Portland’s 2035 Comprehensive Plan is one step closer to taking effect after a favorable ruling last week from the Oregon Land Conservation and Development Commission.

The state commission turned down appeals from the Multnomah Neighborhood Association objecting to the city’s “middle housing” policy and other rules intended to increase density.

“We’re pleased with the decision,” Eric Engstrom, principal planner at the Portland Bureau of Planning and Sustainability, stated in an email message.

“Among other things, it brings new mixed-use zoning to transit corridors and centers outside the Central City. This new zoning will facilitate private investment in needed housing,” Engstrom stated.

The Comprehensive Plan is the city’s wide-ranging document that will govern development within city limits as Portland grows to incorporate more than 100,000 new residents that are expected by 2035. The Comprehensive Plan is set to go into effect on May 24.

An appeal to the Oregon Court of Appeals is likely, Multnomah Neighborhood Association Chairwoman Martie Sucec said.

“That’s our plan,” she said.

Neighborhoods such as Multnomah Village have adapted uneasily to developers building apartments near single-family homes, often with little or no new parking.

In Multnomah Village, Urban Asset Advisors has constructed Multnomah Village Apartments and is planning a second mixed-use building, Multnomah Station, along Southwest Capitol Highway. The buildings have similar designs, with three stories of apartments over ground-floor retail space.

The neighborhood association has fought the developments.

“It’s going to be like a canyon on Capitol Highway,” Sucec said.

Other objections from the Multnomah Neighborhood Association centered on designating Multnomah Village a “neighborhood center” rather than a “neighborhood corridor,” which allows for building up to four stories. The neighborhood association has advocated for a three-story height limit.

“It’s not that we object to density,” Sucec said. “We object to having no role, no assurance, in where those things go.”

A written order will follow the commission’s March 15 decision. If the neighborhood association does not appeal, the comprehensive plan will be considered “acknowledged” by the state, clearing the way for implementation.

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A dispute regarding whether Eugene’s urban growth boundary should include additional land for housing is coming to the state land use board.

The Home Builders Association of Lane County has challenged Eugene’s newly adopted urban growth boundary after the City Council opted not to include additional land for housing.

The Oregon Land Use Board of Appeals will hear oral arguments in the case on Tuesday.

Prompted by years of resistance to expansion of Eugene’s urban growth boundary, the Legislature in 2007 approved a bill backed by the Home Builders Association ordering Eugene and neighboring Springfield to devise separate urban growth boundaries. Eugene and Springfield had shared an urban growth boundary since 1982.

Eugene’s new boundary includes 969 additional acres to accommodate 3,000 new jobs in the Bethel area, two parks and a school, but no more land for housing.

“Here we are 10 years later and still no expansion for single-family (homes),” said Ed McMahon, executive vice president of the Home Builders Association. “I believe that part of it is political. The political majority would prefer to see no expansion for single-family (homes) at all.”

Oregon’s urban growth boundary system is both credited with stemming sprawl and blamed for imposing artificial limits on housing and population growth.

Eugene officials forecast the city will gain 33,778 residents and need 15,105 new dwelling units by 2032. According to the city, housing growth will be 55 percent single-family and 45 percent multifamily – a slight increase in multifamily compared to the current mix.

That growth can be accommodated within Eugene’s existing growth boundary, said Terri Harding, principal planner for the city.

“Our studies show there wasn’t a need or a justification to add housing,” she said.

A committee called the Technical Resource Group that included the Home Builders Association, 1,000 Friends of Oregon and other community representatives began evaluating the growth boundary in 2012.

“Our community has invested a lot of time and volunteer hours in the analysis, and we’re pretty confident it will stand,” Harding said.

Eugene’s analysis found a deficit of 1,000 high-density homes – apartments and condominiums – and 600 medium-density homes in the city. At the City Council’s direction, the adopted UGB calls for accommodating those additional homes within the growth boundary. High-density homes would be encouraged downtown with various incentives.

