Last Monday the Salem City Council voted 7-2 to form a Lone Oak Road Reimbursement District that's supposedly needed to pay for a missing north and south section, plus a bridge over Jory Creek.
I talked about this in "City Council poised to make public pay for improvements, not Larry Tokarski." Tokarski is the developer of Creekside, through which the north section of the so-far unbuilt Lone Oak Road would pass.
The mystery is why Tokarski never was required to pay for that part of the road, plus the bridge over Jory Creek. He started construction of these improvements in 2007, as documented in a staff report for the June 26, 2017 City Council meeting.
Two photos show what was started by Tokarski, then stopped. (click to enlarge)
I asked some questions of Dan Atchison, the City of Salem attorney. He graciously gave me a detailed response, which I've shared below. But after reading what Atchison wrote, I still was left with this post's title question, "Why did Larry Tokarski start, then stop, construction of Lone Oak Road?"
I understand the reasons given by Atchison why Tokarski supposedly wasn't required to make the Lone Oak Road improvements. But the fact that he started to make them sure supports an assumption that Tokarski knew he had an obligation to build the bridge and road.
So why didn't City officials force Tokarski to restart construction rather than letting him proceed with further Creekside development? I hope this gets answered, because it is a $7.5 million question -- the cost to build the bridge over Jory Creek and the northern section of Lone Oak Road.
Here's my response to Dan Atchison, followed by his message that sparked my response.
MY RESPONSE:
Dan, as noted in a previous reply, I appreciate your detailed response to my questions. Having pondered the last City Council meeting where the Lone Oak Road issue was discussed, along with associated documents, I’m still wondering about a few things.
I’ve heard that there was some sort of agreement between the City and Tokarski around 2003 to build the bridge and northern missing portion of Lone Oak Road (year may be not be exact). This has a ring of truth to it, since Tokarski began work on the bridge and road in 2007. So notwithstanding the arguments you made below, in 2007 Tokarski obviously believed that he was required to build the Jory Creek bridge and missing northern section of Lone Oak Road, or he wouldn’t have started to construct these facilities.
Do you know what caused Tokarski to do this? I’m assuming that he didn’t begin that construction work out of the goodness of his heart. And several comments from Peter Fernandez and others indicated that Tokarski had an obligation to build the bridge and road, but stopped work on them and never started that work again. I understand the arguments you made that Creekside was built in phases, and supposedly none of the phases required him to build the bridge and road. However, the fact that Tokarski started to do this seems to me to be persuasive evidence that he actually was obligated to do what he started to do.
I’d be interested in any thoughts you have about this.
— Brian
DAN ATCHISON'S MESSAGE:
Mr. Hines:
A few points of clarification on the MOU. First, I misspoke on Monday when I referred to the 2016 LUBA appeal as leading to the MOU, instead it was the 2015 LUBA appeal, as discussed below. Second, the City did not agree to construct or pay for the bridge in the MOU. As set forth in that document, City staff committed to recommending to Council that the project be included in the City’s capital improvement plan (CIP) up to $750,000.
Council later adopted that recommendation, and the project is in the CIP today. In reality the MOU did not bind the City to do anything, or pay any money, that it was not already obligated to do if and when the project was constructed. The City was not an active participant in the 2015 LUBA appeal. The developer and the HOA, who intervened in the appeal, would be a better source on the background for that issue. Moving the project into the CIP simply made the $750,000 immediately available for reimbursement to a developer that actually constructed the improvements. The project is listed on page 32 of the CIP for $1,050,000 in Transportation System Development (TSDC) funds, and can be found at the following link:
The history of the Creekside developments is detailed in a June 16, 2017 staff report to City Council:
I encourage you to review that staff report as well as the recording of Monday’s council meeting, that you watched, where the developments were discussed at length. The June 2017 staff report and its attachments do a good job of setting out the various phases of development that occurred in that area over the years, what public improvements have already been made, and what development and public improvements remain.
As to the question of why the bridge and sections of Lone Oak Road (Bridge Improvements) have not been built, there is no clear or simple answer, and staff isn’t in a position to speculate as to what may have occurred in the past.
One fact to keep in mind is that “Creekside” is not a single subdivision or development. Instead it was proposed and has been developed as a series of phases, or individual subdivisions (“Creekside” is currently on its fourteenth “phase”). The use of “phase” is a misnomer in this context. A true “phased subdivision” is where an entire property or area is included in a single tentative subdivision plan. Then smaller portions of the area within the tentative plan (phases) are platted, and lots are created, sold and developed in that phase. Currently, when a property is proposed for a phased subdivision, the City ensures that each phase meets the land use requirements independent of other phases. That was not the case for the Creekside subdivisions, because each phase was proposed, approved, and developed as separate subdivisions.
