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Wednesday, April 25, 2012

Tri-Met to use condemnation muscle for Mystery Train

Apparently there are some property owner holdouts on the route of the insane Milwaukie MAX line. If they don't play ball with Tri-Met, off to condemnation court they will go.

Comments (22)

This caught my eye in the description of the first property:

"A portion of the property which will not be needed for access will likely be offered for transit oriented development."

Didn't Oregon adopt some anti Kelo v. City of New London legislation prohibiting eminent domain when the property would be in turn flipped to a private entity?

The weasels are at work.

Note the description of the property and the need to take it. Part is needed fort access to the Lakre Road Station; much will be used asa staging area during construction. After construction, the remainder of the property to the developer weasels for "transit oriented decvelopment".

Shade of City of Bridgeport.

This state really needs some serious controls, embedded in the State Constitution, on governmental agencies taking private property by condemnation and thereafter turning the property over to other private owners for development.

There are no controls and big business has found out. That's why the place is being ransacked. It will take years for enough future "customers" to find out and stop falling for it.

Testimony of John A. Charles, Jr.
Before the TriMet Board of Directors
Regarding the Proposed FY 2012-13 Budget

April 25, 2012

There are some elements of the proposed budget that move TriMet in the right direction. I support the proposals to eliminate the free-rail zone and reduce streetcar funding. Rail passengers have been coddled for far too long and these changes will require them to finally put some skin in the game.

Notwithstanding this progress, the budget overall has serious problems that the Board needs to address. The first is the assumption that management will win its protracted dispute with the ATU. Management has been forecasting this outcome for years, and has consistently been wrong. Examples of past predictions include the following:

TriMet press release, April 13, 2011: “The FY2012 budget assumes that a new Working and Wage Agreement with the ATU has benefits more in line with peer agencies, and consistent with those contained in TriMet’s July 2010 Final Offer.”

TriMet FY 2012 budget message, July 2011: “A critically important assumption upon which TriMet’s financial forecast and the FY 12 Adopted Budget are based is that TriMet enters into a Working and Wage Agreement WWA) with the Amalgamated Transit Union, probably through the binding arbitration process, and that the wages and benefits are consistent with those contained in TriMet’s July 2010 Final Offer….”

TriMet press release, October 26, 2011: “The contract expired in 2009 and both parties are now heading to interest arbitration scheduled for mid-January 2012.

TriMet FY 13 budget message, April 2012: “…the FY 13 proposed budget includes a $12 million revenue increase/expenditure reduction package, based on the assumption of a labor arbitration decision favorable to TriMet.”

Given that every recent prediction about the ATU contract has been wrong, it might be time to change the forecast. A more prudent forecast would be that the ATU wins, creating a $5 million imbalance for FY 13. Perhaps that should be addressed now in the current draft budget.

The second big problem with the budget is the continued fantasy that rail construction has no harmful effects on bus service. Some board members may not be aware that in February 2011, TriMet succeeded in getting the Oregon Transportation Commission to approve $13 million in scarce OTC “flex funds” for the Milwaukie light rail project, by promising that TriMet will “agree to refrain from requesting Capital bus Program funds for bus purchases for the next three biennia…” This deal was made even though TriMet had been so desperate for new buses that it had put a $125 bond measure on the ballot the previous November. My testimony to the OTC is attached.

TriMet management simply does not value bus service; all the glamour is perceived to be in the ribbon-cutting ceremonies for new train lines. In FY 13 TriMet will sell bonds for PMLR and thus incur $3 million in new debt service. The agency is already paying more than $25 million in annual debt service for previous light rail bonds. This debt is a major reason why bus service has been cut by 13% in recent years, even though buses move 2/3 of TriMet customers each day.

TriMet has never demonstrated that the alleged “operating cost savings” of rail transit offsets the debt service and other “opportunity costs” associated with new rail construction.

There’s a very simple solution: terminate all rail expansion plans. It doesn’t matter how attractive rail may have once seemed; moving forward, the capital costs cannot be justified. It is indefensible to impose service cuts year after year, while spending more than $205 million/mile for tiny expansions of the rail empire (7.3 miles for PMLR and 2.9 miles for the CRC).

A third point is that the proposed budget once again hides the true cost of labor, by planning for another token payment into the OPEB trust fund of $865,760. While this is better than the FY 12 contribution of $410,000, the level recommended by the outside auditor last July was $77.7 million.

The unfunded actuarial accrued liability for OPEB is at least $876 million, and because TriMet is allowed to carry this debt off-book the public naturally assumes that all is well when the agency announces that it has a “balanced budget” each year. This practice of shifting obligations downstream simply sets up a ticking time bomb for future TriMet board members.

While making the full ARC payment of $77 million would be impossible now, a substantial down payment – with the tough decisions it would force right now – would have the medicinal effect of waking up the public to the seriousness of the problem....

Business as usual is not going to work anymore. It’s time for board members to stop acting like victims and start taking control of the organization....

http://cascadepolicy.org/news/2012/04/25/testimony-before-trimet-board-of-directors-regarding-the-proposed-fy-2012-13-budget/

Wise stewardship and ransacking are almost always mutually exclusive.

Portland is going backwards as exemplified by light rail and streetcars. Google and others are coming up with driverless cars. Hybrid electric bicycles and other small vehicles render the future as one of a rebirth of individual transport; and not so much mass transit, and especially not rail systems.

