DUNDEE, Ore. — During the Dundee City Council meeting on Aug. 18, an Oregon-based grocery chain proposed building a grocery store in a town without one.
Jon Welsh, CEO of Fresh Foods Market, presented plans to Dundee’s city council for a roughly 15,000-square-foot grocery store along Highway 99W. The store would replace the existing La Sierra Mexican Grill, which would be demolished to make way for the development according to Dundee city administrator Courtney Patterson.
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The proposed development would extend between 10th and 12th streets, near the Southern Pacific Railroad. The plans also included retail space, as well as one- and two-bedroom housing units.
Welsh said the project is intended to serve both Dundee residents and tourists visiting the area. Fresh Foods Market currently operates three locations, including in Manzanita and Cannon Beach, and focuses on locally sourced, higher-end products.
Stephan Zaugg, owner, and Tobias Levey, president and CEO, of Zaugg Timber Solutions, discussed plans to use modular mass-timber construction for the residential portion.
The proposed development would require improvements to 11th Street, which currently terminates near the railroad tracks. Developers said they want to use the project to improve access and parking around the market.
One issue still being worked out is the project’s financing. Developers discussed the possibility of Dundee establishing a vertical housing tax credit program, which could provide tax incentives for mixed-use developments with residential housing above commercial space.
The developers said the tax-credit concept could help close a financial gap for the project. They plan to continue discussions with the city and potentially submit a pre-application.
The presentation was speculative, and there is no timeline on development.
Also at the Aug. 18 meeting
Terrain Hotel presentation
Will Von Schlegell, a representative of Portland-based general contractor Schommer & Sons, and Paul Schommer, the firm’s project manager, provided an update to the council on the proposed Terrain Hotel project.
The planned development would include an approximately 85,000-square-foot hotel along Highway 99W. Developers described the project as a roughly $72 million investment in Dundee and said they have raised the necessary capital and are in the final stages of closing on financing.
The hotel is planned to include two restaurants: a full-service steakhouse and a quick-service restaurant offering pizza, Italian fare, breakfast sandwiches, and coffee.
The project would also include a spa and wellness area, along with a wine-tasting room.
Developers also described additional event, parking, and operational space, including storage and back-of-house areas for hotel operations.
Developers said they are in the permitting process. They are projecting the start of site work in the next 30 days.
Schommer & Sons said they are targeting a spring 2028 soft opening for the hotel, with the second quarter of 2028 being the tentative public opening date.
Sewer ordinance
The council approved an overhaul of Dundee’s sewer regulations as the city prepares for the upcoming wine harvest and crush.
Ordinance 596-2026 strengthens the city’s ability to inspect commercial wastewater users, expands the list of prohibited discharges, and increases penalties for violations.
The ordinance gives the public works superintendent or another authorized city employee the authority to examine and copy records related to wastewater operations. Those records could include production records, maintenance logs, chemical purchase records, and operator logs.
The ordinance also makes refusing authorized city personnel entry into a facility a violation of the sewer code.
The city’s wastewater treatment plant, installed in 2012, uses membrane bioreactor technology. The system relies on thin filters that can become clogged or damaged by solids entering the wastewater stream. The city’s cleaning systems need to be replaced at an estimated cost of $900,000, according to the staff report.
For commercial sewage users, the civil penalty was increased to between $1,000 and $5,000 per violation. The city can also seek compensation for expenses, losses, or damages resulting from violations.
During the discussion, representatives from local wineries raised concerns about wastewater monitoring and the potential financial consequences of violations.
City staff said the city has had difficulty tracing problematic discharges back to individual sources and that similar incidents have occurred periodically over the past several years. The goal of the new enforcement structure is to give the city clearer authority to collect records, conduct inspections, and establish regular monitoring requirements.
The council declared an emergency for the ordinance, making it effective Aug. 19.
Public safety fee gets two-year sunset
The council approved Ordinance 597-2026, adding a sunset provision to Dundee’s public safety fee, a monthly charge used to help fund fire services.
The fee was approved in June as a way to provide partial funding for fire services. Current rates are $4.50 per month for single-family residential units, $1 for multifamily units, and $10 or more per month for nonresidential units, according to the staff report.
The council previously discussed the fee as a short-term measure while the city works on a longer-term solution for funding fire services.
Under the ordinance approved Tuesday, the public safety fee will expire June 30, 2028. The council will review the fee annually during its budget process.
Water reservoir repair
The council approved a contract with Elk Mountain Construction for repairs to the city’s steel water reservoir on Vineyard Road.
The reservoir is leaking and has contributed to significant water loss. City documents state that water loss reached as much as 20% last year. The project has a total budget of $260,000, with $205,115 available for construction after engineering and project management costs.
Four companies submitted bids from $144,000 to $327,250. City staff and the city’s project engineer reviewed the lowest bid and said they were confident in Elk Mountain’s ability to complete the project.
The council authorized execution of the contract and approved future change orders up to $205,115.
Mayor’s report
Mayor David Ford and the council discussed efforts to identify financing options for potentially purchasing the old Dundee Elementary School property.
The city has contacted a real estate agent and the school regarding the space and is exploring potential options.
Ford also said the city received a grant for sidewalk improvements on Southeast and Southwest Third streets. The council is expected to discuss the use of urban renewal funds at a future meeting.
