BEAVERTON CITY COUNCIL
REGULAR MEETING
JANUARY 12, 2004

CALL TO ORDER:

The Regular Meeting of the Beaverton City Council was called to order by Mayor Rob Drake in the Forrest C. Soth City Council Chamber, 4755 SW Griffith Drive , Beaverton , Oregon , on Monday, January 12, 2004 , at 6:41 p.m.

ROLL CALL:

Present were Mayor Drake, Couns. Betty Bode, Dennis Doyle, Fred Ruby and Forrest Soth. Coun. Cathy Stanton was excused. Also present were Chief of Staff Linda Adlard , City Attorney Alan Rappleyea , Finance Director Patrick O'Claire , Engineering Director Tom Ramisch , Operations/Maintenance Director Gary Brentano, Library Director Ed House, Human Resource Services Manager Nancy Bates, Development Services Manager Steve Sparks, Economic Development Manager Janet Young , Emergency Services Manager Mike Mumaw , City Engineer Terry Waldele , Senior Planner John Osterberg , Associate Planner Liz Jones and Deputy City Recorder Cathy Jansen .

PRESENTATIONS:

•  Diversity Award Presentation

James Maguire, Chair, Beaverton Human Rights Advisory Commission, explained this presentation was to honor the first recipient of the City of Beaverton Human Rights Commission 's Diversity Award. He said this annual award was established to recognize an individual, community group, non-profit or business for their efforts, achievements and commitment to human rights in this City. His reviewed the criteria for this award.

Maguire announced the 2003 Diversity Award Winner was Ms. Lidia Krivoy. He explained Krivoy was the Social Worker in the Beaverton School District 's English as a Second Language Welcome Center . He detailed the many ways Krivoy assisted children and their families in the community. Her accomplishments included working to connect people to the community, organizing the Second Annual Family Resource Fair and coordinating the Christina's Smile Children's Dental Clinic.

Mayor Drake and Maguire presented the 2003 Diversity Award to Krivoy and commended her for her dedication. It was noted that Krivoy's name was engraved on a perpetual Diversity Award plaque to be displayed at City Hall.

Krivoy thanked them for the award.

CITIZEN COMMUNICATIONS:

Reverend Ja West, Beaverton , read a letter to Council regarding problems with her neighbors and other various concerns. She said she would make copies of her letter and send them to Council.

Mayor Drake thanked her.

COUNCIL ITEMS:

Coun. Ruby announced the Beaverton Education Foundation would be having its Second Annual Fun Run this Saturday, January 17, 2004 , at Beaverton High School . He said registration would begin at 7:30 a.m. and it would be a 5K (three-mile) run. He noted cost was $5 for elementary school children, $10 for older children and $20 for adults. He invited everyone to come and support the event.

Coun. Soth reported on the recent meeting of the Joint Water Commission. He said the water situation looked good for this region with 26 inches of snow in the Barney Reservoir coastal range which enhanced the water supply for this coming year. He added they discussed several upcoming projects including installation of a new reservoir on Spring Hill, which allowed an upgrade of the present storage system to current seismic standards, and the Tualatin Basin feasibility study.

STAFF ITEMS:

There were none.

CONSENT AGENDA:

Coun. Ruby MOVED, SECONDED by Coun. Soth, that the Consent Agenda be approved as follows:

04008 - Traffic Commission Issues No. 538-541

04009 - A Special Budget Adjustment Resolution Appropriating Bond Sale Proceeds from the Water Revenue and Refunding Bond Issue Series 2004 (Resolution No. 3746)

Contract Review Board:

04010 - Exemption From Competitive Bids and Authorization of a Sole Seller of Street Lights from The Blueridge Agency and Transfer Resolution (Resolution No. 3747)

Question called on the motion. Couns. Bode, Doyle, Ruby, Soth voting AYE, the MOTION CARRIED unanimously. (4:0)

ACTION ITEM:

04011 - Business Plan for Beaverton Business Incubator

Economic Development Manager Janet Young introduced Carol Lauffer, consultant with Business Cluster Development who prepared the Business Plan for the Beaverton Incubator.

Chief of Staff Linda Adlard explained this Business Plan resulted from the City's Economic Development Strategic Plan. She noted staff would review the plan and answer Council questions. She said staff was requesting approval to proceed with the Plan, if Council was satisfied with the proposal.

Young explained the impetus for this proposal came from the Economic Development Strategic Plan adopted in July 2000. She said the Strategic Plan underscored the importance of job creation. She said business incubators offered cities an opportunity to make a difference in the local economy. She noted the Strategic Plan recognized the importance of knowledge-based businesses within Beaverton ; its goal was to retain, expand and attract targeted businesses and industries that created quality jobs and shared Beaverton 's economic vision.

Young explained a business incubator was a facility where fledgling businesses rented space at market-rate rents to operate their businesses. She said in addition to space, they had access to a suite of sophisticated services designed to help them be as successful as possible. When companies reached a certain size, or had been there a certain length of time, they graduated from the incubator. She said the positive aspects of incubators were long-term job creation, employment of local residents and the businesses often stayed in the city. She noted for economies of scale, an incubator needed to house 15-25 start-up businesses. Over a decade, she said, an incubator of this size could graduate dozens of businesses with hundreds of employees in high-quality jobs. She noted 84% of graduating businesses stayed in their communities and 80% of the graduated businesses were still in business five years later (compared to 20% of start-up businesses that were not incubated).

