A real estate firm’s vision for a major new neighborhood east of Bend may be dead.

Deschutes County commissioners on Monday denied a proposal by California-based Newland Real Estate Group to change the zoning on 171 acres it owns along Northeast Butler Market Road, between the city limits and Bend Municipal Airport.

Newland wanted to change the property’s zoning from exclusive farm use to a less strict, agricultural zoning, which would have let the developer build homes.

Newland paid more than $7 million to buy the mostly bare land back in 2007. In recent interviews, the company said it planned to build hundreds of homes on the site.

But after several public hearings and months of deliberation, commissioners voted 2-1 Monday to deny the zone change, saying the property has some agricultural value and should be kept open for possible farm use.

Commissioners Tammy Baney and Alan Unger voted against Newland’s proposal; Commissioner Tony DeBone was in favor of it.

The application has been contentious since Newland officials requested the zone change in January 2013, with discussions centering on the property’s quality of soil and Oregon’s efforts to preserve a dwindling supply of farmland across the state.

Attorneys for Newland have argued the soil is too poor to make a profit by using the property as farmland. Rezoning it to build homes would give the company the best chance to make a profit, they argued.

But a Deschutes County hearings officer in October recommended commissioners deny the Newland application, saying the company’s soil tests on the site last summer “failed to demonstrate the property is not ‘agricultural land’ as defined in (Oregon) statute.”

Those tests found about two-thirds of the soil was below the county’s classification of farm-quality land. But the property also has higher-quality soil and could possibly be farmed, according to the hearings officer’s decision.

On Monday, Commissioners Unger and Baney said Newland hasn’t established that a farmer couldn’t make a living there.

“Like most lands in Deschutes County, this is not very fertile soil,” Unger said. “But that’s the nature of farmland in Deschutes County. … As I look at this, it’s farmland.”

The commissioners have voted unanimously on just about every item they’ve discussed over the last six months .

But DeBone broke off from Baney and Unger this time, saying he didn’t see a way for Newland or anyone else to make a profit by farming the land.

“The soil is in a situation where it is not really a profitable setup” for farming, he said. “It just doesn’t have the potential for productivity.”

Unger countered by saying most agricultural land in the county is low-quality, but farmers still make a go of it despite a short growing season and tough soil.

And Baney said irrigation, fertilizer and other techniques could make the Newland site suitable for some kind of agricultural use. The land has been farmed in the past, and the property still has water rights.

Whether crops could be grown there, cattle could be raised there or some other use could be found remains to be seen, Baney said.

“I think this property could be enhanced in a way that could make it profitable and productive,” she said.

The commissioners’ decision is still pending a legal review, but it effectively blocks Newland from moving forward with its subdivision plan.

What Newland might do with the property at this point, or whether it plans to appeal the commissioners’ decision, isn’t known. An attorney representing the company didn’t immediately return a phone call seeking comment Tuesday.

— Reporter: 541-617-7820, eglucklich@bendbulletin.com

TERREBONNE — After entering through a 22-foot-wide gate of wood and basalt pillars and traveling up a red cinder-chip road about a half-mile, visitors turn the corner and see what looks like a Tuscan villa in the distance.

It’s the Old Winery Clubhouse at Ranch at the Canyons, a private ranch nestled by the base of Smith Rock that totals 1,700 acres. It includes about 600 acres of working farmland and vineyards, more than 500 acres of land protected by the Deschutes Basin Land Trust and 46 landholdings, 21 of which are still for sale.

In an effort to preserve land and give homeowners at Ranch at the Canyons control of the gated community sooner, its new developers and majority owners, Jeff Creagan and Patrick Ginn, recently reduced the number of landholdings available for development from 60 to 46.

“What that means is that we only have (21) landholdings left to sell and then this community is a fully complete, thriving community,” Ginn said.

When 75 percent of the landholdings are sold, ownership will transfer from Canyons Land and Cattle Co., LLC, owned by Ginn and Creagan, to the homeowners association, said ShanRae Hawkins, director of marketing and communications for Ranch at the Canyons. And the reduction of 14 landholdings means the turnover will be happen much sooner.

“It was a goodwill gesture to say, ‘You guys have been patient,’” Hawkins said .

Boom and bust

For more than three years there wasn’t any direction or activity at Ranch at the Canyons, Ginn said.

“It sat with no forward motion because they ran out of funding and there was no vision for the future,” he said.

Ranch at the Canyons started being developed in 2000, after the original owners, Jim Garner and Mick Humphries, were denied permission to build a destination resort on their property because of land use regulations, Hawkins said. They tried for about eight years to turn it into a resort, she said.

When the economy started to turn down, the duo brought in PacTrust, a Portland-headquartered commercial real estate company, to help. PacTrust later took over majority ownership, and after having the property on the market for about a year it put 29 homesites, as well as controlling interest of the ranch, up for auction.

