Salem Political Snark

City staff ignore neighborhood association questions about Creekside development

Stonewalling. Obfuscating. Ignoring.

There's numerous ways to describe how City of Salem staff are failing to respond to questions from the South Gateway Neighborhood Association (SGNA) about why the Creekside developer hasn't been required to build an extension of Lone Oak Road, the cost of which would be borne by the public if a Lone Oak Road Reimbursement District gets a go-ahead from the City Council next Monday.

The neighborhood association is justifiably irritated at how they've been treated by City staff. Here's an excerpt from a letter submitted by SGNA as advance testimony for the March 26 hearing on the Reimbursement District.
Download March 26 City Council Meeting - SGNA Testimony & Attachments

I've circled in red the unanswered question that I'm most interested in.

When "public servants" willfully ignore questions that, if answered, likely would put them in a bad light, this strikes at the heart of the trust that should exist between government employees and the citizens whom they ostensibly serve. 

Look, everybody makes mistakes. These can be forgiven when a mistake is honestly acknowledged, and sincere efforts are made to prevent the error from happening again.

But City of Salem staff are choosing a different approach: ignore tough questions about how the development of the Creekside neighborhood was handled in an apparent hope that throwing up a smokescreen of verbiage will make concerned citizens forget that their queries were ignored.

I hope the Mayor and other members of the City Council will keep asking the following two simple questions of City staff until they get believable answers. 

What we know is that in 2007 the Creekside developer built a box culvert over Jory Creek and started construction of the northern extension of Lone Oak Road. There are photos of this work in a City of Salem staff report.
Download CITY OF SALEM - File #: 17-341

Here's an excerpt from the report.

In 2007, the Creekside developer initiated construction of the missing segment of Lone Oak Road. Construction plans were prepared by a private engineering consultant and permits were issued by the City. A box culvert was installed over Jory Creek and some preliminary earth grading along the alignment of Lone Oak Road was completed. 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.

Question 1: Why did the developer halt work on the Lone Oak Road improvements? Permits to construct the missing segment of Lone Oak Road were issued by the City of Salem. So there wasn't any disagreement about the work to be done, given the permits. The work just was stopped by the developer.

Question 2: Why did City officials allow the developer to walk away from completing the Lone Oak Road improvements? Again, the Creekside developer obviously believed they were required to build a bridge and road, or the 2007 work wouldn't have been started. There should be some documentation of an agreement to allow the developer to stop work on the Lone Oak Road improvements, unless the agreement was verbal, which would be bothersome. Yet City staff haven't been able or willing to provide those documents.

Bottom line: there seems to be some sort of cover-up regarding the Creekside developer's failure to complete the Lone Oak Road improvements that were started in 2007. I'm usually loathe to use that word, cover-up, but it seems fitting in this case.

The spin being put forward by City of Salem staff just doesn't hold up under scrutiny. The staff report for the reconsideration of a  Lone Oak Road Reimbursement District on the March 26 City Council meeting agenda is in a question and answer format, with the questions having been posed by the South Gateway Neighborhood Association. One Q & A says:

Q5: Why did the estimated cost of the bridge crossing Jory Creek increase so greatly?

A5:  The difference of estimated cost is based on a difference of opinion between City staff and the developer’s engineer as to what will be required by the state and federal permitting agencies for the crossing of Jory Creek. The developer’s engineer proposed a long culvert with deep fills, which is less expensive but has greater environmental impact. City staff proposes a bridge structure, which is more expensive but has a lower environmental impact.

But this answer doesn't make sense, since as noted above, permits were issued by the City of Salem for the bridge and road work initiated by the Creekside developer in 2007. So at that time there wasn't any "difference of opinion" between City staff and the developer's engineer, since City staff approved the developer's plan for the Lone Oak Road improvements. 