Young said the recommendation was to locate the incubator in downtown Beaverton to aid with revitalization and to meet the goal of denser downtown development. She said a software business cluster in San Jose had been in business since 1996 and graduated 60 companies; 75% of those remained in downtown San Jose . She said there were now more than 65 software businesses in downtown San Jose and the majority was incubated through the business cluster. She explained incubators always required a subsidy to start operation; they become self-sufficient over time using rental income, grants and sponsorships. She said it was common for the public sector to provide seed funds to start incubators. She asked the consultant to present the details of the proposal.

Carol Lauffer, Business Cluster Development (BCD), consultant, explained BCD specialized in helping develop sector-focused incubators and its clients included cities, universities and private corporations. She said BCD's work was based on a model of sector-focused incubation and that model was replicated in 20 incubators throughout the country. She noted the models were mainly technology focused, such as software, communications, bioscience and information technology. She said her experience included developing and managing incubators, and more than ten years economic development experience in the public and private sectors. She noted she recently served as a judge for the National Business Incubation Association Annual Incubator of the Year Award.

Lauffer explained sector-focused incubation was a highly effective tool for developing companies and jobs in a community. She said the goal was to identify and focus on emerging market sectors, and create resources to help these companies grow. She noted benefits of incubators were: 1) 60% of companies in the incubators will end up doing business together; 2) It builds a community of entrepreneurs; 3) The businesses tend to stay in the community when they leave the incubator.

Lauffer said the Incubator Business Plan (Plan) recommended that Beaverton focus on the software sector, which was a strong industry in the City and the State. She noted there were more than 2300 software companies in Oregon , 24,000 people were employed by Oregon 's software industry, and there were leading software companies in Beaverton (Intel, Tektronix, IBM, and Xerox). She explained they interviewed entrepreneurs, investors and attorneys in Beaverton , and it was clear that software was a real opportunity and a strength. She said the recommendation was to focus on initial areas of strength in the community, create jobs in those areas and evolve the model overtime so that as the sub-sectors in software change, more jobs will evolve.

Lauffer explained the proposal was for an incubator of 15,000 to 20,000 square feet in downtown Beaverton , to house 15-25 start-up businesses. She said start-up companies had one to four employees, they spent 18-24 months in the incubator getting assistance and guidance, and when they graduated they had 20-25 employees and relocated in Beaverton . She said the timing for starting this project was dependent on finding a facility. She said incubators required a subsidy to start. She said costs were $450,000 for the first year and $350,000 for the second and third years. She stressed it was important to commit the right resources to make an incubator successful; strong management and specialized services were essential.

Young explained the next steps to proceed with this proposal were: 1) To look for the right facility; 2) To begin engaging supporters and partners to help support the incubator; and 3) To create of a non-profit organization (501(c)(3)) to run the incubator. She noted the City would have a major role in getting this started and creating the Board; then over time the incubator becomes self-sufficient. She said staff was requesting Council's conceptual acceptance of this Plan; if Council accepted the Plan, staff would move forward this fiscal year, with funding that was already in this year's budget, to look for a site and create the formal organization. She said staff would report back to Council with various pieces of the Plan as they went forward. She stated it was an interesting and exciting experience getting to this stage. She noted the interviews conducted with the Portland business community were heartening and they received many positive and appreciative comments for Beaverton 's interest in being pro-active in job creation.

Adlard stated it was exciting that Beaverton was large enough to have the opportunity to enhance its businesses. She noted they wanted to tap into the knowledge base of the many professional people who were unemployed today. She said these were creative people who would now have the opportunity, with some assistance from the City, to put their creativity together, and have the support system needed, to begin a new venture. She noted this was an opportunity to become a more viable community, to be a challenge to other communities in the region and to be on the cutting edge. She said it gave a strong message to the business community that the City cared about them and wanted them in Beaverton .

Adlard stressed this was a serious discussion for it would take commitment by the Council in the next budget. She said it was not inexpensive in terms of total dollars; but when one considered the opportunity this provided to help many people and further develop the downtown area, it was wonderful to be on the leading edge of getting this started. She asked for Council questions.

Coun. Soth asked where the "Value-added business assistance, access to a network of resources and professional expertise." (page 11 of the Plan) would come from. He asked if this referred to a core group that would be available to any of the incubator businesses at any time.

Lauffer responded the assistance was available to all the companies in the incubator and was provided by a full-time Director and other volunteers recruited to work in the incubator.

Mayor Drake referred to the list of individuals interviewed and noted Dr. Fred Phillips, Oregon Graduate Institute (OGI), was excited about this concept. He asked if he could be tapped as a resource.

Young replied that Dr. Phillips could be a resource and organizations like the OGI and OHSU had numerous services that could be tapped by the incubator.

Coun. Soth asked if the business people interviewed were enthused about financially supporting the incubator.

Young explained they conducted a number of interviews but they were not there asking for funds at that time. She said if the City moved forward with the Plan, then would come the time to look for the best sponsors and partners to participate in the incubator.

Coun. Soth asked how long it took the San Jose incubator to become self-sufficient.

Lauffer replied that the City of San Jose 's Redevelopment Agency still invested in the incubator. She said that might be shifted to other sources, given the budget situation in California . She noted San Jose was starting construction of a bioscience incubator and the Redevelopment Agency formed a partnership with a private developer to fund the construction. San Jose will pay the developer back with redevelopment bonds. She said the goal there was three years of City subsidy, during which time they will seek other funding sources to decrease the City's commitment to the project.

Coun. Soth noted this proposal was for a City grant for startup costs. He said he assumed the machinery would then be in place to go into the 501(c)(3) mode. He asked if during that time the City Council was the governing body or was it some other body.

Lauffer explained the City would create the 501(c)(3) to solicit corporate contributions and sponsorships. She said this would set the path for making the incubator sustainable. The City would have representation on the Board of Directors.

Coun. Soth asked if the Board membership had to be in place prior to the application for 501(c)(3) status.

