Western States Land Reliance Trust filed for bankruptcy under Chapter 11 Friday, as the final step in the foreclosure process loomed for 20 of its properties in the Sweet Home area.
WSLRT owes some $439,188.81 in six years of back taxes on 20 of 23 properties it owns in the Sweet Home area and Linn County. It owes $298,530.92 on the largest property, 2210 Tamarack St., a former Willamette Industries mill site. The properties are generally located north of Highway 20 between 18th Avenue and Clark Mill Road.
The properties are part of a larger master plan that proposed to develop the northern part of Sweet Home with a variety of residential and commercial enterprises. The projects have generally been placed on hold with the downturn in housing and the economy.
WSLRT filed for reorganization because it has been unable to secure financing, which would cover the back taxes, Managing Trustee Dan Desler said. Some $3.5 million has been spent to clean up the former Willamette property, by Weyerhaeuser and by WSLRT.
WSLRT has attempted to get documentation of that fact from the Oregon Department of Environmental Quality, Desler said, but the DEQ has not provided the documentation that the work has been completed.
WSLRT’s potential funding source requires third-party documentation and without it, WSLRT has been unable to receive the funds, which would pay the back taxes, Desler said. So WSLRT has filed for bankruptcy.
It also plans to ask a federal judge for that verification from DEQ, Desler said.
“I’m extremely upset by the Department of Environmental Quality,” he said. “They make mandates, you perform on the mandates and they won’t document it.”
The bankruptcy will give WSLRT a year to resolve the back taxes, Desler said.
Desler, WSLRT and related interests, such as Western Renewable Resources, have faced a variety of legal entanglements in recent years, including lawsuits. Desler also faces criminal air pollution charges related to the partial demolition of structures at 2210 Tamarack St. Trial in that matter is scheduled for January.
“We’re 99 percent settled right now,” Desler said. “The ones that are left can be handled by this transaction (financing) that was stalled by the DEQ.”
“We did not deed it today,” said Linn County Assessor Mark Noakes Monday, referring to the final step in the foreclosure process. “It doesn’t mean it won’t happen, but we did not do it today.”
The bankruptcy was filed electronically after 7 p.m. on Friday, Noakes said. The deadline for making tax payments was 5 p.m. on Friday.
The bankruptcy filing stays everything until his office can determine if the bankruptcy filing is legitimate, Noakes said. There will be a hearing at which all creditors will be duly noted.