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City in contempt over Nike dispute

Annexation try hinted at in paper

BEAVERTON, Ore. -- Can Nike Inc. and this growing city ever be good neighbors again? After the ``smoking gun?" After running up a legal bill of about $1.1 million over a file less than a couple dozen pages thick? And, oh, how about the judge finding the city in contempt?

The only Fortune 500 company in Oregon, which also happens to be the world's largest athletic shoe and clothing manufacturer, is an island in unincorporated Washington County.

After a two-year legal battle with the city and a helpful exemption from the Oregon Legislature, the Nike headquarters campus will likely remain an island for at least 35 years -- despite urban growth that has filled in nearly every nook and cranny around it.

Beaverton Mayor Rob Drake and Nike spokesman Vada Manager say they're ready to put the whole bitter affair behind them.

``We want to move forward and continue to be both a progressive employer and a contributor to the economy," Manager said. ``We certainly don't foresee any repercussions from this litigation."

Drake contends it was all a misunderstanding. The city considered annexation for Nike, but it never got past the discussion stage -- nothing more than a 19-page issue paper that was never going to see the light of day, he says.

But Nike says that issue paper -- nicknamed the ``smoking gun" -- laid out city plans to forcibly annex the headquarters campus and make it pay about $700,000 in taxes annually, while getting practically nothing in return.

Drake says the issue paper was in plain view, and all Nike had to do was look. Nike says it was hidden away during a useless search of more than 2.9 million pages of computer files.

Washington County Circuit Judge Gayle Nachtigal says the city should have just made it easy and handed it over, avoiding the fuss -- and her contempt ruling against Beaverton in mid-September.

``This famous smoking gun memo they keep referring to was in the end a document that our planner devised," Drake said.

He compared it to shopping for a Rolls-Royce Silver Cloud.

``OK, for the joy of it, I might have test driven that Silver Cloud -- but no way in the end would it have been practical to buy it," Drake said.

Manager says it is the way Beaverton handled its annexation plans that drew such a strong response from Nike.

``It's the state's only Fortune 500 company," Manager said. ``There should have been a plan submitted over to Nike to say: `This is what we're thinking.' They needed a better approach than to furtively and clandestinely and forcibly annex us in the way that was attempted."

Joel Mullin, the lawyer for Nike who is handling the case, points out Judge Nachtigal said in court the case was a public records dispute, not an annexation dispute.

Mullin says the city knew the paper was a public document under state law and should have made it available two years ago, when Nike began looking for it.

Instead, the city forced Nike to go looking through those 2.9 million pages of documents on computer hard drives -- for months.

Judge Nachtigal agreed that the burden was on the city, saying ``the city stonewalled, hid, and engaged in behavior that caused this lawsuit to get out of control."

Now Mullin is submitting proposed forms of judgment to Nachtigal to request payment for legal costs, including about $475,000 in attorney fees.

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