Questions arise on lakefront land deal
August 25, 2005
INCLINE VILLAGE – The veracity of the preliminary valuation of a 3.54-acre parcel of lakefront property west of here, slated to be purchased by the federal government, is being called into question by some who say the property is over-priced.
The land, to be purchased under Round 6 of the Southern Nevada Public Land Management Act for a purported $27 million, has, according to many Incline Village residents, been over-valued by as much as 10 times its worth.
Numbers from the Washoe County Assessors office may show the dissenting public might not be far off.
The parcel, owned by the company of Crystal Bay resident and developer Dale Denio, Tahoe Shoreline Properties LLC, was valued at $2.2 million by the Washoe County Assessors office in 2005 according to its records.
In all, Denio owns some 5.34 acres (1.8 would be kept private) of the stretch of lakefront land.
While the property did receive an 825 Individual Parcel Evaluation System score from Tahoe Regional Planning Agency – a 325 is required to build – the property owner was only issued one building permit by the county, and that was three years ago.
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Although Terra Firma LLC, the Minden-based consulting firm hired to handle any possible transfer of ownership of the property, maintains lakefront properties adjacent to the 3.5-acre parcel are “as steep or steeper and have structures on them,” some feel the parcel is not only unrealistic to build on, but even a bigger stretch for eventual public use.
“If you were thinking, as (Sen. John) Ensign may have been, that the property that they were purchasing was on the order of Burnt Cedar or Ski Beach, it might be worth that kind of money,” said Incline Village resident Maryanne Ingemanson. “For that particular type of property, there’s no way you could get public access down that incredibly steep slope. This is a high-watermark location with boulders.
“I can’t see how (the property) would do the public any good. I don’t see how you’d get the public down there, and there’s no beach if you got down there.”
While other residents agreed mitigating public access to the beach would be next-to-impossible, the act of preserving the parcel was not completely eschewed.
“I think for a lot of people, it’s not an issue of ‘should we retire the land,'” said Incline resident Chuck Otto. “It’s ‘what is the real value?’ If someone could snap it up for four or five million and save it forever, sure – go ahead. But that $27 million number has a lot of people really bothered.”
TRPA spokeswoman Julie Regan said people need to be reminded that the government cannot pay more than fair market value for any parcel they acquire.
“Where we have opportunities to preserve land in Lake Tahoe, we need to be aggressive – to preserve them forever for the greater good,” Regan said. “Over time we’ve been able to bring ownership from private to public. We need to provide access or even vista points. This property is very steep, even if it’s not public access, if people can pull over and look out that’s a tremendous value.”
That the land is currently valued at $27 million was downplayed this week by officials from both Terra Firma LLC and the U.S. Forest Service – officials from the consulting firm said the number was created in part based on current lakefront comps.
“Someone picked the number out of thin air. Though, when you look at the neighborhood, there aren’t any one-acre lakefront lots,” said Jacques Etchegoyhen, a principal at Terra Firma LLC. “When you look in that area, there are (houses on) quarter-acre beachfront that are as steep or steeper that have sold for $7 million. Ninety percent of value in Tahoe is land, not structure.
“We penciled that number in consultation with the Forest Service – it doesn’t mean anything until the actual (deal) is complete.”
Indeed, if SNPLMA funds for the Denio parcel are appropriated by U.S. Secretary of the Interior Gale Norton in November, the process of the true valuation and appraisal of the property begins.
Leslie Morefield, realty specialist for the regional lands adjustment team for the U.S. Forest Service, reiterated no specific funds will be placed or official appraisals made until after the proposed expenditures are signed by secretary Norton.
“There’s no federally approved appraisal now,” Morefield said. “By no means have we based current numbers on a federal appraisal. Federal appraisal comes after, assuming it is approved.”
Terra Firma’s Etchegoyhen also allayed rumors that the value given for the land included an estimate based on enhancements that structures built on the property would bring.
“That’s absolutely false,” he said.
While local agencies have jumped at the chance to associate themselves with the management of the 777-acre Incline Lake property, to be acquired in this same round of SNPLMA funding, some of the same agencies would not be involved in helping run or manage the parcel.
“We’re not taking the lead on this one,” Michelle Poche, Assistant Washoe County Manager said. “We’re taking the lead on Incline Lake (from the management and operations because the forest service has requested assistance). But the only role we have (in the Denio property) is as the assessor in valuing the property for tax purposes.”
In order to acquire the Denio property, Incline Lake and a number of small acquisitions, land improvement and fire-prevention projects, Round 6 Preliminary Recommendation for SNPLMA funds requests a $187 million lump sum this year, the remainder of $300 million guaranteed to Tahoe since the SNPLMA was enacted in 1998.
Developer Denio originally planned to build three “estate” homes and perform a remodel on his current residence before he was approached by TRPA officials and asked to consider submitting his land for sale to the federal government Terra Firma officials said.
These properties would be the first acquired using SNPLMA funds in Washoe County according to county officials. The Ponderosa ranch was also slated for purchase using SNPLMA funds until it was purchased by outright last year by David Duffield.
Public comment is being accepted by the Bureau of Land Management through Sept. 28 at http://www.blm.com.