The Shire: When Dreams Become Delusions


In doing advance research about foreclosures in Bend, Oregon, I happened across local news coverage of a most absurd housing development. A planned community with Old World architectural detailing designed to resemble a Lord of the Rings hobbit village, the Shire represents a prime example of irrational excesses that an untrammeled housing market can nurture. I intended to take pictures of the now bankrupt and foreclosed development so I could write a post ridiculing those behind its creation, until I learned one of them had committed suicide.

The Recession Roadtrip charted a course through Bend in central Oregon specifically because of the community's unusually high rate of foreclosure. At around 4 percent, Deschutes County's per capita foreclosure rate is half that of Vegas, but still two to three times any other shire4.JPGcounty in Oregon.  As I wrote last week, the fairly pervasive role of mortgage fraud throughout the local real estate market's expansion sets up the community for a steep fall.

Developer Ron Meyers originated the concept of building a community inspired by medieval fantasy and Old World architecture. He partnered with former emergency room doctor Lynn McDonald to secure financing for the project. Lynn and his wife Janet signed for a $3.4 million loan from Umpqua Bank in December 2004, and building began in fall 2005.

The Shire's artificially thatched-roof cottages would have dragon-shaped support beams and "hobbit holes" instead of tool sheds, and come with fantastical background stories and names like "Butterfly Cottage" or "Thatcher House." The meticulous landscaping includes stone paths along a man-made pond and a burbling stream, traversed by way of a rustic wooden bridge. The inhabitants were to adhere to a "Declaration of Interdependence" listing both practical and feel-good neighborly codes and covenants. shire2.JPG

By the time the real estate market started to decline, only one Shire house had been completed and sold--for $650,000. A second nearly-finished house, "Butterfly Cottage," was unsuccessfully listed for sale at $899,000 in July 2008, the same month a notice of default on the development was filed with the Deschutes County Clerk's office, and just a couple of weeks after Lynn McDonald committed suicide. At the time of his death, Lynn and Janet McDonald owed Umpqua Bank more than $3 million.

Butterfly Cottage never found a buyer, and the bank foreclosed after the development failed to sell at public auction in December. The six-acre 14-lot property, including one nearly completed house, languished on the market for many months, listed at $1.3 million for the whole package.


In May, Castle Advisers LLC, a Hood River-based private equity firm that says it represents investors across the country, nabbed The Shire for a firesale bargain price of $750,000. The firm is re-branding the community "Forest Creek," and plans to sell off lots individually over the next five years as the market recovers.

NOTE: After writing two unflattering pieces from Bend, Oregon, I feel like I need to voice a disclaimer on behalf of its residents. I don't mean to paint Bend in a negative light; it's a beautiful little community and everyone I met there seemed incredibly nice. Also, the local Deschutes Brewery makes an excellent microbrew: Jubelale.

Presented by

Christina Davidson is a writer, photographer, and book editor who specializes in national security, terrorism, and war. She also writes for the food blog Feed The Masses.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus


How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.


Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.


The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.


Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.


Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses


Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in National

Just In