Gould v. Deschutes Cnty., LUBA No. 2014-080

• Decision Date: 30 January 2015
• Docket Number: LUBA No. 2014-080
• Court: Oregon Land Use Board of Appeals
• Parties: ANNUNZIATA GOULD, Petitioner, v. DESCHUTES COUNTY, Respondent, and LOYAL LAND, LLC, Intervenor-Respondent.

ANNUNZIATA GOULD, Petitioner, v. DESCHUTES COUNTY, Respondent,and LOYAL LAND, LLC, Intervenor-Respondent.

LUBA No. 2014-080

LAND USE BOARD OF APPEALS OF THE STATE OF OREGON

January 30, 2015

FINAL OPINION AND ORDER

Appeal from Deschutes County.

Paul D. Dewey, Bend, filed the petition for review and argued on behalf of petitioner.

No appearance by Deschutes County.

David J. Petersen, Portland, filed the response brief and argued on behalf of intervenor-respondent. With him on the brief was Tonkon Torp LLP.

HOLSTUN, Board Member; RYAN, Board Chair; BASSHAM, Board Member, participated in the decision.

You are entitled to judicial review of this Order. Judicial review is governed by the provisions of ORS 197.850.Opinion by Holstun.

NATURE OF THE DECISION

Petitioner appeals a board of county commissioners' declaratory ruling that the development action authorized by the county's prior approval of the Thornburgh Resort conceptual master plan has been initiated.

INTRODUCTION

A. Prior Appeals

Thornburgh Resort Company, LLC proposed a destination resort, Thornburgh Resort, to be located on approximately 2,000 exclusive farm use zoned acres near the existing Eagle Crest Resort in Central Oregon, between Sisters and Redmond, Oregon. Intervenor-respondent is the successor owner of the subject property.

Approval of a destination resort in Deschutes County follows a sequential, multi-step process. That process begins with conceptual master plan (CMP) approval. Following CMP approval a final master plan (FMP) is approved. Following FMP approval, tentative and final subdivision plans are approved, or a site plan is approved, and destination resort development may then begin. County decisions granting CMP approval and FMP approval for the Thornburgh Resort have been appealed to LUBA and in some cases LUBA's decisions have been appealed to the Court of Appeals.¹

The county's first CMP decision was remanded following Gould I and II. The county's second CMP decision, dated April 15, 2008, was affirmed on appeal. The last appeal of the second CMP decision came to an end on December 9, 2009, when the Court of Appeals issued its appellate judgment on December 9, 2009. That April 15, 2008 CMP decision is indirectly the subject of this appeal.

Intervenor's predecessor sought FMP approval on April 21, 2008, six days after the county's April 15, 2008 CMP decision was issued. That FMP decision was appealed and ultimately remanded to the county on August 17, 2010. One of the reasons the FMP decision was remanded had to do with inadequacies in the proposed wildlife mitigation plan. The Bureau of LandManagement identified mitigation sites and made it possible to proceed with another FMP decision to respond to the remand. A second FMP decision following our remand in Gould V has not yet been adopted.

As we explain later in this decision, under the Deschutes County Code (DCC), the April 15, 2008 CMP decision would become void if it was not "initiated" within two years, with that two-year deadline tolled for periods the CMP decision was subject to appeal. On November 1, 2011, intervenor sought a declaratory ruling that the April 15, 2008 CMP had been timely initiated. The hearings officer found the CMP was timely initiated, but on appeal LUBA remanded that decision in Gould VII. LUBA's Gould VII decision was affirmed by the Court of Appeals, without opinion. Gould v. Deschutes County, 256 Or App 520, 301 P3d 978 (2013).

On remand, the hearings officer found the CMP was not timely initiated. Intervenor appealed the hearings officer's decision to the board of county commissioners, which issued a declaratory ruling that the April 15, 2008 CMP decision was initiated before the two-year deadline for doing so expired. In the current appeal, petitioner challenges that board of county commissioners' declaratory ruling.

B. CMP Initiation

One of the issues that we decided in Gould VII was whether the standards that govern whether the second CMP decision was initiated are as set out in OAR 660-033-0140 or DCC 22.36.010.² We concluded that theacknowledged standards at DCC 22.36.010 control. Gould VII, 67 Or LUBA 9. Under DCC 22.36.010(B)(1), "a land use permit is void two years after the date the discretionary decision becomes final if the use approved in the permit is not initiated within that time period." (Emphasis added.) With tolling for appeals, the two-year deadline to initiate the CMP expired on November 18, 2011. Gould VII, 67 Or LUBA 11.

