U.S. Forest Service might tear down Dreyfus buildings | TahoeDailyTribune.com

U.S. Forest Service might tear down Dreyfus buildings

by Sheila Gardner, Tribune News Service

GARDNERVILLE-As recently as 10 days ago, the U.S. Forest Service advised Park Cattle Co. that the federal agency intends to tear down the $3 million, 10,000-square-foot Dreyfus mansion which overlooks Lake Tahoe at Zephyr Cove.

“I had a telephone call 10 days ago that the U.S. Forest Service had made the decision that the buildings will be torn down,” said Reno attorney Gordon DePaoli, representing the Park Cattle Co.

Park Cattle Co. bought the buildings for $3 million from the Olympic Group, a Phoenix-based investment firm. The buildings were purchased for use as a conference center by Park Cattle Co., which also owns the Edgewood Tahoe Country Club and Golf Course.

Olympic sold the buildings to Park at the conclusion of a $38 million land swap, the most expensive in Forest Service history.

“We have to look at what recourse we have, legal or otherwise,” DePaoli said Monday. “We intend to be made whole. They’re (the Forest Service) the ones who made the problem.”

What DePaoli and Park Cattle Co. President Bruce Park don’t understand is why the Forest Service didn’t take title to the buildings when the agency had the opportunity, prior to the sale by the Olympic Group. If the buildings are torn down, Park Cattle Co. will have paid $3 million for nothing.

“The Forest Service had absolute title to this,” DePaoli said. “They could have told us not to be involved at all. It’s a little late in the day now.”

The Park Cattle Co., along with other principals in the land transfer, was the subject of a criminal investigation, details of which were released last week. The report exonerated Park, the Olympic Group which sold the buildings and the USFS and Bureau of Land Management of any criminal wrongdoing.

“I just want people to know we’re not crooks,” said Park who is still mystified at how such a straightforward transaction could end up under investigation by the Office of Inspector General in the federal Department of Agriculture.

“The Park Cattle Co. bought that house with the intention to use it as a supplement to Edgewood,” Park said. “We envision it as a place for weddings, conferences, uses of that type. We bought it with the full knowledge that we would need a USFS permit. We were assured it would be a cakewalk.”

The house with nearly a dozen bedrooms was built in 1984 by wealthy financier Jack Dreyfus. It was rarely used and has been kept up by a caretaker who lives in a residence adjacent to the mansion.

The Forest Service has declined to discuss the investigation. Douglas County officials, who hope to regain property tax revenue if the house returns to private use, are looking for answers Thursday at the county commission meeting.

USFS Lake Tahoe Basin Unit Manager Juan Palma is scheduled to address Douglas County Commissioners at their meeting in Stateline.

Earlier this week, Palma announced that he accepted a promotion to a Bureau of Land Management position in Oregon. A month ago, Palma told commissioners that he was in favor of keeping the Dreyfus estate buildings.

According to the federal investigation, Olympic quitclaimed the improvements to Park Cattle Co. for $300,000 cash, two Edgewood Country Club memberships and seven weeks’ exclusive use of the Zephyr Cove mansion at no cost during each of the next 20 years.

Olympic reported to the IRS that total income from the sale of the improvements to Park was only $300,000, underreporting Olympic’s income from the sale by $2.7 million, according to the OIG report.

“Months after we were assured we would be able to get a special use permit from the Forest Service, we had a meeting in Reno. They told us then there would be no way to get a permit,” Park said.

“We go buy the house, sign all the papers, then the Forest Service says, ‘No, you can’t use it.’ It doesn’t make any sense,” Park added. “We thought this would be a simple transaction. It seemed like a win-win situation for everybody.”

DePaoli said he is at a loss why the Forest Service would want to tear down the mansion.

“I’m just guessing,” he said. “I think they (USFS) feel some mistakes were made and it’s best to just bury them.”

In addition to updates on the Dreyfus exchange, Palma and the commissioners at Thursday’s meeting are supposed to discuss proposed legislation designating the Lake Tahoe area as a scenic and a recreation forest.

Commissioners have withheld their support of the legislation, proposed by U.S. Sen. Dianne Feinstein, D-Calif., because they are concerned too many federal strings may be attached to the $300 million the senator is proposing be pumped into the Tahoe Basin over the next 10 years.

What: Douglas County Commission meeting

When: Thursday, 1:30 p.m.

Where: Douglas County Administration Building, 175 U.S. Highway 50, Stateline

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