Two Sunriver homeowners aim to halt development with lawsuit

Two Sunriver homeowners are suing the Sunriver Owners Association and Sunriver Village Mall owners in what they acknowledge is an attempt to derail a proposed $100 million-plus transformation of the mall into a residential and retail village.

In a suit filed in Deschutes County Circuit Court last week, homeowners Herbert and Betty Adelman say the method for approving the sale of homeowners association land to the mall owners is flawed and violates the Sunriver Owners Association Consolidated Plan and Oregon statute. Herbert Adelman, who lives in Arlington, Va., and has owned a home in Sunriver with his wife for 18 years, has been an outspoken critic of the development.

The retired attorney says the proposed mall isn’t consistent with the mall’s original emphasis on green space and low-density housing.

“This is a tremendous family activity for us,” Adelman said of visiting Sunriver for decades. “I want it to remain as it is.”

The Sunriver Village Mall was purchased in 2006 by SilverStar Destinations LLC, which then announced plans to transform the mall, which is more than 30 years old, into a mixed-use shopping and living center that SilverStar says will be akin to villages found in major destinations like Whistler-Blackcomb in British Columbia and The Village at Squaw Valley near Lake Tahoe in California. The development would add nearly 600 residences to the village core, which currently has none, and 40,000 square feet of retail space to the existing 110,000 square feet.

Some homeowners say the development is critical to Sunriver remaining competitive in the destination resort market, while others, including Adelman, say the project is out of scale for Sunriver and should not be approved as proposed.

“My purpose (of the lawsuit) is to prevent the SilverStar proposal from going forward in the form that it’s presently presented,” Adelman said.

SilverStar and Sunriver Owners Association representatives believe the suit is baseless.

Before construction on the mall can begin, the Deschutes County Commission must approve creation of a new property zoning that would allow residences, without which SilverStar says the development is not financially feasible. The new zoning was approved, with conditions, by the county Planning Commission last week and is awaiting a hearing with county commissioners. That hearing has not been scheduled.

On Feb. 15, the Sunriver Owners Association, or SROA, will hold a special election to vote on the possible sale of part of its common property to SilverStar. The homeowners have five parcels, totaling 6.2 acres, of common area in and around the existing mall, which SilverStar wants to buy and include in the development. The parcels are not contiguous.

If the measure passes, the SROA will be authorized to sell the parcels to SilverStar, said SilverStar spokesman Doug Thompson. These parcels are currently zoned for development, unlike the common areas around the homes in Sunriver, Thompson said, adding that he’s optimistic the measure will pass.

A “yes” vote does not finalize plans for the village revitalization, but authorizes the SROA to proceed with a sale to SilverStar for $2.55 million, Thompson said. Proceeds from the land sale would be used for the SROA owner-approved capital expenditures for community facilities. Up to $750,000 of the proceeds from the sale would be used to build a traffic circle at the intersection of Beaver and Abbot drives, which would be relocated in the new mall plan, Thompson added.

If the SROA opposes the land sale, Thompson and SilverStar Principal John Goodman said their proposal would die. But Goodman believes the SROA will agree to sell the land and that the lawsuit would not derail his plans.

“Substantively, Mr. Adelman’s claims against SilverStar don’t appear to have merit, either procedurally or substantively,” Goodman said. “He has asked us to agree with him that residential development is not permitted in Sunriver’s commercial zone, which is incorrect.”

Fremont Crossing, a new Sunriver residential community, was built in 2004 on 9 acres of commercial property next to the mall, Goodman says.

Additionally, Goodman notes that he is working with the county and community to rezone the property to allow for residences.

“So it is not our intent to add residential uses in the commercial zone,” he said. “We intend to rezone the property.”

The SROA Consolidated Plan states that such property sales need at least 60 percent approval from resident voters, whereas Oregon’s Planned Community Act states that at least 80 percent of homeowners must approve a sale, according to the suit. The suit says the SROA should follow the state act.

The lawsuit also challenges the election ballots and says that even if the SROA gets full approval for the sale, its Consolidated Plan lacks an amendment that would allow residential units on space that is now reserved for commercial use. Adelman’s attorney, Chris Bagley, says the amendment should be necessary even if county commissioners approve the zone creation for the mall.

SROA attorney Brent Kinkade believes the lawsuit is an attempt to stop an election on technicalities.

“We are analyzing the legal issues raised (in the lawsuit), but from what we can see, it’s without merit,” Kinkade said. “The (SROA) board is disappointed that the lawsuit was filed because they strongly believe the underlying issue is whether to sell a common piece of property — that’s for the owners to decide, not the court.”