A few days ago I blogged about newly-elected city councilor Jackie Leung's effort to fulfill a campaign promise by attempting to get the Salem City Council to reconsider its decision to form a Lone Oak Road Reimbursement District.
The Reimbursement District would raise money to pay for road improvements by collecting between about $4,000 and $10,000 from lot owners in the south Salem area when a home is built on their property.
It's unclear whether the City Council will undertake a reconsideration of the Reimbursement District, which has to be done at next Tuesday's council meeting, because an agenda item implements the decision that passed on a 5-4 vote on May 14.
One of the five council members who voted for the Reimbursement District would have to make a motion to reconsider the vote: Mayor Chuck Bennett, or councilors Brad Nanke, Sally Cook, Steve McCoid, and Chris Hoy.
After residents in the Creekside neighborhood began emailing City officials, urging that the Reimbursement District be reconsidered and overturned, they got this response from Tami Carpenter, the City Manager's Executive Assistant.
Thank you for your email to the City Council. We understand your concern regarding the possible closure and development of Creekside Golf Course. This however, is a private property matter that, as you know, has been playing out in the courts.
The City Council does not have authority to stop the golf course owners from closing the facility. If the golf course is redeveloped, it will then have to meet current development standards and be subject to administrative and possible City Council reviews, as warranted.
The issue of funding construction of Lone Oak Road extension with a reimbursement district has been comingled with the possible closure of the golf course. The City Council’s decision has no bearing on the future of the golf course. The decision simply states that if—and only if—the golf course is redeveloped then a fee will be assessed on the new lots to pay for a portion of the street construction. The fee will also be assessed on new subdivision developments south of Jory Creek.
Additional funding from other development fees has also been allocated to the project. The existing Creekside owners are not subject to the fee, nor are any existing Salem residents subject to the fee or assessment for this project. Thank you again for your email,
Tami Carpenter Executive Assistant to the City Manager Mayor/City Manager’s Office
Since I've followed this issue closely, a Creekside resident contacted me and asked if I'd prepare a reply that could be posted on the Creekside NextDoor site. Here's what I wrote and sent to the resident yesterday.
The City Manager’s Executive Assistant has claimed that approval of the Lone Oak Road Reimbursement District “has no bearing on the future of the golf course.”
Well, this requires a belief that City officials don’t care one way or the other whether the golf course property becomes a housing development. But in fact, almost a third of the money expected to be raised by the Reimbursement District (29%) comes from an assumption that 210 lots on what is now the Creekside golf course will be developed as home sites, thereby paying $1,935,000 into the Reimbursement District.
City officials shouldn’t have a vested interest in whether the golf course becomes a subdivision. However, they do — even though a final decision on this issue awaits a legal ruling.
The City of Salem is assuming that 210 lots will be developed on the golf course property prior to the legal ruling, prior to plans being submitted for a subdivision, prior to public hearings on what sort of development, if any, is suitable for an area prone to flooding,
Yet the City Manager’s office would have us believe that City officials are completely neutral on the question of what happens to the golf course property, notwithstanding the fact that the Lone Oak Road Reimbursement District is dependent on 210 lots being developed on the property in order to raise sufficient funds to construct road improvements.
Further, after initially saying that money for those improvements could be raised through a future citywide Streets and Bridges bond should sufficient money be lacking in the Reimbursement District fund, City officials now state that this option is off the table.
This makes development of the golf course into a 210 lot subdivision essential if a bridge over Jory Creek and the northern extension of Lone Oak Road are to be built, since City officials have shown no interest in making the Creekside developer foot the bill.
So it sure seems like the City of Salem has already come to a premature conclusion that development of the golf course into a subdivision needs to happen, thereby putting a thumb on the scale of impartiality that citizens should expect of public officials.
Today I realized that I wanted to share some arguments with City officials about why the Lone Oak Road Reimbursement District is a bad idea. This is the message that went to members of the City Council and key City of Salem staff.
Mayor Bennett and city councilors, I realize that you probably think that everything that could be said about the Lone Oak Road Reimbursement District already has been said.
Actually, I agree with you.
Before the Memorial Day weekend arrives, I simply want to share a couple of things that have been said about the Reimbursement District that bear on the question of whether the City Council should reconsider, once again, it’s approval of the District
These two items are a strong argument in favor of reconsidering and revoking the Reimbursement District, so I wanted to bring them to your attention.
(1) At the May 14 City Council meeting, Councilor Sally Cook asked what the process would be for funding Lone Oak Road if the Reimbursement District didn’t exist. Public Works Director Peter Fernandez gave this response:
“We probably would see the southern leg built, because there are a couple of subdivisions coming in that, you know, need to put pieces of it in, and we could probably make that happen.
We would struggle financially with getting the bridge [over Jory Creek] built. SDC’s [System Development Charges] would be applied, but there wouldn’t be any leverage, so you see the math that Mr. Davis showed you. We’d be waiting a long time for the bridge, but you’d probably get the southern leg built.”
Here’s a screenshot of a slide that shows the southern leg, which passes right by one of the subdivisions, and apparently through the west side of the other subdivision. So it certainly does seem that those subdivisions would build the southern extension of Lone Oak Road even if the Reimbursement District didn’t exist.