Lauffer replied the non-profit organization was first established and then it sought 501(c)(3) status. She said the City would have a role in establishing the organization.

Adlard explained she expected the City would have some influence in the development of the 501(c)(3) and the Board membership, since the City was providing the seed funding. She said the City's strength in its support was representative of how important this was to the citizens and business community. She said her view was that the City would have as few City dollars into this as possible; however, it was extremely important to not be cheap in the beginning. She noted it was important to hire a talented manager who could put these partnerships together quickly, and then have those resources support the incubator to make it a stable, secure and attractive place. She said it was hoped that three years support was sufficient, but it would be assessed annually through the budget process. She stressed this was a big venture and it needed a high level of talent to accomplish, which was why the funding for the first year was higher.

Coun. Soth asked how many initial firms in the San Jose incubator had left the incubator before they were self-sustaining.

Lauffer replied that national statistics indicated some businesses would fail; just because a business went through an incubator it did not guarantee success. She said the chances for success were greater if a business was incubated. She said many of the businesses graduated out and stayed in the San Jose area. She said San Jose made this investment to develop a flourishing software market downtown and that had been achieved.

Coun. Soth asked if the acronyms could be written out in the Plan, as a reminder of what they were. He said from his perspective, it was a case of protecting the citizen's dollars. He asked where there would be space for expansion if all the businesses stayed.

Lauffer explained it was a balancing act; the manager would predict where the growth would occur and set aside space for that. She said when the incubator was full, there was a process for taking requests on a first-come, first-serve basis. She noted these companies were entrepreneurial and they could squeeze more employees into their space than one would think.

Coun. Bode referred to page 55, regarding funding, and asked if the incubator would be independent by the Year 2006.

Adlard explained Council was given an ideal scenario. She said she could not say for sure other business in the community would embrace this and offer support. She said it had been supported in other cities, it was the s tand ard model and sometimes additional subsidy was needed. She said Council would do an annual assessment to ensure the City was maximizing what it wanted as a return on this project. She said ideally, the City would have wonderful partners. who thought the City did an excellent job on this project, and businesses would flock to the incubator and graduate successfully, creating a synergy that worked on each other. She said staff could not promise anything today, but they believed that with the financial commitment for a minimum of three years, they could get to the point where businesses were ready to graduate which would provide an increased work force in the City and would bring new entrepreneurs into the City, to support the local employment, the market and the tax base. She said the best case scenario was less than three years, but the Plan recommended three years.

Coun. Bode asked if Council was being asked for a commitment for the first 24 to 36 months for planning purposes.

Adlard explained they were looking for a commitment large enough to ensure it was successful. She explained they were asking for Council's dedication to this project. She noted if the Council supported this and invested $6/per capita into the incubator, it would reap many benefits to the City and the City would want to continue. She said the first six months they would work to put the organization together, obtain the 501(c)(3) status, find a location, and coordinate the public relations needed to advise businesses of this service.

Coun. Doyle asked Lauffer if there were any other incubators that focused on EDA (Electronic Design Automation) or financial services; was this unique.

Lauffer replied she was not aware of any other EDA-focused incubators; there were other software incubators throughout the country.

Coun. Doyle asked where startup companies typically get the funds to start with an incubator.

Lauffer responded it could come from their personal credit or from families or friends willing to invest to get the business started.

Coun. Soth stated a strong beginning in support was essential to the success of this proposal.

Adlard explained that as the City grows there will be moments when it feels a bit dangerous, but it is the right thing to do if you want the City to continue to grow and be viable and strong. She noted the City must support its citizens and businesses in many ways that were different from what was done in that past; partly because of the today's economy and partly because of the tax situation. She promised that staff would do everything possible to make this a success.

Coun. Bode stated this was a defining moment as it spoke to the entire issue of livability for the City of Beaverton . She noted to have livability, there had to be the connection to the economy. She said she was willing to move forward on this proposal based on the skill of the Mayor and staff in taking on projects, which she has seen in the past; and in their ability to garnish resources, and watch and protect the citizen's moneys used to fund this, and based on the openness of the reports given to Council. She said she was impressed with the research in this report and the willingness of any city to come forward and take a risk for livability. She said she was willing to take the risk and support this Plan, because the benefits outweigh the risk.

Mayor Drake noted the economy in Oregon has been tough the last couple of years and this would build hope for new business. He explained this would help those who came out of the high tech companies to start their own business. He spoke on the evolution of the Silicon Forest in this region from 1940 to today, as an example of companies that started small and grew through the years.

Coun. Doyle MOVED, SECONDED by Coun. Soth, to approve Agenda Bill 04011, the Business Plan for the Beaverton Incubator.

Coun. Doyle said he wholeheartedly and enthusiastically supported his motion because they were taking steps to help the City. He explained the payback potential of this was enormous. He said he felt it was Council's obligation to lead and this was a leadership step. He said he felt the risk was minimal and the dollar per capita was small. He said he was excited and enthusiastic for the infrastructure and benefits from this would be around for a long time. He said he was happy to have some part in this and was eager to see how the next step worked out.

Coun. Soth said this was a very good concept. He asked that Council be given periodic updates as the steps occurred.

Question called on motion. Couns. Bode, Doyle, Ruby and Soth voting AYE, the motion carried unanimously. (4:0)

RECESS:

Mayor Drake called for a brief recess at 7:57 p.m.

RECONVENE:

Mayor Drake reconvened the meeting at 8:07 P.M.

WORK SESSION:

•  Development of the City's Business Continuity Plan by City Staff.

