More than 10 years after two Bend business leaders purchased a house mistakenly built on public land, the Bureau of Land Management has identified several potential solutions for the thorny situation.

However, the federal agency and a lawyer representing one of the owners differ on aspects of the long-running case and could butt heads again in the future.

On Wednesday, the Bureau of Land Management released an environmental assessment regarding a legal case where a house and several other structures, intended to be built on a private Crook County parcel, were inadvertently built on public land managed by the BLM, a situation known as a civil trespass.

The assessment lays out the impact of the structures on environmental and cultural resources in the area, and identifies five options for resolving the situation.

Members of the public can comment on the assessment until June 25.

“We have worked very specifically to provide an objective process where members of the American public can comment,” said Jeff Kitchens, field manager at the Prineville district of the BLM.

However, Greg Lynch, attorney with Bend law firm Lynch Conger McLane LLP, expressed his frustration with a process that has entered its second decade and accused Kitchens and other members of the federal agency of misrepresenting when the trespass became apparent.

“Why they put that in there, I have no idea,” Lynch said. “That’s just absolutely wrong.”

The issue dates back to 1995, when the owners of a 5,000-acre parcel just north of Paulina Highway received permission from Crook County to build a home on the land. In March 2008, Chuck McGrath and Jennipher Grudzien, co-founders of Bend-based Grace Bio-Labs Inc., purchased the parcel. Shortly thereafter, McGrath went to the local BLM office to suggest that he believed the house was on public land, which BLM surveyors later confirmed.

However, the BLM’s timeline diverges from Lynch’s account after that. The environmental assessment states that McGrath told BLM representatives in July 2008 that he had suspicions the property was on public lands three days before the sale closing. Kitchens, who came to the Prineville district eight years after the incident, said the information was based on survey data in the BLM’s records, but Lynch fiercely denied that McGrath had knowledge that the home might be on public land prior to the sale.

“Why would you pay $2.5 million on a parcel with a beautiful log home on it if you weren’t sure you could keep the property?” Lynch said.

Lynch added that McGrath did have a chance to cancel the sale after meeting with the BLM, but said McGrath was assured that the agency would sell the property where the trespass occurred.

Lynch said McGrath was originally open to a land transfer, where the agency would swap a parcel of public land for a privately owned parcel. However, he was informed by the BLM that the process can be costlier and more time-consuming than a land sale. Lisa Clark, public affairs officer for the Prineville district of the BLM, said a land transfer forces the agency to appraise and assess multiple parcels of land, rather than just one in the event of a land sale.

“You’re basically doing double the work,” Clark said.

After Kitchens joined the district, he said the district was open to pursuing a land transfer. By then however, the process had already dragged on for years, and the prospect of adding more time didn’t appeal to McGrath.

“Chuck’s in his 60s, for God’s sake,” Lynch said.

The five outcomes presented in the assessment range from leaving the parcel as it is to keeping the parcel in federal ownership and removing all structures from it.

The assessment provides two options for a land sale: one that would sell just an acre, which houses just the home and its immediate surroundings, and another that would sell 17 acres, which includes nearly all of the structures built on public land — the property has several outbuildings. Kitchens added that any land disposal would trigger a secondary public process.

Lynch’s clear preference is for the government to sell the 17-acre parcel. When asked about what would happen if the agency selected a different option, Lynch did not mince words.

“We’d sue ’em,” he said.

Kitchens emphasized that the agency has worked with Lynch and McGrath up to this point, but during the public process, their voices don’t count any more than any other citizen who comments.

“Their comments will be considered along with everyone else’s comments,” Kitchens said. “We may make a decision they don’t like.”

The comment period will remain open through June 25. People interested in commenting can email their comments to BLM_OR_PR_Mail@blm.gov or mail them to the Prineville district office. Clark encouraged members of the public to provide explanations for their points of view in the comments.

Kitchens didn’t provide a specific timeline for a final decision, but said it could take a month or two. If the agency sells the land, Lynch said he was optimistic that the home could be in escrow by the end of the year.

— Reporter: 541-617-7818, shamway@bendbulletin.com

20375057