Toledo Council Hits Pause On ODF Land Purchase

The Toledo City Council spent a significant portion of its March 18th meeting debating whether the City should move forward with purchasing the Oregon Department of Forestry property off Highway 20, behind the Town Pump and Food Fair area. City Manager Rich Huebner outlined the current numbers for the council. An appraisal commissioned by the state last May valued the land at about $784,000, assuming it was cleared and ready for development. The appraiser also estimated demolition of the existing buildings at roughly $315,000, which would drop the city’s effective purchase price to around $469,000.

However, the Oregon Department of Forestry later obtained a much lower local demolition estimate, creating a gap of nearly $180,000 between the two figures. That difference matters because the higher the demolition cost, the lower the city’s cash offer could be to the state. Huebner told the council he wants a third, independent demolition quote to know which number is realistic—especially given concerns about asbestos abatement in a building that dates back to 1978.

The state’s preference, through the Governor’s office and its Public Lands Advisory Committee, is that this property be used for housing. If Toledo wants to buy it directly—without an open auction—it must commit to a housing project on the site. Huebner also told councilors that if the city pursued income‑restricted or workforce housing, it could potentially tap into a state program called the Moderate Income Revolving Loan Fund, or “MIRL,” which has been capitalized at $75 million statewide. That fund can help cover acquisition, demolition, and development costs, but only if the housing serves households at 120% of area median income or below. If the city opted instead for purely market‑rate housing, it would lose access to that state funding and have to pay for demolition and development on its own.

On the funding side, staff noted that the property lies within the Urban Renewal Area, which opens the door to using Urban Renewal funds. Roughly $500,000 in URA tax revenue was forecast for this year, with allocations for public safety building remodels, inflow-and-infiltration (I&I) work, and a small-business loan program. Reallocating some of those dollars in a future budget could help fund a purchase, but councilors warned that those dollars are already stretched, and the city is facing budget shortfalls in other areas.

Council reaction was cautious to skeptical:

• They don’t see the project as financially smart right now, especially given high construction and asbestos abatement costs and the city’s history with unfinished large projects, such as the public safety building and pool.

• Several councilors raised concerns that Toledo has a reputation in Salem for starting big projects involving state dollars but not always getting them over the finish line. They worried that taking on another large, uncertain project could further damage that credibility.

• Others argued that while more housing is clearly needed, the city may not be the right entity to own and drive a complex housing development, especially one that could require the city to become a landlord or enter into complicated partnerships with nonprofits, tribal entities, or major employers like Georgia-Pacific.

• It was also suggested it might be better if a private developer purchases the property and the city plays a supporting role later—through infrastructure or public‑private partnership—rather than trying to acquire and manage the land itself.

  
  

In the end, there was no formal vote to buy the property. Instead, the emerging consensus was to have City Manager Huebnerl notify the state that Toledo is not ready to make an offer in April and will seek clarification on next steps and timelines. He plans to report back to the council on April 1st with any response from the Oregon Department of Forestry, as well as with more details if a third demolition estimate can be obtained in time. For now, Toledo is pressing pause on buying the Oregon Department of Forestry property—acknowledging the community’s need for more housing, but wary of overextending the city’s limited financial and administrative capacity.