Developer has a long and varied track record of projects in Sisters

Steve McGhehey is helping craft the proposed 45-acre Dutch Pacific development around Conklin’s Guest House at the north end of Sisters. He has a long track record in the area.

He is a power player in Sisters area real estate. But he didn’t start that way.

McGhehey graduated from the University of Oregon with degrees in psychology and sociology because, he said, “the business department was too boring.”

After seven years in marketing training with Xerox, he went into real estate when he was “offered” a no-refusal transfer to Rochester, New York. He had decided, “corporations move too slow. But, in real estate, if you control the land and the design, you control your own show.”

In the late 1980s, McGhehey worked for the C.E. John Co. and was involved in commercial site acquisition and construction in northern California. Projects included a Safeway Grocery, McDonald’s restaurant and various commercial buildings.

During that time his parents wanted a cabin at the coast. So he found a project “that was on its knees and in trouble at the mouth of the Yachats River. I bought into the project and built 18 clustered cabins along the Yachats River and only 200 feet from the ocean.”

He clustered the cabins in circles, right on the stream, so all cabins had a view of the river. He said, “That was in 1984 when interest rates were 17-18 percent and I had to sell the package at $39,000.”

“It won several national architectural awards, partly because it was esthetically pleasing to look at from the river. We left the riparian area untouched and blended our tailored grasses with the natural vegetation along the river.”

The cabin-cluster idea would recur again — and it figures to be a feature of the redevelopment of the Conklin’s Guest House area for Dutch Pacific.

McGhehey said he has learned that, “if you build something that is cute and interesting, with nice windows, you don’t need the square footage.”

That notion was the inspiration for another award-winning project, the Metolius River Resort in Camp Sherman. He calls that project “The most complicated thing I have ever done.”

He recalls, “I found a trailer park that was a piece of junk. We built 12 little cabins on the river and three larger units away from the river. They are all clustered with a real nice restaurant, the Kokanee Cafe, in the middle.”

Like the Yachats project, Metolius River Resort won numerous architectural awards. But the going wasn’t easy.

Camp Sherman residents challenged the development, calling it a subdivision and in violation of land use laws, taking it as far as the Oregon Supreme Court. McGhehey’s argument was that the land was owned by a corporation and individual investors would lease the land on which their privately-owned cabins stood.

He said, “I’m looking for 12 different investors plus a restaurant investor so I can spend a lot of money on these buildings to make them nice. The investors will get the ego attachment of owning the building and enormous tax benefits of owning a structure without owning the land under it, because it’s all depreciation.”

McGhehey won out. The cabins, which sold for $200,000 in the early 1990s, are now reselling for as much as $450,000. The cabins are rented through an on-site manager at $200 per night.

During the same time period, McGhehey began developing The Ridge at Indian Ford, a 142-acre subdivision, with 19 home sites and an equestrian facility. A couple of spec homes followed, another nine-home development in Camp Sherman, then the beginning of one of his most visible Sisters projects, the development of Pine Meadow Ranch (PMR).

PMR involved master planning and developing 62 acres into 121 residential lots, including 14 acres for condominium development and 12 acres of commercial development.

The Weitech commercial building, Pine Meadow Village (on PMR), another commercial building and Park Place Subdivision round out McGhehey’s involvement in Sisters real estate — almost.

McGhehey credits the 1980s Yachats project as the inspiration for another Sisters project, the newly announced Dutch Pacific development that includes Conklin’s Guest House. The Sisters City Council was recently given a “heads-up” on the project (The Nugget, February 2, 2005). No applications have yet been filed with the city.

There was initial concern among developers that the selling price for Conklin’s was too high. But McGhehey responded with, “only if you leave it as a bed & breakfast. Give people their own individual 560-square-foot cabin, with gas fireplace, on the water (an expanded pond). Set up central parking away from the cabins. Do the interiors beautifully. Then make the bed & breakfast into a first-class restaurant.”

He says, “We crunched numbers and think we have investors who would love to send their clients from Portland for a few days in Sisters. We have two pilots who are extremely excited about it. I think we’ll sell all 24 of those (cabins) shortly. And we have to find good management, a good restaurateur. I takes a lot of energy to do it right.”