200407301st Response of Eagle River to Idaho Power.pdf

B. Newal Squyres (ISB No. 1621)
Mary V. York (ISB No. 5020)
HOLLAND & HART LLP
Suite 1400, U. S. Bank Plaza
101 South Capitol Boulevard
Post Office Box 2527
Boise , Idaho 83701
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nsq u yres~ho llandhart. com
myork~hollandhart.com
Attorneys for Eagle River, LLC
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BEFORE THE IDAHO PUBLIC UTILITIES COMISSION
IDAHO POWER COMPANY
Complainant
vs.
CITY OF EAGLE , IDAHO
Respondent.
EAGLE RIVER, LLC
Intervenor- Respondent.
TO:
Case No. IPC- E-04-
EAGLE RIVER, LLC'
RESPONSES TO IDAHO
POWER COMPANY'S FIRST
PRODUCTION REQUEST
COMPLAINANT, IDAHO POWER COMPANY AND ITS ATTORNEYS
OF RECORD:
Intervenor-Respondent Eagle River LLC, by and through its attorneys of record
Holland & Hart LLP hereby responds to Complainant Idaho Power Company s First
Production Request as follows:
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST -
REQUEST NO.: Eagle River, LLC Witness Carlise testifies on page 10 of his
direct testimony that construction of an overhead 138-kV transmission line along the
mile-long northern boundary of the Eagle River Development will degrade the
Development "to the point that land values will fall and building standards will be
forced down." Please provide evidence in support of this assertion.
RESPONSE TO REQUEST NO.Mr. Carlise s statements are based upon
his 35 years of development and real estate experience , as well as his consultation and
work relationships with experts and real estate representatives in developing real
property. Based upon his real estate experience and the recognized impacts of over-
head transmission lines in the real estate industry, Idaho Power s proposed transmission
line will degrade the Eagle River Development, decrease land values, and lower the
type of development that can be created on the property. For example , Mr. George Iliff
who is the Managing Principal of Colliers International with Idaho offices in Boise and
Sun Valley and who is a real estate broker and salesperson with more than 30 years
experience in commercial real estate throughout the western U. S., states: "Anyone who
contends that a series of 80-foot grey metal poles having a diameter of six feet with
wires hanging from arms laced at various heights emanating from that line of poles and
the placement of such a structure along a previously completely open and magnificently
landscaped commercial development would not degrade such development, reduce its
value, extend the time it would take to market , and consequently result in the loss of
investment plus neutralize the previous cost of the high end amenities , is simply
someone who is disingenuous with self-serving reasons for making an obviously false
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST - 2
statement." Mr. Carlise ' s experience and expertise in real estate development is
consistent with Mr. Iliff's statements.
In addition to his expertise and experience in real estate and his consultation
with industry experts, Mr. Carlise s statement is further supported by the City of
Eagle s expert economist, Dr. Don Reading. Dr. Reading concludes that there is a
direct relationship between lower property values and high-voltage power lines. See
Reading Direct Testimony, pp. 5-9. Dr. Reading also concluded that because of Idaho
Power s proposed transmission line , the Eagle River Development will suffer direct
negative impacts: The land values in the Development will be significantly diminished
the quality of the Development will be decreased, and the market exposure time for the
property listings will be extended. Id. at p.8. Dr. Reading s expert conclusions are
consistent with Mr. Carlise ' s experience.
REQUEST NO.: Please quantify the diminution in value that the Eagle River
Development will suffer as generally alleged by Eagle River, LLC Witness Carlise in
his direct testimony in this matter if the 138 - k V transmission line is constructed as
proposed by Idaho Power Company.
RESPONSE TO REQUEST NO.Mr. Carlise s opinion is that the
diminution in value to the Eagle River Development that will be caused by the
construction of the 138-kV transmission line along State Highway 44 (Eagle Alternate
Route) will range between 20% and 30% of the value of the Development.
REQUEST NO.: Please provide evidence to substantiate Eagle River, LLC
Witness Car lise s claim that the presence of a 138-kV transmission line along the
northern boundary of the Eagle River Development will reduce the Development "to a
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST - 3
more average quality development, with much less desirability and appeal to the high-
end businesses and customers Eagle River is seeking to attract." Carlise Direct
Testimony at 10-11.
RESPONSE TO REQUEST NO.Please see Responses to Request No.
and 2 above. In addition, Mr. Carlise s conclusion as to the diminished quality of the
type of development that could be created at the Eagle River Development as a result of
the proposed 13 8-k V transmission line is based upon his 35 years of experience in real
estate development and consultation with real estate brokers and representatives from
across the U.S. and Europe, including retailers such as Ann Taylor, Gucci, Hermes
Gap, Talbots, Brooks Brothers , Borders Books , Cole Hahn Shoes, Federated
Department Stores, and Nordstroms. These retailers simply will not go into settings
with the industrial character typified by 80 foot tall, 6 foot diameter poles and
associated transmission lines. This kind of industrial facility will repulse most high-
end businesses, which are the exactly the type of commercial and retail activity that
Eagle River was designed and constructed to accommodate. According to Mr. Carlise
anyone who disputes this lacks practical real estate experience and a full understanding
of this realm of real estate development and investment.
