10
Smoke Signals
JULY 1, 2019
‘It will be a tourist destination’
BLUE HERON continued
from front page
cluding the Blue Heron site, during
the Wednesday, June 12, Tribal
Council meeting.
Tribal Council Chairwoman
Cheryle A. Kennedy said one prop-
erty includes more than a mile of
waterfront along the Willamette
River. The Blue Heron site at Wil-
lamette Falls was called a “corner-
stone” to the Tribe and its Tribal
fishing culture by Kennedy.
“Should the Tribe purchase the
property, we’re excited to work with
Metro, as well as local, state and
federal partners in a collaborative
manner to shape the future of the
property,” Kennedy said. “Both
of these properties are in various
stages of due diligence and we will
keep the membership informed as
we move forward.”
Don Ossey, a principal with com-
mercial real estate firm Capaci-
ty Commercial who works with
industrial land investments and
sales, said that properties like
Blue Heron will not continue as an
industrial site and are rare to find
in a metropolitan area.
“My opinion is that it is a tre-
mendous asset for the region and
any development should respect
the relationship with the river
and have open public access to the
area,” Ossey said. “And how many
development sites in the world are
connected to the water with views
of a waterfall?”
Ossey said the $17 million pro-
jected purchase price for the two
properties equates to about $17
a square foot, which is a “pretty
good value” considering they front
the river. “It seems reasonable,”
he said.
Mark Hush, managing director
at Portland commercial real estate
advisory firm Newmark Knight
Frank, also called the purchase
price “reasonable.”
“Personally, I think it is a good
thing,” Hush said. “There is de-
velopment potential there and the
Tribe would be a good steward for
the properties, which would be back
in the hands of who it originally
belonged to.”
A December 2017 story published
by Lewis & Clark Bank calls Wil-
lamette Falls “the Niagara of the
West” and states that downtown
Oregon City offers economic and
cultural promise like few other
small cities in the region.
“What we are seeing firsthand is
the move from a legacy industry,
in this case paper, to what’s next,”
Lewis & Clark Bank co-President
Jeff Sumpter said. “While there’s a
big tourism opportunity here, a new
‘Made in Oregon’ manufacturing
opportunity also exists.”
Andrew Mason, executive direc-
tor of the Willamette Falls Trust,
which engages in fundraising and
philanthropic leadership concern-
ing Willamette Falls, said the group
is “excited” to have a potential part-
ner in the Tribe that can accelerate
and focus economic development at
the site.
The proposed Riverwalk, a public
Photos by Timothy J. Gonzalez
The Grand Ronde Tribe is pursuing the purchase of the 23-acre Blue Heron
paper mill site on the eastern shore of the Willamette River in Oregon City.
Commercial real estate experts in the Portland area consider the proposed
purchase to have promising economic development potential while Tribal
officials trumpet the cultural aspects of regaining ownership of one of the
Tribe’s most sacred sites.
walkway along the eastern shore of
the Willamette River, would have
a significant presence on the Blue
Heron site.
“(The Riverwalk) raises a lot
of value,” Mason said. “The Con-
federated Tribes of Grand Ronde
has said it is very compatible
with its vision for the site. It is a
value add. It’s like dancing with
another partner who shares your
dance vision.”
Metro, the regional Portland
area government, is sending a $475
million bond measure to voters in
November that would include $20
million for the Riverwalk project.
Due diligence process
Tribal Council Chief of Staff
Stacia Hernandez said during the
Other Business portion of the June
12 Tribal Council meeting that a
Tribal team is currently performing
due diligence regarding the Blue
Heron property, including review of
documents related to any potential
environmental cleanup issues.
“We’re very fortunate coming into
this that this site has really been
studied to death by a lot of the area
partners,” Hernandez said. “We do
have an extensive team reviewing
more than 130 documents, some
of them over 700 plus pages. We
are currently in due diligence and
we’re taking that very seriously.
We are also consulting with a lot of
third parties on the environmental
reviews and other things that we
need to take into consideration. …
The zoning on the site is good and
we have really good partners on
this property, so in the event we
do look to acquire that, we will be
engaging fully with them and with
everyone else to see what happens
on the site.”
“There is an enormous due dil-
igence process that is well un-
derway,” Tribal Council member
Kathleen George said, which
includes internal and external
experts. “I believe there will be
successful development at this
property,” she said, adding that
besides the economic development
potential, the Tribe will be reclaim-
ing one of its most sacred cultural
sites.
