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Tualatin and Wilsonville have locked horns over some 42 buildable acres south of Victoria Gardens.

COURTESY OF THE CITY OF WILSONVILLE - The central subarea of Basalt Creek is shown outlined with a red dotted lined and with an arrow pointing to it. While the land lies on Tualatin's side of the agreed-upon future jurisdictional boundary, an agreement to which Tualatin and Wilsonville are party states that the land uses for the entire Basalt Creek area must be jointly agreed to.The Tualatin City Council took a tentative step toward finding a way forward in a joint planning process with Wilsonville that has been stalled for much of the year Monday, July 24, but a two-hour-long workshop on the subject ended with no clear resolution in sight.

Tualatin and Wilsonville have been at loggerheads over the Basalt Creek planning area since the Tualatin City Council said in February it wants to see a piece of land expected to eventually be annexed into Tualatin designated for residential development. Previous planning maps of Basalt Creek, an unincorporated swath of 847 acres between Tualatin to the north and Wilsonville to the south, had shaded the so-called "central subarea" just south of Tualatin's Victoria Gardens subdivision for industrial use.

The Wilsonville City Council has reacted strongly to Tualatin's about-face on the subarea, which was prompted by several property-owners and neighbors warning that its rugged topography and abundance of hard basalt rock would make the cost of industrial development there virtually prohibitive. At meetings earlier this year, Wilsonville officials suggested they could void the 2015 agreement between the cities to set the future jurisdictional boundary through the area along Basalt Creek Parkway. Both Wilsonville and Washington County, which will need to sign off on the joint planning map for Basalt Creek to allow the cities to annex the land, have warned that the change — which affects roughly 42 developable acres north of the future parkway — jeopardizes the future of the planning process.

COURTESY OF THE CITY OF WILSONVILLE - A feasibility study by KPFF included renderings of how an industrial campus-style development south of Victoria Gardens might look. A competing study by CESNW suggested the cost of such a development would be prohibitively expensive.

Dueling consultant, staff perspectives presented to council

Tualatin invited Wilsonville city staff and a representative from KPFF Consulting Engineers, which Wilsonville hired to conduct a feasibility study on the central subarea, to address the Tualatin City Council at Monday's work session. The Wilsonville officials reiterated their opposition to marking the subarea for residential development.

"The new proposal really does not seem cohesive with the surrounding area," said Nancy Kraushaar, Wilsonville's community development director and city engineer.

Kraushaar listed several objections her City Council brought up.

"Specifically, our council concluded that the proposal does not support what we have been working on and planning on over the past 16 years, does not support our joint vision for an economically viable employment district, did not support the cohesive parkway or business uses between the cities, does not support industrial massing near Grahams Ferry Road and Basalt Creek Parkway, and really didn't provide creative solutions for transitions from employment to residential," Kraushaar said.

KPFF consultant Matt Dolan presented three "schemes" that laid out how the central subarea could hypothetically be developed as an industrial campus not unlike Lam Research in west Tualatin. While he said he does not see such development as unrealistic, his presentation did not include cost estimates for the grading, retaining walls and other site work that would be needed in the rugged subarea — approximately 63 gross acres in size, about a third of which is considered unbuildable, in between Grahams Ferry Road and the Basalt Creek Canyon.

"We're not trying to achieve the easiest, cheapest solution here or the highest and best use. We're trying to fit into this plan that has been planned for the region for over 16 years," Kraushaar said. "Employment would rarely ever win in that situation. Employment use takes patience. … It's always easiest to do residential."

But consultants from Otak Inc., which has been pressing the council since last fall to go with a residential designation for the subarea, and Tigard-based CESNW Inc. argued that industrial development would be so expensive on the site that the cost of all the site work that would be needed nearly zeroes out the expected value of the land. That would make it very unattractive to developers, especially with other industrial-zoned land in the area to the west, as well as to the south in what is expected to be part of Wilsonville.

"This site's going to compete with a site that's flat," said Tony Weller, CESNW's president, presenting the council with his firm's own findings.

Residents, Wilsonville mayor have strong words for council

Several property-owners on the subarea addressed the Tualatin City Council during its meeting after the work session. They unanimously opposed the idea of an industrial zoning designation.

"I cannot believe the disparity between what Wilsonville says about the property and their studies and what the residents have done with their properties," said Tom Childs. "It's two disparate reports. If you were to look at them, you wouldn't think like they were coming from the same property."

Childs said an employment designation would cause the value of his land to crater. He predicted it would lead to the land remaining undeveloped for years and argued the best course of action would be to effectively extend Victoria Gardens south to the future Basalt Creek Parkway, running east-west across the Basalt Creek area.

"The least cost to developers is residential," Childs said. "The most advantageous thing to landowners is residential. The best use for that area is residential. The employment land will just sit."

Others took a sharper tone.

"Wilsonville shouldn't tell us what to do with our city," opined Scott Powell, who co-owns land in the subarea.

Another property-owner, Sherman Leitgeb, accused Wilsonville of a "jurisdictional land grab" and suggested large-scale development would be impossible without the consent of the nine property-owners on the subarea, remarking, "You've got a better chance of herding cats."

