Couple prevail in property claim

In a rare decision that may be one of the last salvos of the Measure 37 property-rights battle, a Multnomah County judge ruled Wednesday that county and state land-use laws had restricted the use of a couple’s rural Northwest Portland property and reduced its value by $750,000.

Attorneys representing Larry and Laura Luethe, who sought to build a nine-lot subdivision off Northwest Skyline Boulevard, said the county and state must either pay the damage amount or waive the zoning that kept the Luethes from developing the property. The state and county must pay the couple’s attorney fees and court costs in either case, attorneys Stephen Crew and Kristian Roggendorf said.

Larry Luethe, 63, a retired excavator, said battling the land- use system for the past couple of years has been extremely frustrating. He and his wife, who had not spent time in a courtroom before the weeklong trial, welcomed the decision by Judge Jerry Hodson.

"It’s all about citizens’ rights," Larry Luethe said.

The decision is significant because it emerged from the murky legal ground separating Measure 37, the 2004 property-rights measure, and Measure 49, the revision approved by voters in the Nov. 6 election. How Measure 49 will be implemented when it takes effect Dec. 6, and what happens to pending Measure 37 claims in the meantime, is a bubbling dispute among land-use lawyers.

As if on cue, the judge’s decision was immediately criticized by the Cascade Resources Advocacy Group, a Portland law center that generally sides with conservationists. CRAG attorney Ralph Bloemers said the method of determining the Luethe’s property value loss is "very much unsettled law" in Oregon. Bloemers also said state attorneys recently filed a brief arguing that Measure 37 claims that hadn’t advanced sufficiently by the property owner’s significant work or expense — even those tied up in lawsuits — are moot because of the passage of Measure 49.

The attorneys defending the county and state in the Luethe’s lawsuit argued the same thing. When Measure 49 passed one day after the trial began, the attorneys asked the judge to dismiss the case. Hodson declined.

Measure 49 drastically rolled back development rights, prohibiting the large subdivisions and industrial and commercial development that many property owners had sought to build under Measure 37. Under Measure 49, claimants will be limited to three homesites, or four to 10 if they can prove by appraisal that land-use laws sufficiently devalued their property.

The Luethes were a textbook Measure 37 case. Larry Luethe’s family has owned land along Northwest McNamee Road for three generations, and he acquired 20 acres from his father in 1973. At the time, the land was zoned F-2, requiring a two-acre minimum residential lot size. It was subsequently rezoned to a 20-acre minimum, then changed again to a commercial forest zoning with an 80-acre minimum for homesites.

When Measure 37 passed, the Luethes "saw a window of opportunity and took it," Crew said. Viewing development as a retirement investment, they filed a Measure 37 claim in June 2005, asking to develop nine two-acre lots under the zoning that existed when Larry Luethe acquired the property. Multnomah County turned them down, saying their application was not complete. The state, which also ruled on Measure 37 claims, agreed to waive one regulation but not others. The Luethes said that was not enough to allow them to develop the property. The couple filed suit in September 2006.

Attorney Crew said the $750,000 damage figure represents the difference in value between the property as it sits, with the Luethe’s house on it, and if it had been developed with a subdivision.

Crew said the Luethes will accept either the damage amount or a waiver that allows them to develop the property as they requested. Attorneys’ fees and court costs would be added.

Crew said the Luethes prefer to develop the land, but don’t relish the prospect of going through the land-use process. Depending on the day, "If somebody was going to write them a check, they might go along with that," he said.

Meanwhile, he expects the state and county will appeal the decision.

Eric Mortenson; 503-294-7636; ericmortenson@news.oregonian.com For environment news, go to http://blog.oregonlive.com/pdxgreen

Posted on Friday, November 16th, 2007, in Our Work In the News |
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