(2) Regarding the bridge and northern extension of Lone Oak Road, here’s the flawed logic of the Reimbursement District. A large share of the funds expected to be raised by the Reimbursement District, 29%, are to come from the development of 210 lots on what is now the Creekside golf course.
Yet if the golf course is developed, the South Gateway Neighborhood Association pointed out in a letter to the City Council that it would make much more sense if Lone Oak Road were to run through the flat land of the golf course property, which wouldn’t require building a bridge, and the northern extension could be made the responsibility of the Creekside developer.
Here’s a screenshot of a portion of the SGNA letter. It was written when City staff were saying that the northern extension likely would be part of a future Streets and Bridges bond, which now is off the table according to staff:
Here’s an image of how Lone Oak Road could be realigned to run through what is now the golf course property.
So if the golf course is converted to a subdivision, there wouldn’t be a need for a Reimbursement District to fund a bridge and northern extension of Lone Oak Road, because a much less expensive extension could be built on the west side of the golf course property, with the cost paid by the Creekside developer and SDCs.
And if the property remains a golf course, almost certainly there won’t be enough money in the Reimbursement District to fund the $5.6 million cost of a bridge over Jory Creek and the northern extension of Lone Oak Road, since $1,935,000 would never accrue to the District from 210 lots in a subdivision constructed on the golf course property.
In summary, then:
City staff have said that the southern extension of Lone Oak Road likely would be built if there wasn’t a Reimbursement District. And the northern extension likely only could be built if the golf course becomes a subdivision, in which case it would make much more sense to run Lone Oak Road through the flat golf course property, as SGNA advises, thereby eliminating the need for a Reimbursement District for the bridge and northern leg.
Hence, there's no need for the Lone Oak Road Reimbursement District.
Fresh off her upset victory in the Ward 4 City Council race, Jackie Leung is making good on her campaign promise to work hard on preserving open space in the Creekside neighborhood.
She recognizes that unfettered development can't be allowed to diminish the quality of life for Salem residents. So Leung is asking the City Council to reconsider and overturn its recent narrow 5-4 approval of a Lone Oak Road Reimbursement District.
The Reimbursement District collects between $4,000 and $10,000 from lot owners in the south Salem area when a home is built on their property, then gives that money to developers to reimburse them for constructing improvements to Lone Oak Road.
There's some big problems with this plan.
Here's why people in Salem should support fairness by emailing the City Council at [email protected] to urge them to reconsider and overturn the Lone Oak Road Reimbursement District at next Monday's May 29 council meeting.
(1) City officials assume the Creekside golf course will become a subdivision. Even though the Creekside Homeowners Association is appealing a legal decision that allowed developers Larry Tokarski and Terry Kelly to build a subdivision on the golf course property, the Reimbursement District assumes that 210 homes will be built on that property.
It isn't fair for the City of Salem to tilt the scale in favor of developers when people in the Creekside neighborhood are doing their best to preserve the open space that they consider was promised to remain in perpetuity when they bought homes there.
(2) Greenspace is valuable to everybody in Salem. There needs to be a vigorous community discussion about the best use of the Creekside golf course property, should it ever be converted from a golf course. Developers shouldn’t be able to get their way just because they seek to make money from a subdivision development.
Quality of life for Salem residents has to be considered in every development decision. As noted above, the Reimbursement District simply takes for granted that the golf course property will become a subdivision. This ignores flooding risks for downstream homes and businesses by developing that property.
(3) Developers shouldn't get preferential treatment from City officials. As I noted in a recent post about the Reimbursement District, Public Works Director Peter Fernandez said at a City Council meeting that likely the southern extension of Lone Oak Road would be built by developers of two subdivisions in that area even if a Reimbursement District wasn't formed to pay them back.
Government shouldn't do what the private sector already plans to do. Lot owners in south Salem shouldn't have to pay an extra $4,000 to $10,000 when they build a home on their property so real estate developers get a free ride on building road improvements that they would have to construct anyway.
Here's a message Jackie Leung is releasing today which echoes the points made above:
Subject: Email City Council to Save Creekside Golf Course
Dear Creekside Neighbors,
Please join me in writing an email to the Salem City Council ([email protected]) before they meet again on May 29, 2018. Under City Council rules, any councilor who voted for the May 14, 2018 motion can ask that it be reconsidered at the next meeting. The email below is an initial step in our effort to get the City Council on the side of the Creekside community.
If the cloud of the Lone Oak Road Reimbursement District is removed from our golf course on May 29, it will be easier to use the Salem Comprehensive Plan to protect our outdoor recreation and open space. In addition, we can review options for a ballot measure or conservation easement to protect the golf course as permanent green space for south Salem.
Please consider writing an email or letter to the City Council before May 29. This message was sent only to a small list of Creekside residents, so please reach out to others and encourage them to email the City Council.
I am thankful for Creekside's support for my campaign for City Council. I look forward to working together over the next four years to protect the Creekside golf course.
It's a real battle going on between the Creekside Homeowners Association and the owners of the Creekside Golf Club, Larry Tokarski and Terry Kelly.
