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Department of Human Services TimberMill Shores concepts

Concept art from Rubicon Investments showing the proposed DHS multi-service center for TimberMill Shores.

The Oregon Court of Appeals Wednesday upheld a denial by the Land Use Board of Appeals of Sky Lakes Medical Center’s objection to the City of Klamath Falls’ designation of a planned state Department of Human Services facility in the downtown Klamath Falls TimberMill Shores development.

The court backed LUBA’s decision regarding the interpretation of the City of Klamath Falls’ Community Development Ordinance. According to previous H&N reports, Sky Lakes argued that the building was designed to be more of a social services center, not a government building, and is prohibited under the current zoning language. It also questioned the parking study done at the site.

“Although petitioner [Sky Lakes] vigorously argues for a different reading that would place more weight on other provisions of the CDO than did the city, those arguments do not persuade us that the city’s interpretation is an implausible one. In other words, nothing that petitioner points to in the CDO demonstrates that the city was compelled to interpret its ordinance in the manner advocated by petitioner, or that the approach adopted by the city was unreasonable in view of the text and context of the CDO. Consequently, LUBA correctly determined that it was required to accept the city’s interpretation.”

The debate over the CDO interpretation is over, according to a news release from the project’s developer, Rubicon Investments.

“Sky Lakes is now zero for five on legal tribunals related to this development” said Daniel Bunn, CEO of Rubicon. “We know they have unlimited nonprofit hospital dollars to delay the project, but we’re finally reaching the end of the line.”

A statement from Sky Lakes Medical Center was not available as of press time.

With the social service question definitively resolved by the court, the Klamath Falls City Council is now free to clarify a minor question related to traffic impacts of the project as directed by LUBA, the news release stated.

“The next step in the process is for the City Council to write additional findings on the traffic impact of KBBH (Klamath Basin Behavioral Health). While sub-tenants were accounted for in the traffic study, LUBA has asked for some more discussion. We’re talking about the impacts of three additional employees, so there won’t be any material change to the findings” said Bunn.

The developer’s news release also stated that numerous appeals are part of a battle Sky Lakes has been waging regarding the DHS lease contract that was awarded to Rubicon Investments in February of 2018. Sky Lakes picked this battle on behalf of Klamath Works (human services campus) and Sky Lakes’ 50% land ownership in a proposed alternative site. Many members of the Sky Lakes board are personally or financially tied to KW Campus, LLC (the landowner) and Klamath Works (the job program).

“It’s been clear for some time that Sky Lakes’ motivation is financial rather than a general concern for the land use process. As a not-for-profit hospital the public should be holding the Sky Lakes Board accountable for how they are spending donated money and assets. They have spent a lot of time and cash fighting to get our project disrupted and they can afford to do so because they don’t pay property taxes on their medical facilities,” said Justin Hurley Braswell, chief operations officer for Rubicon.

Rubicon is moving forward with the DHS development.

“We’ve completed our architectural plans and have submitted for our building permit,” said Braswell. “We’ve won on the merits at Klamath Falls Planning Commission, City Council, LUBA, and the Court of Appeals– it’s now just a question of how long Sky Lakes plans to delay the inevitable.”

TimberMill Shores is on the former site of Modoc Lumber, and has been in the Rob Shaw family of Klamath Falls for more than 70 years. The last 22 years, the area was a brownfield site that has been cleaned up and awaiting mixed-use development.

Rubicon Investments, who filed for their building permits on May 10, plans to break ground on the new DHS Regional Government Office, at TimberMill Shores once the permits are complete. Pence Construction, a Portland based general contractor, and TVA Architects will work with the developer on the project, with an expected completion date of June of 2021.

Rubicon Investments, based in Medford, intends to hold the project on a long-term basis after completion. The complete statement released by Rubicon Investments regarding the court’s decision is available with this story at