REQUEST NO.: Please provide evidence to substantiate Eagle River, LLC
Witness Carlise s claim that the presence of a 138-kV transmission line along the
northern boundary of the Eagle River Development will discourage the development of
general office/medical office uses within the Development as stated on page 11 , lines 2-
3 of his direct testimony.
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRSTPRODUCTION REQUEST - 4
RESPONSE TO REQUEST NO.Mr. Carlise ' s conclusion that the
presence of the proposed 138-kV transmission line will discourage development of the
general office and medical office portions of the Eagle River Development comes
directly from the source-the purchasers of property within the Eagle River
Development. Mr. Michael Ondracek, Director of Corporate Development for Saint
Alphonsus Regional Medical Center has informed Mr. Carlise that St. Alphonsus would
have strongly considered not purchasing land at Eagle River to build its Ambulatory
Care Facility and its medical office building if the proposed 138-kV transmission line
and its associated 80-foot tall metal towers and power lines was to be built along one of
the primary vistas to its development. By contrast, without the transmission line and its
associated towers , there was no similar reluctance or aversion by St. Alphonsus to
purchase property within the Eagle River Development to build its care facility and
medical office building.
REQUEST NO.: Please provide evidence to substantiate Eagle River, LLC
Witness Carlise s claim that the presence of a 138-kV transmission line along the
northern boundary of the Eagle River Development will delay the build out period of
the Development as asserted on page 11 , lines 8-, of his direct testimony. Please
quantify the extent of any delay that is anticipated and provide evidence to support that
assertion.
RESPONSE TO REQUEST NO.Please see Responses to Request No.
through Request No.4 above.
REQUEST NO.: Please provide direct evidence to substantiate Eagle River
LLC Witness Carlise s claim that the presence of 138-kV transmission lines along the
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRSTPRODUCTION REQUEST - 5
northern boundary of the Eagle River Development will result in a loss "of investment
of the cost and expense of the high-end amenities which (are) incorporated into (the)
Development" as asserted on page 11 , lines 10-, of his direct testimony.
RESPONSE TO REQUEST NO.Please see Responses to Request No.
through Request No.4 above.
REQUEST NO.: Eagle River, LLC Witness Carlise testifies on page 11 , lines
12-, that Eagle River relied upon the representations made in the Eagle
Comprehensive Plan.
Please identify the representations in the Eagle Comprehensive Plan on
which Eagle River, LLC relied.
Please confirm that the Eagle Comprehensive Plan encourages
placement of electric utility facilities on public street and road rights-
of-way and corridors.
RESPONSE TO REQUEST NO.In response to subsection (a) of Request
No., the City of Eagle is widely known for its emphasis on quality of design at all
levels, as emphasized in its Comprehensive Plan. There are a number of relevant
policies established in the City s Comprehensive Plan that Eagle River relied upon in
planning and creating its development. For example, the first stated purpose of the City
of Eagle s Comprehensive Plan is "to protect property rights and enhance property
values." This stated purpose is of such importance that it is placed before the goal of
the City to provide adequate public facilities and services at a reasonable cost. See
Comprehensive Plan, Section 1.
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST - 6
Other sections relied upon by Eagle River include, but are not limited to:
Section 1.3 (The City of Eagle Vision Statement); Chapter 2 (Property Rights); Section
3 (Goal: "To promote a high quality of life and livability in the community. "
Chapter 5 (Economic Development); Chapter 6 (Land Use); Chapter 7 (Natural
Resources); Chapter 9 (Parks, Recreation and Open Spaces); and the Land Use Map,
which is referenced in and incorporated into the Comprehensive Plan.
One of the most pertinent provisions of the Comprehensive Plan is Chapter
governing Community Design requirements , and in particular, Section 12., regarding
Entry Corridors. That provision states:
Entryway corridors are arterials roadways that introduce both visitors
and residents to Eagle. City entryways include State Highway 44 (State
Street and Alternate Route) and 55 (Eagle Road). These entrances with
their landscaping (or lack thereof), commercial signage and building
character provide the first, and oftentimes the most lasting impressions of
the entire community. The City of Eagle has a responsibility to guide
development and redevelopment that occurs along these entryway
corridors. "
As evidenced by Section 12 and the entire Comprehensive Plan, it was and is obvious to
Eagle River that the City of Eagle has a very strong intention of establishing and
maintaining the aesthetic qualities of the approximately one mile stretch of State
Highway 44 (Eagle Alternate Route) that is the northern and longest frontage to Eagle
River.
The City of Eagle s planning goals formed the basis for the strict development
requirements, including its demand for high standards for landscaping and architectural
design, imposed upon Eagle River as a condition of its development. See Exhibit 107
Reading Testimony (Development Agreement between Eagle River and the City of
Eagle). These planning goals and resulting high standards set the stage for a setting and
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST - 7
environment in which high-end retail and commercial development can occur-
precisely the type of development that Eagle River is in the process of creating.
