Ranchers paid for Whites Peak land swap appraisals

Deputy Attorney General Albert Lama warns the State Land Office: We have serious concerns about the propriety of the disposition of state trust lands ... The appraisal lacks sufficient data to support its conclusion.

By Peter St. Cyr

The state’s attorney general’s office, which has been investigating a series of proposed land exchanges, in the Whites Peak area, between private ranchers and the NM State Land Office, has notified Land Commissioner Patrick Lyons that it has found “significant defects” in the land appraisals being used to support the swaps.

In this letter (written just two days before Christmas), Chief Deputy Attorney General Albert Lama requests none of the land deals proceed until “we can verify that adequate appraisals have been done.”

Quoting the Enabling Act, which governs the management and disposition of New Mexico State Trust Lands, Lama points out that the lands must “be appraised at their true value prior to any sale or disposition,” and that after consultation with an independent appraiser the attorney general’s office has identified problems which “appear to run afoul of the Uniform Standard of Appraisal Practice,” including assumptions the land office’s appraiser made.

And the state land office now admits the appraisals done by John T. Widdoss, for the land office, were paid for by the ranchers who are submitting bids, but would not say that alone is a conflict.

Lama indicates the AG’s independent appraiser has determined Widdoss’ “key” assumptions “lacks any substantiation,” and so on “this basis alone, the appraisal lacks sufficient data to support its conclusion.”

Under the proposed Express UU Bar Ranches, LLC swap, which the independent appraiser uses as his example, the ranch would receive New Mexico trust land appraised at nearly $5.5 million, which is more than twice the $2.4 million appraised value of the land the ranch would turn over to the state.

Additionally, Lama wrote “the revenue-generating potential of the property the state would receive may be significantly less than the revenue-generating potential of the land the state is offering.”

But Lyons disagrees. In fact, he wrote a letter to sportsmen, in November, stating the private acreage involved in the exchange "may be fewer in number, but they have a higher appraised value and a higher earning potential than the current trust land."

"In the interest of earning the highest possible revenue for the trust this exchange is highly advantageous," Lyons wrote. "It will consolidate trust land holdings to one large parcel of land rather than a checkerboard of holdings dispersed with private land. This will be more manageable than dispersed land and more profitable as a larger piece has more applicable uses. This exchange will improve land management capabilities for a healthy and productive ecosystem that not only improves hunting opportunities, but the overall health and vigor of the forest."

‘This is more of a sale than it is a swap’

In his letter, Lama indicates the land swap transaction is more like “a hybrid of a sale and exchange, though the majority of this transaction would be a sale."

“If this is the case, we have serious concerns about the propriety of the disposition of state trust lands in this manner,” Lama wrote.

And it’s the “additional cash bonus” being offered by UU Bar’s owners that has raised the ire of State Rep. Brian Egolf, D-Santa Fe, who said that “raises serious concerns about the propriety of the disposition of State Trust Lands in this manner.”

“More than half of the value is being paid by UU Bar in cash, which means this is more of a sale than it is a swap, and the procedures that are required for a land sale were not followed,” Egolf said.

While the land office did not respond to our inquiries about the letter or John T. Widdoss’ appraisals, it’s chief counsel Robert Stranahan told the Associated Press he’s “happy to stand behind his work,” and said “some concerns were misunderstandings of the process.”

“At the end of the day, the appraised value we are getting is more than we are giving up,” he told the AP.

Stranahan said a meeting is scheduled for next Thursday to discuss the appraisals.

While the state land office did not return our request for an interview, we did receive a statement from Gov. Bill Richardson who has consistently stated he does not want the deals to be closed.

“With all of the unanswered questions about the proposed White’s Peak land swaps, the State Land Office should not close the deals,” Richardson is quoted. “I remain very concerned about the potential loss of prime public hunting and other outdoor opportunities as well as the secretive process used to determine the terms and comparable valuation of the exchange.”

Egolf, who requested both the attorney general and state auditor, investigate the land swaps, says Lama’s letter is a good first step.

“Hopefully the next step the land commissioner takes is to suspend these transactions until the attorney general and the legislature are satisfied that the transactions are in the best interest of the beneficiaries,” Egolf said.

The state auditor is expected to provide the results of his office’s investigation before the start of the legislative session on January 19th.

