Stalled swap spreading pain
When Vail Resorts generously made a $2 million, 18 month, non-interest loan to make a high-profile land exchange possible two years ago, the swap had something that virtually everyone liked.
It proposed taking 509 acres of wetlands and pristine forest at Vassar Meadows south of Eagle out of private hands and giving it to the U.S. Forest Service. In return, the Forest Service would give up 480 acres of land west of Avon – north of Interstate 70 – which would become 440 acres of protected open space and 40 acres of affordable housing developed by Vail Resorts.
But over the last two years, Vail Resorts has been unable to develop the site, for a number of reasons, and that has left nearly all participants in the exchange unhappy because the incomplete trade that has tied up money, time and effort.
The swap stasis has prompted a tersely-worded letter from the Forest Service to Vail Resorts, demanding the ski resort giant follow through with the exchange.
“Vail has yet to apply for the affordable-housing zoning on the West Avon parcel or take any other substantive action towards closing this exchange,” wrote Forest Service General Counsel Helena Jones-Siddle “In fact, it is our understanding that Vail is only now even doing site work to evaluate the technical feasibility of the project.
“We are demanding that such agreed-to efforts be undertaken by Vail (Resorts) immediately,” she wrote.
But for the resort company, it’s becoming a bit of a Catch 22.
“We’re remain committed to seeing Vassar Meadows in the hands of the Forest Service,” said Jim Mandel, senior vice president of Vail Resorts Development Company. “It may not look like we’re doing anything, but we are.”
The company has encountered a trio of prickly issues on the 40 acre parcel which are slowing the project down, he said.
The first is access to the property. Simply extending Nottingham Road west won’t work because it would encroach on Interstate 70 and a special permit to do so is not an option, highway officials have said.
The company now is working with a local business to access the parcel by using an existing parking lot. That could prove expensive, Mandel said, because it will require paving additional parking area and building loading docks, requiring construction of a large retaining wall.
“We’ve been negotiating and it’s extremely complicated and extremely expensive,” Mandel said.
A second issue is the site of the affordable housing project contains debris flow left over from heavy runoff and that creates some construction problems. A final issue, perhaps somewhat less problematic because Vail Resorts has significant water rights, is providing water to the site.
“We don’t believe in going fast,” Mandel said. “I don’t think the Forest Service understands that. Saving a few dollars is not as important as saving Vassar. People thought this could be solved the easy way just by extending Nottingham Road.”
The town doesn’t think traffic problems will kill the deal, Avon Town Manager Larry Brooks said.
“We have satisfied ourselves that traffic impacts can be mitigated,” Brooks said. “We have included funding in our 2004 budget.
Like a lunchroom
The ripple effects are enormous for the other participants and have spread to other land exchanges in the county and across the state, most involved have said.
Land exchanges work under approximately the same principle as a lunchroom sandwich swap – each party has something the other wants. Land swaps, however, go far beyond peanut butter, jelly and bread. Like this deal, they tend to be devilishly complicated.
Federal land management agencies typically engage in land swaps to remove isolated private land within federal lands or to protect specific parcels of land from development, as is the case with Vassar Meadows, which was originally eyed as part of the proposed Adam’s Rib ski area that was never developed.
Because the Forest Service is obligated to ensure parcels being exchanged are of equal value, additional small parcels of land and some cash are included in the exchange to cover the difference in appraised value between the parcels.
“This is one of the most significant easements in the county because it’s so good for the community and for the environment,” Cindy Cohagen, executive director of the Eagle Valley Land Trust, said when the deal was announced two years ago this month.
The easement Cohagen referred to is a “conservation easement,” a legal designation that protects land from development.
The glacial pace of this swap has created a situation land exchange experts, such as the Forest Service’s Barry Sheakley, say they haven’t before experienced.
“It’s taking longer than any land exchange I’ve seen in the last 25 years,” Sheakley said. “This is the first time I’ve ever seen this happen.”
His counterpart in the Forest Service’s Regional Office in Denver, Steve Rinella, said “All the parties are ready to close except Vail (Resorts).”
“We have $500,000 in cash that were’ doing our best to hang on to,” Rinella said, adding this land trade is the longest-running swap since he started with the Forest Service in the mid 1980s.
And there are other problems caused by a stalled land exchange. The swap has ended up costing Tom Macy’s nonprofit Conservation Fund cold, hard cash. Macy’s organization protects open space.
He estimates this swap has cost the fund $10,000 per month on interest for the $2 million it had to borrow to purchase the Vassar Meadows parcel to keep it from being developed. Vail Resorts’ non-interest loan has expired.
That’s money, Macy said, that could be used to make other land exchanges happen. But organizations that engage in land exchanges often rely on philanthropy to make trades happen and are reluctant to bite the hand that next year may feed them.
Front door jammed
For Vail Resorts, the inactivity over Vassar Meadows could have repercussions on another land swap the company is pushing to complete in Vail.
It revolves around the redevelopment of the land near the Vista Bahn in a project known as Vail’s Front Door. The $75 million project will require another land swap and this is one that the ski company is pushing to complete.
Vail Resorts needs about 3 acres of Forest Service land at the base of Vail Mountain to build additional residential properties to make the project profitable. In return, the company will give the Forest Service 136 acres on Vail Mountain at South Game Creek and approximately 160 acres on the south side of Arrowhead at Mud Springs.
The Forest Service has said it will not proceed on the Front Door project until Vail Resorts completes the Vassar Meadows exchange.
“Vassar Meadows is our first priority in that valley because of its resource values,” Sheakley said. “Until we can acquire Vassar, we’re not ready to move forward on any other parcels or land exchanges.”
In the Vassar Meadows exchange agreement, the only contractual contingency that could nix the deal is if Avon fails to approve zoning for the parcel in West Avon. That scenario worries swap watchers, but Avon’s town manager said the town is ready when the resort company is.
That still leaves the Sheakley worried about the future of the exchange, he said.
“Our concern is losing Vassar,” he said. “I look at land exchanges as fine crystal. You don’t want to roll it around too much or you’ll break it.”
If the exchange fails to be completed, it is not inconceivable that Vassar Meadows could be acquired by a private developer. But Mandel reiterated that Vail Resorts is committed to saving Vassar Meadows.
“We could have blown this deal out if we had wanted to play games,” he said. “We remain committed. We hope the Forest Service is patient with us.”
Cliff Thompson can be reached at 970-949-0555 x450 or email@example.com
At a glance
U.S. Forest Service parcels given up:
– 480 acres in West Avon; 24 acres abutting the Eagle Vail Golf course; 6 acres adjoining the Sonnenalp golf course driving range in Edwards; 5 acres at the Beard Creek water tank in Edwards; a small parcel in Mountain Star for water storage tanks; and 8 acres in Pitkin County near Norrie, approximately 30 miles east of Basalt.
Land being acquired by the Forest Service:
– 509 acres of Vassar Meadows south of Eagle and up to 130 acres in Eagle-Vail near Battle Mountain High School.
– The Eagle Valley Land Trust is placing a conservation easement on 440 of the 480 acres in West Avon, protecting it from development.
Who pays what:
To equalize the appraised values of the respective parcels being traded:
the Forest Service will pay $556,520; Vail Resorts, $3.4 million; town of Avon, $300,000; and the Eagle Valley Land Trust, $150,000