Juniper Ridge Info

Local Economy Continues To Crater--UE Up To 17%

2009-04-21T16:42:00.000-07:00

Quick post of the harsh numbers that just came out:

Bend MSA
Unemployment, unadjusted, March, 2009: 17%
Unemployment, unadjusted, March, 2008: 7.8%

Deschutes County:
Notices of Default, year to date through April 17th, 2009: 1037

Notices of Default, year to date through April 17th, 2008: 395

Notices of Default, all of 2007: 590

Developer, Bulletin Funding Of Bend City Council Members Campaigns

2009-02-20T05:14:00.000-08:00

Orestar, the database that tracks political campaign financing in Oregon, has campaign finance numbers from through and after the election now. I have queried the numbers to track the investment local development interests, specifically the Central Oregon Association of Realtors (COAR) and the Central Oregon Builders Association (through their PAC Central Oregonians for Affordable Housing aka COAH) have made in the election of new Bend City Council members Mayor Kathie Eckman, Tom Greene (who is also the President of COAR), and Jeff Eager. These numbers are now sorted, summed, and available in several published Google spreadsheets linked below.

As Ms. Eckman made a very public and determined successful effort to become Mayor and so have some control of the proceedings, along with the fact that the three new members plus Councilor Mark Capell made a surprise choice for a new Councilor to replace new State Senator Chris Telfer by picking Oran Teater in a last minute "emergency meeting" that had no public notice and little media notice on a Friday evening, the weight of any special interests in their campaigns is worthy of public notice.

These three new councilors held a invitation-only meeting with local business interests before they were sworn in. And as recently as Tuesday, Feb. 17, the City Council held an all day meeting discussing goals with absolutely no public notice, and what appears to be no minutes, with a single media person in attendance, Erin Golden of the Bend Bulletin. This all-day Council meeting is not listed even now on the City web site, including the list of MP3 recordings, although this list does have the recordings of the scheduled work and regular Council sessions held the next day, Wednesday, Feb. 18th.

We may never see any minutes or hear any recordings of this, the first meeting of the Council after the very contentious emergency meeting to install Mr. Teater on the Council, a meeting which was called "crap" by Councilor Jim Clinton. The only public record of the Feb. 17th meeting is "Councilors set goals, economic strategies" behind the pay firewall on the Bend Bulletin web site. An excerpt from this Bulletin article:

"In an all-day meeting Tuesday, the council outlined its goals for the next several months, noting both the projects it would like to see completed by 2010 and those that might have to wait because of the ongoing economic slowdown. Among the ideas put on the city’s list: maintaining or building up Bend’s reserve funds, assembling an advisory board for Mirror Pond, developing a long-term funding solution for Bend Area Transit and annexing the airport into the city limits to help boost economic development. Set aside, at least for the near future, were other projects, including work on the Central Area Plan, which would provide a framework for downtown Bend and other areas in the central part of the city....

The meeting was the council’s first since it appointed former councilor and mayor Oran Teater to fill an open seat on Feb. 6. Teater’s last-minute appointment came after a month of tension between the other six council members, who were split over the appointment of Kathie Eckman as the city’s mayor and over the process of filling the seat left open when Chris Telfer stepped down in January to join the state Senate.

...Before moving on to the goal-setting discussion, the council took more than an hour to address the divisions that emerged over the past several weeks. During the conversation, some councilors said they were disappointed with how Teater’s appointment had played out, but were ready to move forward.

“I agreed to run again for the City Council because I believe I can do a good job and I believe people supported me for that,” Eckman said. “But I feel like my character has been called into question, and I am extremely disappointed because it’s been on such a public level.”

Others, however, said it will take more time for council members to begin to trust each other...."

There is an obvious public interest in the relationships between those that decide how to spend our tax dollars, whom to hire, and what to zone. Holding such an unnoticed and unrecorded meeting is against the public meeting laws of Oregon. This growing tendency to leave the public out of the process is not in the best interests of the City of Bend. Unfortunately, the only recourse available to citizens of Bend is at the ballot box every other year, or by filing a costly lawsuit in Circuit Court.

Here are those campaign financing numbers with short summaries and links to the entire funding lists:

Mayor Kathie Eckman Contributions
TOTAL $38,484.47
Self funding $8,538.76
COAH/COAR $17,671.34

Councilor Tom Greene Contributions
Total $27,729.34
COAH/COAR $16,292.34

Councilor Jeff Eager Contributions
TOTAL $40,359.34
COAH/COAR $20,671.34

Also, here are details of funding and spending by our local development PACs:

COAH Funding
TOTAL $115,263.40
Miscellaneous Cash Contributions $100 and under TOTAL $27,350.00
Central Oregon Builders Association TOTAL $79,106.92

COAH Spending
TOTAL $152K

COAR Funding
TOTAL $37,102.80
All but $100 anonymous

COAR Spending
TOTAL $26,259.26

And a new one I noted, the Bend Business PAC:
BBPAC Funding
TOTAL $8,065.00
Bulletin in-kind $4000

BB PAC Spending
NOTE: $1625 to Eckman, Greene, and Eager is shown by the council members filings but not shown in the BB PAC filings. Filings by unelected candidate Don Leonard also show $1625 in contributions by the BB PAC

It is interesting to see our only local daily paper, the Bend Bulletin, has decided to fund some candidates in the City Council race as well as reporting on them. This would seem to be a major ethical violation by the elephant of local journalism. That's an interesting and somewhat troubling juxtaposition-our only daily newspaper funds a local political PAC that backs several candidates, editorializes for electing all but one of them before the election. It then editorialized for the last of the four, Don Leonard, to be appointed to fill the vacancy after the election--not once, not twice, but three times. In fact, if you read the pre-election editorial on the Bulletin's preferred candidates, you see that even before the election the Bulletin stated

"Clinton’s opponent, Don Leonard, is one of the better candidates in the race. He has the misfortune of running against Clinton. Not to worry, though. Should Telfer win her Senate race, her seat will soon become available. We hope Leonard applies."

And this was done without any acknowledgment of the Bulletin's financial interest in the election.

That's our Bulletin. And these are facts that need much wider knowledge in our currently financially challenged little city.

Planning To Spend Ten's of Millions at JR

2009-02-13T08:41:00.000-08:00

The Juniper Ridge Management Board is hard at work planning the infrastructure required to build out the first 100 acres as quickly as ODOT will allow. The main needs are:

1) Power--Pacific Corp was sold a piece of land by the railroad along the western edge of JR for $1/sq. ft. This will be the future site of a new substation that will power JR and a lot of the rest of the northside. For the immediate future a temporary substation to power Suterra is being installed. This is going through the public process right now, although you may not be actually hearing about it.

2) Sewer, storm sewer and water under the roads. This also ties into power because the same ditch will likely be made wide enough to hold an underground power cable as well. This also brings into the issue the related question:

3) Exact grade and alignment of the arterial roads. The big ones that tie into that big double roundabout in front of Les Schwab, namely the 18th Street extension. Also the roads around Suterra will need to be precisely planned, as well as the second outlet which will probably tie into Hunter Lane, along the second parcel purchased by Pacificorp for a new service.

These details will all be incorporated into a Special Planned Area for presentation and public process in order to zone them such that Suterra and other companies can move in. CC&R's will be part of this planning as well.

ODOT wants a viable financial plan, which the City is planning to present at a OTC meeting in March. ODOT's Mark Devoney suggested that for the foreseeable future the City should plan on approaching ODOT about more traffic piecmeal, as the companies that want to move in sign up. That will make it easier for ODOT to approve an increase in traffic. Mark suggested that a company should be limited to a maximum of 50 PM trips during peak drive time, and that mitigation measures like shuttles, off-peak shift turnovers, etc. would really help ODOT in making a positive decision.

Suterra construction is moving along at a fast pace. They want to move in by June 30th, but July 31st is more realistic. Some pics I took recently of the construction site, looking from northeast through east to southeast:

The Purchase and Sale Agreements with Suterra and Pacificorp have been signed and executed. the JRMB is working as fast as possible to be able to start selling more land this fall, after the Special Planned Area is officially zoned. This area will place certain types of companies in different places, such as high end office and R&D on the south end, warehousing along the west side by the railroad tracks, etc. Ray and Jeff will be involved in selling the first 50 acres when it is ready.

The Les Schwab Headquarters is in place and functioning:

Up to this point all sales have been "net negative", as Jerry Mitchell put it, meaning it has cost more to build the infrastructure than the sale price. Bend taxpayers have been covering the extra cost, and will well into the future with the bonding necessary to build out the infrastructure.

The approved UGB includes land for a future university at Juniper Ridge. There seems to be a conflict of interest concerning this with the newest member of the City Council, Oran Teater, who currently sits on the Juniper Ridge Management Board. Mr. Teater also sits on the OSU-Cascades Campus Board of Advisors, which would seem to place him in a position directly competing for funds with any future JR University. I will try to interview Mr. Teater and determine where he stands on this issue.

Bend's Defaults Triple From Last Years Record

2009-02-12T18:12:00.000-08:00

Only a month and a half into this new year, Deschutes County records show that Notice of Default & Election to Sell notices have tripled from 128 to 373 through Feb. 12th. That is an astounding number in a county of 150,000 or so.

With a new City Council firmly funded and behind a developer mindset, this is a particularly worrisome development. We have an incredible level of empty homes, 1/3 of those presently listed, and the only answer seems to be to delay any further fees and encourage even more building.

We need jobs. Without jobs we can build thousands of homes, and the only occupants will be the homeless brave enough to break in. Period.

What has our Good Old Boy Network created for jobs? Juniper Ridge is the big push, but virtually every job there is one moved from another part of our small regional area. Les Schwab from Prineville, Suterra from the Old Mill District, Pacific Power.

Can this possibly be called job creation?

NO.

And to see yet another Good Old Boy, namely Oran Teater, coronated as the savior of the City Council, as the savior of Bend, is disturbing, disgusting, and disappointing. Oran led us into the start of the bubble. He is a financial advisor dedicated to increasing his clients net worth. Many of which clients are invested in local development.

Folks, we can't build our way out of this mess. We've tried that. It's time to find another paradigm.

A paradigm that pushes jobs that bring in dollars.

Oran's Coronation as Savior of Bend

2009-02-10T19:59:00.000-08:00

This morning featured the swearing in of Oran Teater as the seventh, tie-breaking City Councilor. Mr. Teater did not apply for the position, and was begged to become part of the City Council by Mayor Kathie Eckman less than an hour before the "emergency" meeting that voted on his "candidacy". This meeting was only noticed to select media, and notably not to our local progressive media at KPOV radio. A lawsuit is reportedly in the works from KPOV, as their reporter Tristan Reisfar was reduced to beating on locked doors trying to gain access to this supposedly public meeting.

Interestingly, Bill Robie, Central Oregon Association of Realtors lobbyist, was the only "public" individual present other than Councilor Jim Clinton's wife. Exactly three media outlets were present as well. A very small and select group were present for this very important vote.

Mr. Teater is also a member of the Juniper Ridge Management Board. He has a long history in Bend, with several years on the Council prior to 2004. He was also Mayor for a couple of years.

I sense very little commitment to even acknowledging a taxpaying citizen of Bend such as myself by Mr. Teater. He limits his interaction to those who he deems "important", while pointedly passing over those of us without an insider tag. He seems to be above "the little people", as if those who actually pay for city services are unimportant unless they hold a public position.

You can listen to the travesty of public process by downloading the MP3 recording. In this you will hear the increasing divide between the Good Old Boys and Girls group and those like Councilor Clinton who much prefer a real public process. Like what was occurring before this last minute vote.

Although Councilor Clinton was refused his request to know the agenda of the "emergency" meeting, candidate Don Leonard stated he was told a half-hour before the meeting that Mr. Teater was to be installed in the last Council position.

To quote Councilor Jim Clinton:

"...It's a slap in the face to the people who applied for these positions...now somebody's being brought in who wasn't even involved in it...now the majority has gone, [and] cooked up this back room deal...are railroading through [this name] just a few hours before the deadline...it's just wrong, it's just against what we are trying to do here make the City government open and transparent...cooking up this back room deal is just wrong."

I couldn't agree more. The Good Old Boys are back in charge. That feeling was strongly reinforced by all the glad-handing among the important people after Oran's swearing in. Whom were about all that were present.

Public process took a beating in Bend the last few days.

FLASH--Summit 1031 Bankruptcy Petition

2008-12-29T14:05:00.001-08:00

Just received a copy. Here is the link. Right-click to download and save.

Couple of notes on first read:
1) It is dated 12/19/08, after the initial 12/15/08 statement.

2) The retainer was $275,000 or $250,000. It's unclear, as one clause says Sussman Shank has received $275,000 before the filing, and another states "...retainer in the sum of $250,000."

3) Of the 20 largest unsecured debts, all from unfinished exchanges, only three are from Oregon: the Tennant's in Portland, $1.035.266.66; Home Valley Bank in Grants Pass, $547,936.88; and the Miller's in Bend, $756,598.82. The other 17 are scattered around the west.

4) A rough tally of the total owed to the top 20 creditors is $21,560,550. The largest creditor is the Alessandro Family Trust, from Rancho Santa Fe, CA, at $2,999,961.

5) The four principals-Neuman, Stevens, Lyon, and Larkin-each own 25% of the company.

The matrix of debtors is not included, so there is a lot more not shown. I'll try to get it from the court.

After I run OCR on the filing I'll update the download with a copy that is searchable.

Many thanks to Ryan Frank at the Oregonian for forwarding this to me. He has a copy and a post about it on his blog as well: blog.oregonlive.com/frontporch/

More Layers Of Management Coming For JR

2008-12-29T09:38:00.000-08:00

From the Bend Bulletin:

Manager sought for Juniper Ridge
Bend hoping to find development specialist for project

With a large amount of infrastructure work to complete, ongoing transportation-related holdups and a second business set to move in, Bend officials are looking for some outside help with the commercial development of Juniper Ridge.

Currently, the city’s 1,500-acre project in northeast Bend is managed by a large and sometimes confusingly structured group of people that includes the Bend City Council, city officials, the project’s former master developer and the Juniper Ridge Management Board, a five-member volunteer group of residents with experience in business, development and government.

But now, city officials are looking to bring in another person to serve as Juniper Ridge’s development manager, a contract position city officials said will be key in helping to organize future land deals with businesses interested the project and oversee other elements of its development...

This will be the fourth or fifth group brought in to move JR forward, depending on if you count the Juniper Ridge Management Board (JRMB). We are still paying Juniper Ridge Partners i.e. Ray Kuratek and Jeff Holtzman (JRP) 6% of every sale of the first 50 acres sold beyond the 20 acres that Les Schwab bought and optioned, per the Option Agreement. This is on top of the $2,515,000 paid to JRP for turning over the Master Plan they developed with Cooper-Robertson.

Three firms were interviewed on a full blizzard of a day in Bend: "James “Jim” Carnahan, a Bend development manager and engineer who formerly worked with David Evans and Associates; Dike Dame, the president of Williams & Dame, the Portland firm that developed the Broken Top golf resort; and David Ditz, a Colorado-based development company owner."

According to John James, Chair of the JRMB:

“The city wears two hats — the city’s normal situation is the regulator, which they do well, and also the developer, and they don’t do that as well,” James said.

“The idea is to get someone independent, from the development community to report to Eric (King) and this board and try to get all the infrastructure and entitlement issues taken care of, which are significant in 2009.”

City manager Eric King indicated the Development Manager would be paid from money budgeted for Juniper Ridge operations.

Due to the blizzard, I stayed home after seeing five accidents within six blocks of Brookswood. More when I speak with Mr. James and read the meeting minutes.

Unfortunately the minutes will probably not be available until after the selection vote by the City Council.

Abuse of Public Process by the City of Bend

2008-11-29T11:46:00.000-08:00

The upcoming Bend Planning Commission meeting on Dec. 8th is a fine example of the abuse of public process by the City of Bend. The last item on the agenda of this meeting is one given little attention, one that is a gift to developers, and one with a preconceived outcome.

This item is a Code change that will give developers an unlimited number of extensions on their approved plans, even if there are changes in the applicable criteria.

The reason for providing additional extensions as needed is stated in the Transmittal Memo provided to the Planning Commission:

DISCUSSION: Because of the current economic crisis, many developers are unable to execute their approved planning permits, which requires the initiation of construction. These developers intend to build their projects and desire to keep their planning approvals active until the market allows them the financial ability to submit their building permits, pay their SDCs and commence construction. As the economic climate continues to stagnate, these developers are approaching the end of their one-year extensions. The proposed Code amendment will give the City Council the ability to recognize the economic environment of today as a reason to authorize one or more additional extensions.

So, in fewer words, developers are nearing two years since gaining their approvals, and still can't find financing with which to actually start building. They have already received a one-year extension on the original one-year approval period, and want more time. As much as they need.