The reserve price was set at nearly $2.3 million, according to the auction catalogue by Realty Marketing Northwest, an Oregon and Washington-based real estate marketing and brokerage company. The catalogue stated about $30 million had been invested in development and 23 homesites had been sold with sales that exceeded $20 million.

In December 2012, Creagan and Ginn purchased the ranch through the auction.

Creagan said he stumbled upon the ranch by accident while looking for the Central Oregon Pumpkin Co.’s pumpkin patch. He took a wrong turn, followed the rock wall that outlines the community and found the auction sign.

“Honestly my first desire was to get involved with the ranch because I liked the place, I thought it was special,” he said. “I first came out here, drove around looked at it and said ‘Wow, this is probably the most beautiful place I’ve been ever.’”

But then, he said, he thought, “I’d love to have a place out here someday, but not currently the way it is.”

So he teamed up with Ginn, whom he’d worked with on similar projects, to bring momentum back to Ranch at the Canyons.

“I think it was similar to most large, half-built communities that you went into in 2010,” Creagan said, referring to the state of the ranch’s development. “Is it going to be great? Is it going to be finished, or is it going to die on the vine and this is what it is?”

Growing value

When they purchased the ranch, Ginn said, no activity was going on.

“It was discouraging for owners and the developers because things stopped selling,” Ginn said.

In the past five years, Creagan said, only two homes have been built in the development. But this year, he said, there will be at least four, including a 3,698-square-foot, $1.6 million home scheduled to be completed in June.

Ginn said the cost for lots ranges from about $300,000 to $800,000, a value compared with what they were before. Originally, he said, they were selling for $1.3 million just for the land, but when the economy started to tank a landholding was short-sold for $160,000.

“It’s certainly been encouraging for our owners … to see values quickly bouncing back,” Ginn said. “Part of it is the certainty of the ownership and the direction that we’re taking it and part of it is the overall improvement in the real estate market. Its values have increased pretty dramatically from their low.”

In addition to owning a home within the community, he said, owners receive collaborative ownership of the ranch.

“It’s like living on a ranch. We have farming, we have our own vineyards … but you don’t have to go out and start your tractor at 6 in the morning and do the hay or prune the grapes,” Creagan said. Landowners pay for the work via their homeowners association.

A turning point

Mike DeGennaro, the development’s first resident, agreed the ranch was paralyzed for a while but said it’s at a turning point.

“The people that were here enjoyed what they had, but it wasn’t a community yet because there weren’t enough people,” he said.

Creagan and Ginn are working to change the ranch — not through a revolution, but an evolution of the original vision, he said.

“We didn’t want (Ranch at the Canyons) to be like other communities,” he said.

DeGennaro said the vision was to take what’s at the ranch — the land and the views — and work with it, not impose commercial elements such as basketball courts or golf courses.

The decision to reduce the number of landholdings is a reflection of that idea, and something DeGennaro said he and other property owners are happy about.

It’s an effort to lower density and have fewer homes on the ranch, he said.

“Part of what we’re trying to do is be good stewards of the property here. This is a beautiful piece of property and it doesn’t need 60 homes on it,” he said.

—Reporter: 541-617-7818,

Finding a place to rent became a full-time job for Bre Aasland when she decided this year to move out of her parents’ home, where she lived three years after returning to Bend.

“I would like to live on my own but I can’t find someone that will take my money,” said Aasland, 25, who works in accounting and marketing for Bend Garbage & Recycling Inc. “I think just this year alone, I’ve been to about five different walk-throughs and before I can finish filling out the application it’s rented out.”

In Central Oregon the vacancy rate shrank to 0.7 percent this year, lower even than the 1 percent rate last year, according to annual survey results released Friday by the Central Oregon Rental Owners Association and Housing Works.

The survey, conducted earlier this year, found just 29 vacant units out of 3,376 surveyed in Crook, Deschutes and Jefferson counties.

The demand for any rental unit — apartments, duplexes, single-family homes — is creating sharp elbows among would-be tenants in Central Oregon.

“A friend told me he’d gone down to Deschutes River Woods for a manufactured home for $1,200 a month,” said Kenny LaPoint, housing director of Housing Works, which manages subsidized rental properties for low-income renters and provides qualified renters with vouchers. “It was like an auction. Eight people were waiting to rent it.”

With demand, rents have climbed. A two-bedroom apartment in a complex of five or more that rented for $704 a month in 2013 goes for $770 this year, according to the survey. A three-bedroom home in Bend that rented for $1,110 in 2013 now goes for $1,221.

Rental owners association President Kevin Restine said rents have climbed but are not inflated. Low tenant turnover, in fact, tends to keep rents “conservative,” despite demand, he said.

