Concerns and Questions Mount Over Demolition Appeal Process

PORTLAND, Ore. – Five months into new code regulations governing home demolitions throughout the city, there have been six appeals for extended demolition delay.

The Eastmoreland, Beaumont-Wilshire and Eliot neighborhood cases have been successful in securing delay extensions, while the Multnomah, Hosford-Abernethy and Concordia neighborhoods have been denied.

The Concordia appeal for a house at 5626 NE 30th Ave. was denied on procedural grounds, with disagreement over whether the application was filed in a timely manner. The concern was raised by developer Dozer Construction LLC through attorney Andrew Seher, and the hearings officer found the complaint had merit. The hearing ended before discussion of the house and plan to save it could even begin.

Concordia neighborhood home. Photo credit: Portland Chronicle

But the other five hearings have offered some insight into the demolition appeal process — and have raised some concerning questions about how it is carried out.

Contrasting decisions

Hearings Officer Greg Frank, employed by the city auditor’s office, oversees demolition appeal hearings. He reminds attendees during each hearing he is not employed by the Bureau of Development Services or anyone else besides the auditor’s office.

Frank explains at the beginning of hearings that his role in demolition hearings is akin to that of an administrative law judge. The process is not a land use case, he says, and is more like a trial, but slightly more relaxed. Appellants must call witnesses to speak, and the appellant (as well as the demolition applicant) acts as a sort of lawyer.

He examines four points for each case, laid out in chapter 24.55 of the Portland City Code: did the appellant contact the developer appropriately, is the structure in question significant to the neighborhood, does the appellant have a plan to save it and is that plan “somewhat realistic.”

Evidence for each of these criteria, though, is not always equally considered, the first few hearings have shown.

In the case of the Hosford neighborhood appeal for a house at 2834 SE 20th Ave., Frank determined the first three criteria were met, as the developer had been contacted, the house was sufficiently significant in the eyes of the code, and that there was an estimated budget plan, called a pro forma budget.

Hosford-Abernethy neighborhood home. Photo credit: Portland Chronicle

In his denial of the appeal, Frank took one sentence spoken by neighbor Erin Flasher as evidence for his opinion that the neighborhood could not actualize a deal with the developer and therefore couldn’t meet the fourth criteria point.

Flasher had referenced an individual who was interested in purchasing the home, but who was not present at the hearing.

“I don’t feel comfortable discussing his financials because I don’t know them and it’s not really my business, but I do believe he and the developer could probably come to some agreement. I’m quite confident that this person is a very, very viable alternative to demolition of this home,” Flasher said.

That sentiment was key to Frank’s decision.

“What I was told is, ‘I really don’t have the desire or ability to talk about his financial situation,’ and quite honestly that’s important in this case, because you may not be interested in it but quite honestly, I am,” Frank said, adding that he subsequently would not take any additional testimony as the appellants had previously stated their case was closed.

Frank reminded the appellants he had to find a “reasonable certainty”  they could consummate the deal within the 60 days of delay extension.

“In this particular case I just don’t have that, I have, ‘the person can do it,’ and I’m not sure I want to go that far with this,” Frank said, denying the request for delay.

DELAY APPEALS

Our coverage of each house:

3030 SE Rex St.

3215 NE 42nd Ave.

2834 SE 20th Ave.

8330 SW 45th Ave.

2405 N Vancouver Ave.

5626 NE 30th Ave.

But a month later, Frank approved a demolition delay appeal for a house at 2405 N. Vancouver Ave., based on similar evidence. The demolition of that house, built in 1889, was appealed by Judge Finklea on behalf of the Eliot Neighborhood Association and what Finklea described as about 75 other nearby neighbors.

The first three criteria were also aptly met by Finklea, who admittedly provided a much more detailed pro forma budget than that of the Hosford-Abernethy Neighborhood Association in the July 21 hearing.

However, when it came to demonstrating the reasonableness of the proposal and ability for funds to be obtained to actualize it, the situation was akin to that of the Hosford-Abernethy appeal. Finklea explained that there was an interested investor, not present at the hearing, and that Finklea had not brought personal financial statements to the hearing, although he could obtain them if necessary.

Eliot neighborhood home. Photo credit: Portland Chronicle

“Did they say they could do it?” Frank asked, to which Finklea responded that the investor had said the funds were available.

“Just leave it at that,” Frank said, approving the demolition delay appeal.

This section of criteria is, admittedly, the area in which Frank says he has the most discretion on a case-by-case basis. But the decision in the Eliot neighborhood case contrasts sharply with the Hosford appeal, in which Frank indicated he did not want to go so far as to believe on second-hand information that there was an investor with the means to actualize the plan.

Proof of funds

Besides the varying decisions based on similar evidence, an issue has come up in several hearings about preferential treatment for wealthier neighborhoods — not necessarily bias toward those neighborhoods, but preference inherent to the appeal process.

In the first five appeals, the Eastmoreland and Beaumont-Wilshire neighborhoods were successful based in part on their finances.

Frank explained that in the Eastmoreland Neighborhood Association case for the house at 3030 SE Rex St., which he approved for an extended demolition delay, the neighborhood had a “track record.” He was convinced partially by neighborhood representative Robert McCullough testifying that he had the money alone to purchase the house immediately.

“I said, ‘It’s pretty hard to disbelieve that testimony,’ so I agreed that there was a fundraising plan, that the person was there,” Frank said.

