Page 10A
OFF PAGE ONE
East Oregonian
Saturday, May 13, 2017
RANCH: Oregon has more than 17M acres of farmland
Continued from 1A
Staff photo by Kathy Aney
The owner of a strip of industrial land just north of
Interstate 84 is engaged in a dispute with the city of
Pendleton.
STORAGE: Horizon Transport
said Marshall had a monopoly
on storage land near Keystone
Continued from 1A
Keystone factory, sharing a
boundary line with an entity
he considers a major threat
to his business — the city of
Pendleton.
Since the city agreed to
rent out storage space to an
Indiana transport company in
2015, Marshall has personally
lobbied members of the city
council and staff to cancel
the lease, the latest instance
coming at a city council
workshop on Tuesday.
Standing before the
council, Marshall said he
had 15 pages of arguments to
make against the city’s lease,
but he would keep it short
to save on time. With four
new councilors and a mayor
sworn in since the last time
he publicly made his case, he
figured they might be more
receptive to his plight.
Marshall’s argument has
remained consistent over the
past year and a half — the
municipal government has
undercut his business with its
lower lease rates, siphoning
off his tenants in the process.
Marshall’s main tenant
was Horizon Transport,
which struck a deal with the
city under a subsidiary called
Queen B Storage.
Under the 12-year lease
signed by the city and Queen
B, the latter pays the former
$1,825 per month for use of
the city’s 8.82 acres.
That means Queen B pays
$207 per acre per month,
much lower than the $1,027
per acre per month figure
the company was paying to
Marshall before it moved off
his property.
Horizon paid Marshall
$4,108 per month to use four
acres of land. As Queen B,
the company is paying the
city $1,825 per month to use
nearly nine.
By including language
in the contract that allows
Queen B to sublet the prop-
erty, Marshall said the lease
will continue to hurt not only
his business, but the more
than 20 other RV storage
businesses across town.
With
RV
business
continuing
to
boom,
Horizon has since returned
to Marshall’s property on a
three-month lease, renting
three acres at a cost of $1,200
per acre.
Queen B/Horizon didn’t
return a request for comment,
but they haven’t been
completely silent about their
choice to move to the city’s
property.
At a public meeting
about the lease in 2015,
Horizon representative Jade
Perrenaud said Marshall
had a monopoly on storage
land near Keystone and his
company needed more room
to grow.
“It seems to me that
the city shouldn’t be
competing with the
private sector, unless
there’s some broader
public benefit.”
— Scott Fairley,
Pendleton city councilor
Perrenaud said the city’s
prices were still higher than
elsewhere — Queen B oper-
ates four other storage yards
in Indiana, Michigan and
Idaho. Still, it was signifi-
cantly cheaper than renting
from Marshall.
City manager Robb
Corbett said the city uses a
special formula to devise its
land lease rates, charging
a rate meant to recover the
market value of the land over
a 10-year period, plus the
property tax costs that come
from operating an income
property.
Councilor Neil Brown
brought up another wrinkle
in the contract that Marshall
hadn’t included in his
calculations — the $250,000
Queen B agreed to pay in
property improvements.
According to Corbett, the
company paid to gravel, level
and fence the land in addition
to extending utilities out to
a modular office. If the city
exits the lease before it ends,
it would be responsible for
paying back the depreciated
value of the improvements.
If Queen B’s investment
was spread out on a per
month basis, the company
pays an extra $1,736 per
month.
Despite some resistance
from the council, Marshall
also received more sympa-
thetic responses.
“It seems to me that the
city shouldn’t be competing
with the private sector, unless
there’s some broader public
benefit,” councilor Scott
Fairley said. “In the instance
where we’re just competing
on price, it seems like we’re
just depressing property
values.”
Fairley and councilor Paul
Chalmers said they were in
favor of taking another look
at the city’s land lease policies
to see how they could better
prevent public competition
with private industry.
At the end of the discus-
sion, Mayor John Turner
said he felt that there was no
desire from the council to end
the lease, but he did invite
Marshall to meet with him
and Corbett privately after
the meeting.
All three men declined to
talk about the specifics of the
meeting, but both Turner and
Marshall said they are open
to compromise.
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ment firms, wind energy
developers,
conservation
organizations, companies
that fit the description of
“Big Ag” and wealthy indi-
viduals looking to establish
private hunting reserves or
vacation retreats.
Primary worry
The impact is unclear at
this point, but the primary
worry is about ag land being
taken out of production.
Jim Johnson, the Oregon
Department of Agriculture’s
land-use and water planning
coordinator, said ag land
conversion is a concern
especially in areas with
“amenity values.” Daggett’s
scenic Wallowa County is
an example, “Where the
primary reason to live out
there is to be there, and
the secondary reason is to
farm,” Johnson said.
Ag property purchased
to be a recreational site, he
said, inflates land values and
makes it more expensive for
farmers and ranchers to buy
or rent.
New owners who aren’t
interested in farming them-
selves might gain more
revenue by enrolling land
in the federal Conservation
Reserve Program, in which
they receive payments for
taking it out of production,
rather than leasing crop land
to other farmers, said Walter
Powell, a Condon-area
wheat farmer. In that case,
there’s a reduction to the
farming infrastructure: the
seed and fertilizer dealer,
the equipment store, local
employment and more,
Powell said.
