Land trade valuations complex, secretive

Chihuahua trade parcels ‘in the ballpark,’ Forest Service says

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BY BOB BERWYN
summit daily news
Summit County, Co Colorado
April 22, 2008

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SUMMIT COUNTY — After taking a first round of public comments on the pending Snake River land trade, the U.S. Forest Service says a draft study on the swap could be released to the public in early May.

The trade involves a private 42-acre inholding along Peru Creek and three parcels of national forest land that would go into non-federal ownership, including a 21-acre tract near the River Run gondola zoned for 24 single family homes, and 52 acres of national forest land near Breckenridge.

The draft study will include information on environmental conditions and cultural resources on the lands to be traded. But it won’t give much detail on the value of the lands to be traded.

Even though the deal involves trading away more than 70 acres of publicly owned land in return for the 42-acre private parcel, the Forest Service won’t release the financial particulars until the agency has made a final decision on the exchange.
In the Snake River land exchange, the Forest Service is putting three tracts into the pot:

• A 21-acre parcel near the base of the River Run gondola at Keystone zoned for development of single family homes;

• and two parcels totaling 52 acres near Breckenridge.

Releasing information on the appraised values of the parcels too early in the trade process could skew the values and subject them to speculation, Forest Service officials have said.

Federal regulations require the lands to be traded to be of equal value, give or take 25 percent. The rules also say that stakeholders in the trade can throw some cash into the pot to even out the deal. The appraisals are to be based on the potential best and highest uses for the land. The Forest Service is also supposed to look at recent land purchases in the same area to gage what the parcels are worth.

Recent Summit County open space purchases in the Snake River Basin show that five acre mining claims have sold for about $5,000. Another 7.8-acre chunk of land in the Peru Creek headwaters, not far from Chihuahua, sold for $9,825 in 2004.

The wild card in the Chihuahua deal is that the inholding was platted as a mining town with 490 lots in the late 1800s. Nobody is sure what the legal status of that plat is. Neither Summit County nor the Forest Service are willing to test the plat in court.

Early consensus
Based on the initial round of public comments, there is some consensus in the community that the public will benefit from the acquiring the Chihuahua land and keeping it development-free. But the secrecy surrounding the value of the land is frustrating for some citizens and watchdog groups, who don’t understand how the remote private backcountry inholding could be worth as much — or more — than the three publicly owned parcels.

But in order to accept the trade proposal and begin the formal evaluation process, the Forest Service had to determine that the relative values of the land were in the same ballpark, according to Dillon Ranger District land specialist Paul Semmer.

That finding was based on a land valuation consultation, Semmer said. The value of the Chihuahua parcel was determined by a private Denver-based consultant hired by Gary Miller, a Keystone-area developer who owns the inholding and wants to acquire the federal parcel at River Run for development. Semmer said it’s standard for a land trade proponent to pay for the early appraisal.

The value of the River Run parcel is in part determined by the county’s preliminary zoning approval for 24 single family slopeside homes. Final approval for that development is dependent on completion of the trade. By conservative estimates, the River Run land could be worth tens of millions of dollars, based on what ski-in, ski-out homes are selling for at Keystone right now.

The two national forest parcels near Breckenridge were appraised by the town, which wants to keep one of the tracts for open space and use part of the other for affordable housing.

Semmer said Breckenridge likely hired an appraiser to look at the tracts, asking what they would be worth if the town simply wanted to buy them outright on the open market.

Those initial valuations of the properties won’t be in play during the next phase of the swap.

“The slate will be wiped clean,” Semmer said, explaining that the next round of appraisals will be done according to strict federal rules issued by the regional Forest Service office.

But the agency still won’t release the preliminary financial information, claiming that those details need to remain confidential.

A Seattle-based public interest group that specializes in monitoring land trades has said that the Forest Service can’t maintain its claim of confidentiality if the appraisals have been reviewed by anyone outside the agency, including the proponent or the private company that is facilitating the trade, said Chris Krupp, an attorney with the Western Lands Project.

But Krupp wasn’t sure if that exception applies to the preliminary valuation consultation documents.

The bottom line is that, although the proponents of the trade claim that the public will benefit from the swap — especially the acquisition of the Chihuahua parcel — a key part of the process is completely un-transparent to citizens.

Not knowing the dollar value of the various parcels makes it hard for the public to comment on the trade in a meaningful way, Krupp said.

Bob Berwyn can be reached at (970) 331-5996, or at bberwyn@summitdaily.com.