Now this may be well and good for the developers, and perhaps even for the city if these developments, like Mercado, eventually gain financing and are built. The city stands to eventually gain income from permit fees and SDC fees when the developers finally find financing. If the underlying economic reasons for these developments continue to exist, of course.

But before we get to the question of the underlying economics to further development in Bend, lets look more closely at the legally required public process being followed to implement these code changes. From the already posted official Recommendation to the City Council

CONCLUSION
On the basis of this record, there is a public need or benefit for the requested text amendments to the City of Bend Development Code, the request is consistent with the applicable State land use law, and the request is consistent with the applicable Bend Area General Plan goals and policies.

So what exactly is this public record? After all, the first I have heard of this is in a comment on the BendBubble2 blog.

Looking at the recommendation again, it states before the conclusion that:

1. The applicant, City of Bend Planning Division, initiated the Development Code text amendment on November 5, 2008.

2. The application was submitted in accordance with Section 4.1.300 of the Bend Development Code. Timely and sufficient notice of the public hearing, pursuant to Section 4.1.315 of the Bend Development Code, has been provided.

3. On December 8, 2008, the City of Bend Planning Commission conducted a public hearing to accept testimony on the request. At the conclusion of the hearing, the Planning Commission voted to recommend that the Bend City Council approve the proposed text amendment. The Planning Division staff report and recommendation together with the testimony of the persons testifying at this hearing have been considered and are part of the record of this proceeding.

Re-read item 3, noting the date.

Yes, on the day this recommendation is going to be voted on and submitted to the City Council for a rubber stamp vote, a public hearing will be held and the city staff already knows what will be said in the public hearing. And they know how the Planning Commission voted.

Amazingly prescient. These city staff guys are good, no?

Or are they just trying to sneak something through without real public review, but only the appearance of a public process?

Let's look at the actual code change, to see what really is being proposed:

Proposed Bend Development Code Text Amendment
(New language is underlined; deleted language is struck-through)

4.1.1310(C) Extensions:

1. The ~~Planning~~ Community Development Director may grant one extension of up to one year for a ~~land use~~ development approval or a phase of a ~~land use~~ development approval, ~~unless the applicable criteria have changed,~~ if:

a. An applicant makes a written request for an extension of the development approval period; and

b. The request, along with the prescribed fee, is submitted to the city prior to the expiration of the approval period.

2. The Community Development Director may grant one or more additional extensions beyond one year if authorized by a City Council resolution which recognizes a city-wide need for an additional limited-duration extension. The additional extension may be granted if:

a. The applicant has exhausted all other extension opportunities; and

b. The applicant satisfies the submittal requirements of (1)(a) and (b) of this section.

So we see the power of granting unlimited extensions, even if "applicable criteria" change, devolve into the hands of a single person--Mel Oberst, Director of Community Development. To me, Mel is one of the good guys, but this is disturbing.

Is this good for Bend?

Should we have a more open public process before making such decisions that impact our city income and landscape?

If you think so, you should go to the City Council bio page, where you can click through to each members bio and email address, and tell them you ARE paying attention.

Also send emails to the following staff, asking them about the public process and how you can be involved:

moberst@ci.bend.or.us
citymanager@ci.bend.or.us

This ongoing trait of minimal public involvement in city decisions must come to an end if we are to survive the current financial crisis. With good management, realistic management, we will work towards filling all the commercial and residential real estate that is empty now, rather than trying to build our way out of this mess.

Sanity must prevail in the long run.

JRMB Meeting: Power Issues, Suterra PSA Still Unsigned

2008-11-10T19:21:00.000-08:00

The Juniper Ridge Management Board met again today, along with a whose who of local developers: Mike Hollern, Todd Taylor, Bruce Kemp and Darren Powderly of Compass Commercial, etc. The subject of this part of the meeting was the absorption rate and pricing for JR. It was eventually established that absorption of 10-15 acres per year was probable, and that a $7 sq. ft. price was a good baseline. It seems that industrial dirt goes for closer to $4/sq. ft., while office dirt is/was closer to $30/sq. ft. All agreed that prices had gone down by 30% to 50% in the last 12 months.

A much more egregious issue is power to the site. As Chair John James noted, if they can't turn on the lights, they ain't going to come (my interpretation) and it ensued that Pacific Power is at least 18 months away from building a substation to provide power for anyone other than Les Schwab. Suterra is going to require a special temporary line, the payment for which will be an issue, for whatever power they end up needing. There was discussion of whether Suterra is expecting power to their property line. No one really had an answer. Angie from Pacific Power roughly estimated cost of a temporary solution at around $100,000.

Suterra seems to be very less than forthcoming with its power consumption figures. They are designing an entirely new manufacturing process, and although both the city and Pacific Power have been repeatedly requesting power load information, they just today supplied a partial answer. They don't seem to really know.

There was also a few minutes spent on the issue of architectural review of the Suterra facility. It was decided that city staff would lead this, and everyone else would rubber stamp it.

But the most interesting thing was that issue nobody wanted to talk about publically: there is still no Suterra Purchase and Sales Agreement signed by both parties.

Even though I was provided a copy that was signed by one Craig Cooper, SVP of Suterra, LLC. It was not signed by Eric King, City Manager.

Which seems very odd to me.

I was then booted from the room because they started an Executive Session to discuss this issue.

To be continued...

Suterra Progress Pics

2008-11-03T08:04:00.000-08:00

Suterra was given an entry and grading permit before the sale was finalized. Knife River has had a crew out working for several weeks, so I went out to take a few pics over the weekend.

The pad looks finished:

Knife River heavy equipment all lined up and looking ready to load up:

Suterra hopes to start the foundation as soon as the zoning change being voted on Wednesday night is in force, perhaps as soon as Nov. 12. The city is responsible for running roads, sewer and water, at a projected cost of $3.5M.

My next post will go over some details of financing Juniper Ridge development and compare that to the cost to the General Fund, and how it affects the rest of the citizens of Bend.

Juniper Ridge Management Board Report

2008-11-02T20:12:00.001-08:00

The Juniper Ridge Management Board met last Wednesday for about the seventh time, under the rather forceful guidance of Chair John James. City staff attending included John Russell and Jerry Mitchell, Mel Oberst, Sonia Andrews, Eric King, and several others. There was also an ODOT presence. The JRMB is aggressively moving forward with financial and physical planning to be ready if and when the ODOT/Cooley/97 issue is resolved. This issue, which will require $50M in identified revenues to overcome, is critical to any future land sales. This large amount of required monies is definitely on the radar of the JRMB.

One of the sources of this $50M will be the trip fees paid by users ranging from Suterra to Super Walmart. It is anticipated that their will be 2900 trips available, with a per trip cost of $9000. The City of Bend will pay $3000 of this fee. The total available from these fees is about $26M, a little over one-half of the required $50M. That means Bend taxpayers will be paying another $8.7M towards Juniper Ridge buildout in "helping out" the companies that want to build around Cooley/97. That includes Super Walmart.

This "co-pay" was first discussed in an Executive Session which was broadcast into the hallway by mistake, which I happened to overhear. That is illegal, and is definitely an issue going forward. As is calling in Suterra to an Executive Session to discuss their financing capabilities before the no public discussion, no public comment council vote on the sale of city land to Suterra.

This abuse of Executive Sessions simply must be confronted and stopped before the installation of the next City Council.

The city anticipates that the other $24M will come from land sales at JR and from bonds supported by the JR redevelopment district. However so far land sales have resulted in multi-million dollar losses due to the cost of infrastructure improvements agreed to by the city.

The next steps to developing JR including such mundane but detail specific items as overlaying streets, working with Pacific Power on a substation, and working with yet more consultants on design standards and CC&R's. The JRMB anticipates meeting at least twice a month through the end of the year to move these items along.

Also high on the agenda are two upcoming meetings with the Oregon Transportation Commission. For the first meeting on Nov. 13th the city plans to present a general overview of its plans to improve surface streets in the vicinity so less traffic will be pushed to Cooley/97. The second meeting in January will flesh this proposal out by identifying specific funding sources to actually build these streets. These meetings will be preceded by a North End stakeholders meeting on Nov. 6th, showing maps of the planned surface street and other improvements.

The next JRMB meeting is Nov. 10th. It is an open public meeting, and while not explicitly encouraged, the public is officially welcome. Meeting details are way down on the right side of this city web site: http://www.ci.bend.or.us/depts/urban_renewal_economic_development/index.html

UPDATE: Suterra Sale--Site Pics, Cali Spraying Controversy

2008-10-24T14:05:00.000-07:00

First, a link to the actual sale agreement in a searchable PDF:

Suterra Sale and Purchase Agreement

Went out to the worksite earlier today and I am amazed at how far along Suterra is on site preparation. There were approximately 20 pieces of heavy equipment breaking rock and moving rock and dirt. If you go out to the new Les Schwab building at the east of Cooley and turn north at the double roundabout, the Suterra site is about 800 yards north. Here are a couple pics:

There was so much going on I didn't want to get too close. I'll try again this weekend.

According to the Sale Agreement, Suterra has had site access since Oct. 4th in anticipation of an agreement. They want to be in the facility next summer-fall from what I've read.

On another Suterra note, Buster has flipped into full research mode on Suterra spraying their Checkmate products from the air in the Bay Area. The stated purpose is to control the Light Brown Apple Moth. There is far more controversy than anyone knows about, including lawsuits, injunctions, city resolutions, state and federal intervention, secret hazardous ingredients, sealing of court records, etc. See the comments at BB2's last post for a whole lot more. It's rather disturbing.

There are plenty of very unhappy folks in the Monterey and Santa Cruz areas over this matter. They've even set up several dedicated websites:
http://www.lbamspray.com/
http://www.stopthespray.org/

For more info here is a Google search for "lbam spray".

I really hope Suterra is a good neighbor to us here in Bend. This kind of stuff is where public process really needs to be proactive. I will further such efforts after the election, so as not to inadvertently help even more pro-development candidates get elected. Candidates like Tom Greene, Don Leonard. Kathie Eckman, and Jeff Eager.

If you have had it up to here with the Council, please consider writing me--Bruce Ewert--in for Position 3. I know I'll get at least one vote :) And I will be in a position to be even more proactive about ending the abuse of Executive Sessions.

There was a ton of activity around the Les Schwab building as well, including a couple of moving trucks that look to be bringing in office equipment. They look really close to moving in. I'll try to get pics soon, without all the trucks and other equipment.

Juniper Ridge is moving forward fast. Here's to keeping it much more public and making sure it doesn't bankrupt the City.

Secrecy Surrounds Suterra Land Sale

2008-10-23T04:53:00.000-07:00

The City of Bend has entered into a Sale and Purchase Agreement with Suterra for land at Juniper Ridge. According to earlier media reports, this purchase is for eight acres at $7 a square foot, a purchase price of $2,439,360. Juniper Ridge Partners will received a fee of 6% on this transaction initiated by Suterra, about $146,000, for some kind of ill defined services that have no documentation. The cost to the city to prepare the site is estimated to be $3.5 million, which will also serve future tenants of Juniper Ridge when the City/ODOT logjam over traffic on Highway 97 is solved. City Manager Eric King estimates this will happen in the spring of 2009.

Only four of the seven Councilors actually made it to the special Joint Session of the Bend Urban Renewal Agency and the City Council (BURA is the City Council), with Councilor Friedman attending via conference call. Councilors Abernethy and Clinton were not in attendance.

Once again a disheartening level of secrecy surrounded a transaction at Juniper Ridge. The meeting was called to order by Councilor Telfer and immediately recessed into Executive Session "to discuss real estate issues" for almost an hour. Suterra executives and EDCO director Roger Lee left he executive session early, and then the Suterra execs were summoned back into the Executive Session again by Economic Development Director John Russell. When the execs came back out 15 minutes later, they were complaining to each other about being questioned so strongly on the subject of being able to finance their project.

The Purchase and Sale Agreement was not available to the public before, during and after the vote on the agreement, and there was no public hearing held before the vote on the agreement, which passed 5-0 on the condition that Suterra provides adequate proof of financing capability to the City. There were public hearings held on the two topics regarding financing issues, specifically to allow the entire purchase price plus another $200,000 from the General Fund to be transferred to the BURA Juniper Ridge Construction Budget to build out the area. The City will also not pay itself over a million dollars in SDC's related to the Les Schwab purchase until some future date, will maintain it's $6 million line of credit until some future date, and will continue paying the $120,000 per year in interest on the line of credit.

No public comments were made. The meeting was not held at the normal time of Council meetings, but rather at 4 PM on the fourth Wednesday of the month, and virtually no public was in attendance. The three votes and all council discussion took about 20 minutes. Most questioning was by Councilor Telfer regarding taking monies from the General Fund for this project. Telfer was the only Councilor to vote no on any of the three issues. Finance Director Sonia Andrews stated that the City could increase it's line of credit by $200,000, but that it was easier to take it out of the General Fund. None of the other Councilor's seemed to take issue with this, although we all remember several hours of discussion over using $70,000 to fund the transit system.

I was told by City Attorney Pete Schannauer that there was no requirement for a public hearing on this public land sale, and that for unspecified reasons the agreement was not made available to the public prior to the special Joint Session. ORS 221.725 states that "...when a city council considers it necessary or convenient to sell real property or any interest therein, the city council shall publish a notice of the proposed sale in a newspaper of general circulation in the city, and shall hold a public hearing concerning the sale prior to the sale." Pete and Economic Development Assistant Director Jerry Mitchell assured me that I could receive a copy of agreement the next day, today. I will update this post with a link to the agreement if and when I receive it.

Suterra seems to be an excellent tenant for Juniper Ridge. According to Suterra President Steve Hartmeier the average salary is $90,000. Five to ten new jobs will be created per year, in addition to the 50 or so employees that will move from the current Suterra facility in the Columbia/Simpson area, which has almost 200,000 square feet of space empty and available already. Suterra creates pheromone-based insect control products. Suterra claims a high level of safety, although there have been reports of extensive safety issues with aerial applications in California.

This reporter has no issue with the tenant but does take issue with the process. Secrecy and extensive Executive Sessions have no place in the public process, and in fact are tightly regulated to certain issues that the City of Bend has far exceeded. This is an issue that will be further examined in the near future, as I firmly believe that the next City Council needs to become much more open, especially as the Highway 97 issue is cleared up and further lands are sold in Juniper Ridge. Also the continued significant payments to Juniper Ridge Partners for completely undocumented "services" is very troubling.

City Strategy At Odds With ODOT Plans

2008-08-28T12:33:00.001-07:00

Last week there was an Oregon Transportation Committee meeting at Eagle Crest, with it's main focus on the Hwy 97 realignment. The city gave a long presentation of traffic studies and other data supporting its desire for a Cooley/97 interchange to allow further development at Juniper Ridge in the very near future.

To my surprise, the OTC has already, back in March, decided that they did not want any direct connection to Hwy 97 from Cooley Road. Their guidance document from March, 2008 states:

IV. Cooley Road - Preference is to include an overpass at Cooley Road and US 97, with no direct access to US 97.

This came as a complete and utter surprise to me. After all, we went through a several months-long process last year going over various scenarios for improving traffic flow at the Cooley/97 intersection. An idea that has been shelved, it seems.

In reality, the city's plans for Juniper Ridge are seen as a detriment to traffic flow on 97, and the OTC and ODOT have continued to press for surface solutions for Juniper Ridge and other local traffic in the area. Local roads for local traffic.

Simply put, the OTC and ODOT do not want Bend's proclivity for allowing development to exceed traffic flow capabilities, such as with the ProTerra development on the Mt. Bachelor bus parking lot, to cause their main north-south conduit east of the Cascades to fail.

I contacted the OTC to clarify this stance, and received this email from "ODOT Bob":

Bruce - I was asked to respond to your request. I've attached the slide from the presentation last week that references guidance that we received from the Transportation Commission during a presentation in February 2007. We have developed the alternatives for the US 97: North Corridor project consistent with this guidance, and we did not hear anything from the discussion last week that would cause us to change direction.

In fact, the traffic analysis accomplished as part of the project bears out the merits of the guidance at least as it pertains to the connection at Cooley Road. Any direct connection from US 97 at Cooley Road that would serve future development in Juniper Ridge causes the Parkway through Bend to fail. The traffic model shows that trips from throughout the community would use the Parkway as opposed to alternative local routes if their destination is Juniper Ridge. This additional local traffic volume would exceed the capacity.

Bob Bryant
Region Manager
ODOT Region 4

The emphasis is mine.

To my simple mind, it seems that the city is pushing ahead with plans that are at loggerheads with those who actually control the state's highways. And that is a no-win situation.

The Chair of the OTC stated that she supported funding of local arterials to take the pressure off of state highways. The idea being that state highways need free and clear flow, and local traffic is local traffic. Perhaps our city staff and council should explore this idea. Explore how to build a local traffic system that intersects with the state system on their terms. One that supports the local businesses and provides alternatives to the parkway.

