Today marks the end of a very long chapter of my life. I purchased Lehman Hot Springs with a group of investors in 1992 because I saw an exciting opportunity. In fact, my wife was traveling with her family in the summer of 1992 and I asked if they could swing by Lehman and check it out.
I remember my wife calling me from the payphone up there and telling me “it has a lot of potential, but it’s going to take a lot of money.” Of course, I really only heard the potential part of her comment. From my front door to the front door of Lehman, it is 285 miles. I had several older business partners that told me it would be very difficult to manage from afar. But at the time, I was 29 years old and knew better…
Over the years we invested an incredible amount of time, energy and money. It was extremely difficult to find employees at such a remote location. We had many good people work for us, and some not so good. It is a lot more work than anyone realizes until you do it. I did absolutely every job up there at one time or another. In 18 years, I never took a paycheck. I was investing for my family’s future and trying to make Lehman a better place. I am a real estate developer in the valley, and I invested much of what I earned at home into Lehman Hot Springs.
I found it to be extremely difficult to manage the various state regulations from afar, particularly in regard to DEQ. We admittedly have had a very long and arduous conflict with DEQ. This particular case has been going on for almost 5 years.
I admittedly had problems adhering to all the DEQ regulations, but it was never intentional and we never harmed the environment. In the spring of 2009, we had a very unfortunate event take place in that we had an unusually harsh winter and the snow melt found its way into the sewer collection system. The Oregon Attorney General at the time, John Kroger, saw this as an opportunity to advance his political career. Because of our past compliance issues with Lehman Hot Springs, we became public enemy #2 (only behind the Hanford Nuclear Cleanup according to the Annual Report of the DOJ)
On April 15th 2009, I met with representative from DEQ and the US EPA that had been called in by DEQ. At EPA’s request, I gave EPA written permission to take over the resort if needed to protect the environment. We agreed on a 15 point implementation plan to correct the infiltration problem with the collection system. We promised to send daily reports to EPA via email, which we did. We hauled off, by way of septic pumper trucks, over 600,000 gallons of water. We had the lower sewer pond in compliance within 3 days of our meeting with EPA. We had the entire collection system repaired and it passed inspection within about 30 days of our meeting. The EPA never came back up to the site, other than once, at DEQ’s request, to do a dye test to see if the ponds were leaking. The results of the dye test came back negative. The EPA did extensive water sampling, and those results showed no pollution. The DEQ took samples on at least 5 different occasions, but never released the results to us because they were in our favor. They never presented them as evidence in this case as they said they were “privileged”.
In the ruling from the Administrative Law Judge on our Civil Penalty case, the Judge stated that we went to extraordinary measures to comply. I can honestly say that I did everything I possibly could to make it right, in spite of the State’s efforts to hinder our efforts. DEQ did finally admit in their closing argument, that I “never polluted or violated any water quality standards.”
2008 and 2009 were extremely difficult years in the financial world. The problems at Lehman Hot Springs could not have happened at a worse time. I was trying to manage multiple large construction projects in the valley, while working on the repairs at Lehman Hot Springs and preparing and attending I think 9 civil hearings as well as depositions related to State vs. Lehman. We had false press releases from the AG’s office to contend with, as well as the AG’s office calling all of my various lenders on my unrelated projects and spooking them at a time when I was negotiating extensions of time on my construction financing. It was not fun. This was in the middle of one of the worst financial crisis this nation has ever been through.
I take personal offense at the states incessant statements and press releases that I flagrantly disregard the environment and am a polluter. I was the second person in the state to sign a contract with DEQ known as a Prospective Purchaser Agreement. I agreed to purchase and clean up a contaminated site known as Frontier Leather in Sherwood, Oregon. Frontier Leather consisted of an abandoned car battery plant and leather tannery. The site had contamination from 300,000 buried lead car batteries that had burnt in a fire, chromium, benzene, chlorinated solvents, arsenic, and many other contaminates that I can’t even pronounce. I spent many years and 1.4 million dollars cleaning up the site and making my community and my state a better place. DEQ signed off on the cleanup and I received a No Further Action determination from DEQ for my efforts.
As part of my contract with the State, I was entitled to seek contribution from the prior owners of the contaminated site, should I be able to locate them. At the same time the legal events were taking place at Lehman Hot Springs, unbeknownst to me, the State had located the prior owners and was negotiating in secret with the Potentially Responsible Parties to the old Leather Tannery. To make a long story short, the State of Oregon DEQ entered into a settlement agreement with the responsible parties, did not include me in any of the negotiations, and in fact refused to include me, and used my property that I cleaned up as a negotiating tool with the prior owners. There are a total of 6 tax lots, of which I cleaned up the worst 4 tax lots, but the state included the property that I cleaned up and I owned in their legal description for the settlement agreement. They negotiated away my property rights. They then went to Washington County Circuit Court to get a Consent Judgment signed to legitimize their secret deal. I was allowed to intervene in the Washington County case, and was, according to DEQ, the first person to intervene in one of their Consent Judgments. The settlement agreement between the state and the other parties states that if I appeal the case to the Oregon Court of Appeals, that the settlement money would go into escrow at the DOJ, pending the outcome of my appeal. Should I be successful, the Potentially Responsible Parties will have their settlement funds returned as they will have to compensate me for my expenditures cleaning up their mess.
There are several responsible parties, including Wells Fargo Bank, who actually managed the leather tannery operation for a wealthy family. Today, 2.6 million dollars is in escrow at DOJ, of which my
company is entitled to 1.4 million. I have claimed an offset to the civil penalty imposed by DEQ to be taken out of the money I am owed for cleaning up the Leather Tannery. I will also claim an offset against any fine imposed in this proceeding.
I don’t want to take up any more of the courts time with details, but suffice is to say that the actions of DEQ have been so egregious, that the Legislature is actually taking the issue up. It could settle in short order, or it could go on for several more years. This is why I do not think this criminal case should be in any way linked to the payment of the Administrative Hearings case. This is why I fought so hard and spent every dime I had and then some, to keep my name clear from being a “polluter.” I would greatly appreciate having this portion of the DEQ vs. Lucas chapter concluded.
Thank you your Honor.
Lehman Hot Springs is currently closed.
After being open to the public for people of all ages for over 138 years, Lehman was falsely accused of letting its sewer leak into the creek. While Lehman owners used all of their available resources to try to fight this wrong accusations, but unfortunately after a decade of fighting the "Under Dog's Battle" sadly the Lucas family had to close Lehman.
“DEQ admits there wasn’t ever pollution” According to the closing arguments from the State of Oregon “
In the DEQ opening brief, page 3, they admit “DEQ has never asserted a violation of water quality standards, or that Respondents actually caused pollution,
“DEQ admits there wasn’t ever pollution” According to the closing arguments from the State of Oregon"
How Lehman was started?
Patrick Lucas and his family bought Lehman in 1992 with the vision of
Rumors, Rumors, Rumors ~ Fact or Fiction
Lehman Hot Springs Sewer is leaking into the creek
THE FACES OF THE FAMILIES EFFECTED