Portland billionaire Robert Pamplin Jr. is considering selling the historic hotel and everything else he owns in Shaniko after failing to resolve a long-simmering dispute with residents over plans to use a private water well inside the city limits.

Pamplin owns two-dozen parcels of land in Shaniko totaling more than 70 acres, including the hotel, several shops, the old city hall, jail and wool barn, as well as a small RV park.

For sale signs recently went up in the windows of the hotel. It is normally only open a few months a year and is not taking reservations for this summer.

Pamplin had plans to rebuild some historic structures and build new homes in the town. Doing so required more water, but he hit resistance from some resi- dents after he drilled a well of his own and found the city, under state law, couldn’t comply with all his requests.

“There are lots of parts that needed to come together, and they simply didn’t,” said Keith Mobley, a Dufur lawyer who has been representing the city of Shaniko in talks with Pamplin. “There were too many issues that we couldn’t seem to get resolution on.”

Floyd Aylor, the president of Columbia Empire Farms, one of Pamplin’s companies, said the issues came down to water.

“We were just trying to get a good supply of water for the hotel, and it didn’t happen,” said Aylor, who was Pamplin’s college roommate.

Rich Canaday, Pamplin’s attorney, said a sale price for the hotel has not been set. Pamplin is still weighing whether to sell all of his Shaniko properties, or just the hotel, cafe and RV park, he said.

Pamplin did not return calls seeking comment last week.

“I’m sure he’s looking for somebody to buy it who would treat it the same way he has treated it,” Canaday said.

Pamplin and his father earned their wealth first through a group of textile mills in the South. His companies now include a chain of Christian radio stations in the Northwest and Columbia Empire Farms, which is one of Oregon’s largest hazelnut growers and processors. Pamplin owns about 60,000 acres of land north of Madras, much of which is used for grazing about 4,000 head of cattle.

The breakdown in Shaniko has some residents ready to see Pamplin gone for good, though they worry about the damage that could be done if he pulls his support. Other residents are intent on making the most of the situation and see it as a way to regain control of the city’s future.

While Mobley said he was hopeful negotiations could pick up again, Canaday said that was unlikely.

Pamplin has donated tens of thousands of dollars to the city and to the Shaniko Restoration Guild, a historic preservation nonprofit, each year since he started buying land there in 2000.

“I’m glad now that he’s going to sell it,” said Judith Drew, who lives in Crooked River Ranch and runs a living history museum in Shaniko each summer.

Reviving a ghost town

Shaniko was once the “Wool Capital of the World” during its brief heyday in the first decade of the 1900s. A train line to Shaniko that was complete before the railroad reached Bend meant ranchers from across Central, Eastern and Southern Oregon would bring their wool to Shaniko to be shipped across the nation.

A fire in 1911 destroyed almost all of the buildings in the city, and the completion of the Oregon Trunk Line that year made the short line between Biggs and Shaniko unnecessary for trade.

The town’s population dwindled to about 20, and many buildings deteriorated in the following decades.

Pamplin’s interest was initially seen as positive for the struggling town. The old schoolhouse was rebuilt and though the large wool barn was shortened, it also got a fresh coat of paint. His donations meant new paint and repairs for many other buildings in Shaniko.

April Pitre, who has lived in Shaniko year-round since 2005 and owns a candy shop there, said Pamplin could have done more to help the city.

“We could have built the (railroad) roundhouse and the depot back in had he wanted it, because those are on his property,” Pitre said.

Still, tourists came, staying at the hotel, eating at the cafe and browsing Shaniko’s shops.

Tensions emerged last year when Pamplin drilled a well on his property inside the city limits with plans to use the water at the hotel. And he revealed his desire to build dozens of new homes.

Pamplin came to Shaniko in August and met with residents to try to assuage their concerns. He pledged to move the housing development farther east and south, so that it would be outside of a national historic district.

But people continued to express worry when they saw draft contracts he wanted to sign with the city, Holbrook and Pitre said.

Residents discussed two possible contracts at a community meeting in November, minutes of that meeting show. Though Pamplin proposed sharing his private well with the city, a local ordinance says the city’s water system must be used. And operating two water systems alongside each other might not appeal to state and federal agencies that provide grants to help upgrade water systems, Mobley said at that meeting.

Pamplin started hinting last year that he would shut down the hotel if negotiations over sharing the well water with the city didn’t pan out, Shaniko City Council minutes show. The town currently gets its water from nearby surface springs, but they don’t produce enough water for Pamplin’s plan to build as many as 30 new homes in the city of 40 people.

“The dictator attitude wasn’t appreciated (in July 2007), and continues to be unpopular with many,” Holbrook wrote in the minutes of the Nov. 9 community meeting.

And the spring water, though it has almost always tested clean, still carries a risk of picking up contaminants on the surface, state health officials told Shaniko last year. The well Columbia Empire Farms drilled in March 2007 produced 250 gallons of water per minute and is 600 feet deep, according to a state well report.

Overcoming setbacks

This isn’t the first time Pamplin has backed out of negotiations with a city. Last May, talks broke down between him and the city of Portland over donating part of Ross Island and turning it into a nature reserve. But a week later, Pamplin returned to the table and in September agreed to donate 45 acres to the city.

Pitre called Pamplin’s actions in Shaniko “childish and petty.”

“How simple would it have been to hook himself and the city up to the well and just say, ‘Hey, I don’t want to pay a water bill,’” Pitre said.

But Canaday said Pamplin would have ended up paying the vast majority of water main improvements for the rest of the city for the next five years.

“A fair summary would be that the city, the other citizens in the city, didn’t seem to be of one mind about what they were going to do during the five-year period,” he said.

Holbrook said the city has submitted its plans to the state to drill two new wells near its spring. While the city could seize Pamplin’s well, doing so would likely cost as much as drilling new wells where the city already has a pump station, she said.

With the hotel on the market and not taking reservations for this year’s tourist season, which starts May 1, residents worry that no one will come.

“He may not truly want to sell it,” City Recorder Debra Holbrook said. “He may just want to starve us out.”

Mayor Goldie Roberts said her ice cream parlor, also in a building owned by Pamplin and on the market, would open this year.

Without the hotel, the closest place to stay is a 45-minute drive, either south to Madras or north to Maupin.

Despite the apparent setbacks, Pitre and Drew remained positive.

“We need people that are interested in the history of the region to get their bucks together right now,” Drew said. She hopes a group of investors will buy up the land to keep the town running.

Pitre said truckloads of donated lumber arrived last fall that she plans to use this spring to re-create an encampment. And plans are moving forward to relocate a historic locomotive from The Dalles to Shaniko this summer.

“This place is never going to make you rich,” Pitre said. “It will enrich your spirit, it will enrich your life, being part of it.”