Fair deal?

Wait before drawing conclusions on appraisal for open space

- Editorial
Friday, June 16, 2006

When the state Attorney General's Office speaks, people tend to listen. But there are some legitimate concerns about the fairness of what the Attorney General's Office had to say this week about an appraisal for land that the Sonoma County Open Space District helped buy two years ago.

The AG's office contends that the appraisal was "incomplete and misleading" and that the public ended up overpaying for the 648-acre Dickson Ranch near San Pablo Bay. Furthermore, the report calls for the license of the appraiser - Charles D. Bailey of Mill Valley - to be suspended or revoked.

Many of the criticisms have to do with technical flaws in the appraiser's work. Much of the complaint concerns Bailey's work in appraising 19,000 acres of salt ponds circling San Francisco Bay purchased from Cargill Inc.

Still, for the Open Space District, the timing couldn't be worse. The district is on the verge of launching a campaign for a ballot measure re-authorizing its quarter-cent sales tax funding.

The central issue in the Dickson Ranch complaint concerns the developing science of appraising property for its highest and best use - as a mitigation bank. Such banks allow developers to obtain construction approvals by paying for the restoration of wetlands areas or animal habitat in other areas.

The appraisal said the property was worth about $2 million as a hay farm and $5 million as a mitigation bank. In 2004, the Sonoma Land Trust ended up buying the property for $4.2 million, of which the Open Space District paid $2.6 million.

In its complaint, the state infers that the property should not have been appraised as a mitigation bank. It notes the risks of the restoration process and the fact "that most mitigation banks fail."

But here's the problem with that argument. Regardless of how Sacramento officials feel, mitigation banks are a real business - one that's driving the fair market value of many undeveloped properties. As District General Manager Andrea Mackenzie said, "The market is there whether we like it or not."

We're also troubled at what appears to be a lackluster effort by the state to investigate this matter. Mackenzie says no one from the state contacted the Open Space District before this report was issued.

We don't know how this issue will play out. But residents shouldn't rush to judgment on whether the public overpaid for this valuable property.

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