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Marion County Judge Denies South Salem Subdivision Vested Rights Claim by Leroy and Jean Laack

The Oregonian reports that a Marion County judge reversed a decision by the Marion County Board of Commissioners who in July 2009 voted that the Laack’s had a vested right to continue building a 42-unit subdivision in the South Salem Hills under their Measure 37 waivers.  The judge, relying on a recent Court of Appeals case, Friends of Yamhill County, Inc. v. Board of Commissioners of Yamhill County, __ Or.App. __ (September 2010, No. A140899), concluded that the Laack’s expenditure of about $385,000 on the project with a total budget of $12 million to $14 million was not enough to constitute a vested right. 

To read the story in the Oregonian click here.

Friends of Yamhill County, Inc. v. Board of Commissioners of Yamhill County is the first Court of Appeals decision to issue on the question of whether a Measure 37 claimant has a vested right in his or her Measure 37 waiver.  In that case, the Measure 37 claimant owned a 38.8-acre parcel in rural Yamhill County that is zoned AF-80 (Agriculture Forestry).  The property contained one existing residence and the Measure 37 waiver granted the right to divide the property into 10 separate parcels and to construct 9 new residences.  Before the effective date of Measure 49, the applicant had expended $155,000 in constructing subdivision roads, arranging for the construction of electrical service and widening the adjacent county road.  Having satisfied the condition for preliminary subdivision approval, the applicant also recorded the final plat.  The issue before the court was to apply the Holmes factors for determining whether a vested right occurred.  Applying the Holmes factors includes reviewing the ratio of expenditures incurred to the total cost of the project, good faith of the landowner, whether or not he or she had notice of any proposed zoning or amendatory zoning before starting the improvements, and the type of expenditures.

As for the County’s application of the Holmes factors in the Yamhill case, the court focused on whether the county erred by not requiring the claimant to compare the substantial expenditures towards the residential development to the total cost of the development.  The court ruled that since the record did not contain an estimate of the total cost of development, the county erred in its consideration of the expenditure ratio factor. 

In Marion County, the judge did have evidence of the total project cost at $12 - $14 million and was able to determine that the ratio of expenditures incurred, $385,000 compared to the total cost of the project was not significant enough to constitute a vested right to continue construction of the subdivision.

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