In early December, Tim Stephenson laid out why a Malheur County agency should give him $1 million. He explained to public officials that his company, Vale Textiles, would revive the defunct mushroom plant in Vale. The new company would create jobs with hourly starting pay of $30, making Vale a manufacturing hub. The company would make fake leather out of mushroom roots. “The demand for a leather alternative is high as the traditional leather market fails to keep up with the raging demand of fast fashion,” his packet said. The Oregon Trail Mushroom plant in Vale may see new life as home to a new industry. The plant, on the city’s east edge, has been unused for about 17 years. (LES ZAITZ/The Enterprise) To back up his plans, the Adrian resident and former mortgage broker provided the officials with nine letters of support. One key letter given to the Eastern Oregon Border Economic Development Board was listed as the “Columbia Letter of Support.” The one-pager bore the logo of Columbia Sportswear, the Oregon clothing giant. Support from such an international company would bolster the sense that Stephenson was onto something with his untested concept. “We are looking for reliable, cost effective, durable, and sustainable materials to produce our products with,” said the letter. But the letterhead bore a fuzzy logo different from what Columbia Sportswear uses on such correspondence. And the message was from a low-level employee with no authority to speak for the company. Columbia executives, in fact, had never heard of Tim Stephenson or Vale Textiles. “Columbia Sportswear Company does not support or know anything about the Vale Textiles project,” the company said in a recent statement. “I provided a generic endorsement,” the employee said in an email to the Enterprise. “I do not speak for Columbia Sportswear. It is regrettable that it was used in the way in which it was presented.” The letter isn’t the only questionable feature to emerge in a closer look at Stephenson. The newspaper examined hundreds of pages of public records and interviewed government officials and Stephenson’s associates. The findings: •Stephenson has a history of personal financial troubles, ranging from past unpaid income taxes of more than $400,000 to unpaid credit card bills. He fought foreclosure on his own Portland home for years, skipping years of mortgage payments before the property was sold at a sheriff’s auction. •Stephenson for years was involved in Oregon’s marijuana industry, a fact he resisted discussing with the Enterprise. Just last month, the state approved the sale of his latest license. •Vale Textiles bases its business plan in part on mushroom-growing experiments underway in the living room of a St. Helens home. •The Vale operation would need $4 million in public money to cover virtually all of its costs in its first year. Public officials are considering funding the new venture as Malheur County officials work to extract themselves from another venture they backed with millions in public money ­– the Treasure Valley Reload Center. In a 90-minute interview, Stephenson contested some findings from the newspaper’s investigation and wouldn’t comment on others. “I don’t think it’s fair just to look at public records and say, ‘Oh, who is this shady character?”” A farm boy at heart Stephenson, 57, grew up on the family farm outside of Adrian, attended school there and worked summers at the mushroom plant in Vale when it was a going concern. He was 22 when he started in the banking business in California in 1990. Eight years later he joined a small mortgage company outside San Francisco called Charter Capital. The company boomed over the next decade, Stephenson said, noting that Charter Capital had 14 branches at its peak, including an office in Hawaii. He was one of three partners, he said. “Annual production peaked at roughly $1 billion per year,” he would write in later years. He moved to Portland to expand the company into Oregon, and in 2003 settled his family on a 24-acre property on Sauvie Island, west of Portland. Regulators’ records show Stephenson left Charter in 2008. He said in an interview that he grew disillusioned with the mortgage industry practices. He said he reached a “settlement” with his partners after the recession took its toll on the housing industry. Neither of his former partners could be reached for comment. Instead of leaving the industry, though, records show he jumped to another mortgage lending company in Portland. He later would write that he owned a branch of the company, shown in state records as Alliance Capital Group. He would stay for several years, working in Portland, Lake Oswego and Scappoose, although not listed in licensing records as an owner. His license to operate in the industry expired in January 2021, records show. “Due to the ongoing litigation at that time, and advice of counsel, traditional payments to the correct party were unclear.” –Tim Stephenson on missing mortgage payments Along the way, Stephenson endured years of financial strains, according to state records and court filings. He fought foreclosure of his $950,000 Sauvie Island property, a hobby farm where his family