And it's incorrect for City staff to say in the answer to Question 5 that the developer's engineer "proposed" a long culvert with deep fills, because this is what was actually built by the developer after getting permits from the City of Salem. Here's the proof:

I realize that Salem's city councilors are unpaid and don't have staff of their own, which makes them dependent on City of Salem employees. However, they still can ask tough questions of City staff and not put up with refusals to answer cogent questions. 

If City staff can't answer the two questions I posed, which reflect questions asked by the South Gateway Neighborhood Association, there shouldn't be a vote on the Lone Oak Road Reimbursement District proposal.

Salem citizens shouldn't be asked to foot the bill for completing the unbuilt northern section of Lone Oak Road until it is clear why the Creekside developer was allowed to stop construction of the bridge and road after beginning this work in 2007. Again, the questions are:

Why did the developer halt work on the Lone Oak Road improvements?
Why did City officials allow the developer to walk away from completing the Lone Oak Road improvements?  

Statesman Journal reporter criticizes Salem Weekly for story his paper didn't cover

I've got no problem with reporters dishing dirt on stories from another news outlet. But it sure seems that if they do this, their own coverage of the issue -- or in the case of the Statesman Journal, non-coverage -- becomes open to critiquing. 

Yesterday Statesman Journal reporter Jonathan Bach tweeted about a follow-up story regarding the Creekside development and Lone Oak Road in our town's alternative paper, Salem Weekly.

Gordon Friedman, who used to be a Statesman Journal reporter and now works for the Oregonian, chimed in with a comment on Bach's tweet, as did another person.

Here's my problems with Bach, Friedman, and Ms. Matzo Ball Soup.

First, the Statesman Journal has engaged in exactly zero coverage of an important issue that has consumed a lot of City Council time and is a big concern of the South Gateway Neighborhood Association that represents the Creekside area, along with other south Salem residents.

Namely, who is responsible for leaving a bridge over Jory Creek and an extension of Lone Oak Road uncompleted, and should a Lone Oak Road Reimbursement District be established that shifts the cost of these projects from the Creekside developer to the public?

Salem Weekly has run four stories about this, including a front page opinion piece that I wrote.

So a reporter from a "glass house" newspaper that is doing a spectacularly lousy job covering local news, including City Hall goings-on, shouldn't be throwing stones at an alternative paper that is printing stories the Statesman Journal is ignoring.

Second, Helen Caswell, who wrote the Salem Weekly piece Bach tweeted about, is indeed a journalist. And for that matter, so am I in a very real way. We both write factual, carefully researched pieces, Caswell for Salem Weekly, me for the blogs that I've posted to regularly since 2003 (I also had a two-year stint as a columnist for Salem Weekly).

I don't know what Friedman is referring to when he tweeted, "Lol at all of this. Totally sums up everything that is wrong with the Salem Weekly."

Salem Weekly, along with me, got a letter from an attorney representing Creekside developer Larry Tokarski after the paper published my opinion piece. Caswell's follow-up story addressed several issues raised by the attorney, James Vick. She reviewed a bunch of documents relating to the Creekside development and spoke with City of Salem staff, along with Tokarski's attorney, I believe.

Which gets me to...

Third, if Jonathan Bach had been covering the Creekside/Lone Oak Road story with anywhere near the diligence Caswell and I have, he would have known that this mess (that's the way the Mayor and city councilors describe it) is a highly complex tangled web of voluminous documents, failed commitments, and a notable lack of straight talk from all concerned -- City of Salem staff and people involved with the Creekside development.

Caswell's story, "Opinion run by Salem Weekly is both sound and problematic," reflected this confusion. She basically found that I correctly identified Tokarski as the Creekside developer, though I didn't highlight several legal entities led by Tokarski that carried out the many phases of the Creekside development. 

Tokarski's attorney seemed to claim that the reason construction by the Creekside developer of a bridge over Jory Creek and the northern extension of Lone Oak Road was started in 2007, then stopped, was because of what amounted to a "change order" that markedly increased the cost of the bridge owing to environmental requirements. 