Recently I came across a May 9, 2018 letter that the Creekside HOA sent to its members, describing what was going on with the Association's fight to prevent the golf course from being turned into a subdivision, as Tokarski and Kelly are trying to do.
The HOA letter I've shared addresses an issue that I'd wondered about. Since the Creekside Homeowners Association is appealing a legal ruling that gave the golf club owners the right to convert the golf course into a subdivision, why should the $422,789 in legal fees owed to Tokarski and Kelly be paid now?
If the HOA ends up winning its appeal, seemingly they would be the ones owed reimbursement for legal fees, not the Creekside Golf Club owners. (I'm not an attorney, so I might be wrong about this.)
So the letter says:
On March 26, 2018, the Association filed a formal appeal of the supplemental judgment. In order to prevent the golf course owners from collecting the awarded attorney fees and costs while the appeals are ongoing, the Association sought financing to bond the judgment. (If the judgment was not bonded, then the golf course owners could have taken collection actions against the Association to collect on the judgment.) Therefore, in order to bond the judgment, the Board took out a loan of $500,000.00 from NW Bank.
The loan is for a term of 20 years. The collateral pledged to NW Bank is the Association's right to assess the owners if the Association is in default on the loan. If the Association is not in default, then NW Bank cannot take action against or assess the owners. Monthly loan payments are approximately $3,500.00/month.
This makes sense to me. Might as well wait until the appeals are settled before paying the legal fees.
But I'm sure this is a controversial issue among members of the Creekside Homeowners Association. Most, I'm pretty sure, don't want the golf course turned into a subdivision, since they bought homes at Creekside believing the golf course would be there in perpetuity. And their homes would be worth less if the golf course amenity went away.
Here's some thoughts on this fine mess from my position as an interested outside observer.
(1) Tokarski and Kelly are playing hard ball. The Creekside developers must have made a lot of money since the early 1990s, when the Creekside neighborhood began to be built. Yet they're willing to toss away the goodwill of those who bought homes there in order to make even more money by converting the golf course into a subdivision.
Sure, I understand that this is what developers like to do: make money. It just seems to me that given how successful Creekside has been for its developers, they could cut the neighborhood some slack on the golf course conversion.
After all, this is a wetlands area prone to flooding. Likely the City of Salem won't allow them to build as many homes as their initial plans called for (354, according to a Statesman Journal story).
Maybe I'm being unrealistic in suggesting that Tokarski and Kelly could produce a positive legacy by leaving most, or all, of the golf course as open space and/or a park if the golf club truly isn't profitable, instead of engaging in a knock-down, drag-out fight with the Creekside Homeowners Association.
But sometimes realism is a drag.
(2) Suing the HOA over spending money to preserve the golf course property was extreme. What Tokarski and Kelly did when they sued the Creekside Homeowners Association over its spending HOA money to fight Tokarski and Kelly was positively Trumpian.
I say this, because it reminded me of Trump trying to tell Justice Department officials that they shouldn't be conducting an investigation into the Trump campaign's possible collusion with Russia, along with Trump's possible efforts to obstruct that investigation.
Sure, the parallels aren't exact, but a Statesman Journal story said that Tokarski and Kelly had standing to sue the HOA because they are members of it.
Creekside Golf Club’s owners have asked a judge to remove the board of an adjacent homeowners association and put the HOA into receivership.
It’s the latest volley in a two-year legal battle that will decide whether the club’s owners, developers Larry Tokarski and Terry Kelly, can close the South Salem championship course and turn it into a residential subdivision.
...The lawsuit claims Tokarski and Kelly have the right to sue because they own property in the development, making them members of the homeowners association.
Hmmmm. So Tokarski and Kelly are battling the Creekside Homeowners Association in their effort to convert the golf course into a subdivision. Then Tokarski and Kelly put on their hats as Creekside HOA members to sue the association for spending money on fighting them.
Weird, though legal. It just shows the lengths Tokarski and Kelly are willing to go to get their subdivision built.
(3) There's a certain karmic justice in Jackie Leung's City Council victory. Lastly, I can't help but mention that the recent victory of Jackie Leung over incumbent Steve McCoid in the Ward 4 City Council race has a sort of karmic ring to it. Here's what I mean.
Larry Tokarski has been a substantial contributor to conservative political campaigns in Salem. McCoid, though he billed himself as a moderate, is considerably more conservative than Leung, whose campaign featured a pledge that she'd be tougher on making developers live up to their obligations, and would do her best to prevent the Creekside golf course from becoming a subdivision.
It seems clear to me that Leung got the vote of many, if not most, Creekside residents, or she wouldn't have beaten McCoid. Those voters were turned off by McCoid's support of a Lone Oak Road Reimbursement District that assumed the golf course would become lots which would pay into the District when they were developed.
So this strikes me as a "what goes around, comes around" sort of thing. I'm confident that Tokarski and Kelly would have preferred to see McCoid win, yet their efforts to convert the golf course into a subdivision helped lead to Leung's victory.
Watching last night's City Council final deliberation on a Lone Oak Road Reimbursement District reminded me of a demolition derby.
The plan that was approved on a 5-4 vote was the last one standing, like a bashed-in car with smoke streaming from its hood, oil leaking all over, fenders missing, dents everywhere.
