When residents of a north Bend neighborhood objected to a plan to put thousands of acres of nearby public lands into private hands, state officials assured them that Pronghorn Resort hadn’t influenced the process.

What the state didn’t tell them was that Pronghorn and Eagle Crest resort officials, after private meetings with the Department of State Lands, vetoed state plans that would have opened up lands around those resorts to development instead, a review of state records shows.

”They haven’t told us the whole truth,” said Linda Sullivan, a resident who has led the Boones Borough subdivision’s fight against the proposed land transfer. ”I don’t know if they’re actively misleading, but when they’re put on the spot they come up with a half-baked answer.”

The state has targeted three parcels of land – one near the Boones Borough subdivision north of Bend, one just south of Redmond and property west of Cline Buttes.

The transfer is intended to satisfy a debt that the government owes Oregon.

The federal government owes the state about 3,400 acres – a debt that dates back to statehood in 1859, when the U.S. government deeded federal property to Oregon.

Central Oregon’s hot real estate market drew the state to consider public lands in the fast-growing area. After the transfers are finalized, the state plans to sell or lease the land to the highest bidder and use the money to help fund public education.

Steve Purchase, assistant director of Oregon’s Department of State Lands, defended the state selection process. He said it’s inaccurate to say that resort officials influenced the state selection process.

”We made our own decisions, independently,” Purchase said.

The land transfer process has rankled residents. Some of them bought property based on its proximity to undeveloped public lands that have been proposed for exchange.

Residents of the Boones Borough subdivision have been particularly vocal. They say the proposed transfer of 640 acres near the intersection of Deschutes Market Road and Highway 97 could degrade a historic trail, ruin the rural character of the area and harm wildlife habitat.

Some chafed at the notion that state officials settled on land in their area after first passing on public lands around the exclusive Pronghorn resort.

”We felt like ‘Well, why are we second-class citizens compared to Pronghorn?’” said Jeff Boyer, who lives in the area.

State officials attempted to mollify the neighborhood. Department of State Lands Director Ann Hanus sent a letter to several residents in late May explaining the state selection process.

In the letter, Hanus said rumors that Pronghorn officials had ”convinced” the state to drop a proposed land transfer adjacent to the resort were untrue.

Pronghorn was dropped from consideration only after Redmond officials dropped their initial opposition to the transfer of 880 acres immediately south of Redmond, Hanus said.

”The shift back to the original choice did not happen as a result of pressure from Pronghorn,” Hanus wrote.

But a state memo from DSL property manager Chris Bedsaul to Nancy Pustis, eastern region manager of the agency, suggests that input from Eagle Crest and Pronghorn played a role in the state’s transfer selections.

The memo, dated April 29, 2004, says the potential selection of federal lands identified adjacent to Eagle Crest and Pronghorn is ”based entirely” upon future development of those resorts.

”Confirmation of land needed for expansion by Pronghorn Development representatives shall be verified before final recommendations for this selection,” Bedsaul wrote.

If resort officials decided they didn’t want to expand, DSL should instead attempt to transfer for the 640 acres near Boones Borough, the memo states.

Other documents detail state meetings with resort officials.

* Existing residents of Eagle Crest were opposed to expansion of the resort, an Eagle Crest official told a DSL representative at a May 4, 2004, meeting, according to state documents.

* A meeting with an unnamed DSL representative and Nancy Craven, an attorney representing Pronghorn, took place on April 28, 2004, according to a second memo from Bedsaul to Pustis dated May 11. Craven told the state on May 6 that ”any future expansion of Pronghorn is unlikely under the current development and management plan,” according to the May 11 memo.

Then, Craven asked that the state withdraw proposed land selections surrounding Pronghorn Resort, the memo states.

Craven couldn’t be reached for comment.

Purchase, of the Department of State Lands, said he wasn’t aware that a DSL employee had met with Pronghorn. But it wouldn’t have influenced the state’s decision to abandon the plan to transfer lands surrounding the resort, he added.

”The only people in this agency that can make a decision to select lands are Ann (Hanus) or myself and neither Ann nor I met with Pronghorn,” Purchase said.

The state abandoned the Pronghorn selection in favor of south Redmond because it was apparent that development would occur faster south of Redmond, Purchase said. The south Redmond selection has the support of Redmond and Deschutes County elected officials, he added.

The memo tying selection of the Pronghorn lands to future expansion of the resort isn’t significant because it wasn’t written by a manager with decision-making power, Purchase said.

”We’re going to make a decision that we think benefits the long-term stewardship of the common school fund, not based on what a developer thinks,” Purchase said.

Boones Borough residents, who have hired attorney Paul Dewey and enlisted the help of state legislators, aren’t buying the state’s explanation.

Eunice Landon, who has lived in the area since 1991, said the memos contradict the state’s explanation of how the land selections were made.

”That’s the way I read (Hanus’s) letter was – ‘we had nothing to do with (Pronghorn) and they had nothing to do with us,’” Landon said.

The fact that state officials conferred with resort officials is not a surprise, said Jack Keeney, a resident of Boones Borough.

”They’ve sort of worked behind the curtain the whole time,” Keeney said.

The final transfer of land from federal ownership to the state is far from complete.

Just last week, BLM state chief Elaine Brong ruled that the Boones Borough parcel and the state selection west of Cline Buttes would require an amendment to a land management plan before the land could be transferred.

The amendment could delay the transfer by several years.