School property sale a long, winding road

The Sisters School Board decided at its August 18 meeting to sell 29.5 acres of surplus property -- the former Lundgren Mill site -- for $100,000 an acre. That decision may have seemed quick, but it culminates a history that goes back two decades.

In the early 1980s, the school board decided that it wanted to get back into the high school business. A four-year high school program that had served local students since 1923 had been closed in 1967 for lack of funding.

Sisters students attended Redmond High School after that.

Looking toward the restoration of a 9-12 program, the board purchased 29.5 acres at the north end of Pine Street, land that had been occupied by a pine lumber sawmill. The Lundgren sawmill closed in 1968, caught in the same economic troubles that had forced the closure of the local high school.

Toward the end of the '80s, the board placed a bond issue on the ballot to build a new high school, presumably on the Lundgren Mill site. Voters said "No."

Even if they had said "Yes," the school would have had to go somewhere else because by the time of the election the Federal Aviation Administration was saying that the school site was in the flight path of the nearby Sisters airport and therefore unsafe for a public facility such as a school.

To make a long story shorter, the school board subsequently bought 40 acres from the U.S. Forest Service on the Old McKenzie Highway just west of town, passed a second-try bond issue and built a high school that opened in September, 1993, welcoming high school as well as middle school students.

That building has been occupied by the mighty Outlaws, acclaimed for both academic and athletic prowess, for the past 10 years. A new chapter in this saga will begin this month with the opening of a brand new Sisters High School just down the road from the "old" one. The old high school has been remodeled and will be transformed into the middle school.

But what became of the Lundgren Mill property? Why did it take the school district a decade and a half to put up for sale nearly 40 acres of land it knew could never be used for a school?

The basic reason is that the school board decided to take the time to maximize its return on the land. Because of the location, knowledgeable people knew this site might be marketed as prime industrial property. But first it had to be upgraded to that status under the law, requiring rezoning and, ideally, inclusion within city limits.

That process took quite a while. It was strongly opposed by some neighboring property owners. But ultimately, the school district succeeded in both the administrative labyrinth and in the courts.

Sisters voters authorized the site's annexation by the city in 2000 and the Sisters City Council approved formal annexation a year later. The last obstacle was overcome in January 2002 when the Oregon Court of Appeals rejected a formal legal challenge of the proposed rezoning and planned future development of the land.

Some both inside and outside the school system have grumbled about how long it has taken since that court decision to get the property on the market. But now it's there, officially offered for $100,000 an acre.

If the district gets its price, it will receive $2,950,000.

And what will it do with the money? It will use roughly $800,000 to repay the money it borrowed to make roof, siding and other repairs that were needed on the old high school. The Lundgren Mill property was used as collateral for that loan and proceeds from the eventual sale have been pledged to repay this money all along.

In fact, the board approved a specific outline of uses of Lundgren Mill sale proceeds in a formal resolution on March 12, 2001. The resolution received little notice because it was overshadowed by bigger news from the same meeting -- board authorization of a May election on a $20.5-million bond issue to build a new 700-student high school.

The preamble of the Lundgren Mill resolution notes that "Sisters schools are in need of repair and upgrade of facilities" and that "the cash flow to repair and upgrade facilities (has) been inadequate over time..."

The resolution itself says that the board will "use the property to secure financing (loans) until such time as the land use planning processes are completed and the property is marketable at its highest and best use."

The financing would be used "to pay for the repairs and upgrades needed at the current high school" as well as "to purchase school furniture, equipment and other items not covered by the bond that are needed to equip the new school."

The final point of the resolution says: "Any additional revenue generated by the sale of the property beyond the repaying of the financing deal or deals shall be dedicated to payment for future repairs, maintenance and upgrades to the school facilities and equipment."