Not a pleasant sight, but in the eyes of a majority of City Council members, better than nothing.
The Council considered four alternatives to the original Lone Oak Reimbursement District plan that landed with a resounding "no thanks!" thud at a public hearing a while back, which led to the Council reconsidering that plan.
Here's a screenshot from the CCTV video of the meeting that shows the alternatives considered last night.
The left column says "Adopted," since this was the original plan that was adopted by the Council before the reconsideration of it. The policy question was who is going to pay for a bridge over Jory Creek, a northern extension of Lone Oak Road extending south of the bridge, and a southern extension of Lone Oak Road.
It struck me as decidedly strange that after all the criticisms of the original "Adopted" plan, and the Council's vote to reconsider it, City of Salem staff recommended sticking with the plan that hardly anybody liked except City staff. This shows a disturbing lack of both understanding political reality, and flexibility, on the part of City staff.
This screenshot shows the unbuilt sections of Lone Oak Road.
Here's some key takeaways from last night's vote:
(1) No inclusion in a Streets and Bridges bond. City staff made clear that including money for the Lone Oak Road improvements in a future Streets and Bridges bond was off the table, contrary to statements made by Public Works Director Peter Fernandez at previous meetings that this was the only way the Jory Creek bridge could be financed. So this is a win for Salem taxpayers, who shouldn't have to foot the bill that developers should be paying.
However, since City staff didn't alter their recommended budget for the Reimbursement District ("Adopted" column above), the reason Fernandez said a Streets and Bridges bond would be needed to pay for the bridge hadn't changed. Namely, that there won't be enough money in the Reimbursement District to pay for a crossing over Jory Creek. More about this below.
(2) More emphasis on SDCs. City staff presented three alternatives to the original plan that relied more on Systems Development Charges to pay for the Lone Oak Road improvements. To my understanding based on what I heard last night, these are accumulated from citywide development to the tune of an average of $1,200,000 annually.
So even though some City Councilors said they were pleased that developers, not taxpayers, would be paying for the improvements, this is questionably accurate for several reasons. First, it is development all over Salem that produces the SDC pot of money, not development solely in the Lone Oak Road area. Second, the Reimbursement District will collect money ($4,900 to $9,200) whenever a lot is platted for a house in the district boundary.
Often this will be a lot owned by an individual or family, not a real estate developer. So while it is true that development is paying into the Reimbursement District, this isn't always a major subdivision developer, but someone developing a single lot.
(3) Steve McCoid wanted Creekside excluded entirely. Councilor McCoid represents the Creekside area. He's in a race against Jackie Leung that will be decided tonight. McCoid said that in the course of his campaigning, he's heard from many people that they don't want to include Creekside lots in the Reimbursement District for several reasons, including a feeling that the Creekside developer should have paid for the road improvements, and not wanting the Creekside golf course turned into a subdivision.
McCoid made a motion to eliminate all Creekside lots from the Reimbursement District, a proposal that took a while to even get a second and pretty clearly wasn't favored by anyone but him. Other councilors said that it made no sense to let the Creekside developer off the hook for helping to pay for the Lone Oak Road improvements, since a 210 lot subdivision on the golf course property is expected to bring in the $1,935,000 shown in Alternatives 2 and 3.
(4) Alternative 3 ended up being chosen. Councilor Tom Andersen made a substitute motion to McCoid's motion that called for selecting Alternative 1 instead, which was the staff recommendation with the exclusion from the Reimbursement District of lots in the eastern part of south Salem, since few people who live in that area would use Lone Oak Road, and they were irked at being part of the District.
Not much love was shown for this motion either, so Councilor Chris Hoy made a substitute to the substitute motion by calling for Alternative 3 to be approved. This was the same as Alternative 1, except for the exclusion of 50 lots in the Creekside area that already had been platted and weren't likely to be further divided.
As mentioned above, the vote was 5-4 in favor of Alternative 3, judging by a show of hands from those opposed to the motion: Councilors Andersen, Ausec, Kaser, and Lewis.
(5) Peter Fernandez' surprising statement. During the deliberations prior to voting, Councilor Sally Cook asked what would happen if the Reimbursement District wasn't approved. After Glenn Davis attempted an answer, Public Works Director Fernandez jumped in with a statement that I feel deserved a lot more attention than it got. Here's a video I made of the interchange.
Fernandez said that the southern extension of Lone Oak Road likely would be built by developers of two subdivisions in that area, because the road is needed for the subdivisions. As I've noted in previous posts, this raises an obvious question: if those developers were going to build the southern extension anyway, why is a Reimbursement District being formed to pay them back for what they would do regardless?
Note in the video how Glenn Davis struggles to find words to describe how the developers would react if there wasn't a Reimbursement District that the Oak Ridge Estates developer requested after learning that they'd be expected to pay for improvements to Lone Oak Road.
After listening to Davis, my reaction was that a perfectly acceptable response would have been: "Well, if there wasn't a Reimbursement District, the developers would just have to pay for the southern road improvements on their own, since this would be a condition of their subdivision approvals."
Those two subdivisions total about 120 lots.