But Caswell notes:

Although Mr. Vick asserted to Salem Weekly that costs shot up because City staff chose at some point to require a more robust bridge or a bridge with a different design or function, this is something we haven’t seen documentation on.

So it's no wonder Caswell couldn't come to firm conclusions about some aspects of the letter from Mr. Vick, Tokarksi's attorney. Even though there are hundreds, and likely thousands, of document pages relating to the Creekside development, somehow supposedly there isn't anything relating to the start/stop 2007 work on the bridge and road.

Like I said, this whole Lone Oak Road issue is a mess.

And who is casting light on it? Well, it sure isn't the Statesman Journal, nor the Oregonian. Below is what a Google search of "Lone Oak Road Reimbursement District" turns up in the top five results. A Salem Weekly story. A City of Salem document. Two of my blog posts. A post from the Salem Breakfast on Bikes blog.

Nothing from the Statesman Journal, which used to be called our "paper of record." Now, it's Salem Weekly and bloggers who are writing about local issues that the Statesman Journal isn't covering. So let's ease up on criticism of the work others are doing in your stead, Statesman Journal reporters. 

 

Salem Weekly delves into messy history of Creekside development

After I wrote an opinion piece for Salem Weekly, "Larry Tokarski leaves the public with a $7.5 million development bill," an attorney representing Tokarski, James Vick, sent a letter to me and the Salem Weekly publisher taking issue with the piece.

In the current issue of Salem Weekly there's a story by Helen Caswell that delves into a couple of questions reflected in Vick's letter:

(1) Is it correct to call Larry Tokarski the Creekside developer?
(2) Was the City of Salem responsible for raising the cost of constructing a bridge over Jory Creek and an extension of Lone Oak Road?

Regarding the first question, here's part of what the story says:

In the first question of who was the developer of the property, the bulk of the documented evidence we could find, beginning with a 1991 letter to the City of Salem from Mr. Tokarski through a 2016 LUBA (Oregon Land Use Board of Appeals) decision document (LUBA No 2016-025) through the transcripts of City Council meetings this spring, indicates that the primary, commonly-understood “developer” is indisputably Mr. Tokarski. This includes his 1991 relationship (as General Partner) with Hawaii Ventures Northwest when he first initiated discussion with the City about stages of development.

This fits with my understanding.

Yes, the story also notes that several legal entities were set up as part of the Creekside development process, but Tokarski signed most of the documents I've been able to review as the General Partner, Managing Partner, or a similar title showing he was a "controlling member" of those entities (in the words of a 2016 Land Use Board of Appeals opinion regarding Creekside). 

The second question wasn't addressed in my story, so I was interested in what Caswell's piece had to say about that issue. In short, not a whole lot that was definitive, which points to the complex, messy, confusing history of who was responsible for building the bridge/Lone Oak Road, and why the cost of the bridge supposedly escalated. 

Caswell writes:

Although Mr. Vick asserted to Salem Weekly that costs shot up because City staff chose at some point to require a more robust bridge or a bridge with a different design or function, this is something we haven’t seen documentation on.

There is still no agreed-on bridge plan and no means of funding for it.

What is undeniable from City Council testimony by citizens, from the frustration of local homeowners in the Creekside HOA and from the letter from James Vick is that nearly every actor in the development feels a sense of injustice about either how this matter is understood or how the costs have been assigned.

That's an accurate portrayal of the situation. However, it seems really strange that so far no one representing the City of Salem or the Creekside developer has been able to answer questions regarding the cost of the unbuilt bridge and northern section of Lone Oak Road. 

The Salem Weekly story has a photo of a culvert that was built over Jory Creek in 2007 by the Creekside developer. In a blog post I shared other photos of the partially completed bridge and road work that were in a City of Salem staff report.

Here's what I don't understand.