Eugene’s land-use options are limited to the west by wetlands and the airport, and to the east by Springfield. The UGB needs to bring in a mix of farmland to the north and hillier areas to the south, McMahon said.

“I believe we need a combination of both to create the homes we need for the population we believe we’ll be housing, because we don’t have the inventory,” McMahon said.

Much like Portland, Eugene’s housing inventory has dipped to unusually low levels. Eugene had two months of housing inventory in October, according to RMLS, a real-estate listing service. Six months inventory is considered a balanced market.

Home prices have risen, too. The median sales price for a Eugene home in October was $265,000, up 6.4 percent from a year earlier.

“Demand is extremely high, supply is very low,” McMahon said. “They’re selling as soon as they’re finished, and prices are skyrocketing.”

LUBA is expected to issue a ruling in the UGB case in January. Either side may appeal the board’s ruling to the Oregon Court of Appeals.

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The developer behind the proposed has dropped its plan to build and operate a natural-gas-fired power plant at the Troutdale Reynolds Industrial Park in Troutdale.

Now it looks like FedEx, which operates a distribution hub nearby, will explore the possibility of expansion at the Port of Portland-owned site.

In a letter dated Jan. 26, Troutdale Energy Center LLC principal Willard Ladd notified the Oregon Department of Energy that the company intended to withdraw its application from consideration. was for construction of a 652-megawatt plant at a vacant site that formerly housed a Reynolds aluminum plant.

“Basically, it’s dead,” said Nathan Baker, staff attorney for Friends of the Columbia Gorge, a nonprofit involved in two challenges to the proposal. One is an appeal now before the Oregon Court of Appeals that Troutdale Energy Center LLC has said it would ask the court to dismiss. The other was a contested case before an administrative law judge that was dismissed this week.

A number of groups vocally opposed the Troutdale Energy Center project, which would have occupied 80 acres beginning about 500 feet west of a Columbia Gorge National Scenic Area boundary. Advocacy organizations filed evidence assuming impacts to air and water quality, wildlife, recreational amenities and viewshed. Notably, the Oregon Pilots Association claimed that emissions would threaten air travel over Troutdale.

Troutdale Energy Center LLC’s application was filed in 2012 – the year Portland General Electric began looking for new energy sources following its decision to close the state’s only coal-fired power plant. That 550-megawatt plant, in Boardman, is scheduled to shut down in 2020.

In March 2015, FedEx Ground went before the Port of Portland Board of Commissioners to purchase lot 1 (14.5 acres) in the industrial park.

“(FedEx) had an option on lot 3 – the same lot tied to the TEC – so we’re now moving forward with them on that,” said Melanie Mesaros, spokeswoman for the Port of Portland. “But there hasn’t been anything finalized.”

The sale of lot 1 is under way. The sale agreement includes an exclusive option to purchase two additional lots for expansion.

The company confirmed the action through a spokeswoman.

“We are making inquiries with the appropriate authorities about any necessary approvals to a proposed expansion of our existing hub in Troutdale,” wrote Nikki Mendicino of FedEx Ground public relations.

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The city of Scappoose, which lies approximately 30 miles northwest of Portland, has struggled in recent years to find ways to fill the economic gaps left after the timber industry dried up and the numerous mills around the area closed.

But that may soon change in light of a recent decision by the Oregon Court of Appeals that will allow the city to annex a 380-acre parcel of industrial land into its urban growth boundary (UGB).

The decision isn’t expected to alter only the future of Scappoose. Land use experts say the court’s ruling, which upheld a prior decision by the Oregon Land Conservation and Development Commission (LCDC), is expected to change the fortunes of other cities in Oregon that have run into opposition from residents and environmental groups when they have tried to bring land inside their urban growth boundaries.