raised Christmas trees. When U.S. Bank moved in 2012 to foreclose, Stephenson fought back. He claimed in court submissions that his loan paperwork wasn’t in order and it wasn’t clear to whom he owed money. “Due to the ongoing litigation at that time, and advice of counsel, traditional payments to the correct party were unclear,” Stephenson said in a recent email to the Enterprise. After a trial and mountains of exhibits, a state judge in July 2015 concluded that U.S. Bank could foreclose. The judge said in his ruling that Stephenson hadn’t made a mortgage payment for four years. READ IT: Judge’s ruling Stephenson appealed, and another four years passed. He was ordered by a judge meantime to pay $2,000 monthly as rent. In 2019, the appellate court ruled against Stephenson, requiring him to also pay the bank’s legal costs for the appeal, amounting to $95,086. He disclosed the foreclosure in February 2019 while renewing his mortgage license with Oregon regulators. He wrote that he expected a “satisfactory outcome.” He provided regulators one document – his claim filed in court seven years earlier that the foreclosure wasn’t proper. He didn’t disclose that a state judge had already ruled against him or that he was appealing. He attested under penalty of perjury that his submissions to renew his state license were “current, true, accurate and complete,” according to state records. Court records show that the Sauvie Island property was sold at a sheriff’s auction on July 23, 2019, to settle the debt to U.S. Bank that had grown to $1.1 million. He had other troubles during those years. In 2010, the IRS issued a lien for $435,284 for 2006 federal income taxes owed by Stephenson and his wife. More liens followed for unpaid federal income taxes in 2009, 2010 and 2013. Stephenson and his wife arranged a payment plan with the IRS in 2011, agreeing to pay $200 a month to clear a balance of $126,047. Multnomah County records show the 2009 federal tax lien was cleared in 2020 and the 2013 tax was cleared in 2021. There is no record the IRS has released the liens for the 2006 and 2010 income taxes although Stephenson said in a recent email that “all of these tax liens have been paid.” The Oregon Department of Revenue filed tax warrants against Stephenson for unpaid income taxes for 2015 and 2017. The warrants were lifted in 2018 and 2020, Multnomah County records show. Separately, creditors won judgments for unpaid credit card bills. Cascade Collections Inc. got a judgment in 2012 for $27,262, a judgment the creditor renewed in 2022, court records show. A second creditor, Capital One Bank, got a judgment for $11,085 in 2019. Court records don’t show the judgments have been paid. “Payment arrangements have been made with these creditors,” Stephenson said in an email on Friday, Jan. 3. While his foreclosure was pending, Stephenson worked as a mortgage broker in Scappoose, state licensing records show. He joined another broker in 2011 to found a separate company to help those facing foreclosure. Stephenson said in an interview that through MSA Associates LLC he was hired by attorneys as an expert on the arcane world of loan mortgage documentation and ownership. His partner in the company was Matt McHugh, who is still in the mortgage business in Scappoose. McHugh recalled that the partners were contacted by the state Justice Department with questions about the advice they were giving clients. McHugh noted they were working through attorneys, not directly with clients as other advisers were at the time. He said that by then Oregon law changed to clarify foreclosure proceedings, eliminating the company’s niche business. “We saw the writing on the wall after a year or so – and moved on,” McHugh said. “We weren’t getting paid well anyhow.” The company, MSA Associates LLC, lasted about one year, state records show. Stephenson still held his license in the mortgage industry but ventured into the business of marijuana. New enterprise In an interview, he didn’t want to talk about the company he formed in 2017, Family Innovation Farms. “I’ll tell you exactly what happened or what Family Innovation Farms is but I’m not going to tell you on the record,” he said. Told nothing was off the record, Stephenson explained how he came by a state license for the marijuana business. “At some point in time, a customer owed me some money,” he explained. “And it became clear that he wasn’t going to be able to pay with dollars, so he offered up a license as a form of payment. And it’s when marijuana went legal.” State records show that in 2017 Stephenson himself applied for an Oregon marijuana license for Family Innovations to grow up to an acre of marijuana. Stephenson listed himself as the “operations manager” with no ownership in Family Innovation Farms. A Silverton man, William (Zach) Bonner, was reported to be the owner. Bonner didn’t respond to telephone messages seeking an interview. At some point that couldn’t be established, Stephenson became half owner of the company, according to a court claim filed by Bonner. Bonner included another document showing that Stephenson would become owner of the company on Sept. 18, 2018, and would pay Bonner $25,000 for his share. Stephenson maintained later that Bonner’s deal was with the company, not with him personally. Whatever the circumstance, Stephenson said Family Innovation Farms had 15 employees. The outdoor grow operation was on leased farm property about two miles from Stephenson’s Sauvie Island home, state records show. Ownership of that land changed in 2020, with a former police officer turned farmer buying the property. Jim Abeles said he inherited the lease with his purchase, and that about an acre of marijuana was being turned into joints in a storage building. He said he had no problems with Stephenson but let the lease lapse because he didn’t want marijuana on his property. He said Stephenson told him he also worked for a Hillsboro marijuana business. State records list Stephenson as a member of a company called Handsfree Production, formed in 2022 by Ash Gupte of Hillsboro. The records registering the company with the state give no indication of its purpose and it dissolved a year later. By the time he partnered with Stephenson, Gupte was in the medical cannabis business. Records of the Oregon Liquor and Cannabis Commission show his medical marijuana firm, Nova Paths LLC, agreed in 2021 to pay $9,045 after it was accused of not tracking inventory used at a trade show. The company the next year agreed to another settlement, this time for $30,000 over allegations it allowed adulterated vape cartridges to be shipped in 2019. Gupte didn’t respond to telephone messages seeking an interview. According to a former partner, Stephenson sold Family Innovation’s marijuana license in 2021 to another partnership. Aaron Pulley, a one-time partner in Family Innovation with 20 years in the marijuana business, said that at the time of the license sale, Oregon’s recreational marijuana was booming. The buyer was West Holdings, a company operated by Cory Cooper, who said he planned to establish an indoor grow operation in Cottage Grove as part of his commercial marijuana enterprise. He said the recreational marijuana partnership fell apart and “we pulled out” of the $200,000 deal for Family Innovation’s license. By June 2022, Family Innovation no longer held a license to operate in the marijuana industry. Six months later, Stephenson applied for Family Innovation to get another license, this time to grow marijuana indoors. There is no indication Stephenson ever ran such a business. Instead, Pulley said, Stephenson sold his new license to another party for operating the Cottage Grove indoor plantation. Pulley said he and another man ran the business. Stephenson “had nothing to do with it. He owned the license and he was to get paid monthly,” Pulley said. He said Stephenson never got the monthly payments and the deal with Stephenson ended. “He’s one of the most stand-up guys I’ve ever met in this industry,” Pulley said. “In the first five minutes of being around him, he’s a laid back, mellow guy.” In December, state officials approved the sale of Family Innovation’s license to yet another marijuana entrepreneur. Gavin Pechey of Portland (second from left) visits with researchers at Idaho State University for a project researching how mushrooms can help recycle plastics. Tim Stephenson of Adrian was part of Pechey’s company in 2024. (Idaho State University photo) Moving to mushrooms Stephenson’s first idea for the Vale mushroom plant was to turn it into a sort of plastics recycling center. In early 2023, he partnered with a Portland entrepreneur who was exploring the concept. With global concerns growing about plastic waste, finding a commercially-viable way to deal with plastics could be lucrative. The entrepreneur, Gavin Pechey, described in a submission to state regulators how he started a company on a banana plantation in Guatemala in 2022 to deal with used plastic sheets from farming. “We realized this waste could be fully broken down by using mycelium fungus within a few months,” Pechey wrote to the Oregon Department of Environmental Quality in mid-2023. He formally registered his company ­­– later known as Sporadicate – in Oregon in January 2023, listing Stephenson as the corporate secretary. Pechey told the DEQ that he had arranged an experiment with the city of Pocatello to test the plastic-munching idea. Stephenson would later cite that experiment to Malheur County officials as evidence mycelium had commercial application. He didn’t disclose his role in Sporadicate. Pechey said in a recent interview that he didn’t want to discuss his partnership with Stephenson. “I can’t really say that he made too much of a contribution,” Pechey said. Stephenson struck out on his own, forming Mycterra LLC just nine months after helping Pechey establish his company. The intent echoed what Pechey had been working on. “We were looking at using enzymes excreted from mushrooms to dissolve different types of plastic,” Stephenson explained. His listed partners from public relations and lobbying firms ­– and a Portland scientist better known for running a popular wine bar. The business was based in Scappoose, state filings show. Molly McGrew, one of the partners, said the company formed as state officials in 2023 considered