Caswell's story indicates that neither the City of Salem nor Tokarski's attorney was able to come up with documents that support the “bridge got way more expensive” explanation for why work was started on the bridge/road, then stopped and never re-started. 

It sure seems that if the Creekside developer started work on a bridge/road project that had certain specifications expecting to cost a certain amount, there would be both documentation of the original construction plan and also documentation of a “change order” requiring a different sort of work and associated cost. And one would think that there also would be documentation of permission being granted to the Creekside developer to stop work on the revised bridge/road project.

 

So it's possible there were some verbal agreements between the Creekside developer and City of Salem staff, given that Caswell was unable to find documentation of any required increase in the cost of the bridge/road project after work on this started in 2007.

 

UPDATE:  The Salem Weekly story says that "it is possible that the developer was not fully aware of federal, state, and city permit requirements protecting riparian habitat which might mandate more expensive building methods (retaining walls and a bridge rather than a long culvert with large fills) than perhaps he initially anticipated." However, a PUD 03-1 document approved by the City of Salem in May 2003 includes this language, circled in red, which appears to show that the Creekside developer should have been aware of the need to consider environmental requirements. 

 

Hopefully more information will be forthcoming before the City Council hearing on March 26 regarding a reconsideration of the Lone Oak Road Reimbursement District proposal that was passed by the Council on a 7-2 vote, but which drew valid concerns from the South Gateway Neighborhood Association.

 

Caswell's story ends with a couple of paragraphs that made me think Right on! when I read them. 

While saying that, as far as we can tell, Mr. Hines opinion is largely accurate, Salem Weekly acknowledges that this issue is more complex than the story we printed by him stated. It is also perhaps more nuanced than anyone lacking specialized knowledge or training could explain fully and fairly, especially in any way that is readable for the general public.

Salem Weekly remains open to further documentation on this matter that might be presented by any interested party.

This brings to mind something that I remember from my stint as a Research Associate in the Oregon Health Sciences University Department of Family Practice after I graduated from the Portland State University School of Social Work way back when.

Because part of my job involved patient satisfaction research, I got to sit in on seminars where Family Practice faculty taught the residents in the program (recent M.D.s getting specialized training),

A psychiatrist on the faculty was fond of telling the residents, "Explain things to your patients so your grandmother could understand what you're saying,"

OK, this is mildly sexist, so let's make it "grandmother or grandfather."

Regardless, in my Salem Weekly opinion piece I noted that there was a general consensus at the City Council meeting where the Lone Oak Road Reimbursement District was approved that the Creekside developer should have built the bridge over Jory Creek and the northern extension of Lone Oak Road.

Yet no clear "grandmother-friendly" explanations for why this failed to happen were brought forward.

City of Salem staff, in the person of Public Works Director Peter Fernandez, assured councilors that this development mess wouldn't happen again. Well, if no one can say why it happened with the Creekside development, how can anyone be sure that it won't happen again?

Steve Powers, the City Manager, should press hard on getting answers to questions such as why the Creekside developer started construction of the bridge/road, then stopped work before the Lone Oak Road work was completed. The goal wouldn't be so much to assign blame, as to learn from past mistakes so something like this doesn't reoccur.

Is Larry Tokarski the developer of Creekside?

Yesterday I got a letter from an attorney representing Larry Tokarski.

The letter also went to A.P. Walther, the publisher of Salem Weekly. It was in response to the opinion piece I wrote for Salem Weekly, "Larry Tokarski leaves the public with a $7.5 million development bill."

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.

Salem City Council reconsiders making public pay for Lone Oak Road improvements

A citizen win!

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 impetus for the reconsideration was a letter from the South Gateway Neighborhood Association. Here's a screenshot of how it starts out.
Download SGNA - Reconsideration of Lone Oak Reimbursement District


There will be another public hearing on a Lone Oak Road Reimbursement District at the council's March 26 meeting, if I recall the date correctly. 