Gov. Bill Richardson expressed concern last month, saying the plan “would mean a net loss to the state of almost 4,000 acres of alpine meadows and pristine forest.” At the time Richardson said he’d heard from citizens, state lawmakers and New Mexico’s congressional delegation about the deal.

Egolf said he hopes the attorney general is able to persuade the land commissioner “to do the right thing” and “suspend these deals.”

“Let’s make sure all the parties, including the attorney general and the legislature have a chance to really understand what this deal is all about, to make sure that its being done properly, and to make sure it’s the best interests of the beneficiaries of the state trust,” Egolf said.

State Trust Land Access vs Hunting Opportunities

Just before Thanksgiving, two weeks before the first bid was accepted from Stanley Ranches, Lyons told 770KKOB News that the land swap includes four different exchanges, and said his detractors shouldn’t analyze just one. He insisted the four deals need to be looked at as a group.

“One thing, it’s been very controversial area for about 50 years because it’s all checker-boarded,” Lyons said. “It has private land mingled in with state land, and state land mingled in with private land. So it’s always been a contention of private property rights versus access.”

Lyons has said the exchanges in the White Peak area would reduce conflicts among landowners, sportsmen and the state by better consolidating trust land and cited cited trespassing and vandalism as a reason it’s working with ranchers on the exchange.

That has sportsmen groups and the NM Wildlife Federation “outraged,” and the NMWF is asking its supporters to write letters to Lyons urging him to stop the deals because “they clearly hurt hunting deals.”

“They also will be bad for the public at large and for public schools that earn income from state lands,” the NMWF website states. “The State Land Office has repeatedly said the trades are necessary to resolve conflicts between the public and private landowners in the Whites Peak area, but has never said how the trade will benefit public education, which is its primary mission.”

NMWF claims the public will lose some 3,700 acres of state trust land if the first two trades go through.

“Even worse for sportsmen, the lands lost are much higher quality in habitat, featuring ponderosa pines, small lakes and streams and abundant wildlife,” the website claims. ”A substantial portion of the lands the state would receive in return from these trades would be in a single parcel of treeless grazing land strung out along State Highway 120.”

Lyons said after the deal is completed, “it’s going to be continuous acres of 25,000 acres on one side and 18,000 acres on the other side with the state land being in the middle — and that way we’ll know where the definite boundaries are.”

Last May, Lyons announced that he’ll run for a seat on the Public Regulation Commission next year, when term limits oust him from his current job at the State Land Office.

Is NM Land Office making deals behind closed doors?

Rep. Brian Egolf
by Peter St. Cyr

Tuesday is the the final day to submit a bid at the State Land Office to acquire thousands of state land near Whites Peak in Northern New Mexico.

“We’re losing 4,000 acres of prime hunting and fishing land in exchange for scrub brush along a desolate highway,” State Rep. Brian Egolf (D-Santa Fe) said. “It’s not a fair trade to give up timber, wooded areas and incredible water resources on the mesa top. It doesn’t make any sense to me.”

The first-term representative believes the only way to stop a deal planned by New Mexico State Land Commissioner Pat Lyons and two private ranchers is for the state public schools (which are the beneficiaries of state lands) to file a lawsuit.

Egolf told us he believes the deal between Express UU Bar Ranches, LLC, Stanley Ranches, and the state land office has been in the works for months, if not years.

So on Friday, Egolf grilled Lyons, at a Legislative Finance Committee hearing in Santa Fe, about the land office’s plan with the ranchers.

“There has been no public process up to this point,” Egolf said. “It has all been done behind closed doors which is the opposite of the way we need to be doing things with our public lands.”

Land Commissioner Pat Lyons

A complicated deal defines boundaries

Lyons told 770KKOB News that the land swap includes four different exchanges and his detractors shouldn’t analyze just one. He insists the four land swaps need to be looked at as a group.

“It’s been very controversial area for about 50 years because it’s all checker boarded,” Lyons said. “It has private land mingled in with state land, and state land mingled in with private land. So it’s always been a contention of private property rights versus access.”

The land commissioner said after the deal is completed “it’s going to be continuous acres of 25,000 acres on one side and 18,000 acres on the other side with the state land being in the middle and that way we’ll know where the definite boundaries are.”

Still, Egolf wants to know how the deal helps public school children. At the hearing, Egolf asked Lyons to provide the benefits.