modernizing recycling standards. “The biological breakdown of material into a soil substance seemed intriguing,” said McGrew. She owns MMC Consulting and Government Relations in Portland. She said Stephenson’s concept seemed particularly important for rural Oregon and farming operations that generate plastic waste. Chris Edmonds, founder of Coastline Public Affairs in Portland, also worked with Stephenson on the idea. “Tim is obsessed with mushrooms, mycelium and the power of mushrooms,” Edmonds said. “The guy nerded out.” The partners said research was needed to show such composting could work at a commercial scale. Money from a blend of government and private sources would be needed for the startup and some wealthy individuals were interested, McGrew said. Stephenson already was talking about buying the vacant Vale plant for the new enterprise. “Buying a mushroom facility in Vale and getting it up to speed is a very difficult thing to do,” said Edmonds. Edmonds said he dropped out of the project because his own company was growing. And McGrew dropped out, understanding that the DEQ wasn’t going to change state rules to allow for the type of composting the partners had in mind. “That killed the option,” McGrew said. Stephenson explained he abandoned the concept because the gasses given off during the process sickened him. He also was troubled that some microplastics would remain. In a subsequent email, he said that “we realized that the technology was far too underdeveloped and capital intensive to bring to the market in the near term.” That’s when he locked onto a new idea for mushrooms – commercial production of leather-like sheets to use in clothing, purses and upholstery. Stephenson said he came to the idea through “a whole lot of reading” and talking to people in the mushroom industry. He didn’t, however, talk to anyone actually making such sheets derived from mycelium. “We just started doing it,” he said. Mycelium – the threadlike root mass of mushrooms – is grown in compost, sawdust, or some other biomass. The resulting mass can be manipulated into different materials, including generic leather for clothing and accessories, like purses and handbags, and upholstery for furniture and cars. The process takes about three weeks, resulting in a marshmallow-like fiberboard. Vale Textiles projected its material would cost $3 to $5 a square foot, compared to as much as $40 a square foot for cowhide leather. Stephenson cited one company already at work on such production, a California company called MycoWorks. The company raised $125 million in funding in 2022 and, in January 2024, announced that it had “successfully harvested over a thousand sheets of the company’s revolutionary luxury leather-alternative biomaterial.” In an interview, Stephenson described experiments in growing mycelium underway in St. Helens. He said trays of mycelium trays have taken over the living room and kitchen at a partner’s home there. The partner, Kris Oman, for years managed a St. Helens boot factory. He didn’t respond to messages seeking an interview. Stephenson hadn’t formally established his new company with the state when, in early 2024, he courted public officials in Malheur County. Taylor Rembowski, the county’s economic development director, said he reached out to Stephenson after learning he was interested in the shuttered Vale plant. In April, Rembowski took Stephenson to the Malheur County Court. A letter had already been drafted for the signatures of Malheur County Judge Dan Joyce and Commissioners Ron Jacobs and Jim Mendiola. “The alternative leather market is a fast-growing industry with voracious demand. Vale Textiles will initially provide alternative leather to the clothing, furniture and wallpaper markets,” said the county court’s letter. “We encourage you to give the grant funding request from Vale Textiles full consideration.” READ IT: Malheur County Court letter During a 20-minute presentation in April, Stephenson described himself as having a “ranching background” and that Vale Textiles would like to hire “a couple of ranchers to be our spokespeople.” He also said that “we’ve already gotten letters of support from Columbia Sportswear.” The commissioners voted on the spot to endorse the effort, signing the letter as Stephenson watched. State Rep. Mark Owens issued a similar letter on April 11. He hasn’t responded to a request for comment on the letter that wasn’t addressed to anyone but opens: “Re: Grant Application for Vale Textiles.” “I encourage you to give this request from Vale Textiles for grant funding full and fair consideration.” –State Rep. Mark Owens, R-Crane “To start, Vale Textiles estimates a minimum of 72 jobs will be created, with even more jobs added with market growth,” he wrote in his letter. “I encourage you to give this request from Vale Textiles for grant funding full and fair consideration.” The letters from the county and Owens each claimed that Vale Textiles had “strong relationships” with industrial companies – including Columbia Sportswear. Vale Textiles gushed over such support. “We have been overwhelmed with the willingness and encouragement from Malheur County staff and various