Oregon: Damascus waits to see how growth will proceed


The Oregonian

DAMASCUS, OREGON -- Last year, a potential buyer backed away from The Plantsmen nursery because it is on a septic tank.

This year, a real estate agent advised owner Roger Hollingsworth to boost the $920,000 asking price of his 13 acres along Oregon 212 because of the promise of urban development.

Like the rest of Damascus, The Plantsmen is in limbo. It straddles a rural past and an urban future that will arrive in slow steps that make real estate purchases and sales risky propositions.

In December, Metro, the Portland area's regional government, voted to allow urban development on 18,600 acres of rural land spanning the suburbs -- two-thirds of it in this bucolic community south of Gresham. The state requires Metro to manage the urban growth boundary, an invisible line that corrals city-style development. Last year's expansion, the largest ever, is intended to make room for the region's expected population growth through the next two decades.

But houses, shops and fire stations don't just spring up. They may take more than a decade to develop, especially in Damascus, which has no government, no sewers and few clogged thoroughfares.

There is no telling where the Hollingsworth nursery will fall in the grand scheme, although its location along the current main drag assures it will be close to an eventual downtown. Planners have yet to decide how homes and businesses will surround the cluster of shops and fast-food joints in the community's small core.

Developers approach the area cautiously, and property owners aren't sure when they'll see real change.

The state's Land Conservation and Development Commission will decide in May whether Metro conducted the expansion properly. Any challenges to the commission's vote will go to the Oregon Court of Appeals.

After a final decision on the expansion, Metro's responsibility fades and Clackamas County's ramps up. The county hopes to finish a concept plan by the end of 2005, planning director Doug McClain said. Transforming Damascus into a suburban community will require billions of dollars in public investment, although no firm number is available.

A group of residents and officials from nearby governments has tentatively agreed Damascus should have the chance to become its own city. The citizen-based Committee for the Future of Damascus is preparing for a November 2004 vote. Approaching cautiously Hollingsworth, who grew up in Damascus and farmed his 13 acres for more than 30 years, takes it in stride. He thinks change will happen, but he refuses to increase his asking price and dismisses calls from investors as long shots.

"Nobody's really putting up money yet," the 70-year-old said. "We're still in a flux situation. I don't think there are that many gamblers out there. There aren't that many dice-rollers."

Many developers say they don't want to invest in Damascus until the state approves the expansion and governments guarantee roads, sewers and all the other suburban trappings. Now, cars line up at rush hour for an opening to turn onto Oregon 212, and big businesses such as Safeway and Bi-Mart operate on septic systems.

Sitting on land for years is costly, even for a large company, said Holly Iburg, Newland Communities project manager. When Newland purchased a smaller firm, it inherited the former St. Mary's site in Washington County, which cannot be developed, after the courts tossed out a previous boundary expansion.

"It's just so expensive for developers to hold onto land," Iburg said. "Usually, if people invest their capital, they want an immediate return -- or as close to it as they can get."

Centex Homes, a national company with 60 Portland workers, buys only property that can be used quickly. But Centex tracks prospects such as Damascus and participates in planning when possible.

Nobody is snapping up land in Damascus without careful investigation, said Centex officials David Cady and Steve Miller. Investor caution comes partly because parcels have yet to be zoned for businesses, homes, industry or other urban uses.

"There's high risk," said Cady, the company's local land development manager. "There has to be a high reward. That means land value has to be very low when they go to purchase it early in the process."

Although they have less money, small local developers seem to be canvassing Damascus more than their larger counterparts. Local firms know the area well, see potential for profit and don't have to abide by corporate policies on risk-taking, said Mike Hammons, a Prudential Northwest Properties agent in Damascus.

Owners of large tracts also report increased interest since the December growth boundary expansion, but investors are keeping quiet. Several local developers rumored to be casing Damascus did not return phone calls.

Many don't want to show their cards until they have secured property -- and don't want to secure property until important questions are answered, said Fred Sanchez of Realty Brokers, who is selling Hollingsworth's property. He said he has received several calls a week for the past few months.

"They don't want to let the competitor know they're considering the project," Sanchez said. "They are secretive. Once houses are for sale, then they want the biggest sign in the world out there."

Most Damascus residents realize the urban growth boundary is expanding, but the depth of their knowledge varies from a nuanced understanding of specifics to a vague notion that the urban landscape will change, real estate agents say.

Burns & Olson Realtors hosted a Metro planner in January for a question-and-answer session, partner Chris Olson said. "When you meet somebody now, that's the first question they ask: 'Am I selling too soon? Will I get more if I hold out?' " he said.

Agents say they advise clients with typical large-lot homes not to raise prices. Owners with enough acreage for a subdivision can bump up prices, experts say, but nowhere near the $200,000-an-acre rate common for developable land in other parts of the region.

In Hollingsworth's case, the $72,000-an-acre price tag hovers between farming and development prices. Waiting for change Hollingsworth surveyed the nursery on a recent morning, preparing to sell some of his dwindling supply to another nursery.

"I really hate to leave it. Sometimes I come out here and it almost makes me cry," Hollingsworth said, taking note of the clutter. "I used to have one of the cleanest nurseries."

A mile or so west, Loren and Loretta Fisher hope to sell the 12 acres where they have raised hay, hogs, rabbits and cattle for three decades. Living on the farm kept the Fishers' three children out of trouble and, at least for a while, kept the family in the country.

Over the years, though, increasing traffic killed three dogs and nibbled away at the rural lifestyle. These days, their land on Southeast 172nd Avenue houses a few cows and a sign advertising the family excavating business.

"I haven't tried to sell it," Loren Fisher said. "I never really wanted to. I figured I would die here. But I don't live in the country anymore. I live, basically, in . . ."

"The suburbs," his wife broke in.

The Fishers have heard for years that Damascus would be urbanized, but it never seemed to materialize. They're not convinced this time will be any different.

Still, Loren said, maybe it will.

"I get the feeling something's going on, but nobody's talking about it," he said. "Maybe it's just me, but it seems like something's in the air." Laura Oppenheimer: 503-294-5957; loppenheimer@news.oregonian.com


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