Development of those lots would add about $1,100,000 to the Reimbursement District fund ($9,212 per lot times 120). So as Peter Fernandez said, it makes sense that the developers would go ahead with building the southern extension of Lone Oak Road without a Reimbursement District, since the total cost is only $15,000 per lot ($1,800,000 divided by 120).
But nobody on the City Council asked the obvious question after listening to Fernandez: "If the two subdivision developers would make the southern improvements to Lone Oak Road on their own, why are we including these improvements in the Reimbursement District?"
Bottom line: I realize this is geeky stuff. But I feel the need to go into this much detail so there's a record of what transpired at least night's City Council meeting, especially since the Statesman Journal has devoted exactly zero reporting resources to this subject. (The newspaper wouldn't even publish a guest opinion that I wrote for them.)
Because of me, Salem Weekly, the South Gateway Neighborhood Association, and numerous individuals who complained about the Lone Oak Road Reimbursement District, the original plan was improved. It's good that the eastern part of the District was dropped out, and that the idea of paying for the bridge over Jory Creek by including money for it in a Streets and Bridges bond has been given up.
But the Reimbursement District plan approved by the City Council still is tilted too much in favor of developers. Almost certainly the Creekside developer isn't going to build the bridge and northern extension of Lone Oak Road unless they get approval to convert the Creekside golf course into a 210 lot subdivision.
A City of Salem staff report gives this a 50-50 chance of happening. Which is a good chance. I'd put the odds at even higher than that. It sure seems like it would be justified to require construction of the bridge and northern extension of Lone Oak Road as a condition of approval for a subdivision on what is now the golf course.
But as it stands, the Creekside developer would be able to make those improvements, then get paid back for what they cost through the Reimbursement District. Pretty sweet deal.
I realize that developers are in the business of making money. I'm just saying that it would have made more sense to hold off on forming a Reimbursement District for the bridge and northern extension of Lone Oak Road until it was known whether the golf course would become a subdivision.
If this happens, the Creekside developer could have paid for those improvements as a normal cost of doing business.
However, with the approval of the Lone Oak Road Reimbursement District, there's a very good chance that (1) a legal ruling will allow the Creekside golf course to be transformed into a housing development, after which (2) the Creekside developer will build the bridge over Jory Creek and the northern extension of Lone Oak Road, then (3) be paid back by the Reimbursement District, likely not all at once, but over the span of, say, ten or more years as the District accumulates funds when lots are developed in the south Salem area.
If people in the not-too-distant future ask, "How the heck did the Salem City Council allow this to happen?", I feel good that this blog post, and other posts I've written on this subject, will provide a detailed answer.
Here's the letter: Download Letter from Tokarski attorney The gist of the letter is an assertion that Tokarski isn't the developer of Creekside. Well, let's look at some evidence that argues otherwise. My point in doing this is to show that a reasonable person, namely me, is justified in calling Larry Tokarski the "Creekside developer."
Here's a screenshot of a 1990 document relating to the original development permit for Creekside. As with the other documents, I've circled Tokarski's name in red. This City of Salem document shows Larry Tokarski as the developer of the 264 acre Creekside property.
Here's a 1991 letter Tokarski sent to City Manager Gary Eide where he's identified as the General Partner of Hawaii Northwest Ventures.
Creekside was developed in numerous phases. The 2005 document below relates to Phase 10. It shows the owner/applicant as Larry Tokarski.
The next document from 2006 shows that Larry Tokarski is the Managing Partner of Hawaii Northwest Ventures. Note that the City of Salem document says that each person included as the Developer are jointly liable for the conditions of the agreement relating to a Creekside development phase.
A 2016 Planning Commission order identified Larry Tokarski as the controlling member who signed off on various plats associated with phases of the Creekside development.
A 2015 Memorandum of Understanding regarding Creekside was signed by Lawrence Tokarski as trustee of a revocable living trust.
In 2016, Lawrence Tokarski was the petitioner in a case regarding the development of Creekside.
In that LUBA opinion is a footnote saying that Lawrence Tokarski is a controlling member of various entities that applied for Creekside Planned Unit Development (PUD) permits, and that he is properly viewed as the applicant, or one of the applicants, for the various applications.
So does it make sense to say that Larry Tokarski is the Creekside developer? I certainly believe so.
Last night the City Council voted unanimously to reconsider their decision to have the public pay for two extensions to Lone Oak Road in south Salem, rather than the developers who really should be footing the bill.
The overarching issue here is who should pay for two extensions of Lone Oak Road needed in the Creekside area: the general public, or developers planning to build subdivisions on currently undeveloped land?
As shown above in a slide from a City of Salem presentation about the Reimbursement District, which would impose a fee on lots divided or developed in areas near Creekside to reimburse developers who construct Lone Oak Road, there are two unbuilt sections of the road shown in yellow.
The north section runs through a new phase of Larry Tokarski's Creekside development (outlined in green; existing phases are outlined in red). So why isn't Tokarski being required to pay for that part of Lone Oak Road?
This is a key question that City officials need to explicitly address in a staff report before next month's "re-do" public hearing on the Lone Oak Road Reimbursement District. There's abundant evidence that Tokarski was supposed to build the north extension of the road, and indeed started to do so in 2007, but was let off the hook for City of Salem staff.
