Land Use Hearing: Z0437-25 and Z0438-25 - Aug. 4, 2026

Agenda

File No.: Z0437-25 and Z0438-25

Applicants: M & S Investments LLC / Andrew Stamp, VF Law

Proposal: A Comprehensive Plan map amendment to change the land use plan designation for the subject property from Agriculture (AG) to Rural Industrial (RI), with a corresponding zone change from Exclusive Farm Use (EFU) to Rural Industrial (RI), as an “abandoned or diminished mill site,” pursuant to ORS 197.719. No development is proposed with this application.

Staff Contact: Martha Fritzie, Principal Planner, 503-742-4529, MFritzie@clackamas.us

Staff Report to the Board of County Commissioners

File Number(s): Z0437-25 and Z04388-25, Comprehensive Plan Map Amendment and Zone Change

Staff Contact: Martha Fritzie, Planning and Zoning, mfritzie@clackamas.us

Board of County Commissioners Hearing Date: August 4, 2026; 11:00AM

Proposal

This application requests the Clackamas County’s Comprehensive Plan land use plan designation be changed from Agriculture (AG) to Rural Industrial (RI), and for the zoning designation be changed concurrently from Exclusive Farm Use (EFU) to Rural Industrial (RI) for a portion of the property located at 33532 S Kropf Road.

This application is submitted pursuant to Oregon Revised Statute (ORS) 197.719, which permits land that meets the statutory definition of an “abandoned or diminished mill site” to be rezoned for industrial use, notwithstanding other land use regulations that protect farm or forest land.

This means that if the subject property meets the requirements in ORS 197.719 for an abandoned or diminished mill site, an “exception” to Statewide Land Use Planning Goal 3 (Agricultural Land), or Goal 14 (Urbanization) is not required to amend the Plan and zoning designations to industrial, as proposed.

The application does not itself propose, nor would its approval authorize, any new development.

Background: The subject property is located at 33532 S Kropf Road, approximately ½ mile north of the intersection of S Kropf Road and S Gibson Road and is approximately four miles southwest of the city of Molalla. It has approximately 700 feet of frontage on S Kropf Rd, a minor arterial, and direct access to that road.

The subject site is currently zoned EFU (Exclusive Farm Use), with a corresponding Comprehensive Plan designation of AG (Agriculture)and is located within a large block of agricultural land; all surrounding properties are also zoned EFU.

The site consists of a single taxlot (51E21, tax lot 01000) with a total of 20.79 acres. Approximately 7.5 acres of that total contain the developed area that is proposed for redesignation. This developed portion of the site is relatively flat, but steep slopes are present adjacent to the large pond (formerly a log pond) that encompasses the eastern and northeastern portions of the property. The property is bound on the east and northeast by Rock Creek, a regulated stream in the county’s Goal 5 inventory. The Dept of State Lands (DSL) Statewide Wetland Inventory identifies a riverine wetland (Rock Creek) and a freshwater “log pond” on site. Both the pond and stream would remain zoned EFU under this proposal; only the developed portions (roughly 7.5 acres) of the property would be redesignated.

Two soil types are mapped on the portion of the subject site proposed for redesignation. Both are considered prime, Class 2 agricultural soils; however, there has been a substantial amount of development, including numerous buildings and surface lots for parking, outdoor log/lumber storage, and other mill-related uses on this portion of the site for over 80 years. It is unlikely that much, if any, of the prime agricultural soils remain intact on this portion of the property.

Subject Property and Surrounding Area (Source: Clackamas County PlanMap, 2025 photo)

IMG1

Subject Property and Proposed Zone Change Area (Source: Exhibit 1, Application [Exhibit 2B])

IMG2

The developed area is shown above, with the pink line around Buildings “A” through “L” and “N” representing the area historically developed and used as the mill site and the area proposed for the Rural Industrial (RI) designation. According to
the applicant, this development is served by one exempt-use well and two septic systems.

Based on information provided in the record, there exists a total of approximately 94,682 square feet of building area on the subject property (including two lean-to storage areas not identified in the graphic above).

The buildings are currently being utilized as identified:

• Vacant: 38%
• Warehousing: 26%
• Other Storage/Office: 21%
• Kiln: 11%
• Pocket Door Fabrication: 3%

Historic uses on the site are discussed in detail in the application and the Planning Commission staff report included in this packet. Generally, evidence in the record establishes that:

• A lumber mill was established on this site in 1941
• That mill became a nonconforming use when the first restrictive zoning - Exclusive Farm Use (EFU) - was applied in 1976.
• The developed portion of the property has continued to be used for over 80 years. A lumber mill operated for many decades, but a series of alterations to that nonconforming use over the last 20-30 years have changed the types of uses operating on the site from milling and primary wood product processing to uses like warehousing and processing of wood pellets and other secondary wood products.

