Baca Ranch Sale Article Series

by David Nicholas


The Crestone Eagle, June 2002:

Baca Ranch sale overcoming hurdles

by David Nicholas

A last-minute attempt to throw more hurdles in the way of the sale of the Baca Ranch to The Nature Conservancy (TNC) was rebuffed by lawmakers and ultimately withdrawn by its author in the Colorado House of Representatives, Monday, May 6.

Rep. Mark Paschall (R-Arvada) introduced legislation that would have blocked the State Land Board’s $5 million investment in the Baca Ranch, seen as a crucial piece in the process of adding the 100,000-acre Baca to the Great Sand Dunes National Monument.

Once the Baca has been purchased and turned over to the National Park Service, Great Sand Dunes will earn designation as Great Sand Dunes National Park.

“It sounds like a land speculation deal to me,” Paschall is quoted as saying when he introduced the bill, at the request of lobbyist Jim Brandon, who has been involved with Baca Ranch operating partner Gary Boyce and his attempted water speculation deals in the past.

Basically, HB 1466 would have thrown up more environmental analysis requirements and other hurdles in an attempt to delay, or possibly, torpedo the State Land Board’s investment in the Baca.

“It’s just a smokescreen to try and delay the park,” Entz said. While Paschall was the bill’s sponsor, Entz said he’s “kind of a scapegoat,” who was actually carrying the bill at the behest of Brandon and Boyce. “He’s (Paschall) taken the lead for Gary Boyce and Jim Brandon.”

By waiting until the last week of the session to introduce the bill, it was apparent that Paschall believed it would be pencil-whipped through the process, along with a plethora of other last-minute legislation.

Entz and Rep. Jim Snook (R-Alamosa) were on their toes and saw the bill for exactly what it was. “They tried to pull a fast one us on, and we rolled them pretty hard,” Entz said.

The Land Board is estimated to incur at least that much in legal expenses in order to back out of its contract with TNC. Snook stressed that fact in the House and came up with at least 44 representatives who were prepared to vote against Paschall’s measure, causing Paschall to withdraw his bill, realizing it was not going anywhere. And State Attorney General Ken Salazar also opposed the measure, saying it would illegally impair a contract.

Farallon Management Services, the ranch’s majority owners in San Francisco, are prepared to sell the Baca over the objections of Boyce. Aiding TNC is the State Land Board, among other groups. Once the ranch is purchased and the title cleared, TNC will sell the property to the National Park Service for inclusion in Great Sand Dunes National Park.

Court OKs foreclosure
In a move, which was expected since the agreement to sell the ranch was signed in late February, Farallon Management Services’ holding company, which represents its interest in the Baca ranch, Vaca Partners, foreclosed on the Cabeza de Vaca Land and Cattle Company. The order to foreclose was approved on May 9 in Saguache District Court by Judge Robert Ogburn.

The move detaches the ranch from claims by Cabeza partner, Peter Hornick, and American Water Development, Inc (AWDI), which are yet to be heard in Federal District Court in Denver. And it was no surprise that Hornick opposed the action, claiming that no foreclosure could be taken until all legal issues surrounding the property have been cleared.

Under the agreement for selling the ranch, signed in February, The Nature Conservancy is holding the Baca Ranch in trust until claims to the property are cleared and the ranch can become part of the proposed Great Sand Dunes National Park. However, administration of the property will be through the State Land Board, who loaned $5 million towards the sale, until the ranch formerly transfers to the federal Government in 3-5 years.

The reason cited for the foreclosure order by Vaca Partners stated, “There is litigation pending in State and Federal Court regarding the various issues involving American Water Development, Inc. and Hornick (both of whom oppose the plan to create a National Park). As a result of that litigation, Cabeza and Vaca Partners agreed with TNC that, as a fall back position, in the event of a foreclosure by Vaca, TNC would purchase the ranch from Vaca Partners rather than Cabeza. This permits the sale to go forward so that the National Park can be created while the claims of the various parties are resolved in orderly fashion in other litigation.”