Emergency Manager Mike Mumaw explained that after the City Hall fire in 2001, his program was given the task of developing a Business Continuity Plan to provide a framework to guide the City's efforts to respond to and recover from any events that may interrupt its ability to conduct business and provide services to its customers. He summarized how the Plan was developed, hazards that were identified and activities that were identified to minimize impact and loss from such hazards (detailed in Plan). He noted this was a "living" document and it would be revised as staff worked through the procedures, tasks and training. He offered to answer Council questions.

Coun. Bode asked how the top hazards were ranked.

Mumaw explained four methodologies were used to assess the risk: 1) Potential impact on property and people; 2) Probability of event occurring; 3) Speed of the onset of the event; and 4) Duration of event. He said these methodologies were put into a formula; based on the formula the top ten hazards were identified, with scores which ranged from 600 (highest) down to 200. He explained the top five hazards were:

No. 1. Failure of the Internal Network: Major disruption to City's ability to conduct business. He noted there was little warning when this occurred and with its high impact, it was ranked as the top disruption.

No. 2. Biological, Chemical or Radiological Contamination. He noted the anthrax contamination which occurred two years ago on the east coast and caused a long-time closure of facilities.

No. 3. Malicious Damage and Destruction of Software and Data, along with unauthorized or accidental modification of the software.

No. 4. Earthquake and Hazardous Materials Incidents.

No. 5. Vandalism, Terrorism and Bomb Threats.

Mayor Drake asked if Councilors had any questions or revisions, could they get them to Mumaw in the next couple of weeks, so he could respond before the final document was brought back to Council for approval.

Coun. Soth stated he was most concerned about the probability versus possibility of any of these events occurring. He asked if the likelihood of the events was considered.

Mumaw explained staff looked at past history for the three key City facilities (Library, City Hall and Operations). He said Hazardous Materials was pushed higher because of problems with gas leaks at City Hall. His stated historical factors played a large role in the evaluation.

Coun. Soth asked if this Plan was for the continuation of business in City facilities rather than those events which happen outside a City facility.

Mumaw replied that was correct.

Coun. Bode asked if the strength of the City's firewall was monitored and if the City monitored the attempts to break through the firewall.

Mumaw explained ISD monitored the firewall for malicious hacking.

Coun. Bode noted breaking into the City's computer system would have a huge financial impact on the City. She wondered how the system was backed up and monitored.

Mumaw explained the City had a complete backup system which included servers.

Finance Director Patrick O'Claire explained the system was backed up and stored off-site every night. He said it was backed up on disks and tape. He noted the City was part of the Broadband Users Group, which has a centralized firewall in Washington County and, in addition, the City had its own firewall that monitored incoming and outgoing traffic.

Coun. Doyle noted this type of incident was rated No. 4. He noted the top concern was the physical failure of the system.

Mumaw confirmed that was correct.

Mayor Drake noted the Plan would be brought back in February for adoption.

PUBLIC HEARING:

04013 - APP 2003-0010 Appeal of DR 2003-0005 Canyon Town Center Retail Building Design Review

Development Service Manager Steve Sparks read a prepared statement defining the process that needed to be followed for this hearing, including the various required disclosure statements (in record).

Sparks asked if any Councilor had a potential or actual conflict of interest.

None were declared.

Sparks asked if any Councilor had an ex parté contact to declare.

Coun. Soth stated he had no ex parté but he visited the site two or three different times.

Mayor Drake stated he had known Mr. Barmann for almost two decades and was also familiar with the applicants and their attorney. He said these arm's-length relations had not affected him either way. He said he visited the site this afternoon.

Coun. Doyle said he had been to the site numerous times.

Sparks asked if any Councilor wished to declare any site visits and noted it was covered under the previous question.

Sparks asked if any member of the audience wished to challenge the right of the Council to consider this matter or challenge the right of any Councilor to participate in this hearing, or wished to request a continuance of the hearing to a later date.

There were no challenges or requests to continue.

Sparks and Associate Planner Liz Jones presented the staff report. Sparks explained this was an appeal of the Board of Design Review's (BDR) decision to approve construction of a 6,000 square foot retail building off SW Lombard Avenue . He said the appellant asserted the proposal obstructed an existing vehicular connection and the location of the proposed building was inadequate given the existence of a shared driveway onto SW Lombard. He noted both of the appellant's objections related to the access onto SW Lombard Avenue . He said staff had not agreed with the appellant's conclusion that the BDR erred, as noted in the staff memorandum of December 23, 2003 . He noted staff submitted a memorandum dated January 12, 2004 that gave additional findings for Council to consider with staff's recommendation to deny the appeal. He explained staff concluded that because the access rights to SW Lombard had ceased due to the expiration of the lease agreement between the neighboring properties, vehicular connections no longer legally existed to SW Lombard ; therefore, the proposed development did not obstruct an existing or approved vehicular connection. He said the staff recommendation was to deny the appeal and uphold BDR's decision for reasons set forth in the Council packet and in the January 12, 2004 , memorandum from staff.

Coun. Soth asked if the phrase ".will close the existing physical internal drive aisle that connects the gas station property and the shopping center property." (January 12 memo, page 1) referred to the area from the existing curb cut on the access to that area of the shopping center which was east and north of the concrete barrier. He noted there was no access from the gas station property internally to any of the shopping center property except that which was in the driveway south of the concrete barrier.

Associate Planner Liz Jones explained the barriers were installed two weeks ago on the north property line which divided the shopping center from the station property. She said there used to be a vehicular connection that was subject to the lease agreement, but the barrier now divided the north/south property.

Coun. Soth noted the existing curb cut and driveway, was located three-quarters on the shopping center property and one-quarter on the gas station property. He asked if that was why the barrier was angled to the north from the eastern terminus.

Jones replied that was correct.

