Category Archives: Environment

Land Use Considerations Related to OSU-Cascades Campus Expansion Site

OSU-Cascades is planning to expand its programming to a four year degree university and is seeking to develop an integrated campus on vacant land on the west side of Bend.  The site selection has garnered both support and concern from west Bend residents.  The university is pursuing the location, stating that the location is both developable within its limited budget (including land value and infrastructure improvement costs) and is near necessary amenities to attract high caliber students. Currently, the university has a 10 acre site plan pending before the city of Bend under Oregon’s land use laws and plans future applications to address the full campus build out, hopefully on an adjacent 46 acre property.  Oregon’s land use system can be complicated, yet it is intimately related to some of the concerns raised about the site selection and potential development impacts.

  1. The Site is inside Bend’s Urban Growth Boundary.  Cities are designated as urban areas—on purpose under Oregon land use laws, which are intended to prevent sprawl and protect resource lands.  If the university were to select a location outside of the urban growth boundary (UGB), urban levels of amenities would be prohibited from growing out to support it, unless the UGB is later expanded to include the campus.  However, UGB expansions are undertaken under very restrictive statewide standards, and such a result is highly speculative.
  2. The Site is Developable Land within the UGB.  The university’s current site is developable land within the urban growth boundary which mandates certain densities. The city of Bend is undertaking a UGB expansion process that was originally turned down by the State, in part, because the City could not justify the number of acres it desired to take in.  In other words, the City will be required to implement policies that ensure development densities that justify its UGB expansion area.  In summary, in light of the policy requiring infill development to meet these density requirements, it is unlikely that a vacant site inside the UGB will remain so.
  3.  The Land Use Process is About Identifying and Addressing Development Standards.  Understanding that the site a) is in an urban area and b) is unlikely to remain vacant, the issue then becomes what development impacts are allowed under Oregon land use laws.  All development has impacts.  Whether the site is developed as a shopping center (which has been under consideration) or a university campus, the Oregon land use system is designed to mandate certain development standards that require the developer to identify potential impacts, and find ways to avoid, reduce or mitigate them to meet the standards. Importantly, the land use system is “standards based,” and the process will only consider the subject of the application. In other words, if the developer can meet the standards, the City will have no basis to deny the application.  Of high relevance to the site selection, such standards include meeting traffic safety standards, including those very expensive ones imposed by ODOT at the Juniper Ridge site, thereby taking Juniper Ridge out of consideration.  In contrast, the City is currently considering and will make a decision on only the 10 acre proposal at the west Bend site, which does not appear to require the same magnitude of traffic infrastructure costs.
  4. The University is Proposing a Phased Development Process, but the Full Build Out Impact will be Addressed.  As noted above, the City will not at this time consider all of the impacts of a full 56 acre build out of the area, because the university is only currently applying for a 10 acre build out and because the university is still undertaking due diligence on the remaining 46 acres for development.  Concerns about the full build out of the campus will be studied and made part of the university’s future land use application(s).  The future phase(s) will include the same open land use process and will be designed to apply the development standards to the land use application(s).  Importantly, the City’s consideration of development impacts is cumulative—meaning, with the future application(s), the City will consider impacts on top of then-existing impacts of the 10 acre phase, so that the full development impact will be considered.
  5. OSU Cascades Public Process Exceeds that Required by Oregon Land Use Laws.  Of note, OSU Cascades has voluntarily opened up a community advisory committee process and a regional collaboration effort to collect and share information to help it plan for the future development phase(s) and achieve desired community and university outcomes.  This advisory committee and collaboration process is not required under Oregon land use law and is not a common practice for private developers.
  6. Food For Thought: Consider Development Characteristics.  While the City may be prohibited from denying an application that meets the standards, it can impose conditions that are reasonably necessary for ensuring compliance with a particular standard.  The nature of the conditions will be directly related to the characteristics of the proposed use.  OSU Cascades may provide some unique opportunities for managing development impacts that other developers may lack.  For example, OSU can control its enrollment; it can control when courses are offered to help manage traffic; and it can plan for student transit, living and life arrangements to reduce traffic trips and off campus impacts.  In contrast, a shopping center would not have these tools to mitigate impacts.
  7. You Can Get Involved, But Collaborative Input is Most Effective.  The Oregon land use process is open to public participation.  And, as noted above, OSU Cascades has voluntarily initiated a citizen advisory process related to the campus expansion and a regional collaboration effort to address expansion issues and more.  Anyone can get involved; however, involvement is most constructive and effective if it focuses on becoming informed and on being open to offering solutions where some can be had.  There are many examples, including the southern crossing bridge, where constructive and collaborative public participation shaped a result that improved the outcome and satisfied numerous interests.