One that might actually win support and funding from the state.

It might be an even better idea to try to really work with those who control highways 97 and 20, rather than continuing to push a homegrown solution against ever more fierce resistance.

Analysis of Juniper Ridge Tilt Towards Residential Uses

2008-08-05T13:43:00.000-07:00

I've put together a table that shows how planned land uses at Juniper Ridge tilted heavily towards residential, and have pretty much stayed that way even though Allan Bruckner was quoted in the Bulletin as being happier that more land was to be used for employment purposes. The numbers denote acres:

Plan Developer	OTAK	JRP	C-R
R&D/LI	643	350	350-400
Office/Commercial	46	50	75-150
Residential	154	510	500-600
Mixed Use	75	75	75-150
University	154	200	175-235
Parks/OS	183	175	150-175
Roads/Facilities	245	140	125-150

Note that the R&D/Light Industrial land use of 350-400 acres in the C-R plan that was approved includes 100 acres for 10+ acre parcels. That's it. Les Schwab already has 12, with an option for 8 more. Suterra has formally requested 10 acres. Pepsi has informally requested 10 acres. At this rate large parcels will be gone in a year or two, unless the City ignores the master plan and continues to sell large plots.

This is exactly what the City seems to be doing in the case of the Suterra request. My next post will cover that-a 10 acre parcel adjacent to Les Schwab, either north or west. This overlays planned parcels of 2-4 acres. And I have questions about how the City is moving forward with this sale despite JRP's exclusive three-year option on the 50 acres surrounding the Les Schwab property. Are we setting ourselves up for another lawsuit?

To say nothing about the emergence of a possible new sales deal with JRP, which may or may not be discussed at tomorrow's City Council work session. While, at least publically--I suspect it will be discussed in Executive Session.

Just as a $3000 per trip Bend-taxpayer-funded "incentive" to help defray the $9000 per trip cost of temporarily fixing Cooley Rd was discussed in the last Executive Session, and is revealed in the letter to Suterra from Econ Dev Director John Russell. That is if ODOT can be bent over and twisted into agreeing with the City's plan to increase congestion at Cooley/97 just like they plan to do around Simpson and Columbia for Proterra's development of the Mt. Bachelor Bus Parking area, according to the BULL:

Bend roads compromise may pave way for similar agreements

A compromise agreement between the city of Bend and a developer over road improvements in southwest Bend could set an example for other areas of the city...

Proterra’s plans for a mixed-use project with condominiums, offices and retail space were shot down by a city hearings officer earlier this year because of the amount of traffic the project would add to nearby roads...

City officials agreed that at that latter two intersections, they would tolerate slightly more congestion in the near term as a result of the development’s traffic...

The compromise with Proterra — in which the city will not require full traffic improvements for new development, tolerating slightly more congestion instead — sets a new precedent...

By agreeing to the compromise, the city also believes it can pressure the Oregon Department of Transportation to do the same thing at Cooley Road and U.S. Highway 97.

ODOT has said no new construction can happen near that intersection - including at the city’s 1,500-acre Juniper Ridge development - unless the city comes up with $40 million to upgrade the intersection.

Instead, the city is trying to reach an agreement with ODOT that would allow slightly more congestion at the intersection, which is most clogged during the morning and evening rush hours.

Mayor Bruce Abernethy and Councilor Bill Friedman agreed at Monday’s meeting that the city’s move to allow more congestion on its streets would put it in a better position to convince ODOT to do the same thing.

So the Council is saying "we like screwing over our own citizens, would you please do so, too!"

Just what we Bend citizen's want--even more congestion in the name of developer subsidies. Right. I bet you agree with that, kind reader. Just a little more "temporary" congestion in front of Lowe's on 97 during rush hour.

To be continued...

Sources for plans:
OTAK 8/05

Juniper Ridge Partners (JRP) 5/2/07

Cooper-Robertson, approved by City Council 7/16/08

Junper Ridge Master Plan Only Saves 100 Acres For 10+ Acre Plots

2008-08-01T13:39:00.000-07:00

All that talk about how Juniper Ridge is going to save Bend by being a place where larger employers can have a place for facilities covering 10 acres or more?

Yep, it's just talk. The final Juniper Ridge Master Plan, approved by the City Council on July 16, has only 100 acres set aside for large plots. That's awfully little, considering Les Schwab already has 20, Pepsi wants 10, and two more companies are stated to want 10 each.

I brought this up in public comments before the vote and Mayor Abernethy chastised me, stating the Council is very aware of the need for jobs, and that private landowners just outside Juniper Ridge will provide the necessary land.

He must know something I don't.

The old OTAK master plan that the Council deemed not good enough set aside 500 acres for large plots. Considering the paucity of such land in Bend, that makes a hell of a lot more sense. Especially considering up to 750 acres are being set aside for residential uses.

So someone tell me--where are the employers that will provide well-enough paying jobs to buy houses on that 750 acres be able to set up shop?

Please Support Stifled Unions

2008-05-04T18:45:00.000-07:00

http://www.tsweekly.com/index.php?option=com_content&task=view&id=2777&Itemid=71

Buying a Bulletin Ad Is Tough for Union

Bend’s Only Daily Newspaper must be so flush with advertising dollars that it can afford to be really picky about what ads it accepts – at least if they come from the union representing Bend Area Transit bus drivers.

Back in mid-April, Amalgamated Transit Union Local 757 tried to place an ad in The Bulletin urging the city not to raise BAT fares or cut service to cope with its budget crunch. The ad also claimed there is a “gross disparity in wages and benefits between BAT workers and every other city worker.”

The union originally wanted the ad to run on Tuesday, April 15, to publicize a press conference and rally to be held at Bend City Hall the next day. But when Catharine Alexander of the union submitted the ad to Bulletin account executive Lisa Legg, she was told the contents had to be vetted by the paper’s higher-ups before it could be printed.

“I sent your ad for approval to our management, who would like you to provide a back up for the claims in the ad,” Legg wrote to Alexander April 10 in an e-mail provided to The EYE.

Alexander responded by sending some supporting documents. Shortly afterward Legg e-mailed: “For each claim in the ad, we will need to know what page of the information you sent over pertains to that particular claim. We do not know how to look through each page and decide what goes with what.”

The next morning, Legg asked if the ad could run on Wednesday instead of Tuesday. “Can we still get Tuesday?” Alexander responded. “I can possibly get it in late, pending approval from management,” Legg replied.

But later that day, Legg e-mailed: “I just spoke to Sean Tate, our advertising manager, and Jay Brandt, our advertising director. They would both need to review every page of the documents that you sent, which wouldn’t be possible in time to run the ad. We would be happy to run an ad inviting people to come to the Press Conference and Rally.”

Alexander next asked Legg if Tate and Brandt could review the ad in time to get it into the Wednesday paper. Legg told her they wouldn’t be able to review it until Monday, when they both would be “on the road, which means we’d miss the deadline for Wednesday as well.”

Alexander then wrote that “we’re thinking the contents of the ad are timeless,” so it could run after Wednesday. She asked again when the ad could run.

Legg responded that “once our directors have gone over and approved the content of the ad, then we can get it put in the paper. If they approve it Monday while they are on the road we could get it in for Thursday.”

But as of April 21, Legg was telling Alexander that her “manager” – Tate, presumably – still wanted more corroboration: “He said that we will require verification of your information and not a list of phone numbers and people to call.”

The Bulletin still hasn’t published the union’s ad. But on April 28 it did publish an ad from Paratransit Services, the Bremerton, WA-based private company that operates BAT, attacking “the Portland union” for allegedly being uncooperative in negotiations.

And on April 20, it published an editorial calling the BAT drivers’ demand for a pay raise “astonishing.”

By April 21, Alexander apparently was getting exasperated. “The Union has placed similar ads in the Eugene Register Guard, the Corvallis newspaper, the Grants Pass newspaper and the Salem newspaper without having to prove anything,” she e-mailed Legg. “This has been true even when the editorial page has been against the Union’s position. If the publisher of the Bulletin doesn’t want to take our ad for political purposes the publisher certainly has that right. But the publisher should say so.”

Although I don't agree with the demand for an immediate raise, I do agree we need a transit system.

Public Safety Staffing May Be Cut To 05/06 Levels

2008-04-15T06:45:00.000-07:00

In a subdued meeting with much tallk about layoffs and not filling job openings, the most disconcerting news in the April 14 Bend City Council Work Session on department by department budget cuts were the proposed staffing cuts at the Police and Fire Departments.

This was so troubling to the City Council that they decided to move $100,000 from the Mirror Pond restoration fund to the Fire Department to ensure that all six stations remain open at all times, at least for the forthcoming fiscal year. Even then, Fire Chief Larry Langston stated that "two out of three days, we are out of EMS units for ambulance runs at some point during the day".

Police staffing is also going to be cut, both through not filling current openings and by not filling two openings created by expected retirements this summer. This should not affect call responses or violent crime investigations, but will affect the clearance rate for property and other low-level crimes. It is also expected to affect the budget due to reductions in traffic and other fines.

The complete elimination of Code Enforcement was proposed. Street maintenance is to be cut from $1.7 million to $700,000. The snowplow budget will be reduced to $150,000, in the hope that next winter will not require the $550,000 worth of plowing that this winter did. Transit cuts were proposed to eliminate Sunday Dial-A-Ride service and some mid-day fixed routes, along with bus stop improvements like benches, garbage cans, and shelters. The UGB process will be delayed, and there is concern that if the City is sued over the UGB there may not be enough money for legal defense services. Accessibility projects will see staff cut from six to three. The Affordable Housing budget will go from a proposed $2.1 million to $1.1 million. Engineering will be cut 40%, delaying transportation and utility improvement projects.

The Planning Department is being hit especially hard, as it is fee-based with supporting revenues from permits. Unfortunately, the residential permit level has dropped into the basement, and it turns out that the residential permits had been supporting the commercial permits all along. Department Director Mel Oberst stated commercial permit fees have never been high enough to cover required planning and inspection services, as commercial buildings are much more complex. The General Fund has been tapped to help pay for these services.

Reserves are being decimated, with most departments to only carry 1.5 to 2 months of reserves, while Transit will only maintain two weeks of reserves.

The "winners" seem to be the Community Development and Economic Development Departments, along with the Juniper Ridge and Airport Improvement projects. Both these departments are seeing year-over-year increases in monies from the General Fund, while the General Fund will be tapped to cover $250,000 in debt service for the Airport Improvements, and another $180,000 in debt service for the Juniper Ridge improvements required for the Les Schwab project. Both of these debts do not currently have a stable funding source for repayment.

City staff will return soon with specific immediate cuts, and also plans to revisit the subject in September, with further cuts possible depending on the economic situation going forward.

The residents of Bend will see a definite drop in services, from filling potholes to enforcing the sign ordinances, as the City battens down the hatches in the face of the oncoming recession.

All hopes hang on selling land this fall

2008-04-14T23:08:00.001-07:00

Following the City Council meeting this evening, a Work Session focused on budget cutting, I talked to Finance Director Sonia Andrews. We discussed the amount of funding going towards JR from the General Fund, which she stated as $180,000 for debt service on a line of credit to cover our obligations per Les Schwab. All potential cuts in the JR budget as presented last fall have been undertaken. We are still waiting on ODOT for a number of trips that can possibly result in land sales this fall.

Ms. Andrews characterized the City's position as "crossing their fingers" in hope of everything working out. If not, it's dead in the water for now, and the City is paying debt service on the $6 million we will end up in the hole until things turn around. Ron Garzini and, to a lesser extent, John Russell are the rainmakers. Ms. Andrews even admitted that even if the trips are OKed, she has no idea where the money to fund the $40 million Cooley/97 interchange will come from. That's on the Garz/Russell plate.

In a realistic aside, Ms. Andrews stated that even if they can sell 50 acres for only $5 a square foot, half of the $10 that Russell is promoting, but far more realistic for undeveloped land considering Les Schwab paid $7 for shovel ready with no SDC's, that she is off the hook because that $10 million will pay for costs incurred.

There was very little discussion of Juniper Ridge at the actual meeting. Much more time was spent on saving a $100K here or there, than on the big parts of the budget. My guess is that if the voters don't decide to fund the transit system this fall, it's gone. Capell and Telfer already question it's priority, especially considering the deep cuts to public safety.

But strangely, no one questions the developers subsidies through unrealistically low SDC's and permit fees, which has led us to this point. Growth has simply not paid for itself. Councilor Clinton is the only one who even brought this up.

Low SDC's and permit fees-->Planning/Engineering/Road/Utility deficits-->General Fund hits-->Public Safety cutbacks

As an example, consider the city of Troutdale. Per their SDC worksheet, a one-ERU residential hookup costs $4426, while according to the Bend worksheet, a one ERU hookup to the sewer is only $2038. Is Bend's cost really less than half of Troutdale's? Or are Bend taxpayers picking up the difference for the developer?

A Public "Mea Culpa" To Mark Capell

2008-04-04T02:53:00.000-07:00

I recently filed a complaint with the Oregon State Ethics Commission regarding City Councilor Mark Capell and his votes on issues regarding Knife River Corp. and President, Todd Taylor, Mark's cousin. Mark's mother and Todd's mother are sisters, as Mark informed me Wednesday.

This was in error, as it is completely legal to vote this way. Oregon state law does not consider a cousin to be a relative in this regard. To quote the Oregon Revised Statutes on the definition of a "relative":

ORS 244.020 (14)(d) Siblings, spouses of siblings or parents of the public official or of the public official's spouse

So cousin's are fine, while in-law's are not.

Sorry, Mark.

UPDATED: For Sale: 10 Acres With View, Westside, Price: $0.00

2008-04-02T08:47:00.000-07:00

Or "How The Bulletin Lost It's Objectivity About Real Estate"

UPDATE: There was an actual exchange of property, with the Bulletin giving up property north of Olney. I am trying to figure out the exact details. The recordings are available at http://recordings.co.deschutes.or.us/ when you search with WESTERN COMMUNICATIONS INC in the Last Name field. Look for records around Oct. 18, 1999.

Deschutes County DIAL records show that the big headquarters building sitting above Mt. Washington and Century, this building, sits on land acquired for nothing:

The key pages of the DIAL document, pages 2 and 3, are these:

Note that sale price: $0

And you wonder why the Bulletin is so pro-Brooks Resources development?

Bend CC Spends $2.5M w/NO COMMENT

2008-03-19T19:45:00.000-07:00

I just returned from the Bend City Council meeting. They all voted for the settlement with Juniper Ridge Partners, in an amount over $2.5 million dollars and giving JRP the right to purchase the first 50 acres of Juniper Ridge land, with absolutely no public comment or questioning or anything.

$2.5+ million dollars from Bend taxpayers without even a cursory debate. Whatever debate was held was in secret, in Executive Session. Not to be heard be the people actually paying this bill.

This is not only disgusting, but also may be illegal. The State Ethics Commission will weigh in on this.

How can you call yourself a responsible representative of the citizen's of Bend and sign off on this without any debate.

Absolutely no public debate.

City's Hands Now Tied? Notes on JRP Termination Agreement and Exclusive Purchase Option

2008-03-16T04:47:00.000-07:00

Reading over the agreements terminating the City's nascent Master Developer relationship with Ray Kuratek's and Jeff Holtzman's Juniper Ridge Partners, LLC, one thing stands out: they gain not only $2,515,000, but also an exclusive three-year option on the 50 acres surrounding the Les Schwab property. At a price to be set by up to three appraisals (one by a City appraiser, one by a JRP appraiser, and, if there is no agreement, a third by an appraiser chosen by the Deschutes County Judge) which will almost certainly come in at the same price as Les Schwab paid, $7/sq ft with no SDC's, since that is the only true comparable. And then JRP gets a 6% "finders fee" knocked off the appraised price.

The mechanics of the agreement are that the city will deliver an "Entitlability Notice" to JRP, which will then have a total of 105 days to exercise their option and close the transaction, and will then have an additional two years to begin development. JRP will be responsible for all infrastructure improvements, and must prove their financial capability for such work to purhcase the property. It is an all or nothing purchase--the 50 acres will not be broken down for partial purchase by JRP.

There don't seem to be any usage restrictions, as the zoning has not been changed for this property as it has on the Les Schwab parcel. Their is no requirement for using the land for employment purposes, and in fact it states:

City acknowledges that through this Agreement, JRP is purchasing excess City property and is developing the same for JRP's own purposes and pursuant to JRP's own development plans. This is not a contract by which JRP is constructing an improvement for, or to the specifications, the City or any other municipality or governmental entity.

How is the city planning to develop anything at JR without JRP? How is the city planning to make our $50+ million dollar investment, counting the Cooley/97 interchange, back? Are we going to get badly need jobs or more unneeded housing?

