Sean C. Morgan
Of The New Era
The Sweet Home City Council agreed Dec. 11 to extend a development agreement with Santiam River Development Company.
The agreement required Santiam River Development to begin development of the project within three years, City Manager Craig Martin said. Although the company has continued working on marketing, no formal construction has started.
The city has a right to terminate the agreement after the three years.
Santiam River Development’s Santiam River Club is a proposed high-end residential development on land between the Santiam River and Highway 20 east of Clark Mill Road. It is part of a larger master plan shared with Western States Land Reliance Trust that includes up to 1,500 units. The master plan area stretches east across old industrial land east of 18th Avenue along the South Santiam River to Wiley Creek.
The Santiam River Club project will develop homes, primarily second homes and vacation homes, in a natural setting of ponds, streams and forest, with activities centered on a wide range of outdoor activities.
Under the agreement, Santiam River Development gave five acres of land near Wiley Creek to the city for the construction of a new water treatment plant. In exchange, Santiam River Club would be able to use the city’s untreated excess water rights to fill streams and ponds throughout the development.
As the city grows and uses more of the water rights for residents, the amount available to Santiam River Club would decrease. The development would begin using treated effluent from the wastewater treatment plant.
An unfavorable market led Santiam River Development to put the project on hold in May, but the deadline in the agreement is in April.
“To this date, that group has been great to work with,” City Manager Craig Martin said. The water treatment plant project is well under way in terms of securing property and getting easements for water lines.
“As you know, we have been struggling just like every other part of this country,” Phil Ordway of Santiam River Development told the council. The project is in mothballs for now.
Investors are interested in the project, Ordway said. But unlike recent years when a developer could finance a project piece by piece, it’s now a “show-me” market where developers must build the amenities first.
The market will probably stay that way for the next eight years or so, he said, so Ordway and his partners will need to raise the capital to begin construction.
“Within the last month or so, in spite of … forecasts, we have begun to experience renewed interest in the Santiam River Club from potential investors,” he said. He has investors from Arizona and Florida “that are really enamored, as they should be, with Oregon. They really believe in what we’re trying to do with this ecologically based project.”
The city’s right to terminate the agreement in April “makes the prospect of raising the needed additional capital even more difficult,” Ordway said. Conversely, an extension “will provide comfort to potential investors that the city and Santiam River Development Company will continue to cooperate in this difficult market.”
Ordway believes it will be 2009 or 2010 before the markets are back in shape to begin the project, he said. “We want very much to pursue discussions with potential investors so that when market demand does recover, which it most certainly will, we will be in a position to proceed with development at a more rapid pace.”
The council approved the extension 5-0. Voting yes were Mayor Craig Fentiman, Jim Bean, Jim Gourley, Scott McKee Jr. and Eric Markell. Rich Rowley was absent. The seventh council seat remains vacant.