The opinion
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
PARK DEVELOPMENT INC., )
)
Plaintiff, ) TC-MD 250404N
)
v. )
)
CLACKAMAS COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff appealed the real market value of property identified as Account 00931941
(subject property) for the 2024-25 tax year. A trial was held on November 3, 2025, in the
courtroom of the Oregon Tax Court. John Taylor (Taylor), broker, appeared and testified on
behalf of Plaintiff. Timothy Whiting (Whiting), licensed real estate broker, and Steve Roper
(Roper), civil engineer, also testified on behalf of Plaintiff. Tam Truong (Truong), senior
appraiser, appeared and testified on behalf of Defendant. Plaintiff’s Exhibits labeled A through
C, E, and F were received over Defendant’s objections to Exhibits A through C.1 Defendant’s
Exhibits A through K were received over Plaintiff’s objection that Plaintiff did not receive the
exhibits.2 Defendant’s Rebuttal Exhibits L through S were received without objection.
I. STATEMENT OF FACTS
A. Subject Property, Estacada Industrial Campus, Preliminary Subdivision Plat
The subject property is a 22.49-acre parcel of industrial-zoned land within the Estacada
Industrial Park. (Def’s Ex A at 4, 11.) Taylor determined the subject property had 19.45 usable
1
Defendant objected to Plaintiff’s Exhibit A based on its failure to conform to appraisal ethics rules, which
are outside of this court’s jurisdiction. Defendant objected to Exhibits B and C because Defendant disagrees that
Plaintiff is required to install a sewer pump station. That issue goes to the weight given to the exhibits.
2
The court confirmed that Defendant timely served the exhibits on Plaintiff at the correct mailing address
provided to Defendant and the court. (See Certificate of Service to Def’s Exhibits.)
DECISION TC-MD 250404N 1
acres excluding wetlands and area needed for a retention pond. (Ptf’s Ex A at 4.) Whiting
testified that the subject property is in phases 2 and 3 of the campus development.3 (See Ptf’s Ex
B at 4, Ex C at 5.) A preliminary subdivision plat prepared in 2020 proposed to create 12 tax lots
on the subject property.4 (Ptf’s Ex B at 4; Def’s Ex A at 12.) Whiting testified that the phase 2
and 3 plat for the subject property has been approved but not recorded.
The Estacada industrial campus “began development in 1997 and has the highest
concentration of industrial property in the area.” (Def’s Ex A at 16.) It includes 85 tax lots with
an average size of one acre, with a few five-acre parcels. (Id.) As of January 1, 2024, only two
industrial zoned tax lots over five acres were available. (Id.) The subject property, like the rest
of the campus, has “all utilities necessary for development (except natural gas) * * * available at
the street.” (Id. at 16-17.) Whiting testified that the subject property does not have sewer access.
B. Costs of Developing Subject Property: Pump Station, Stormwater, Wetlands
The City of Estacada (City) imposed additional requirements on development of the
subject property as a subdivision. (Ptf’s cover letter, Ex C.) Taylor noted that several costs
resulting from those requirements are “above the normal development cost” for a subdivision,
notably a “[s]ewer pump station and forced main crossing the neighboring property to lift
station” at an estimated cost of $2,204,464. (Ptf’s Ex A at 4.) Whiting confirmed that the pump
station is necessary to develop the subdivision.5 Truong noted the pump station is required only
3
The subject property was previously part of a larger, 43.47-acre parcel for which a preliminary plat in
2020 proposed a 22-lot subdivision. (See Ptf’s Ex C at 4; Def’s Ex A at 12.) In 2022, a 10-lot subdivision was
recorded on 20.98 acres, leaving the subject property at 22.49 acres. (See Def’s Ex A at 12)
4
The 2020 plat approval with conditions had a four-year time limit, requiring a time extension in 2024.
(Ptf’s Ex C at 18.) Whiting testified that, in his experience, the City will typically grant the extension because they
want to see industrial lots developed.