The public trustee, who is Saguache County Treasurer, Connie Trujillo, has set a May 30 sale date for the ranch. The process of foreclosure requires that the sale will have to be advertised, and bids taken. If a higher bid is received, Cabeza, as current titleholder, retains a redemption right. If anyone comes in with a higher bid on the property, Cabeza will be able to match that bid and retain the property. Anyone submitting a bid must have cash on-hand on the date of the sale, or his or her bid is rejected. Once the sale is closed, the debtor has a period of time, about 180 days, to match the sale price and redeem the property.

At time of writing, there have been no inquiries.


The Crestone Eagle, October 2002:

Baca Ranch acquisition moves toward completion

by David Nicholas

In the unlikely event that some bidder appears out of the blue to top Vaca Partners bid of approximately $34 million, the foreclosure sale of the Baca Ranch should be completed on November 30. Vaca Partners will then take control of the ranch from Cabeza de Vaca Land and Cattle Company, the firm set up to create and operate a water exportation plan. Under the terms of the foreclosure sale, there was a 180-day period before acceptance of the deal could be finalized.

The Baca Ranch is one of the integral parts for the creation of the Great Sand Dunes National Park and Preserve. This inclusion of the ranch in the Park removes the property as a target for private water development.

Finalization of the foreclosure means that the sale of the Baca Ranch by Vaca Partners to The Nature Conservancy (TNC) can proceed. If all goes well, completion of the deal should take place by April 30, 2003. Two lawsuits by former partners of Cabeza de Vaca are still obstacles and will need to be resolved before the deal is completed. However, all parties are optimistic that the lawsuits will be resolved before then.

The Nature Conservancy financed the $31.28 million purchase price through a series of loans from non-profit foundations and private donors ($16.1 million), a loan from the state lands board ($5 million), and partial funding from the Federal Government ($10.2 million).

The Colorado State Land Board
The mission of the Colorado State Land Board (CSLB) is to “manage the assets entrusted to our care (granted by the Federal Government when Colorado became a state in 1876) for our beneficiaries by producing a reasonable and consistent income with the long term protection of economic values, while providing environmental stewardship to ensure the conservation of natural resources.” What all that means is that the Board can issue grazing, farming, recreational and mining leases on these lands.

20,000 acres of State Trust Lands, as they are called, border the southwest corner of the ranch, and these will be incorporated also into the federal acquisition under the National Park legislation. In mid-2000, Lexam Exploration, which holds the mining rights on the Baca Ranch, applied to the Board to drill natural gas exploration wells on the adjacent lands. The National Park Service objected and Lexam withdrew the application before a decision could be made.

The CSLB did lease these lands to Cabeza de Vaca partner Gary Boyce, when he and his partners acquired the Baca Ranch in 1995, and as such were included as part of the Baca Ranch in the National Park legislation.

The $5 million loan by CSLB was an expression of state support for the National Park by Governor Bill Owens

The Interim Management Agreement
Now, when the ranch passes to The Nature Conservancy, the operation will be overseen with a different arrangement. At this time, the Interim Management Agreement for the Baca Ranch is being negotiated between the United States, the CSLB and TNC to oversee the transition period at this time. The agreement calls for a board of three members to determine the use of the ranch.

As there are three Federal agencies with interests in the Baca Ranch, the United States Representative will be the agency which has the appropriate interest. For example, grazing leases in the southwest corner of the proposed National Park would be the US Fish and Wildlife Service; while elk hunting, depending on the area where the culling program takes place, could be either the US Park Service or the US Forest Service.

The board will decide administrative matters either by consensus or a majority vote.

Under the transition, leases for grazing and ranches will be available; there will be a competitive process to determine who will be the lessee.

There also will be hunting licenses issued to applicants for the proposed culling of the 4,500 elk herd, which currently grazes on the ranch. The Colorado Division of Wildlife wants the cull to reduce elk numbers to about 1500, which is what they think the land can handle.

