West 12th Avenue with a depth of
133.6 feet, for a total size of approximately 7,482 square feet. Under the current code,
that lot would have to be developed with 7,482 square feet of building due to the
requirements of the 1: 1 FAR. A building of that size would be massive on that small lot,
and the structure would dominant the area. Additionally, a building of this size would
preclude on-site parking. Though the property is not required to provide on-site parking,
street parking is always full during the day and the nearest public parking is the West
Broadway parking structure, located four blocks north. To accommodate anyon-site
parking under the current 1: 1 FAR, the building would likely be elevated over ground
floor parking and be excessively tall. This would result in a very large, unattractive
structure, and higher construction costs associated with such a project would make
development economically impossible.
An example of the type of building we wish to construct is the property at 11 78
Charnelton--I have included a photo. The property is an 8,000 sq ft site that was
developed in 1997 with ground floor offices and second level apartments, just what we
want to do. We wish to build to the 0.65 FAR that was in place when we purchased the
property, resulting in a building of over 4,800 square feet and a density 50% greater than
the development on the 1178 Chamelton site. A building of 4,800 square feet is a very
sizable building on this site compared with others in the immediate area. To my
knowledge, there has been no commercial in-fill in the neighborhood built to the 0.65 or
1.0 FAR requirements without some from of subsidies.
Waiving the FAR requirement will allow a piece of real estate near the downtown core to
be developed with a building that will be most compatible with other properties in the
neighborhood, rather than to require the construction of a monstrous structure that will
not fit the current or likely future characteristics of the immediate neighborhood. We're
asking for the owners of this property to be allowed to develop an in-fill property with a
project that is compatible to the neighborhood and that will continue to support the
downtown area.
No building type could be constructed to the 1: 1 FAR requirements and still be
financially feasible. If we do not develop the site with the intended use, our best
alternative is to sell it to the adjacent property owner for their continued use as a parking
lot. If we do not develop the site, I am highly confident it would remain a surface
parking lot far into the future.
This is the reason we filed our Measure 37 claim. We are not asking to make more
profits, we are simply asking to be able to develop the property with the use that is most
compatible with the neighborhood, makes economic sense, and allows a 30-year
downtown company to continue to own and maintain an office building in the downtown
core. Last year I spent approximately 3 months working with 1000 Friends et al in Salem
on BM 37 issues, ,and I'm currently assisting Senator Prozanski with valuation issues
relating to Measure 37 claims.
In closing, I wish there were alternative courses of action to develop our 1 ih and
Charnelton property. After discussions with city staff, planners and architects, we
realized we had no choice if Duncan & Brown were to stay downtown. Measure 37
claims are not malignant by definition; though I believe the largest portion of claims are
inappropriate, I do think there are some claims that may be appropriate, like ours.
Thank you for your thoughtful consideration and for your service to our community.
John H Brown
DMB Green LLC
1260 Chamelton Street
Eugene, OR 97401