Prineville is exploring a possible $1.2 million land purchase near Barnes Butte that officials say would add to the city’s water rights, as well as help accomplish some long-term transportation, preservation and development goals.

The deal, which has the city buying 460 acres of undeveloped property inside the city limits from Bend development company Brooks Resources Corp., would see up to 305 acres of surface water rights transferred to the city, City Manager Steve Forrester said Friday.

Also, the new property would allow the city to link the north and south parts of Prineville by connecting Peters and Combs Flat roads. Additionally, preservation of the land, which surrounds recreational hot spot Barnes Butte, could be balanced with the development of other projects, like a sports complex the city’s been thinking about for years. But Forrester said housing construction on the site would most likely be minimal.

“That’s a pristine area — a lot of open space and wildlife, and lots of people walking and jogging out there,” said Bill Mintiens, communications director for Prineville. “How do we develop it, do we develop it, and how much open space do we leave — the City Council and city staff don’t have any idea yet. It’s so early in the process.”

Currently the city is figuring out whether it will move forward with the draft sales agreement that Prineville city councilors authorized at a special meeting last week. Officials are looking into potential land use restrictions that come with the property, the water rights that would be transferred and some environmental concerns the city has, Forrester said. The city’s due diligence could take until October or longer.

Mining for cinnabar, a reddish-orange ore containing mercury and other metals, near Barnes Butte in the 1940s left enough mercury to raise health concerns, according to tests the Bureau of Land Management conducted in 2014. The BLM spent $250,000 on a cleanup last year, but Forrester said the city wants to be careful.

“We want to be very certain that there is no residual tailings from those operations,” he said.

The land is part of a 1,105-acre property that Brooks Resources bought in 2004, with designs to build a housing development called IronHorse. At the time, the development company had big plans for the site, which caused a couple of years of anxiety for Prineville residents worried the city was losing its small-town feel.

”There was a palpable sense of concern about how this would affect the town,” a Brooks Resource project manager told The Bulletin in 2006.

Brooks Resources’ plans for the development, which company Chairman Mike Hollern in 2004 said could eventually have more than 2,000 units, have since been scaled back. Brooks Resources Marketing Director Valerie Yost wrote in an email on Friday that the company had been too ambitious with the large housing development.

“When the recession hit, it became clear that this was an ambitious number of residences for Prineville so that plan has been on hold ever since,” Yost wrote, noting the city’s plans for the 460 acres would benefit the current residents of the IronHorse development, where 194 finished single family home sites have been sold to date. “We currently own 1,000 acres which we think is much too large for a community in Prineville at this time. We see this as an opportunity to ‘right size’ our IronHorse project.”

Along with reducing the size of the property, the land sale would eliminate the remaining $1.2 million in debt that Brooks Resources is still paying off for required sewer line upgrades the city paid for back in 2006, according to Eric Klann, Prineville’s public works and engineering director.

If Prineville does end up buying the property, the city considers the water rights that come with it the biggest perk. Klann said the water rights would be important to the city in the coming decades to offset other usage of city water, especially if the state tightens restrictions on drilling wells.

“Just acquiring the rights would allow us to serve 4,100 homes in the future,” Klann said. “That’s huge to know that you just secured that much water.”

Regarding the connecting of Peters and Comb Flats roads, as well as Combs Flat and Barnes Butte roads, Mintiens said that the new north-south routes would be important to the people who live in the northern part of Prineville.

“It gives people a faster way to go to town,” he said, adding that with St. Charles and Barnes Butte Elementary located near IronHorse, such a route — laid out in the city’s transportation plan — is necessary.

What the city would do with the 460 acres is still up in the air. Forrester said a lot of it would be preserved, but some parts could be developed. For instance, there’s been talk of building a sports complex in Prineville for a couple of years, and a committee formed to look into potential sites for the complex pinpointed the land near Barnes Butte. Whatever ends up happening, Forrester said the public would have the opportunity to weigh in at City Council meetings, both on the land purchase and what happens with it.

“There’s no predetermined use for this property yet,” he said.

— Reporter: 541-617-7829,

awest@bendbulletin.com