Silverton property developer wins rare reversal from land use board on subdivision plan

In over 20 years working in real estate in his life-long home of Silverton, Gene Oster has learned a lot about land use.

The step he and every other property developer want to avoid is taking a case to the state Land Use Board of Appeals as the odds of winning in that arena aren't great, less than 5%.

But when Silverton officials rejected a subdivision proposal of his, effectively suggesting he would need to spend more than $2 million on roadway intersection improvements, Oster figured the appeal was worth the risk.

And he was right. Oster was one of the few appeals upheld by LUBA. He's now prepping to start building homes.

Applying to develop a subdivision

Except for his college days at Oregon State, Oster has spent his entire 66 years in Silverton.

After graduating college with a business degree, he was the co-owner and operator of an insurance agency in Silverton for 30 years, but before he retired from that line of work, Oster dabbled in real estate.

“Like I say, I love the community,” Oster said. “I’ve just been fortunate over the years to be able to live in Silverton and make a living. I’m a small town guy.”

He previously was involved in three subdivision developments in Silverton — Webb Estates, Noble Glen and the Steelhammer subdivision in 2015.

Since the economic rebound following the Great Recession, there has been a shortage of available real estate in smaller cities throughout the Willamette Valley including Silverton, Independence and Sublimity.

“We still have a low inventory, but we’re trying to get more things brought into town as far as opportunities for people to live,” Oster said.

In 2016, he and partners Terry Ernest and Patricia Caster purchased a 9.5-acre farm recently annexed into the city for $460,000 from the estate of Adeline Seim, according to records from the Marion County Tax Assessor’s office. The property was a recently annexed part of town on North James Street just up the road from Silverton Middle School

Oster submitted the application to the city planning commission for approval to subdivide the property for development in May 2018 into 33 single-family homes and seven duplexes.

But the application was denied in July 2018; the city's planning commission said the proposed development would not improve performance of two nearby intersections.

Oster appealed the ruling to the Silverton city council, and it upheld the planning commission’s decision.

The city gave one reason for denial, the failure of Oster’s development to include improvement to nearby intersections.

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When Oster decided to appeal his case, he was told by his attorney the most likely judgment was a remand — sending the case back to the city council for further consideration. Even Oster was surprised when the decision was handed down and the board ordered the city to approve his subdivision, which the city council did Monday.

"Believe me, the last thing I wanted to do is to go to LUBA," Oster said. "It wasn’t real bad, but it’s a little adversarial. I like to fly under the radar as much as possible. I’d rather work things out than be in an adversarial position."

The board agreed with Oster that the city didn’t include its transportation system plan into the system development charges, fees each residential developer pays to build a new home.

An engineer hired by Oster calculated the cost to improve the intersections at North 1st Street and Hobart Road and North 1st Street and Jefferson Street would cost $2,118,550.

In his application, Oster offered to build a westbound left turn lane at the Highway 214 and Hobart Road intersection.  

The LUBA decision stated the city may be allowed to require the improvement of building a westbound left turn lane at Highway 214 and Hobart Road in its conditional improvements as the city appeared to include that condition in its findings. 

"What we proposed to the city council initially — that they turned us down on — that’s what we’re ending up with,” Oster said.

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What LUBA does and why it rejects most cases

Oregon's land use system, including things like urban growth boundary, was signed into law in 1973 with Oregon Senate Bill 100. 

The Land Use Board of Appeals was created by the state legislature in 1979 as a three-member board of real estate attorneys, who are appointed by the governor, in 1979, under the umbrella of the Land Conservation and Development Commission, though it is a separate body now.

The board has jurisdiction to review all land use decisions by governments in Oregon.

Most cases are dismissed or affirmed by the board, 130 of 177 in 2018.

Normally when the board disagrees with a governing body’s decision, it remands the decision back to that body to reconsider certain aspects of its decision, 23% in 2018.

A small percent of appeals, between 2% and 5%, each year, are reversed.

Oster’s case was one of the rare few.

He can now start the process of taking bids for work on the property including constructing roads and sidewalks, running plumbing to the sites. Then he'll split the property up and sell the plats to builders, something he expects to happen in a year.

The median home price in Silverton according to Zillow is $328,000, up 11% in the past year.

bpoehler@StatesmanJournal.com or Twitter.com/bpoehler