Eastmoreland neighborhood home. Photo credit: Portland Chronicle

In a subsequent hearing for a house at 3215 NE 42nd Ave. in the Beaumont-Wilshire neighborhood, a neighbor “came in and said, ‘I’ve got the money and we’ve got three or four of us (that) are gonna do it but I can buy it all by myself so if they don’t put together … the group then we can do it.”

Frank stated that he was “looking (the neighbor) in the eye” and questioning him, and explained in his decision that the neighbor was the difference between winning and losing the neighborhood appeal.

The self-reported finances of representatives from the Eastmoreland and Beaumont-Wilshire neighborhoods figured largely into approval of their demolition delay appeals.

The Multnomah Neighborhood Association appeal, meanwhile, was rejected based on Frank finding there was not reasonable probability the plan to purchase the property could be actualized.

That same day during the Eastmoreland appeal, Frank commented on the fairness of approving wealthier neighborhoods over those without the imminent means to pay developers.

“It’s possible to have a neighborhood under this section of code with very few financial resources, and then we have a case here where there’s a neighborhood with a significant amount of resources and we get an entirely different result,” he said. “From a diversity, from a fairness, from a just general perception of government I think, that raises the possibility of having different decisions based solely on economics.”

While having the ability to actualize a deal is inherently an economic consideration, he was still uncomfortable with the disparate decisions the code seemed to decree.

“This code is inherently not equally treated amongst income levels or neighborhoods, and that’s become painfully aware,” Frank said. “I’ve become painfully aware of that today.”

“At best, the city staffer who wrote that line seemed determined to show the poor to the door,” McCullough said.

The Portland Chronicle asked Eastmoreland Neighborhood Association president Robert McCullough about this phenomenon, which he has dubbed “greenmail,” a spin on the concept of blackmail.

“The logic of blaming neighbors who are able to pay greenmail to preserve the environment and livability of their area seems a bit backward to me,” McCullough said in an email. “It is the equivalent of blaming families who raise the blackmail to free their loved ones.  The blame should be on the kidnappers, not the victims.”

Still, McCullough pointed to a line written into the regulations setting up the new demolition delay appeal process, the requirement that the appellant show reasonable potential of making the plan happen within 95 days “by providing a pro-forma budget and either evidence of funds on hand or a fund raising plan sufficient to meet the financial requirements of that budget.”

“At best, the city staffer who wrote that line seemed determined to show the poor to the door,” McCullough said.

Not required to negotiate

Another issue that has arisen with the process — perhaps the most evident in each case — was brought up by Frank during the Eliot Neighborhood appeal.

At the end of the hearing, Frank stated that the developer testified he would not sell the property in any scenario. Frank explained that with this in mind, he sees nothing in the code that requires the developer to acquiesce to any deal. While the delay had been extended, he said, that does not ensure the building will be saved.

“If you carry away from this hearing that the hearings officer said, ‘You have to agree with either of those two plans,’ … that’s an unfair interpretation of what I have authority to do and what I’m telling you I can do,” Frank explained to the appellant. “Really, the burden now shifts back to your shoulders but you’ve been granted until Sept. 25 to try to get that done.”

The regulations do not compel a developer to negotiate with the appellant for an alternative outcome to demolition, meaning the process could simply delay the demolition without any chance of a deal being struck.

Beaumont-Wilshire neighborhood home. Photo credit: Portland Chronicle

“It really means that how you get along with this developer and whether or not the developer acts reasonable or you act reasonable” play heavily into the prospects for a deal to be struck, Frank said.

During the Multnomah neighborhood appeal, Renaissance Homes representative Jeff Shrope repeatedly indicated selling the house was not up for debate.

“The house is not for sale, as of this point we have not said we are going to sell the property. So I don’t know how they’re going to be able to buy, consummate, move, if we’re not willing to sell,” Shrope said.

“That’s why we’ve arranged to sit down with you to see what your asking price would be if you would be willing to sell,” Multnomah Neighborhood Association chair Carol McCarthy responded.

“At this point it’s not for sale,” Shrope concluded.

Following that exchange Frank himself commented on the perceived flaw this presented in the process.

“If all an applicant for a demolition appeal permit has to say is, ‘The property’s not for sale,’ therefore there’s no such number that it can possibly be sold, that kind of flies in the face of what I think the intent of the code is,” Frank said. He added that each party is required to act in a “reasonable” manner and that the developer adopting this stance probably would not fit into that definition.

His denial of the Multnomah neighborhood was not based on the developer’s unwillingness to sell, he added, but on the neighborhood’s lack of probable ability to actualize any deal.

Developers not being required to entertain offers on houses under extended delay is perhaps the most visible phenomenon with the demolition appeal process, as two of the three successful appeals have run the course of their extended 60-day delay and still received demolition permits without successful negotiations. In both cases (Eastmoreland and Beaumont-Wilshire) the developer is Renaissance Homes.

The Eliot neighborhood house extended delay is set to expire Friday.

Lawyer up

The appeal process is still relatively new, having only undergone a half dozen hearings, but comments during the Beaumont-Wilshire hearing suggest the process could become much more reliant on legal arguments in future cases.

Frank stated he has “set the standard really low” on how to persuade him of significance and the ability to actualize a plan.

“Somebody needs to help me out on that,” he said, telling representative Anthony Cristobal of Renaissance Homes he would be wise to bring an experienced attorney to the table. “We get a good persuasive lawyer in here starting to argue significance and the right to sell or not sell … I think the complexion of these cases could change completely at least in the short term.

“If the applicant wants to start prevailing on a regular basis I need better help,” he said.

Frank also advised neighborhood associations to forge stronger legal arguments for their cases.

“If you really want to stand a chance on the long-term basis I need some better tools, some better arguments,” he said.