Park closes Dreyfus deal
One of the most expensive land swaps in U.S. Forest Service history increased in price Friday.
The Forest Service purchased the Dreyfus Estate buildings on Tahoe’s east shore from Park Cattle for $575,000; four years after the Forest Service obtained title to the 47 acres of Zephyr Cove real estate that included the Dreyfus buildings.
At a cost to taxpayers of $38 million, the federal government gave a land-brokerage company, Olympic Group, 1,350 acres of public land around Las Vegas in 1997 in exchange for the Zephyr Cove property and structures on it.
Since then, the Dreyfus Estate has been the center of controversial negotiations.
After the land and structures were conveyed to the Forest Service, the agency allowed Olympic Group to sell the structures to Park Cattle, a Minden-based firm with extensive holdings in Douglas County, including Edgewood Tahoe Golf Course.
Park Cattle purchased the 15-year-old mansion and structures two months after the Forest Service should have obtained clear title to them.
But according to a federal investigation report, a Lake Tahoe Basin Management Unit employee promised Olympic the mansion and other structures could be severed from the land deed — a promise the employee didn’t have the power to make.
According to the Office of Inspector General, the Forest Service’s intent was for Olympic to demolish the buildings and sell the property.
Regardless of the intent, Park Cattle purchased the mansion and structures from Olympic for $300,000, two memberships to Edgewood Tahoe Golf Course and seven weeks exclusive use of the mansion annually for 20 years. Park purchased the buildings with the understanding LTBMU would issue the company a special-use permit to operate an exclusive resort.
When the Forest Service denied the permit in January 1998, Park placed “Private” and “No Trespassing” signs on the public lands surrounding the mansion and padlocked the main gate to 11.8 acres of the 47-acre parcel, blocking road access. Park claimed it had exclusive rights to
the driveway leading to the Zephyr Cove improvements and the lakefront.
Park’s claim prompted a federal investigation into the land dealings.
“The Forest Service’s interest in seeking to acquire Zephyr Cove was to broaden public access to Lake Tahoe’s beaches, protect sensitive wildlife species and improve hiking activities by joining separate parcels of land the Forest Service already owned. However, Zephyr Cove currently satisfies none of these interests,” the Office of Inspector General’s audit stated last July. “What was to be a prize acquisition for the Forest Service is instead a fenced-off area with a title encumbered by claims of private ownership, with access by the public restricted by a private operation that has taken constructive possession of the property, and with a total cost to the government ($38 million) that is potentially in excess of twice the actual value of the land when it was conveyed to the Forest Service.”
With that conclusion, the Inspector General recommended the Forest Service regain access and clear title to the Dreyfus Estate buildings by January 2001. The Inspector General also decided the Forest Service should collect a fee for back rent from Park Cattle. The Forest Service’s regional office management estimated Park owed about $450,000 a year for Park’s exclusive use of about six acres of public land surrounding the buildings. The Forest Service concluded the public was out $1.35 million in rent because Park Cattle refused in 1998 to pay the fee based on the land’s fair market value and did not remove buildings the company had no special-use permit to operate.
In the final agreement signed Friday between Park and the Forest Service, Park paid the United States $70,000 in back rent.
Park Cattle President Bruce Park said the company will donate the $505,000 in net proceeds from the settlement to the Boys & Girls Club of Lake Tahoe for construction of the club’s 28,000-square-foot multi-use facility and indoor soccer field.
“When Park Cattle Co., took ownership of these structures, it intended to establish a special and unique facility to be used by Lake Tahoe’s residents and visitors,” Park said. He said the donation is to “ensure Lake Tahoe is doubly benefited by the settlement reached with the United States.”
LTBMU officials did not disclose an intended use for the buildings and land to which the Forest Service finally obtained clear title.
“We are quite pleased that the entire Dreyfus property, both land and structures, now belong to the United States,” said LTBMU Forest Supervisor Maribeth Gustafson. “We look forward to engaging in a public process to determine the best use for the land and the appropriate disposition of these structures in the future.”
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