This is a complex subject. I'm going to describe it as clearly as possible in this post. If you want more detail, check out my previous blog posts about Lone Oak Road:

City Council poised to make public pay for improvements, not Larry Tokarski
Why did Larry Tokarski start, then stop, construction of Lone Oak Road?
Larry Tokarski leaves the public with a $7.5 million development bill
Neighborhood association asks City Council to reconsider Lone Oak Road decision

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.

Neighborhood association asks City Council to reconsider Lone Oak Road decision

Good news! There's a chance Larry Tokarski, the Creekside developer, won't be able to walk away from his obligation to build an extension of Lone Oak Road after all. 

The South Gateway Neighborhood Association has sent a letter to Mayor Chuck Bennett, Councilor Steve McCoid, and the other members of the City Council asking that the council reconsider its 7-2 decision to form a Lone Oak Road Reimbursement District. 
Download SGNA - Reconsideration of Lone Oak Reimbursement District

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. 

Larry Tokarski leaves the public with a $7.5 million development bill

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.

 

 

 

Why did Larry Tokarski start, then stop, construction of Lone Oak Road?

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:

https://www.cityofsalem.net/citydocuments/adopted-cip-fy-2017-18-through-fy-2021-22.pdf

 

The history of the Creekside developments is detailed in a June 16, 2017 staff report to City Council:

https://salem.legistar.com/LegislationDetail.aspx?ID=3086823&GUID=70C367C5-5E88-4B71-887D-00F5B96F8501.

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.

City Council poised to make public pay for improvements, not Larry Tokarski

Tonight the Salem City Council is having a public hearing on forming a Lone Oak Road Reimbursement District in the Creekside area.

Basically, as I understand it, a developer (Garrett and Alice Berndt) has requested that buyers and owners of lots in the area be saddled with a total of $7,347,000 in fees to pay for needed improvements to an extension of Lone Oak Road. 

This is a complicated subject, and I don't pretend to be familiar with all of the details surrounding this issue, which has been festering for many years.

Arguments have gone back and forth about who should be responsible for road improvements in the area, which is in part a safety issue, since some current and proposed home sites only are served by one road, so if it were to be inaccessible emergency vehicles can't reach those homes.

What's most interesting to me is that Larry Tokarski was the developer of the Creekside neighborhood, and back in the early 1990's he was required to pay for improvements to Lone Oak Road. See:
Download UGA90-09Pages1-43

Here's a screenshot of one of the pages in that document.

My understanding is that in 2003 the City of Salem and Tokarski had an agreement that after 350 homes were built in the Creekside development, the improvements to Lone Oak Road would be made by Tokarski. However, as noted below, in 2007 these improvements were put on hold.

At two City Council meetings last year (March 27 and June 26), this issue came up for discussion. I've made a short video of comments made by councilors Steve McCoid, who represents the Creekside area, and Chris Hoy.

It's sort of surprising that in both these comments, and also elsewhere in discussion of the issue, I never heard anyone mention the name of the developer. I'm pretty sure Larry Tokarski is the developer being referred to, hence I titled the video "Salem City Council on Tokarski development screw-up."

Rich Fry, another Salem developer, spoke about this issue during the public comment period at the March 27, 2017 City Council meeting. Following Fry's remarks about the Lone Oak bridge, which supposedly would cost around $6 million, Public Works Director Peter Fernandez said: "The project was the responsibility of the Creekside developer and over time they simply never built it."

Now, unless there is a statute of limitations on commitments by developers to build roads and bridges needed for their development, it sure seems like Larry Tokarski and his firm, Mountain West Investment, should be the ones on the hook for the Lone Oak Road improvements. 

What makes this issue even more interesting politically is that Tokarski is the biggest contributor to conservative causes in Salem, people running for office and ballot measures. Last April Salem Weekly ran a story, "The Man Whose Money Talks in Salem."

