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Public Lands Foundation
Position Statement:
2010-12
Land Exchanges of Public Lands
Administered by the Bureau of Land Management
August 8, 2010
Executive Summary
The disposal of Bureau of Land Management
(BLM) administered public lands by the land exchange process, where the
federal lands are traded for private or State lands of equal value, has
provided many benefits for Federal public land management—improved public
access, management efficiencies, protection of environmental values—and to
States and private landowners as well. However, controversy and criticism
over land exchanges and land exchange appraisals have plagued the BLM for
decades, primarily related to exchanges involving high-value public lands
around fast growing urban areas in the western states. The problem has
become more acute in recent years as increased demand has ballooned the
value of public lands suitable for urban development.
The issue is the BLM and the public are
frequently shortchanged by the way the land exchange authority is being
used for the disposal of high value public lands in urban areas. The land
exchange process is flawed, and the problem will not be solved by trying
to make better land appraisals.
Most of the BLM land exchange problems
would be mitigated or eliminated if:
- disposals of BLM administered lands by
exchange are confined to trades of lands of similar character and land use
potential, and where it is clearly in the public's interest to acquire the
non-federal land, and
- high value, developable BLM lands are
sold at public auction under an authority such as the Federal Land
Transaction Facilitation Act of July 25, 2000, with the money from the
sale being used to purchase non-federal lands needed for BLM programs.
The BLM and the Department of the Interior
should develop new policies and guidelines for making land exchanges, and
for selling high value lands at public auction to ensure that the full and
fair value is received for the BLM lands, and that the money is used to
acquire other lands that are needed for conservation purposes. Priority
should be given to meeting needs in the BLM’s National System of Public
Lands.
The Federal Land Transaction Facilitation
Act needs to be reauthorized by Congress to provide the Federal agencies
with continued authority to sell public lands and use the monies to
acquire other lands needed for conservation purposes.
Background
The BLM, and its predecessor, the General
Land Office, have been making land exchanges for over 75 years, ever since
land exchanges were authorized by the Taylor Grazing Act in 1934. In the
1960's, Congress began passing various special Acts to authorize land
exchanges to help other federal land management agencies acquire
non-federal lands within the National Park and National Wildlife Refuge
Systems. The Federal Land Policy and Management Act of 1976 (FLPMA)
replaced the Taylor Grazing Act with new authority for BLM land exchanges,
and the Federal Land Exchange Facilitation Act of 1988 was designed to
streamline land exchange procedures.
In the early years, most BLM land
exchanges were made with the States and substantial progress was made to
consolidate or rearrange the ownership patterns of Federal public and
State Trust lands.
In the 1950's, private landowners began
applying for land exchanges with the BLM. Some land owners wanted to block
up intermingled federal and private lands in rural areas for more
efficient management in areas like the checkerboard railroad grants which
cross many of the western States. In many cases however, rural landowners
just wanted to move their land holdings closer to urban areas where there
was more development potential.
In the 1960's there began a flurry of BLM
land exchange activity on behalf of National Park Service (NPS) programs.
Congress passed special Acts authorizing landowners within NPS units like
the Point Reyes National Seashore and the Lake Mead National Recreation
Area to trade their private lands for any property "under the jurisdiction
of the Secretary of the Interior."
In one of the earliest NPS exchanges in
1962, it took over six thousand acres of BLM lands in the desert near
Phoenix to equal the value of several hundred acres of privately-owned,
ocean-front lands north of San Francisco. The oceanfront lands became part
of the Point Reyes National Seashore. The developer, who had purchased
this Point Reyes parcel so he could exchange it for the large block of
Arizona lands, immediately began to construct the city of Fountain Hills
on the lands near Phoenix. The National Park Service got the land they
wanted. All that the BLM received from the exchange was controversy over
land values, public criticism of the exchange, and two Congressional
investigative committee hearings that accomplished little except to
further embarrass the BLM.
This same scenario has been replayed over
and over again during the past 50 years throughout the West with different
players in different places as investors, developers and land speculators
have sought ways to use the BLM's land exchange authority as a way to have
an inside track on the "land boom" around fast growing urban centers. The
exchange process gives the land exchange proponent an avenue to acquire
blocks of developable lands in prime locations from the federal
government, and without competition.
In some cases, the land exchange
proponents trade large blocks of rural lands that have little development
potential, but which are valuable for BLM or other federal agency
management programs, for a smaller acreage of BLM lands adjacent to urban
centers. In other cases, the proponents trade smaller tracts of high value
private lands, with "special" environmental values that need protection in
public ownership, for larger blocks of BLM lands that lay in the path of
urban expansion. In each of these situations, the values of the BLM and
private lands were considered equal at the time of the exchange, but it
was obvious that the public lands BLM traded away had much greater
potential for value increases after the exchange.
With expertise in real estate and
knowledge of the direction of urban expansion, many land exchange
proponents inherently have the inside track on the potential values of
properties once they are in their hands, and these companies have used the
exchange process to gain a non-competitive advantage in getting federal
lands. Some have used the Exchange Facilitation Act authority to buy an
additional 25 percent of choice development lands without competition.
Usually the proponents who deal in these
types of urban land exchanges have seemingly unlimited resources and
influential contacts with agencies, Congressional delegations, and city,
county and state officials to help advance their exchange proposals. This
is a major reason why BLM has continued this controversial program over
the years.
Many of these urban area exchanges are
"three way" land exchanges that involve offered private lands that are
inside other federal land management areas. The other federal land
managing agencies have viewed BLM lands as a "cash cow" that provides
opportunities to acquire non-Federal inholdings at no cost to the National
Park, National Wildlife Refuge and National Forest programs.
