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It's About Time – How Not to Plan For Future Industry in Oregon

Industrial developers already struggling in the recession, specifically the now nearly defunct Opus Northwest, LLC, were dealt another blow in September 2010 by the Court of Appeals in 1000 Friends of Oregon v. Land Conservation and Development Commission (“LCDC”), a decision which not only stated the obvious about findings, but came at the end of a very lengthy process. 

In the late 1990s, the City of Woodburn began the periodic review process to update its comprehensive plan.  As part of that process, the city amended its urban growth boundary (UGB) to add over 900 acres, including 409 acres for industrial uses.  In order to carry out its aggressive development strategy and attract the identified target industries, the City justified the additional industrial acreage, among other reasons, as necessary to “provide choice among an adequate inventory of suitable sites.”  1000 Friends of Oregon objected, arguing that by including these market choice lands, the City included far more industrial land than it needed to accommodate target industries over the planning horizon without any demonstrated need for these lands. 

Goal 9, Economic Development, requires that a comprehensive plan “identify” the lands needed to accommodate industrial and employment uses and “designate” lands suitable to meet a city’s needs.  Goal 14, Urbanization, requires that establishment of the UGB be based on a “demonstrated need” for types of lands, including employment, based on a 20-year population forecast.  Both of these goals must be satisfied and Goal 9 cannot be used to trump Goal 14.  But the City reasoned that because its industrial needs analysis concluded that providing market choice was a key component of a successful industrial development strategy consistent with the requirements of these Goals, 409 acres of industrial land were needed.

Begun in 2005, by 2006, the City took final action on the periodic review and forwarded its plan and zoning amendments to the Department of Land Conservation and Development for acknowledgment.  Objections by 1000 Friends and others were considered and the LCDC affirmed the joint decision of the City and Marion County.  In the spring of 2007, 1000 Friends of Oregon appealed LCDC’s decision to the Oregon Court of Appeals.  The briefing schedule was subject to a number of delays, once for extensions for a vacation and a second time for over two months for the court to resolve an uncontested motion to file an extended length reply brief.  All of the briefs were submitted by the fall of 2008, but citing a six to seven month backlog, oral argument did not occur until May 28, 2009.  The court’s opinion was issued in September 2010, nearly 18 months after the appeal was filed and about four years after the City approval.  Since that time, the market for industrial lands has contracted and the primary proponent, Opus NW, LLC and its sister companies have all filed for Chapter 7 bankruptcy; meanwhile Opus NW, LLC teeters on the brink of collapse.

It is difficult to see how it could take three and a half years for this case to be decided.  The decision is only 8 pages long not including the cover page and footnotes and although the parties raised a number of complicated arguments, the opinion addresses only a single issue – whether LCDC erred in allowing a UGB that included market choice to allow more land than could be justified under Goal 14.

There are a number of lessons here.  First, areas outside of the Metro boundary might well proceed with five year updates of their population projections and needs analysis rather than undertake a full-fledged periodic review, thereby short-circuiting formal DLCD review and providing for a more expedited appeal to LUBA.  Second, LCDC must adopt rules providing for expedited processing of periodic review tasks similar to the ones in place at LUBA.  Finally, and most importantly, state law needs to be changed to subject decisions by LCDC to a timeline for judicial review similar to that which applies to appeals from LUBA.   

It is very little solace to wait four years for a case to be resolved on appeal, treading water (and paying carrying costs) the entire time, and be left with a short instruction – that the findings regarding market choice are insufficient.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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