Coun. Soth noted if the barrier was perpendicular to Lombard , it would delineate the existing property line between the two properties.

Jones replied that was correct.

Sparks added that from the submitted site plan, the driveway on the Unocal side was approximately eight feet wide.

Coun. Soth noted the driveway/curb cut was approximately 30 feet now.

Jones replied that was right.

Mayor Drake said he thought he read the appellant chose not to negotiate a new lease.

Sparks suggested the appellant could better respond to that question.

Sparks entered into the record additional correspondence received by the City this evening: 1) Letter from Lawrence Derr, representing the appellants, dated January 12, 2004, with two enclosures which were a January 6, 2004 letter from Jeff Payne of ConocoPhillips and a copy of a Service Station site lease; 2) Letter from Steven Pfeiffer of Perkins Coie, representing the applicant, dated January 12, 2004.

Mayor Drake said there was discussion about an alternative driveway in the event the Council upheld the BDR's decision. He said it appeared access to Lombard was more beneficial to the station operator. He asked how difficult it would be to obtain westerly access onto Lombard for the station, to replace the access that would be cut off.

Sparks explained the Land Use Application required was a Type 1 Design Review. He said it could only be appealed by the applicant if the City placed conditions on such an approval. He added it required other ministerial applications such as a right-of-way permit for a new curb cut and electrical permits to move illuminated signs.

Mayor Drake noted Lombard was a City street and the State preferred that there not be an access any closer than the driveway that was recently closed. He asked if the State could live with an access south of the current access.

Sparks said the correspondence from the State (in the record) showed the State appeared to be comfortable with the current situation. He noted the decision would be the City's.

Coun. Soth said with the access closed, the northern 22 feet of the driveway was off limits to the gas station; that left the station eight feet of driveway. He noted the Type 1 review would be in the event they proposed to extend that eight foot driveway to allow access for themselves and customers. He noted the extension was 16 feet, to provide the required 24-foot driveway and required the relocation of lights and a sign.

Sparks replied that was correct.

APPLICANT:

Steven Pfeiffer, Perkins Coie, Portland , attorney, stated he was representing applicant Group MacKenzie and the owner/developer of the property P & F Properties. He noted William Floberg, owner P & F Properties, was present to answer questions if needed.

Pfeiffer explained Parcel 5 (east of Lombard/north of Unocal site, site of the 6,000 square foot building), was the subject of a lease with Unocal; with the lease came the access easements over the northern property line, to the east of the proposed building, and to the Lombard curb cut. He said there were two extensions to the lease and the last opportunity to extend the lease occurred October 24, 2003 . He said the appellant elected not to pursue the lease extension and thus lost the rights to those easements. He stated the appellant's position was that the easement was perpetual. Pfeiffer stated this was a legal debate more appropriately handled by a circuit court judge, if it needed to be addressed. He said the issue before the Council involved private property rights and the interpretation of the easements, rather than land use policy. He said the appellants alleged violation of two of the criteria in front of the BDR, but in both cases their position was dependent on the continued right of a private access agreement as the sole basis of a violation. He stressed the access did not exist; it was not a condition of a prior land use approval imposed on the center and it was not the result of an exaction by the City. He said this was a private, negotiated agreement which the appellant decided to forego and they were now before the City asking them to reinstitute the access at the applicant's and City's expense.

Pfeiffer explained the barrier description was accurate. He said that a month after the BDR decision he wrote a letter to Derr stating they would have to impose that barricade, but not follow the property line; instead they would head northwest to form a triangle to allow them to continue to use the access. He said they did this because they were providing the applicant not less than 45 days to pursue with the City a modified curb cut to the south. He said the barrier had been installed for a month and, to his knowledge, the appellant had yet to approach the City with that application.

Pfeiffer stressed he did not believe the Council had the authority to impose these easements on the applicant, because the appellant's need for access was not the result of this project. He noted the applicant was not the source of the appellant's traffic problems. The appellant had the opportunity to prevent the problems by exercising the lease and they chose not to. He urged the Council to uphold the BDR decision and deny the appeal. He noted the appellant could go to circuit court for a remedy or they could pursue a modified access to the south. He urged Council to let the appellants follow the opportunities and solutions available to them.

Coun. Soth stated the Council did not have the authority to act on or interpret a private agreement when it was not imposed as a condition of development. He referred to the staff report page 0058, Article 3, Section 3.1, third line, where "only during the lease term" was written in; he asked if that was what the applicant was referring to when he said the easements had expired.

Pfeiffer replied that was correct.

Mayor Drake asked if it was not recorded, how could there still be a perpetual easement if the lease agreement expired.

Pfeiffer said their position was that the duration of the easements was linked to the term of the lease; the easements survived and expired only through the duration of lease. He said there were perpetual easements that survived a lease, but in this case there was a specific intent to limit the duration of the lease.

Mayor Drake asked who intended to limit the lease and why.

Pfeiffer replied it was the applicant's intent to limit the lease, because when the lease expired they wanted to use the land; but with easements in place they could not do so.

APPELLANT:

Bob Barman, Beaverton , appellant, sketched a copy of the subject site (the gas station owned by Barman) on the whiteboard in the Council Chamber (in the record). He reviewed the history on this site from the 1987 Local Improvement District. He said he gave up his original design and moved the station over because he had a perpetual easement. He said he did not want the 20-foot extension being discussed because Light Rail was coming through and it would put a raised median down Lombard . He said he needed the internal connection to deal with Light Rail and Canyon Road . He stated he gave up two curb cuts for one large curb cut and if he had known this was happening, he would not have invested his money in 1987 for a 16-year gas station. He said the station was built for 40 years.

