Millions of dollars down the drain?
Millions of dollars invested in the Hyatt Lake Resort are on the line as cabin owners fear the fallout from a recent ruling by a Jackson County hearings officer.
At the same time, the owner of the resort, Bob McNeely, filed for bankruptcy on Sept. 30 for Nor'wester Industries Inc. of Washington, the company that built the cabins, which McNeely describes as recreational vehicles.
On Oct. 13, McNeely filed an appeal with the Oregon Land Use Board of Appeals over the Jackson County hearings officer's decision that finds the county Planning Department erred when it allowed 22 units on the property in the first place.
Owners of the cabins, who have agreements to rent them out for $150 or more a night, now are worried about their $150,000 to $200,000 investment, and the fear has spread to nearby Campers Cove, where another 25 units have been installed. Most of the owners live in Jackson County.
"I think everybody is pretty stressed out and concerned," said Robin Schooler, who owns one of the small cabins at the Hyatt Lake Resort.
The Bonanza resident said her dismay about the situation is directed more at surrounding Greensprings property owners who appealed Jackson County's approval of a limited expansion of the resort.
Hearings officer Donald Rubenstein concluded that 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 20 miles east of Ashland resembles a high-density residential development with some units only 7 feet apart.
Rubenstein concluded county planners erred in allowing 22 of the cabins at the resort. He rejected a request to add an additional 13 spaces.
Schooler said her husband, Michael, helped Bob McNeely's brother, Don, log some of the trees on the property.
"The whole situation for us is kind of sad," she said. "My husband and Don McNeely are best friends. We're not letting any of this come between us."
Still, Schooler is worried about receiving a percentage of the rent from her cottages that goes back to August, particularly with property taxes now owed. "That's pretty upsetting," she said.
Despite the lack of rent collected from tenants who have stayed in her cabin, Schooler said she and her husband continue to make the payments for the park model and lease of the property from Campers Cove.
Schooler said McNeely told cabin owners that filing an appeal with LUBA would buy an extra 12 to 14 months before any action could be taken to remove the park models.
"We don't want to lose our cabin," she said. "We don't want to lose the resort."
McNeely said he's ready to fight any attempts to shut him down.
"I will go to my grave resolving it," he said.
He said millions of dollars now are tied up in the project, his line of credit has been canceled and his company, Nor'wester, has been shut down and its 105 employees have been laid off. He said he's also laid off more than 30 employees at the resort. So far, he said he has spent almost $150,000 in legal fees.
As a result of the publicity, McNeely said he has received 57 cancellations at his resort, but disputed claims he is behind in payments to cabin owners.
He blames both the Greensprings neighbors and the county, which gave him the permits, for the situation that threatens his livelihood.
With the economy in such a slump, he said he doesn't understand why his efforts to clean up the resort and make things better in Jackson County have been battered by local government.
"Honest to God, I feel I'm in a communist country," he said.
If the state does rule against him, he said it would lead to closing other facilities in Oregon that have similar types of recreational vehicles. He cited, in particular, Howard Prairie and Lake of the Woods.
In addition, McNeely said cabin owners likely will sue him, and he will sue the county if the hearings officer's decision is upheld.
McNeely said the records on his property seem clear. He said he is entitled to 65 recreational vehicle spaces, but only wanted to use 35.
"I didn't build any sites there," he said. "They were already there."
He said he received septic licenses from the Jackson County Health Department for 35 sites.
In the hearings officer's decision, McNeely said he sees the potential to try to shut down nearby Campers Cove.
He said there is a lot of misinformation, particularly about the cabins, which he said are clearly designated and designed as recreational vehicles.
While McNeely struggles to keep his resort going and fend off the county, he said he has noticed local government agencies continue to improve parks and have even proposed an aquatic park in Medford.
"The county owns all of the recreation in the county," he said. "It's a real crying shame what our country has come to."
Sandy Speasl, a member of the neighborhood group Southern Oregon Citizens for Responsible Land Use Planning, said she understands why the cabin owners blame her group. "They have to blame somebody," she said.
But, she said, other landowners have been forced to adhere strictly to county regulations, so she said all her group is asking is the resort adhere to the same rules.
"The whole reason we did this is so the county would give everybody equitable treatment, and so that they would obey the laws that are set up," she said.
Speasl said the hearings officer's decision is appropriate, even if it means the cabins would have to be removed.
"I think the hearings officer was pretty clear on that," she said. "They are not allowed."
Talent resident Felicia Hazel said she and her husband are very concerned about the investment they've made at Hyatt Lake Resort.
"We got into it as a rental, and that rental would pay for itself, and it hasn't even come close to that," she said. "As far as what happens next, I'm not sure."
Hazel said she hasn't yet received the rental income from August, though she continues to make lease payments on the land.
She said most of the value of buying into the resort is in placing the cabins on the wooded property a short distance from the lake and just off Hyatt Prairie Road.
"The value is gone if we have to remove the park model and the hot tub," she said.
Hazel said she looked at Whaleshead Beach Resort, also owned by McNeely, before making the purchase, and she and her husband were impressed.
Because of the uncertainty, Hazel said, "We need to take a look at what our options are to protect ourselves."
Phoenix resident Fred Riffle owns a cabin at Campers Cove, and he's worried the land-use problems from Hyatt Resort could become a problem for him.
"It's just going to be a complete loss of investment if the county and whoever has their way," he said.
Riffle, 68, said he was counting on the income from the rental of his cabin to help him with his retirement.
He expects to call McNeely to ask him about the back rent in the near future, but wants to give McNeely ample time to resolve the situation.
"We're not going to bug him," he said. "He needs all the time he can get to defend himself."
Reach reporter Damian Mann at 776-4476, or e-mail email@example.com.