Siltcoos and Tahkenitch water rights and dams up for bid

The dam on Siltcoos outlet was built in 1963-64. It features a kayak portage on its northwest side and a fish ladder on the southeast side. The dam, along with a similar one on Tahkenitch Creek, is up for auction, along with the water rights on both lakes and the former Industrial Paper site in Gardiner. Bids must be received by Nov. 16. Photo by Zac Burtt/Siuslaw News

Former IP site up for auction Nov. 16

Nov. 8, 2022 — Dunes City residents and recreators alike have their eye on the date of Nov. 16 — when bids will be due for the auction of 440 total acres of property stretching from Gardiner to Siltcoos Lake south of Florence.

The property includes the site of the former Industrial Paper (IP) pulp mill in Gardiner that closed in 1999. After shutting down operations, IP removed the paper and wood production facilities and completed all environmental clean-up.

The property is being offered, in its entirety, for a published reserve of $16,145,000, a nearly $7 million reduction from the last asking price of $23 million. The published reserve is the minimum bid a seller must accept.

In addition to bidding on the whole property, interested parties may also bid on individual “stand-alone” parcels within the entire offering. These parcels, individually, are:

  • The 335 plus acre former IP site in Gardiner, with 145,000 square feet of building space (warehouses, shops, office and storage buildings) — $10,500,000
  • Water Rights and distribution system on Siltcoos and Tahkenitch Lakes, two dams on 70 acres in Douglas and Lane Counties — $4,850,000
  • Sparrow Park Road sand pit — $795,000

Of particular concern to the residents of Dunes City, along with those who recreate on or around Siltcoos and Tahkenitch Lakes, is the water rights to the two lakes and the dams.

The Siltcoos Dam, located west of Westlake on Siltcoos Outlet, is the topic most on the minds of people in the area as that dam is directly responsible for the depth of Siltcoos Lake. The dam controls in and out flow of water between Siltcoos and the Pacific Ocean. The depth of the lake affects water quantity, quality and temperature and, in turn, the flora and fauna that can or cannot flourish in its waters. The depth of the lake also affects wells and dock access.

On Tuesday, Nov. 1, a town hall meeting was held at Dunes City Hall with Mayor Sheldon Meyer and all councilors in attendance except Duke Wells. The purpose of the meeting was for the city to share what they knew about the upcoming auction.

Meyer opened the meeting with the information that most people who were in attendance were interested in: whether or not the dams will remain in place after the sale of the property.

“The businesses that are looking at the property will need the water as much as the mill did when they were making paper,” said Meyer. “[Jon Rosenthal, President of Realty Marketing/Northwest, the firm selling the property] assured me that he has not had anyone that is interested mention removing the dams. You would have to go through the state and feds to interrupt what we have here. … No one is interested in doing that.”

IP opened its in mill in Gardiner in 1954. In April 1964, the two dams were completed and, according to The Coos Bay World, they were dedicated to “the concept of harmony and compatibility between industry and recreation.”

Since then, things have been relatively harmonious.

In 2017, a Washington company, Industrial Harbor USA, bought the mill site and water rights and has operated the dams since.

There is a running discussion amongst residents of the Dunes City about what level Siltcoos Lake should be maintained and it is somewhat of a mystery to most as to when the dam is opened and closed and what justification is used to open and close it.

The dam operator receives parameters for proper lake level from Susan Douthit, Watermaster for District 15, that includes both lakes.

According to Dunes City Administrator Jamie Mills, Douthit instructs the operator to keep the lake “at eight feet for a little while but mostly its five feet and can’t go below three.”

There seemed to be confusion amongst the city and residents as to what the depth of the lake is supposed to be, but there was a consensus amongst those in attendance that, while it is reassuring that the dams will most likely remain in place, it is important that whoever buys the property works with Dunes City to maintain a depth that is a compromise between all interested parties.

What the property in Gardiner and the water rights to the lakes will be used for after purchase is still a mystery.

“The site would be ideal for industrial water use, such as fish farming, because of the 15 million gallons of water a day that comes with the water rights,” said Rosenthal.

Other large scale aquaculture operations have also been mentioned as a possible use by the purchaser, along with other marine-related uses. The property is zoned Heavy and Marine Industrial.

Another possibility is that the property could be purchased as part of a mitigation or conservation effort by a corporation, public utility or green investment fund.

FEMA currently leases about 40 acres of the industrial site, potentially generating $22,500 a month for a prospective buyer.

For more information on the property, go to