Another interesting thing is that both Juniper Ridge Partners LLC and Heather Kuratek are listed as contractors in the Termination Agreement and Release. There is absolutely no indication of actual amounts paid to any contractors by JRP, and there doesn't seem to be any accounting or audit requirement at all. Just the desire to pay them off and get out from under any potential lawsuit.

Another thing that isn't clear is when does the time clock start ticking with entities like Cooper Robertson on the city's dime? Does this agreement provide the taxpayers with Bend a master plan at a known cost or are we going to continue to pay Cooper Robertson and others going forward? Is the city going to be billed from now on rather than JRP? These questions are not answered in the agreements.

My biggest concern is that map shown in the Option and Purchase and Sale Agreement:

This is the first 50 acres to be developed, what the city is hoping to be able to develop with the additional $40 million investment in the Cooley/97 interchange and subsequent sign-off by ODOT. According to the Issue Summary, the city is hoping to have a funding source for the new interchange in the not too distant future:

We are beginning to communicate with investors who might assist us in funding the 97/Cooley mid-term intersection improvement project. We hope to find a funding solution by Fall 2008.

Of course, this is six months behind what we were told just a month or two ago, but in this economic climate it probably isn't that big of deal.

What's going to be the by far more important part of any such agreements is the precise number of trips allocated to Juniper Ridge. Garzini has to negotiate the full 3000 for divying up between potential funders and JR, without any going to existing and future housing infrastructure in the area, or developing even 50 acres is dead in the water. I've heard several rumors now that the main source of this funding is going to be Walmart, in conjunction with the development of their land on the NW corner of the intersection.

Even with this investment at Cooley/97, the city will not be able to develop any more than 50 acres without other vehicular access, which is another big question mark. Where and at what cost? Perhaps the council and staff will inform us of their plans regarding this issue soon.

This will be an fascinating week. Signing up for a $2.5+ million payoff at the same time you are hearing about cuts in vital city services has to be gut wrenching for any members of the council that truly have the interests of all of Bend's citizens in mind.

Rumors of Bend Bulletin Real Estate Reporter's Demise Abound

2008-03-09T10:03:00.000-07:00

One casualty of the turmoil in Bend may be David Fisher, who covered the real estate beat for the Bend Bulletin. From the Bend Economy Board there is an interesting thread fleshing out a rumor reported in the alternative weekly,the Source:

Interesting week in The Bulletin's business section.

First, The Source comes out with this blurb on Thursday ...

Quote:
TV isn't the only one getting into the act. A little bird told us that a reporter across town, well known for his real estate coverage, walked out when editors insisted that he spin his latest story to emphasize the positive side of the housing slump.

Oh, well, what's one more fairy tale in makebelieveland?

That caused Bulletin Executive Editor John Costa to fan his line editors through the newsroom to assure everyone that said real estate reporter had really been fired for lying about being sick.

Which didn't play well with a lot of the staff, because this email had already made the rounds for a couple of days ...

Quote:
Charlene: (Apparently meaning Sharlene Crabtree, the Bulletin's Human Resources Director) Here's my response to the March 4 Separation Notice:

3-4-2008
I did not "lie about being sick." I took two days off after an article I wrote for the Feb. 26 paper was edited by my supervisor, Business Editor John Stearns, in such a way as to remove any facts or opinions that tended to disagree with a public speaker's rosy predictions for the local real estate industry. As I told him, my intent was to carefully consider why that particularly editing job, which I viewed as dishonest, upset me, and to calm down enough to rationally discuss the issue with him.

When I returned, I was not "questioned about the days off" -- I initiated a meeting with Mr. Stearns and told him, without prompting, that I had not been physically ill but needed two "mental health days," in my phrasing, to determine how I should best discuss my future with the paper with him in a calm, rational way, rather than forcing the issue when I was angry and confused.

I told him during that meeting on Feb. 28 that I felt that the editing job on my Feb. 26 story was part of a pattern of editing that included misleading headlines, sources being banned from my coverage, story ideas getting spiked, and odd pre-story cajolling, all of which seemed designed by the executive editor to generate more favorable coverage of the local real estate market than I have thought was best in the two years I have been assigned to cover it for the paper. I further told him that, although I believed that the articles I had written for the paper were as thorough and as accurate as I could make them, the utter hack job that was done on my Feb. 26 story had led me to conclude that the paper was not willing to cover the industry as honestly as it should, given that the housing market -- which is economically important to the paper -- is now in the midst of a steep downturn.

I asked to be shifted to another beat, including others that had been identified by the executive editor as important to the paper's overall coverage, such as the business of medicine, or the banking industry. I told him I felt that I would be allowed to cover those beats "straight," without what I perceived to be the editors' emotional desire to slant coverage of the real estate market.

He denied that the paper's editors intended to color the news and criticized me for taking the days off, rather than confronting him with my concerns immediately. I told him again that I felt that I needed the time to clarify my own thoughts before I attempted to have a discussion with him, but if he felt the days weren't covered by our sick leave or vacation policy, I would be happy to take them as unpaid time off.

Stearns told me on March 3 that he had discussed my request to change beats with the executive editor. I don't know what was discussed in that meeting, but I was fired the next day.

In conclusion, there was no violation of the ethics code. I was quite honest about my reasons for not coming to work for two days, and was, I suspect, fired for stating those reasons to my supervisor.

Thank you for allowing me the opportunity to respond.

According to a quick look at the edit trail in The Bulletin's computer system, apparently what set him off -- finally -- was an edit job on a story on Dana Bratton's pie-in-the-sky real estate "forecast" speech last Monday that scrubbed paraphrases from Bill Valentine and Brooks Resources honchos Kirk Schueler and Mike Hollern, all saying that they think the downturn is going to last a whole lot longer than the April 25 turnaround date that Bratton ladled out to the adoring real estate crowd at The Riverhouse.

That pesky stuff got axed on orders from Costa, who told his business editor to "stick to what was said at the meeting."

Out, too, went a section that pointed out that the ridiculous predictions that Bratton made last year of a quick RE turnaround also -- uh -- kinda failed to pan out.

Which left the good readers of Bend with the vision of Dana Bratton, grand real estate prognosticator, predicting that everything will be hunky-dory by May, contradicted only slightly by those notorious pessimists at the National Association of Realtors, who actually suggested that sales might not turn around until late this year.

Could it be an accident that all of this is happening a week after the Realtors and Builders announced their "Best Time in 20 Years to Buy a House" campaign? Complete with plans for a good, old-fashioned media blitz?

Journalism at its finest, and right here in River City.

A search on the Bulletin site shows Fisher has only couple of bylines since the Bratton story, while before he wrote something nearly every day. One of his last was "Sellers Offer Cold, Hard Cash To Get Homes Off The Market". Andrew Moore wrote the latest real estate story on Awbrey Butte's new homeowners association. So perhaps the pushback has really taken another step forward.

On a related note, I am now officially a stringer for the Bend Weekly, with a Press Pass on the way. My first article was posted here. Now I should be able to get into the Executive Sessions. I plan to offer a much more skeptical viewpoint then the other cheerleaders in town, and certailnly better than the crap in the Bulletin today titled "Juniper Ridge Q&A", which I would link to if it wasn't behind their paywall.

Plus there is that pesky little detail of the City Council making a $2.56M decision in Executive Session to pay off Juniper Ridge Partners. My biggest goal is to force greater transparency around this issue, and a major step forward in that process will occur this week. Stay tuned...

Wait, my math doesn't make sense

2008-03-03T18:19:00.000-08:00

But I still don't get how we are going to finance the build-out.

My 4 AM math was wrong on the 50 acre sale, as one acre = 43,560 sq. ft. Then 50 acres equals 2,178,000 sq. ft., so:

50 acres at $10=$21,780,000

50 acres at $7=$15,246,000

To put these numbers in perspective, we are spending $13+ million getting roads and utilities to the Les Schwab parcel of only 20 acres, and that doesn't count the $37-40 million to be spent on the Hwy 97/Cooley upgrade where we hope to gain 3000 daily trips.

Also we need to note that while 50 acres will be the nominal amount added to the industrial UGB, taking out roads, parks, etc. will reduce that by 10% or more.

Sorry for the error, though. It's embarrassing.

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JR Financing Just Doesn't Make Sense

2008-02-21T03:46:00.000-08:00

Big updates on Juniper Ridge tonight, some good, some curious. Short update now, as it's the middle of the night, with more to come.

The good: Les Schwab came through with a building that looks nice and, most important, creates jobs. Which is what JR is supposed to be all about. Open, natural light, pretty much as green as a building can be. Kudos to the architect and LS for making it happen. It's not a wart, which is a huge relief to everyone. The LS PR person promised to send me the latest rendering from their Powerpoint show tomorrow, which I'll post here. It is really very nice.

Now to the "curious": Could someone from the City please tell me just how we are going to finance this thing without going bankrupt? The sequencing just does not make sense to me. Let me try to sort this out better, as this was what was bothering me and it came together and woke me up just now.

City Finance Director Sonia Andrews gave an update on the JR financing, stating flat out that we don't have the money or the financing capability to even cover everything we are doing now for LS, and that some "hard choices" are going to have to be made if we don't make any land sales in the near future. And this doesn't include the $37-40 million for the Cooley Rd/Hwy 97 changes that need to be made. we need about $14M, and about half of the is going to have to come from a short term bank loan, which although it is going to be at a good rate (3%) it is going to have to be repaid, and the only source for repayment of it all is going to be next 50 acres in land sales at JR that will be made possible by the Cooley/97 upgrades if all goes as planned.

Ron Garzini passed around a letter he was proposing to send to local businesses to see if they were interested in purchasing trips to help fund the Cooley/97 changes, although there still seemed to be confusion over whether we had 3000 trips available or only 1500, according to ODOT. Ron was still negotiating with ODOT on this, as best I could decipher. It's a huge difference, one that could be a deal breaker in and of itself, so getting a clear answer on this is imperative.

But, even more incredulously, John Russell, Director of the Department of Economic Development, blithely stated that we would get enough from that 50 acres, which he seems to think will be an easy sale at $10 a square foot, to cover the shortfall for the improvements so far, i.e. to repay the $7+ million dollar line of credit from the bank, through a combination of cash from the sales and, I presume, bonds that the City will be able to sell once we have more taxes coming from that land. Mr. Russell stated that he expected to get $10 sq. ft. for the land.

And this is where my confusion began:

1) Les Schwab has set the comparable at $7 sq ft shovel ready, without SDCs, so unless Mr. Russell knows something I don't $10 a sq. ft. doesn't seem very realistic.

NOTE:UPDATED PER ABOVE
2) Even at $10, the proceeds are $21,780,000, while at $7 they are $15,246,000, leaving the issue of SDC's out of it for now. As an example of SDC amounts, LS was relieved of paying around $400K-$500K of them for their initial 120,000 sq. ft. building on 6 acres of their land.

3) This is where my head exploded--to have a chance in hell of getting $10, it is going to have to be shovel ready, like the LS land, with sewers, roads, etc. Which is going to cost millions of dollars. Which is going to have to be financed somehow, but the money from this next 50 acre sale is going to be used to pay off the bills for LS's 20 acres (not including the Cooley/97 bill) meaning it won't be available to pay for the infrastructure needed to make the 50 acres shovel ready in order to sell it.

Do you see what I'm getting at? Exactly. It just doesn't add up, let alone work out in the sequencing of financing and infrastructure improvements provided as the "plan" for getting out of this hole.

After the presentation I brought up the LS comparable and the infrastructure issue with Mr. Russell, and was simply and rudely dismissed as some kind of idiot. I followed him around and brought up the infrastructure issue again, and was simply told "No" when asking about if the City had plans to pay for it, and was again rudely dismissed and further ignored.

I must say that Mr. Russell is pretty damned rude to at least one of the citizens that are paying his salary.

So, I'll ask you again, Mr.John Russell, oh-so-much-smarter than myself Director of Economic Development, please tell us stupid tax-paying citizen's of Bend a couple of things, seeing as how you weren't willing to discuss them any further with me at the City Council meeting:

1) How is the City going to pay for the 50 acres of infrastructure needed to sell said 50 acres for the shovel ready price of $10 per sq. ft.

2) What company is going to pay $10 a sq. ft. plus SDCs when we sold Les Schwab property for $7 sq.ft. with no SDCs, and this is now the most direct comparable.

Because there are some real curious and not-feeling-real-prosperous-right-now Bend citizens that want to know.

You know the kind: they're the ones that pay your salary.

UPDATED--$2.56M To Dump Kuratek And Get Master Plan

2008-02-06T22:12:00.000-08:00

Mayor Abernethy read a short statement about the decision the Council had made in Executive Session before the regular meeting to accept the offer of JR Partners and move on. The Council handed out a news release, which I will link to when it is posted on their website. It states that the City Council has accepted JR Partners offer and directed staff and management to implement the agreement. Mayor Abernethy stated afterwards that he hopes to have the agreement finalized in 7-10 days.

The key points are:

1) The City pays JR Partners $2.56 million.

2) JR Partners completes the Master Plan over the next three months, working with the City.

3) JR Partners hands over ownership of the Master Plan to the City.

4) The MOU is no longer in force and there is no longer a Master Developer relationship, specifically including Section 11.5 and it's prohibition of the City working with other parties for six months after the new UGB, including some JR land, is finalized and in force.

In interviews, Mayor Abernethy stated this would finally allow the City to move forward, both with JR and with the Cooley/97 interchange. One huge sticking point to the interchange issue is that ODOT may only allow an additional 1500 trips, not the 3000 expected, stating that it believes that 1500 would be needed for additional neighborhood development in any case. This would increase the cost of a trip to over $25,000, if indeed it provided enough leeway for much further development at all. The City wants to sell these trips to adjacent businesses to help pay for the interchange, and even 3000 doesn't provide a lot of leeway for both sales and JR development.

The Mayor also stated that informal discussion among the staff may lead to eomployment development being scaled up by 100 acres or so overall, and maybe more if we yell and scream loud enough at the public input meetings that will be held. The Mayor provided the following quote via e-mail:

"I believe that we will change the mix between light industrial and residential and informal discussion among staff is to recommend 100 acres additional employment land. The final amount will obviously be decided after we have had a chance to listen to the public. I will say that there is no interest on the part of the Council to return to any plan that has all 1,500 acres designated as industrial."

The Council still strongly believes in the neighborhood center concept (including a water feature) with employment to the west. This would put industry on the Hwy 97 side, both within and outside of JR, with a neighborhood center or two on the canal side, with room for a university as well. I told him that the huge jump in residential acreage in the Master Plan, which we obviously don't need with all the empty housing in the City since we have been so overbuilt in the recent past, was what people were upset about, that they wanted family-wage jobs, not housing, and we were going to yell and scream about it some more, which he seemed resigned to. The Council's concept is the overriding thing it seems.

I plan to keep pushing towards a further move towards the OTAK 2005 concept plan, as seen on page 50 of the May 2, 2007 update. This had only 8-10% housing, 150 acres max. Here is that page, showing the OTAK "2005 Concept", the original industrial concept, and the current Kuratek Concept:

When you review this plan, which set off such a row almost 10 months ago now, it is amazing how many pages are devoted to the different types of housing for land that was to be used for a public purpose, which everyone at the time thought referred to jobs. Someone needs to do a housing count, just how many are empty, how many have been on the market and not sold and are now rented, how many subdivisions have how many empty lots. I think the count within a mile of me, around Silverlake and Reed Market, is probaly north of a 100. And heading out Reed Market and along 15th or 27th you can see many, many more, in subdivisions planned, started, or almost finished. Of course, adding even more housing to this overabundance will tend to bring the median price back to 4X average household income, under $200,000, even quicker.

One just wishes the overall concept paid more attention too all that empty, soon to be foreclosed Siberian Tract Housing on the east side, which could house employees while providing worker access to JR without using 97. I always thought that JR was supposed to be a Silicon Valley type addition to the City as a whole rather than its own cute self-contained Light Industrial/R&D Celebration type of town. But the Mayor guaranteed that the public will get several chances to input it feelings, although there most likely would not be a Public Advisory Board as the County suggested in their January working meeting together. The County repeatedly emphasized the importance of listening to and acting in response to public input in this meeting.

Mayor Abernethy also said that the City will not get the invoices for the work but will or had received other documentation of costs, which I will continue to pursue although it is a moot point with the cancellation of the MOU, but at least we will get an idea of what it actually cost JR Partners. If one wants to place blame for this fiasco of an agreement, it would be good to start with the signatories: Andy Anderson for the City and John Russell, head of the Department of Economic Development, for Bend Urban Renewal Agency.

The Mayor stated that he believes that there were four good things to come out of the decision to settle(thus breaking my rule of the strenght of three's) and was starting to go through them with me when he was called back into the Council meeting. He updated and clarified some statements via e-mail, including enumerating these points as such:

"Positive aspects of settlement vs. under the current MOU and stalemate in negotiations:

1. It enables us to develop and have ownership of a master plan for Juniper Ridge within the next 90 days. This timeline was undetermined and out of our control and we would not have ownership of the master plan if we simply terminated negotiations.