These facts are important in determining whether the subject site meets the standards under ORA 197.719 as an “abandoned or diminished mill site”. Under ORS 197.719, if a site meets the statutory definition of an abandoned or diminished mill site, it may be rezoned to industrial zoning without an exception to Statewide Planning Goal 3. Importantly, the statute does not require the site itself be vacant in order for the mill to be considered “abandoned”; rather it requires a determination of whether the uses on the site would still meet the statutory definition of a “mill site”. In this case, evidence suggests that the existing uses to not meet that definition and the site can be redesignated as industrial under ORS 197.719. Per ORS 197.719, several conditions must be put on this redesignation however, including:

• Only industrial uses may be allowed on the site;
• The site cannot be rezoned to allow commercial, retail, or other non-industrial uses without a goal exception; and
• Only the portion of the property that contained the mill site may be redesignated.

These applications are also subject to the criteria and processes outlined in the county’s Comprehensive Plan and Zoning & Development Ordinance (ZDO), as well as the Statewide Planning Goals. Based on the findings detailed in the Planning Commission Staff Report (attached), and the items discussed above, Staff finds that the proposal meets all applicable criteria both for a Comprehensive Plan map amendment and zone change from the Agriculture/EFU designation to a Rural Industrial/RI designation, subject to conditions of approval included on page 5 of this report.

Related to Prior BCC Action

None
 

Planning Commission Action

A public hearing was held on July 13, 2026, for Planning Commission consideration of the applications and the staff recommendation. The applicant team was the only party who provided testimony at the Planning Commission hearing.

The Planning Commission voted unanimously (9-0) to recommend approval of Z0437-25 & Z0438-25, as proposed. Draft minutes of the Planning Commission hearing are attached.

CPO and Hamlet Recommendations

The local Community Planning Organization (CPO), South Canby, is inactive.

Significant Issues

At its July 13th hearing, the Planning Commission was supportive of the proposal. Although there was some discussion of and concern about the environmentally sensitive areas on the subject site (but outside the area to be rezoned), the Planning Commission ultimately voted unanimously to recommend approval of the proposal.

Revised Traffic Study

One issue needed to be resolved however; there was a discrepancy in the total building square footage that was analyzed in the traffic study. The analysis presented in the original traffic study identified a total of 87,100 square feet, whereas the applicant’s narrative and maps identified between 92,500 and 95,000 square feet of building space on the site. The stated intent from the applicant is to retain the existing square footage of buildings on the site. Because the redesignation will be limited by what is analyzed in the traffic study, the total square footage on the property needed to be verified and reflected accurately in the traffic study to avoid a situation where the rezone would have to be conditioned on allowing the use of less square footage of building space than actually exists on the property.

To resolve this issue, the applicant:

• Verified that the total square footage of building space, including two “lean-to” storage

areas, is approximately 94,682 square feet; and

• Provided a revised traffic study (see Exhibit 4) that resolves the prior square-footage discrepancy by analyzing up to 100,000 square feet of gross building floor area. This study found that applicable criteria related to adequacy and safety of transportation system are still met with the increased square footage modeled

County engineering staff has reviewed the revised traffic study and concurs with its findings (see Exhibit 5), noting the following: Based on the updated trip generation, operational analysis, and crash review, the transportation system is adequate and will remain adequate with approval of the proposed zone change. The study intersections are projected to continue operating within applicable County and ODOT mobility standards, and the updated safety analysis does not identify a need for transportation mitigation.

Staff Recommendation

Staff recommends APPROVAL of files Z0437-25 and Z0438-25, the Comprehensive Plan Map amendment from Agriculture (AG) to Rural Industrial (RI), and corresponding zone change from Exclusive Farm use (EFU) to Rural Industrial (RI), as also recommended by the Planning Commission, subject to the following conditions of approval.

1. The Clackamas County Comprehensive Plan Map 4-7a, Non-Urban Area Land Use Plan, and all other maps of the Comprehensive Plan that include the subject property (tax lot 51E21 01000, with situs address 33532 S Kropf Road, Molalla) shall be amended to show the identified approximately 7.5-acre portion the subject property as having a Comprehensive Plan land use designation of Rural Industrial (RI).
2. The Clackamas County Non-Urban Area Zoning Map shall be amended to show the identified approximately 7.5-acre portion of the subject property the subject property as being in the Rural Industrial (RI) zoning district.
3. The subject site shall not be rezoned for retail, commercial or other nonresource use, except as provided under the statewide land use planning goals or under ORS 197.732.
4. Permitted uses shall be limited to industrial uses that are authorized in the Rural Industrial (RI) District and accessory uses customarily provided with the permitted industrial use.
5. The total amount of building square footage that may be occupied shall not exceed 100,000 square feet.

