News and Opinion from Sisters, Oregon
News and Opinion from Sisters, Oregon
The developers of the Lundgren Mill property at the northwest end of Sisters are seeking more time to make a final payment to the Sisters School District.
The district sold the property to 3 Sisters Partners LLC in June 2005 for $3.3 million. A final payment of $700,000 is due in September. There is an interest rate of 3.3 percent on the unpaid balance.
3 Sisters Partners has asked the district to relax a 10 percent penalty that would come due if payment is not made on time. The partnership has indicated that they are willing to pay a somewhat higher rate for extended terms of payment, but they desire to pay less than the 13.3 percent rate that would be due if they default. If the partnership was to remain in default for a year, penalty payments would add up to $70,000.
The request met little favor from the school board at its July 1 meeting.
In presenting the developers' request to the board, Superintendent Elaine Drakulich said, "I want to think we all want to be really good neighbors... but we also know that funds in the district are really tight."
She noted that the partnership proposed paying the district 100 percent of any sales that occur while the district allows extended terms.
"I think that's generous, but in this economy, it's 100 percent of nothing," Drakulich said.
She questioned whether allowing extended terms is a good business decision.
Board members left little doubt.
Tom Dumolt acknowledged that "being nice with your neighbor crossed my mind first" but he said he could not justify asking voters to support funding for schools if the district was to give ground on a contractual agreement.
Board chair Christine Jones was adamant.
"Much as I'd like to be a 'nice guy,' this was a contract signed with a real estate developer who knew full well the risks, as did we," she said.
Jones noted that if the partnership is unable to pay, the district has the right to repossess the property.
Board member Mike Gould noted that such situations are often misperceived as a negotiation when what is being requested is "a concession," with the only question being how much the district is willing to give up of money it is owed.
"It's not a negotiation," Gould said. "In this case, only one side is being asked to give anything up and that's the district."
The board took no action. Drakulich indicated that she would communicate the board's sense of the matter to the developer.
Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.
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