Measures 37 and 49, which modified Oregon's land use laws, mostly are out of the state's consciousness after the hotly contested successful campaign to pass Measure 49 last November.
But not out of mind for those concerned about large Measure 37 claims which hope to be deemed vested ("grandfathered in," basically) because they were far enough along with development before Measure 49 came along.
A court case on the Tumwater at Pete's Mountain project just concluded two days of hearings. Read all about it in the West Linn Tidings: "Tumwater is in the judge's hands."
Ralph Bloemers, a Crag Law Center attorney who is representing our neighborhood in another Measure 37 subdivision case, is quoted in the story. He argued against vesting on behalf of a group of Pete's Mountain residents.
I was pleased to read that there were six state attorneys defending the case. Meaning, the state Department of Justice opposes a vested rights determination.
As it should.
The Goal One Coalition has asked the Department of Land Conservation and Development to yank vesting decisions from counties because so many vested rights applications are being rubber-stamped without regard for the common law.
While the Tumwater at Pete's Mountain case is being heard in district court, the same vesting issues are in play in cases heard by a county hearings officer or board of commissioners.
Such as whether the expenditures a Measure 37 claimant has made are a significant fraction of the total cost of development. A ratio of 1:14 (or 7.1%) is a frequently cited figure – based on case law.
There also are legal precedents about what expenses and costs should be included in the numerator and denominator of the ratio. And judging from the West Linn Tidings story, these are being argued about in the Pete's Mountain vesting case.
The attorney representing the owners of the property, Charles Markley, asserted that the total cost of development doesn't include building homes on the 41 lots in the subdivision. The Department of Justice attorney argued otherwise, correctly.
Development rights for Measure 37 claims aren't transferable. So it isn't possible to sell bare land to a buyer, who then would build a home on the lot. The claimant needs to sell a home along with the lot, which means the total cost of development is much more than the cost of building roads and other infrastructure.
Yet somehow the Pete's Mountain owners are saying that the whole project will cost only $3,285,000. Since they claim to have already spent $1,342,280, that's over 40% of the total cost – way above 7.1%.
Not so fast, says the Department of Justice and concerned neighbors of the project. What about the homes that would need to be built on the lots?
Here's where we see the games Measure 37 claimants like to play in vesting cases.
Speaking in defense of the landowners, Markley said if the court wants to include the value of homes that could be built in the future his estimate of the value of those homes and land would be about $15.5 million, which means that 8 percent was invested before the effective date of M-49.
This means, by my calculations, that 41 homes supposedly could be built for $12,215,000 ($15.5 million minus $3.285 million), or $298,000 a house. And how did Markley arrive at that figure?
Well, it's no coincidence, for sure, that 8% is a teensy bit above 7.1%, the ratio frequently used in vesting cases as an indication that substantial expenditures have been made on a development. But is it reasonable?
The Department of Justice attorney, Stacey Posegate, didn't think so.
But Posegate told the judge that the properties (from one to two acres each) are designed for high-value homes that would have a value of between $30 million and $40 million, bringing the percentage below the court-tested amount.
That translates into a per home cost between $732,000 and $976,000. I'd say that's a more reasonable reflection of the housing market in that area.
Heck, the nascent Tumwater at Pete's Mountain web site speaks of "Estate home sites." I don't think many people would consider that a $298,000 house on a 1-2 acre Pete's Mountain lot deserves the title of "estate."
Here's how a West Linn real estate broker described Pete's Mountain: fancy.
I live and [in] West Linn (5 years now) and I am also a real estate broker. West Linn does tend to be more pricey, but there are older areas of the city where the homes may not be as well-kept. Some of these homes get purchased and then fixed up, but it takes time for the whole neighborhood to turn over. Some of the older areas are Bolton, Cedaroak, Robinwood and Sunset. There are many fancy areas also: Barrington, Hidden Springs, Parts of Tanner, Pete's Mountain.
Hopefully the district court judge won't be fooled by the low-ball $298,000 home construction estimate. His decision will be made by May 30, according to the newspaper story.