‘The next thing I heard . . . it had been approved. I was kind of shocked. I thought we had made a big mistake.’ : Warning Ignored in Rush to Buy ‘Plum’ Parkland

From the start, things did not look right to Tom Hickman.

His job was to critique appraisals that set the value of property sought by the National Park Service. In the past, from his Los Angeles office, he had approved prospective parkland purchases as far afield as Death Valley and Guam.

The property in question this time--336 acres of oak-dotted slopes and meadows abutting Agoura Hills--was a “plum,” Hickman recalled. But because the appraisal that set its value at $8.4 million gave heavy weight to an unconfirmed and anonymous competing offer to buy the land, Hickman said, he found it “unacceptable.”

In a long memo to his superiors, Hickman wrote that many questions needed to be answered before the deal should proceed. The anonymous offer, he wrote, “should be discounted completely unless evidence can be provided that it is legitimate.”

Even so, within weeks, the Park Service approved the complex sale of the land--which went in two steps, first to a nonprofit conservation group, then to the Park Service.

Most Expensive Purchase

In January, 1985, for what was hailed as a bargain price of $8 million, the property, known as lower Cheeseboro Canyon, became the most expensive addition ever purchased for the Santa Monica Mountains National Recreation Area--a string of parks and trails from Griffith Park to Point Mugu in Ventura.

Last week, after a lengthy investigation by Department of Interior investigators, a federal grand jury returned indictments charging the seller of the land, Encino real estate developer Jerry Oren, with fraudulently inflating its value by more than $2 million.

Two years after Hickman first questioned the anonymous offer, the prosecutor of the case, Assistant U.S. Atty. Charles J. Stevens, has alleged that the offer was fabricated by Oren and two former consultants.

If the charges hold up in court, Hickman, 50, who was criticized by park officials for placing his negative comments about the appraisal in the permanent file on the purchase, said he will feel vindicated.

Affects Future Deals

The controversy surrounding the sale of the property already has had strong repercussions within the Park Service, changing the way the government scrutinizes land deals such as this one, said Willis P. Kriz, chief of the land resources division of the Park Service in Washington.

It is now nationwide policy that the director of the National Park Service approve an appraisal before a nonprofit organization starts negotiating with any landowner, Kriz said. “We’re not going to be backed into a corner as we were with this one,” he said.

The property that generated the controversy is an undeveloped tract, dotted with nearly 2,000 oaks and home to cougar, bobcat and mule deer. It was targeted for purchase by the Park Service almost from the creation of plans for the national recreation area in 1979.

Serious negotiations began in 1983 between Oren’s firm, Oren Realty and Development Co., and the Trust for Public Land, one of several nonprofit conservation groups that buy land for later resale to local or federal parks agencies. The trust in this case planned to secure an option to buy the land for the Park Service, which at the time lacked the funds to purchase the land on its own.

Originally Asked $7.5 Million

That September, Oren granted the trust an option to buy the 336 acres for $7.5 million. But before the deal could proceed, the National Park Service required that the trust commission an appraisal of the land to be sure that the price did not exceed its fair market value.

A preliminary appraisal conducted for the trust in 1984 determined that the land was worth only $5.8 million, according to the indictment, far too low a figure to justify the purchase price. That appraisal was never shown to the Park Service by the trust.

According to the indictment, after the trust gave Oren a copy of the appraisal, Oren allegedly said that he had received other higher offers for the property. The offers had not been taken into account in the preliminary appraisal.

Request for Letter

About that time, according to the indictment, Oren called Moshe Ziv, a personal friend and former consultant to Oren’s firm, asking him to write a letter indicating that a client of Ziv’s New York firm wanted to buy the Cheeseboro Canyon property.

Ziv then allegedly had a secretary type a letter indicating that Union Pacific, a client, offered to purchase the 336-acre parcel plus an adjoining tract owned by Oren. The amount offered for the portion sought by the Park Service was $9.3 million.

Oren and a consultant, Radoslav L. Sutnar, then allegedly changed the date on the letter so that it bolstered Oren’s earlier contention that there were other parties who had expressed interest in the land.

Reportedly unaware of any impropriety, the Trust for Public Land commissioned a new appraisal of the land--taking into account the purported offer. The value of the land was recalculated to be $8.4 million. This was the appraisal presented to the Park Service by the trust.

And this was the appraisal that Hickman questioned.

Hickman said he was pressed to visit the Cheeseboro property, critique the 76-page appraisal and provide comments in just a couple of days. Time was short because the trust’s option to buy the land was going to expire in less than a month. With the competing offer waiting in the wings, there was much pressure to complete the transaction, he said.

Memo Was Critical

He had plenty of experience, having reviewed appraisals since 1963, first for the Alabama Highway Department, then the U.S. Fish and Wildlife Service and the Park Service. He quickly produced an eight-page memorandum that was harshly critical of the $8.4-million value set for the property.