Jordan Ramis shareholder Tim Ramis, who argued the appeals court case for the city of Scappoose and has worked on the legal side of land use issues for decades, agrees the decision may indeed be a game-changer.

“I think the court will be more willing to approve UGB amendments and refrain from overturning (in cases) where LCDC and local government have created a good record for compliance with the law,” Ramis said. “I think it’s a good sign.”

The parcel in Scappoose, according to Scappoose City Manager Michael Sykes, is one of the last few large chunks of industrial land left in the Portland-metro area. Since 2011, the city had been trying to bring it into its urban growth boundary in order to allow the owners, Joe Weston and Ed Freeman, to move forward with development. Because the property is located near the Scappoose Industrial Airpark, the city believed that airport-related businesses that could be established there would help spur job growth.

“(Columbia County has had) some setbacks because of our dependence on natural resources,” Sykes said. “Plenty of (timber) mills have closed in the past 15, 20 years. There’s always been a vision that (area) could be a hub to industrial development.”

Not everyone in Scappoose agreed, however. A group of citizens opposed to bringing the land into the UGB asked the LCDC to review the case. The commission ultimately determined the city had provided enough evidence to show that bringing the property into the city’s UGB would create enough jobs and attract enough people in the future to justify the move.

Patricia Zimmerman, who lived in the city at the time and was opposed to the plan, remained unconvinced. She decided to appeal the LCDC decision to the Oregon Court of Appeals.

Because the Scappoose case was subject to a legal test called substantial evidence, the LCDC had based its decision on whether it felt the city of Scappoose had provided ample evidence to justify allowing the city to bring the land into its urban growth boundary. The usual approach attorneys have used in the past to argue such cases when they advance to the appeals level has been to argue the evidence of the case.

“In the case of industrial land, you’re trying to show the amount of land you’re proposing is supported by evidence you need this land,” Ramis said.

Ramis, representing the city in the appeal, knew that other cities in Oregon had ended up on the losing end when their similar battles had landed in the state’s appeals court. So he and his team decided to take a different approach.

“We chose not to argue the evidence of the case,” he said. “Instead, we argued the court’s scope of review should be limited.”

In other words, Ramis and his team argued that the appeals court’s responsibility wasn’t to determine whether there had been substantial evidence in the record to support the original decision. Instead, the court’s role was simply to determine whether the LCDC understood the law when it ruled that Scappoose had provided adequate evidence to show that future population growth, spurred by development on the land, would support and justify including the 380 acres in the city’s urban growth boundary.

“The court agreed … it should defer to the expertise of the LCDC,” Ramis said. “Sometimes simple is best.”

The appeals court’s decision could be overturned if the state Supreme Court agrees to consider the case. However, Zimmerman’s attorney, Michael Sheehan of Sheehan & Sheehan LLC, said his client has decided not to pursue the issue further.

“It’s done,” Sheehan said.

Before development can begin on the property, it will need to be annexed into the city’s UGB, Sykes said. He doesn’t expect to run into hurdles in that area, however. Although at one time, annexing land into the city required voter approval, city residents about a decade ago voted (54 percent in favor) to eliminate that requirement.

The city hasn’t heard of any specific plans for the 380 acres yet from the property owners, according to Sykes. At one point, he said, there was talk that Portland Community College was considering land around the airport as a location for a Columbia County campus.

Whatever eventually rises on the land, Sykes believes it will help the city increase the number of jobs within its boundaries – helping those already living in the city while also attracting new residents.

“Approximately 90 percent (of those living in Scappoose) commute to jobs in either Beaverton or Portland,” he said. “We’re hoping this becomes a catalyst for growth.”

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The state Court of Appeals this week upheld a decision by the Land Use Board of Appeals to allow a $92 million development in Lake Oswego to proceed.

In coming to its decision, the court rejected a claim by the group Save Our Village that PHK Development’s Wizer Block project did not adhere to the city’s “village character.”

