A gulf of nearly $6.4 million in appraisal valuations for athletic fields the West Linn-Wilsonville School District plans to sell the city of West Linn has put the two governmental partners seemingly at odds. And, if no compromise is reached, the matter could wind up in court. Though the city of West Linn has not decided on a price to put on a May bond ballot for the purchase of Oppenlander fields, the West Linn-Wilsonville School Board agreed Feb. 9 that it wants $6.5 million for the property if voters approve the bond measure.
The board passed a resolution at their Feb. 9 meeting to insert the $6.5 million purchase price into the purchase and sale agreement in place of language designating the property as park land.
With a deadline looming for the city to submit ballot materials to Clackamas County for a May election, the school board was not open to putting off the bond vote until the November election to allow the two agencies more time to negotiate.
The West Linn City Council must make a decision on the sale price to include in the bond at a meeting Monday, Feb. 14.
During the school board's Feb. 9 meeting, Board Chair Chelsea King noted she was not confident the board and city could continue to engage in a good faith deal regarding the property, but "cautiously" voted for the resolution requesting to amend the purchase agreement.
"I personally, speaking on behalf of myself would support getting out of this deal now because I think based on what's been happening so far, it's not going to go well in the future," King said.
The $6.5 million figure came from an appraisal completed last April, while a January appraisal from a firm hired by both the city and district valued the land at just $120,000. The value of the land, located on Rosemont Road, was diluted because, under the agreement, it can only be used as a park or open space. The purchase and sale agreement signed by the city in December and the district in January stipulated that the price of the property would be based on a joint appraisal or the average of two appraisals if the district and city preferred to hire their own appraisers. The two sides chose the former option.
District Chief Operating Officer Pat McGough and legal counsel James Walker said the second appraisal methodology was flawed and that the city did not tell the district that the park limitations would be considered in the appraisal.
"To use anything other than fair market value would be disingenuous at best," McGough said.
During the board's work session, McGough mentioned the situation could wind up in litigation.
"Failure to reach a resolution on the matter makes it likely that the parties will enter litigation," McGough said. "We anticipate that the city has a legal team prepared to litigate the PSA and the district does as well. Both are highly confident they would 'win' if this goes to court but we also understand that the city, district and community would lose if litigation results due to failure by the parties to pursue a good faith solution."
On the other hand, West Linn City Councilors Bill Relyea and Mary Baumgardner contended that the figure represents the fair market value for a park.
"The appraiser explained in the appraisal the hypothetical conditions that the fair market value — when property is going to be used for a particular restricted purpose — can and usually should be valued at that restricted purpose," Ed Trompke of the city attorney's office told the City Council during a meeting Monday, Feb. 7.
The appraiser came to that number based on looking at other cities purchasing land designated as open space, Trompke explained.
Before the council discussed the Oppenlander situation, it heard from a handful of residents with thoughts on how the purchase price should be determined. Some residents supported the council selecting the $120,000 figure, while others suggested some sort of compromise.
While the council did not decide on a purchase price at Monday's meeting, some councilors seemed amenable to a figure somewhere between $120,000 and $6.5 million. Councilor Todd Jones said he was comfortable purchasing the property for $6.5 million.
Following the school board's meeting Wednesday night, City Council President Rory Bialostosky shared his own thoughts with Pamplin Media Group.
"I am disappointed in the School District for coming out on the defensive rather than looking to work collaboratively with the City to find a reasonable solution to the disputed valuation," Bialostosky said in an email. "In essence the School District has said, 'give us everything we want' or they will force this issue into litigation. That's not how partners treat each other."
He suggested he'd like to use the average values of the two appraisals as the purchase price.
Members of both the school board and council suggest they are simply trying to show fiduciary responsibility to best serve their students and constituents. Before the district and city began negotiating the property transaction, the district reportedly received offers for the property well above the initial appraised value.
King said during the board meeting that she makes decisions on behalf of 10,000 students who go to school in both West Linn and Wilsonville.
"We have a history in this district of making wise choices when buying and selling property. We've been strategic and that has set us up for success," King said. "We recently bought a piece of land across the street from West Linn High School to provide parking. We bought that at fair market value to provide parking to respond to community interests. We do need to be strategic and business-oriented in our decisions, but we are also providing an education to our students."
Baumgardner expressed hesitancy about purchasing the property at $6.5 million because of improvements needed to bring the park up to city standards, which are expected to cost just shy of $2 million. Baumgardner also mentioned the Abernethy Bridge waterpipe the city will ask voters to pay for in a bond vote that will likely cost around $10 million.
"I was feeling a burden in making sure the taxpayers understood some of these other issues, so I never was comfortable with $6.5 million," Baumgardner said.
The purchase and sale agreement states that if voters do not approve of the purchase, the agreement will automatically terminate on June 15, 2022.
