This article was originally published by The Lund Report and is used with permission.
Property owners have sued to block construction of a $35 million Lane County mental health crisis center as well as a 96-bed behavioral health hospital launched by PeaceHealth to help fill the void left by the closure of its University District hospital in downtown Eugene.
The suit is significant not just due to the projects it targets, but because it also challenges the constitutionality of high-profile legislation approved by Oregon lawmakers in June that was intended to change civil commitment criteria in the state and fast-track the siting of behavioral health facilities.
PeaceHealth is calling the hospital Timber Springs. In an email, a PeaceHealth spokesperson said, "Expanded behavioral health care is greatly needed in Oregon, and in particular Lane County. Timber Springs Behavioral Health Hospital is an important part of meeting that growing need.”
Asked for comment, Lane County’s public information office did not respond.
The fast-tracking provision — called “supersiting” in the suit — was embedded in a much larger bill addressing civil commitment standards. The bill, known as House Bill 2005, came together in just two days at the end of the 2025 session. The suit contends that, as a result of the timing, Oregon lawmakers approved a bill that was not only poorly written but was not fully understood.
“The limited floor debate on the bill indicated that legislators did not understand the substance of the bill, particularly its land use provisions,” the suit alleged. “For example, when Senator Mike McClane, R-Powell Butte, raised a question about the Supersiting provisions, another senator erroneously asserted that Senator McClane was talking about the wrong bill.”
The suit is filed by three neighboring property owners, including Richardson Sports, which employs 400 people on land zoned for industrial uses. They are using two Portland attorneys, Greg Hathaway and Timothy Volpert, as well as Michael Gelardi of Eugene.
Project stemmed from Kotek intervention
In 2023, after financially ailing PeaceHealth announced plans to shut down its University District hospital in downtown Eugene, Gov. Tina Kotek intervened to push the health system to slow down the closure and preserve the 35-bed inpatient behavioral health unit located there given the state’s longstanding shortage.
The Eugene hospital had helped provide care to homeless people downtown and helped people experiencing mental health issues.
But hospital behavioral health units for years had been chronic money losers, thanks in part to low state reimbursements for the costly services.
Peacehealth responded to Kotek that the state needed to provide higher reimbursements under the Oregon Health Plan to support such beds, and Kotek initiated a review of the rates.
The promise of higher rates then led PeaceHealth to announce plans to build a behavioral health hospital in Springfield in October 2024.
The facility is intended to treat patients with a broad range of behavioral health conditions, including major depression, anxiety disorders, bipolar disorder, post-traumatic stress disorder, psychosis, schizophrenia and co-occurring alcohol or substance use disorders, among others.
The hospital is to be built and operated with Tennessee-based LifePoint Health, a company owned by a private equity giant, Apollo Global Management.
Meanwhile, PeaceHealth joined with Lane County officials to collaborate on a Lane County Stabilization Center that would also be located on the site, connecting people in crisis with longer-term supports. The suit would block both projects.
Fast-track siting bill failed in 2023, 2024
Advocates have long said Oregon land use law conflicts with federal law because local governments can throw up barriers to building residential treatment facilities in response to what critics call exaggerated fears and “not in my backyard” sentiment.
In the 2023 and 2024 legislative sessions behavioral health advocates and some government officials backed bills to change that. Both times the bills failed. One concern expressed by the League of Oregon Cities was that the legislation would lead to costly litigation against local governments.
However, in 2024 Lane County officials supported a bill in 2024 to “avoid an otherwise cumbersome land use process.” It supported fast-tracking again in 2025.
The behavioral health siting provisions were part of a much larger bill that assembled a variety of measures into one. It came together in the span of just two days and no written testimony was filed concerning its siting provisions.
After its passage, Disability Rights Oregon executive director Jesse Cornett said in a statement that he was “pleased to see the final bill stops counties from making it harder to build the behavioral health facilities we need.”
Constitutionality challenged
The suit also faults Lane County officials, saying that, earlier this year, they failed to disclose during zoning hearings affecting the property that they were also backing state legislation to fast-track siting.
The suit contends that the law, which primarily focuses on civil commitment, is at odds with city of Springfield rules, other parts of state land use law, and violates the Oregon constitutional requirement known as the “single-subject” requirement — meaning that bills should address only one area of law or policy.
It asks the judge to declare HB 2005 unconstitutional.