For months, the League of Women Voters offices in Northwest
Portland have been like a war room, with members pondering
how they can, in effect, save City Hall from itself.
In January, the city announced it intended to award developer
Homer Williams a $1.18 million credit, in the form of
fee waivers, in exchange for parkland he gave the city.
What was controversial was that Williams had been required
by a previous agreement to provide the land "at no cost."
City officials seemed surprised by the fee credit application,
which they said they had to approve. "What we need to
do right now is change the code so this doesn't happen
again," Commissioner Jim Francesconi told The Oregonian
in mid-January.
But league co-presidents Shelley Lorenzen and Debbie
Aiona recently obtained a letter showing that City Hall's
current quandary was the result of some savvy lobbying
and cooperative city officials--and that Williams' request
shouldn't have surprised anyone.
Williams' fee waivers didn't make headlines until January,
but the story begins in 1997, as part of a controversial
agreement giving him the right to build on 35 acres in
the River District. In return, among other things, Williams'
firm, Hoyt Street Properties, agreed to give a square
block of Northwest Portland land to the city "at no cost,"
to be a park.
After signing the agreement, Williams realized that a
development fee being crafted to support parks might apply
to him as well. He didn't think it was fair for the city
to force him to give up prime real estate for parkland
and then pay a fee as well. Williams told WW it
was never intended "that we were going to donate millions
of dollars worth of land--and then put up the money to
build the park."
Luckily, Williams had a well-connected lawyer, Stephen
Janik, who happened to sit on the park fee ordinance drafting
committee.
On March 31, 1998, Janik sent Francesconi aide Kathy
Turner a letter on behalf of Hoyt and another client,
Schnitzer Investment Corp., to make sure they qualified
for an exemption to the new park fee. That exemption allowed
donating land instead of paying the fee.
Janik noted Hoyt's 1997 agreement to give parkland to
the city and posed the following question: "Because these
transactions are 'required' as a part of this agreement,
does that mean that they are not eligible [for the credit]?"
In the wake of Janik's 1998 letter, city officials added
vaguely written language to the draft ordinance that exempted
Hoyt from the fee. The league questioned the language,
Lorenzen recalled: "The response that we got was, 'Not
to worry, this ordinance will not apply' to [the River
District]. In hindsight, we wish we had pressed it further."
Parks boss Charles Jordan argues that the 1997 agreement
saying Williams would convey the land for "no cost" was
never intended to bar the developer from future compensation--a
claim Lorenzen dismisses as "tortured revisionist history."
Janik's letter also sheds light on how the city agreed
to give Williams $1.18 million worth of financial credit
in exchange for a piece of land that the county assessor
currently values at only $658,480.
The value of the credit is based on half the value of
the developer's appraisal, which came in at $2.25 million.
That figure is so high because the appraisal ignored the
fact that the land was slated to be a city park and therefore
off-limits to lucrative development.
"We thought that they were going to appraise that property
as open space," says Aiona. "But the ordinance allows
them to appraise that as if it could be a high-rise."
The ordinance's wording may have been, in part, a result
of Janik's handiwork. As originally written, the ordinance
would have based the credit on the land's value at the
start of the development of the River District--a much
lower sum. But in his letter, Janik objected, saying,
"The developer will be forced to give land early in the
project's development, knowing that the success of the
project will make that land even more valuable in the
future." The final ordinance was rewritten to allow the
higher valuation.
Turner, Francesconi's aide, says she forwarded the letter
to the city attorney's office and thinks the changes were
made there. For his part, Francesconi said he was surprised
at the appraised value and told WW that he didn't
recall reading the letter. He defends the value, though,
saying the city wound up getting more parkland than expected.
The league is appealing the city's decision to allow
the $1.18 million credit, but has chosen to make its case
in front of a hearings officer, rather than the City Council.
"I think the City Council believes that if they give
us a forum to vent, that will satisfy our concerns," said
Lorenzen. "But it won't."
She says that if the city wanted to retroactively exempt
Williams from the parks fee, then it should have debated
the idea in public. "To think about how many years it
took to publicly negotiate that development agreement,
and then to think that it can be weakened in these backroom
deals, is just totally wrong," she says.
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Willamette Week | originally
published March 1,
2000
