West Linn-Wilsonville Clarifies Actions With Oppenlander Purchase and Sale Agreement

Posted by West Linn-Wilsonville School District on 2/10/2022 10:00:00 AM

The West Linn-Wilsonville School Board held a public meeting on February 9, 2022 to receive critical updates regarding the District’s Purchase and Sale Agreement with the City of West Linn for the Oppenlander Property (1275 Rosemont Road, West Linn, OR 97068; 10.08 acres). District staff provided an overall update and corrected several inaccuracies that have been made in recent public meetings.

Current Situation

The West Linn-Wilsonville School District [District] received an appraisal of the Oppenlander Property at “fair market value” of $6.5 million in April 2021. In connection with the Purchase and Sale Agreement (PSA), the City of West Linn [City] ordered an update to the appraisal that was also to be conducted at “fair market value.” In January 2022, the City received an appraisal of the Oppenlander Property at $120,000 based on “park value”. The District rejected the appraisal of $120,000 because the January 2022 appraisal does not reflect the fair market value of the property.

Why Did the District Agree to Designate the Property as a Park in the PSA?

The District requested that the Oppenlander Property be designated as a park because the District believed the citizens of West Linn would be interested in maintaining the property for park use that residents have enjoyed for decades.The specific reference in the PSA of the City Charter Chapter XI, Section 46, was requested by City staff and the District was agreeable.  

Statements that the District operated in error or made a mistake simply are not true. The District’s intent — and by the District’s understanding — the City’s intent was not to use the park restriction to arrive at a purchase price that does not reflect the fair market value of what would be prime developable real estate. All conversations and agreements between the City and District leading up to the appraisal used “fair market value.” Fair market value is written into the PSA as the appraisal methodology. Additionally, the City referenced the “fair market value” concept with respect to the property in various conversations, agreements, the Letter of Intent, PSA and even in a survey with the citizens of West Linn.

Could a second appraisal have been conducted?

Yes. When both parties received the January 2022 appraisal of $120,000, City staff and District staff immediately discussed the need to have the appraisal value corrected to reflect conversations, understandings and agreements between the two parties that used a fair market value methodology. An expedited review and second appraisal was possible at that time and the District was willing to pay the extra cost of a second appraisal. The District later learned that the City was no longer interested in conducting a second appraisal.   

Has a vastly reduced “park value use” or “school value use” been applied in past property sales?

No. In all past property transactions between the City of West Linn and the District, property has been valued at “fair market value” rather than applying a massive discount based on the prospective use of the property. Even when the District intended to only use property as a school, there was no insistence that the value of property be reduced to reflect that purpose.  Likewise, when the City has purchased property from the District in the past there was no insistence that the value of the property be reduced to reflect the intended purpose.  

When the District has purchased property from the City, private citizens, churches or other entities, “fair market value” has always been applied regardless of the intended or limited use of the property for the District. 

  • In 2011, the City sold a portion of Sunset Park to the District for fair market value which at that time was $301,000/acre.  Neither party used “school use only” to justify reducing the value of the property.  
  • In 2011, the District sold property on Parker Road to the City of West Linn for “fair market value” of $301,000/acre.  Neither party used “park use only” to justify reducing the value of the property.
  • In 2021, the District purchased two homes from New Life Church with the agreement to convert the lots into parking lots for the District and Church to use.  The transaction used “fair market value” and not a reduced “parking lot value”.  

There has been a long-standing, historically-proven course of dealing between the City and the District to apply “fair market value” without discounts based on particular use in past property transactions.

Could the City sell the Oppenlander Property in the future to a developer?

Yes. The West Linn City Charter Chapter XI allows the city to remove the park designation at any time with the approval of the voters. This is precisely how the City sold a portion of Sunset Park in 2011 to the District at fair market value; the voters approved a change in designation of the property. After a change in designation, the City could sell the Oppenlander property at any time for a substantial financial profit. 

Could the City and District dissolve the PSA if there is no agreement?

Yes. If both parties mutually agree to dissolve the PSA, that can be done. Both parties can also modify the agreement by mutual consent. Failure to reach a resolution on the matter could result in parties entering litigation. Both parties are highly confident that they would “win” if this were to go to court. But the District also understands that the City, District and community at large would “lose'' if litigation resulted due to a failure by the parties to pursue a solution in good faith.

Board considered two remaining options

At this time, the District is still willing to move forward in good faith with the City of West Linn and avoid any costly legal process that would not serve the community or citizens well. The District has offered a number of options (e.g. a second appraisal) to the City, but the options are narrowing. 

District staff presented two remaining options to the School Board at a February 9 special meeting.

  1. Option A is to formally offer the City Council an amendment to the PSA that removes the designation of the property as a city park.  If Council agrees to open the PSA to this modification, the purchase price could be established by the R.P. Herman appraisal performed in April 2021 that places the appraised value of the property at $6,500,000.  This amount has been used in all discussions between both parties and the community in conversations and public outreach.  The District would rely on the West Linn community to determine the present and future use of this property.

  2. Option B would be to delay the ballot measure until November, 2022. This option would allow the City and the District to continue to negotiate modifications of this agreement without the impending timeline of a May ballot.

The School Board voted and approved a resolution selecting Option A as their desired path forward, offering to modify the existing PSA to remove the designation of the property as a city park. 

The modification can only occur if both parties mutually agree. The District has sent the signed resolution to City staff to present to City Council for their consideration. The District remains hopeful for an agreeable path forward that continues to honor an established pattern of good faith dealings between the City and District.