Former prison land sale offers 390 acres for potential Salem housing development

A 390.5-acre property that includes the now shuttered Mill Creek Correctional Facility is up for auction next month. (Higgenbotham Auctioneers)

The nearly 400-acre property that housed a Salem prison until last year is up for auction next month, billed as a stretch of land suited for redevelopment into large housing communities.

Mill Creek runs through the property at 5465 Turner Road S.E., which is the largest currently for sale in Salem, according to Tim Stuart, broker of record for the auction . The suggested opening bid on the auction listing is $7 million.

The sale offers up hundreds of acres of land at a time the city is seeking ways to help fill Salem’s housing gap and identify more locations for sheltering homeless residents. But city officials say the Mill Creek property was outside their budget.

The state Department of Corrections was required under state law to first notify other state agencies of their intent to sell the property, followed by nonprofits, tribes and then local governments. 

Clinton Dameron, the city’s real property services manager, wrote in a January 2021 letter to the state Department of Administrative services that city officials were interested in potentially acquiring the Mill Creek property. 

“It was explored as we were trying to identify locations for sheltering our unhoused. Informal conversations happened with councilors at that time,” said interim city manager Kristin Retherford.

The letter came five months before Mill Creek Correctional Facility closed its doors on June 30, 2021, the first of three state prisons shuttered under a plan by Gov. Kate Brown as state officials sought to cut Oregon’s prison population.

The 2,000-acre minimum security prison, built in 1929, had 201 people in custody and 52 employees in early 2021.

The facility now sits empty on Salem’s southeast edge, its three floors scattered with cracks and phones yanked from the walls. Some artwork remains, such as paintings on the walls of Crater Lake and animals like deer and fish. It includes a basement, workout area and basketball court with several surrounding barns outside, most in disrepair.

Stuart told Salem Reporter the Mill Creek prison would likely be torn down and not repurposed. 

A room inside the former Mill Creek Correctional Facility building in Salem (Higgenbotham Auctioneers)

Retherdford said the land price combined with renovation and other development costs for filling wetlands made the property out of reach for the city’s budget, and city officials never made an offer to purchase it.

The property’s market value is $12.48 million, according to an August 2021 email from Tracy Wilder, real property manager for the state Department of Corrections, to Dameron. 

“Unfortunately the city does not have funds to cover the purchase at market rate,” Dameron wrote in an August 2021 email to state Department of Corrections officials.

Stuart said there are no stipulations about what can be done with the property. 

The creek splits the 390.5-acre property, “providing a scenic corridor in the property for walking trails, cycling, recreation and wildlife study,” the auction listing said.

The auction listing describes the property as “perfect” for redevelopment into large single or multi-family housing communities, as well as potentially public health services and use by local employers.

Mill Creek splits the 390.5-acre property, which is advertised as suitable for redevelopment into single or multi-family housing. (Higgenbotham Auctioneers)

About 128.42 acres of the property is above the floodplain, while the rest could be filled to add additional land for redevelopment, according to the listing.

Sealed bids are due Aug. 2 at 10 a.m. The state has the option to hold a second round of bidding on Aug. 4 at 2 p.m. by phone for the top five bidders.

For the high bid that’s accepted, a 10% non-refundable deposit is due no later than Aug. 5 at 5 p.m.

The total is due at the close of the sale within 60 days of state approval.

Contact reporter Ardeshir Tabrizian: [email protected] or 503-929-3053.

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