A development that was conceived during the height of Bend’s housing boom but failed during its bust has gone back to the bank.
The Shire, a 15-lot, village-themed concept in the southeastern part of the city, was marked by its Old World housing styles and fantasy setting styled after J.R.R. Tolkien’s “Lord of the Rings” series.
Umpqua Bank, which held a public auction for the property Dec. 29 that received no bids, foreclosed Jan. 16, according to Deschutes County property records.
The bank originally loaned $3.4 million to Lynn and Janet McDonald in December 2004. Lynn McDonald died July 7.
“We obviously made the loan based on knowledge that we had at that time,” said Lani Hayward, Umpqua’s executive vice president of creative strategies, based in Portland. “Umpqua is pretty good at doing its due diligence on those kind of deals. This was a new development starting at a time that was unfortunate.”
Neither Janet McDonald nor her attorneys could be reached for comment Tuesday.
Umpqua has listed the 6-acre property — which includes 14 vacant lots and one partially completed house — for $1.3 million, said Brian Meece, principal broker with Steve Scott Realtors in Bend, the bank’s listing agent. The property is located off Benham Road near Powers Road.
The future of the project — including its codes, covenants and restrictions, which the project’s developers called “A Declaration of Interdependence” in reference to the community values the developers were trying to create — remains undetermined, Meece said.
The CC&Rs promoted the use of English architecture, including unique stonework, artificial thatched roofs, terraced gardens and a network of streams and ponds with a pathway leading to what was called The Ring Bearer’s Court.
One home sold in the development, for $650,000. A partially completed home, the only other home built on the subdivision, was listed for $899,000 in July 2008.
As it stands, the development is being sold by the bank in bulk, not in pieces, Meece said.
“The bank is trying to sell it to a single developer,” he said. “The CC&Rs could, in most probability, change.”
The Shire’s lone homeowner, Greg Steckler, would like to see the bank sell the project to a developer who would retain the project’s original vision, he said.
“We don’t know what’s going to happen,” Steckler said. “There are a lot of people interested in The Shire, but with the economy, everyone is pulling in their horns and the bank wants to get their money.”
Meece said whoever buys the property will make the decision on how to develop it.
“We have activity on it — let’s leave it at that,” Meece said.