Speedway land throttles back to wetlands pace.

Byline: SHERRI BURI McDONALD The Register-Guard

Just west of the new Wal-Mart in west Eugene, land that for decades housed an auto speedway is returning to its roots: wetlands.

After five years of tough negotiations with property owner Asghar Sadri, the Bureau of Land Management has bought the speedway and acreage around it for a hefty $4.6 million, incorporating it into the sprawling network of preserved marshes and other wetlands that lace west Eugene.

The acquisitions - 32.7 acres in September and 46.1 acres in January - aren't the largest the BLM has made to save wetlands in west Eugene. They are, however, among the most valuable and the most expensive, said Steve Madsen, a BLM real estate specialist in Eugene.

They're also likely to be among the BLM's last major acquisitions in west Eugene. The agency has amassed extensive wetlands in that area in the past decade and now wants to focus on preservation purchases elsewhere in the state, Madsen said.

Government agencies and nonprofit groups, including the BLM, the Nature Conservancy and the city of Eugene, have bought large tracts of swampy land in west Eugene as part of the nation's wetlands preservation push. The purchases, coming at the same time as development gobbled up big chunks of the area, have given west Eugene its patchwork appearance: New factories, warehouses and retail strips sit alongside valuable wetlands that will be spared from filling.

The BLM's latest purchase forms a key link between the Willow Creek Natural Area - a 440-acre Nature Conservancy wetlands preserve south of West 18th Avenue - and government-owned wetlands along Amazon Creek north of West 11th Avenue. The purchase also expands the habitat for wildlife traveling along Willow Creek.

The purchase keeps the Willow Creek preserve from being isolated from the other wetlands, said Ed Alverson, Willamette Valley ecologist for the Nature Conservancy.

No more speculation

The BLM's purchase ends years of speculation about whether the speedway land would be saved as wetlands or become the latest site for commercial sprawl along the West 11th Avenue retail corridor. In the past year, Wal-Mart and Target have built big stores near the former speedway. The land is one of the last big vacant commercial-zoned tracts in west Eugene.

The BLM originally figured it would need about $13 million to buy wetlands in west Eugene, and the agency has spent nearly that much, said Steve Gordon, a planner with the Lane Council of Governments.

Since 1992, the local BLM has received about $12 million in Land and Water Conservation Funds, congressional appropriations to acquire national park or other federal lands. The BLM has spent the $12 million to acquire 1,678 acres in west Eugene, 1,195 of them wetlands.

The congressional panel that screens funding requests and the Oregon delegation that lobbies Congress for the money would like the project completed, Gordon said, adding that other priorities are emerging, such as protecting Steens Mountain in Eastern Oregon.

Congress appropriated $1.85 million to the west Eugene wetlands in the year ended Sept. 30, 2001, and $1.5 million this year, Gordon said. Now, the partners that manage the wetlands will figure out what properties are priorities to buy and will make another request to Congress, Gordon said.

A restoration plan

The 79 acres that the BLM acquired from Sadri contain 62 acres of moderate- to high-quality wetlands. The BLM plans to preserve the high-quality wetlands and restore the lesser quality wetlands, BLM spokesman Doug Huntington said. Rare plants on the property, such as Bradshaw's lomatium and the Willamette Valley daisy, will be protected.

Ultimately, the BLM and its partners will seek funds for an endowment to pay for the long-term management of the wetlands.

The Eugene speedway operated from the 1940s to 1995. The grandstands have since been torn down, and all that's left is an old parking area and a bumpy paved oval track. The wetlands surrounding the speedway oval are largely undisturbed and of high quality, Alverson said.

The 14-acre oval itself contains no wetlands. That patch of property - zoned for commercial use and available for development - drove up the price paid by the BLM. An independent appraisal of the property approved by the BLM valued the 14 acres at $2.86 million, or $4.78 a square foot. By contrast, the appraisal valued nearby acreage containing wetlands at 28 cents to 46 cents a square foot.

The BLM's long-term plan is to turn the speedway oval back into wetlands, Madsen said.

Hard bargain

The real-estate dealings between the BLM and Sadri were long and complex.

"This has been a career case," Madsen said.

Sadri, an out-of-state land owner, is "a very tough negotiator," he said.

Sadri could not be reached for comment for this story. Property records list a Vancouver, Wash., address, but Sadri signed the speedway land sale papers in Hawaii.

Sales talks began in 1996 when the BLM contacted Sadri, informing him that proposed amendments to the West Eugene Wetlands Plan - the document that sets out wetlands policy for west Eugene - would probably cut the market value of his property by designating much of the wetlands there for preservation. Eugene and Lane County adopted the plan amendments to Sadri's wetlands in 2000.

Sadri and another investor, Wallace Teuscher, had bought the 140-acre parcel that included the speedway in March 1977 for $592,418, according to Lane County property records. Sadri became sole owner in October 1989, when Teuscher, who had filed Chapter 7 bankruptcy, transferred his interest to Sadri.

Little is known about what Sadri planned for the property. Some say he wanted to build a shopping center. Sadri has worked on mobile home parks and other residential property in the Portland area.

Sadri is developing condominiums in Hawaii, Madsen said. That helped push along real-estate negotiations in Eugene because Sadri needed to sell his west Eugene property and invest the capital gains in his Hawaii project by Jan. 8 in order to qualify for a Section 1031 exchange under the federal tax code, Madsen said. The provision allows a property owner to pour gains from one real estate deal into another without triggering a taxable event. The capital gains tax liability is rolled into the new property the investor buys.

The appraisal of Sadri's land was done before Wal-Mart and Target bought property in the area, so those sales weren't used to figure the price. Wal-Mart paid $6.80 a square foot for the 21.5 acres it bought last June. Target paid $7.80 a square foot for the 11.1 acres it bought on the north side of West 11th Avenue last May.

However, the appraisal did include other land sales in the area: Waremart at Barger Crossing, which sold for $3 a square foot; a shopping center at Danebo and Royal, $3.10 a square foot; and Wal-Mart in Springfield, $4.20 a square foot.

Sadri's team could have argued for the appraiser to include the Target and Wal-Mart sales on West 11th. But "they didn't want to subject themselves to additional delays," Madsen said.

Pollution discovered

Another complication was the discovery of lead contamination at the site. Over the years, lead paint from the grandstands had chipped off, contaminating soil at the site.

Sadri paid for cleanup over the summer, and the Oregon Department of Environmental Quality signed off on the job before the BLM bought the property.

Sadri didn't sell all of his land in west Eugene to the BLM. He kept 48 acres at the southeast corner of Willow Creek Road and West 11th Avenue. Almost 41 acres of that are wetlands, said Neil Bjorklund, a city of Eugene planner. About 38 of the 41 wetland acres are designated for development in the West Eugene Wetlands Plan; three acres are designated for protection or restoration, Bjorklund said.

Sadri hasn't indicated what he plans to do with that land. Eugene-Springfield's long-range development plan labels it for light-industrial use.

"Given the percentage of wetland on the site, it might sit vacant for some time until the expense of mitigation is justified," Madsen said.

Wetlands designated for development may be filled, but the property owner must mitigate the filling by enhancing or creating wetlands elsewhere, or paying into in the local wetlands mitigation fund.

Sadri also still owns about 13 acres at Willow Creek and 18th Avenue. Eugene-Springfield's development blueprint calls for multifamily housing there.