>La Grande Observer | Union and Wallowa Counties' News Leader

With a purchase agreement deadline looming a few weeks away, Union County is awaiting a verdict from the Meyer Memorial Trust on funding applications for the proposed Mount Emily Recreation Area.

The county is requesting a $1 million program-related investment in the endeavor, a possible purchase by the county of about 3,700 acres on La Grande’s signature peak from Forest Capital Partners — or, failing that, $250,000 under the same conditions.

The county faces an Oct. 1 purchase agreement deadline with Forest Capital Partners, which owns the land.

Planning Director Hanley Jenkins provided an update on the purchase negotiations at a special meeting of the county commissioners Tuesday afternoon.

In July, the Oregon Parks and Recreation Commission authorized $4.4 million from the ATV Grant Program toward the project. This is contingent upon a number of conditions: a 2,880-acre perpetual recreation easement on the upper portion of the property; additional access to the upper portion from Igo Lane; and a cultural resources evaluation of the site, which Jenkins said was in progress.

The county had also applied to the Oregon Parks and Recreation Department for a local government grant in the amount of $1 million. The department ranked the Mount Emily request 16th out of 48 applications for that funding pool. The $4 million local government grant program budget was depleted by higher-ranked projects before Union County received funding.

With two different options for acquiring the recreation area, the county faces the upcoming deadline under the terms of its purchase and sale agreement with Forest Capital, the dates having been extended twice now.

“The current amendment requires that we actually make a decision on the two options by Oct. 1,” Jenkins said.

Should the county move forward with the deal, it would then have to actually make the purchase by Nov. 1.

Under the first option, the county would buy the land and all of the timber value at a pricetag of $7.8 million. Subtracting the ATV grant, this leaves $3.4 million for the county to generate.

Jenkins said that, ideally, the county would use a $1 million Meyer Memorial Trust program-related investment — with the land as collateral, and repaid with grants or possibly timber harvest — in combination with a $2.4-million loan from Community Bank secured by land and timber.

The bank loan can be guaranteed at 80 percent by the U.S. Department of Agriculture.

Should the Meyer Memorial Trust money not come through, the county would pursue a loan for the full remainder from Community Bank/USDA.

Such a loan would be repaid through timber harvest.

Alternatively, under the second option, the county would buy all the land and one-third of the timber value. This comes out to $4.65 million, or $250,000 with the ATV grant accounted for.

Jenkins said that this would be a viable deal if Meyer Memorial Trust granted the $250,000 to the county, rather than the full million. Should the trust decline committing the program-related investment, the county would seek other grants or loans to complete the purchase by the deadline.

Under that second option, Forest Capital would retain ownership of the other two-thirds of the property’s timber and would harvest it over a period of four years, beginning in 2009. During that period, Jenkins said the county could still purchase additional timber, should the money become available.

Commissioner Steve McClure said, “I don’t think we’re at decision point today.”

He said that, in addition to the pending decision by Meyer Memorial Trust, the variable value of timber — which the county would be using to pay back a bank loan — added some uncertainty to the arrangement.

“The risk right now is the unknown piece with the timber prices going into the future,” he said.

He pointed out that the public had directed the board of commissioners to seriously consider the option of purchasing acreage for the recreation area in its majority vote in May.

This support was with the understanding, he said, that the county’s general fund would not be used for a possible purchase.

During the public comment period, citizen Stephen Donnell said he supported the project if the loans could be guaranteed and repaid. But he worried about the fluctuating worth of both land and trees, and cautioned, “Prudent people don’t go into something (with) too many unknowns.”

He urged the board to “broaden (its) scope” and consider forming a separate entity like a community forest authority to seek funding for the deal.

But Tom Tuchmann of U.S. Forest Capital (a consulting firm unaffiliated with Forest Capital Partners) said via telephone that a community forest authority could only finance the purchase. An independent non-profit organization would have to be the actual owner.

Commissioner Colleen MacLeod expressed concern that such a system would result in a different type of management regime than that envisioned by the county.

Jenkins said he expected to hear about the Meyer Memorial Trust’s decision by Sept. 15.