Flywater is finally OK'd for development

Rezoning of the formerly state-owned property had stalled for nearly 4 years

SHADY COVE — After nearly four years of contentious public meetings, the City Council voted, 4-1, late last week to approve an agreement rezoning 191/2; acres of formerly state land along the Rogue River from a public designation to private residential.

The land, commonly known as Flywater for the name of the development the owners had proposed, was purchased by the city for $575,000 with money provided by companies owned by local real estate broker Mike Malepsy and his partner Robert Kolodny, a California attorney.

Malepsy had approached the council in early 2007, offering to provide enough money to buy the property if, after the city acquired the land, it would transfer the property to the Flywater company. Once the property was rezoned and a development agreement signed, Malepsy and Kolodny agreed to donate 6 acres of the property back to the city for a park.

The council subsequently approved the transfer agreement and the purchase was made, but for the next few years the zone change slowly made its way through numerous Planning Commission meetings and City Council public hearings.

In December 2010, the council, opposed to the possibility of a future R3 zoning that would allow high-density development, denied the zone change, leaving Malepsy and Kolodny as owners of public land that couldn't be commercially developed. They filed an appeal with the Oregon Land Use Board of Appeals.

Last November, when the city agreed to revisit its decision and attempt to negotiate a new agreement, LUBA released the case.

Those negotiations led to last week's agreement.

Mayor Ron Holthusen said the new agreement simplifies the earlier agreement, clarifies the relationship between the parties, limits liability, provides for manageable growth and allows public access to the Rogue River.

One of Flywater's major concessions in the agreement was to waive any right to seek an R3 zoning, agreeing to an R2 medium-density zone and limiting development to 40 residential units.

The city agreed to not seek a $200,000 park development gift. Under the original agreement, Flywater would have developed the city park, minus the cost of bringing utilities to the site.

Councilman Gary Hughes opposed the new agreement.

"I look back on the original vote (to deny a zone change), and it was unanimous. At the time, we thought R1 zoning (low density) was more appropriate for that area. "… I still stand by the original vote that R2 zoning is too much for this area. It puts a burden on our resources, our water and sewer and everything else."

Bonnie Malepsy, wife of Mike Malepsy, was the only representative of the Flywater group to attend the meeting. She declined to comment.

Writer Bill Miller lives in Shady Cove. Reach him at

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