The court affirmed an earlier determination by the Oregon Land Use Board of Appeals that the proposed project on Block 137 in downtown Lake Oswego is consistent with the city’s development code. The Court rendered the decision without comment.

Plans for the Wizer Block development call for demolishing the Wizer Building at 140 A Ave. and constructing three four-story buildings with 201 residential units and 36,500 square feet of commercial space along with underground parking.

Save Our Village, along with the Evergreen Neighborhood Association, filed a lawsuit earlier this year against the PHK Development that was unsuccessful at the LUBA level.

Lake Oswego Mayor Kent Studebaker said he is happy with the court’s decision and expects the project to move forward.

“I’m glad they made a decision and I’m glad they upheld LUBA,” he said. “I’m also glad that it seems to be something that will resolve the appeals issue and that they gave a decision without an opinion.”

Save Our Village attorney Greg Hathaway said he was surprised the appellate court did not include written comments in the case and doesn’t know yet if his client will request the case be reviewed by the state Supreme Court.

“We’re still digesting what’s happened here,” Hathaway said. “I notified the client, but we have not had a conversation yet about what would be the next step.”

Lease Crutcher Lewis of Portland will serve as general contractor for the project. ZGF Architects LLP will be the project design architect, working in partnership with Ankrom Moisan Architects Inc., the architect of record. Landscape architecture will be by Lango Hansen Landscape Architects. Structural engineering will be by Froelich Engineers Inc. and civil engineering will be handled by Harper Houf Peterson Righellis. GeoDesign Inc. will be in charge of geotechnical engineering; Interface Engineering will provide mechanical, electrical and plumbing engineering.

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Construction crews will soon break ground on the new Oregon State University-Cascades campus in Bend despite the potential for another appeal of project approval.

The Oregon Land Use Board of Appeals earlier this month denied an appeal submitted by community group Truth in Site LLC questioning city of Bend approval for the university campus to be built on a nearly 10.5-acre parcel near the intersection of Southwest Century Drive and Chandler Avenue. The group has until Monday to file a notice of intent to appeal the LUBA decision to the Oregon Court of Appeals.

But OSU officials have said they are confident that even if the decision is appealed, the Court of Appeals is unlikely to remand the LUBA ruling. The university announced plans late last week to begin construction of the new campus as soon as necessary permits are obtained from the city – likely within the next two weeks.

“We have made the decision to proceed with construction knowing that yet another appeal may be filed by the June 29 deadline regarding the development of the 10.44-acre campus,” OSU President Edward Ray wrote in a letter addressed to the Oregon State community. “The LUBA decision fully and strongly affirmed the city of Bend’s approval of the site plan and Oregon State’s development of a four-year university branch campus.”

Plans for the estimated $24 million first phase call for construction of a 45,630-square-foot academic building and a 114,000-square-foot residence hall and dining complex as well as new campus streets, pathways and parking. OSU early last year hired Portland-based Boora Architects in partnership with Bend-based BBT Architects and Portland-based Walker Macy to design the academic building and campus grounds. Portland-based SERA Architects is designing the residence hall and dining center.

Crews from Portland-based Fortis Construction will construct the academic building and campus infrastructure. Portland-based Walsh Construction Co. will build the student housing and dining complex.

The campus is scheduled to open for classes in fall 2016 and serve up to 1,890 students.

OSU officials had initially planned to break ground last summer and open the campus this fall, but appeals delayed construction.

In Truth in Site’s appeal to LUBA, the group raised multiple concerns, including claims that the proposed campus would exacerbate traffic congestion in the surrounding area and offer insufficient parking for students.

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On Aug. 6, the Oregon Court of Appeals in FountainCourt Homeowners’ Association v. FountainCourt Development LLC, handed down a decision making clear that standard-form liability insurance policies cover construction defect claims as long as any “property damage” for which the insured is responsible took place during the policy period.