2. Having a master plan in place enables us to move forward on planning for the first 300 acres of Juniper Ridge. As per the MOU, we could not negotiate with anyone other than JRP until 6 months after the UGB expansion. This had the effect of tying our hands even on the 500 acres that was already inside the UGB!

3. Having a master plan in place will enable us to determine the trips generated by various forms of development in Juniper Ridge. This will be critical in helping us determine cost allocations to help pay for the Hwy 97/Cooley Road improvements.

4. It enables us to move forward without fear of a lawsuit by JRP. This was a risk that the City faced."

Additionally, I spoke with Sonia, asking her specifically about property tax receipts. She said that so far it look like the deliquency rate is about the same as the last few years, only 6%, and that we would know for sure in 10-14 days when the Budget Detail for January is finished. She is going to send me a copy and then we will have a meeting talking about expected shortfalls and cutbacks. We may yet survice this slowdown, although it will take severe belt-tightening. The $2.56 million going out is not going to help, because even though it is in the "assumed" costs (as the Mayor pointed out repeatedly to the media) it was not in the committed costs until last night. It was more like a contingency fund in that it was budget but wouldn't be spent unless actually needed.

Since it looks like City revenues are going to be at least $20-25 million under budget, we are going to need every dollar we can get to maintain service levels while continuing construction at JR and things like the Reed Market corridor. If month over month revenue continues to fall, we could easily be $30+ million under budget, which would be ugly. I am awaiting the budget detail for January with great interest, both for comparision with the sharp downtrend in December as well as for comparision over Jan, 2007. It will give us a better picture of what to expect going forward.

City Council Should Follow Laws For Using Executive Sessions

2008-02-05T20:18:00.000-08:00

“Information is the currency of democracy.” -- Thomas Jefferson

Our City Council could make giant strides in gaining citizen trust and support by following Oregon Open Government laws and properly noticing the secretive Executive Sessions it holds during virtually every City Council Meeting. It would achieve far more from this simple step than from any PR efforts it could make.

Instead, our Councilors hide behind a single line, seen in virtually all the City Council Meeting Agenda’s: “Executive Session pursuant to ORS 192.660 (2) (a through h)”. The minutes of a meeting states something like “Mayor Abernethy called a recess to Executive Session at 6:14 P.M. pursuant to ORS 192.660 (2) (a through h)”. Even during recent joint meeting with the Bend Metro Parks and Recreation Board there was evidently a need for secrecy, so the minutes reflect that “Mayor Abernethy called an Executive Session of both agencies pursuant to ORS 192.660 (2) (a through h) at 7:06 P.M.” A citizen may rightfully wonder what can and must be discussed in secret about our city’s parks. And Oregon law requires more than what our Council provides

Oregon‘s Public Meetings Law, first enacted in 1973, specifically allows Executive Sessions, where the public may be excluded except for media representatives, for certain items. These are the reasons as stated in ORS 192.660(2)(a through h):

(a) To consider the employment of a public officer, employee, staff member or individual agent.

(b) To consider the dismissal or disciplining of, or to hear complaints or charges brought against, a public officer, employee, staff member or individual agent who does not request an open hearing.

(c) To consider matters pertaining to the function of the medical staff of a public hospital licensed pursuant to ORS 441.015 to 441.063, 441.085, 441.087 and 441.990 (3) including, but not limited to, all clinical committees, executive, credentials, utilization review, peer review committees and all other matters relating to medical competency in the hospital.

(d) To conduct deliberations with persons designated by the governing body to carry on labor negotiations.

(e) To conduct deliberations with persons designated by the governing body to negotiate real property transactions.

(f) To consider information or records that are exempt by law from public inspection.

(g) To consider preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations.

(h) To consult with counsel concerning the legal rights and duties of a public body with regard to current litigation or litigation likely to be filed.

Oregon Open Meetings laws state that Executive Session notice requirements are the same as for all other meetings, which must include a list of principal subjects with enough specificity for citizens to recognize items of interest. In addition, Executive Session notices must include the specific statutory authority for each agenda item discussed in the executive session. This specific statutory authority must be also announced before going into an Executive Session.

Executive Sessions are allowed for only very limited purposes. Deschutes County Commission rarely holds Executive Sessions, while the Bend City Council holds them at virtually every meeting. Even on the subject of ORS 192.660(2)(e), the real estate exemption, the Oregon Attorney General long ago stated that:

‘A governing body may meet in executive session to "conduct deliberations with persons designated by the governing body to negotiate real property transactions." The apparent policy underlying this provision is to permit public bodies to protect their negotiating position in real estate transactions by keeping certain information confidential. This provision does not permit a governing body to discuss long-term space needs or general lease site selection policies in executive session.’

The Bend City Council seems to have gone far beyond these limitations, particularly in its deliberations around Juniper Ridge.

An example of a good notice of an Executive Session is this, from the Newberg City Council Work Session Agenda for October 17, 2005:

“X. EXECUTIVE SESSION

1. Executive Session pursuant to ORS 192.660(2)(d) relating to a real
property transaction – McKillip Property located at 8015 NW Hash Rd.”

An example of a good record of an Executive Session in the Minutes of a meeting is this, from the Sherwood City Council Meeting of Dec. 11, 2001:

“EXECUTIVE SESSIONS

1. Executive Session #1 held pursuant to ORS 192.660 (1) (e) Real Property Transactions and ORS 192.660 (1) (h) Consult with Legal Counsel – Meinecke Road intersection - took place from 6:03 to 6:28 p.m.

2. Executive Session #2 held pursuant to ORS 192.660 (1) (i) Employee Evaluation. – the City Manager six-month review took place from 6:30 to 6:50 p.m.”

Complaints of Executive Session violations may be directed to the Oregon Government Ethics Commission, for review, investigation and possible imposition of civil penalties. Members of a governing body may be liable for attorney and court costs both as individuals or as members of group if found in willful violation of the Public Meetings Law. Judy Stiegler of Bend is the current chairperson of the Ethics Commission.

I have fully documented the use of Executive Sessions back to the Special Meeting resulting in the Les Schwab property sale on December 12, 2006. This includes documentation of Executive Sessions held after regular City Council meetings that were never noticed. I also received a copy of a December 8, 2006 e-mail from the City noticing the December, 12, 2006 Special Meeting after filing an open records request. Yet my contacts with the media representatives that attended said session and a review of the Bend Bulletin from December 8 to December 12 fail to show any record of this email.

The Bend City Council simply does not follow the Oregon Open Meetings law in its constant use of Executive Sessions. I urge the Council to at least conform with and preferably even go beyond the letter of the law, in the manner of the City Councils of our fellow Oregon cities Newberg and Sherwood. By doing so, the Council may win back the trust of its constituents in a much more fundamental way than any PR campaign could.

None of us want to take the next step of filing a complaint with the Ethics Commission.

A Follow-Up Article by Allan Bruckner Makes Excellent Points

2008-01-31T13:40:00.000-08:00

The following article is by former Mayor of Bend Allan Bruckner. It is a follow-up to his June, 2007 article in the Bend Business Review. Unfortunately, this article no longer seems to be available online.

JUNIPER RIDGE
Ramifications and Consequences
By Allan Bruckner

August 15, 2007

Following publication of my article “The Bend Ultimatum: Juniper Ridge” in the Bend Business Review last June I have repeatedly been asked about the project. This presentation will relate some of the problems created by the flawed procedures, outlined in the article, used by the City of Bend.

It appears the council and staff completely overlooked the impact, and complications caused, by choosing to do a 1500 acre project. And it now appears that promoters of the project have vested so much of themselves in it that they cannot objectively consider any other points of view. All questions and criticisms are automatically rejected without discussion, kind of like the Bush White House. While presentations of site plans have been presented by consultants, the city has never openly debated the economics, policy directions or wisdom of the overall project.

THE BIG CHANGE - 500 v. 1500

The basis for almost all the questioning of the project was created by changing the project from a 500 acre industrial land development to a 1500 acre project with high end housing, and a town center or two, becoming the biggest component. The project was so changed after the RFQ of May 2005, at the October 19, 2005 developer selection date. Refusing to acknowledge this as a significant change, Councilor Jim Clinton defends the city by quoting one line in the RFQ that says, “the city desires to retain the same development team for all phases of Juniper Ridge.” Ignored is the first sentence on the first page, “solicit qualifications from development teams to develop approximately 504 acres of land,” and the first sentence on page 5 that says, “the property addressed in this RFQ includes approximately 504 acres recently brought into the Bend city limits and is referred to as Juniper Ridge Phase 1.” Also ignored is the fact that the two firms not selected addressed only the 504 acres, and the firm selected in his June 24, 2007 response to the RFQ said, “this RFQ is intended to be for phase 1.” The refusal to discuss this change and the reasons and justification for it does not lend confidence in the decision making process or the decision makers.

The firm selected was not a major regional firm, but just two individuals who formed an L.L.C., strictly to bid on the project. Their proposal was selected although awarding a 1500 acre project was never discussed in public. In fact, eight studies for the city of Bend, costing nearly a million dollars, were conducted in the year before the selection, all related to the 500 acre Phase 1, already brought into the UGB for industrial purposes. Regardless, signing an MOU for 1,500 acres has caused incredible consequences throughout the community.

THE INDUSTRIAL LANDS DILEMMA

One significant factor in electing the developer was his “providing a potential absorption rate for the entire 1500 acres in 15 years.” The other finalist “utilized predicted (land absorption) rate by ECONorthwest which was prepared for the city in 2004 as part of the Otak master planning effort.” The selected developer also proposed 100 acres, of Phase 1 added to the UGB for industrial uses, be sold for housing. The city accepted this even though it is in violation of both county and state requirements that Phase 1 be used for industrial purposes. This conflict has never been publicly addressed.

The selected developer’s original proposal showed 300 acres would be developed for industrial purposes in 15 years. This April in a huge but scarcely noticed change, the industrial needs component was changed from 20 acres per year to just 11 acres per year, and the time frame for total absorption was changed from 15 to 31 years. These two changes create a completely different project compared to the proposal selected in October 2005. The city is now giving control of its land to the two individuals for 31 years. Apparently the change has been accepted by the city with no justification and no questioning. This should be subject to extensive public discussion, as it has become a completely different project with inadequate industrial land.

The significance of the change in industrial land absorption is critical. In talking to eight persons extremely knowledgeable about industrial land (Deborah McMahon, Erich Schultz, James Lewis, Bruce Kemp, Dale VanValkenburg, Roger Lee, Louis Hoffman, Bill Smith), all agreed the minimum needed is 20 acres per year and it is likely that 40 acres are needed annually. If the mid point of 30 acres is assumed, then over 30 years the need approximates 900 acres. Adding 200 to be reserved for the university and 150 required for parks means there is not the large acreage the developer wants for housing.

The “bait and switch” for a huge housing development would not be possible, but for the newly changed unrealistic assumption on industrial land needs. The city, in its apparent blind enthusiasm for the project never questions this. Actually, after a developer presentation this spring, Mayor Bruce Abernathy did note, “It seems to me that by the time the university was constructed, employment sites would have filled up. It would seem to me we’d want the ability to attract businesses after the university arrived.” Excellent point. It has been completely ignored.

The state Department of Land Conservation and Development (DLCD) has also weighed in on the industrial land needs. In a letter to the city February 6, 2006 it noted the “need to maintain the city’s base industrial land inventory, per the 2004 periodic review” (the basis of the 500 acre annexation). On the same topic in a February 20, 2007 conversation, DLCD stated the MOU with the developer “has a lot of conflicts with state planning law”. Then in a July 11, 2007 letter to the city noting since Juniper Ridge is the only place for industrial uses “it is important that the land is still available for industrial uses when it comes time for development”. Obviously these points should have been addressed before committing over 500 acres to housing, and selling part of Phase 1 industrial land for housing.

INCONSISTENT JOB NUMBERS

The city, in its desire to move rapidly, has also allowed the developer to play fast and loose with another significant number – new jobs. Based on several consultant studies it was projected that Juniper Ridge would create 3,400 jobs in 20 years (on 500 acres of phase 1) and 8800 eventually. The developer’s proposal claimed 24,000 jobs in just 15 years. This city did not request any support for this, accepting that the job number reflects “the developer’s aspiration for higher employment density than was assumed in the concept plan”. This assertion should have been challenged, as it was a significant factor in the selection.

Then in their April 2007 update the developer’s numbers were reduced to 18,000 jobs in 31 years. That’s 1/3 fewer jobs in twice the time frame, but still twice what the city’s consultant projected. This decrease came despite increasing the anticipated jobs in education from 535 to 3000, for which no reason was given! This dramatic change should question the credibility of the numbers, but was never challenged by the city, apparently too eager to keep their deal going. There is no responsibility assigned for creating any jobs.

TRANSPORTATION

Another significant problem created by the city’s lack of thorough study and haste to develop the entire 1500 acres, relates to transportation. The city and developer have always proceeded on the basis that Highway 97 would provide the access for Juniper Ridge although the state Highway Department never assured them of such. And studies have always shown that the Cooley Road interchange with 97 was near capacity and not capable of increased use from a large scale development.

Nevertheless the developer’s consultant drafted, with concurrence from the city, master plans showing large residential developments and one or two town centers utilizing a new interchange further north on Hwy. 97. Apparently enthusiasm got ahead of communication, finally forcing the state to officially notify the city on July 17, 2007 that “transportation analyses should assume, for the 20 year horizon, that there is not a middle interchange serving Juniper Ridge”. One wonders how may hundreds of thousands of dollars were wasted on site planning because in the rush, proper transportation analysis was not undertaken first.

When the city finally realized that the project would not be served by Hwy. 97, they immediately said it would be served by Deschutes Market Road. To address this, the city is realigning its street planning priorities and likely its capital improvement program. Money was immediately diverted from the Brookswood study, a problem area for citizens now, to study future road needs for a potential development. The push for Juniper Ridge is unfortunately and unfairly drawing scarce resources from areas of the city needing immediate attention.

NEW URBANISM

Another area where the claims of the proposal are questionable is that their “new urbanism” will reduce overall traffic. There is no supporting documentation regarding the effect of a community of 5 or 10 or ultimately 15,000 residents (depending on the time frame of 10 or 20 or 30 years) developed 3 to 5 miles from the center of a very attractive city of 75,000.

As a common sense observation, if a new 500 to 600 acres residential development takes place, (think Northwest Crossing), it is clear that most of the needs of the residents will not be met on site. Residents will regularly travel for medical appointments, for movies, for dinners, and for major shopping, as well as for jobs to established businesses. Clearly the further one is from these established services, the more travel that will occur.

The most recent claim of the developer (OTAK memo of April 11, 2007) shows more jobs being created than household residents. Obviously these jobs will be filled by other residents of Bend, and since Juniper Ridge is on the very extremity of town, these trips will likely be longer than average. Since not all the residents will be working in Juniper Ridge, longer than average trips to their jobs will also be required.

A study in 2003 in Jackson County, Oregon addressed a somewhat similar situation, in White City, near Medford. White City had a good employment base but the county felt a residential development was needed for the workers. As planned for Juniper Ridge, jobs in White City pay above average wages. The study concluded that many of these firms’ employees can afford to live throughout the region, and do. The conclusions, after three years was that “people relocating to White City … are driving more in general and their relocation to White City appears to increase commuting distances and times”.

In its letter to the city on July 17, 2007 the Oregon Department of Transportation summarized the situation by referencing the recent Bend Area Central Area Plan. ODOT stated, “It is important to recognize that focus on redevelopment of this area would provide the opportunity for relatively shorter trips to be accommodated by a variety of transportation nodes, while development of areas more distant from the core area and downtown will be more problematic to provide transportation infrastructure for.”

IMPACT ON THE UGB

The biggest problem brought on by the precipitous change in the approach to Juniper Ridge concerns the UGB expansion. In the MOU the city promised, “The city will seek an expansion of the UGB to include all the property.” If the city had stayed with the plans to develop just Phase 1, this would not be a problem since it is already in the UGB. But now the city must get the additional area into the city, because failure to so, would negate the ability of the developer to proceed as planned. Indeed the city authorized the developer to hire consultants to develop a master plan that assumed inclusion into the UGB, although at the time of selecting the developer, the land was not even in the area being studied for inclusion in the UGB, or in the urban area reserve.

This removes impartiality and credibility on the boundary expansion study. Unless the staff decides to go against the council’s wishes, they must promote this parcel over others, since the amount of land to be included is strictly limited. Clearly the staff is following the council’s wishes.

However, before including an area into the expanded UGB, the city must legally study alternative areas with specific factors weighted. Most important are the existing urban area reserve designation, present zoning, transportation and sewers.

In brief, the UGB expansion requirement says that the first areas to be considered are in the urban area reserve. Juniper Ridge is not.

