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Deseret Morning News, Friday, July 19, 2002

Critics blast land-swap deal

They say the appraisals favor Utah, cheat feds

By Donna Kemp Spangler and Jerry D. Spangler

Deseret News staff writers

Critics of a massive land swap in the San Rafael Swell are raising the same concerns they
expressed over two previous land trades: The federal government is being ripped off, while
the state of Utah is making out like a bandit.

"This is federal land, it doesn't just belong to the

people of Utah, and we are losing tens of millions of
dollars," said Janine Blaeloch, director of Western
Land Exchange Project, a Seattle-based watchdog
group.

Blaeloch is referring to a proposal that would allow

Utah to acquire 137,000 acres of federal lands, many
rich in minerals, in exchange for 108,000 acres of
scattered Utah school trust lands. The exchange
removes state parcels from the San Rafael Swell, a
critical step toward the creation of the San Rafael
National Monument that has been proposed by Gov.
Mike Leavitt.
The San Rafael Swell, seen from the
Wedge, is a key element in a land-swap
deal between Utah and the federal
government. Critics are questioning the
methods used to determine the value of the
land in question.
Laura Seitz, Deseret News

The proposal, which has the support of Utah's

congressional leaders, is making its way through Congress. A subcommittee gave approval to
it Thursday, and the House Resources Committee, chaired by Rep. Jim Hansen, R-Utah, will
hold hearings next week.

The bill is expected to pass the House despite the criticisms. Utah's Republican Sens. Bob
Bennett and Orrin Hatch plan to sponsor the legislation in the Senate.

But Western Land Exchange Project and Bureau of Land Management officials hope to
convince lawmakers that the deal is a scam.

"We at least want some member of Congress to stand up and confront this issue," Blaeloch
said.

Issues raised by BLM appraisers and environmentalists are raising concerns among those who
negotiated the complicated land swap that the deal could be killed.

"It could," said John Harja, who negotiated the proposed land trade on behalf of the state. "I

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haven't seen the concerns," he added. "But we intend to look at (them) and prepare a
response."

The primary dispute is over the way the lands were appraised, or rather the fact formal
appraisals were not done at all in some instances.

"I'm not opposed to the land exchange," said Kent Wilkinson, a BLM appraiser who helped
analyze the lands in question for the federal government. "My concerns are with the
appraisals."

In general, Wilkinson's appraisals found the federal land was undervalued, where the state
lands were overvalued. And in one instance, valuable coal reserves were not even added to the
value of federal lands being given up, he said.

"This is being misrepresented in Congress," Wilkinson said. "It's gross misinformation."

Dave Cavanaugh, the BLM's top appraiser in Washington D.C., has also expressed concerns,
and in an internal BLM memo he said the "rationale used in the individual tract appraisals is
being misapplied to the disadvantage of the BLM."

The land swap was negotiated by Harja and Terry Catlin of the BLM's National Land
Exchange Team. According to a white paper defending their approach, the state and BLM
"chose not to engage in the long and costly traditional process of engaging appraisers to
determine value, then trying to reconcile the differing opinions of value."

Using a traditional appraisal approach, the cost could even exceed the value of the lands being
traded, they said.

Instead, they hired outside "real estate valuation consultants" to advise both sides on the
valuations. The consultants found the end result to be approximately equal in value. The lands
given up by the state, they found, were of greater value than the lands given up by the BLM,
hence the greater number of acres transferring to state ownership under the $35.5 million
deal.

Critics say that methodology used to reach market value are bogus, maybe even illegal.

"Federal law mandates that no lands can be leased or sold for less than appraised fair market
value," said former BLM appraiser Jack McDonald, who blew the whistle on questionable
land exchanges in 1998 and 2000 involving hundreds of thousands of acres in Utah's west
desert and in the Grand Staircase-Escalante National Monument.

It would also be illegal if the outside consultants hired to review the evaluation of data
actually adjusted land values. "Regardless of whether they are appraisers or not, it is
absolutely illegal to act as a consultant and appraiser at the same time," McDonald said,
drawing the comparison to the infamous Arthur Anderson accounting/consulting fiasco
regarding Enron.

And what if Harja and Catlin adjusted the values through negotiation? "The law is clear,"
McDonald said. "You have to be licensed and certified to make property valuations on a

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federal project."

E-MAIL: donna@desnews.com; spang@desnews.com

© 2002 Deseret News Publishing Company

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