When the initial development application for Creekside was made in the early 1990’s, the City did not have provisions for phased development of residential subdivisions, so there were few rules on the books to review and regulate multiple interrelated subdivisions. With the adoption of the Unified Development Code (UDC) in 2013, the City now has regulations in place to address phased development of subdivisions, though they are not intended to specifically address a circumstance like this.
In the 1990’s, as is the case now, each individual subdivision must be reviewed for conformance with the criteria on its own merits. Under U.S. and Oregon “takings” law, governments may only impose exactions that are proportional (and have a rational nexus) to the impacts of a proposed development. In the case of the different Creekside phases, none of the individual subdivision phases would warrant imposing a requirement that the development pay for and construct an approximately $9 million off-site street improvement that constitutes the Bridge Improvements (On-site improvements, those within the boundary of a development, are easier to exact and justify than off-site improvements because they are necessary from a physical standpoint for the development to function). The Bridge Improvements would be an off-site improvement for every past phase of Creekside, other than phase 14 which encompasses the bridge and road sections, because the developer platted and developed areas that did not touch this particular part of Jory Creek where the bridge was proposed.
In my opinion, the decision to delay development of the bridge area is reasonable and shouldn’t be seen as nefarious. The developer was simply developing other properties in the area that were relatively easier and cheaper to develop and sell first. Further, the 1990’s saw a significant housing boom in Salem and nationwide, so every developer was moving as quickly as possible to develop residential subdivisions to meet the demand for housing.
In retrospect, it is easy to say now that the developer should have been required to construct the Bridge Improvements early on. However, because each subdivision had to be reviewed as its own independent development, and the Bridge Project was not wholly within any one of them, it was difficult as a matter of law to prohibit development of those phases, when they were able to provide alternatives to meet the accessibility requirements the bridge was to provide (See, the Sahallee phase, which found access to the south on Rees Hill Road, instead of connecting to Lone Oak).
Regardless of the fact that the cost of the improvements was clearly disproportional to the proposed individual phases, the City did impose conditions of approval to require the construction of Bridge Improvements on different phases of the Creekside development, as well as other developments in the vicinity. This was because along with the subdivision applications, the developer proposed the Creekside area be developed as a Planned Unit Development (PUD), which in essence is a master plan for the area, and staff believed that the PUD was an overriding factor tying all the different phases together.
When the City’s 2016 decision for phase 14, which included the condition to build the bridge, was appealed to LUBA, the City argued that the condition was warranted and justified because the developer was seeking to modify the entire PUD approval, and not simply seeking to further divide a small portion of the overall property. We were not successful in that argument, as LUBA found that a PUD modification was not necessary for that particular subdivision. LUBA viewed the particular subdivision application in isolation, and made this holding notwithstanding the fact that the result was the elimination of the condition to build the bridge, which was (in the City’s view) a key element of the overall PUD. LUBA took the same position in a similar case involving the City of Corvallis.
In general, whenever a subdivision application is submitted, the developer will be obligated to construct major public facilities in the immediate vicinity that will serve the development. These facilities include water, sewer, stormwater, and transportation facilities. In some cases these facilities are required in the City’s master plans to be “oversized” to serve not only the specific development but also future development in the vicinity. In these cases, the developer is responsible for their pro-rata portion of the cost of the facility, and may seek SDC credits, or reimbursement of the cost beyond their portion through formation of a reimbursement district.
The Bridge Improvements are only minimally SDC eligible, and the developer would not be able to recover the complete cost of constructing the facility through SDCs. Ideally, a reimbursement district would have been established at the beginning of the development, that would have imposed a reimbursement fee on the development of all of the potentially benefitted properties. However, Salem’s code did not allow reimbursement districts until 2005, 13 years after many of the phases of Creekside were platted. Reimbursement fees are only required to be paid upon development of lots through land division or obtaining a building permit for a home. Therefore developed lots within a platted subdivision are generally not eligible for, nor included within a reimbursement district, because it is unlikely they will generate reimbursement fees.
By the time in 2005 that a reimbursement district was an option for Creekside, the majority of the property within the Creekside area had already been divided into lots and/or developed diminishing the effectiveness of a reimbursement district.
I hope the above discussion sheds some light on the issue.
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