Larry Derr, Portland , attorney representing appellants Robert and Katie Barman, noted Council had a letter from Jeff Payne of ConocoPhillips, which referred to the issue of gasoline delivery trucks. He said they were initially concerned that the most devastating effect of the closure at the property line was that the trucks would not be able to enter off Canyon Road , make a turn and get back onto Lombard . He said the ConocoPhillips delivery staff said they believed the trucks could make this turn, though circulation and maneuvering would be more difficult. He said the delivery issue was not a reason for approving or denying this proposal.

Derr said they were more concerned about the additional trips on Canyon Road , particularly the Canyon/Lombard intersection. He said ODOT wrote a letter to the City stating extreme concern about the additional traffic; ODOT recommended the internal connection between the properties be maintained and, if necessary, the City should make it a condition. He noted in the December 23, 2003 , staff report there was a statement that "ODOT cited in their letter concern about the increase in vehicle use of the existing SW Canyon Road curb cut, but ultimately found that the increase in usage did not classify as a change of use for the purposes of access on Canyon Road ." He said he knew ODOT was not comfortable with the situation, so he contacted ODOT staff and they clarified that "meeting the access s tand ards" meant it would not trigger a requirement for a new access permit, if the other accesses were closed and Canyon Road was the only access. He read a section of a letter from ODOT, dated January 12, 2004 , as follows : "This letter is to clarify that previous ODOT concerns with regards to potential increase in conflicts at the Canyon Road/Lombard Street intersection still apply even though the permit process would not be triggered." He stressed this indicated ODOT's concern was still in the record and had not been addressed.

Derr stated Coun. Soth was correct that cities and counties do not get into matters of enforcing private rights. He said that was not what they were talking about; they were not asking to impose easements on neighboring property. He said they were asking the Council to not grant approval for development that impaired existing access. He said that was why Council was in the position of arbiter of a private legal property right. He said the City could not avoid this issue because of a provision in the Code that said "A proposal will not obstruct an existing, approved or Comprehensive Plan identified connection." He stressed these were three independent alternative categories: existing, approved or Comprehensive Plan identified. He said there were two existing connections, the one to Lombard and the internal connection that was blocked. He said the question became "What does existing mean." He said staff took the position that if there was no legal right to use it, it was not an existing access within the meaning of the Code. He said Council had to decide if this was an existing access.

Derr said the easements did not come from or exist in the lease. He read from page 8, Section 13 of the lease for Parcel 5 (submitted into the record at this meeting): "The parties shall enter into a reciprocal easement agreement for the benefit of the super station for the term of the lease." He noted this was not the easement, it said what the parties would do; the easement was not done with this lease. He said in November 1988, Preece & Floberg sold a portion of the Center to Copelands and entered into a reciprocal CC&Rs conveyance agreement between the shopping center members. He said that gave reciprocal easements to Copelands and the Preece & Floberg shopping center property and it said Preece & Floberg was authorized to extend those reciprocal easements to Parcel 5 and to the Unocal station property on the corner provided that Unocal gave back reciprocal easements for the shopping center through the property. He said that was what Barman spoke about. He said in January 1989, the document was signed and recorded; he said this was in the record. He said this document provided two separate easements: 1) One for Parcel 5 the lease hold property; 2) One for the station property at the corner. He said at the end of the easement document, it said "this easement agreement had perpetual duration except for the easements granted with respect to the lease hold property." He said if you were giving an easement to a fee title owner (the station property on the corner), that owner had an interest in having that easement go on in perpetuity and nothing in this agreement said that it did not.

Derr noted the revised version of this document was in the record and was submitted by the applicant; he said presumably the applicant's representative made the marks. He noted on the section about exclusive easements, they wrote in "only during the lease term." He said that not in the document that was signed. He said the document went on to say that this benefited Parcel 5 and the adjoining Unocal station property. He said on page 48 of the record was the document that was signed, the adjoining property language was crossed out and then written back in and was initialed. He said that was a hotly negotiated issue for the easements still existed. He said the Council needed to take the documents on face value and then look at the Code s tand ards and decide if the proposed development obstructed the existing rights. He said to do anything else was to make a legal conclusion that those easements rights that were granted and were in recorded documents, no longer existed. He said the Council had to further conclude that under the Code provisions, they did not have to abide by these requirements.

Mayor Drake noted Derr had exceeded the 15-minute time limit and asked him to conclude.

Derr noted that moving the Lombard access was expensive and it would operate in a less functional way. He asked by what right the City could impose that obligation on the neighbor, when its standard was that you were not to obstruct the existing connection. He said even if the Lombard access was moved, it would not serve its purpose when the commuter rail came in.

Mayor Drake noted that Derr's testimony time was up and any argument related to commuter rail was premature since that was not what was being dealt with here.

Derr responded that they were told by City staff that if they approved that access, it would have a condition of right-in/right-out when commuter rail came in. He said they knew this would be the recommendation for limitation.

Mayor Drake asked if Council had any questions.

Coun. Soth noted on page 0012 Derr quoted a portion of BDC 40.20.15.3.C.3 and had not included the portion that dealt with the Comprehensive Plan designation. He said he felt an important part was omitted; the part that dealt with the Comprehensive Plan identification of a street or access. He asked why Derr abbreviated that statement then and now he came in with the Comprehensive Plan designation.

Derr said he was trying to focus the issue. He said the operative words in this situation were "They obstruct an existing vehicular connection." He said the rest of the provision said it was also a violation if they obstructed an approved vehicular connection or if they obstructed a Comprehensive Plan identified vehicular connection. He said those were three alternative scenarios and it did not take all three at one time to violate a provision. He said if any one of those three was obstructed, it was a violation. He said he raised it because City staff took the position that "or" meant "and"; he noted in staff's memo dated January 12, 2004, staff said Council might interpret "or" to mean "or".

