Ongoing legal disputes continue to plague Hyatt Lake Resort, and the U.S. Bureau of Reclamation has ordered the removal of a restaurant, bait shop and older cabins by next year.

Ongoing legal disputes continue to plague Hyatt Lake Resort, and the U.S. Bureau of Reclamation has ordered the removal of a restaurant, bait shop and older cabins by next year.

"I think it's disgusting that they are going to tear down those old buildings," said Terry Sowerbutts, a 65-year-old who lives close by. "When the restaurant was fully functioning, it had the best views on this mountain."

Resort owners have been locked in legal disputes with the county, federal agencies and people who bought cabins on the property.

Rick Arndt, Pacific Northwest program manager for the bureau, said the lease on 11 acres ends in September 2012 and his agency has asked that all the structures be removed.

According to the bureau's records, there should be a restaurant, about five cabins, two mobile homes and a workshop on the federal land.

The agency earlier found the resort owners had remodeled buildings without seeking its permission, and concerns had been raised about the resort restricting access over the federal lands.

A letter sent by Arndt on Sept. 3, 2009, to the Jackson County Development Services Department asked county officials not to issue any permits for construction or renovation on the federal lands.

Under terms of a 1963 lease, concessionaires of Hyatt Lake Resort need approval by the federal government to build new buildings or remodel old facilities.

Arndt said the existing structures don't comply with modern disability access rules.

He said the bureau will study whether it should manage access to the lake and boat docks on its own, or whether some other agency such as Jackson County or the Oregon Parks Department could take over that responsibility.

The bureau also will require the resort build a different access road to the cabins.

Arndt said his agency might be able to find another concessionaire who wants to build a new restaurant.

He said a lot of ideas are being discussed for the property, which sits next to the dam at Hyatt Lake.

"We need to find what the public demand for recreation in the area is," he said. "Starting fresh won't hurt."

Leonard Faas of Yorba Linda, Calif., took over operations of the resort from Bob McNeely. He said he's been involved with disputes with the county and other agencies as well as residents who own cabins.

"I had a very bad partner that all but ruined the place," he said. "I have some very unhappy residents."

McNeely filed for bankruptcy on Sept. 30, 2009, for Nor'wester Industries Inc. of Washington, the company that built the cabins, which McNeely describes as recreational vehicles.

The county found the resort couldn't install 13 additional cabins on the site. Ultimately, cabins had to be removed off federal land onto the land owned by Faas and McNeely's Campers Cove Resort LLC, which owns both the Hyatt resort and the nearby Campers Cove Resort.

Faas said the county is requiring he seek new permits for the remaining 22 cabins on his property. County officials expressed concern earlier that the cabins might have been built too close together.

One of the cabins on federal land has been moved to Brookings, and another eight cabins have been sold to a California man, Faas said.

At the same time, nearby Campers Cove continues to operate and its restaurant remains open, Faas said.

"We take a lot of pride in it," he said.

Faas said workers have begun stripping out the inside of the restaurant at Hyatt Lake Resort. A buyer for the five cabins has been found and they will be moved, he said.

The legal situation at the resort continues to be in a state of flux, Faas said.

"I spent $1.6 million of my retirement money trying to make people happy," he said. "They're still not happy."

Reach reporter Damian Mann at 541-776-4476, or e-mail dmann@mailtribune.com.