Present zoning is a major factor. EFU-zoned property is a very low priority. Juniper Ridge is EFU.

Transportation is also a major factor. Juniper Ridge is clearly a transportation disaster as previously discussed. It is essentially landlocked without major city expenditures.

Sewers are the other important factor. City policy is generally to promote gravity lines and discourage pump stations. The 1000 acre Phase 2 requires pumps (Phase 1 does not). It can be argued that in order for the sewer expansion to not be a negative factor due to cost, the city made another inappropriate boundary decision. To cut the sewer cost to Juniper Ridge, it accepted an offer from Newland Properties to include its properties in the UGB, in exchange for $10 million in funds for the sewer expansion. Again Newland Properties are outside the UGB study area, outside the Urban Area Reserve and is zoned EFU. All are negative factors for inclusion. Other property owners were not given the opportunity to “buy” their way in, only the one that would benefit Juniper Ridge.

IMPACT ON OTHERS

The lack of coordination, and the decision to not involve others in these major
community decisions, has also offended other agencies. Including Juniper Ridge Phase 2 in the new UGB, of necessity, eliminated other areas that appeared logical to be included. For example, the Bend-LaPine School District based their long term school site search on information given them, by the city, regarding where the likely UGB expansion would occur. A city official sat on their site selection committee. A school bond issue was passed based on that information. One site has been purchased and two have been negotiated but not finalized. Selecting new sites and negotiating their purchase will be very costly for all Bend residents. One official said they were “stunned” when the new boundary proposal excluded all their selected sites.

Additionally most of the 1000 acres of Phase 2 are in the Redmond school district. The city’s announcement that it wants those residents’ children in the Bend schools was made without consulting either school district. It is presumptuous and an invasion of the prerogatives of the school districts. Changing district boundaries also involves complex tax considerations that have never been addressed. Clearly the whole issue should have been investigated and discussed before even considering a major residential development.

Bend Parks and Recreation District has major problems with the manner in which the Juniper Ridge plans have unfolded. The city plans exclude Juniper Ridge from the Parks District. In a June 2007 joint meeting of city councilors and the parks board, a city councilor stated, “This is a real quality development and the developer wants to control the quality of its parks development.” This means the District would not receive property taxes or SDC’s that fund pools, trails, ball fields, Pine Nursery, etc. Abiding by the developer’s wishes, the city made it clear that Juniper Ridge would not be annexed to the Park District.

Again in the rush to have a deal, the city may have overlooked a city ordinance: Bend Development Code 3.4.300 D. 2. states that “as a condition of approval the land owner of a proposed subdivision or partition of land lying within the Bend UGB, but outside the boundaries of the BMPRD, shall be required to sign an annexation agreement with the BMPRD”.

Central Oregon Irrigation District has a canal running the north-south length of Juniper Ridge, approximately 2¼ miles. Steve Johnson, manager of COID, wrote the city in November 2005 right after the 1500 acre decision, with a proposal to pipe the canal, enabling a generating plant at the north end. Although the city has promoted piping with other districts for water conservation, Johnson indicated he has never had an official reply from the city. In the meantime the developer’s consultant’s site plans have open water features, negating water conservation efforts and perhaps the generating facility. Apparently a city project is exempt from water conservation projects it is encouraging for others. And more planning money has been wasted.

URBAN RENEWAL DISTRICT

Along with the inclusion of the 500 acre Phase 1 into the urban growth boundary for industrial purposes, and the numerous consultant studies previously referred to, the city of Bend on August 29, 2005 adopted an urban renewal district. The district was to help develop that 500 acres for “primarily industrial and ancillary commercial support uses”. The report minimized the impact of the urban renewal district by stating, “All properties in the area are within the city’s commercial and industrial zoning districts … therefore the increase in population and especially school age population within the area is not expected to be significant and should not result in easurable increases in the demand for municipal and social services.”

Apparently without considering this, less than two months later the selected developers accepted proposal included selling 100 acres of this industrial reserve for residential use. In the MOU it was increased to 200 acres. The county approval for adding the 500 acres to the UGB expressly stated that the city “may zone that portion of the property for industrial uses”. The conflicts with the urban renewal district and the county should have been publicly addressed before proceeding. It makes one wonder if anyone realized there were such conflicts, or if they didn’t care about such.

LES SCHWAB TIRE CENTERS

Only one firm has signed up to locate in the 500 acre industrial park that was annexed 2½ years ago. That firm is Les Schwab. The city agreed to sell the land at approximately half the market rate and exempt Schwab from any restrictive covenants, master plan requirements, and future local improvement district costs that may be imposed on the development.

Two of the conditions agreed to by the city and county in 2003 regarding the Juniper Ridge project are that the property be master planned before any development occur and that no building permit be issued before a final subdivision plat has been approved. Under terms of this agreement the city cannot sell the property to Schwab or issue building permits at this time. This is another procedural misstep that makes one question their ability to manage a substantial project.

CONCLUSION

The above are just some of the problems created by the sudden decision to develop the entire 1500 acres. While most of the objections have come from the business community, the problems affect the public at large, have major financial impacts on the city, and have significant negative impacts on other agencies. No time was allowed to thoroughly investigate these and other complex factors. Nor has the city addressed the impacts if the project is not successful. The city should have resolved these issues before any agreement was signed. Major lawsuits will be filed against the city.

As the OTAK Sustainability Study for Juniper Ridge of June 23, 2005 states, “Experience shows us that if community leaders don’t intellectually and emotionally own a project, it cannot be successfully implemented and maintained.” I believe the community does not have “ownership” in this project.

The only way to resolve the situation is for the city to withdraw its request that Phase 2 be added to the UGB, terminate the MOU and proceed with plans for Phase 1.

Allan Bruckner

Source: http://www.bendrealestatemom.com/Forms/bruckner_article_II%5B1%5D.pdf

NOTE: This did not have any copyright notice on it, so I took the liberty of copying and posting it here. Mr. Bruckner, if you object simply e-mail me and I will delete it. Or, if you do not object, and if you want to update it, I will be glad to post an updated version here as well.

JR Costs Making City's Financial Woes Worse

2008-01-30T13:34:00.000-08:00

The City of Bend is coming under increasing financial pressure as the development bubble has burst in the residential sector, with the commercial sector soon to follow. The city made large budget adjustments in December to try to prepare for this coming reality, but it the Dec. 31, Budget Detail Report shows a worsening of the situation.

Many of the individual budget funds had fallen short throughout the current fiscal year, which began July 1, 2007. This trend accelerated in December. Some individual funds and their percentage shortfalls in revenue are:

-Building Fund: -14% for year-to-date, -49% in December alone.
-SDC Revenue Fund: -12%, -64%
-Planning Fund: -46%, -44%
-Affordable Housing Fund: -33%, -73%
-Tourism Fund: +10%, -42%
-LID Debt Service Fund: -36%, -38%
-LID Construction Fund: -105%, -105% (yes, you read that correctly--a fund that was budgeted to have $100,000 in it actually is $4,818 in the hole)
-Transportation Construction Fund: -70%, -37%
-Airport Fund: +1%, -20%
-Cemetery Fund: -33%, -36%
-Water Fund: -10%, -34%
-Intra-Governmental Services: -28%, -39%

Even the General Fund was hit hard in December, coming up 15% short in revenue after weathering the previous six months OK.

How does Juniper Ridge affect the budget?

The biggest issue is the current Knife Ridge (that company run by Councilor Mark Capell's cousin) contract for improvements for the new Les Schwab Headquarters and other related expenses.

From the BURA Juniper Ridge Construction Fund, page 21 of the Budget Detail:

Resources through 12/31/07 are $3,601,597, all of which came from the Les Schwab land purchase. LS finally paid in December, even though they had been building since September. Anticipated resources through June 30, 2008 are $9,487,403, with the future revenues coming from Long Term Debt Proceeds of $7,650,000; Transfers From Other Funds of $1,662,000; and Private Developer Contributions of $470,000.

These numbers bode ill. Think about it.

#1--We are going to go over $7.5 million farther into debt, which is being guaranteed with the full faith and credit of the City of Bend because BURA tax revenues are nowhere near enough to cover it, and we only received an "A" rating on this debt issue. It is being sold about now, which is not a good time to be issuing debt as we are in a worldwide credit crunch. The only good thing is that interest rates are historically low so we probably won't have to pay too much of a risk premium.

#2--We are taking over $1.6 million out of city coffers that are already severely extended. We are already cutting back on public safety, our transportation construction is already down 70%, and recent snows are going to take a substantial additional unbudgeted transfer of significant funds. Where are we going to steal another $1.6 million from without hurting services even further?

#3--Under the best of scenarios, there will be no further land sales until the 3rd quarter of 2008. My personal feeling is that will be pushed another six months or so. So exactly who is a half-million dollars going to come from? And where is it going to come from if not from a private developer?

Looking at the Expenditures in this fund, we see that we are already over budget 41% for Personal (Personnel?) Services and that Net Available Working Capital is currently negative by over a million dollars, at ($1,376,282).

We are committed to over $12 million on this project, and are budgeted for over $14 million for this fiscal year. As we watch the city's revenues continue to meltdown in the coming months, this albatross may become an anchor on Bend's finances.

That fateful, illegally noticed last-minute meeting, where by a bare majority our City Council approved a one-sided purchase agreement with Les Schwab, may come back to haunt those who voted "yes" in the next election.

FLASH--Les Schwab Pays City

2008-01-17T07:19:00.000-08:00

In response to my direct question about this issue, I was told by City Finance Director Sonia Andrews that Les Schwab had indeed paid the City of Bend for their Juniper Ridge land. My other questions quickly grew tiresome to the Council and I was told to contact Ms. Andrews directly for answers. I did learn that the City has received an A rating for the upcoming bond issuance.

One thing that puzzles me is a seeming discrepancy between the Budget Summary and the Detailed Budget. The Summary shows $3,846,000 in property sales, while the Detail shows $0. Both are dated 12/31/07. Some of the other figures don't match up, either, so I'll have to do a little comparision and see what's up. If it doesn't come out all hunky-dory, I'll ask Ms. Andrews about it.

On the conflict of interest issue, it was a bit of a joke. It only covered one issue, that of the rezoning of land near 15th and Bear Creek for a bus barn. All the councilor's stated they hadn't really talked about it with anyone or owned any land near there, kind of laughingly. I don't really know what the purpose was with that particular issue, as the rules apply on every issue.

I did get up and ask about this as well, as the staff member that presented it stated they had contacted everyone within a 100 feet, which seemed ridiculous. This is right across from Bear Creek Elementary, so it affects many more people that that. It is also a popular cycling route heading east towards Dodd's Road. And sure enough three neighborhood people were also there and expressed their opposition to putting the industrial traffic out onto Bear Creek Road. It seems to this thick-skulled soul that if they simply found a way to make the main access point exit onto 15th, north of the Bear Creek/15th roundabout, everybody would be much happier. As it is, it seems the city is intent on shoving it down the throats of the local populace, although the repeated opposition to this gave them pause and it is going to be studied some more.

Tonights CC Meeting--Some Questions In Advance

2008-01-16T08:16:00.000-08:00

I plan on attending for several reasons, not the least of which is to hear this:

11. Statement of Procedural Rules by City Attorney and declaration of ex parte contacts and conflicts of interest.

I hope to hear something about Capell and Knife River, and if I do I may shelve the ethics complaint I have prepared. At least for now.

I will also present the following questionns about Les Schwab and Juniper Ridge, and about the impending $5 million bond issue:

1. Has the City received payment for the Les Schwab land?

2. If it hasn't, and considering the Sales And Purchase Agreement automatically terminated on Dec. 31, what is the current status of the sale?
and
3. What is the precedent for allowing such large-scale private construction upon un-purchased city land?

4. Considering the cities current financial woes, what rating is the city expecting for the upcoming offering? Will it be insured, at what additional cost?

5. Considering the currently high yields on municipal bonds, what is the interest rate range expected?

6. How will the debt service affect the city cash flow, and will this debt service come from the general fund?

I am very interested in hearing the answers to these questions.

City and JRP Agree to Further Negotiations

2007-12-26T11:36:00.000-08:00

After being in a state of flux since the Oct. 22 Garzini memo to JRP, Kuratek and Holzman signed and returned a Dec. 11 followup from Garzini. The followup requested their signatures to "...memorialize JRP's and JRI's (the investor group, such as it is) intention to negotiate in good faith the terms and conditions of a DDA in accordance with my earlier memo." This followed a harsher Dec. 6 letter that stated

If, on the other hand, there are one or more bulleted points set forth in my memo of Oct. 23rd that you are unwilling to discuss with the goal of incorporating them into the disposition and development agreement, we will consider all negotiations termintated.

The signed letter signifying JRP's willingness to negotiate appears to have been delivered in person at the City Council meeting Dec. 13.

A series of emails that preceded this signing gives us a little view into the status of the investor group that is to finance JR and share in the proceeds with the City. At this point, it consists of Kuratek and Holzman, with no large investor since AIG pulled out. The original structure with AIG as a partner, called Juniper Ridge Ventures, LLC, was never executed and filed. JRV consisted of Juniper Ridge Investors, LLC, AIG, and Juniper Ridge Partners, LLC (as the managing member). Juniper Ridge Investors, LLC, is composed of JRP and "our investor group". What that group is seems rather nebulous at this point.

Relevant documents:
Oct. 15, 2007 City Policy Summary on Juniper Ridge DDA
Oct. 22, 2007 Garzini letter laying out redline bullet points
Nov. 1, 2007 JRP Response (no letter, Bulletin article behind pay wall)
Nov. 30, 2007 JRP response offering to negotiate, perhaps with a mediator
Dec. 6, 2007 Garzini letter requesting acceptance of Oct. 22 bullet points
Dec. 11, 2007 letter requesting JRP signatures as proof of intention to negotiate

Will things be patched up? How long will this next chapter take to play out? Will the City ever receive a return? How close to bankruptcy will we come with a single tenant that received land at 50% off, paid no SDC's, and was given $8 million in further improvements for access? Will any other potential tenants agree to stricter terms than Les Schwab?

Only time will tell. The saga continues...

The First LS Sale Has Been Completed--We Think

2007-12-23T15:48:00.000-08:00

According to a deed filed with Deschutes County at 4:09 PM, Dec. 19, 2007, Les Schwab has received title to Parcel 2, 12 acres, for consideration of $3,671.236.80. That is the $7 per sq. ft. price. The following is page two of the recording:

The recording states that the actual sale was witnessed Dec. 7 by a Notary Public, as it was executed by Eric King, acting City Manager. It was recorded shortly before the 12/19/2007 City Council meeting. There doesn't seem to have been any mention of it at the Council Meeting, but I'll listen to the recording and see if it was.

So I guess the whole Contingency Removal Notice thing was ignored, as I received a response from the City dated Dec. 21, after the sale was recorded, that no Contingency Removal Notice from Les Schwab had been received by the City.

UPDATE: I just listened to the 12/19 Work Session and "Jerry" (I thought it was Eric King at first, and it might be as the recording is hard to understand at that point) stated that "Focusing on the Les Schwab headquarters for one moment, we think the sale is going to close this week, we think there will be a big check coming to the City yet this week, and so we're delighted (nervous, happy laughter from Council) to have that happening, pretty much on schedule. And of course they've broken ground and are doing a fast track permitting process out there."

He goes on to state that they know they need to get a Master Plan for JR in place as soon as they can, and Eric hopes it is the Cooper Robertson Master Plan, i.e. the one Kuratek and Holzman worked on. The target, the goal, is to get the first 50 acres beyond Les Schwab to market as soon as possible, hopefully by the 3rd quarter of 2008. This will require a Land Use Master Plan to allow the City to pursue zone changes and land partitions. Assuming the trips are available at Cooley and 97 they can prepare to develop of the next 250 acres.

The City is counting on selling that first 50 acres, most likely at a comparable price to the LS sale, to get us out from under the $15M we are going to be into it by then. While, that may not be all we are into it, as the Cooley/97 mid-term upgrade is going to cost another $37-40 million, if all goes as planned.

We've already seen how things go "as planned", with the $1.6M upgrade to the Knife River contract for the LS driveway.

My question is simple--commercial is going to be going under next year, so who is going to buy land in JR? Do we have anybody working on selling it? It seems like a huge risk. What happens if that 50 acres just sits there along with all the other RE?

Bend City Council Executive Sessions--Legal or Not?

2007-12-20T09:41:00.000-08:00

This is a question that has been on my and many others minds for a long time: is the broad and secretive way the Bend City Council holds Executive Sessions completely legal under Oregon's Open Meetings Law?

Oregon Revised Statutes Chapter 192 — Records; Public Reports and Meetings contains the relevant law in paragraphs 192.610 to 192.690. The relevant paragraphs state:

192.610 Definitions for ORS 192.610 to 192.690.
As used in ORS 192.610 to 192.690:

(1) “Decision” means any determination, action, vote or final disposition upon a motion, proposal, resolution, order, ordinance or measure on which a vote of a governing body is required, at any meeting at which a quorum is present.