Leitgeb added, "I will never ask for annexation to Wilsonville, nor will I ask for annexation to Tualatin if it's industrial zoning."

The council also heard from Wilsonville Mayor Tim Knapp, who took more than 20 minutes during the meeting — with the blessing of his counterpart, Tualatin Mayor Lou Ogden — to lay out his case.

Knapp said, "Housing is always going to be cheaper and easier to build. We know that. It's always going to be something that's more doable, in a lot of ways. … Yet employment is critical to the future of our communities."

Knapp repeatedly stressed that the joint land use planning map is not a development plan, downplaying concerns members of the Tualatin City Council have expressed about how industrial or office park development on the central subarea would work. He also noted that the concept plan is looking 20 years ahead, and that burgeoning trends like automation, digital and web-based products, and telecommuting will continue to transform the industrial landscape.

"The world of work 20 years hence is going to be different than the world of work today," Knapp said.

But Knapp's argument also came with a warning: Tualatin needs to fall back in line with Wilsonville, or Wilsonville may withdraw the "offer" it made that led to the 2015 boundary agreement, in which it gave up land north of Basalt Creek Parkway that was originally planned for future annexation into Wilsonville.

"If Tualatin doesn't feel it can foster that development, Wilsonville can foster that development," said Knapp, who claimed the city has already been approached by industrial developers interested in the disputed subarea. "It's a question of how we want this to go."

FILE - At the center of both the Basalt Creek planning area and a stubborn dispute between Tualatin and its planning partners is this 63-acre piece of land just south of Tualatin's existing city limits and east of Grahams Ferry Road.

Council remains skeptical of industrial use for subarea

While Knapp and Wilsonville staff argued that residential development as far south as Basalt Creek Parkway would clash with the overall employment area and could even scare off industrial developers, some members of the Tualatin City Council suggested they see it as complementary.

"We have one new subdivision, and that essentially eats up all of the available residential land in Tualatin for new houses, and we are experiencing a plague of traffic coming into the city every day, choking Tualatin-Sherwood Road, choking the other arteries," Councilor Robert Kellogg said. "We need more people to live here and work here. And one of the ways to do that is to add a patch of residential. I mean, with any luck, some people that live in that new piece of residential might work across the street or in that area and not clog the arteries any further."

"On Tualatin Road, we have residences across the street from manufacturing, and it's not a big deal," said Councilor Frank Bubenik. "To me, it's not a big objection in my mind, because our manufacturing area's doing very well on Tualatin Road, and all those homes are sold and occupied on the other side of Tualatin Road."

Ogden has staked out his own position on the issue. A forceful advocate on the council in 2015 for more industrial zoning on the Tualatin side of the future boundary, the mayor shifted his stance somewhat after hearing from Otak and local property-owners late last year.

"I have been 100 percent in agreement that this land ought to be industrial land. I've never wavered from that. … And I have concluded that that's not viable, based on what it would need to make that happen," Ogden said early on in Monday's work session.

Ogden said several times Monday that he is trying to see how industrial development in the subarea would work, telling Childs, "I don't think it's our job to try to find the best, highest use of your land. … From my perspective, that's not the city's job to perfect the use of your land. But I do believe it's our responsibility to make sure that we don't make the land unusable in perpetuity."

Next steps in joint planning process are unclear

The KPFF study dovetails with a report commissioned last year by Washington County by the design services firm Mackenzie that found business park development would be feasible in the central subarea. County staff, as well as planning staff in both Tualatin and Wilsonville, have said likewise, although Tualatin Planning Manager Aquilla Hurd-Ravich has advised her council that the subarea would likely be one of the last pieces of the Basalt Creek area developed due to its topography.

Metro is a fourth partner in the joint planning process. The regional government brought the Basalt Creek area into the urban growth boundary in 2004 with the intent of increasing the amount of developable employment land in the region, but there is controversy over whether the 13-year-old ordinance can be interpreted to support residential development in the central subarea.

Metro Councilor Craig Dirksen told The Times earlier this year that while Metro would prefer to see it as employment land, it must also consider what is feasible in the area.

Tualatin, Wilsonville, Washington County and Metro have an intergovernmental agreement in place regarding the joint planning process for Basalt Creek. That agreement was extended for three more years last fall.

The agreement has no provision for arbitration in case of a dispute. In other words, the parties must come to an agreement among themselves to move forward.

Sherilyn Lombos, Tualatin's city manager, told The Times she had hoped a "technical answer" would come out of Monday's workshop, but she said she didn't think that happened.

"I don't know that we're any further along," she said.

Lombos said staff from the two cities will likely discuss what the next step will be as they try to broker some sort of resolution to the stalemate.

"I think there must be some compromise somewhere, I just — I don't know where that is yet," Lombos said.

She added, "I did think that Wilsonville coming and sharing their concerns and them hearing the property-owners' concerns and Tualatin's concerns, I think that's got to be helpful."

By Mark Miller
Assistant Editor, The Times

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