The City Council has decided against putting permanent restrictions on the city's 829-acre Imperatrice property that could have protected its grasslands and trees but also could have reduced its estimated $7.6 million value.

The City Council decided against putting permanent restrictions on the city's 829-acre Imperatrice property that could have protected its grasslands and trees but also could have reduced its estimated $7.6 million value.

The Southern Oregon Land Conservancy had proposed that the council put a conservation easement on the property that would have barred subdividing the land and building homes there. The easement would have remained in place even if the city sold the land.

The hilly property is located across Interstate 5 from Ashland at the base of Grizzly Peak.

During a Monday night study session, a majority of city councilors said they were interested in having the city create a master plan for the land, instead of agreeing to the Land Conservancy's proposal at this time.

The issue will have to come before the City Council at a future regular meeting for councilors to make that decision official. Creating a master plan could take a few years.

The city bought the Imperatrice property at least 10 years ago when an earlier City Council was grappling with new Oregon Department of Environmental Quality mandates that the city stop dumping phosphorus-laden treated sewage water into Bear Creek. The initial plan was to spray treated sewage water on the hillside to avoid having to upgrade the sewage treatment plant with costly phosphorus-removing technology.

But the earlier City Council reversed course and decided to upgrade the sewage treatment plant so that treated sewage water could still be emptied into the creek to supplement flows for fish.

Ashland City Finance Director Lee Tuneberg said he believes the Imperatrice land was probably bought with money from the city's 5 percent sales tax on prepared food and beverages, as well as with money from people's sewage bill payments.

The total cost for upgrading the sewage treatment plant, without interest payments, was $33 million.

Tuneberg said he is certain the Imperatrice property purchase was included in the total cost for the upgrade.

Voters are being asked to renew the city's prepared food and beverage tax until 2030. Otherwise, it will sunset in December 2010. Ballots are due Nov. 3.

Restaurants would be able to keep 5 percent for their efforts in collecting the tax, while the city would keep 2 percent for administrative costs. Of the remaining amount, 80 percent would fund sewage debt and possible future sewage projects, while 20 percent would go for park land purchases, park land development and major parks projects.

Ashland Springs Hotel General Manager Don Anway, who opposes the meals tax renewal, said the city should consider selling the Imperatrice property and putting the money toward the sewage debt.

"I think they need to put proceeds from that land back to sewer treatment," he said.

According to the Ashland Finance Department, the annual debt payment on the sewage debt is almost $1.8 million. As of June, $17.63 million in principle remained to be paid. The interest rate on the loan is 3.43 percent. Almost $4.99 million in interest will be paid on the remaining principle through 2022. The debt will be paid off in 2023.

The Jackson County Assessor's Office has put the market value of the Imperatrice property at $7.61 million.

The Ashland Public Works Department has asked the City Council to maintain the city's ability to use the Imperatrice property for possible sewage water sprinkling in the future.

The city has yet to deal with DEQ rules that say the city's sewage effluent still causes harm to fish because it's too warm to dump into the creek.

The city plans to begin two studies, one to update the city's sewage plan, and one to research potable water and irrigation water needs and a variety of water sources — including treated sewage effluent, Public Works Director Mike Faught said.

Each study will take about two years.

Options communities have for dealing with warm sewage effluent include building cooling facilities, sprinkling effluent on land and planting trees to cool streams and rivers, according to DEQ's Web site.

The Southern Oregon Land Conservancy's proposal for a conservation easement would have allowed for effluent sprinkling on the Imperatrice property. The easement would also have allowed for low-impact recreation like hiking.

Meanwhile, the City Council majority's expressed preference to create a master plan for the Imperatrice property means the city will go back to the drawing board when it comes to the land's future.

So far, the city has used the land for cattle grazing, although to some locals, the property is known derisively as the city's "squirrel ranch."

Some people have been waiting since May for the city to issue an official Request for Proposals that would have solicited detailed ideas people have for using the Imperatrice property. Submitted information would have had to include financial information to help city officials determine the feasibility of the ideas.

The city will not issue the Request for Proposals if the City Council formally votes at a future regular meeting to develop a master plan first.

Ideas for the property that have been floated include an eco-friendly village, a solar panel farm and a windmill farm.

Standing Stone Brewing Co. owner Alex Amarotico said that he probably would have submitted a proposal that would have involved food production and/or processing facilities. He said he was not willing to go into specifics.

"There's a shortage of local food in the valley," he said.

Councilors David Chapman, Russ Silbiger and Greg Lemhouse said they favored developing a master plan.

Chapman said the master plan should look at what's feasible for the Imperatrice property, including whether the city should sell the land.

Councilor Eric Navickas preferred putting a conservation easement on the land and then issuing a Request for Proposals for the land's use. Councilor Carol Voisin also favored the conservation easement.

Staff writer Vickie Aldous can be reached at 479-8199 or