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Developer Arlie offers LCC complex plan of land swaps.

Byline: CHRISTIAN WIHTOL and GREG BOLT The Register-Guard

Within weeks of buying 1,100 acres of forest land south of Lane Community College in January, land speculator John Musumeci set to work trying to win over LCC executives on a series of land-swap and development proposals, public records show.

So far, though, LCC is keeping Musumeci at arm's length.

In letters and meetings from January through last Tuesday, Musumeci, the land-deal manager for Eugene-based Arlie & Co., has made a string of proposals to LCC. They center on LCC trading or selling to Arlie the wooded 100-acre stand known as the Jay Marston Forest. In return, Arlie would build a sewage treatment system that LCC could use, plus Arlie would provide LCC with land and a cash donation of $500,000 or $1 million, according to the letters and LCC internal memos that The Register-Guard obtained under the state's public records law.

During the recent months, the dialogue appears to have been convoluted. Musumeci's complicated proposals repeatedly changed shape, and LCC officials appeared fuzzy as to exactly what Musumeci was proposing and why.

In a letter this week to LCC, Musumeci wrote that there may have been "confusion and misunderstanding" and that his intentions all along simply have been to help financially strapped LCC. The proposals aren't connected to any development Arlie might pursue on its land, Musumeci wrote.

A deal with Musumeci could help Lane address what might be the worst budget crisis in college history, brought on by LCC's own efforts to keep up with demand for classes at a time of declining state support. LCC's board recently approved a steep tuition increase and voted to reduce or eliminate dozens of programs to close a $6.2 million gap in next year's budget.

In his initial contacts with LCC, which came before the college announced the depth of its budget problem, Musumeci's proposals were couched as business deals sweetened by an offered donation. According to the documents, a written offer presented to the college board during a March 18 nonpublic session involved Arlie buying the 100-acre forested parcel at appraised value, building a sewage system that Arlie would share with the college, a no-cost lease to the college of 20 acres of Arlie land adjacent to LCC and a $500,000 donation to the LCC Foundation.

All together, the deal would have been worth more than $2 million to the college.

Board members declined the offer. LCC President Mary Spilde said in a letter to Musumeci that LCC is studying its land needs, and board members want to see those results before deciding on the long-term use or disposition of college property.

"We're not in a position with the analysis to say whether it would make sense for us or not," she said of the offer Wednesday. "It's too early to say for now."

The documents show college officials believed that Musumeci wanted them to consider the deal as a single package. But after the board turned it down, Musumeci sent a letter expressing dismay over that perception and suggesting he was willing to make a gift to the college separate from the land deal.

And on Tuesday, after college attorneys informed Arlie that records of the proposal had been released under the public records law, Musumeci sent another letter characterizing the entire offer as a gift meant to help ease LCC's financial difficulties. In that letter, Musumeci said he and his wife, Suzanne Arlie, want to help LCC "maintain its excellent vocational training programs."

Outside the boundary

The meetings and letters between Arlie and LCC are an odd twist in the debate over a region of the Eugene-Springfield area that may eventually become a development hot spot.

The LCC neighborhood has its own interchange on Interstate 5 - a big plus from a developer's perspective. But the entire area is outside the Eugene-Springfield urban growth boundary and is largely zoned for forest use - a huge drawback to any developer. Also, it has no public sewage system.

Musumeci has been much in the news in recent months as a key player in the controversy over PeaceHealth's plans to build a hospital in Springfield's Gateway area. Led by Musumeci, Arlie last year accumulated 160 acres in Gateway, paying about $16 million. Then, Arlie sold the property to PeaceHealth for $34 million.

Using some of its profits, Arlie on Jan. 14 bought the 1,100 acres of forest land south of LCC from the Dexter-based McDougal Bros. timber dealers for $2.98 million. That land is zoned for forest use.

The McDougals bought the land about a decade ago, hoping Eugene would expand its growth boundary to encompass the property, the McDougals' attorney, Larry Gildea, said. But that never happened, and planning officials said it's unlikely to happen anytime soon.

Without a rezone, the land probably could be only sparsely developed with a few large homesteads, planning officials said.

But Musumeci appears to have development intentions for that acreage nonetheless. In his most recent letter to LCC, Musumeci said the property "is slated for eventual development."

His offer to build a sewage system appeared to be aimed in part at serving future development on his land. However, he wrote that he would build it before any development took place on his acreage so the college could hook into it for free rather than spend $1.32 million to fix problems with its sewage lagoons.

Musumeci has not yet settled on how to develop the acreage Arlie bought in January, so the company is not sure whether the proposed sewage plant would serve only LCC or would also serve other development, Arlie spokeswoman Liz Cawood said.

Musumeci declined to be interviewed by The Register-Guard.

Douglas fir, Ponderosa pine

The Jay Marston Forest could be a tasty morsel for a developer. The land overlooks Interstate 5 and is just a half-mile down a narrow street from the I-5 interchange at 30th Avenue. Also, the land, zoned for forest use, has some dense stands of valuable timber.

But in his latest letter to LCC, Musumeci said he had no development designs on the LCC forest parcel and would leave it untouched.

"We intended to dedicate the parcel as park and had no development plans for it," Musumeci wrote.

LCC is protective of the Jay Marston Forest.

In 1996, McDougal proposed acquiring the forest from LCC. That sparked vigorous opposition from the college's science department.

The forest, with a stand of Douglas fir that is approaching old growth status, plus Ponderosa pine, hardwoods and grassland, is a precious science education resource, plus a fine example of environmental stewardship, the science faculty argued. The proposed transaction fizzled.

In the LCC-Arlie conversations, the sides have met twice for lunch and have passed letters back and forth. Aside from asking for the forest land, Musumeci at various points asked that LCC keep its program that trains flight maintenance workers and move ahead with its project to build a Native American longhouse, according to the notes and letters. Musumeci also talked about developing student housing next to the campus, according to one LCC memo.

For LCC, Musumeci's offer of a free sewage system could be a godsend.

Discharge from the college's sewage lagoon system into a nearby creek has repeatedly violated state clean water standards, and the state Department of Environmental Quality is forcing LCC to upgrade the lagoons.

Why Musumeci has proposed such a complex array of land swaps and other deals instead of simply offering the college money is unclear. Cawood said complex proposals are typical of Musumeci.

"He thinks things through in much more detail than the average person does," Cawood said.

Contact Christian Wihtol at 338-2381 or cwihtol@guardnet.com. Contact Greg Bolt at 338-2369 or gbolt@guardnet.com.
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Title Annotation:Proposal: Wooded college acreage next to land speculator John Musumeci's property is involved.; General News
Publication:The Register-Guard (Eugene, OR)
Date:May 10, 2002
Words:1293
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