A 2016 LUBA (Land Use Board of Appeals) decision summarizes some of the history of this. Above is a screenshot of part of the decision. I've circled a pertinent part in red. The applicant is Larry Tokarski and his development company. Download LUBA ruling So City officials allowed development to proceed at Creekside even though Tokarski reneged on his promise to build the north portion of Lone Oak Road and a bridge over Jory Creek. The LUBA decision negated a later requirement that Tokarski build the road to serve a small 4-lot Creekside subdivision, offering up some narrow legal justifications.
But it's an open question whether the City can still require Tokarski to build the north section of Lone Oak Road. A footnote in the LUBA decision (see above) points to this possibility of him paying for at least part of it. Strangely, City staff haven't addressed this in staff reports dealing with the Lone Oak Road Reimbursement District.
Seemingly it's just been assumed that a rich developer who has been required numerous times to build that portion of Lone Oak Road can't be made to do so, so the public has to pick up his road construction bill.
The South Gateway Neighborhood Association proposal makes sense: defer action on a reimbursement district until a legal case is settled and it is known whether Tokarski is able to convert the Creekside Golf Course into a large subdivision. If that happens, for sure Tokarski then could be required to build the north extension of Lone Oak Road, and it could run through flat land on what is now the golf course.
Also, City staff have said that there won't be enough money raised by the reimbursement district to pay for the north extension of Lone Oak Road, so this will have to be made part of a future streets and bridges bond. Which raises the question: why go to the trouble of forming a reimbursement district if it won't raise enough money to build Lone Oak Road?
Bottom line regarding the north portion of Lone Oak Road: either Tokarski can be made to pay for the road that he promised to build, or building the road can be made a condition for developing a subdivision on the golf course property, should he be allowed to do this. Either way, the public doesn't have to pay Tokarski's bill.
The unbuilt south portion of Lone Oak Road is easier to figure out: make the developers of the two subdivisions outlined in purple and orange pay for it.
Last night Mark Shipman, an attorney representing the 10 acre, 38-lot "purple" subdivision, explained that his clients wanted the City of Salem to help them find a way to pay for the cost of building the south portion of Lone Oak Road. The reimbursement district was what came out of this.
Wow. After letting Larry Tokarski off the hook for $7.5 million in Lone Oak Road improvements, City officials were pleased to do the same for the developers who should be paying for the unbuilt south section of Lone Oak Road.
There's no discernible reason why the developers of the two subdivisions shouldn't be paying for the extension of Lone Oak Road south to Rees Hill Road. If the 20 acre development is built to the same density as the 10 acre development, 114 lots will be developed (38 + 76).
This sure seems like enough to justify making the two developers pay for the south extension of Lone Oak Road, since the map above shows the road going immediately adjacent to the 10-acre development and through the west side of the 20-acre development.
I've seen no explanation why a reimbursement district was justified to pay back the developer(s) for the cost of building the Lone Oak Road extension to Rees Hill Road. Seemingly it just was assumed that if a developer complains about the cost of constructing needed infrastructure, the public should foot the bill instead.
Attorney Shipman said that his clients are ready to build the south portion of Lone Oak Road. Great. They should build it. And also pay for it on their own. Then they can be partially reimbursed by the developer of the 20 acre property outlined in orange above, whose subdivision application is more recent.
City officials have been bending over backwards to please developers who don't want to pay for roads needed to serve their developments. This needs to change. Our "public servants" need to start living up to their name and begin putting the interests of the general public above the wants of developers.
Instead, as shown in the image above, the letter proposes an intriguing alternative idea.
If Tokarski comes out on top in a legal challenge to his plan to convert the Creekside Golf Course into 210 additional home sites, then Lone Oak Road should be built on flat land that now is the west end of the course (green dots) rather than the steep difficult terrain where Lone Oak Road currently is planned to be built in the Salem Transportation System Plan (red dots).
Here's a screenshot of part of the letter from the South Gateway Neighborhood Association board.
Hopefully the City Council will discuss this idea at its February 12 meeting, because it makes a lot of sense. So much so, I wonder why City staff didn't suggest the idea, rather than leaving it to the neighborhood association to come up with it.
As the letter says, much of the funding for the Lone Oak Road Reimbursement District is expected to come from the development of 210 home sites on what is now the Creekside Golf Course. A $9,212 fee would be assessed on the development of each lot.
But this eventually would only bring in about $2 million, and right now the cost of the STSP Alignment for Lone Oak Road is $7.5 million. This is why taxpayers all over Salem would end up paying for the road through a future Streets and Bridges bond -- as I noted in my Salem Weekly cover story, "Larry Tokarski leaves the public with a $7.5 million development bill."
In 2007 Tokarski started to construct the missing northern portion of Lone Oak Road. Preliminary earth grading of the road occurred and a box culvert was installed over Jory Creek. So this shows that Tokarski knew he was obligated to make those improvements.
But he never completed them. A City of Salem staff report says, “Work on the project was halted by the developer and no additional work has occurred since 2007. At present there is no timetable for constructing the bridge and remaining sections of Lone Oak Road SE.”