Coun. Soth noted page 78 was a sketch illustrating the turning radius for a semi-truck. He noted few outfits used semi-trucks anymore; most were truck and trailer with an overall length of 75 feet. He said the turning radius for one of these units was shorter than the radius illustrated for the semi-truck.

Derr replied that was not their sketch; the ConocoPhillips staff brought the sketch to a meeting with City staff to discuss the impact of this proposal. He said they told staff it was not to scale and they were not sure it applied. He noted City staff requested a copy and submitted it to the record. He noted that earlier he testified they were not objecting on the basis of truck delivery; ConocoPhillips said their trucks could serve the station but delivery would be more difficult.

Barmann said he was at that meeting and they didn't know that would be discussed. He said the real problem was that if a car pulled up under the canopy, the front end of the car was almost where the barriers were; it would be very difficult for the truck to get out until the car left because the driveway was parallel with the dispenser.

Coun. Soth asked what route the supply trucks utilized to discharge fuel into the station tanks.

Barmann explained they come up on Canyon Road and went around the station on the east side between Chili's and the dispenser.

Mayor Drake asked if the lease Derr presented this evening was the latest lease and was it a perpetual lease.

Derr said the lease document did not create the easements; it said the easements would be created. He said the parties negotiated a different deal for a perpetual easement. He said his submittal on pages 48 and 49 were the relevant pages of the signed document. He said the document on page 8 was the lease for one part of Preece & Floberg's property; the perpetual easement went beyond that parcel. He said there was the lease and there was a perpetual easement; two separate issues.

Mayor Drake asked if the perpetual easement was renewable.

Derr said the perpetual easement was a permanent easement tied into the entire development.

Mayor Drake asked if the perpetual easement accessed Lombard Avenue .

Derr said the perpetual easement allowed for permanent easements across all the property for all the owners to use all existing street accesses; this included the station property, Parcel 5 and the rest of the shopping center.

Mayor Drake said it seemed this issue was not related to this development; it was a circuit court issue. He said this was not something the BDR or Council would decide. He said he did not find evidence of a perpetual easement.

Derr responded it was on page 49 and it said "The duration of this agreement is perpetual."

Barmann said that agreement had nothing to do with the lease. He noted he owned the Chevron station at Murray and Allen but Chevron owned the property. He said if he stopped leasing that site and it became a Subway there would still be a perpetual easement right through that property.

Mayor Drake noted that the lease agreement referred to by Derr (page 49, Article 6) said "The agreement.shall terminate upon the termination of such lease."

Derr read from the lease agreement (page 49, Article 6) " This Agreement is perpetual provided, however, that Unocal's rights with respect to Sub parcel 5." and noted Sub parcel 5 was not what they were talking about. He said Sub parcel 5 was the undeveloped parcel where they wanted to put a lube operation. He said that Sub parcel 5 was the only part that terminated. He noted there were two types of easements; easements to Sub parcel 5 and to the station-fee ownership.

RECESS:

Mayor Drake declared a brief recess at 9:31 p.m.

RECONVENE:

Mayor Drake reconvened the meeting at 9:38 p.m.

Coun. Ruby agreed there was an issue about the relationship of the easement to the lease termination, with both sides taking different positions about the legal effect of the termination of the lease. He noted the applicant acknowledged this matter could be presented to court. He asked if there was any reason why, if the Council denied the appeal, it would prejudice or impair the appellants' rights in court to present their arguments about the easement being perpetual and unaffected by the lease termination.

Derr replied no. He said the complaint was drafted; they held off on filing to see what happened at this meeting. He said there would be a land use appeal.

There were no other questions or testimony.

REBUTTAL:

Pfeiffer stated the appellants were relying on three points for their position. First, the City might install a median that restricted their ability to use the southerly curb cut. He said this was a self-imposed hardship that the appellants brought upon themselves by not maintaining the easement, the lease and the access rights. Second, ODOT was still concerned. He said ODOT's concern did not confer additional authority on the City. He said he could not imagine why they would not go forward with the review of the project and let ODOT state its concerns and work out a solution. He noted this argument did not prove the existence of any access over their property. He said if the appellants wanted to address ODOT's concerns, they would proceed with the relocated curb cut, but they had refused to do so. Third, it was an existing access.

Pfeiffer continued by stating the appellants said the applicant's position was untenable and if Council were to side with the applicant, it was taking a legal position. He noted the appellant stated their own position was clear and there was no other way to interpret the lease documents or the intent of the parties; and if Council agreed with the appellant's position, it would not be making a legal interpretation. Pfeiffer said he did not agree with the appellant and the documents were not clear. He said either way the Council was being called upon to make a legal interpretation of documents that should go to court. He said that was the position of the BDR and staff. He said the burden of the appellants' problems was not the proposed development; also, the loss of access was not from this development. He said that access would at some point be barricaded with or without this development, to protect the property owner's rights. He said denial of the development would not give the appellant access as their easement rights expired. He urged the Council to support the BDR and staff's recommendation.

Mayor Drake asked if the City Attorney or Councilors heard anything new in the rebuttal that would lead to a surrebuttal.

City Attorney Alan Rappleyea stated he had not heard anything out of the scope of the arguments raised earlier.

The Councilors indicated they had not heard any new evidence.

Mayor Drake noted that it was his ruling as Chair, based on information heard from the City Attorney and Council, that no new evidence was heard.

Rappleyea said this came down to the legal issue of the validity of the easement. He noted the Council's role was to determine whether there was substantial evidence that the criteria was met. He said to look at the substantial evidence; one had to see whether or not there was a lawful access. He said he reviewed these documents and he thought the access had expired and there was no access. He noted a circuit court could disagree with that, but he felt there was substantial evidence in the record to make the finding that the access had expired.