In a widely anticipated decision in which the Associated General Contractors, the Home Builders Association and others submitted friend-of-the-court briefs, the Court of Appeals held that it is up to the insurance company to try to prove how much, if any, of the damages and repair costs typically sought in construction defect cases are subject to policy exclusions or happened solely outside the insurance company’s policy period.

This showing will be difficult or impossible for an insurance company to make. As a result, the FountainCourt decision should make it easier for construction industry policyholders to obtain construction defect coverage without resorting to expensive and time-consuming litigation.

The FountainCourt case arose in a fairly unusual context – a “writ of garnishment” proceeding in which townhouse and condominium owners sued a contractor’s insurance company to collect as judgment creditors on a contractor’s insurance policy. The contractor allegedly was responsible for defective siding, windows, caulking and flashing that led to water intrusion.

As is typically the case, the units’ owners claimed that the water intrusion required repair of the contractor’s work, but that it caused damage not only to the contractor’s work, but also to other parts of the structures.

The owners in Washington County Circuit Court won a $3.8 million jury award for negligent construction against the contractor, based on a repair estimate in that amount. The award did not segregate the repair costs between those necessary to fix the contractor’s work and those necessary to fix other water-damaged components of the structures. The jury’s verdict also did not specify how much of the damage occurred during the insurance company’s policy period.

Oregon law allows judgment creditors such as the FountainCourt unit owners to garnish assets of the debtor, including the debtor’s insurance assets. A garnishment action is a summary proceeding before a trial judge in which the judge determines whether the debtor’s property is subject to collection by the creditor. In the insurance context, this means deciding whether the creditor “standing in the shoes” of the debtor policyholder is entitled to coverage.

In the FountainCourt case, well-respected trial court Judge Marco Hernandez (now with the U.S. District Court), held that the owners were entitled to collect on the insurance policy because they had proved that property damage for which the contractor was held liable occurred during the policy period. Judge Hernandez did not require the owners to prove how much of the repair costs were to fix the insured contractor’s work as opposed to other damage, and did not require the owners to prove how much of it occurred during the policy period.

The Oregon Court of Appeals affirmed these aspects of the trial court’s ruling, allowing the owners to collect up to the policy limits.

The insurance company made two principal arguments. First, it argued that the “your work” exclusion requires the policyholder to prove how much of the repair costs are for damage to parts of the structure other than its work. Second, the insurance company argued that the policyholder had to prove how much of the repair costs were for damage during its policy period as opposed to other years.

The Court of Appeals rejected both arguments. It held that because the “your work” exclusion was just that – an exclusion – the insurance company had the burden of showing how much of the repair estimate was due to fixing the insured contractor’s work. The court also held that because some of the damage occurred during the insurance company’s policy period, the insurance company had to pay for all of it unless it could prove that specific costs were for damage occurring solely outside its year of coverage.

For a continuing loss such as progressive water damage, it is usually difficult or impossible to isolate a specific repair cost as resulting solely from damage during a particular insurance policy year. As a result, the FountainCourt decision should allow Oregon construction industry policyholders to get what they pay for when they buy liability insurance: coverage in full, rather than piecemeal coverage obtained only after costly litigation.

The FountainCourt decision is consistent with those of the Oregon courts in other contexts – for example, for environmental insurance claims. Although the insurance company in FountainCourt might seek further appellate review, there is no reason to believe that the result will change.

Scott Kaplan is a partner in Stoel Rives LLP. His practice focuses on insurance coverage litigation and counseling. Contact him at 503-294-9186 or sjkaplan@stoel.com. The views expressed herein do not necessarily reflect those of Stoel Rives LLP or any of its clients.

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Adina Matasaru has joined Dunn Carney as an associate.

Matasaru received her law degree from Willamette University College of Law. She previously served as a clerk for Judge Darleen Ortega in the Oregon Court of Appeals.

At Dunn Carney, she will focus her practice on civil litigation, insurance defense and malpractice defense.

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