Z0437-25 & Z0438-25: Proposed Comp. Plan Map Amendment & Zone Change

Public Hearing, Board of County Commissioners August 4, 2026; 11:00 AM

Proposal Overview

• Comprehensive Plan map amendment with corresponding zone change
  • Plan: Agriculture (AG) to Rural Industrial (RI)
  • Zoning: Exclusive Farm Use (EFU) to Rural Industrial (RI)
• “Abandoned or diminished mill site”, per Oregon Revised Statutes (ORS) 197.719
  • No goal exception required
  • Only “mill site” portion of property may be redesignated
• No new development proposed or authorized

Subject Site

IMG1

• 33532 S Kropf Rd
• 51E21, taxlot 01000
• 20.79 acres total
• Approx. 7.5 acres proposed for redesignation to RI
• Developed area flat
• Eastern/ northeastern portion: slopes, pond, wetland, stream

Zoning and Vicinity

IMG3

• Exclusive Farm Use (EFU)
• Surrounding uses:
  • Farmland, cultivated fields, some treed areas
  • Few rural/farm dwellings

Proposed Zone Change Area

IMG2

Land Use History

• Mill established 1941
• EFU zoning first established 1976
• Nonconforming uses and alterations, 1993-2013
• Current usage
  • 38% Vacant
  • 26% Warehousing (farm store supplies)
  • 11% Kiln/unknown (for lumber “redrying” business )
  • 21% Storage/office (for lumber “redrying” business )

Notice and Comments

• Notice sent June 8, 2026
• No public comments
  • Exhibits 3 & 5: Engineering staff concurs with findings in applicant’s traffic studies, recommends conditions of approval
  • Exhibit 4: Additional information from applicant
    • Revised traffic study – resolves discrepancy in total building square footage
    • Information about environmental clean-up of site and adjacent lot
• CPO: South Canby, inactive

Relevant Policies and Criteria

Statewide Planning (SWP) Goals

Oregon Revised Statutes (ORS) 197.719, “abandoned or diminished mill site”

County Comprehensive Plan Goals & Policies

• Chapter 2, Citizen Involvement
• Chapter 3, Natural Resources and Energy
• Chapter 4, Land Use
• Chapter 5, Transportation
• Chapter 11, The Planning Process

Zoning & Development Ordinance (ZDO)

• Section 1202, Zone Changes
• Section 1307, Procedures

ORS 197.719 (Criteria)

• Site that meets statutory definition of “abandoned or diminished mill site”:
  • May be rezoned to industrial
  • Does not need an exception to SWP Goal 3
  • Must only allow industrial uses (not retail, commercial, etc.)
  • May not rezone to non-industrial uses without following usual rules, goal exception
  • Only area of mill site may be redesignated

ORS 197.719 (Definition)

• Definition of “abandoned or diminished mill site” a mill, plant or other facility engaged in the processing or manufacturing of wood products, including sawmills and facilities for the production of plywood, veneer, hardboard, panel products, pulp and paper, that:
  1. Is located outside of urban growth boundaries;
  2. Was closed after January 1, 1980, or has been operating at less than 25 percent of capacity since January 1, 2003; and
  3. Contains or contained permanent buildings used in the production or manufacturing of wood products.

ORS 197.719 (Findings)

• Was closed after January 1, 1980, or has been operating at less than 25 percent of capacity since January 1, 2003
  • …engaged in the processing or manufacturing of wood products, including sawmills and facilities for the production of plywood, veneer, hardboard, panel products, pulp and paper
  • Key dates:
    • Jan 1, 1980
    • Jan 1, 2003
    • Today
  • Nonconforming uses vs. “abandoned”
• Pie chart
  • Vacant: 38%
  • Warehousing: 26%
  • Other Storage/Office: 21%
  • Kiln: 11%
  • Pocket Door Fabrication: 3%
• Only developed area of mill site (approx. 7.5 acres) would be redesignated
  • Old aerial photography and land use approvals
• Conditions to ensure other criteria met
  • Only industrial uses allowed
  • May not be rezoned, except as provided under the statewide land use planning goals or under ORS 197.732

Planning Commission Hearing

Public hearing: July 13, 2026

• No testimony (only applicant)
• Discussion, environmental concerns
  • Portion of property with environmental constraints not proposed for rezone, but adjacent
• Recommend approval: 9-0 vote

Significant Issue

Total building square footage

• Discrepancy: 87,100 sq ft (traffic study) vs. 92,750 - 95,000 sq ft (application narrative)
• Applicant’s stated intent: no increase in building square footage
• Applicant verified footage on site: approx. 94,682
• Revised traffic study (addendum)
  • Analyzed 100,000 sq ft of building area, industrial use
  • Will not have a significant effect on adequacy or safety of the transportation system
  • County Engineering staff concurs

Staff Conclusion & Recommendation

• Application meets all applicable criteria
• Recommends approval of Z0437-25 & Z0438-25, with conditions, as noted in staff report