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Falls Legacy LLC still owes $200,000 for delinquent account related to the 23-acre site in Oregon City

JONATHAN HOUSE - A public riverwalk in front of the old Blue Heron paper mill is delayed, impacting the redevelopment of the area as part of the Willamette Falls Legacy Project.Officials said last week that Willamette Falls property owner George Heidgerken won't get a large public investment without fulfilling his obligations under an easement agreement for construction of a walkway to the falls.

Heidgerken's vision of a private development at Willamette Falls will have a waterfront view of a $25 million public investment supported by a coalition of four public entities: Oregon City, Clackamas County, Metro and the state of Oregon.

Heidgerken's Falls Legacy LLC recently paid the county more than $46,300 in back taxes and more than $39,000 to Oregon City for years of unpaid utilities.

Receiving the payments due to Clackamas County for back taxes and to Oregon City for overdue utilities has encouraged the four public partners to move forward without meeting all of their demands in a Feb. 23 letter to Heidgerken. Falls Legacy still owes $200,000 to the four public partners as part of an easement agreement he PHOTO COURTESY: METRO - George Heidgerken and Jim Desmond shake hands to finalize the signed agreement between the developer and Metro in 2014.signed in 2014, but he won't have to make that payment — past due since January 2017 — in the face of the partners' deadline last month to use $12.5 million in state funding to construct the public riverwalk.

"The priority of the project is to deliver on the public expectations of a riverwalk with a prominent view of Willamette Falls in Phase 1," said Carrie Belding, Willamette Falls Legacy Project spokesperson. "We only received payment for taxes and utilities, and the partners agreed to move the project forward to ensure short-term preservation of the more than $12 million in funding for the project and allow more time to resolve payment of the $200,000 under the easement."

According to the terms of the 2014 easement agreement, Heidgerken was required to sign the permits about a year prior to March 19, when he finally did so. Willamette Falls Legacy Project Manager Brian Moore said that the public partners could have long ago taken Heidgerken to court for breach of contract, but it didn't make sense to go through a long and costly court battle when the timing of the project was on the line.

Heidgerken has told Metro officials that he is actively working to get a new partner on the project to help him to recapitalize and move forward with private development.

"We are not fooling ourselves, trying to wear rose-colored glasses on this project," Moore said. "We're opimistic that George would like to see this project happen, and we're very carefully tracking his actions to make sure his actions align with what he's saying."

Metro and the other public partners on a public walkway to the falls now are submitting signed permit applications to the U.S. Corps of Engineers and Oregon City to proceed with construction of Phase 1 of the riverwalk. The joint permit application to the U.S. Army Corps of Engineers kicks off a Section 106 process, which will up to nine months and cost the partners nearly $50,000.

The public partners' position remains tenuous, since Heidgerken could at any time revoke his signatures for the construction simply by writing to the city and the Corps to pull the permits. During a March 21 work session, the partners had considered asking Heidgerken to sign onto additional requirement that would bring more assurance to the public that the developer wouldn't hold up the project again.

"There was no additional documentation signed by Falls Legacy LLC," Belding said on May 23. "Metro holds the easement that obligates Falls Legacy to sign the permits. Having the signed permits now and moving forward reinforces the design approvals by both parties and provides greater clarity about future design decisions. "

As previously reported, the partners recently had offered Heidgerken at least $5 million for the property; he declined the offer. Heidgerken paid $2.2 million in bankruptcy court for the property in 2014.

"This will continue to be a complex real estate negotiation, because Falls Legacy was unwilling to sell the property to Oregon City earlier this year," Belding said. "The importance of this site to Oregonians outweighs the short-term challenges of continued negotiations."

WFLP - Artist rendition of Riverwalk concept at the Willamette Falls Legacy Project, which has hit a snag.With the momentum continuing toward developing the Willamette Falls site, public tours of the former Blue Heron Paper Co. mill are restarting for the first time in more than a year, thanks to the cooperation of Falls Legacy LLC and PGE.

On the afternoon of Friday, June 1, and the morning of Saturday, June 2, the Willamette Falls Legacy Project team will lead more than a dozen tour groups through the former paper-mill site. Tour leaders promise to stop along the way "to soak in" the history and the future of Willamette Falls.

Those 18 or older who wish to tour the industrial ruins are encouraged to register for one of these 60-minute tours. Sturdy footwear is required, and hard hats will be provided

Officials say don't get discouraged that the tours are full — register anyway at willamettefallslegacy.org/public-tours-are-back — as tours inevitably end up including folks from the wait list.


Raymond Rendleman
Editor, Clackamas Review/Oregon City News
971-204-7742
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