September 22, 2011  6:37 PM

Willamette Falls site presents risks, opportunities for Metro and the region

High risk, high reward – and uncharted territory.

Those are the themes of the conversation as Metro and other state and local partners decide whether to move forward with trying to acquire an abandoned industrial site in downtown Oregon City, adjacent to Willamette Falls.

The former Blue Heron paper mill, perched on a rocky ledge between Willamette Falls and the core of Oregon City's downtown, is up for auction after its owner declared bankruptcy. It's a site with potential risks – it's been operating as an industrial site for 170 years, and Metro staff acknowledges more investigation into the environmental condition of the site is needed.

But the site's potential, as a new anchor for struggling downtown Oregon City, as a magnet for visitors at the second largest waterfall in North America, and as a critical historical site for Northwest native tribes and Oregon pioneers have staff from Metro, the state, Clackamas County, Oregon City and other groups looking at whether to try to take over the site.

The Metro Council will decide Oct. 4 whether to move forward with a bid on the site.

Metro staff briefed the council on its work studying the site, and the potential to purchase it, at its Sept. 22 meeting.

Staff is being tight-lipped about the process, in part to avoid tipping their hand to other parties that might want to place bids, as well as to the trustee they'd ultimately be negotiating with if their bid moves forward.

But Metro sustainability center director Jim Desmond emphasized that the project is immense in scale.

"There'd be a whole lot of expense, and it would be significant," Desmond said. Much of that would be pre-construction. Building something on the site would be an added expense.

Complicating matters are rules surrounding the money Metro would use to buy the property. About $100 million remains in the regional fund from Metro's 2006 natural areas bond measure, but that cash can only be used for site acquisition. If Metro and its partners wanted to put a park on the site, a new source of revenue would have to be lined up.

Learn about Metro's natural areas bond program

While Desmond emphasized that it's speculative at this point to say that money to finish the project could come from a given source, he said he thinks the private sector should be involved in the process.

"It's possible a private investor would want to finance some of the public improvements," Desmond said. "There would be great monetary value in the public pieces done right, that would really add tremendous value to the (private sector) site, whatever that looks like."

Any office or housing on the site, for example, would benefit from views of the falls.

But don't expect to see condos rising from the Blue Heron site any time soon.

The bidding on the site closes in late October. If Metro's bid is accepted, the agency, its partners and the trustee would have to agree on terms of the sale before a deal could be closed.

Then, the partners would have to actually plan the site. Anyone who's been involved in developing a site master plan in Oregon knows that is likely to be a lengthy process.

Desmond estimated it could be a decade before the site is restored. But the rewards at the end of that, he said, would be huge.

"It's a beautiful, historic downtown," Desmond said. "We think connecting that to the falls, in terms of making a great place, would make it a tremendous on-the-ground example of all the goals we're talking about in terms of helping Oregon City achieve its aspirations."

Metro news editor Nick Christensen can be reached at or 503-813-7583. Follow Metro on Twitter @oregonmetro.

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