Tribal members expressed con-
cerns about purchasing the site
during the June 12 meeting, rang-
ing from possible environmental
cleanup and development costs to
a possible money pit repeat of the
Microgreen investments in 2014-15
that cost the Tribe more than $28
million.
Tribal Council member Michael
Langley said purchasing the Blue
Heron property is not like the Mi-
crogreen investment because there
is real estate collateral involved.
When Microgreen closed abruptly,
the Tribe only had cup-making
equipment to sell to recoup a small
portion of its investment.
“I do think it’s going to be a great
investment down the road,” Lang-
ley said, adding that Willamette
Falls is the second largest waterfall
by volume in the United States. “It
will be a tourist destination and we
will be the ones telling our story
there.”
Site history
Wood pulping and paper manu-
facturing started at the facility in
1908 by the Hawley Pulp and Paper
Co. Before the pulp mill, the site
was used by a saw mill that later
converted to a woolen mill.
In 1948, Hawley Pulp was pur-
chased by Times Mirror and the
mill became Publisher Paper Co.
In 1986, Publisher was purchased
by Jefferson Smurfit Corp. and was
renamed Smurfit Newsprint Corp.
In May 2000, the facility sold to
its employees, who renamed it Blue
Heron Paper Co. Blue Heron ceased
operations and filed for bankruptcy
in 2011.
According to an Environmental
Cleanup Site Information summary
report from the state Department of
Environmental Quality, the federal
Environmental Protection Agency
directed a site inspection in 2007.
In December 2008, the EPA deter-
mined that it did not anticipate
action regarding the site under the
Federal Superfund Program.
The DEQ summary identifies the
property as a brownfield site, which
means it is previously developed
land used for industrial or com-
mercial purposes with known or
suspected pollution including soil
contamination due to hazardous
waste. The summary states that
“potential” site contaminants may
include polychlorinated biphenyls,
petroleum hydrocarbons and met-
als.
Mark Pugh, project manager
within DEQ’s Cleanup Program,
said that contamination at the site
is moderate overall and not unex-
pected for a site with Blue Heron’s
history.
Pugh said the Tribe is currently
negotiating a prospective purchaser
agreement with DEQ that will de-
termine a scope of work for cleaning
up the property and also get the
Tribe a release of liability from
the Department of Environmental
Quality. Cleanup work could be
spread out over years, he added,
providing the Tribe is working in
good faith to accomplish its goal
and that EPA grants could help pay
some of the cost.
“Contamination, for the most
part, is safe for workers,” Pugh
said. “Cleanup would be required if
the property was going to be used
for residential purposes.” He added
that remaining drums of chemicals
and asbestos in poor condition will
have to be removed.
A January 2018 environmental
site investigation conducted by
Apex Environmental Consulting
of Portland says that although
chemicals are present site-wide,
“The nature of the chemicals and
detected concentrations indicate
future parking lots and construc-
tion pads could serve as a cap for
soil contamination if implemented
as a remedial action with DEQ
oversight.”
Pugh said that a public notice
regarding the Tribe’s scope of work
will be published on July 1 and
provide a 30-day comment period.
A public meeting will be held in
mid-July.
In November 2014, Oregon City
approved a zoning change that
opened the industrial site to future
shops, restaurants, offices, housing
and, most importantly, public ac-
cess to Willamette Falls.
During the Tribe’s 2018 effort to
build a removable fishing platform
at Willamette Falls, access became
an important safety issue after
Portland General Electric revoked
permission for Tribal members and
staff to cross its West Linn proper-
ty. Tribal members and staff were
forced to ferry supplies and people
to build the platform across the
rapidly flowing Willamette River
from the Oregon City side.
Tacoma, Wash., developer George
Heidgerken currently owns the
Blue Heron site, which he pur-
chased for $2.2 million in 2014. It
is covered with approximately 50
buildings, most of which have little
historical value.
Kennedy said that the Tribe has
no plans to build a casino at the
Blue Heron site. She added that
Grand Ronde has invested heavily
in Spirit Mountain Casino and is
committed to keeping it the state’s
No. 1 gaming facility.
On Tuesday, June 11, a more
than $17 million supplemental
budget hearing announcement re-
garding acquisition of ceded lands
in Clackamas County was posted in
the front of the Governance Center.
The hearing regarding the Blue
Heron site, originally scheduled
for June 26, will be held during the
Tribal Council meeting on Wednes-
day, July 10.