5
Initially, there was a possibility that the City would place a new treatment facility north of the subject
DECISION TC-MD 250404N 2
if the subject property is developed as a subdivision. (See Def’s Ex S at 1 (email from City
Senior Planner so stating).) Roper testified that he prepared the pump station cost estimate based
in part on the price reported to him by a City engineer. (Ptf’s Ex F.) He testified that the 20
percent contingency is based on the likelihood of encountering groundwater when connecting the
sewer line and associated costs. Roper acknowledged that the pump station is necessary only if
the subdivision is developed but noted that there would be costs associated with connecting the
subject property to sewer lines even as a single parcel.
In addition to the pump station, Taylor noted that a one-acre storm water retention pond
and stormwater swales are also required, but he did not provide an estimated cost for those items.
(Ptf’s Ex A at 4.) Roper testified that the City requires stormwater runoff at same rate as before
development, but extensive paving can increase flows to downstream neighbors, so it’s almost
always necessary to create a retention pond. (See also Ptf’s Ex C at 23 (City’s storm drainage
requirements in conditions of approval).) The subject property would need a pond, losing more
land and costing more money.
The subject property includes 2.51 acres of wetland and wetland swales. (Def’s Ex A at
17 (citing to AKS Engineering and Forestry LLC survey).) Roper testified that the subject
property wetlands would likely cost between $200,000 and $400,000 to mitigate. Truong
concluded that, “based on the 2020 preliminary plat, the wetlands [do] not impact the
development of the subdivision into usable tax lots.” (Id.) Yet, a comparison of the proposed
plat with the wetlands map shows that the wetlands overlap several proposed lots. (Compare
Def’s Ex F with Ex K.) Truong did not attempt to account for wetland mitigation costs.
///
property, allowing gravity flow to that facility, but the City ultimately selected a different location.
DECISION TC-MD 250404N 3
C. Sales Comparison Approach
Both Taylor and Truong presented sales of undivided parcels that they considered
comparable to the subject property. Taylor relied on two sales in Estacada and one in Happy
Valley. (Ptf’s Ex A at 3.6) Truong relied on four sales, located in Salem, Happy Valley, Canby,
and Battle Ground, Washington. (Def’s Ex A at 24-26.) The Happy Valley sale is the same.
1. Plaintiff’s comparable sales
Plaintiff’s sale 1 was a 26.91-acre parcel in Estacada that sold for $2.99 per square foot
on August 16, 2022. (Ptf’s Ex A at 3.) Taylor testified that it was less than a half mile away
from the subject property. He made a downward size adjustment and an upward location
adjustment because sale 1 was further from the road with less exposure. (See id.) He found an
adjusted price of $2.84 per square foot. (Id.) Whiting testified that he was the broker on a prior
sale of the parcel in 2020. At the time of the 2020 sale, all utilities were stubbed but not
extended, and the parcel was not platted. It did not yet have stormwater management and
required expansion of an existing retention pond. It had no wetlands. (See Def’s Ex P at 2 (sale
confirmation).)
Truong also considered Plaintiff’s sale 1, but did not rely on it as comparable because she
concluded the seller was motivated and the sale was “off-market.” (Def’s Ex A at 27 (additional
sale).) She confirmed the sale with the seller, learning that “the buyer and seller had a history of
prior business dealings.” (Id.) The buyer approached the seller directly and offered $4,000,000
for the property. (Id.) “Motivated by the need for quick capital to secure a down payment on a
separate property, the seller agreed to a $3,500,000 sale price.” (Id.) The buyer paid $1,500,000
6
Plaintiff presented a fourth comparable sale of a 1-acre lot representing the value of a single lot after
subdivision. (Id.) That sale is discussed below in the section Sales of Subdivision Lots, Residual Land Value.