Coun. Soth referred to the original staff report, staff said the applicant's proposal met the criteria of Section 40/20.15.3.C.3 (The proposal will not obstruct an existing, approved or Comprehensive Plan identified vehicular..connection.) in terms of obstruction of access He noted the appellants took exception to that, saying that staff said it was "and" rather than "or" in reference to the Comprehensive Plan. He noted in the January 12, 2004 , memo, staff moved away from its original interpretation and gave credence to the appellants' position that it was any one of those, rather than all three.

Sparks read from the January 12 memorandum "If the Council finds this interpretation to be consistent with the intent of the criterion, then staff suggest the following supplemental finding addressing the above cited criterion.." . He noted Derr stated staff was conceding a point on the word "or". He said staff was not conceding any points. He said in the memorandum staff was saying if Council agreed with the appellants' interpretation, here were findings of logic. He said staff's position on this criteria remained that it was an existing, approved or Comprehensive Plan identified vehicular connection and that section applied to roads, not to curb cuts or driveways.

Rappleyea noted in the memorandum of January 12 he was suggesting that if the Council wanted to support the application and deny the appeal, that it make additional findings for the other criteria.

Mayor Drake asked the City Attorney if the Council decided to support the application and deny the appeal, was it his recommendation that the January 12 memorandum be included as additional criteria for denying the appeal.

Rappleyea responded that was his recommendation, along with the determination that there was no lawful access at that location.

Coun. Doyle asked if the City Attorney was saying that the easement and lease were linked.

Rappleyea replied that the easement had terminated by the fact that the lease terminated. He said the stand-alone CC&R's document referenced this parcel; the lease superseded that and the intent was that those would be temporary.

Mayor Drake closed the public hearing at 9:54 p.m.

Coun. Soth MOVED, SECONDED by Coun. Ruby, that the Council deny the appeal and uphold the decision of the Board of Design Review, based upon the fact that what was being considered was an application for a piece of property that had no bearing on what the appellant had indicated, due to the fact of the independent lease access agreement which was a legal issue, rather than an issue that the Council was qualified to legally determine.

Coun. Soth explained the lease was not recorded, it was not a condition imposed by any of the land use reviewing bodies within the City, and it was not imposed as conditions of approval on any of these sites. He noted it was not the Council's responsibility to interpret these in the same way that a circuit court may. He noted the appellant had opportunities as outlined in the letter from ConocoPhillips. He said for these reasons, and based on the findings of the BDR and the findings in the January 12 memorandum, he made the motion to deny the appeal.

Mayor Drake asked if the intent of the motion included the change in the grass in the planting strip.

Couns. Soth and Ruby confirmed that was correct.

Mayor Drake noted there were only four Councilors present and he did not vote unless there was a tie.

Coun. Bode stated she did not unders tand why Derr's client would not sign the lease renewal and put himself in the position of not having an easement. She said she did not clearly see two different documents. She said the logic of not signing the lease and thinking one would continue to do business and still have the easement was not clear to her. She said she was voting to deny the appeal and the question of why there were not two clear documents would have to be determined by another body.

Coun. Ruby noted that Coun. Bode's comments indicated the difficulty of this appeal. He noted it was not a situation where Council applied a set of facts; it was a situation that necessitated a legal interpretation to make a decision. He said in those instances the Council should defer to the City Attorney's judgment, unders tand ing that this might be revisited by the court.

Coun. Doyle said he would support the motion for reasons voiced earlier. He said once the legal issue was resolved, the land use situation would be resolved. He said he would rely on the judgment of the City Attorney.

Mayor Drake noted that since this was a de novo appeal, the Council was acting as the Board of Design Review and the motion was to deny the appellants' appeal and uphold the decision of BDR with conditions stated in the BDR's final order and with additional information supplied in the January 12, 2004, staff memorandum from Liz Jones , referring to the Supplemental Staff Response.

Question called on the motion. Couns. Bode, Doyle, Ruby and Soth voting AYE, the motion carried unanimously. (4:0)

ORDINANCES:

Suspend Rules:

Coun. Soth MOVED, SECONDED by Coun. Ruby, that the rules be suspended, and that the ordinance embodied in Agenda Bill 04014 be read for the first time by title only at this meeting, and for the second time by title only at the next regular meeting of the Council. Couns. Bode, Doyle, Soth, Ruby voting AYE, the MOTION CARRIED unanimously. (4:0)

First Reading :

Rappleyea read the following ordinance for the first time by title only:

04014 - An Ordinance Amending Ordinance No. 2050, The Zoning Map, From Urban Standard Density (R7) to Urban Standard Density (R5); ZMA 2003-0017 Holland Park PUD Zoning Map Amendment (Ordinance No. 4285)

Second Reading :

Rappleyea read the following ordinances for the second time by title only:

04006 - Ordinance Annexing Property Generally Located at 12345 NW Barnes Road to the City of Beaverton : Expedited Annexation 2003-0012 (Ordinance No. 4284)

Rappleyea noted there was a minor modification to legal description of Parcel 2 which was not a substantive modification so an additional reading was not required.

Coun. Soth MOVED, SECONDED by Coun. Doyle, that the ordinance embodied in Agenda Bills 04006, now pass. Roll call vote. Couns. Bode, Doyle, Ruby, Soth voting AYE, the MOTION CARRIED unanimously. (4:0)

ADJOURNMENT

There being no further business to come before the Council at this time, the meeting was adjourned at 10:01 p.m.

APPROVAL:

Approved this 2nd day of February, 2004.

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Rob Drake, Mayor