Jim Wood, a cattle
rancher near Post, in Central
Oregon, said the biggest
threat to high-desert cattle
ranching is the fragmentation
of grazing ground. Ranching
in his area requires big
acreage to be ecologically
and economically sustain-
able, and segmentation or
development for other uses
cuts into that and increases
land prices, Wood said.
“If you overgraze, this
landscape is quick to be
unforgiving, and you’re
going to be out of business,”
he said.
Oregon’s land-use laws
— adopted to preserve
farm and forest land from
urban sprawl — generally
preclude rapid, wholesale
development of agricultural
land.
Statewide,
counties
approved 473 houses on
farmland in 2014 and 522
in 2015, the most current
figures provided by the
Oregon Department of Land
Conservation and Develop-
ment.
Daggett, whose Wallowa
County property was sold,
acknowledges an argument
could be made that the
“highest and best use” of
her family land could be as
a “view property.”
But ownership changes
can ripple deep in rural
communities.
“This is very personal
for me,” said Daggett, who
was Wallowa County’s
planning director in the late
1990s and, ironically, now
sells real estate. She said her
son had hoped to run cattle
on the family land, but now
leases land from others.
“Like a sharecropper,”
Daggett said.
The giddy buyer who
called her husband in the
Caymans has yet to build
a dream home on the prop-
erty. It appears someone is
leasing the pastures.
“There’s an impact to the
historic social fabric, there’s
this disruption socially,”
Daggett said.
“It’s more than a question
of who’s buying,” she said.
“It’s who’s buying, and then
what?”
Big properties
Some of the listings
carried by Whitney Land
Co. are breathtaking. The
Pendleton-based real estate
company specializes in
farm and ranch properties,
especially big ones.
Until the owner took it
off the market this spring,
one of Whitney Land’s
offerings was called the
Kinzua Ranch, in Wheeler
County: More than 39,000
acres with a $28 million
asking price.
The property included
much of what used to be the
timber holdings and former
community of Kinzua, a
company mill town that
ceased operation in 1978.
Timber industry reps have
expressed interest, but the
property hasn’t sold yet.
Whitney Land Co. has
other big properties to sell,
including the Maurer Ranch
at Clarno, along the John
Day River, which is listed
for $19.7 million. It includes
more than 29,000 deeded
acres plus 18,000 acres of
Bureau of Land Manage-
ment and U.S. Forest Service
grazing leases, which hold
significant value.
The property has been
in the same family for more
than 90 years, has been used
for cattle, grain and hay
production, and includes
nine fenced pastures and
eight miles of river frontage.
The owners may break it
into smaller parcels and sell
it that way, said Todd Long-
good, a Whitney broker.
While cautious about
characterizing
possible
clients, Longgood said
Oregon farms and ranches
catch the attention of what
he called “corporate ag”
or “intense ag” buyers.
Some potential buyers
are looking for “longterm
holds,” figuring the land will
increase in value and they
can resell later; others pursue
crop land “knowing there
will always be a market for
food.” Some buyers bring
with them the resources to
develop or expand irrigation
systems, critical for high-
value crops.
“In the corporate ag
world, there is more money
available for ag land than
there is supply,” he said.
Sales add up
At
Portland
State
University, land-use and
urban planning professor
Megan Horst is assembling
ground-breaking data on
Oregon farm and ranch
sales. Working with a
graduate research assistant,
she asked county clerks for
information on sales from
2010 to the end of 2015 of
land zoned Exclusive Farm
Use, or EFU.
Horst is compiling land
sales in the eight agricul-
tural regions defined by
the Oregon Department of
Agriculture. In Northeast
Oregon, 360,265 acres of
EFU land sold during the
2010-15 time period. In the
Willamette Valley, 169,572
acres sold, and along the
Coast, 13,397 acres sold.
Oregon has slightly more
than 17 million acres of
farmland. Over the six-year
study period, the acreage
sold in the three ag regions
analyzed so far amounts
to only 3.2 percent of the
state’s total farmland.
In some cases, however,
significant money was
involved. According to
Horst’s figures, the median
sales price per acre of Willa-
mette Valley EFU land was
$21,909. On the coast, it was
$10,299, while in Northeast
Oregon the median price per
acre dipped to $2,451. The
values include permanent
crops such as orchards and
vineyards and other infra-
structure.
Individual sales raise
as many questions as they
answer. In the Northeast
Oregon ag region, an entity
called Antone Acquisitions
LLC apparently paid $25
million for 12,000 acres.
The company is listed in
Oregon corporation records,
but little other information
is available. The compa-
ny’s
registered
agent,
who appears to be with an
asset management firm in
Portland, did not return a
call from EO Media Group
seeking information.
Meanwhile, Horst is still
assembling data on land sales
in the Columbia Plateau,
Southeast Oregon, Southern
Oregon, Central Oregon and
the Mid-Columbia regions,
where ag production ranges
from wheat, hay and cattle
to tree fruit, vegetable seed
and wine grapes. Horst
hopes to finish and publish
the project next fall.
Horst said the sales
figures compiled so far raise
issues Oregonians ought
to be discussing. Among
them: Who has access to
agricultural land, and what
happens if food production
is concentrated in the hands
of the few who can afford to
buy large swaths of land?
The research follows a
study Horst co-authored
with five others: “The Future
of Oregon’s Agricultural
Land.”
The report, produced by
Oregon State University,
PSU and Rogue Farm
Corps, an advocacy group,
noted that the average age of
Oregon farmers is now 60.
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