DECISION TC-MD 250404N 4
cash and the seller offered “owner-carry financing for the remaining $2,000,000.” (Id.) The
seller thought the price was “fair” and both parties “were well informed.” (Def’s Ex P at 2 (sale
confirmation).) The buyer ultimately recorded a 14-lot subdivision plat in May 2024 and
incurred development costs to extend utilities to each lot and create a storm water facility.
(Def’s Ex A at 27, Def’s Ex P at 1.7) To the extent an indicated value could be derived from the
sale, Truong concluded it would be “significantly greater than $2.99 per square foot” based on
the sale date and conditions of sale. (Def’s Ex A at 27.)
Plaintiff’s sale 2 was a 20.61-acre parcel in Estacada that sold for $2.22 per square foot
on January 29, 2020. (Ptf’s Ex A at 3.) Taylor testified that he thought it was zoned industrial,
but Truong offered a zoning map showing that it was zoned residential. (Def’s Ex L.)
Plaintiff’s sale 3 was a 24.98-acre parcel in Happy Valley, that was pending for $6 per
square foot. (Ptf’s Ex A at 3.) Taylor testified that he was unsure if sale 3 closed. He made an
upward size adjustment but testified he should have adjusted in the other direction. Taylor had
concluded an adjusted price of $3.20 per square foot, but presumably that should be $3 per
square foot based on his revision at trial. (See id.) Truong asked Taylor about his $1.00 per
square foot zoning adjustment, noting that sale 3 is zoned industrial campus, like the subject
property. (Def’s Ex O.) Taylor was unable to explain the adjustment.
Taylor placed the most emphasis on sale 1, concluding $3 per square foot or $2,541,726
for the subject property. (Ptf’s Ex A at 3.) He subtracted $2,204,464 for the pump station cost,
yielding an indicated value of $337,262, which he rounded up to $400,000. (Id. at 4.)
///
///
7
The appraisal states a 16-lot subdivision, but the confirmation states a 14-lot subdivision.
DECISION TC-MD 250404N 5
2. Defendant’s comparable sales
Truong determined that the subject property’s highest and best use (HBU) was “industrial
development.” (Def’s Ex A at 23.) She testified that she disagreed with Taylor that the subject
property’s HBU was to subdivide it. Based on her HBU conclusion, she did not subtract any
development costs, including the pump station. (See id. at 24.)
Defendant’s sale 1 was a 26.16-acre industrial parcel in Salem that sold for $4.66 per
square foot on October 21, 2022. (Def’s Ex A at 25.) The net useable area was 23.16 acres due
to a water reservoir and setbacks. (Id.) Truong testified that sale 1 was purchased for truck
storage. She considered the location superior to the subject property but the sale date inferior.
Sale 2 was a 35.95-acre industrial parcel in Battle Ground, Washington, that sold for
$2.75 per square foot on September 22, 2022. (Def’s Ex A at 25.) There were wetlands on site,
but they did not impact the use or sale of the property. (Id.) Truong testified that the property
was purchased for a church. She noted Battle Ground is a similar distance from the freeway.
Sale 3 was a 23.92-acre industrial parcel in Happy Valley that sold for $5.76 per square
foot on March 28, 2024. (Def’s Ex A at 26.) It is the same as Plaintiff’s sale 3. Like the subject
property, it was former farmland annexed into city. (Id.) The wetlands on site had no impact on
the sale. (Id.) The City of Happy Valley purchased the site to build a public works facility and a
PGE electrical substation, holding any remaining land for future use. (Def’s Ex N.)
Sale 4 was an 11.28-acre industrial parcel in Canby that sold for $5.51 per square foot on
July 26, 2024. (Def’s Ex A at 26.) It was located on a gravel road and still needed some utility
connections. (Id.) The useable area was 8.8 acres due to required river setbacks. (Id.) Truong
testified that the buyer planned to build a warehouse.
///
DECISION TC-MD 250404N 6
Truong made qualitative rather than quantitative adjustments to her sales and placed the
most weight on sales 2 and 4 based on the similarity of each location. (Def’s Ex A at 27.) She
concluded a price of $4.40 per square foot or $4,310,522 for the subject property. (Id.)
