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City considers land deal fair.

Byline: Edward Russo The Register-Guard

The sale price of Arlie & Co. land near Lane Community College compares favorably with similar parkland acquisitions by the city, Eugene officials say.

The City Council has tentatively agreed to buy 287 acres from Arlie & Co. that are southeast of Lane Community College for $5,000 an acre. The land is outside the city limits and urban growth boundary, beyond where dense urban development can take place.

Councilors also agreed to pay $18,000 an acre for 28 additional acres in the same area that Arlie, a Eugene-based land investment firm, didn't initially propose selling, but city parks officials want.

In comparison, the city two years ago paid Arlie $15,000 an acre for 200 acres on the ridge line above LCC. And in two other purchases, the city bought comparable land outside the urban growth boundary for even higher prices, according to figures supplied by Parks and Open Space Planning Manager Neil Bjorklund.

In 2007, for example, the city bought 49 acres for $21,983 an acre, and the next year, the city acquired 20 acres for $17,500 an acre, the figures show.

The parcels are outside the city limits, southeast of Bailey Hill Road.

They were added to Wild Iris Ridge, which is being kept as an undeveloped natural area park and will be used in the future to expand the Ridge line Trail on the southwestern edge of the city, Bjorklund said.

The city's parkland acquisitions have been financed by a $27 million bond measure approved by voters four years ago. Most of the money was designated to expand the city's parklands. The bond measure will provide the money for the Arlie purchase.

The Eugene Parks Foundation, dedicated to expanding and improving the city's park system, doesn't automatically support parkland acquisitions by the city.

Two years ago, for example, the group declined to endorse the city's attempts to buy and preserve 40 acres of forestland in south Eugene near the Amazon Headwaters because the owner, Aurora-based developer Joe Green, wanted $85,000 an acre for the property.

Unlike the Arlie land, the Green parcel was inside the city limits and designated for residential development. Green planned to put houses on the property, and the city eventually bought the land for $40,000 an acre, mostly with bond measure funds.

But parks foundation board members don't have similar qualms about the Arlie sale because the $5,000 per acre price "seems reasonable for the city to consider," parks foundation President Terry Smith said.

Arlie & Co., led by John Musumeci and his wife, Suzanne Arlie, acquired 1,144 acres near LCC in 2002 as part of a dispute settlement with Dexter-based businessmen Norman and Melvin McDougal.

The sale deed filed with Lane County didn't disclose a purchase price. It simply says the price was $1 and other valuable consideration.

At the time of the sale, however, a lawyer for the McDougals said Musumeci paid $2.98 million in cash for the land - which equals $2,604 per acre.

Musumeci this week said that in addition to the cash, Arlie also gave the McDougals an ownership stake in Arlie land and redwood timber in California, a transaction worth $10 million.

Add that value to the $2.98 million cash for the LCC land, Musumeci said, and his total cost for the LCC land equals about $13 million, or $11,363 an acre.

"This was a fair value because we believed then, as we believe now, the majority of that land is destined to be brought into the city of Eugene," Musumeci said.

But that would take a decision by city and county officials to extend Eugene's urban growth boundary to include Arlie's land.

Arlie's land near LCC is designated for forestland use and is not served by water, sewer, electricity and other utilities. In its current designation, Arlie could seek county approval to sell 80-acre homesites.

About 14 such homesites would have fit onto the 1,144 acres, a number that would be much smaller now because of the firm's previous sale of 200 acres to the city, plus its agreement to sell the city another 315 acres.

The city had Arlie's land appraised in 2008 before it acquired the 200 acres to extend the Ridgeline Trail to a point south of LCC.

The appraisal, by Powell Valuation of Salem, took place before the plunge in real estate prices.

Powell analyzed Arlie's entire 1,144 acres and concluded that the north portion nearest LCC was worth $20,000 an acre and the south portion $10,000 an acre, with a "blended" per acre value of $15,000.

With its location outside the urban growth boundary, "development of subject property is very limited," the appraisal report said. "However, its location on the cusp of development and close proximity to the growth boundary supports its probable future development."

Parks and Open Space Division Director Johnny Medlin said Arlie & Co. earlier this year proposed the $5,000 acre price for the 287 acres, but that he asked Arlie to consider selling 28 additional acres.

The 200-acre segment the city bought from Arlie two years ago is relatively narrow, as little as 350 feet wide in some places, and parks officials want the extra 28 acres to buffer the corridor from potential development, Medlin said.

The city's land includes a scenic butte, he said. Without extra acreage, homes one day could be built near the hilltop similar to houses near Gillespie Butte Park in north Eugene, Medlin said.

Arlie originally asked the city for $20,000 an acre for the 28 acres, he said. "I asked them to discount it" and Arlie dropped the price to $18,000 an acre, Medlin said.

Arlie's asking price for much of its land is similar to another high profile parkland acquisition.

In October, the Wildish family sold 1,257 acres near Mount Pisgah to The Nature Conservancy, which intends to preserve the parkland land with financial help from the Bonneville Power Administration and the Oregon Watershed Enhancement Board.

In that deal, the Wildish family sold 304 acres with the same forestland designation as the Arlie land for $5,000 an acre, the same price requested by Arlie.

An additional 796 acres of Wildish land that could have been mined for sand and gravel sold for $25,000 an acre, reflecting an enhanced value because of the potential mining revenue.

Also, the Wildish family got $10,000 an acre for 157 acres that could have been developed with houses.

City Councilor Alan Zelenka, who favors buying Arlie's land, said he hasn't heard criticism of the price.

"I think it's a good deal," he said.
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Title Annotation:City/Region; In a tentative agreement, Arlie will sell 287 acres to Eugene for $5,000 each and 28 acres for $18,000 each
Publication:The Register-Guard (Eugene, OR)
Date:Dec 5, 2010
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