George Pfromm II

In an odd twist in the battle over Portland's land-use laws, two cemetery owners have filed claims to develop their land—or force the city to pay them for a loss in property value due to land regulations under Measure 37.

The biggest of the two claims, filed by River View Cemetery in SW Portland, seeks to develop residential properties on 185 acres of surplus land—land that is currently protected from development under "open space" zoning. If the cemetery doesn't get its way, it's demanding $24 million in compensation. According to the cemetery's attorney, Stephen Janik of Ball Janik, the money will be used to maintain existing burial plots.

The cemeteries join a tidal wave of land-use claims filed in Portland since November 1, which clock in at a staggering quarter of a billion dollars in demands from large property owners. The sheer size and nature of the claims could tie city council's hands.

Neighbors aren't pleased.

"Hasn't River View held land since 1883 as expansion room for the cemetery, not as a housing development or investment?" asked concerned neighbor John Miller. "If so, this looks like just another opportunistic M37 try for millions 'lost' because they can't build houses on cemetery land. If anything is to change about that land, it should undergo a deliberate public process where all options and interests can be considered, for example, adding it to Tryon State Park, or allowing Metro to acquire it through the natural areas bond measure or a land trust."

Rose City Cemetery on NE Fremont has filed a $10 million claim, but didn't respond to requests for more information.

In 2004, Oregon voters passed Measure 37 by a wide margin, creating a law that allows land owners to demand compensation for loss of property value caused by land-use regulations. These rules have limited development on protected property, and kept the state from being swallowed in a sea of strip malls. But under M37, if city, county, or state governments refuse to compensate the land owners, they are forced to waive these regulations.

In the past two months—particularly in the first week of December—61 M37 claims were filed in Portland, totaling $244 million. By contrast, prior to November 1st, only 30 claims were filed for a total of $16 million. (The flood has come partially in response to a soft deadline built into the law, which requires additional paperwork for claims filed after the first two years.)

The Portland city council, which makes the final decisions on claims after the Planning Bureau has vetted them, has so far managed to negotiate or suspend 12 claims and has only approved two. Council has also denied 10 claims. (Six claims are still waiting to be heard.)

But the new claims are far larger and more complex, says the city's M37 manager, Chris Dearth. Plus, they involve some of the city's largest developers and property owners, employing some of the city's largest law firms. In other words, city council may have a difficult time dispensing with the new claims.

The big claims include demands from property owners like Oregon Worsted, which filed for a waiver of regulations that prevent them from putting a 150,000 square foot big-box store (like Wal-Mart) on its Sellwood site. The company acquired the land in 1919, and is asking for all land-use regulations created since then to be removed—and for that waiver to be transferable to new owners. If Oregon Worsted doesn't get its way, the company said in a letter through its attorney, it is demanding $4.46 million.

Complicating matters is the fact that the city only has 180 days to respond to the claims, and the Planning Bureau is still pouring through the mounds of paperwork created by the last minute filings. If the city fails to hit its deadline, it may be forced to grant the remaining claims, undoing the land-use regulations that give Portland much of its character.

Luckily for the city, the Oregon legislature is poised to consider reforms to M37 in this year's session.

"The hope is that the state legislature will examine Measure 37, perhaps suspending it, and then figure out a way to fix its problems and refer it back to voters," City Commissioner Randy Leonard said. "I'm keeping my fingers crossed."