How Long Will The Interim Agreement Last?
The Interim agreement lasts until such time as the Federal Government completes the acquisition of the Baca ranch from The Nature Conservancy. This is dependent on the final allocations of funds in the Federal Budget.

In 2002, $10.2 million was allocated, and the funding has been applied for the acquisition.

The 2003 budget, yet to be voted on by the Congress, will be between 10.5 and 12.5 million. The 2004 or 2005 Budget will provide the remaining money. How much this will be depends on Yale University, whose 50% interest in Vaca Partners was disclosed earlier this year. Yale has undertaken, in verbal promises to US Senator Wayne Allard (R-Colorado), to provide $4 million towards the Federal Government’s costs.

Those in the know believe that all the wrinkles will be ironed out and make the creation of the Great Sand Dunes National Park one of the swiftest in history.


The Crestone Eagle, April 2003:

Closing date on the Baca Ranch extended, Dunes north entrance through the Baca to be debated

by David Nicholas

Steve Chaney, Superintendent of the Great Sand Dunes National Monument and Preserve, announced on Tuesday, March 25 that the April 30 deadline for the transfer of the Baca Ranch to take place between Vaca Partners and The Nature Conservancy has been extended to August 31. The Baca Ranch is part of the plan for the National Monument to be upgraded to a National Park.

The new date is to allow for Vaca Partners to complete the outstanding law suits still not resolved. The other outstanding case by junior partner, Peter Hornick, has yet to have its day in court. Hornick asks that his 12.5% interest be recognized in any sale of the ranch; that, as the sale price is far less than the ranch is worth, the sale should be denied; and that he is entitled to about $67 million in compensation and punitive damages. Save for the first claim, the others have little chance of success.

Right now, it does delay things, but Chaney says that he is hopeful that all the claims will be resolved by the end of May. Deep breaths.

The north entrance furor
Since the National Park Service’s town meeting at the POA Hall in February, rumors that the National Park was planning a north entrance off County Road T have abounded.

This first route of the so-called north entrance was said to go through the Baca Subdivision, utilizing the road system to the southern boundary of the subdivision/park boundary.

The next route is rumored to be a continuation of the new road recently created from CR T by the Baca Grande Water and Sanitation District, which goes to the district’s sewer lagoons at the stables, and to extend this down to the subdivision/park boundary following the edge of the Baca subdivision’s western side—a road which will be open to all traffic 24 hours a day.

The third route is rumored to enter the Baca Ranch’s headquarters on CR T and to continue down through the future wildlife refuge to the park boundary—access open to all traffic 24/7.

“These ideas were raised at the management plan meeting in February,” said Chaney. “Various attendees raised the issue. The push for it is coming from here.” Not, as was rumored, from elected Federal representatives.

In order to answer residents’ questions on this and other park issues, both Park Superintendent Steve Chaney and Baca Wildlife Refuge Manager Mike Blenden will be on hand for an informal question and answer session at the Desert Sage Restaurant in Crestone on April 10, from 1-3pm.

 

The Crestone Eagle, July 2003:

Sale of Baca Ranch postponed again

by David Nicholas

Citing delays due to continuing legal matters, Steve Chaney, Superintendent of the Great Sand Dunes National Monument and Preserve, announced that the new date for the sale of the Baca Ranch from Vaca partners to the Nature Conservancy is now March 31, 2004. The sale of the Baca Ranch completes the process for the new National Park designated by Congress in October 2000.

Speaking at the first Crestone meeting of the newly created Advisory Council for the Great Sand Dunes National Park, June 26, Chaney said that American Water Development, Inc (AWDI) was still seeking appeal avenues against the judgment handed down by Judge O. John Kuenhold earlier this year. The judgment upheld a binding arbitration decision made in 2003, awarding AWDI $694,000 for their 10% interest in Cabeza de Vaca Land & Cattle Company, a holding company for assorted partners interested in exporting water from under the Baca Ranch. The judgment also required that AWDI, which holds a lien note on the ranch, withdraw the lien so the sale of the Baca Ranch to the Nature Conservancy could be completed.