Rail systems are inflexible; cost a god awful amount of capital (federal taxpayer and nationally borrowed monies); present obstacles in streets for automobiles, bicyclists, and pedestrians; are slow versus rapid bus transit; and are so open as to present crime problems. There. If only we could vote Metro wide on this view, we would at least have recognition we are going down the wrong track with rail transportation.

It's a historically terrible time to sell real estate unless you absolutely must, so a fair condemnation award in a normal market wouldn't seem fair now.

Also, two of those properties look like nice houses with treed lots on streets with little traffic. It's heavy-handed for TriMet to plan a light rail route right through part of a neighborhood. It's unfortunate that TriMet's mode of operation is to disturb neighborhoods, cut down trees, and fill in wetlands.

Jonathan:

You are correct. Oregon voters approved Ballot Measure 39 in 2006. Measure 39 prohibits a government from using its condemnation authority to condemn private property that it intends to transfer to another private party, except in cases of truly blighted properties. The definition of blight was tightened up significantly to ensure that only dilapidated and unsafe structures met the criteria.

Tri-Met is likely unaware of the change in the law - most cities and agencies are.

Actually the situation is much worse than described in the original link, which refers to the March meeting.

At today's meeting, the Board rubber-stamped condemnation proceedings for what will likely be the single most expensive property on the project -- the Beaver Heat Treating mill near McLoughlin and Tacoma. This facility has ovens that can never be shut down. They make parts for the Ford F-series trucks, and they get fined by Ford $25,000 per minute if they don't produce the parts. TriMet will have to find a new site and build them a new facilitiy before they shut down the ovens.

This is likely to be a $25-30 million taking, for one small parcel, upon which no transit riders will be moved until 2016. Just a scandalous waste of public money.

How much more scandalous can this get?

This has been going on for far too long.
Adams shifting money for the mystery train, and all kinds of maneuvers
to put this on the rails no matter what!
I would suggest the Clackastani rebels and others in outlying areas tell friends in the Portland area to look carefully at pdx elections to see if candidates are big light rail supporters. If Adams had not been elected Mayor or had been recalled, there might not have been such easy financial maneuvers and support to assist the mystery train.

It's a historically terrible time to sell real estate unless you absolutely must, so a fair condemnation award in a normal market wouldn't seem fair now.

While this one issue that puts me square on the side of the property rights crowd - perhaps the only issue, in fact - market conditions aren't an argument against it. The displaced homeowner in theory can buy an equivalent house in the same down market. It's the same situation as an up market. If you sell low, you can buy low; if you sell high, you can buy high.

Now, will the offer be fair? That's a legitimate issue.

Look out N Missouri Ave - you're next.

"The displaced homeowner in theory can buy an equivalent house in the same down market."

Good point, but I question whether this theory applies in practice during a down market. Based only on my own casual observation, it seems like down markets tend to be flooded with undesirable properties, whereas desirable properties tend to stay in strong hands until better times. It seems fair for that dynamic to be factored into the appraisal that forms the basis for the condemnation award, so that the owner of the condemned property really can buy something as nice or nicer. Put another way, it seems to me that using appraised fair market value as the basis of a condemnation award really isn't an equitable valuation method, especially during a down market, because the owner of the target property is operating under a compulsion to sell. Ultimately, the proof is in the pudding; based on the news of the holdouts, I suspect that TriMet is trying to lowball the property owners.

What do you think, John Rettig? Perhaps our esteemed host has some wisdom to add to this valuation issue?

I believe the down economy is precisely why we're witnessing smash-and-grab, rushed through projects. What better time to take advantage of people than when they're down?

Similar condemnation and discussions of property values for property TriMet wants around PSU for MLR is also happening at the other end.

From good sources, appraisers and consultants are making strong arguments that the values of this down real estate market isn't the only factor to determine what should be paid for real estate. Averages of prior years are part of determining property values, as well as what might be expected in future years. Many owners are making strong arguments that TriMet can't low-ball them.

John Charles...

A $25k PER MINUTE fine? Really?

One would need a GIGANTIC performance bond or L/C to credibly assume that kind of liability. That's a $252 million dollar fine EACH WEEK. A BILLION dollars a month. That's real money for anybody except the U.S. Congress.

It would bankrupt most Oregon manufacturers after a few days. Our largest manufacturing companies don't earn that kind of profit in a good year.

$25,000 per minute can't be accurate.

I think the $25,000 is technically accurate but not really realistic. I think that's what they may be liable for if Ford had to shut down their production line unexpectedly due to them. In reality Ford would not let it come to that and there would be a lot of notice.

(And I bet the number was just from napkin math, multiplying Ford's 1,200 employees by $20/hr or so.)

While on this subject, has anyone asked why the MLR route of destruction has to weave back and forth across McLoughlin several times, each time I'm assuming, requiring a crossing gate, signals, etc?

Is the route avoiding specific locations, targeting them, or just trying to create as many interruptions to other kinds of traffic flow as possible?

Ultimately, the proof is in the pudding; based on the news of the holdouts, I suspect that TriMet is trying to lowball the property owners.

What do you think, John Rettig?

I really don't know - it would take a statistical analysis of forced property transactions under eminent domain, against similar properties with arms-length transactions. I don't know of any such study in Oregon.

Aside:

The proof is NEVER 'in the pudding'.

The proof of the pudding is in the eating.

While on this subject, has anyone asked why the MLR route of destruction has to weave back and forth across McLoughlin several times, each time I'm assuming, requiring a crossing gate, signals, etc?

Where are they planning to do that? The only places I've seen are near OMSI where it crosses under next to the railroad and south of Milwaukie where it will be elevated.


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