(2) “Executive session” means any meeting or part of a meeting of a governing body which is closed to certain persons for deliberation on certain matters.

(3) “Governing body” means the members of any public body which consists of two or more members, with the authority to make decisions for or recommendations to a public body on policy or administration.

(4) “Public body” means the state, any regional council, county, city or district, or any municipal or public corporation, or any board, department, commission, council, bureau, committee or subcommittee or advisory group or any other agency thereof.

(5) “Meeting” means the convening of a governing body of a public body for which a quorum is required in order to make a decision or to deliberate toward a decision on any matter. “Meeting” does not include any on-site inspection of any project or program. “Meeting” also does not include the attendance of members of a governing body at any national, regional or state association to which the public body or the members belong. [1973 c.172 §2; 1979 c.644 §1]

192.640 Public notice required; special notice for executive sessions, special or emergency meetings.
(1) The governing body of a public body shall provide for and give public notice, reasonably calculated to give actual notice to interested persons including news media which have requested notice, of the time and place for holding regular meetings. The notice shall also include a list of the principal subjects anticipated to be considered at the meeting, but this requirement shall not limit the ability of a governing body to consider additional subjects.

(2) If an executive session only will be held, the notice shall be given to the members of the governing body, to the general public and to news media which have requested notice, stating the specific provision of law authorizing the executive session.

(3) No special meeting shall be held without at least 24 hours’ notice to the members of the governing body, the news media which have requested notice and the general public. In case of an actual emergency, a meeting may be held upon such notice as is appropriate to the circumstances, but the minutes for such a meeting shall describe the emergency justifying less than 24 hours’ notice. [1973 c.172 §4; 1979 c.644 §3; 1981 c.182 §1]

192.660 Executive sessions permitted on certain matters; procedures; news media representatives’ attendance; limits.
(1) ORS 192.610 to 192.690 do not prevent the governing body of a public body from holding executive session during a regular, special or emergency meeting, after the presiding officer has identified the authorization under ORS 192.610 to 192.690 for holding the executive session.

(2) The governing body of a public body may hold an executive session:

(a) To consider the employment of a public officer, employee, staff member or individual agent.

(b) To consider the dismissal or disciplining of, or to hear complaints or charges brought against, a public officer, employee, staff member or individual agent who does not request an open hearing.

(c) To consider matters pertaining to the function of the medical staff of a public hospital licensed pursuant to ORS 441.015 to 441.063, 441.085, 441.087 and 441.990 (3) including, but not limited to, all clinical committees, executive, credentials, utilization review, peer review committees and all other matters relating to medical competency in the hospital.

(d) To conduct deliberations with persons designated by the governing body to carry on labor negotiations.

(e) To conduct deliberations with persons designated by the governing body to negotiate real property transactions.

(f) To consider information or records that are exempt by law from public inspection.

(g) To consider preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations.

(h) To consult with counsel concerning the legal rights and duties of a public body with regard to current litigation or litigation likely to be filed.
(NOTE: there are more reasons listed but the specific wording the City Council uses is usually "Executive Session pursuant to ORS 192.660 (2) (a through h)")

Now let's review how the City Council notices Executive Sessions--they use a single sentence in notices of Regular Sessions or BURA Sessions that reads as follows:

Executive Session pursuant to ORS 192.660 (2) (a through h)

They also hold Executive Sessions after Regular Sessions, but before the Regular Session is adjourned, with no written notice. I personally witnessed this at the last two Council sessions I attended.

The specific wording used by Mayor Abernethy to announce the Executive Session is "The Council will now go into Executive Session pursuant to ORS 192.660 (2) (a through h) to discuss real estate matters." And fifteen to twenty people march into the conference room just off the Council Chambers. You can walk around the building and see them all in there through the window. I've been tempted to snap a picture of the scene.

Is this all legal?

The source regarded as the golden guide is the Oregon Attorney General's Public Records and Meetings Manual. Regarding notice of Executive Sessions, this manual states on B-6, in its Checklist for Executive Session, that the Council must:

Provide notice of an executive session in the same manner you give notice of a public meeting. The notice must cite the specific statutory provision(s) authorizing the executive session.

(snip of the list of reasons)

Announce that you are going into executive session pursuant to ORS 192.660 and cite the specific reason(s) and statute(s) that authorize the executive session for each subject to be discussed. See sample script on p. B-9. (NOTE: Emphasis in original)

Additionally, on A-4 we read:

Q. Must a notice be provided for a meeting that is exclusively an executive session?

A. Yes. The notice requirements are the same and must include statutory authority for the executive session.

Q. Is a meeting without proper notice an illegal meeting?

A. A meeting without notice violates the Public Meetings Law. See discussion of Enforcement of the Law.

And on page F-6, we see:

Letter of Advice(OP-6376), May 18, 1990

A governing body may meet in executive session to "conduct deliberations with persons designated by the governing body to negotiate real property transactions." ORS 192.660(1)(e). The apparent policy underlying this provision is to permit public bodies to protect their negotiating position in real estate transactions by keeping certain information confidential. This provision does not permit a governing body to discuss long-term space needs or general lease site selection policies in executive session.

So let's posit a few specific questions and I'll answer them as I read the relevant law:

1) Can the Council legally give such a broad statutory reason as "ORS 192.660 (2) (a through h)"?

NO. It must give a specific statute for each specific item discussed.

2) Can the Council not say what the specific items discussed are-can it legally state the broad line "real estate issues" when it announces it is going into Executive Session?

NO. The only "real estate issue" that can legally be discussed in executive session is specifically to "conduct deliberations with persons designated by the governing body to negotiate real property transactions". Presumably this limits discussions regarding anything else, including zoning, funding, DDA's, etc., with persons (like Ray Garzini or Juniper Ridge Partners) designated as such.

Also, all items discussed must be specifically enumerated, both in the public notice and in the announcement of going into Executive Session.

I will clear these questions up with a call to the Oregon Government Standards and Practices Commission. In fact, I'll review this entire blog entry with them and publish their answers to these questions.

And if the Council is disregarding the law, there are Enforcement provisions, including some that hold them personally liable and subject to financial penalties. That section is covered in ORS 192.680 to 192.695, which we will review as necessary. Right now I wish to clarify these points with the OGSP Commission and educate our councilors on the finer points of the laws they operate under.

And perhaps, with the help of my readers, shine a whole lot more sunlight on the whole Juniper Ridge process.

City Charging Ahead, Another $37-40M for Cooley/97 Interchange For JR Access

2007-12-19T09:22:00.000-08:00

Picture this--your company sales are down 30%, you are going to lose $10M this year, your reserves are starting to look a bit low, and your major market has seen its sales drop by 2/3's, and all signs point to sales getting far worse before they get better. And your second major line is starting to see inventory pile up rather heavily as well.

You've been planning a great new addition to your product lines, but have run into problems here and there and now it's late. Plus the regulators told you just recently that you have to fix some "issues" they are concerned about before you can take your new product to market. And it's going to be a very expensive fix, like a $37 to $40 million dollar fix if all goes as planned.

And throw into the mix that your first big sale in this new product line, to a high-profile buyer who managed to force through a sweetheart deal on faith, still hasn't followed through and that buyers' promise expires in less than two weeks.

What would you do?

Personally, I would batten down the hatches, keep the product development percolating at a low-level, cut back expenses as far as I possible could, especially any expenses directly related to the promise my "buyer" made and plan to cut them even more if the sale falls through, and live to win another day. Wait it out. Let the cycle come back around, in my favor. Realize that I had a hell of a run and I better tighten everything up fast before I let it all get away on me and end up worse off than ever.

Taking my time and making sure I'm ready when the cycle inevitably goes up again. It could be two or seven years, who knows. But I would run lean at all costs, ferociously preserving my reserves, and eking out value from every penny going out while maximizing every dwindling penny coming it. Making my existing customers damned happy. I would want to make sure I'm still here, I survived, and I'm ready for the next big ride.

But is that what our fine City Council and it's ever-the-optimist Special Projects Manager R. Garzini are planning to do?

Hell, no. They are forging ahead as if it's 2004, and the bubble called Bend Real Estate is just hitting the booster rockets.

Build it and they will come. It works great, in a movie. In the real world, if the time is right, the price is right, and the place looks nice, they might come with a little persuasion.

One out of three ain't bad, if you're an optimist.

I just wish the Council saw the realism that close to two hundred of our local residents are seeing as their homes are getting foreclosed on in this beautiful Christmas season.

Huge Increase in Deschutes County Foreclosures

2007-12-16T21:21:00.000-08:00

To our fine City Councilor's--please think long and hard about these numbers before committing our general fund to repayment of millions more in municipal bonds for Juniper Ridge:

Notice of Default and Intention to Sell Recordings

Month Number
12/05 17
01/06 21
02/06 18
03/06 20
04/06 17
05/06 20
06/06 14
07/06 13
08/06 19
09/06 17
10/06 18
11/06 19
12/06 25
01/07 26
02/07 24
03/07 38
04/07 33
05/07 30
06/07 41
07/07 56
08/07 52
09/07 56
10/07 76
11/07 80
12/07 39 through 12/14

Source: http://recordings.deschutes.org/login.asp

Username: anybody
Password: anything

There's a serious meltdown happening here. There are almost as many foreclosures as there are sales right now. And it's only going to get worse next winter after all next summer's subprime mortgage resets.

Put this in the context of our present budget shortfall, which will get even worse as the RE market continues to tank, and you are putting the City in serious risk of bankruptcy if you continue to pile on debt at the rate you have been.

Please be responsible and take your fiduciary duties seriously.

City Funding BURA at JR

2007-12-15T08:08:00.000-08:00

A little noticed item on the coming Monday's BURA meeting before the City Council meeting will fully commit the City of Bend to paying BURA costs, with the hope that in the future BURA will be able to repay the city general fund.

From the Issue Summary:

On December 5, 2007, City Council approved a resolution to issue full faith and credit obligations of up to $5 million. A portion of these obligations ($3.725 million) will be used to finance Cooley road and other infrastructure improvements for the Juniper Ridge Urban Renewal Area. This debt is expected to be issued in January 2008.

Tax increment revenues from the Juniper Ridge Urban Renewal Area will be used to repay the $3.725 million in full faith and credit obligations. Current tax increment revenues total approximately $150,000. With the addition of Les Schwab, the increment revenues are expected to total $300,000.

Because tax increment revenues from the Juniper Ridge area are currently not sufficient to allow the Agency to issue its own tax increment debt, the Agency has to rely on City issued full faith and credit debt for the Juniper Ridge Urban Renewal Area for now. In the future, when increment revenues are adequate, the Agency will be able to issue its own tax increment debt for infrastructure improvements.

The attached Intergovernmental Agreement provides a pledge of tax increment revenues by the Agency for repayment of the $3.725 million City full faith and credit debt and future City full faith and credit obligations up to $10 million.

This just days after announcing that current budget shortfalls are going to force cuts in many other services, including police and fire services. And now we're going to dig an even deeper hole?

What is it going to take to force our Council to deal with the reality of our city's financial situation?

And can someone tell me why the BURA board is the City Council? How did that ever come about? You look at this stuff and it looks like two groups working with each other, and then you realize is is the exact same people wearing two hats!

And you look at the Intergovernmental Agreement itself, and you see its signatories are two city employees, John Russell and Eric King. WTF?

The Garzini Letter

2007-12-12T16:28:00.000-08:00

Cue ominous tones. A little lightening and thunder. And send "The Letter" to Juniper Ridge Partners. The one that said the City has a spine. No more amateur hour, put up or take a hike.

It's here And I wish this letter had been sent months earlier, for it actually addresses some of the concerns with Juniper Ridge Partners("JRP") and the Disposition and Development Agreement("DDA") the City has been negotiating with them.

To many it seems as JRP has been trying their damndest to get a sweetheart deal covering the next 25 years. Case in point: the only binding part of the Memorandum of Understanding" signed between JRP and the City back on Sept. 6, 2006 is the part that guarantees JRP at least $2.5 million.

The important part, you know.

11.5 For a period of the greater of (a) one year after the date of this MOD or (b) six months after the expansion of the UGB and end of any appeal periods, the parties agree to exclusively negotiate, in good faith, terms and conditions for the disposition and development of the Property (the "Exclusive Negotiation Agreement"). The City and the Agency agree not to solicit any other proposals or negotiate with any other private developer regarding the Property during the Exclusive Negotiation Agreement. At the end of the Exclusive Negotiating Agreement, if a DDA is not executed, the City Council will vote to either (a) extend the Exclusive Negotiating Agreement for a mutually agreeable period, or (b) terminate the Exclusive Negotiating Agreement. If Developer negotiates in good faith but a DDA is not executed and the Exclusive Negotiating Agreement is terminated, the City will reimburse Developer and Investor 75% of their master planning, design, legal, marketing and related expenses, up to a maximum reimbursement of $2,500,000. By separately initialing this paragraph 11.5, the parties further agree that this, and only this, paragraph 11.5 of the MOD shall be binding on the parties. The remaining provisions of this MOD are non-binding and shall be given no force and effect, pursuant to paragraph 11.2. If this paragraph is not separately initialed,
there shall be DO binding exclusive negotiation obligations on any of the parties.

So, it doesn't guarantee them $2.5M, it says 75% of expenses up to $2.5M. Big difference. Yet, $2.5M is the amount listed on the "Detail of Juniper Ridge Costs Through FY07-08".

When I read this memo from Garzini, I was struck by how many of the issues he raised should have been raised long ago. Like this one:

At certain junctures throughout the twenty-five year term, the City needs to be able to evaluate the project, including the performance of the developer and the investor, to determine whether the City wishes to continue the arrangement. We need to modify the term and add provisions to provide for scheduled review and potential termination (and related remedies if the City elects to terminate the DDA because such termination is in the public interest or is pursuing termination because of developer or investor default).

Now put this into the context of this part of the MOU:

MANAGEMENT; OPERATION; KEY PERSONNEL.
The parties acknowledge and agree that Developer was selected by City to develop the Project because of Developer's unique qualifications and proposal for development. Because of the scope and nature of the Project and the relationship between the City, the Agency and the Developer, the qualifications, key personnel and identity of the Developer are and 'will continue to be of particular concern and importance to the Bend community and its City representatives. For these reasons, the parties agree that subject to the terms of the DDA, the Developer) by and through Ray Kuratek and Jeff Holzman, will be involved in the Project through the build-out period.

I mean does any sane organization commit to 25 years of the same crew, with no performance guarantees?

Yet our City's negotiators, whether staff or council members, seem to have wanted to. Why? That's one of my big questions.

I have an open records request in for all communications between Garzini and JRP, as well as any payments to JRP. To be continued...

ATTN: For those along Mt. Bachelor Road

2007-12-09T20:12:00.000-08:00

Tetherow Destination Resort Public Meeting, December 17, 2007

"The Community Development Department, Deschutes County has scheduled a Public Meeting on Monday, December 17, 2007 at 10:00 AM before the Deschutes County Board of Commissioners to hear applicant's (Arrowood Development) request for an amendment to the WCDA (Westside Consortium Development Agreement) to renew the now expired WCDA for an additional 7 years to December 28, 2012. The Public Hearing wiil take place at the Deschutes County Administrative Services Building, 1300 NW Wall Street. The parties to the WCDA are Deschutes County, City of Bend and Cascade Highlands currently known as Tetherow. The purpose of the now expired WCDA was to provide the City of Bend with system-wide transportation improvements related to Cascade Highlands, now known as Tetherow Destination Resort. All interested persons may appear, be heard, be represented by council or send written signed testimony; written replies must be received prior to the hearing date or submitted at the hearing. The file, MC-07-08, may be seen at the Deschutes County Planning Division, adjacent to the Deschutes County Services building, 1300 NW Wall Street or questions may be directed to Anthony Raguine, Senior Planner at (541) 617-4739."

The actual application is here.

It wants to extend the period during which the developer does not have to pay for traffic mitigation to Dec. 28, 2012, based on the original deal back in 2000 and the fact that the developer did not receive final approval until Dec. 28, 2005.

It does not address why everyone else should put up with the unmitigated traffic or force them to pay for the mitigation expenses instead of the developer, other than stating that this is a negotiated benefit for the previous owner and should be carried over.

I strongly recommend taking action. NOW.