Hickman’s handwritten comments, sent to Jack MacDonald, chief appraiser at the Park Service’s Western regional office in San Francisco, listed many concerns.

In one passage, he said: “The appraiser has not explained to what extent the . . . towering toxic landfill will affect the marketability of the subject . . . .” Hickman was referring to the Calabasas Landfill, a county-run dump that accepted toxic waste until 1980. “It resembles a Mayan temple and is in clear view of some of the more ‘prestigious’ lots. It also smells.”

Hickman was also frustrated because he could not get access to the preliminary appraisal of the property that had been commissioned by the Trust for Public Land before Oren announced that more than one buyer was interested in the land.

In general, a certain amount of secrecy surrounds such deals, an official of another conservation group said. The trust considered the information confidential.

Identity Not Revealed

But the key criticisms concerned the unsubstantiated offer from another party, whose identity was not released by the trust or Oren. Hickman summed up his opinion by saying the offer “has a certain odor to it.” His conclusion: “Please do not approve this appraisal as it now stands.”

The word “please” was underlined.

Hickman’s criticisms of the appraisal--including his sharp doubts about the anonymous option--had no effect on the outcome of the deal. No details of the offer--the name of the party with the competing offer, the seriousness of the offer--were ever demanded by the Park Service, according to Park Service records.

In a report filed November 9, 1984, recommending that the Cheeseboro purchase take place, MacDonald wrote, “Although edited for confidentiality the offer appears valid and excellent market evidence . . . . There is no evidence of any clandestine motivations.”

Several park officials confirmed that the evaluation of the Cheeseboro deal was conducted in haste. “There was an extremely short time in which the Park Service had to accept the TPL offer or the deal was going to go down the drain to this third party,” said Kriz, of the Park Service.

Not Consulted

Hickman said that no one consulted him before the decision was made. “The next thing I heard about it was that it had been approved,” he said. “I was kind of shocked. I thought we had made a big mistake.”

On Jan. 10, 1985, with much fanfare, Oren Realty sold the Cheeseboro tract to the Trust for Public Land for $7.5 million, and the trust immediately resold it to the Park Service for $8 million.

(It is standard practice for such trusts to take a portion of the proceeds of a parkland sale to cover costs and save for new acquisitions.)

One high official in the Park Service’s Washington office explained the apparent sidestepping of Hickman’s critique by saying that Hickman “was the kind of person who was always jousting with windmills. . . . You didn’t always know whether you could give what he said total credence.”

But a park official more closely involved in the Cheeseboro deal denied that Hickman’s opinion was ever discounted in this or any other appraisal review. Looking back at the purchase, the official said: “Why wasn’t Hickman better acknowledged? Clearly . . . I didn’t do my job.”

Almost immediately after the sale was completed, a flurry of criticism erupted over the unprecedented cost of the land.

Sale Price Questioned

“I knew I was on the right track when I got telephone calls from independent appraisers in that area wondering why in the world we’d paid that much money for that property,” Hickman said. “One appraiser was in court on a condemnation case, testifying to the value of property nearby. Then here comes the National Park Service buying land at a figure that seemed so high it cast some doubt on his appraisal.”

Many park officials and conservationists had acknowledged all along that the land seemed expensive. But opposition to the purchase was muted by the fact that it was unanimously considered a crucial acquisition for the national recreation area that might be lost if it was not bought immediately.

When faced with a fleeting opportunity to buy a prime piece of parkland, Kriz said, “What are you going to get criticized for more--buying it wrong or allowing it to be developed?”

Part of Permanent File

After the deal was closed, Hickman put copies of his critical memos in the permanent file on the purchase so that he would be on the record as opposing the transaction if questions were subsequently raised. “I thought I’d be criticized for letting it go by on my watch,” he said.

He said he was rebuked by higher-ups in the Park Service for placing the memos in the file because they later became public after being acquired by the Times through the Freedom of Information Act. A high official in the Park Service’s land resources office in Washington confirmed that Hickman’s filing of the notes had been criticized.

“I didn’t know the notes would be made public,” Hickman said.

Last March, partly because of the rift with the Park Service and because the land acquisition office in Los Angeles was being moved to San Francisco, Hickman quit his job. Now an independent real estate appraiser, Hickman works out of his Canoga Park apartment.

Oren, Sutnar and Ziv are scheduled to be arraigned in federal court in Los Angeles on March 23.

Even with the possibility that fraud may have raised the cost of the Cheeseboro land, many conservationists and park officials say it was a good purchase.

“That was still a damn good acquisition,” said one high official of another conservation group that has acquired many tracts for the Santa Monica Mountains National Recreation area. “ . . . That property had to come in one way or another.”