The Oregon Land Use Board of Appeals this week confirmed Hyatt Lake Resort cannot pursue expansion efforts and left a legal question mark over 22 existing cabins.

The Oregon Land Use Board of Appeals this week confirmed Hyatt Lake Resort cannot pursue expansion efforts and left a legal question mark over 22 existing cabins.

LUBA determined Donald Rubenstein, Jackson County hearings officer, was correct when he concluded the resort couldn't install 13 additional small cabins referred to by the owner as recreational vehicles.

Last October, Rubenstein also found Jackson County planners erred in approving the installation of 22 cabins at the resort, located 20 miles east of Ashland.

Rubenstein's conclusion sent shudders through cabin owners and Hyatt resort owner Bob McNeely, who worried the cabins might have to be removed.

LUBA said Rubenstein's determination doesn't mean the cabins have to be removed at this time. LUBA did caution that the Hyatt Lake resort might have to undertake a lengthy land-use process in the future to prove the cabins comply with state law.

Sandy Speasl, a member of the neighborhood group Southern Oregon Citizens for Responsible Land Use Planning, said she hadn't reviewed the LUBA decision, but had expected the ruling would block expansion plans.

"We felt there were some land-use laws that were being violated," she said. "If the county made an error, the county should do what's right."

Rubenstein concluded that the small cabins referred to by the resort owner as recreational vehicles are, in fact, dwellings that potentially pose a fire danger for the resort and the surrounding forest.

He said the resort resembles a high-density residential development with some units only 7 feet apart.

Portland attorney Roger Alfred, who represents McNeely's company, Campers Cove LLC, said his client was reasonably pleased with the outcome.

"If I were one of the 22 owners, I would be a lot happier than a week ago," he said.

He anticipated that opponents would have a tough legal road to try and get the 22 cabins removed.

McNeely filed for bankruptcy on Sept. 30 for Nor'wester Industries Inc. of Washington, the company that built the cabins.

McNeely has previously said he has millions of dollars tied up in the resort, his line of credit has been canceled and Nor'wester has been shut down and its 105 employees have been laid off.

As a result of the publicity, McNeely said he has received cancellations of reservations at his resort, but has disputed claims he is behind in payments to cabin owners.

Frank Hammond, who is the county counsel, said the LUBA ruling is consistent with the county's position on the resort. The county maintained that even though the hearings officer found an error in the approval of the 22 units, he was just using it as an example to support not approving the 13 units. The hearings officer did not revoke the permits on the 22 units.

Medford attorney Sydnee Dreyer, who represents 26 clients who have an interest in the cabins, said, "We are pleased with the outcome because that doesn't affect the status of the original 22 units."

Reach reporter Damian Mann at 776-4476, or e-mail dmann@mailtribune.com.