Secret Dreyfus estate negotiations drawing protests at Tahoe

Wednesday, Oct. 13, 1999 | 10:40 a.m.

"Our purpose is just to get them to let there be public input," says Joyce Nolan, who has been joined by as many as 20 people on weekend protest walks to the Zephyr Cove estate. "Why won't they listen to anyone from the public. That's just not fair."

Nolan and others in her group believe they have something to add to the ongoing talks about the 10,000-square-foot mansion and caretaker's house on 46 acres of lakefront land.

The Douglas County, Nev., resident says she's worried that the mansion and part of the surrounding land will be managed in a way that would restrict public access.

"We think it should be something other than a private corporate retreat," she says. "There are other things that can be done with that land. It's really a beautiful piece of property."

The U.S. Forest Service and Park Cattle Co., which owns much of the land on which Stateline-area casinos stand, have been talking in private for months, revealing little if any information to the public.

In a land swap valued at $38 million, the federal government two years ago gave a land-brokerage company, Olympic Group, public land around Las Vegas in exchange for the 46-acre Zephyr Cove property that had been owned by New York mutual fund tycoon Jack Dreyfus.

The Forest Service wanted the 3,000 feet of sandy beach, a meadow and creek on the property but had no interest in the mansion or other improvements. But an initial plan to demolish them was dropped and the agency allowed Olympic Group to sell them.

Park Cattle Co. bought with the understanding that a special land-use permit would be issued to operate the buildings as a business.

The cost was $300,000, two memberships to pricey Edgewood Tahoe Golf Course which is owned by Park, and seven weeks' exclusive use of the mansion annually for 20 years.

Park Cattle Co.then applied for a special-use permit from the Forest Service, but withdrew after the U.S. Department of Agriculture's Office of the Inspector General began a criminal investigation into the transaction.

The Department of Agriculture earlier this year released the investigative report, which found no criminal wrongdoing. The report says regional offices of the Forest Service and Bureau of Land Management were inexperienced in dealing with land swaps such as the Dreyfus one - the most expensive land exchange in history - and that's the underlying reason for the problems hampering the exchange.

Park Cattle Co. and the Forest Service then began negotiating the future of the mansion. Both parties agreed not to speak about the talks publicly.

"Bear in mind, the negotiations do not involve public land or public buildings. It's standard to have negotiations involving private property in private," says Matt Mathes, press officer for the U.S. Forest Service regional office.

"We realize some people don't like that. But we hope what people realize is the Forest Service has an exceptionally strong interest in doing what's best for the public, and we always have," he adds.

Mathes says Pat Romiero and Phil Bayless, the two regional Forest Service workers involved in the negotiations, are passionate about doing what is best for the public.

"I have never known anyone in the Forest Service in my 21 years that is more dedicated to providing good public access," he said. "Believe me, the public wants these two people on their side."

He adds that negotiations are ongoing and he can't say when an agreement may be reached.

"These things always take time. We just ask the public to be patient," he said. "Our interest has not changed. Our interest is to improve the public's access to the shoreline of Lake Tahoe."

The Zephyr Cove swap is separate from another major exchange involving property on Tahoe's east shore formerly owned by Dreyfus. The other deal involves a 140-acre lakefront parcel near Sand Harbor that includes a medieval-style French chateau known as the Whittell Mansion.