Still, “Things are moving at warp speed,” Restine said. “The best thing a tenant can do is to look early and often … and make themselves as attractive as possible,” by having good credit and rental histories, he said.

New apartment complexes or rental homes could be years away, said Andy High, vice president of government affairs for the Central Oregon Builders Association. The time lapse between proposing a project to the city and actual construction can take a year or more. Plus, available land on which to build in Bend, for one, is scarce.

But higher rents may encourage builders to erect more apartment complexes, High said.

“That’s been a problem with apartment complexes: Could you make it pencil out to get the financing?” he said. “Now we’re at the point where we’re seeing that. A fair amount of people are trying to make things work.”

In Bend, just one new apartment complex is under construction, the 104-unit Sage Springs on Boyd Acres Road. But that complex, due for completion in June, is 100 percent reserved, according to its leasing agent.

Four other proposed projects in Bend are months if not years away from breaking ground. And on the horizon, plans to expand the Oregon State University-Cascades Campus will create further demand for rental housing.

“It’s now profitable to own investment property again, and that’s going to spur another wave of people providing housing,” Restine said.

In the short term, investors may be enticed again to buy property they can rent for a steady income, said Dan Seim, a Bend real-estate blogger and office manager for Preferred Residential, his wife Becky Seim’s firm. Even though home prices have climbed since 2012, buyers are still willing to spend on an investment property, he said Friday.

“You can make the deal work just about any way as long as it will rent,” Seim said. “It’ll rent as long as owners are not too greedy about how much rent they get.”

The tight rental market results, in part, from the Great Recession and its aftermath, Restine said. Foreclosures turned many homeowners into tenants after 2008, creating a demand for rental property. The recession nearly extinguished new construction, as well, so few new homes, rental or otherwise, were built.

Meanwhile, some homeowners still await foreclosure actions on properties on which they’ve made no mortgage payments in years, said LaPoint. Resolving those cases will free some properties for sale as rentals but may create new tenants.

Meanwhile, Aasland said she’s moved in with a friend until she can find a place of her own. She considers herself a good prospect as a renter: good job, clean credit. She hopes to find something at $850 a month, tops.

“I’ve been pretty annoyed but I’m pretty mellow, so it hasn’t been that big of a deal,” she said. “It’s not that I’m a poor applicant, it’s just that there’s so many people looking that you have to be in the right place at the right time.”

— Reporter: 541-617-7815,

Deschutes County has a growth spurt

Census estimates say it’s fastest-growing county in Oregon

By Tim Doran / The Bulletin / @Newsinbendor

Published Mar 27, 2014 at 12:01AM

The demand for rental housing in and around Bend is increasing, especially for low-income tenants, Kenny LaPoint, housing and resident services director of Housing Works, said recently.

Housing Works, the housing authority for Central Oregon, helps low-income renters find and pay for housing. LaPoint said the agency received 2,043 applications for government-subsidized housing during the five-day application period in January, 559 more than the year before.

“That’s the highest number we’ve seen apply,” he said. Last year, he said, 1,484 applied.

Housing Works also conducts the annual survey of all rental vacancies for the Central Oregon Rental Owners Association, LaPoint said. Last year, the survey found 46 of 4,618 units in Central Oregon available for rent, a 1 percent vacancy rate. The official results of the survey this year will be released at the association’s annual meeting April 18.

Based on what he’s seen, LaPoint said, he believes the vacancy rate is probably one-half of 1 percent by now.

“This year is going to be very tight,” he said.

By way of example, he said, low-income renters could only use 15 of 60 housing vouchers Housing Works issued late last year, because that’s all that was available.

Property managers have several applicants for every vacancy. Would-be tenants must move quickly when they find a vacant home or apartment, said Central Oregon Rental Owners Association President Kevin Restine.

“The best advice: Look early and look often,” he said.

One apartment complex, the 104-unit Sage Springs off Boyd Acres Road, is leasing units in buildings as contractors complete them. That’s the one multifamily project under construction in Bend, according to the city Community Development Department.

Three others are in various stages of preconstruction work.

Woodhaven, 144 units planned off Reed Market Road, and 500 Bond, 230 units at Southeast Wilson and Southwest Bond avenues, both have planning approval, which is the first phase in the city review process.

The city has approved plans for Mill Quarter, 49 multifamily units proposed near the western junction of Colorado and Arizona avenues, but the developers only have until Monday to obtain a building permit before the approval expires. The project was first proposed in 2006, said Bend Planning Manager Colin Stephens.

The developers of a potential fourth project, 400-unit Aspen Heights, have yet to submit a plan for city approval, Stephens said.

— Reporter: 541-617-7815, jditzler@bendbulletin.com