Whiting testified in rebuttal of Truong’s sales comparison approach. He noted that all
her comparable sales were located far from Estacada in different markets. Estacada has no
natural gas, which is a major issue for users heating large buildings; propane is cost-prohibitive
for large spaces. Manufacturers often will not consider Estacada due to its distance from the
interstate, resulting in higher trucking charges. Truong acknowledged those issues in her report
stating, “[i]ndustrial development in [Estacada] has been somewhat limited due to its location
away from heavily traveled interstates and arterials, distance from major employment centers,
large population centers, the city’s dated commercial infrastructure and lack of natural gas which
is desirable for large manufacturers.” (Def’s Ex A at 15.) Yet, she testified that she believes
there is demand in Estacada for a single user of a large site like subject property. Truong
testified that some owners of one-acre lots have bought a second or third lot to expand.
3. Other market evidence: offers and listings
Whiting testified that he offered Plaintiff $800,000 for the subject property. His offer
reflected his understanding that the pump station is essential to developing the subdivision.
A 50.61-acre parcel of industrial land adjacent to the subject property was listed for
$15,320,000 or $6.95 per square foot. (Def’s Ex A at 28; Def’s Ex G.) Whiting is the listing
broker. He testified that it does not have the same stormwater issues as the subject property.
Whiting has been listing it for $7 per square foot and getting “no action.” He thought it was
unlikely a buyer would pay $7 per square foot, but “miracles do happen.” A 2018 deal for $7.7
million fell through because development costs were “horrendous” even for a single user.
DECISION TC-MD 250404N 7
D. Sales of Subdivision Lots, Residual Land Value
Both parties presented evidence concerning the market for sales of one-acre subdivision
lots. Taylor testified that Plaintiff’s sale 4 was a one-acre parcel in Estacada located close to the
subject property in phase 1 of the park. It sold for $6.66 per square foot on February 2, 2022.
(Ptf’s Ex A at 3.) He adjusted it downward $2.50 per square foot for “development cost” and
$1.00 per square foot for “risk and holding cost,” concluding an indicated value of $3.16 per
square foot. (Id.) Taylor testified that sale 4 was an example of a potential lot sale after the
subject property is subdivided. Defendant questioned why Taylor selected a sale from 2022
when there were more recent sales. (See Def’s Ex Q at 1 (2023 sales).) Whiting testified that
fully developed one-acre lots sell for $8 to $9 per square foot.
Truong also considered individual lot sales through a residual land value approach that
captured the “developer’s perspective.” (See Def’s Ex H at 1.) From the “last 24 months,” she
found 14 sales in the Estacada Industrial Campus of tax lots ranging from 0.67 to 1.47 acres.
(Id.) The median sale price was approximately $8.60 per square foot. (Id.) Truong applied that
price to the subject property if subdivided into 12 lots, finding a value of $7,334,981. (Id.) She
accepted Roper’s cost of $2.2 million for the pump station but reduced his contingency from 20
percent to 10 percent for a revised cost of $2,020,759. (Id. at 2.) Truong subtracted a 15 percent
developer’s profit, concluding a value of $4,213,975. (Id.) Truong testified that she looked to
Marshall and Swift for subdivision costs, finding they are $830,000 to $1.18 million, but that is
not reflected in the report. She did not subtract any cost for wetlands mitigation.
E. Tax Roll, Property Value Appeals Board, Requested Values
The subject property’s 2024-25 real market value, sustained by the Property Value
Appeals Board, was $2,909,658. (Compl at 3.) Its maximum assessed and assessed values were
DECISION TC-MD 250404N 8
$21,037. (Id.) Plaintiff requests a real market value of $400,000 but would accept $800,000
based on the recent offer. Defendant requests a real market value of $4,310,522.
II. ANALYSIS
The issue before the court is the subject property’s 2024-45 real market value. “Real
market value” is “the amount in cash that could reasonably be expected to be paid by an
informed buyer to an informed seller, each acting without compulsion in an arm’s-length
transaction occurring as of the assessment date for the tax year.” ORS 308.205(1).8 The
assessment date was January 1, 2024, for the 2024-25 tax year. ORS 308.007; ORS 308.210.
Real market value “shall be determined by methods and procedures in accordance with rules
adopted by the Department of Revenue * * *.” ORS 308.205(2). Three approaches to value
must be considered but may not be applicable in every case: the cost approach; the sales
comparison approach; and the income approach. Oregon Administrative Rule (OAR) 150-308-
0240(2)(a). Both parties relied on the sales comparison approach in this case.
The party seeking affirmative relief bears the burden of proof by a preponderance of the
evidence, which means “the greater weight of evidence, the more convincing evidence.” ORS
305.427; Feves v. Dept. of Rev., 4 OTR 302, 312 (1971). Here, Plaintiff bears the burden of
proving a decrease in real market value, and Defendant bears the burden of proving an increase.
A. Highest and Best Use
HBU is “the first issue”; “the market value of the property at that use” is “the second
issue.” Freedom Federal Sav. and Loan Ass’n v. Dept. of Rev., 310 Or 723, 727, 801 P2d 809
(1990). HBU “means the reasonably probable use of vacant land * * * that is legally
permissible, physically possible, financially feasible, and maximally productive, which results in
8
The court’s references to the Oregon Revised Statutes (ORS) are to the 2023 edition.
DECISION TC-MD 250404N 9
the highest real market value.” OAR 150-308-0240(1)(e). An HBU “analysis ‘is an economic
study of market forces focused on the subject property.’” STC Submarine, Inc. v. Dept. of Rev.,
13 OTR 14, 18 (1994) (quoting Appraisal Institute, The Appraisal of Real Estate 276 (10th ed
1992)). “An appraiser determines the [HBU] of property by weighing market demand for the
uses, products or services the property is designed to provide.” Id. The HBU is “generally
consistent with, and similar to, surrounding uses * * *. However, a property’s [HBU] may be
unusual or even unique.” Id. at 19 (quoting The Appraisal of Real Estate at 289).
Neither appraiser presented a robust analysis of the subject property’s HBU. Taylor
presumed the subject property’s HBU would be to develop a subdivision of 12 one-acre
industrial lots, notwithstanding the significant development costs required. Taylor’s conclusion
is supported by the surrounding uses, particularly the development of 85 one-acre tax lots in the
campus, and the active market for such lots. Truong concluded that the subject property’s HBU
would be to remain as a single, large industrial parcel. That use is out of sync with surrounding
uses, and she was unable to provide any examples of similar uses in Estacada, such as for large
manufacturing or warehouse space. Estacada’s distance from the interstate and lack of natural
gas explains why such uses were unlikely as of January 1, 2024. The court next considers
comparable sales, placing emphasis on sales with the same HBU as the subject property.
B. Sales Comparison Approach
“Under the sales comparison approach, the value of a property is derived by ‘comparing
properties similar to the subject property that have recently sold, are listed for sale, or are under
contract * * *.’” Linstrom v. Dept. of Rev., 24 OTR 223, 230 (2020) (quoting Appraisal
Institute, The Appraisal of Real Estate 377 (14th ed 2013)). “The selection of properties for
comparison is based on many factors, and adjustments are made for any differences between the
DECISION TC-MD 250404N 10
comparable properties and the subject property so that the appraiser can derive a value for the
subject property.” Id. (citing Magno v. Dept of Rev., 19 OTR 51, 58–59 (2006)).
Plaintiff’s sale 1 is most similar to the subject property in size, location, and intended use.