Chaney said that the remaining partner with legal issues against the Cabeza partnership, Peter Hornick, was set to have his case heard sometime in October this year.

When asked what pressures this would place on the sale of the ranch, given the high interest loans made by the Nature Conservancy to raise the needed finance to purchase the ranch, Chaney replied that actually, if anything, this would ease it. Of the $31.1 million purchase price, the Federal Government has paid approximately $20 million to the Conservancy. Chaney also said, that the remaining money will likely be allocated in the 2004 Federal Budget.

The $4 million promised by Yale University for its 50% interest in Vaca Partners would probably occur after the sale, Chaney said.

 

 


 

The Crestone Eagle, November 2003:

$9M allocated for Baca Ranch purchase

US Senator Wayne Allard (R-Colorado) announced Wednesday, October 29, that $9 million had been allocated in the 2004 Federal Budget toward the purchase of the Baca Ranch. The allocation comes as a result of the conference committee of the Senate and the House of Representatives and brings the Great Sand Dunes National Monument one step closer to National Park status. It is expected that this version of the 2004 Budget should pass in both houses of the US Congress without amendment.

This brings the total allocated towards the purchase of the ranch to $30 million. Just $2 million shy of the $32 million purchase price—money which should be allocated in the 2005 Federal Budget.

Allard had actually $11 million allocated in the Senate version of the 2004 Budget, but the House of Representatives had been reticent to make any such determination in the Department of the Interior’s budget. That the $9 million allocation appears as a specific line item at all is due largely to the fact that the chair of the powerful Senate Finance Committee has become open and Senator Allard, as the ranking Republican, is the front-runner to fill the position.

Progress on the sale of the Baca Ranch by Vaca Partners, which includes a 50% interest by Yale University, to the Nature Conservancy is still dependent on a suit brought by Peter Hornick. Hornick is a disaffected partner claiming damages against Vaca partners and the now defunct holding company, Cabeza de Vaca Land and Cattle Company. The suit will be heard in February 2004.

Once the suit is decided and the sale is finalized, it appears now that the Nature Conservancy will hold the ranch for one year. Under the terms of the sale, the Colorado State Lands Board will control the operation of the ranch during this period until the agencies of the Federal Government involved in the sale take possession.


The Crestone Eagle, December 2004:

Congress approves funds, Baca Ranch deal near completion

by David Nicholas

Finally, the deal for the transfer of the Baca Ranch from the Nature Conservancy to the Federal Government is near completion. The final $3.4m needed for closing costs was included in the 2005 Federal Budget, passed in the waning hours of the 108th Congress on November 19.

When the funds are released, the Baca will be surrounded by three federal agencies in the east, south and west. At that point, both the US Fish and Wildlife Service and the US Forest Service will take possession of the lands designated by the legislation creating the Great Sand Dunes National Park and Preserve passed in October of 2000.

The National Park Service has been in control of its portion of the Baca Ranch, some 13,000 acres, since September when the Secretary of the Interior, Gale Norton, declared the Sand Dunes a National Park on September 13. On October 10 the ownership of the Baca ranch was transferred from Vaca Partners to The Nature Conservancy.

For Colorado’s US Senators Wayne Allard and Ben Nighthorse Campbell, and Scott McInnis, the retiring Congressman of the 3rd Congressional District, this was a remarkable effort, in a time when Republicans viewed the acquisition of private property by the Federal Government as anathema.

Senator Allard said the funding “will provide the final segment of the combined national park and wildlife sanctuary. It has been my great pleasure to work on this project.”

Congressman McInnis added, “Preserving the abundant resources, on the surface and beneath the Baca Ranch, is the single most important component of the Great Sand Dunes National Park legislation.”

Also included was funding for the Baca National Wildlife Refuge, which takes the largest chunk of the Baca Ranch west of the Subdivision—approximately 62,000 acres.