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Blue Heron bankruptcy could offer opportunity in West Linn

by: Vern Uyetake Since the 1960s or ’70s, Blue Heron Paper Mill has piped wastewater under the river from Oregon City to a lagoon in West Linn, where the water is treated before flowing back into the Willamette. But on Monday, the West Linn City Council and mayor sent a letter to Beth Kieres, president of the Willamette Neighborhood Association, stating that the property in West Linn might not be suited to industrial or residential use.

The former Blue Heron Paper Co. property in West Linn might not be suited to industrial or residential use, even if the land was approved for those functions in the past.

That's according to a letter endorsed by the city council and signed by West Linn Mayor John Kovash Monday. It was sent to Beth Kieres, president of the Willamette Neighborhood Association.

'We believe the site should be transformed into a regional asset accessible to the neighborhood, the city of West Linn, and the entire region,' Kovash wrote. 'This begins by recognizing that the site sits in a natural floodplain and uses that might have been permitted years ago, whether industrial or residential … in some cases are no longer appropriate.'

The city council's letter provided a response agreeing with a letter sent in June by Willamette Neighborhood Association to a trustee overseeing the liquidation of the paper company's assets.

Blue Heron closed in late February, filing for bankruptcy and leaving property on both the Oregon City and West Linn sides of the Willamette River in limbo.

The company's real estate - the 22-acre mill site in downtown Oregon City and nearly 40 acres in West Linn, including a 15-acre lagoon on Volpp Street in the Willamette neighborhood - will play a large role in paying off Blue Heron's roughly $14 million in debt.

Representing more than 2,600 households and businesses in the historic Willamette district, Kieres wrote to the bankruptcy trustee in June to outline concerns about road access, wetland protections and infrastructure surrounding the mill's West Linn property.

In his response, Kovash notes that the property's sale offers a 'never-to-come-again opportunity to re-imagine our relationship with the Willamette River and its falls.'

'The sale of the Blue Heron property to a new owner creates the potential for realizing longstanding city and neighborhood objectives,' he said. 'We will make every effort to assure all our citizens that the city council plays an important role in determining the site's future.'

Peter McKittrick, the trustee overseeing sales of Blue Heron's assets, has said he is currently accepting tentative offers from entities interested in buying the property.