“I’m very sad to say that I learned that he can present no justification whatsoever for doing this land transfer,” Egolf said. “I asked him explicitly -- ‘how does this land transfer benefit the school children of the State of New Mexico?’ -- and he couldn’t answer the question.”

But, Lyons is defending the deal, which he said has been advertised, as required by law, for 10-days.

“The state trust always has to receive benefits,” Lyons said. “We make at least 10%. We only exchange surface for surface. We always keep our subsurface, because we don’t know what the value of the mineral is underneath there. ”

The land commissioner, who is term-limited, and is not running for re-election in 2010, also insists the land office benefits on the appraised value of each exchange.

Is the deal really a win-win?

“The major thing about it is we’re going to improve the wildlife habitat so much up there. And it’s going to improve the quality of the hunting up there,” Lyons said. “We’re going to close some roads that are eroded that aren’t good for the environment. At the same time we’re going to try to get one good all-weather road in there for all familes to have access. It’s a win-win situation.”

But it’s hunting and fishing that have Gov. Bill Richardson and Egolf concerned. They fear once fences and gates are put up the ranchers will be “in a great position to open private hunting camp with pristine land.”

“Once its private land the regular folks can’t hunt on it anymore, because it’s not public property, so UU Bar and Stanley Ranches will be able to fence this land off and keep people out,” Egolf said. “People from the North who traditionally have used this as prime hunting and fishing land they’re not going to be able to go there anymore. White Peaks is not some anonymous random piece of property. This is an important area culturally for the Northern part of the state.”

The issue of access began to emerged six years ago when the ranchers from Oklahoma put up a barrier — which prevented sportsman from crossing through the ranch on a public road to access the state lands.

After litigation in 2003, the New Mexico Supreme Court ruled against UU Bar and the road was reopened.

“You take land people have enjoyed for generations and because one person decides it’s a good idea it’s going to be gone forever,” Egolf said. “The governor and legislature can’t do things like that. We’ve got constituents to answer to and we’ve got public meeting requirements and all these things to make sure that there’s huge amount of public input to every decision we make. At the land office it’s the opposite. They’re doing everything they can to keep it secret.”

Lyons claims nothing was done in secret and said public comment remains open until 4pm on Tuesday.

“The bid process closes Tuesday for one of the first part of the exchange. The second one is on December 8th, and the third and fourth haven’t been advertised yet, so we don’t even have a bid in the office yet," Lyons said. "They don’t even come in until the last day. When the come in we’ll evaluate all of them and see what’s in the best interest of the trust and then we’ll go from there.”

More public hearings proposed for land deals

But Egolf, who couldn’t find any maps on the land office’s website finally received maps and other documents after filing an inspection of public records request, doesn’t believe the process has been open at all.

In fact, he believes the land office “wanted as little attention as possible because they know that this is a bad deal for New Mexico.”

“You would expect if that’s true they wouldn’t know every inch of property that they are swapping for because they haven’t received a bid yet, but they have this map that is incredibly detailed that shows not only all the land the state land office has put up, it also shows all the land they are anticipating getting and each parcel that they expect to get has been appraised and measured. So how do they know what’s coming if they haven’t gotten the bid yet?” Egolf asked.

Now Egolf is proposing more oversight, review and public hearings on state land exchanges.

“The State Land office is the most powerful office you’ve never heard of,” Egolf said. “He’s got no oversight, no review, and no public process. So as long as he publishes a notice in a newspaper that he wants to dispose of this property he can sell it to anybody he wants to for any price that he thinks is appropriate. He doesn’t have to show any analysis about what makes this a good deal for the school kids of New Mexico.”

Egolf said he’s considering introducing legislation to make future land deals follow the same open meeting rules that the government agencies and the legislature follow.

“I will be pursuing legislation to require that these land swaps and distributions and distributions of public land be done after public hearings and after a proper analysis of the economics of these kinds of swaps,” Egolf said. “I believe everything can be done through legislation. I don’t think you need a change in the constitution to add to some oversight to the process.”

For now, Egolf believes the only way to stop the proposed land deal is to file suit.

“Public scrutiny is critical in this process. He [Lyons] needs to understand that people are paying attention,” Egolf said. “hopefully we won’t have these kinds of bad deals done in the future.”