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What’s next for Dreyfus estate?

by Christy Chalmers and Sheila Gardner

A spokesman for the U.S. Forest Service says the agency will be taking “particular note” of a report that criticized its handling of a Lake Tahoe land swap.

The report, compiled by the federal Office of the Inspector General, was released Thursday. While it supported what officials had previously said and found no evidence of criminal wrongdoing, it did say “procedural errors” were made during the exchange.

The Forest Service and the Bureau of Land Management helped engineer an exchange of the 47-acre Dreyfus Estate at Zephyr Cove for public land outside of Las Vegas with the private Olympic Group. Questions arose when a house, caretaker’s cottage and other improvements on the Dreyfus land were accounted for in the appraisal price for the property but not included in the exchange. Instead, they were sold to the Park Cattle Co.

The report notes the exchange was the first to involve a private party keeping improvements on land transferred to the Forest Service. It cites “inexperience of the Forest Service and BLM employees in handling such an exchange” and “breakdowns in communications between BLM and the Forest Service” among factors that resulted in omission of language that should have been included in an original warranty deed for the property. The warranty deed details the terms of the transfer.

n Glad report reieased. Linda Massey, spokeswoman for the Forest Service’s Lake Tahoe Basin Management Unit, declined to comment Friday except to say the agency is “glad the report has been released so you can see for yourself what the Office of the Inspector General has been saying for a while.”

Matt Mathes, spokesman for the U.S. Forest Service’s regional office, said Friday he also couldn’t comment on many details of the report because agency officials hadn’t read it, but they want to address the issues it raises.

“We’ll be taking particular note of their comments about inexperience of our employees in a transaction of this magnitude, and we’ll also be looking very closely at the comments about a breakdown in communication between the BLM and the Forest Service,” said Mathes. “The first thing we want to do is sit down with the Office of the Inspector General and make sure we understand fully what they’re saying. What we do next will largely depend on those discussions.”

The estate was valued at $38 million. It includes a main house that overlooks Zephyr Cove, a caretaker’s cottage, a meadow, creek and a sandy beach. The land exchange was the most expensive in Forest Service history.

Mathes said he hasn’t heard rumors that the Forest Service wants to remove the estate buildings. Park Cattle officials said at the time of the exchange they wanted to rent the mansion for conferences, weddings and other special events and expected Forest Service cooperation in securing a special use permit to do it.

The report mentions a “last minute decision by the BLM Nevada State Office to prohibit the removal of the improvements from the Zephyr property” and indicates a BLM official said in April 1997 that the structures “could not be torn down because of the expected public reaction to the government destroying a mansion it had just paid a lot of money to buy.”

The name of that official and several others was removed from the copies of the report supplied to the public.

The report also details a March 1997 conversation between two apparent Forest Service officials in which the fate of the buildings was discussed.

In the conversation, an agreement between Olympic and the Forest Service about the buildings is mentioned, followed by a statement that “(Censored identity) wanted to ensure that the improvements were used for a public benefit rather than the Forest Service subsidizing a ‘glorious summer home.'”

Mathes said Park Cattle is the owner of the buildings, and the agency considers them private property. But the surrounding land, he emphasized, is open to the public.

“It’s just like any piece of land the Forest Service owns,” he said. “The public can use the land.”

n “Sheer madness.” Sen. Richard Bryan, D-Nevada, who provided a copy of the report to The Record-Courier, said it would be “sheer madness” to tear down the buildings.

“It makes no sense to tear down the structure,” Bryan said Thursday. “This is an extraordinary, magnificent building. It was built as a home by someone who had unlimited means to build and furnish their residence. We’re not talking about some structure that is about ready to fall down.”

He said the buildings may need modification for public use, but the dwellings are sound structurally.

“I keep hearing that, ‘Oh, gosh, we’ve got to tear it down.’ In my view, that would be sheer madness,” said Bryan, who has visited the Zephyr Cove estate.

“I think the Forest Service is obligated to work with the purchaser of the property because the purchaser relied on the Forest Service’s assurance to get the special use permits to utilize the buildings,” Bryan said.

County Commissioner Don Miner, an outspoken critic of the investigation, called the incident “a complete overreaction” by the Forest Service.

“The report identifies the failure and inexperience by the Forest Service management and they would like you to believe it was the private sector. I suppose the next thing would be the Forest Service taking the position that the private sector is trespassing on their land. Wouldn’t that be interesting?”

Miner said he would like to see Lake Tahoe Basin Management Unit Supervisor Juan Palma be given the authority to proceed with master planning and developing the Dreyfus estate into the pubic recreation area the Park Cattle Co. envisions.

“We insist on it,” Miner said. “Hopefully, the gag has been removed from his mouth and he will be able to converse freely about it at Thursday’s commission meeting.”

Palma is scheduled to talk to commissioners about a number of issues, including Sen. Diane Feinstein’s bill to pump $300 million into environmental issues at the Lake.

n Any strings? So far, wary commissioners have withheld their support, suspicious of potential bureaucratic strings.

“If he (Palma) is unable to answer specific questions about the bill, the credibility issue will be at stake again,” Miner said. “I don’t imagine the majority of commissioners will support it.”

Commissioners meet at 1:30 p.m. Thursday at the Stateline administration building.