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Money pit? County, Sweet Home want to offload ex-mill site, but it won't come fast

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Linn County and the city of Sweet Home want to offload the former Weyerhaeuser/Willamette Industries mill property in the heart of town as soon as possible. But it likely will take time.

The Linn County Board of Commissioners met Tuesday, Nov. 9 with the Sweet Home City Council to discuss the future of the site, which has sat dormant for more than a decade following the county’s acquisition of the property through a lengthy tax foreclosure process.

The cleanup of the site, which has environmental concerns, has been even lengthier. Hundreds of thousands of dollars have been spent through a combination of state and federal grants, as well as taxpayer money.

The county has worked with the Environmental Protection Agency, the Oregon Department of Environmental Quality, and the Oregon Health Authority for a string of tests and management plans for potential soil and water contamination of the site.

Contamination worries

In particular, some of the structures contain asbestos, and due to the decades of lumber operations on the site the DEQ has tested for a wide range of potential contaminants. There’s also naturally occurring arsenic that could potentially seep into private wells in the area — though testing in recent years has measured surrounding wells at less than dangerous levels.

Early testing revealed some soil contaminants, which were the subject of cleanup efforts in 2005 and 2009. Now, the DEQ has given out judgments of “no further action” — NFA in environmental regulation-speak — on several parts of the property, indicating that these concerns have been adequately addressed.

In 2018, multiple agencies released a report saying that the site, and surrounding wells and water sources, did not pose major health risks to the surrounding public.

That doesn’t mean the environmental work is completed, however. Contaminants remain a concern, particularly with structures remaining on the site that still contain asbestos, as well as pollutants that have seeped into the former log pond in the middle of the property.

Never-ending tests?

It’s all contributed to a feeling that the mitigation work will never end.

“The DEQ hasn’t not found one more test they want to run,” Commissioner Will Tucker told Sweet Home officials on Tuesday.

Tucker also said that the county is waiting on a response from the department regarding its "Contaminated Media Management Plan," basically a framework for how to identify and safely dispose of the remaining contaminants on the site. That process is estimated to take about a year, which would also hang over any future sale.

The environmental aspects of the property continue to cast a cloud over whether the property is marketable for private developers.  

“I have serious doubts about a developer taking on a property with that level of cleanup,” Sweet Home City Councilor Dave Trask said.

That’s part of the reason county officials, prior to the Sweet Home meeting last week, seemed set on a “parceling out” approach, where they would partition marketable pieces of the property — the ones with NFAs and without environmental concerns — while the county retained the middle portions of the property which still need cleanup.

The thinking is that the county, which has access to more grants and assistance from state and federal agencies, would be more successful in mitigating those environmental issues. Though, this also comes with the risk that the county would be left with the dirtiest and costliest parts of the property for much longer.

But these contamination concerns are just the latest in a long saga of trying to properly manage this property in the heart of Sweet Home.

A long, tortured history

The county came by the nearly 400-acre property (parts of which have transferred or sold off since) through foreclosure after more than $500,000 in back taxes were racked up on the site. It was a plywood mill up until 1994 and then taken over by the Western States Land Reliance Trust.

The trust was managed by Dan Desler, who was initially pursuing a plan to develop an amphitheater, artisans’ village and high-end housing and teaching centers on the property. Those plans changed several times, at one point morphing into a 434-lot residential housing development. All were completely derailed by the foreclosure proceedings on the property.

Even before the foreclosure, however, the property presented numerous problems. There have been multiple fires at the property, many of which were caused by warming fires started by unhoused people using the old structures for shelter.

It was a fire in 2004 that revealed open asbestos. Firefighters at the scene contacted the Department of Environmental Quality, which notified Desler.

He hired an unlicensed contractor to conduct the work of tearing down the buildings, crushing and chipping the materials. Most of them were left sitting out, uncovered, however. This led to the Environmental Protection Agency supervising a $1.1 million cleanup of the more than 4 million pounds of asbestos-containing materials.

Desler pleaded guilty to a count of negligent endangerment by releasing a hazardous pollutant into the air. He was also charged in 2009 with failure to inspect prior to demolition or renovation, failure to provide notice, and six counts of work practice standard violations in connection with work completed at the mill site.

All this doomed the plans for the property by the time the county acquired it in 2010. Ever since, county officials have been saying how much of a money pit the property is, with so much environmental work and infrastructure needs that must be addressed before any developer could begin building something new there.

Tired of waiting

With so many twists and turns to the saga, officials are fed up with waiting.

“Time is time, and it’s been a long time cleaning up this property,” Commissioner Roger Nyquist said at the Sweet Home meeting.

It’s why Nyquist was pushing hard to pursue a sale sooner rather than later.

“I feel like if we put the property up for auction tomorrow, somebody would buy it and start utilizing it in a way that would start to be beneficial to the community,” he said.

Part of his urgency, Nyquist said, comes from fears that rising interest rates and a red-hot economy may soon make the real estate market take a nosedive, which could hold up the sale for years.

After lengthy discussion, the Sweet Home council agreed, giving an informal thumbs up to the county pursuing an auction of the property. The city just wants to make sure that whoever buys it works with City Hall to make the property line up with officials' vision for this large lot near the downtown core.

While residential subdivisions or multifamily housing are almost sure to go on part of the property, it would require rezoning, and the city also wants new businesses to move into the area.

The Sweet Home property joins a list of other former mill sites the county is handling. The Board of Commissioners in September finalized the sale of a mill in Lyons to Sierra Cascade Forest Products, and Tucker said in a follow-up interview that the county is involved in another former mill in Lebanon.

Tucker also said that the county will bring a resolution before the board directing staff to begin the auction process, which has many legal ins and outs. The sale has to be publicly noticed for 30 days before an auction can be conducted, for example.

The county tried to auction off the property once before, in 2019. No bids were received, though commissioners say the NFAs and further progress made on the property since then may make it more attractive to developers now.

Still, officials note that with so much still up in the air, any potential sale could still take time and is by no means a guarantee.

“No buyer in their right minds would make a purchase agreement on that property without a DEQ prospective purchaser agreement,” Tucker said. “That would take about a year. … And in that time we would hope to have that contaminated media management plan completed.

“That’s my concern in selling this property,” he added. “(Having) the person never finish the building tear-down and not properly managing the contaminated media, … then (wanting) to walk away from that.”

Troy Shinn covers healthcare, natural resources and Linn County government. He can be reached at 541-812-6114 or troy.shinn@lee.net. He can be found on Twitter at @troydshinn. 

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