Real-Estate Nightmare: Oregon Subdivision, Desert Life Don't Mix

PRINEVILLE, Ore. - Gary Reagan, a retired Portland bus driver who bought five acres in a legally questionable subdivision, is worried that he won't be given a permit to build his retirement retreat.

He paid cash for the property and has sunk thousands of dollars into a well and a road. He now lives on the land in a tiny travel trailer, waiting for permission to build.

"I've spent all of my savings. If they deny us (a building permit) I don't know what we'll do," he said. "I'm planning on spending the rest of my life here."

Reagan and many others are victims of a real-estate shark who vanished years ago but left behind a nightmare development. Almost 200 people bought lots in the Riverside Ranch subdivision.

Fewer than 10 percent of the 281 five-plus acre lots have been developed, and it is questionable whether many more buildings will be allowed.

This is exclusive farm-use territory, a zoning designation that blocks residential development. Planting several hundred homes across this rough range land would destroy its agricultural value.

Pete Schannauer, Crook County planning director and county counsel, said there's no chance that all landowners will be able to build.

The county considered rezoning the land to rural residential with a five-acre minimum, but the Department of Land Conservation and Development balked.

Schannauer has considered rezoning most of the Riverside property to allow homes on 20-acre parcels. Landowners who couldn't build would be able to swap their properties for lots elsewhere that are owned by the county.

Christine Cook, a staff attorney with 1000 Friends of Oregon, doubts that any effort to allow significant development will be legal.

She said Oregon's land-use restrictions were put in place largely because of poorly thought-out developments like Riverside Ranch.

Just because dozens of people bought land there expecting to be able to build one day does not justify ignoring those restrictions, she said.

It was concern about cumulative effects that finally stopped building approvals. Crook County had been gradually granting conditional-use permits allowing development at Riverside Ranch.

The pace of development has been slow over the decades. But area ranchers worry that continued approvals would lead to a population boom. And people and ranches, particularly range operations where cattle roam free, don't mix well. So the ranchers began appealing permit approvals to the state, which has yet to rule.

Ron Eber, rural plan analyst for the Department of Land Conservation and Development, said Riverside Ranch owner Gerald Martin developer acquired interests in about 15,000 acres of Crook County ranch land in the late 1960s or early 1970s.

He started to peddle the lots, often selling them sight unseen. He promised to build roads and sewer systems and other improvements but failed to do much of the work.

Martin avoided the subdivision rules in place in the early 1970s by keeping all the lots at just more than five acres.

Eber said Martin had a long history of shaky real-estate deals. He eventually pleaded guilty to illegal land sales in Crook County and was fined.

"He's one of the reasons we have our land-use laws," Eber said.