Forest Owner Opportunities in California’s Cap and Trade Program

In 2006, California passed Assembly Bill (AB) 32, the Global Warming Solutions Act, directing the California Air Resources Board (ARB) to develop a program to reduce greenhouse gas emissions to 1990 levels by the year 2020 in California.  ARB developed its Cap and Trade Program, and 2013 saw the start of mandatory compliance obligations.  In general, the program sets emission caps which reduce over time and which trigger emission compliance obligations.  To comply with the program, covered entities such as electric utilities or fuel refineries must acquire either emission allowances (“Allowances”), issued by the ARB, or carbon emission offset credits (“Carbon Offsets Credits” or “COC”) from COC project owners/developers (collectively, “Compliance Instruments”) and then surrender these Compliance Instruments to the ARB for their covered emissions.

The Carbon Offset Credit component of the program creates opportunities for forest owners in the lower 48 states to participate and receive revenue for being a COC provider.  As part of the Compliance Offset Program, the ARB has adopted four Compliance Offset Protocols under which projects can be developed, implemented and verified for issuance and sale of Carbon Offset Credits:  Ozone Depleting Substances Projects Protocol, Livestock Projects Protocol, Urban Forest Projects Protocol, and US Forest Projects Protocol (the “Forest Protocol”).

The COC creation market has the potential to be significant.  Unlike voluntary carbon credit markets, California Carbon Offset Credit prices are responsive to regulatory floors and requirements—namely, the ARB sets a price floor for the Allowance auctions which helps to support COC prices.  COC prices are discounted to the Allowance price because Carbon Offset Credits may comprise only 8 percent of a covered entity’s compliance obligation.   For example, the 2014 floor price for an Allowance is set at $11.34, and the 2014 Allowance budget is 159.7 million Allowances—meaning there is an opportunity in 2014 to market approximately 13 million offset credits at prices that could range from $8-10 per offset (or higher if the allowances trade higher than the floor price).  This annual market opportunity grows in later years due to additional covered entities entering the regulatory program (for example, the Allowance budget jumps to 394 million Allowances in 2015).  Further, there is flexibility in the market as Carbon Offset Credits may be banked for future year compliance obligations.

Eligibility of forest lands for the Forest Protocol depends on the project type.  The Forest Protocol identifies three different project types: 1) Reforestation; 2) Improved Forest Management; and 3) Avoided Conversion.

  • Avoided Conversion projects may only occur on privately owned (including tribal) land, unless the land is transferred to public ownership as part of the project.  Lands are only eligible if it can be demonstrated that there is a significant threat of conversion of project land to non-forest land use.
  • Reforestation projects are limited to lands that have had less than 10 percent tree canopy cover for a minimum of 10 years or have been subject to a Significant Disturbance removing at least 20 percent of the land’s above ground live biomass in trees.  The projects may occur on private land, tribal land or on state or municipal public land.
  • Similarly, Improved Forest Management projects may occur on private, tribal or state/municipal lands.  These projects involve management activities that maintain or increase carbon stocks on forested land relative to baseline levels of carbon stocks.  To be eligible, these lands must contain more than 10 percent tree canopy cover.

Notably, federal lands, except for tribal lands, are not eligible for any of the projects.  The exclusion of federal lands creates a significant opportunity for private and tribal forest owners to participate in the carbon market and create additional asset value.  The Carbon Offset Credits create opportunity for an annual revenue stream. And, importantly, some of the Forest Protocol projects are not incompatible with ongoing timber management objectives, but may, in fact, help generate revenues that can assist in overall forest health and timber management objectives such as through thinning projects and/or biomass removal.  The Carbon Offset Credit revenues could also be rolled into other management objectives, for example, forest land acquisition.  However, there is a cost to entry and ongoing management costs for reporting and verification which should be factored into any project projection.

Any forest owner interested in the program should contact a reputable professional to assist them in a feasibility review of the Forest Protocol and the forest owner’s lands, forest composition and management practices and objectives.  This would evaluate potential size of project, credit generation and revenue and cost projections.  For example, under the Improved Forest Management protocol, project sizes under 5,000 acres may not make financial sense standing alone, but could perhaps be aggregated with other land holdings.  In addition, invalidation and other legal risks should be evaluated.

In summary, the California Cap and Trade Program is large enough and valuable enough to entice interest in forest carbon offset project development on private and tribal lands.  These offset projects can create additional value for forest owners, but only if they are consistent with existing overall management objectives. While the market is regulated, it is also still emerging.  Accordingly, it is important to evaluate the risks as well as the opportunities before committing to a project.