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Saturday, May 20, 2000
Deseret News

Edition: All
Page: A01

Trouble over land trades

Deals to save tortoises in S. Utah called
'taxpayer ripoff'
Copyright 2000 Deseret News By Jerry D. Spangler and Donna M. Kemp
Deseret News staff writers

Saving the endangered desert tortoise in Washington County comes with a stiff price:
about $90 million for the land alone.
Or something like $12,500 per tortoise, give or take.It's a price tag that has critics of the
desert tortoise habitat conservation plan crying foul, government investigators probing
alleged violations of federal law, and a Seattle-based watchdog group digging furiously into a
flurry of tortoise-related land deals that made millionaires out of many southern Utahns.
"It is certainly evident there are a lot of people making big money on these trades," said
Janine Blaeloch of the Western Land Exchange Project. "It's also evident the Utah
exchanges are the ultimate example of a taxpayer ripoff."
Blaeloch's accusations are not new. The land exchanges associated with the conservation
plan have been embroiled in controversy for years.
What is new is that investigators with the Department of Interior's Inspector General's
Office and with the Government Accounting Office are conducting separate investigations
into the Washington County land deals and whether federal law regarding land trades
might have been violated.
The probes are extensions of much-larger investigations by those two offices into Las
Vegas-area land deals also related to desert tortoise habitat preservation.
Jack MacDonald, the now-retired former chief appraiser for the Utah office of the Bureau
of Land Management, prompted the Utah investigations with accusations that state and
federal officials conspired to consummate land trades whereby the state and private land
owners received federal assets valued 50 to 100 times greater than the lands they were
giving up. He alleges that appraisals were not done properly, resulting in windfalls for certain
land speculators.
And that, he said, violates a basic principle of land trades: that the values traded be
approximately equal.
Officials with every entity involved in the Washington County conservation plan -- the U.S.
Fish and Wildlife Service, the BLM, state and local government, and conservation groups --
insist the properties were properly appraised and that the exchanges were unquestionably of

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equal value.
"Great efforts have been expended to ensure fair market value for the lands," said Reed
Harris, Utah field director for the U.S. Fish and Wildlife Service. "It is fair market value any
way you slice it."

Tortoise millionaires
With its roughly $90 million real estate price tag, critics like Blaeloch and MacDonald say
the Washington County habitat conservation plan is the ultimate example of waste. In fact,
Blaeloch called the trades the worst of any she's looked at in terms of abuse of the American
taxpayer.
Critics all point a finger of blame at Rep. Jim Hansen, R-Utah, who attached a rider to a
1996 omnibus parks bill that specified that private lands in Washington County being
acquired by the federal government to save the tortoise would be appraised as if they had no
endangered species on them.
That meant property worth a few hundred dollars an acre because it could not be
developed (the Endangered Species Act prohibits the destruction of species habitat) suddenly
became prime Washington County development properties worth up to $20,000 an acre.
The costs associated with the conservation plan soared from the original $6 million price,
MacDonald said.
"A small group of land speculators went to Hansen and said they didn't like it (the deflated
land values because of the endangered tortoises) and said, 'Make us a deal.' And Hansen
was willing to do it for them."
Added Blaeloch, the land deals illustrate "the pitfalls of land-swap proposals that gather
unstoppable momentum despite glaring evidence that it is the profiteer and not the public
who is benefitting."
A total of 34 land deals already completed in the tortoise preserve has resulted in 11 land
owners each reaping more than $1 million in cash and/or land. Those contacted by the
Deseret News all insist they sold their land to the government at prices less than what they
could have made selling it on the open market.
"We were willing sellers only to the point the federal government had our arms twisted
behind our backs telling us we had to sell," said Washington County Commissioner Alan
Gardner, whose family sold 139 acres in the preserve for about $1.8 million.
According to Allen Freemyer, staff director for the House subcommittee on national parks
and public lands chaired by Hansen, the provision on tortoise-related appraisals in
Washington County was attached to the legislation because of Hansen's often-expressed
concern that federal agencies responsible for protecting the desert tortoise were valuing the
private lands for as little as one-tenth of their actual value.
"The congressman has always been concerned that folks get the true fair market value for
their lands, and he believed the way to do that was to evaluate those lands without
consideration of the desert tortoise," he said.
Freemyer was unaware if a similar exemption had been granted before the 1996 rider or
since, but he said the bottom line is it worked to get the southwestern Utah plan to protect
the tortoise up and running.
"It streamlined the process and it got the deal done," he said. "It would have been very
difficult (to implement a habitat conservation plan) with land owners not being willing
participants."
Freemyer said the committee is closely monitoring the two federal investigations, and "we
hope the BLM has done everything aboveboard. Valuation is a matter of opinion, and we
hope they have paid fair market value for those lands."
And to Hansen, who has never expressed fondness for the Endangered Species Act, that

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means fair market value without consideration of endangered species.