2007-12-09T09:18:00.001-08:00

Just added the countdown timer at the top, showing how long before the Purchase and Sale Agreement between the City and Les Schwab expires as provided for in Para 3.3:

3.3 Contingency Removal Notice. If Buyer desires to close the acquisition of Phase 1, Buyer shall give to Seller written notice of its intention to do so (the "Contingency Removal Notice") on or before the final day of the Contingency Period. At the election of Buyer, in its sole discretion, the Contingency Removal Notice may specify the acquisition of both Phases at the time of the Phase 1 Closing. If no such Contingency Removal Notice is given, this Agreement shall automatically terminate and Buyer shall be entitled to the return of the Deposit with no further obligations on the part of either party, except for Buyer's indemnity of Seller contained in Paragraph 3.2 above. Buyer's decision to proceed shall be at its absolute and sole discretion.

The Contingency Period is defined in the Summary Sheet:

3.3 Contingency Period: The period from the Effective Date through and including December 31, 2007.

What happens of Les Schwab backs out?

That's the $12 million and counting question.

What is the price Les Schwab is paying?

2007-12-07T07:59:00.000-08:00

This question continues to puzzle me. I look at the various documents and things just don't add up.

Let's start with the relevant information information gleaned from the "Discussion of Juniper Ridge Costs and Financings Needed Issue Summary":

Juniper Ridge Costs to Date
The Juniper Ridge fund has incurred $12.6 million to date as follows (see attached
Detail of Juniper Ridge Costs Through FY 07-08):
FY05-06 thru FY07-08
Construction of infrastructure (Cooley impvs, pump station,
utilities & Les Schwab SDCs ) $ 8,291,388
Payment to Juniper Ridge Partners (per MOU sect 11.5) 2,500,000
Legal and consulting 923,463
Personnel and overhead costs 917,033
Total incurred and required $12,631,884

Note the bolded part: Les Schwab SDCs. We'll come back to that.

We also get this:

(1) The Les Schwab property sale is expected to close within the next few months with proceeds of $3 M to $3.2M.

If we look at the related document, "Detail of Juniper Ridge Costs Through FY07-08", we see the exact amount of the Les Schwab SDCs being paid by the city taxpayers: $474,120

So we know that the expected proceeds from the first sale are $3M to $3.2M, and that the SDCs are being waived, i.e. the city is paying them, not Les Schwab.

Now lets take this and see how it relates to the actual "Agreement of Purchase and Sale". First we see:

1.
Purchase Price:
The Purchase Price of Phase 1 is the product of the number of
square feet contained in Phase 1 as determined by the Survey
(see Paragraph 5) multiplied by $7.00; provided, Seller has the
right to elect the Alternate Phase 1 Purchase Price as discussed
in Paragraph 1.2. The Purchase Price for Phase 2 is the product
of the number of square feet contained in Phase 2 as
determined by the Survey multiplied by $7.00; provided if the
Phase 2 Closing Date designated by Buyer is after the first
anniversary of the Phase 1 Closing Date, then the Purchase
Price of Phase 2

Hmmm, what is this "Alternate Phase 1 Purchase Price"??

1.2 Alternate Phase 1 Purchase Price. Seller has the right, by written notice given no later than the earlier of March 31, 2007 or ten (10) days following the date the Contingency Removal Notice is given, to require that the Purchase Price for Phase 1 shall be $6.00 per square foot of Phase 1 as shown on the Survey (the "Alternate Phase 1 Purchase Price") rather than $7.00 per square foot. If Seller timely elects the Alternate Phase 1 Purchase Price, then Paragraph 4.7.2 below shall be applicable.

So the City has the right to decide whether to charge $6 or $7 per square foot. Why would it charge less? Well, looking further we see:

4.7.1 Generally. It is the intent of the parties that, except only as provided in Section 4.7.2 below, Buyer will not be required to pay any additional amounts for off-site infrastructure, will not be required to pay any amount regarding any present or future local improvement districts, and will not otherwise be asked to pay any amount for present or future development of Juniper Ridge or other properties. Buyer will be responsible for all the cost of all service connections and customary connection charges for utilities. Except as provided in Section 4.7.2 below, Seller, not Buyer, shall pay all such amounts that would otherwise be payable by Buyer, including all System Development Charges (SDC's) applicable to the Property and its development or use, within ten (l0) days of request by Buyer. If any such additional amounts are requested from or charged to Buyer or are assessed against any part of the Property, Seller shall pay the same within ten (10) days of request by Buyer. The Purchase Price for the Property has been negotiated on the basis that Buyer shall not be responsible for any such amount and that Seller shall pay all such amounts. However, it is understood that Buyer, not Seller, shall pay, on the same basis as do other owners, typical land use application fees, building permit fees and the cost, if any, of special inspections. Buyer, not Seller, is responsible to obtain required land use and building permits and for the cost of any appeals of such permits.

4.7.2 Payments for Phase 1. If Seller timely elects use of the Alternate Phase 1 Purchase Price, then, notwithstanding Paragraph 4.7.1 above, Buyer shall pay up to $525,000 of SDC's applicable to Phase 1 and Seller shall pay all SDC's, if any, applicable to Phase 1 above $525,000.

So this difference in price is related to the SDC issue.

Let's summarize: If $6, Les Schwab pays up to $525,000 in SDCs; if $7, the City pays all SDCs.

Read this through and it looks like the city pays for everything but the building itself and the related landscaping. Sweet deal! And one I'm sure every future potential tenant of Juniper Ridge will be asking for.

OK, now let's do a little math. From the Annexation Map we know that the first parcel is 524,610 sq. ft. So what are the potential proceeds?

524,610 * $6 = $3,147,660

524,610 * $7 = $3,672,270

So, since the city is expecting $3 to $3.2 million, it must be $6 per square foot, right? Meaning the city has elected to use the Alternate Purchase Price.

But if so, Les Schwab is responsible for paying the SDCs, up to $525,000.

Yet, the city has budgeted for paying $475,000 in SDCs.

That is what puzzles me.

I calculated the estimated SDCs on a 120,000 sq. ft. office building using the current SDC rates and came up with roughly $475,000, which matches what the city is budgeting.

Which makes it even more puzzling.

CC discussion on additional debt for JR

2007-12-06T11:26:00.000-08:00

Short answer: there was zero discussion.

Sonia Andrews read the long title of the resolution:

CONSIDER A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BEND, OREGON, AUTHORIZING THE EXECUTION AND DELIVERY OF AN INTERGOVERNMENTAL AGREEMENT, TAXEXEMPT FINANCING AGREEMENT, ESCROW AGREEMENT, AND RELATED SALE DOCUMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF THE CITY OF BEND, OREGON FULL FAITH AND CREDIT OBLIGATIONS, IN ONE OR MORE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $5,000,000 TO FINANCE STREET REALIGNMENT AND IMPROVEMENTS; ACQUISITION OF A STORM WATER MAINTENANCE VEHICLE; THE CONSTRUCTION, REMODELING AND EQUIPPING OF AN EXPANSION TO CITY POLICE FACILITIES; THE ACQUISITION OF FIRE AND INTERFACE ENGINES AND OTHER PUBLIC SAFETY EQUIPMENT; AND TO AUTHORIZE, EXECUTE AND DELIVER FULL FAITH AND CREDIT REFUNDING OBLIGATIONS, IN ONE OR MORE SERIES, TO ADVANCE REFUND ONE OR MORE SERIES OF OUTSTANDING FULL FAITH AND CREDIT OBLIGATIONS; AUTHORIZING SUBMISSION OF AN ADVANCE REFUNDING PLAN TO THE OREGON STATE TREASURER; DECLARING INTENT TO REIMBURSE; DESIGNATING AUTHORIZED REPRESENTATIVES AND DELEGATING AUTHORITY; AND RELATED MATTERS.

And the council members kind of laughed at its length, and then promptly passed it 5-0. The title reading took longer than the vote. Just like that, another $3.725 million for the Les Schwab driveway.

The only other mention of it the entire night was my own rather muddled statement imploring the Council to delay this funding measure until Les Schwab actually delivers that Contingency Removal Notice and we know they are going to actually buy the land. It fell on deaf ears.

Of course, since I broke my lower partial eating Thanksgiving dinner, I am feeling pretty shy in public and look pretty stupid. Hopefully I'll have that corrected by Christmas.

I also had a couple of discussions with Bend City Attorney Pete Schannauer about the validity of bloggers as members of the press. He basically thought it was a joke when I tried to get into the Executive Session with my Press Pass. He also approached me after the Regular Meeting, just as they were going back into Executive Session, and talked about how I wasn't being picked on because their had been someone on the Chamber of Commerce that had a "little newsletter" that was also refused entry as media into Executive Sessions. His take was that the number of readers has a direct effect on whether he considers someone legitimate media or not. Still, he seems like a nice enough guy.

I looked up the law and it says:

"...person connected with, employed by or engaged in any medium of communication to the public.."

I am researching it further. Pete gave me his number if I wanted to discuss it further, and stated that a couple of days notice would be nice. It's something to work on.

City Council Meeting: City Layoffs, $10.5M Budget Shortfall, $5M More Debt

2007-12-06T10:21:00.000-08:00

Report from 12/05/07 Bend City Council Meeting

Biggest news: the City is laying off 10 employees as of March 31 and another 35 jobs will be "affected" by current revenue shortfalls. I discussed the revenue shortfalls in detail in the BendBubble2 comments earlier today. Year-to-date overall revenues are off $10.5 million or 11% through the end of October. Much more detail is at the end of this post.

Juniper Ridge news: Council authorized several things that will cost Bend taxpayers more money.
1) $100,000 for a traffic study in NE Bend, related to the Cooley Road Interchange
2) $5,000,000 in additional debt through municipal bond sales, of which $3,725,000 will be used for the Cooley Rd./18th Street improvements aka Les Schwab's new driveway. Details here.

This is part of the "Short Term Financing Plan for Juniper Ridge":

Costs incurred in the Juniper Ridge Construction and Operating Fund, not including the change order and additional development costs discussed above, total approximately $8.3 million to date since FY2005-06 ($5.8 million in construction and City engineering costs, and $2.5 million in consulting and operating costs since FY2005-06). The $8.3 million will be funded/financed by a bond issuance of $5 million (expected to be issued in December) and the $3 million of Les Schwab property sale proceeds (expected in November or December) and $300,000 of tax increment revenues. The $5 million bond issuance will be secured by the City’s full faith and credit and is expected to be repaid with Juniper Ridge tax increment revenues and property sales.

This additional short-term debt of $1,662,000 will also be secured by the City’s full faith and credit and is expected to be repaid with property sales.

This is one more step in that march to over $12.6 million and counting for the Juniper Ridge project, which has only one (tentative) tenant. As shown in the 11/19/07 "Juniper Ridge Costs And Financings Needed Issue Summary" the costs so far are:

The Juniper Ridge fund has incurred $12.6 million to date as follows (see attached Detail of Juniper Ridge Costs Through FY 07-08):

FY05-06 thru FY07-08

Construction of infrastructure (Cooley impvs, pump station, utilities & Les Schwab SDCs ) $8,291,388
Payment to Juniper Ridge Partners (per MOU sect 11.5) $2,500,000
Legal and consulting $923,463
Personnel and overhead costs $917,033

Total incurred and required $12,631,884

And for those of you who think there is some sort of firewall between Juniper Ridge and the City General Fund, note this:

Funding/Financing of Costs (assuming land sales Do Not occur within 2 years)

If land sale do not occur within 2 years, General Fund discretionary revenues or other revenue sources will be needed to repay the line of credit.

And if Les Schwab doesn't deliver that "Contingency Removal Notice" to the City by 12/31/07, all bets are off. Even if LS does buy all 20 acres, we still need the Cooley Road/Hwy 97 intersection fixed. I can't imagine that happening faster than in 18 months, and more likely 24-36 months. Which puts potential land sales a long way out.

And every single company that is looking to buy at Juniper Ridge is going to use the Les Schwab sweetheart deal as a basic price negotiating tool. I just can't see how this place is going to pay for itself, as it now stands.

But Bend taxpayers will still be on the hook. $12,631,884 spread over 77,780 people is $162 per person. Not counting interest on debt, services, maintenance, etc. To say nothing of the opportunity cost of putting the City into such a financial bind.

One other small thing that might affect me and my ability to continue to dig up docs from the city was buried in the City Fee Amendment Resolution":

"Section 6.9.07 – Change the description of the fee charged for Records Research to “Time Required to Respond to Public Records Request”."

I'll be able to tell pretty quick if there is any change, as I'm putting together a request for an listing of any and all payments to Juniper Ridge Partners and what department they were charged to. Have they been paid anything? Is the $2.5 million buyout in addition to the $60,000 per month agreement? Or did that $60,000 per month never start, because the DDU was never finalized? I still have lots of questions.

October, 2007 City Budget Details, as noted at the start of this post:

P. 31 Revenue Totals By Dept.

The Good
Tourism Fund +30% +$114,000 (they are still coming in throngs)
Stormwater Fund +38% +$215K (that new stormwater fee is working)
Downtown Parking Fund +64% +$216K (mostly "in-lieu of" fees)

The Bad
SDC Revenue -10% -$465K
Building Fund -12% -$235K

The Ugly
Planning Fund -43% -$639K
Affordable Housing Fund -39% -$237K
Trans Construction Fund -25% -$934K
Intra-Gov Services -23% -$3.32 Million

Overall Revs -11% -$10.5 Million

P. 32 Total Expenditures by Dept.
Overall Expenses
Budget $63,406,202
Actual $53,418,300
Cuts-Affordable Housing, cut 90%, Accessibility Construction, cut 71%
Intra-Gov Services, cut 40%, $6.2M

Other Requirements
Budget $8,814,960
Actual $6,651,025
Cuts-Future Construction/Facilities and Future Major Maintenance Reserves

Change in Working Capital
Budget -$14.6M
Actual -9.9M

Net Available Working Capital
Budget $24.1M
Actual $25.7M

So things aren't dire, yet. But we can't keep spending $10 to $15 million a year more than we take in, that's for sure.

Annexation Map for Juniper Ridge

2007-12-05T08:24:00.000-08:00

At tonights City Council meeting, the packet shows that item 12(C) relates to the annexation of the first portion of Juniper Ridge into the Bend Metro Parks And Recreation District. This is so the Park District can assess SDC's.

Although the actual document attached to the packet purports to have an Appendix A that describes the property, it doesn't. So I filed another Open Records Request and received it, scanned it , and uploaded it. You can see it here.

It shows that the actual size of the first portion of JR is 623 acres, split into three parcels. Two of those parcels, totaling 19.9 acres, are the areas described in the Agreement of Purchase and Sale executed between the City of Bend and Les Schwab Tire Co. on Dec. 12, 2006.

Note that as of Nov. 26, 2007 LS had still not sent a Contingency Removal Notice to the City, as defined in this Agreement, so the actual purchase has not occurred. Although $7+ million of construction paid for by the taxpayers of Bend is underway. See BilboBend's post on the BendBubble Blog for pictures and more of the status as of Thanksgiving.

According to this contract:

3.3 Contingency Removal Notice.If Buyer desires to close the acquistion of Phase 1, Buyer shall give to Seller written notice of its intention to do so (the "Contingency Removal Notice") on or before the final day of the Contingency Period...If no such Contingency Removal Notice is given, this Agreement shall automatically terminate and the Buyer shall be entitled to the return of the Deposit...

The Contingency Period is "The period...through and including December 31, 2007." So the clock is ticking. If LS decides not to proceed, we get nothing but a big bill for a road to nowhere.

The City's fight continues with Kuratek

2007-12-05T07:53:00.000-08:00

This is getting richer and richer (in more than one way, I'm sure we'll find out), from Tuesday morning's BULL, and behind the pay firewall online:

"COUNCILORS WILLING TO TALK JUNIPER WITH MASTER DEVELOPERS"
"Bend city councilors appeared guardedly optimistic Monday that the city would be able to sit down and talk again with the master developers for its 1,500-acre Juniper Ridge project, though they expressed concerns about the tone of a recent letter from the developer....In letters and recent interviews, Ray Kuratek, one of the master developers, has threatened to sue the city for negotiating in bad faith, somthing that could cost the city millions of dollars if it resulted in protracted litigation."

Cue some more dumbness from our councilors--someone with E-BULL access will have to cut and paste it all.A question for our councilors: Kuratek and Holzman were supposed to bring $30M to the table. If they can't, they are in a basic default position. They can't. Inform them that if they can't cure this default within a short time frame, like 90 days, that the absolute most they are going to get is the $2.5 million, if they give up the master plan.

Grow a fucking spine. Don't hang us citizen taxpayers out to dry yet again.I'm not hopeful any of our fine councilors has a spine. At least, those that are not in on the game somehow.

More richness from this article. I just have to add this idiocy from Councilor Linda Johnson:

"At this point the city could use some expert guidance."

Ya think? So who are they thinking about getting this guidance from? David Leland, a land use consultant from Portland that helped the City get into this mess in the first place:

"Before that, the city used Leland in 2005 to provide advice on how to proceed with Juniper Ridge before it picked a master developer. "

Yeah, that sounds like a smart choice.

City Council Meeting tonight. I need a Press Pass. Anyone out there want a freelancer?