LAND-SWAP DEAL UNDER FIRE

Critics say feds are shortchanged in San Rafael plan; Appraisers Say San Rafael Land Swap a
'Rip-Off'

BY BRENT ISRAELSEN

THE SALT LAKE TRIBUNE

Government appraisers and a watchdog group say a proposed $36 million land exchange between
the U.S. Bureau of Land Management (BLM) and the state of Utah is a "rip-off" for the federal
government. The proposal, negotiated after Gov. Mike Leavitt announced in January his desire
for a new national monument in the scenic San Rafael Swell, calls for BLM to deed to Utah
137,000 acres of federal lands rich in minerals and real-estate potential.

The state would give the federal government 108,000 acres of Utah's school-trust lands that are
difficult for the state to manage because they are scattered within large federally owned blocks.
While negotiators on both sides of the deal touted their lands as being of "approximately equal
value," BLM appraisers and a Seattle-based group that specializes in scrutinizing federal land
transactions say the San Rafael exchange heavily favors the state of Utah.

"Everybody knows that the appraisals were really messed with," said Janine Blaeloch, director of
the Western Land Exchange Project. If true, Utah would be getting a huge federal handout at the
expense of U.S. taxpayers. John Harja, who negotiated the proposed land trade on behalf of the
state, defended the proposal, saying it would be a fair trade based on a "businesslike"
reconciliation of disputed land values and compromises between the state and federal
governments. Blaeloch's group is trying to derail or at least change the proposed San Rafael land
deal, which is working its way through Congress in the form of a bill sponsored by Reps. Chris
Cannon, R-Utah, and Jim Matheson, D-Utah.

The bill, HR4968, has the backing of Leavitt and the BLM, which is headed by Kathleen Clarke,
a former Leavitt cabinet member. On Thursday, the bill passed a House subcommittee and is
expected to be considered next week by the Resources Committee, chaired by Utah Republican
Rep. Jim Hansen. Some critics of the measure say the trade appears to be an example of politics
trumping propriety to benefit a state well connected to the Bush administration.

"To me, it looks like someone is pulling a fast one. . . . This is a rip-off," said Jack McDonald,
former chief appraiser in the BLM's Utah office who retired in 1999 after complaining about a
pair of similar land exchanges around the state. Several Democrats on Thursday expressed
concern about apparent inequities in the proposed exchange. Cannon said he would try to resolve
those concerns, noting he wants this exchange to be a model for future such deals in Utah.

The problem with the San Rafael exchange, its critics say, is that the federal lands were generally
undervalued, while the state lands were overvalued. "Calling this an equal-value exchange is a lie.
There's no other way to characterize it," said Kent Wilkinson, a 25-year veteran BLM appraiser
who helped analyze the lands in question for the federal government.

Harja scoffed at any suggestion the trade is not equal. "No question I dispute that statement
totally." But Wilkinson said the negotiators of the land exchange -- Terry Catlin for the BLM
and Harja for the state -- often lowered the values of the federal lands and, in some cases,
completely disregarded their mineral values.
For example, in their "white paper" prepared to defend the exchange, Catlin and Harja note that
certain parcels of federal land in Emery County have "nominal mineral value." Wilkinson's
appraisal found otherwise. "The [Emery County] parcels have been characterized by the [BLM
minerals experts] as having a high likelihood of significant mineral-related demand and value
because of their proximity . . . to the North Horn coal reserves," Wilkinson wrote in his appraisal.
Harja said those federal parcels near the coal reserves are not intended to be exploited for their
mineral value but to provide access to state-owned lands within the coal reserves.

BLM appraisers also complained about how Harja and Catlin negotiated the values of 1,119 acres
of federal land at Anderson Junction, the Interstate 15 exit to Toquerville. The federal appraisers
valued the land at an average $5,973 per acre. The Utah School and Institutional Trust Lands
Administration (SITLA), which oversees the school trust lands, valued the lands at
"approximately $4,000 per acre," according to the white paper. So the negotiators on the state-
federal exchange team "reconciled" the figure to $4,500. The reconciled figure represents a loss
of about $1.6 million to the federal government in land value.

Conversely, the value of state lands was often hyped, said Wilkinson. In the San Rafael Swell,
where the state owns 102,000 acres of school-trust lands, SITLA employees, who are not
professional appraisers, valued the school trust lands at more than $21 million -- more than
double the $10 million value assigned to the San Rafael lands by the more-experienced BLM
appraisers. The wide discrepancy between the SITLA and BLM appraisals was later reconciled to
$14 million. That figure still represents a $4 million gift to the state from the federal government,
said Wilkinson.

Harja disagreed, noting that appraisals are not the only means for valuing land, especially with
tens of thousands of acres in question." For [BLM appraisers] to say SITLA was off-base is not a
valid criticism. All viewpoints were looked at and everyone had their say."

In another alleged inequity, trust lands parcels proposed to be traded to the federal government
inside the desert tortoise preserve near St. George were valued individually, rather than as a
block, thereby inflating their value. By contrast, federal lands in the Uintah Basin were valued as
a block. All told, Wilkinson said a true valuation of the lands would show that the federal
government is giving up tens of millions of dollars.

The problems in the white paper prepared by Catlin and Harja have prompted other BLM
appraisers to complain, including Wilkinson's boss, Richard Rawson, and Dave Cavanaugh, chief
appraiser in BLM's Washington office. They also criticized the report of a pair of "independent
consultants" hired by SITLA to review the proposed land exchange.

Rawson said he hoped to meet with Catlin sometime next week "to iron out differences that we
have." McDonald, who has read the white paper and spoken with his former colleagues, derided
the proposed San Rafael land trade as one in a string of bad deals. He said two previous state-
federal land exchanges -- one in 1998 and another in 2000 -- resulted in a $1 billion windfall
for the state of Utah. “It’s such a joke," said McDonald from his northern Wyoming home. "It's
criminal and ridiculous but nobody will do anything about it."

What's ridiculous, countered Harja, is trying to do large-scale land exchanges the old way, relying
only on appraisals, which are costly and do not tell the whole story of land valuations. The goal in
the San Rafael land trade is for SITLA to receive lands it can use to boost the permanent school
endowment. For the government, the goal was to receive scattered school-trust lands, particularly
within the San Rafael region, that are a management headache.Said Harja, "We reconciled values
in a businesslike manner that was an intelligent, efficient way to accomplish these means."