A second issue that was resolved in Gould VII is whether the standards at subsections (1), (2) or (3) of DCC 22.36.020(A) govern in this case to determine if the CMP was initiated before November 18, 2011.³ No party in Gould VII questioned the hearings officer's decision to apply DCC 22.36.020(A)(3). DCC 22.36.020(A)(3) requires two findings to determine whether the development action authorized by a permit has been "initiated," within the meaning of DCC.36.010(B)(1). First, the county must find "theconditions of a permit or approval have been substantially exercised." Second, the county must find that "any failure to fully comply with the conditions is not the fault of the applicant." Although we questioned whether DCC 22.36.020(A)(2) should have been applied instead of DCC 22.36.020(A)(3), that issue is now resolved for purposes of this case. Gould VII, 67 Or LUBA 12-13.

C. Gould VII

Having determined that whether the development action authorized by the county's CMP decision was initiated before November 18, 2011 is governed by the two-pronged standard at DCC 22.36.020(A)(3), we considered petitioners' challenges to the hearings officer's decision that the development action was initiated prior to November 18, 2011. In doing so, a number of interpretive issues regarding DCC 22.36.020(A)(3) that have some bearing on this appeal were resolved. We identify and clarify those resolved interpretive issues below before turning to petitioner's assignments of error.

1. All 38 Conditions Must be Considered in Applying DCC 22.36.020(A)(3)

A central dispute in applying both the "substantially exercised" prong and the "fault of the applicant" prong of DCC 22.36.020(A)(3), see n 3, was whether all 38 conditions had to be considered or whether, as the hearings officer found, only the 15 conditions that the hearings officer found to be "relevant" had to be considered.⁴ We rejected the hearings officer'sinterpretation of DCC 22.36.020(A)(3) and concluded that all 38 cond must be considered in applying DCC 22.36.020(A)(3):

"We can appreciate that initiating a complicated project like the Thornburgh Destination Resort by 'substantially exercis[ing]' all 38 conditions of approval within two years and demonstrating that any failures to 'fully comply with the [38] conditions is not the fault of the applicant' is an extremely difficult and perhaps practically impossible obligation in this case, given the way the 38 conditions of approval are written. But that difficulty is equally attributable to (1) the way DCC 22.36.020(A)(3) is written, and (2) the way the 38 conditions of approval are written. * * *

"* * * The hearings officer essentially rewrote DCC 22.36.020(A)(3), to add the bold language set out below:

"'Where construction is not required by the approval, the conditions of a permit or approval that must be satisfied before FMP approval have been substantially exercised and any failure to fully comply with the conditions is not the fault of the applicant.'

"Under ORS 174.010, the hearings officer is not entitled to add and subtract language from DCC 22.36.020(A)(3). The simplest way to describe the hearings officer's error is that she assumed that because other approvals would be required to fully comply with some of the 38 conditions of CMP approval those conditions of approval should not be treated as relevant conditions of CMP approval under DCC 22.36.020(A)(3). However, whether it was intentional or unintentional, by imposing conditions of approval that would require the applicant first to secure additional land use permits, the city effectively required the applicant to secure those additional permits within the two-year period imposed by DCC22.36.010(B)(1) to avoid having the CMP permit become void.[⁵] That result may be harsh in this case, but it cannot be avoided by interpreting DCC 22.36.020(A)(3) to say something that it does not say." Gould VII, 67 Or LUBA 18-19.

To summarize and clarify the above, when applying the "substantially exercised" prong of DCC 22.36.020(A)(3) all 38 conditions of CMP approval must be considered, not just those that can be satisfied without FMP, land division, or site plan approvals.

2. The DCC 22.36.020(A)(3) "Substantially Exercised" Prong Applies to the 38 Conditions as a Whole, Rather Than Each Individual Condition

In applying the "substantially exercised" prong of DCC 22.36.020(A)(3), petitioner argued the county must find that each of the 38 conditions of approval, individually, was substantially exercised during the two-year period. We rejected that argument, concluding it is the 38 conditions, viewed as a whole, that must be substantially exercised:

"We do not agree with petitioner that DCC 22.36.020(A)(3) requires that each of the 38 conditions of approval must have been 'substantially exercised' within the two-year period, although the county could probably interpret DCC 22.36.020(A)(3) to impose that obligation. Because DCC 22.36.020(A)(3) is ambiguous about whether each of the 38 conditions of approval must separately be 'substantially exercised,' we conclude the hearings officer could interpret DCC 22.36.020(A)(3) to require only that the 38 conditions of approval, viewed as whole, have been 'substantially exercised,' even though some of those 38 conditions of approval have not been 'substantially' or 'fully' 'exercised,' or perhaps have not been 'exercised' at all. But the hearings officer must be able to find both that the 38 conditions of approval, viewed as a whole, have been

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