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FILED: June 14, 2006
IN THE COURT OF APPEALS OF THE STATE OF OREGON LEUPOLD & STEVENS, INC., Petitioner, and HENRY KANE, Intervenor-below,
v. CITY OF BEAVERTON, Respondent.
2005-073; A131242 Judicial Review from Land Use Board of Appeals. Argued and submitted March 20, 2006. Robert Van Brocklin argued the cause for petitioner. With him on the brief were Michelle Rudd and Stoel
Rives LLP.
William J. Scheiderich argued the cause and filed the brief for respondent.
Before Landau, Presiding Judge, and Brewer, Chief Judge, and Schuman, Judge.*
LANDAU, P. J.
Affirmed.
*Schuman, J., vice Richardson, S. J.
LANDAU, P. J.
The City of Beaverton (city) adopted an ordinance annexing property owned by petitioner Leupold &

Stevens, Inc., without petitioner's consent. Petitioner appealed the ordinance to the Land Use Board of Appeals (LUBA). In the meantime, the legislature enacted a statute pertaining to local government authority to annex certain properties without owner consent. Petitioner argued to LUBA that the new statute retroactively eliminated the city's authority to annex in this case. LUBA affirmed the ordinance on the merits and rejected petitioner's argument under the new statute on the ground that it was predicated on facts that petitioner had failed to put in evidence.
Petitioner now seeks judicial review, advancing two propositions. First, petitioner contends that LUBA's and the city's decisions have become moot by virtue of the enactment of the new statute. Second, petitioner contends that LUBA erred on the merits.
We conclude that, on the record before us, there is no basis for concluding that the matter has become moot. We further conclude that LUBA did not err in affirming the city's annexation ordinance and therefore affirm.
I. FACTUAL BACKGROUND
The relevant facts are not in dispute. Petitioner owns several lots that are part of a larger territory that is surrounded by the city. One of the lots is "Lot 700," which is zoned for industrial uses, is improved with a building, and has a value in excess of $7 million.
On February 14, 2005, the city adopted a resolution to initiate annexation of petitioner's lots, including Lot
700. The city proposed to annex the lots pursuant to ORS 222.750--often referred to as the "island annexation" law --which provides that, when unincorporated land is surrounded by the corporate boundaries of a city, the city may annex the land "with or without the consent of any owner of property within the territory." Petitioner objected to the annexation. As pertinent to the issues before us, petitioner argued that, notwithstanding ORS 222.750, the city lacked authority to annex Lot 700. According to petitioner, under Oregon Laws 1987, chapter 737, section 3, which is compiled as a note before ORS 222.111, notwithstanding any other provision of law, a city may not annex property without the owner's permission when the property is not residential, is zoned for industrial use, has "sewer and water lines" that were "paid for and installed by the property owner," and has an assessed valuation in excess of $7 million. Petitioner offered evidence of the current use and zoning of Lot 700, of its valuation, and --most significantly for the purposes of this case--of the fact that it had installed sewer and water lines at its own expense. Included in the expenditures was $25,890 spent in 1995 to relocate a 21-inch public sewer pipe to accommodate an expansion of the building on the lot.
The city found that petitioner's evidence was inadequate to demonstrate that Lot 700 qualified under section 3 of the 1987 law. In particular, the city found that petitioner had failed to demonstrate that it "installed" its own "sewer and water lines." According to the city, the statutory term "sewer and water lines" includes only the large, shared, public lines that deliver water to individual properties and collect waste from those properties. The term does not include, the city explained, "lateral" pipes that merely connect individual buildings with those larger, shared lines. In this case, the city found, the pipes that petitioner installed were almost entirely of the lateral type.
The city acknowledged that petitioner did expend $25,890 to relocate a 21-inch public sewer line. It nevertheless concluded that even that expenditure did not suffice, because the statute applies only when the property owner "installs" such pipe, not when it merely moves it to accomplish an expansion of development. In this case, the city contended, the pipe actually had been installed at public expense in 1987 to replace an existing, inadequate 10-inch pipe. Petitioner merely moved the location of the pipe southward so that petitioner could expand one of its buildings into an area where the 21-inch pipe originally had been located.
On May 2, 2005, the city adopted an ordinance annexing Lot 700. Petitioner appealed to LUBA. It argued that, among other things, the city erred in finding that petitioner had not demonstrated the factual predicates to the statutory exception to the city's annexation authority stated in section 3 of the 1987 law.
While the appeal was pending before LUBA, the legislature enacted a statute that alters the authority of cities to annex unincorporated property. The legislation was signed into law on September 2, 2005, and took effect immediately. Portions of the new law apply to all annexations approved under the "island annexation" statute, ORS 222.750, on or after March 1, 2005. Among the sections that apply retroactively is section 6, which provides that
"[a]n area of land within the urban growth boundary of the metropolitan service district
established in the Portland metropolitan area may not be annexed under ORS 222.750 if:
"(1) The area of land is larger than seven acres and is zoned for industrial use; "(2) The land is owned by an Oregon-based business entity that has been in continuous
operation, either directly or through a predecessor, for at least 60 years; and
"(3) The business entity employs more than 500 individuals on the land."
Or Laws 2005, ch 844,

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