partners within Malheur County,” the company wrote in December. The Oregon Trail Mushroom plant in Vale may see new life as home to a new industry. The plant, on the city’s east edge, has been unused for about 17 years. (LES ZAITZ/The Enterprise) Vale finances Stephenson publicly revealed the outlines of what he had in mind in early December. He appeared before the Eastern Oregon Border Board on Monday, Dec. 2, making his pitch to get $1 million for Vale Textiles. The board, whose members include Rembowski, can issue grants and loans to support economic development projects in the area. State records show that Stephenson didn’t formally establish Vale Textiles until the Saturday before that board’s meeting. And he submitted its million-dollar application just hours before the border board convened to hear about his project. READ IT: Vale Textiles application “Vale Textiles intends to creatively use the current resources in the county to create a sustainable source of economic development for the future,” the application said. “As Vale Textiles scales to utilize the totality of the facility, a significant labor force will be assembled and maintained.” The opportunity comes “with the hope that future generations can thrive in Malheur County,” the application said. Vale Textiles mapped out phases that would eventually create 72 jobs in producing mycelium leather. There was the promise of even more industry. “Vale Textiles plans to expand within Malheur County with our own textile brands. This could potentially lead to well over 100 extra jobs,” the company said. The application projected that the company’s costs before starting operations would total $2.1 million. The biggest expense shown was $1.65 million for the Vale property. Stephenson wouldn’t discuss the purchase, which was supposed to close at year’s end. He declined to disclose whether his company had that money or financing. The company listed among its other initial costs equipment, website development and $246,000 for five people to engage in “ongoing experimentation.” “We have some personal funds we’re throwing at it,” Stephenson said of the company’s partners. “We obviously are contributing the labor.” The public money is needed to operate the business, according to the company’s submission to the border board. Paying employees, buying supplies and installing more equipment in initial phases through 2025 would take $4.24 million, according to the company’s projection. The company said it hoped to get $3 million from Business Oregon, the state’s economic development agency, $1 million from the Eastern Oregon Border Board and $100,000 from the city of Vale. The company doesn’t list where it would get the remaining funding of $145,000. The $1 million from the border board “will allow Vale Textiles to purchase equipment and retrofit the existing grow rooms in the Vale facility,” the application said. The company said it would provide a $8.7 million “contribution” to the business. Of that, $8.5 million is the value of the property – after its acquired and developed. Vale Textiles listed no cash in its inventory of contributions, instead rounding out the list with everything from a water truck to a $3,500 golf cart. One border board member was skeptical. “I have a concern that self-funding does not truly exist, and cash flow will depend upon on grant funds,” said Ron Haidle, the former chief executive of Malheur Federal Credit Union. He made his remark in an online chat available to the public. Much of the start-up funding listed by the company appears to be based on the future value of anticipated income, he said in a later interview. Haidle said in an online chat remark that such an approach “would not fly on Shark Tank,” referring to a reality television show that features entrepreneurs making business presentations to a panel of investors. The border board deferred a decision until February. State officials say they have yet to see an application from Vale Textiles. And Stephenson said continuing review of the property is delaying the final purchase. Still, he remains committed to his plan. That doesn’t surprise his associates. “He’s an unbelievably passionate guy,” said McGraw. “Whatever he ends up doing with that factory will be a success,” said McHugh, his former mortgage business partner. “If I were a betting man, I’d be betting on him.” Stephenson hopes the people of Malheur County will indeed bet on him. “If people feel like, you know, they feel like they take a chance on me, you know, I feel like I’m willing to take a chance on Malheur County,” he said. Tim Stephenson of Adrian is CEO of Vale Textiles, which plans to retool a shuttered mushroom plant in Vale to make leather-like material. His company is seeking $4 million in public funding. (LES ZAITZ/The Enterprise) This article was originally published by the Malheur Enterprise, which shares ownership with Salem Reporter. Contact Editor Les Zaitz: [email protected] STORY TIP OR IDEA? Send an email to Salem Reporter’s news team: [email protected]. The post Adrian man with troubled financial past seeks millions from public for mushroom leather project appeared first on Salem Reporter.