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City slammed with $6.5 million judgment

Federal jury says staff erred in development along David Hill Road

A federal jury in Portland has hit the City of Forest Grove with a $6.5 million judgment instructing it to pay a developer who claims the city delayed his housing project along David Hill Road in 2005.

City Manager Michael Sykes said he expects the city to appeal and in a prepared statement issued Tuesday, blasted the verdict, which was handed down late Friday, nearly one month after the trial began.

'I have never been more shocked in my entire career than I am by this decision,' he wrote. 'I simply do not understand how the jury could have erred so badly given the fact and the law in the case.'

Rather than delay the development, known as The Parks of Forest Grove, Sykes said the city 'bent over backwards to assist an inexperienced developer to complete the job.'

The contractor, Tim McDonald, couldn't be reached, but Steve Morasch, a lawyer for the plaintiffs, said the jury sent a strong message with its verdict.

'The judge said the jury could find liability if they found the city abused its power in a way that shocks the conscience,' Morasch said. 'The evidence supports that. And the jury agreed with that.'

McDonald and his partners hoped to build a 217-lot subdivision north of Forest Grove High School. The complaint alleges the city increased its right-of-way for David Hill Road, required the developer to build half the street, held up the sewer until other nearby developments were underway, and didn't secure a right-of-way for the development from a nearby property owner, forcing David Hill Development to purchase the right-of-way for $300,000.

The complaint, which asked for $8 million, also says that the city delayed construction for 14 months, and during the delay a downturn in the residential property market caused the developer to lose $4.7 million.