Scott Swanson
Linn County has an offer on the table to purchase Edgewater RV Park and Marina on the west shore of Foster Lake.
The county has offered $775,000 to OSU Federal Credit Union, which holds a note on the property, which is in foreclosure.
County Parks Director Brian Carroll, who reported to the County Commission on the status of the negotiations last week, said he couldn’t comment too fully on the situation due to the legalities involved.
“All I can tell you is I’ve been talking with an attorney representing OSU Federal Credit Union,” he said.
He said he learned “in late 2013” that the resort was in “some kind of financial trouble,” and had been asked whether the county would be interested in purchasing it.
“More or less, where we were at, we would have preferred that it stay in private hands,” Carroll said. “We didn’t want to get in the way of a private buyer.”
At the same time, he said, “We felt strongly that it was a valuable recreational facility in the county and we wanted to make sure it didn’t close.”
Edgewater RV Park was completed Memorial Day weekend 2008 by developers Dennis Gibson, Dan McGarry and Steve Leith.
McGarry and Leith were partners in Foster Lake Investments, which built the lakeside homes off 60th Avenue and Highway 20, along with the RV resort.
All three developers were from the Philomath area. The marina was completed in July of 2009.
Leith, who is now located in the Seattle area, said he and McGarry ran into financial difficulties two years ago and were unable to come to a lasting agreement with OSU Federal Credit Union on what needed to happen to make the resort pay off.
The partners planned to add a lodge-type facility, with a restaurant, to the 49-space RV facility.
“We needed to build it out to make it a profitable enterprise,” Leith said, noting that business at the park has steadily increased each year since it was built.
The marina has 40 slips, most of which are seasonal slips that are consistently sold out during the summer months. It has a permit for up to 148.
Leith said that after OSU Federal decided in 2012 not to lend any further for build-out of the resort, and started the foreclosure process, the partners and the credit union eventually decided that the best course of action was for Edgewater to file Chapter 11 bankruptcy, which they did in July of last year.
Meanwhile, McGarry had been diagnosed with cancer early in 2013 and died last September.
Leith said they hoped to package the RV park and marina facilities with the 25-year lease they have for the lakeside marina property from the U.S. Army Corps of Engineers, for a buyer.
Now, with the county’s offer on the table and a bankruptcy court involved, the next step is an “overbid period” dictated by the court, to see if any better offers materialize, Leith said.
Cautioning that “this is, to a certain extent, all speculation,” Carroll said he thinks Edgewater would “fit in well” with the county’s existing campground facilities in East Linn County.
He said Lane County has two marinas and Jackson County also has one, so his department would “certainly be looking at their models, how they operate.”
He said if the county gets the property, he hopes it’s before the tourist season kicks off on Memorial Day weekend.
“From our standpoint, we would certainly have it completed, everything fall in line and due diligence completed some time this spring so it’s in our hands in enough time for us to operate in a competent manner during the recreational season. We want to take care of the folks who are planning on using it.”
Leith said he believes county ownership “would make a lot of sense” and would add financial stability, particularly if the property were not built out according to the original plan.
He pointed out that Edgewater has continued to operate through the financial difficulties and he said he still believes the business model is solid.
“It’s a tough situation for us,” he said. “We spent 10 years on planning and building it and to have it end like this is disappointing. It’s pretty sad for us.”