...If the next streets and bridges bond measure includes a request for $7.5 million (in current dollars) to build the northern portion of Lone Oak Road and the Jory Creek bridge, it may be saddled with an unfortunate nickname, “The Tokarski Bailout Bond.”
My guess is that Tokarski legally will prevail over the Creekside Neighborhood Association, which is trying to prevent the golf course from being turned into a subdivision. If this happens, Tokarski should be required to pay the full cost of building the extension of Lone Oak Road through what is now the golf course.
Congratulations to the South Gateway Neighborhood Association for coming up with a creative and workable alternative to forming a Lone Oak Road Reimbursement District. As the association's letter says, plans for the District should be put on hold until the legal dispute over the golf course is settled.
If the golf course becomes a subdivision, then Lone Oak Road can be built on the flat land of what once was the course, and Tokarski clearly should pay for the road, since it will run through his new 210-lot Creekside development.
It took me about two seconds to say "Yes" when the publisher of Salem Weekly, A.P. Walther, asked me via an email if I'd be interested in writing a story about the unbuilt section of Lone Oak Road that the City Council is asking the public to pay for, after the developer, Larry Tokarski, walked away from his obligation to make the road improvements.
The front page story appeared in this week's issue of Salem Weekly. You can read it online. Here's a PDF file of the story as I sent it off to Walther. Download Salem Weekly Lone Oak story PDF This shows the importance of Salem having an alternative newspaper. Before I heard from Walther, I toyed with the idea of seeing if the Statesman Journal, our daily newspaper, would be interested in doing a story on this subject.
But since Tokarski's real estate company, Coldwell Banker Mountain West, is a major advertiser in the Statesman Journal, I figured that the chances of the newspaper running a story that put Tokarski in a bad light were slim to none.
So it was great that Salem Weekly gave me 1,500 words for a story about Tokarski leaving Salem citizens with his $7.5 million unpaid development bill.
Here's some comments that were left on Facebook posts about the story, along with my response to two comments.
So... today we learn that after months of Creekside advocates moaning and groaning that the golf club absolutely needs a $60,000 irrigation water rate reduction or it will go out of business, thanks to good reporting by the Statesman Journal's Tracy Loew we know this isn't true.
Creekside Golf Club’s owners have released a statement saying they will not close the business after all.
"We want to reassure the membership that our intentions are not to close Creekside Golf Club and we would like to put that concern to rest," owners Terry Kelly and Larry Tokarski wrote.
Since April, the owners have been adamant that, without a reduction in their city water bill, they would close the course and develop the property into housing.
As recently as Monday, club manager Danny Moore told the Salem City Council that a proposed irrigator rate decrease was the only thing that would keep the business going.
But that testimony was incorrect, a club member committee now says.
Obviously there's a lot of dysfunction in the Creekside Golf Club. When the owners say the manager doesn't know what he's talking about, pretty clearly this business is struggling to find its way.
But what I find much more interesting is how the Creekside debacle points to longstanding dysfunction in Salem's City Hall, where a conservative Mayor and her right-wing City Council majority have been demonstrating their incompetence in running the City of Salem.
(Improvement should be coming in 2017, after voters elected three progressive councilors who take office in January. Unfortunately, Mayor-elect Chuck Bennett is a major contributor to the current dysfunction, so he and the four right-wingers who will remain on the 9-member City Council can continue to control it.)
Here's my takeaways on the larger implications of what I like to call the "IrriGate" scandal. My numerous posts on this subject can be found here.
When special interests in this town whistle, City officials come running. With their tongues hanging out, because the Chamber of Commerce's Create Jobs PAC, along with other special interests, have been the major contributors to the campaigns of Mayor Peterson, Mayor-elect Bennett, and the right-wing city councilors.
Larry Tokarski, President of Mountain West Investment and a co-owner of the Creekside Golf Club, is a very rich guy. A $60,000 water rate irrigation reduction must be spare change to him. But still, he wanted it, and the usual gang of City officials jumped to attention.
And pay attention to the ethics complaint filed against Councilor Steve McCoid, who lives at Creekside and is a golf course member. He came up with the idea to give the golf course a $60,000 water rate reduction by lowering the rate for all irrigators and saddling regular water users with a $600,000 rate increase.
The Oregon Government Ethics Commission is reviewing a complaint filed against Salem City Councilor Steve McCoid over his involvement in a deal to reduce Creekside Golf Club’s water bill.
McCoid is a member of the golf club, which has said it will close if it doesn’t get a rate reduction. And he owns a home in nearby Creekside Estates, where owners worry that property values would plummet if the course closes.
An outmoded crony capitalism philosophy rules at City Hall. The obvious question about the whole Creekside Golf Club water rate weirdness is "Why the heck should the City of Salem bail out a struggling private golf course?"
Many courses across the country are closing because fewer people are golfing. Yet the first reaction of Mayor-elect Chuck Bennett was to say:
“It’s not unusual to try to save or to create 50 jobs in this town forgiving taxes for years on end, for doing a whole variety of fiscal gymnastics to get them in,” said City Councilor Chuck Bennett, a committee member. “I’m not sure why in the case of a business like this we wouldn’t do the same kind of thing relative to this cost.”
