Monaco Coach buys, sells real estate in Coburg neighborhood.

Byline: JOE HARWOOD The Register-Guard

COBURG - Motor home maker Monaco Coach Corp. is branching out into the residential real estate investment business.

The company over the past year has spent more than $756,900 buying four homes in the 14-lot Coburg Commons subdivision immediately south of its recreational vehicle factory.

The purchases appear to be part of a settlement Monaco reached last October with residents living in homes next to the company's industrial campus.

The homeowners in February 2001 filed a lawsuit seeking $33 million in damages from the company in an effort to stop Monaco from emitting chemical fumes that residents said bathed their subdivision in strong paint odors and tiny paint droplets.

All the properties the company has purchased in the past year were owned by plaintiffs in the lawsuit.

The residents first started complaining of metallic-tasting fumes wafting through their neighborhood late in the summer of 1999, shortly after the RV maker completed an expansion and started operating new paint-spray booths next to the homes.

The neighbors said the fumes irritated their eyes, nose and throat, forcing them and their children indoors.

Monaco's emissions contained traces of toluene, xylenes, ethel benzene and other chemicals classified by the federal government as hazardous, according to reports the company filed with the Lane Regional Air Pollution Authority.

The sides have disclosed few details of the settlement that they reached last year. However, the deal did require Monaco to spend about $2 million to buy and install gas-fired burners to incinerate the toxic fumes coming from its paint booths.

The incinerators, installed earlier this year, are supposed to eliminate virtually all fumes being emitted from the booths.

The settlement also included a cash payment to the plaintiffs, but the amount was not disclosed.

David Paul, the Portland attorney who sued the company on behalf of the residents, said he could not comment on Monaco's purchase of the homes.

Some of the residents who were part of the lawsuit against Monaco also declined to comment on the sale of the homes, citing confidentiality agreements with Monaco.

Monaco made its first home purchase last October, just days after the settlement.

The company paid $170,000 for the home on Rustic Court and then sold it for $10,000 less in August of this year, according to deeds.

Of the three other homes Monaco has bought, one has a sold sign in the yard and the other two remain up for sale.

Monaco bought one home on Shane Court for $209,748 in September, and is now asking $209,900.

A Coburg resident who lives south of the subdivision and was not part of the lawsuit said the settlement included a provision that Monaco would buy the homes of plaintiffs for fair market value if the homes were placed up for sale and didn't sell in a specified time period. The resident asked not to be named.

Monaco did not return a phone call Wednesday seeking comment.

Records at LRAPA indicate that citizen complaints have plummeted since Monaco started using the incinerators.

The agency has received only nine complaints since January.

Prior to the installation of the incinerators, residents filed hundreds of complaints with LRAPA.

Sigrid Fuller, who lives immediately west of the Coburg Commons subdivision but did not join the lawsuit, said the air quality has improved only marginally since Monaco installed the burners.

"I still get headaches when I walk out on my porch and get hit with that chemical smell," Fuller said. "It happens within minutes."

A chemical odor similar to nail polish remover was readily noticeable in and around the subdivision Wednesday afternoon.

Residents in the past have said the nail-polish-type smell comes from the Monaco plant.

Also unclear is whether Monaco's decision to dedicate a portion - less than an acre - of its property to an adjacent homeowners' group is part of the settlement.

Monaco earlier this year appealed its 2001-2002 property taxes to the Oregon Tax Court, arguing its assessment was too high.

The court agreed, saying Monaco is due a $106,382 refund plus $11,702 in interest.

Chip Cool, a property appraiser with the county, said the refund was due to Monaco having dedicated the property to the homeowners group and to a recent legislative change in the way property is valued.

County records show Monaco will pay roughly $265,600 in property taxes for the 2001-2002 tax year. This takes into account the refund.

The company is exempted from paying taxes on $23.7 million worth of property and equipment for that tax year, because it is eligible for enterprise zone property tax waivers for the 1999 expansion, which also includes the paint-spray booths.

The waiver should save Monaco about $305,000.

In the 2000-2001 tax year, Monaco was exempted from paying $351,000 in taxes.

Through the first three quarters of the year, Monaco has posted profits of $32.4 million on sales of $922 million.

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NICOLE DeVITO / The Register-Guard Monaco Coach last year settled a $33 million lawsuit filed by 25 neighbors because of smelly toxic fumes coming from its paint spray booths. Monaco's emission stacks are visible behind this home for sale in the Coburg Commons subdivision.