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Old mill’s fate hangs in balance

Published on November 19, 2017 3:01AM

Last changed on November 19, 2017 8:00AM


DEXTER — Each year, Lane County forecloses on a dozen or so properties whose owners have failed to pay back taxes and interest for at least half a decade.

They’re typically bare lots or long-neglected houses, which the county then auctions off with prices of often just a few thousand dollars.

The former wood products mill at 38534 Dexter Road is different.

First, there’s the 10-foot-tall gate at the main entrance, topped with two types of barbed wire and flanked by signs warning of security cameras.

Then there are the dozens of cars, trucks and recreational vehicles in various stages of decay littered across the 20-acre site.

There’s a marijuana growing and processing operation, either on the property, on adjacent land or both.

And then there are the neighbors, who have called the Lane County Sheriff’s Office at least 10 times in the past three years reporting gunshots, trespassing, illegal dumping and other disruptive activity by people living on the sprawling industrial property.

Lane County foreclosed on it and took possession in September after then-owner James Peterson Jr.’s unpaid tax bill ran up to about $27,000 over a five-year period, officials say.

The site includes a 28-year-old, 30,000-square-foot wood products factory and outbuildings including a large barn. The county says the property has a market value of $281,000.

Now the county faces the unusual question of what to do with a property whose residents allegedly have menaced and intimidated neighbors in this rural area west of Dexter Lake.

“Not very often do we get a property that’s zoned industrial,” said Lane County property management officer Jeff Turk, who oversees the county’s sale of tax-foreclosed properties. “It’s rare. I’ve been doing this 25 years and I can barely remember one.”

Making things more complicated is the fact that Peterson wants the property back.

During the public comment portion of the Lane County Board of Commissioners’ Nov. 7 meeting, attorney Robert Smejkal explained that Peterson’s medical problems resulted in multiple hospital stays over the time he fell behind on his property taxes.

“He is in extremely poor health,” Smejkal said. “He weighs over 400 pounds, he’s on oxygen 24/7, he’s confined for the most part to his home. He has home health care that serves him. ... I just urge you to allow us to have a further hearing in order to consider this matter before the commissioners.”

Peterson apparently does not live at the mill — although apparently others do.

No eviction started yet

Though Lane County now legally owns the site, it has not started any eviction action. The camping, streams of people coming and going from the property, late night revving of car engines and motorcycles and other activities have continued since, neighbors say.

Once the site of Dexter Forest Fibre, the property was purchased in 2006 by Frances Peterson for $800,000, according to a deed filed in Lane County.

Records list her as trustee to the James E. Peterson By-Pass Trust. Ownership of the property, across a small creek from a Lane County Public Works road maintenance shop, was transferred to James Peterson Jr. last year.

A few months before the Peterson family bought the mill, Rosanne Wolf and her husband, Michael Morris, bought a house on 3 acres that shares an access road with the property.

Wolf met Peterson Jr. a few times back then. She said he planned to turn the building into storage space for upscale boats and RVs. The plan never went far.

“He was a good neighbor,” Wolf said. “Then it changed, is the only way I could say it.”

Smejkal, Peterson’s attorney, declined to comment.

Peterson doesn’t appear to live at the site. He was gifted a 31-acre farm property off nearby Highway 58 from a family trust in 1996, according to Lane County records. Multiple calls to a phone number listed for the property went unanswered.

Campers on the property

But others are living in the mill or camping around the property. Wolf said some of the people operate a car repair business there. Others appear to work in an old barn near the ex-mill, though she doesn’t know what goes on inside.

She does know Benjamin Tannar Mushrush. State business records list Mushrush as the owner of Northwest Concentrates LLC, an entity set up in late 2015. The license lists the mill address as its primary place of business, and the business activity as producing “concentrates and essential oils.”

Turk, the county property management officer, said the county is aware of marijuana being grown on the mill site or nearby. County records show that Mushrush purchased 5 acres of land bordering the mill for $150,000 a month before he registered the business.

Mushrush declined to comment when reached by phone.

But Mushrush hasn’t caused trouble since showing up a few years ago, Wolf said. She and other neighbors say the other campers on the property are causing the trouble. Those problems intensified as Peterson’s health has declined, she said.

“There has always been a certain element over there, but in the last couple years there seems to be more of it,” Wolf said. “There is 24-hour-a-day activity going on, and people you don’t necessarily feel comfortable with walking or on bikes. And like all the neighbors, we’ve heard gunshots at night.”

Garret Towne bought a house along the access road from the mill last year.

He filed a complaint with the Lane County Land Management Division in August, detailing what he said were 40 old vehicles parked on the mill property, motorcycle and four-wheel racing there and in private forestland to the west.

“My understanding is that the property is zoned (rural industrial), which means that the 20 or so people living there in RVs and tents should probably find another place to rev motors, shoot guns and scream at each other during all hours of the night,” Towne wrote. “I’m pretty sure that if you want to find some violations, you wouldn’t need to look any further than the property adjacent to mine.”

Commissioners will decide

On Nov. 28, Peterson or Smejkal will argue to county commissioners that Peterson should be allowed to pay the $27,000 and take back legal possession of the mill site.

Lane County policies and Oregon law offer paths for commissioners to return the site to Peterson, sell it or possibly keep it for county use.

The county typically sells surplus properties valued at $15,000 or more at an annual public auction.

But a section of the Lane Manual, which sets county policies, gives commissioners the right to approve a sale back to the former owner if he or she can prove that a mental or physical incapacity affected them throughout the foreclosure process.

“The issue there is whether or not the record owner suffered from a mental or physical incapacity or inability during the foreclosure,” Smejkal told commissioners Nov. 7, “and whether satisfactory evidence can be presented to the board of commissioners in support of that.”

A section of Oregon law regulating county-owned property appears to give commissioners broad leeway to sell it through an auction or private sale, potentially for much more than the $27,000 Peterson owed.

That’s because a section of Oregon Revised Statutes Chapter 275 distinguishes industrial-zoned properties such as the mill site from residential ones. It authorizes sale proceeds to be placed into a county fund to boost manufacturing, agricultural or other operations “if that property is located in an area planned and zoned for industrial use under an acknowledged comprehensive plan of the county.”

The mill property has a real market value of $281,000, according to Lane County Assessment and Taxation figures.

Wolf knows what she would like to see happen to the property.

“I’d like the county to be able to use it for their (Public Works) equipment, whatever business goes on over there,” she said. “As long as it’s for the business and there aren’t the extra people.”

Follow Elon Glucklich on Twitter @EGlucklich . Email elon.glucklich@registerguard.com .



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