In these situations, the exchange
proponents usually have the weight of the Administration, Congress and the
general public behind them when they approach the BLM about land exchanges
to help "block up" these other National Federal Land Systems.
These "three way" exchanges have usually
resulted in the exchange proponent getting urban land for development, the
National Park Service, Forest Service or Fish and Wildlife Service getting
land to block up their management areas, and the BLM getting the "black
eye" of adverse publicity over the land appraisals used in the exchange.
It needs to be acknowledged that the BLM
has made some significant acquisitions of environmentally sensitive lands
by trading off urban public lands. Prime examples include the lands in the
BLM's San Pedro Riparian National Conservation Area, Las Cienegas National
Conservation Area and Agua Fria National Monument in Arizona, the Silver
Saddle Ranch in Nevada, and the desert tortoise habitat in the St. George,
Utah area, all of which were acquired in trades of urban BLM lands. But
even many of these transactions invoked controversy and public criticism
at the time the exchanges were made, again over the land appraisal issue,
because the exchange proponent was considered to have received a financial
windfall from the land exchange.
In contrast with urban land exchanges,
there have been many land exchange successes for the BLM and for State and
private landowners over the years that have attracted relatively little
attention or controversy, primarily because they have involved rural lands
of similar character and with little or no development potential. The
per-acre values have been similar, and thus the acreages of the federal
and non-federal lands in these rural land exchanges have been roughly
equivalent.
Most of these rural land exchanges have
been made to facilitate management of intermingled Federal, State and
private lands, to improve public access to public lands, or to put
environmentally sensitive lands into public ownership. These types of
exchanges have typically caused little controversy because the new owner
of the former public lands has usually not changed the existing use of the
land.
Discussion
Land exchanges have been a valuable tool
for the BLM, helping the agency acquire private and State lands needed for
such public purposes as blocking up federal ownership patterns for more
efficient management, obtaining public access to public lands, and
protecting environmental values.
The issue is the BLM and the public have
been frequently shortchanged by the way the land exchange authority has
been used to dispose of high value, developable public lands. This has
caused public controversy and criticism of BLM land exchanges for over 50
years.
Most land exchange controversies center on
land valuation and whether or not the BLM, and therefore the public, get a
“raw deal” in the land trade. BLM has attempted to deal with the
continuing controversies by overhauling the appraisal and appraisal review
processes. However, the appraisals are just the lightening rod; the real
problem is in the land exchange process.
Land exchanges, which involve developable
public lands in urban settings, will invariably produce controversy and
public criticism of BLM because:
1. Disposal of public lands by exchange
eliminates market competition from other prospective bidders who in many
cases would pay far more than the appraised value, and
2. The exchange proponent will commonly,
and quickly, obtain what the public perceives as "windfall" financial
profits from the development or resale of the former public lands.
The solution is not in how to make better
land appraisals, but in how to better select situations for making land
exchanges.
The most feasible solution to the problem
is to stop disposing of high value urban public lands by land exchange.
Urban public lands that are best suited for
residential/commercial/industrial development should be offered for sale
at public auction to give bidders a competitive opportunity to buy and to
more firmly establish the fair market value of the public land.
On July 25, 2000, Congress enacted a new
law, the Federal Land Transaction Facilitation Act (FLTFA), which
authorized the Department of the Interior to sell BLM administered Public
Lands at public auction and retain the receipts of land sales and use them
for the purchase of non-federal lands within the same State for federal
management purposes.
FLTFA enabled the BLM to accomplish what
they have been trying to do through land exchanges, i. e., use the value
of urban public lands to acquire non-federal lands for conservation
purposes; and, by selling the urban public lands at public auction, the
land value controversies are largely eliminated.
Unfortunately, FLTFA was given a 10-year
life, and this land sale authority expired on July 25, 2010. It is
imperative that the Federal Land Transaction Facilitation Act be
reauthorized.
There is another facet of the land
exchange problem that is often overlooked or forgotten in the turmoil over
land appraisals, and that is the question of the "need" to make the land
exchange. Does the Federal government really need to acquire the offered
lands? The fact that the offered land lies within a National Forest, Park,
Wildlife Refuge, or the National System of Public Lands, or contains some
special environmental resource values, does not necessarily mean that the
Federal government needs to acquire the land. Most land exchanges are
driven by the exchange proponent, sometimes aided and abetted by another
Federal land management agency that has nothing to lose and everything to
gain in the exchange.
Before BLM gets very far into the
difficult, costly, and time consuming land exchange process, it should be
well established that the proposed land exchange is clearly in the public
interest. A fully informed public needs to have adequate opportunity for
input to the decisions on both the disposal of the public lands and the
public need for acquiring the offered lands. Local public involvement will
be critical to decisions on whether to exchange or sell public lands that
have development potential.
PLF Position
1. Major changes need to be made in BLM's
procedures for disposing of high value Public Lands. The BLM and the
Department of the Interior should develop new policies and guidelines for
making land exchanges and land sales of Public Lands in the National
System of Public Lands.
2. The Federal Land Transaction
Facilitation Act needs to be reauthorized by Congress.
3. Disposals of high value, developable
public lands should be made through sale at competitive auction as
authorized by the Federal Land Transaction Facilitation Act (FLTFA) with
the money from the sale being used to purchase non-federal lands that are
needed for BLM management purposes.
4. Disposals of BLM administered lands by
land exchange should be confined to trades where the federal and
non-federal lands are similar in character and use potential, and where it
is clearly in the public interest to acquire the non-federal land.
5. When BLM administered lands are
disposed of by exchange or by sale under FLTFA, first priority should be
given to acquisition of lands needed by BLM management programs in the
National System of Public Lands.
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Updated from PLF No. 18-01, February 13, 2001 |