While excitement bounds over expansion of UGBs, results of speculative deals are not yet known
David w. Meyer
There is much hoopla over the anticipated expansion of the Urban Growth Boundaries in Clark County, and for good reasons. These boundaries, mandated by the state’s Growth Management Act, confine the area into which higher density housing and certain commercial developments can occur. Expansion of the boundaries, an inevitable result of our area’s rampant growth, presents fantastic opportunities for developers, the construction industry and landowners alike.
Unfortunately, the precise locations of the expected expansions are not yet known. The prospective expansion, though, has already caused an extraordinary volume of speculative purchase proposals to landowners whose tracts lay just outside the present boundaries. In most cases, those agreements have a variety of contingencies so that one party or the other – usually the buyer – can terminate the deal if something does or does not transpire. There is always, however, a certain amount of expense, effort, and stress incurred in negotiating the contingent deal. None of the parties who have entered into an agreement to buy or sell in anticipation that the particular property will be inside the envelope knows whether their gamble will pay off.
The factors that are likely to make the difference, neighborhood to neighborhood, in the decision to expand the boundary in certain areas include the presence of nearby roads and utilities with the capacity to handle increased use caused by increased density of development, compatibility with adjacent properties within the current growth boundaries, and future growth potential which is deemed to be in compliance with the long range goals of the county’s comprehensive plan.
Now, the U.S. Supreme Court’s recent decision (Kelo v. City of New London) allowing local government to utilize eminent domain powers for condemnation of private property for private redevelopment is not at play in the expansion of the boundaries. No movement is afoot to force anyone to sell their home, business or land. While some people will inevitably be displeased with the prospect of higher density in their neighborhood, their right to sell will just as inevitably become more valuable.
Those who have already entered into deals on the fringe of the current boundary have bet on their horse, are watching the race, and hope that theirs will get across the line. Most of the deals will terminate automatically if the subject property remains outside the boundary when the lines are redrawn. It remains to be seen whether buyer’s remorse or seller’s remorse will be more prevalent among those who already have written commitments upon property that ends up within the new boundary, and whether those who waited until the decision is made before committing to buy or sell will be the lucky dogs or the losing snoozers.
David W. Meyer is an of-counsel attorney with the Vancouver office of Bullivant, Houser, Bailey, PC, a West Coast regional, multipractice law firm with seven offices in four states. His practice emphasizes strategic planning, contract drafting, negotiation, litigation and appellate practice for clients under the areas of business law, estate planning, real estate and land use. He can be reached at 360-737-2301 or firstname.lastname@example.org.