Defining market value

"The conspiracy," as critics like to call it, began in 1989 when the desert tortoise was placed
on the endangered species list. With that listing came a litany of restrictions on what would
and would not be allowed on tortoise habitat, which was on prime development lands
around the city of St. George.
Developers who had dreamed of building condos and golf courses were left holding lands
that could not be developed. It was a nice place to live, but it had been zoned "tortoise only."
Washington County realized the potential economic impact if growth were curtailed, and
negotiations were initiated with federal and state authorities, as well as with conservation
groups interested in protecting the tortoise.
The idea was to come up with a plan whereby the government would buy private properties
in one area to protect some desert tortoise habitat in exchange for the remaining lands being
released to development.
The negotiations slowed to a crawl when MacDonald and his team of BLM appraisers
insisted the lands be appraised one way and landowners were adamant they be appraised
another.
According to MacDonald, federal law is specific in directing that the government is
required to pay no more or less than "the agency's approved appraisal of the fair market
value." And it must be appraised in "as is" condition, meaning things that diminish its value,
like the presence of endangered species, must be factored in.
And because of the tortoise, "any credible appraisal of the land in an as-is condition would
have undoubtedly reflected a significantly diminished value," MacDonald wrote to General
Accounting Office investigators.
In other words, the lands the government would purchase were worth a few hundreds
dollars an acre, not the thousands of dollars an acre speculators had once envisioned.
Landowners balked at the lower appraisals, most refusing to even consider selling. The
conservation plan was, for all intents and purposes, dead in the water.
And that's when things got ugly, MacDonald said.
"As a consequence of this potential impasse, and in order to resolve the problem quickly,
certain officials have attempted every conceivable ploy to circumvent standard appraisal and
exchange procedures, from providing misleading guidance to appraisers to outright violation
of existing laws and regulations," MacDonald wrote in a letter to federal investigators.
When MacDonald protested, he and the other BLM appraisers from Utah, who had
conducted appraisals in Washington County for the previous 17 years, were excluded from
the trade negotiations. In fact, they were told not to go anywhere near Washington County,
he said.
The Utah BLM appraisers were replaced by private appraisers, and the new appraisals
were reviewed by experts in Oregon and South Dakota. The Utah BLM appraisers were not
even allowed to see the findings, MacDonald said.
Gardner said it was MacDonald's intransigent attitude toward fair market value that
prompted local land owners to insist that MacDonald and other Utah BLM appraisers be
removed from any involvement in the tortoise land deals. And the BLM acquiesced because
the deals would never have been completed had MacDonald been involved.

White knight or black hat?

The impasse was broken when Hansen attached a rider to the 1996 Omnibus Parks and
Public Lands Management Act that allowed appraisals of lands within the habitat
conservation plan to exclude any impacts caused by the desert tortoise. In other words,

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Congress threw out the "as is" provision of federal law and allowed the deals to proceed as if
there were no endangered tortoises.
It was the first time the government had ever agreed to appraise lands without
consideration of the negative economic impact of endangered species, although it served as a
model for similar provisions added to subsequent endangered species legislation.
Property values, as determined by subsequent appraisals, soared, pushing the total value of
the lands to be traded to $90 million, although MacDonald insists it "is currently estimated
to be in excess of $225 million."
"For the BLM to pay those prices is corrupt, and Jim Hansen is responsible for the
corruption through his legislation," he said. "It is difficult to believe that Congress
understood the impacts of what they were voting for in this case."
"Ironically, not one penny of this is for protection of the tortoise or its habitat, as they are
already protected by the Endangered Species Act," he added.
Regardless, all appraisals since the 1996 Hansen rider -- the BLM says it uses licensed
Washington County appraisers, as well as two appraisers from Salt Lake City, and that all
appraisals are reviewed by lands experts -- have valued the land as prime development
properties.
Critics complain that acquiring property at prices that are many times in excess of federal
definition of fair market value may pacify a few angry landowners and quiet political
opposition to the Endangered Species Act, but taxpayers are carrying the burden.
"The American people are asked to go into these deals blind and trust the few who
hammer out the legislative language that they will protect the public's interest," Blaeloch
said. "Congressman Hansen will be happy to protect the interests of Utah, but he has shown
he cares less about the interest of the American people at large."

Following the law

Caught in the middle are federal agencies, primarily the BLM and the U.S. Fish and
Wildlife Service, that are being accused of waste and mismanagement but are doing nothing
more than complying with the Hansen rider.
And they don't dispute that the appraised values of the lands being acquired have made
many southern Utah landowners rich, at least on paper. But the landowners would have been
rich anyway if they had been allowed to develop the lands now within the conservation
areas.
"These are very valuable lands a stone's throw from St. George," said Randy Massey, the
BLM land expert overseeing trades in Washington County. "We complied with the law; we
had the lands appraised, and we met every legal test."
In some cases, the federal government purchased the lands for prices ranging from
$3,000 to $20,000 an acre. In other cases, the lands were purchased by environmental
land trusts, which will then sell the properties back to the federal government.
In most cases, the landowners were given BLM lands elsewhere. Because of the high value
assigned to the lands being acquired for conservation, the landowners often got two or three
acres of less-developable federal land elsewhere.
"The development potential of the lands we are giving up is considerably farther outside
of town and considerably farther out time-wise," Massey said.
To date, the BLM has acquired through exchange or purchase 4,320 acres of private, state
or local government land within the Habitat Conservation Plan. The value of those lands
has been placed at about $35.5 million.
Still to be completed is a deal for 1,500 acres of private land owned by Environmental
Land Technologies, owned by James Doyle, and a land exchange for about 10,000 acres of
state school trust lands.

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Critics of the deal say the 16,000-acre tortoise preserve is not only a monumental waste of
taxpayer money, but it isn't needed.
"There are 10.5 million acres of desert tortoise habitat. And they want to acquire 16,000
acres in St. George? Tell me, are they really buying habitat or are they buying silence?"
MacDonald said.
The way the deal was done, no one will speak out for American taxpayers, MacDonald
added. The state likes the deal because it gets to trade previously undevelopable trust
lands for developable lands elsewhere. Developers like the deal because it releases all non-
conservation plan lands to development. Environmentalists like it because it has the
appearance of protecting an endangered species.
"And the BLM doesn't care because they are spending your money," he said.

E-mail: spang@desnews.com or donna@desnews.com

Words: 2212
Section: Local

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