Posted on Sat, May. 31, 2003

What are the ponds worth?


THE salt pond purchase deal by the city of San Jose (Page 1A, May 20) reminds me of the savings and loan scandals in the 1980s. That fraud led to new appraisal rules that were supposed to protect the public from such abuse again.

Wrong. Once again bogus appraisals deplete the public coffers.

Cities, and all government agencies, are required to uphold the law and must abide by these appraisal standards. Market value appraisals require evidence of market activity, which is the missing ingredient in these appraisals for the mitigation value of the land. Without market evidence and proper analysis, the sky is the limit. This flies in the face of the regulations created to stop appraisal fraud. San Jose must be held accountable.

The city has guaranteed in writing to support Cargill's claim to the IRS that the $13.5 million it paid was a bargain, and it will support the company's request for a tax deduction on the $3.6 million difference. Even the state of California refused to agree to do that when it bought 16,500 acres for $6,000 an acre.

The need nationwide to set aside critical lands is obvious. The question is not whether we should acquire environmental lands, but rather, ``Why should we pay illegitimate prices for vital acquisitions?''

Margaret Lewis


YOUR news coverage takes issue with the appraisals of the Cargill properties that state and federal agencies purchased. Your readers should know that the Wildlife Conservation Board retained Jones, Roach & Caringella, Inc. -- a licensed general appraiser -- to review two separate appraisals of the property: the so-called ``Bailey appraisal'' performed for the federal government, and a second appraisal by Joseph Ainsworth, Esq., Valuation Associates LTD., prepared under contract to Cargill.

This professional review, which recommended the Bailey appraisal as a fully reliable estimate, was itself given further scrutiny in 2001 by the California Department of General Services, Real Estate Services Division, and by the federal government. A further updated analysis by the Department of General Services in May 2002 concluded that the values in the original appraisal had not depreciated and approved the acquisition price of $100 million -- only 40 percent of the closely scrutinized appraised value.

The Wildlife Conservation Board and all the other public agencies involved in the negotiations with Cargill took every possible step to protect the interests of the public. The result, as Gov. Davis said when the proposed deal was announced in 2002, is ``more than just a purchase. It's a commitment to a one-of-a-kind project that will benefit the environment and people of California for generations to come.''

Al Wright

Executive director

Wildlife Conservation Board


© 2003 Mercury News and wire service sources. All Rights Reserved.