Larry Tokarski began his real estate career in Salem in 1973. Since then he has founded and managed Mountain West Investment Corporation through which he has influenced the development and building of over a billion dollars of real estate. This includes over 1,000,000 square feet of commercial and residential facilities and more than 30 subdivisions. Tokarski has also been involved in the development and building of 47 retirement communities in Oregon, Washington, Idaho, Colorado, and Nevada.

Not a Salem resident (Tokarski lives in Wilsonville) the developer has invested a minimum of three-quarters of a million dollars in local political campaigns since 2009.

For example, Mountain West Investment Corp contributed 75 percent of the Salem Area Chamber of Commerce’s Build Jobs PAC funding for the May 2016 election. Below you see, Tokarski paid $10,000 to support the campaigns opposing progressive candidates for spring 2016 Salem City Council election, Sally Cook and Cara Kaser.

Well, someone who has been involved in over a billion dollars in real estate apparently should be able to pay for about $7 million in road improvements for the Creekside area, especially since this was agreed to by Tokarski. 

Before the City Council asks another developer to pay for those improvements through a Lone Oak Road Reimbursement District, it sure seems like the agreement(s) made by Tokarski should be carefully examined. I didn't see any sign of this in tonight's staff report, since the history of the Lone Oak Road improvements only begins with a 2008 requirement that Garrett and Alice Berndt make those improvements.

Somewhere along the line Tokarski appears to have been relieved of the necessity of making those promised improvements. An earlier 2017 staff report does detail how the "Creekside developer" (Tokarski) failed to complete the improvements:

Lone Oak Road SE is functionally-classified as a collector street in the Salem Transportation System Plan. From its northern terminus at Browning Avenue SE, Lone Oak Road SE runs north-south parallel to, and roughly mid-point, between Liberty Road SE on the west and Sunnyside Road SE to the east, to its current southern terminus at Jory Creek. Attachment 6 contains photos taken on April 6, 2017, at various locations along the missing segment of Lone Oak Road SE.

In 2007, the Creekside developer initiated construction of the missing segment of Lone Oak Road. Construction plans were prepared by a private engineering consultant and permits were issued by the City. A box culvert was installed over Jory Creek and some preliminary earth grading along the alignment of Lone Oak Road was completed. 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.

So as Councilor McCoid asked in the video above, who let Tokarski off the hook for constructing the Jory Creek bridge and remaining sections of Lone Oak Road? And could it have been someone who benefitted from Tokarski's political contributions?

UPDATE: I've been watching tonight's City Council meeting via CCTV and have learned that the situation is even worse than I thought.

Because the City of Salem allowed Tokarski to walk away from his responsibility to build a portion of Lone Oak Road and the bridge over Jory Creek when he stopped construction on the bridge in 2007, after an adverse legal decision City officials supposedly were forced to enter into a Memorandum of Understanding (MOU) with Tokarsi in 2013, I think it was. The MOU has Tokarski spending a million dollars or so on the road improvements, and the City supposedly spending a million or so on finishing the bridge.

Except, actually the cost of the bridge is $6 million.

So either Public Works Director Fernandez underestimated the cost of the bridge by about 600%, or the City of Salem decided to give Tokarski a sweetheart deal in the MOU. Bottom line: either Tokarski played the City of Salem for fools, or City officials willingly gave Tokarski what he wanted -- to be able to walk away from his responsibility to build infrastructure associated with his Creekside development.

Who is going to pay for the bridge now? The general public. Either lot owners in the Creekside area, or all property owners if, as sounds likely, the bridge over Jory Creek is made part of a future transportation bond measure.

Update to the Update: I had the date of the MOU wrong. It was 2015. This puts it a year before an adverse 2016 LUBA ruling that required the City of Salem to only consider a further small subdivision phasing of the Creekside build-out, not the entire development. After I asked City Attorney Dan Atchison about this, he responded thusly:

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: 

https://www.cityofsalem.net/citydocuments/adopted-cip-fy-2017-18-through-fy-2021-22.pdf