Well, Chuck, the answer is that giving tax breaks and other subsidies to companies almost always is a really dumb thing to do. Urban planning expert Chuck Marohn spoke about this during his recent talk in Salem.
Paying someone to pretend to love you isn't going to produce a good longterm relationship. Neither is giving subsidies to businesses in a similar form of governmental prostitution.
It's decidedly strange that the so-called conservatives currently in charge at City Hall are so dismissive of free market capitalism. I'm confident they decry the federal government picking "winners and losers," but they're totally on board with the City of Salem doling out subsidies to chosen businesses.
Especially those who are big contributors to their election campaigns.
High-ranking city officials rarely think carefully or ask good questions. Having closely watched Salem's Mayor and City Council for the past three years or so, I've been struck by how poorly important issues are analyzed, delved into, discussed, debated.
Groupthink rules at City Hall.
Unanimity and complete consensus is valued over seeking out the truth and finding the wisest course of action. Questioning is viewed as an attack, or "bomb throwing." Pointing out factual errors is met with heads-in-the-sand denial. Skepticism about a poorly thought-out policy is dismissed as negativism.
In this Creekside Golf Club example, why didn't the Mayor, city councilors, and high-ranking city staff (such as City Manager Steve Powers and Public Works Director Peter Fernandez) ever wonder...
(1) How a $60,000 annual water rate reduction could be so crucial to saving a golf course with 50 jobs?
Let's assume very conservatively that each job costs Creekside $40,000: 50 X $40,000 is $2 million. Is a multimillion dollar business going to sink or swim over the long haul because of a $60,000 reduction in an annual expense? Plus, the golf course manager had said that the Creekside already was laying off several staff, so the business already must have cut expenses on its own by more than $60,000.
But from what I can tell, nobody at the City of Salem ever asked these obvious questions.
(2) Why is it supposedly so important to keep the Creekside Golf Club open?
When he wasn't urging a subsidy to Creekside to save those 50 jobs, Mayor-elect Bennett liked to talk about the need to preserve the golf course open space so storm runoff caused by Tokarski turning the land into a pavement-filled subdivision wouldn't flood other parts of Salem.
Again, poor thinking.
City planners don't have to approve land use actions that aren't in the public interest. They can put conditions on a new subdivision, such as requiring stormwater runoff to be within certain bounds, and handled in certain ways. Bennett made it sound like the City of Salem was helpless to stop the owners of the golf course from doing whatever they wanted if they decided to turn it into a dense subdivision.
But again, from what I can tell, nobody at the City of Salem considered how untrue this was.
Here's another twist in the Creekside Golf Course water rate reduction scandal: City Councilor Warren Bednarz, a member of the City of Salem Water-Wastewater Task Force, repeatedly voted to give himself a 30% reduction on his irrigation bill.
Now, if you're thinking, Aren't elected officials supposed to recuse themselves from votes that would give them a private financial benefit?, congratulations. That's the correct thought.
But someone who listened to recordings of the Water-Wastewater Task Force meetings has learned that not once, but twice, Bednarz admitted that he owned commercial irrigated property which would benefit from the 30% rate reduction he voted "Yes" on.
At the July 14 meeting, Councilor Bednarz admitted that he had a conflict of interest:
First off, before the meeting began I mentioned that I have two meters that are “irrigation only” so I am least a little privy to the five months, four months, three months a year, turn it off.
Yet later in that meeting Bednarz voted for a recommendation that would reduce the water rate for all irrigators by about 30%. Amazingly, apparently no one else on the Task Force thought it was unseemly for Councilor Bednarz to be voting for a water rate reduction that would personally benefit him.
Well, more than unseemly, since state law requires that a public official declare a conflict of interest on an issue that would give the official a "private pecuniary [monetary] benefit." Then the official isn't supposed to vote on that issue.
But Bednarz didn't declare a conflict of interest, and he did vote to recommend the 30% irrigator rate reduction.
At the Task Force's next meeting on July 28, Bednarz again spoke about how he is one of 670 irrigators, as is the Creekside Golf Club. Referring to Peter Fernandez, the City of Salem Public Works Director, Bednarz said:
Peter, I am two of those 670 meters. I have two of them. I’m not looking for a rate reduction. There’s no reason. Two or three hundred a month isn’t going to kill me. So I still think that a classification based on something is a way that we can get around this policy-wise.
Once again, Bednarz didn't declare a conflict of interest. This time he voted against the irrigator rate reduction.
A few weeks later, though, on August 11, my source tells me that Councilor Bednarz seemingly voted with all of the other members of the Task Force (except Councilor Brad Nanke, who voted "no") to support the 30% rate reduction for irrigators. This is what the audiotape of the August 11 shows; no written minutes of the meeting are available yet.
Earlier this year Bednarz was hit with two ethics complaints for the very same thing: failing to declare a conflict of interest on issues that would benefit members of his family. So it appears that Councilor Bednarz still feels that he is above the law in this regard.
Fortunately for the citizens of Salem, last May Bednarz was soundly defeated by challenger Sally Cook in his City Council re-election bid.
Here's my previous posts about the sleazy Creekside Golf Course goings-on: