Tuesday, July 03, 2007

Becoming Absurd: Jaquiss Blows ANOTHER Johnson Story

Lord, how we have tried. We have given reporters and editors at both The Oregonian and Willamette Week numerous opportunities to correct their work, explain how or why they missed crucial details, and to look askance at further "tips" on Betsy Johnson before putting together another half-researched set of accusations and innuendo like the ones they have already produced.

And yet, whether it's because they think our voices are still too quiet in the mass media to endanger theirs, figure they can outlast the indignation, or--apparently like the President--sense that their public credibility is already so poor that little chance exists that things will get worse if they keep doing dumb things, they persist. Carla explained on Monday how The O screwed the pooch on their most recent smear attempt, failing to verify the claims of a rejected suitor for Scappoose Airpark privileges while repeating previously admitted debunked claims of profit for Johnson.

As for Willy Week, after Nigel Jaquiss' embarrassment of a column linking Brookings Airport with Bandon Dunes (check the map) which necessitated a full retraction, we figured the Pulitzer Prize winner would flinch before touching the stove again (unless something beyond pure journalistic pursuit was pushing their efforts on the story.) In last week's edition of the paper, however, Jaquiss not only touches the stove he sticks his whole hand into the lobster pot:
Several people familiar with the value of metro-area industrial land say a property deal state Sen. Betsy Johnson brokered last September represented an extraordinary bargain for the buyer.

In the transaction, records show Stanley Wagner, now 80, sold 232 acres on West Lane Road in Scappoose to developer Ed Freeman for $2.385 million.

Johnson, a Scappoose Democrat whom political insiders call a top contender for her party's 2010 gubernatorial nomination, says she earned no money in the deal but merely acted as a go-between.
Mistake #1--saying that Johnson "brokered " the deal. In most other contexts I wouldn't say anything, but in a real estate transaction to "broker" something has a definite and specific meaning--for example, "An intermediary who receives a commission for arranging and facilitating the sale of a property for a buyer or a seller." At BEST Johnson 'facilitated' the sale, but she neither arranged it nor received payment for it, and Jaquiss fairly well acknowledges that in the last sentence I quoted. So was he just being sloppy to say she brokered real estate when she's not a broker? Or was the intent to imply more than what really occurred?

SB 680 created a program for three rural airports—Scappoose is one—that would promote development and ease runway access for adjacent property owners such as [developer Ed] Freeman. SB 807 would create taxing districts to funnel property taxes back into airport-related projects for 25 years.
Wrong. SB680 couldn’t have increased the land value as "through the fence" permits already existed at Scappoose Airport prior to its introduction by Johnson. And Freeman denies any knowledge at all of 807 prior to his purchase.

Would that these were the only kinds of errors Jaquiss made, but they become much more serious as you progress through the article. The main contention is that Johnson set up a deal for Ed Freeman (the developer in both this story and the original story about another land deal involving the three parties) whereby he would reap an enormous windfall by getting the land for far less than its actual worth, and then reselling it for much more:
"That's a hell of a deal for the buyer," says Bowlus Chauncey, who operates a company called Beaver Bark on 30 acres about a mile from the Wagner property.

Chauncey and Dave Molony, who separately owns 34 acres of industrial land along West Lane Road, say industrial property inside Scappoose's city limits and urban growth boundary is worth about 10 times the per-acre price of about $10,300 Freeman paid Wagner.

Those familiar with industrial land agree that it is a valuable commodity.
What Jaquiss says here about industrial land inside Scappoose and within the UGB is in fact true--it's pretty valuable turf. But there's one problem: the land was neither zoned industrial nor within the UGB when Freeman bought it. Even in its current formulation, less than half of the original parcel is zoned for industrial use. At a bare minimum, the flurry of comparative value calculations should have accounted for that.

Regardless, Jaquiss' framing reflects a core dishonesty in presentation, just as surely as if I claimed outrage that New Seasons Market is charging me $4 a pound for pineapple, when a farmer in Hawaii sells his to Del Monte' for 50 cents a pound. Wouldn't you think it pertinent to mention that a) New Seasons is paying for an organic pineapple rather than one treated by pesticide, and b) somebody had to pay to bring it to Oregon so I could buy it? If so, the fact that the land was agricultural rather than industrial when Freeman bought it should mean something to you.

Obliquely, Jaquiss admits that the property Freeman bought is not the same property he's trying to sell; he had to get it annexed into Scappoose and rezoned. But the very clear intent of the article is to suggest that this was a simple, inexpensive process that the original owners (octegenarian Stan Wagner and his wife) could have undertaken themselves before selling, thus locking in that profit for themselves:
Getting the land annexed, which automatically brought a zone change to "industrial," is a process Scappoose city manager Jon Hanken says is "not difficult at all." Annexation is something the Wagners' trustee, Murray-Lusby—or a higher-paying buyer—could have accomplished.
Apparently however, "difficult" is in the eye of the beholder--particularly if that beholder wants to selectively quote a source to suggest conditions for scandal. We talked to Hanken ourselves and got a much different picture. According to him, the process of annexation requires a lot of oversight/shepherding by a property owner. Once a parcel is identified for the UGB by a municipality as a part of their planning, they must designate its potential land use. The property owner then requests annexation and plans are submitted to the city. A series of steps then takes place at the city level via the planning commission and the city council. Then the city council votes. After they vote, it then goes to a vote of the people whether to annex the property inside the UGB.

Are you clear on that? Getting the property rezoned and annexed is EASY--all it takes is putting your request on a referendum ballot after a series of lengthy and complex steps! Freeman estimated to us that he spent about $30,000 in planning, engineering and surveying fees, along with a bunch of his own time, in order to get the land included as part of Scappoose. Oh, and did I mention the sewer line? As Freeman put it, “the property isn’t worth anything without sewer on it,” and so he forked over about $2 million to have that taken care of.

Jaquiss implies that the Wagners could easily have taken care of this themselves before selling to Freeman, thus reaping much greater profit. It's true that the Wagners likely could have covered the application fees and prep costs for annexation, and with proceeds from another recent sale of land they held in North Portland the couple might have been able to pay upfront for sewer extension to the property as well. But financial cost is only one consideration; you'd have to ask yourself whether babysitting your annexation proposal through City Council and onto the ballot is how you want to spend your time when you're sick and 80 years old.

No, the Wagners were not interested in becoming the Trumps of Columbia County. What they were concerned with was that their property not fall into the hands of people who wanted a gravel mining operation on their land, which is why they dealt with Johnson--who had promised she wouldn't let that happen. But what about this long-time acquaintance of the Wagners?
Tom Heckman, a West Lane Road property owner who says he's known Stan Wagner for more than 50 years, disagrees.

"Stan got screwed on the deal," says Heckman. "When I was over at their house helping them pack up, I told Mrs. Wagner, 'You got robbed.' She said, '[$2.385 million,] that's enough for me and Stan.'"
I said 'acquaintance' for a reason, because while Jaquiss tries to make Heckman into a lifelong friend, sources in Scappoose say that Heckman tried to buy the Wagners property and was rebuffed because he wanted to sell it off to be mined. That would have been useful information to have, wouldn't it? Yet again, someone cited by the papers as a source claiming dirty dealings turns out to have an axe to grind (cf Pete Williamson, Greg Jenks, Tim Bero.)

If you're still with me, one other way Jaquiss tries to impugn the sale is by using sources who suggest that the supply of industrial land in the area is nearly nonexistent:
Port of St. Helens operations manager Kim Shade says the Port has only 40 acres of industrial land for sale. That land is more fully developed but five miles farther from Portland—which lessens its value—than the property Freeman bought in Scappoose.

The Port's asking price is $4 per square foot, or about $175,000 per acre—17 times what Freeman paid Wagner. "There's just not a lot of industrial land for sale," Shade says. "We're getting a lot of inquiries for our property."

Shade says the Port based its price on a November 2006 appraisal that evaluated recent property sales in cities such as Canby, McMinnville, St. Helens and Ridgefield, Wash.

Andy Kangas, an industrial-property broker at CB Richard Ellis in Portland, recently closed the sale of 14.23 acres of land in Gresham for $204,000 an acre. He echoes Shade's assessment.

"There's basically no industrial land left in the metro area," Kangas says.
We're not clear on what land Shade is talking about; we've gone to the airport and identified about 30 industrial acres for sale by the Port...on land immediately adjacent to Freeman's parcels, not any '5 miles away.' As for Kangas, "full of crap" is the best way to characterize his knowledge of the area. This study of regional industrial land availability from Metro in 2001 {pdf} includes a table on page 16 of supply and demand projected to the year 2025. Columbia County's estimated demand is for 50 buildable acres; in 1999 the number of vacant acres for development was 883...and 70 of that was ready-to-develop. Even if many of those buildable acres have since been utilized in the intervening 7 years, remember that when Freeman bought from the Wagners NONE of those 232 acres were development-suitable, so the appropriate comparison would be to 883 acres, not 70. Some shortage.

Some among the readership consider our partisanship to be the driving force behind the continued defense of Johnson. No amount of protest to the contrary is likely to convince those folks otherwise, but our interest has long since surpassed merely defending a politician against unsubstantiated charges and allegations. At this point, we are far more concerned with the professional atrophy of what are supposed to be the premier daily and weekly papers in this state. We considered Nigel a friend, and still do--to his credit, he has at least retracted a piece that didn't meet journalistic muster, and took a considerable amount of time to defend his work to us privately.

But we're still concerned. We can no longer trust what comes from Jaquiss' keyboard, because we have run out of plausible explanations for the repeated missteps...save one: someone desperately wants to see Johnson hurt, and/or wants to block legislative efforts that would hurt them financially, and has convinced WWeek and The O that there really is something there. And by repeatedly failing to check and seek the motives of the sources for their reportage, they are at best doing that someone's bidding, at worst actively contributing to it. And dammit, that makes us mad.

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