In response to subsection (b) of Request No., Section 4.7 of the City of
Eagle s Comprehensive Plan does encourage the placement of electric utility facilities
on public streets and road rights-of-way. There is no indication, however, that this
provision is to take precedence over all of the other provisions of the Comprehensive
Plan, nor is there any provision which states that this provision and the placement of
electric utility facilities on public streets and rights-of-way is to be at the expense of
Eagle s community design policies and objectives.
REQUEST NO.: Please identify with specificity the nature of the "reliable
technology" referenced by Eagle River , LLC Witness Carlise on page 12 , lines 18-
of his direct testimony "that would not require Idaho Power Company to construct the
massive 1 38-kV poles and lines.Id. at lines 19-20.
RESPONSE TO REQUEST NO.The reference statement was made based
on the testimony and conclusions of the City of Eagle s electrical utility expert, Mr.
Pike Teinert.
REQUEST NO.: Please identify with specificity the source of information
relied upon by Eagle River, LLC Witness Carlise when he asserts on page 12 , lines 20-
, that alternative "reliable technology..., would not cost any more than Idaho Power
Company s current proposal to construct the lines along the Eagle Bypass.
RESPONSE TO REQUEST NO.The reference statement was made based
on the testimony and conclusions of the City of Eagle s electrical utility expert, Mr.
Pike Teinert.
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST - 8
REQUEST NO. Please name all of the communities generally
referenced by Eagle River, LLC Witness Carlise in his direct testimony on page 12
lines 22-, that have used the alternative "reliable technology that would not require
Idaho Power to construct the massive 1 3-kV poles and lines.Id. at lines 19-20.
RESPONSE TO REQUEST NO. 10:The reference statement was made based
on the testimony and conclusions of the City of Eagle s electrical utility expert, Mr.
Pike Teinert.
REQUEST NO. Please describe the bases for Eagle River, LLC
Witness Carlise s assertion on page 13 , lines 3-, that "Idaho Power Company did not
consider alternative technologies as a means of mitigating the impacts of its
transmission line.
RESPONSE TO REQUEST NO. 11:The reference statement was made based
on the testimony and conclusions of the City of Eagle s electrical utility expert, Mr.
Pike Teinert. Furthermore , if Idaho Power had considered alternative technologies, it
would have considered the type of line referenced by the City of Eagle s electrical
utilities expert in his direct testimony. Idaho Power s myopic view of its proposed
transmission line is further evidenced by its consideration of only select route
alignments for the line , as well as by the manner in which they sought public
involvement in the selection of their proposed route. In determining its preferred route
Idaho Power conducted neighborhood meetings regarding the subject transmission lines
and towers by sending out notices to owners that had an Eagle zip code. However
Idaho Power excluded from its notices any property owner who did not have an Eagle
zip code, even if that property owner was located along the proposed transmission line
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST - 9
route and would be directly impacted by the line. Because Eagle River did not have an
Eagle zip code , it was not notified of the proposed locations for the transmission line.
Idaho Power was plainly aware that Eagle River would be an affected land owner, as is
most clearly evidenced by Idaho Power s negotiations and ultimate agreement to bury
existing high voltage lines along the West boundary of the Eagle River Property (at a
cost to Eagle River of more than $100 000) at the very same time it was conducting
community" meetings to discuss alignment of the subject transmission lines and poles.
Eagle River was never advised or notified by Idaho Power of those meetings.
In its planning efforts for its transmission line and even up to the present, Idaho
Power fails to understand or recognize the impact the transmission lines will have on
development. Idaho Power has publicly stated that a mixed-use high end development
such as Eagle River is comparable to an industrial area and therefore can tolerate the
presence of a 138-kV transmission line and 80-foot towers. Idaho Power has also
concluded that running such a transmission line and towers to the North of the City
through currently undeveloped land is the equivalent of running it through a residential
area. Having made these statements, Idaho Power could not have given real or
thoughtful consideration to the location of its transmission line or to alternative
technologies that would mitigate the impacts of the line on development in the area.
DATED this ~day of July, 2004.
HOLLAND & HART LLP
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRSTPRODUCTION REQUEST -
CERTIFICATE OF SERVICE
I hereby certify that on this ~day of July 2004, I caused to be served a true
and correct copy of the foregoing by the method indicated below, and addressed to the
following:
Donald L. Howell II, Director
Idaho Public Utilities Commission
472 West Washington Street
Boise, ID 83720-0074
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Barton L. Kline , Esq.
Monica B. Moen, Esq.
Idaho Power Company
1221 West Idaho
O. Box 70
Boise , ID 83707-0070
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Susan E. Buxton, Esq.
Bruce M. Smith, Esq.
Moore Smith Buxton & Turcke, Chtd.
225 North 9th Street, Suite 420
Boise, ID 83702
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3260968
EAGLE RIVER, LLC'S RESPONSES TO IDAHO POWER COMPANY'S FIRST
PRODUCTION REQUEST -