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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 - 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.While both sides aired out their beliefs regarding a disputed piece of the Basalt Creek planning area July 24, a two-hour-long workshop on the subject ended with no clear resolution in sight.

Tualatin and Wilsonville have been at loggerheads for most of the year over the "central subarea" south of the Victoria Gardens subdivision. The joint planning process ground to a halt after the Tualatin City Council said in February it wants the area designated for residential development.

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, want the area designated for industrial development. And they have warned that Tualatin's change of heart jeopardizes the future of the planning process.

Nancy Kraushaar, Wilsonville's community development director and city engineer, was one of several Wilsonville officials invited to present their city's side at the meeting of the Tualatin City Council. Kraushaar said the Wilsonville City Council believes the change "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."

Matt Dolan of KPFF Consulting Engineers, which was hired by Wilsonville to conduct a feasibility study for the central subarea, presented three "schemes" that laid out how it could hypothetically be developed as an industrial campus not unlike Lam Research in west Tualatin. While Dolan said he does not see such development as unrealistic, his presentation did not include cost estimates for grading, retaining walls and other site work.

"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."

Wilsonville Mayor Tim Knapp echoed that point, telling the Tualatin City Council, "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."

But consultants from Otak Inc., which has been pressing the Tualatin 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. Assuming property owners won't sell their land for close to nothing, that would make it very unattractive to developers.

"This site's going to compete with a site that's flat," said Tony Weller, CESNW's president.

Knapp repeatedly stressed in his remarks that the joint land use planning map is not a development plan. 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."

Knapp's remarks were not received favorably by some property-owners in the subarea at the meeting, like Sherman Leitgeb, who accused Wilsonville of a "jurisdictional land grab."

Leitgeb 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."

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

Tom Childs said an employment designation would cause the value of his land in the central subarea to crater and predicted it would remain undeveloped for years.

"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."

Skeptical of industrial use

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."

Mayor Lou 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 the work session.

Ogden said several times 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."

Planning staff for Washington County, Wilsonville and Tualatin have all said they believe some form of industrial development of the central subarea is feasible, although Aquilla Hurd-Ravich, Tualatin's planning manager, has acknowledged that the subarea would likely be one of the last pieces of the Basalt Creek area developed due to its topography.

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, said she had hoped a "technical answer" would come out of the workshop, but she said she didn't think that happened.

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

Tualatin City Manager Sherilyn 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."

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