It sold for $2.99 per square foot in August 2022 and for a price less than the offer due to the
seller’s desire for quick capital. Both of those factors merit some upward adjustment.9 The offer
price of $4 million indicates a price of $3.41 per square foot, which was likely a low indicator as
of January 1, 2024. Plaintiff’s sale 3 was also used by Defendant, even though the intended use
was for a public works facility and electrical substation, not a subdivision. It sold for $5.76 per
square foot in March 2024. Both appraisers concluded a downward adjustment was required
based on the superior location. Defendant’s remaining sales ranged from $2.75 to $5.51 per
square foot. The court gives those sales less weight because none were located in Estacada and
each was intended for a different use than the subject property. Plaintiff’s sale 2 is disregarded
because it was in a residential zone. Overall, the sales presented indicate a value of $4 per
square foot, or $3,918,656, before a reduction for the pump station cost.
The court places no weight on either the $800,000 offer for the subject property or the
$6.95 per square foot listing of an adjacent industrial parcel totaling 50.61 acres. Neither had
resulted in a sale as of the assessment date or even as of the trial date in this case. Whiting
testified that the listing price was optimistic and had produced no interest.
Finally, the court is persuaded that the pump station is an extra cost required to develop
the subject property as a subdivision and accepts Roper’s estimate of $2,204,464. Subtracting
that cost indicates a real market value of $1,714,192.
9
The court disregards Taylor’s adjustments, which were unsupported and potentially duplicative. For
example, he adjusted sale 1 downward for “development costs” yet the parcel was not developed as a subdivision at
the time of sale. The court instead uses qualitative adjustments to compare the sales.
DECISION TC-MD 250404N 11
C. Residual Land Value
Both appraisers considered lot sales as additional evidence of real market value. Truong
described this residual land value calculation as “a hypothetical valuation that assumes the
[HBU] of the land is the development of the proposed 12 tax lots and then works backwards to
estimate the value of the raw land.” (Def’s Ex H at 1.) Taylor performed a similar calculation
based on the sale of a single subdivision lot in 2022. The court places no weight on his analysis
because it was based upon a single lot sale some time before the assessment date. Truong’s
analysis is more persuasive. She determined a sale price of $8.60 per square foot based on 14 lot
sales. That price is in line with Whiting’s testimony that fully developed one-acre lots sell for $8
to $9 per square foot. Truong concluded a total value of $7,334,981 for a 12-lot subdivision.
Truong subtracted most of the pump station cost estimate and 15 percent developer’s
profit, for a resulting value of $4,213,975. (Id.) She did not subtract any development costs,
though she noted Marshall and Swift report costs of $830,000 to $1.18 million. Accounting for
the full pump station cost as well as typical development costs indicates a value of $3,030,270.10
A further reduction for wetlands mitigation is supported and Roper estimated a cost of $200,000
to $400,000, indicating a value of $2,730,270.11
D. Reconciled Real Market Value
The sales comparison approach indicates a value $1,714,192 after adjusting for the cost
of the pump station. The court places less weight on the sales comparison approach based on the
limited number of truly comparable sales. The residual land value method indicates a value of
$2,730,270. The sale price of subdivision lots was well supported, though the costs associated
10
That calculation is $7,334,981 (gross development value) less $2,204,464 (pump station cost) less
$1,100,247 (developer’s profit) less $1,000,000 (subdivision costs). $3,030,270
11
That calculation is based on the midpoint of Roper’s cost range of $300,000.
DECISION TC-MD 250404N 12
with developing the subdivision were somewhat more speculative. Both approaches indicate that
the tax roll real market value of $2,909,658 is overstated. The court concludes that the subject
property’s real market value was $2.5 million as of January 1, 2024.
III. CONCLUSION
Upon careful consideration, the court concludes that the 2024-25 real market value of
property identified as Account 00931941 was $2.5 million. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal is granted in part. The
2024-25 real market value of property identified as Account 00931941 was $2.5 million.
If you want to appeal this Decision, file a complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your complaint must be submitted within 60 days after the date of this Decision
or this Decision cannot be changed. TCR-MD 19 B.
This Decision was signed by Presiding Magistrate Allison R. Boomer and
entered on March 25, 2026.
DECISION TC-MD 250404N 13