Public will get day at beach - somewhere

Monday, Jan. 31, 2000 | 1:56 a.m.

The Forest Service got the land in a controversial swap - and is in the middle of a closed-door deal that could result in a new swap for other beach property on the Nevada side of the lake.

"The public should realize the land the public ends up with may not be land at the estate," said Matt Mathes, spokesman for the Pacific Southwest Region of the U.S. Forest Service. "If we do wind up with public beach access elsewhere, it will be equal or better."

The future of the 10,000-square-foot Dreyfus mansion and surrounding land, including 3,000 feet of sandy beach, has been uncertain for more than two years. The Forest Service now owns 46 lakefront acres and Park Cattle Co. owns the mansion, caretaker's cottage and driveways on the property.

Park Cattle submitted a proposal to the Forest Service in late December, and the federal agency likely will respond within a few weeks. Mathes wouldn't divulge details.

"The letter made it seem like we're heading in the right direction. We will be responding soon, possibly next week," Mathes said. "We are cautiously optimistic, with emphasis on the word optimistic."

In 1997, the Dreyfus estate was the subject of one of the most expensive land exchanges in Forest Service history. The swap, valued at $38 million, gave a land-brokerage company, Olympic Group, valuable public land around Las Vegas in exchange for the Zephyr Cove property once owned by New York mutual fund tycoon Jack Dreyfus.

The Forest Service wanted the beach, a meadow and creek on the property but not the mansion or other improvements, and let Olympic Group sell them. Park Cattle Co. bought thinking it would get a special use permit to operate the buildings as a business.

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

Park Cattle applied for a special-use permit, but withdrew after the U.S. Department of Agriculture's inspector general began a criminal investigation.

The agency last year found no criminal wrongdoing, but said regional offices of the Forest Service and Bureau of Land Management were inexperienced in such land deals, and that's the underlying reason for the problems hampering the exchange.

The Zephyr Cove swap is separate from another major exchange that also involved land on Tahoe's east shore formerly owned by Dreyfus.

The other deal involved a 140-acre estate near Sand Harbor that includes the old Whittell mansion, a medieval-style French chateau. The University of Nevada-Reno ended up with the chateau and other improvements, and the Forest Service now has most of that land.