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Rawlins property process moving forward on two separate counts


Of the Keizertimes

One Keizer property is being actively discussed in the courts and the state legislature.

As reported the last couple of weeks in the Keizertimes, the city has an ongoing struggle regarding the Rawlins property in Keizer Station, with the Local Improvement District (LID) fee on the property being the focal point.

State legislators are working with a LID-related bill that deals specifically with the Rawlins property, while in Marion County Circuit Court a summary judgement on the issue is now expected to come out March 10 – a few days later than originally scheduled.

City leaders and Linda Rawlins, in addition to Dave Hunnicutt from Oregonians for Action, met with legislators from the House Committee on Rural Communities twice last week. A seventh amendment to House Bill 4017 was moved to the House Rules Committee, but with no recommendation.

“The (dash 7) amendment to 4017 would allow the judge to make the determination as to whether or not the assessment to the Rawlinses represented the actual value of the benefits the Rawlinses received,” Hunnicutt told legislators Feb. 13. “If the court decided the amount of assessment is too high, then the court would lower the assessment to what the court believes and then enter a judgement. Keizer could then foreclose on the property.”

After an LID assessment of $6.7 million was put on the property in 2008, Northwest National LLC and developer Chuck Sides started making LID payments to the city as well as rent payments to the Rawlins family.

Shannon Johnson, Keizer’s city attorney, wrote recently the rent was $12,500 per month for the first year and $25,000 per month after that.

Reached this week, Sides said the Rawlinses were still being paid their rent “until last month” but did not confirm what the rent amount was. Sides declined to say much else about the situation.

“We’re still trying to resolve that situation,” Sides said. “It’s a delicate subject.”

LID payments were being made to the city until the summer of 2010. After waiting three years, attorneys for the city began foreclosure proceedings last year, since the city is having to make payments on the LID loan every six months. The next payment is due in May.

As the foreclosure process moved forward, the Redmond-based Rawlinses reached out to state legislators to plead their case, hence the proposed legislation. City leaders said little publicly about the issue until recent filings with the court and testimony to legislators last week.

Prior to Tuesday’s Keizer City Council meeting, city manager Chris Eppley talked about the legislation status.

“The rural committee approved the (dash 7) amendment, which gutted parts of the bill, and passed it to the House Rules Committee with no recommendation,” Eppley said. “The no recommendation was for the House Rules to act as a parking lot for the bill, to allow the city and the Rawlinses to make a deal.”

He said the House Rules Committee could let the bill die with a deal or send it to the House floor for a vote.

“If it makes the floor, it would likely pass, since it only affects one community,” Eppley said, referring to Keizer. “There’s no reason for representatives to vote against it.”

If approved by the House, the bill would then go to the state Senate and go through a similar process. If the bill ends up on the Senate floor, Eppley opined it would again be passed since it would have little impact for most senators. If it passes the senate, it would be sent to Governor John Kitzhaber.
“We hope we’d be able to talk with him about it,” Eppley said of the governor. “If not, the fight is in the court. The litigation is a separate track.”

Costs for the litigation keep going up. During Tuesday’s Urban Renewal Agency meeting prior to the council meeting, agents approved an additional $90,000 for the foreclosure proceedings.

Susan Gahlsdorf, finance director for the city, noted $120,000 had already been budgeted for this fiscal year to deal with legal costs associated with Keizer Station property foreclosures.

“Due to continued legal complexities unforeseen at the time the budget was amended, outside counsel estimates an additional $90,000 is needed,” Gahlsdorf said. “This is based on the reasonable assumption that the courts will rule favorably for the city.”

The money was transferred from debt services funds to legal services funds.

“There’s not many options for this,” Gahlsdorf said.

Agent Dennis Koho, a Keizer attorney, noted the price tag.

“How many lawyers are we paying and over how long of a time?” Koho asked. “That’s more than I bill my clients over a whole year.”

Gahlsdorf said it started last fiscal year.

“There are two main attorneys outside of counsel working on this,” she said. “It’s very expensive.”

Agents approved the transfer with a 6-1 vote, with Koho voting against it.