Value of Streisand Land Gift Unclear : Malibu: A parcel that went unsold for $11.9 million is said to be worth $15 million. The discrepancy may have tax implications.

The asking price for Barbra Streisand’s Malibu estate went up by millions of dollars just before she gave it to a conservation agency, raising questions about an appraisal of the property and the size of the tax break she may get.

When the gift to the Santa Monica Mountains Conservancy was announced in November, Streisand’s agents said the property had been valued at $15 million. If the IRS accepts that as the fair market value, Streisand will be able to avoid being taxed on as much as $15 million in earnings.

However, the appraisal of the property commissioned by the conservancy failed to mention that the property had gone unsold at a price of $11.9 million--which would normally set the top limit of its value.

The discrepancy may involve an unusual instruction the appraiser said he received. Admonished to keep his assignment confidential, the appraiser said he did not consult local real estate agents or officials--although experts say such contacts are a key element of appraisal research.

Instead of the $11.9 million, the report cited only a listing of $19.5 million--a price that took effect last August, just days before the appraiser was hired.

The appraiser, Edward P. Reilly, declined an interview request, saying, “I was aware of the $19.5-million listing--that’s as far as I’m going to go. . . . I just don’t want to get involved.”

Susan Keenberg, Streisand’s business manager, called Streisand’s conduct impeccable and said she was not trying to gain an unfair tax advantage.

“Her whole reason for doing what she did was to make a beautiful and generous gift to the state of California,” Keenberg said.

While declining to discuss specifics of Streisand’s tax situation, Keenberg said, “The IRS will be the final arbiter of what is right, and (Streisand) will abide by whatever decision is made.”

The Internal Revenue Service is not required to accept a taxpayer’s view of the value of her gift, even if supported by appraisals.

“The measure of the deduction is the fair market value, and the fair market value is what a willing buyer would pay a willing seller,” said Rob Giannangeli, public affairs officer for the Los Angeles district office of the IRS.

Streisand’s 22.5-acre retreat in Ramirez Canyon features four houses and a caretaker’s residence. Conservancy officials said the complex, to be called the Streisand Center for Conservancy Studies, will serve as an environmental research and conference center.

When the donation was announced, conservancy Executive Director Joseph T. Edmiston described it as one of the three most important gifts of land in the Santa Monica Mountains in the past 50 years, along with the 186-acre Will Rogers estate and the oceanfront holdings of Leo Carrillo.

It’s a “splendid piece of property for the use of the Santa Monica Mountains Conservancy, whether its value is $15 million or $10 million,” Edmiston said this week.

The property had been on the market since the late 1980s. In August, Streisand authorized the conservancy to conduct an appraisal, as it had to do before accepting the gift.

“The one stipulation we wish to put on this is that all information must be kept strictly confidential,” Streisand’s business manager said in an Aug. 27 letter to the conservancy.

Conservancy officials avoided the normal bidding process and hired Reilly over the phone for $11,000. Streisand’s agents were in a hurry and Reilly alone “responded affirmatively that he could do it within the time required,” said conservancy Deputy Director Belinda Faustinos.

In a letter to Reilly on Sept. 2, Faustinos reminded him that “this appraisal must be kept strictly confidential.”

Reilly was provided a copy of a real estate advertisement offering the property for $19.5 million. However, the Multiple Listing Service--whose comprehensive listings are used by realty agents throughout the Los Angeles area--shows the $19.5-million price took effect in August within days of Reilly being hired. From February, 1993, until last August, the asking price, according to MLS listings, was $11.9 million.

Keenberg, Streisand’s business manager, and David R. Perry, co-listing broker on the property, told The Times the $11.9 million was for only a portion of the property--not the entire estate as the listing showed. “Somebody screwed up with the damn copy,” Perry said.

If it was a mistake, however, it was not corrected. The phone book-size volumes of MLS listings are updated every two weeks. A check of several volumes from March through August consistently showed an $11.9-million price for the whole property.

Colleen Rose, the co-listing broker, when first interviewed stated that the entire estate was offered for $11.9 million. Told that Perry said otherwise, Rose replied, “Maybe I haven’t remembered it properly.” The brokers declined to provide documentation.

Reilly’s appraisal report, dated Oct. 1, is sprinkled with disclaimers on the scope of his research. The “market data investigation was limited in that no owners or brokers were contacted to verify sales or building information,” Reilly wrote on Page 3.

“No contact was made with the broker or any other parties due to the fact that all information was to be kept strictly confidential,” he said on Page 59.

Although Reilly mentioned the $19.5-million listing at least five times, the report did not state that the listing was new. The amount “seems excessive,” he wrote, but the “broker must have a ‘feel’ for a value or the property would not have been listed.”

Appraisals are based, in part, on data from “comparable sales” of similar land in the same area. In the case of such an expensive parcel of land, there are rarely many comparisons available. Due perhaps to the limitations of his research, Reilly overstated the price of a one comparable sale--which would tend to affect his estimate of the Streisand property.

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According to Reilly’s report, an oceanfront estate sold by celebrities Julie Andrews and Blake Edwards brought a price of $11.5 million to $11.9 million in December, 1991. However, the Los Angeles County assessor’s office and sources familiar with the sale said the actual price was $9 million--or about 25% less.

Bob West, director of the state Office of Real Estate Appraisers, a licensing body, said an order not to contact local brokers should be “a red flag to any appraiser (that) the analysis is going to be limited because the scope of research and data is going to be limited.”

An appraiser with experience in the Santa Monica Mountains who did not wish to be identified said he “would resist an appraisal assignment where they didn’t want me to talk to any brokers. . . . To be told not to do that certainly cripples your investigation.”

The Streisand appraisal was reviewed within the state Department of General Services. Robert D. Meier, a senior real estate officer with the department, said he reviewed the report for form and content, but did not independently investigate market data.

Conservancy officials said the tax treatment of the gift is between Streisand and the IRS. Faustinos said the reason Reilly was told to keep the assignment confidential was because “if word got out about it, basically Ms. Streisand would pull out of the deal.”

Nonetheless, Faustinos said, Reilly was not explicitly told to avoid speaking to brokers. The assignment “had to be kept strictly confidential, and he used his own independent judgment about what that meant.”

Real estate appraisals customarily are publicly available once land transfers to a public agency. When The Times sought a copy of the Streisand appraisal, conservancy officials agreed--but then reversed themselves under pressure from Streisand’s agents.

In a Dec. 28 note to Edmiston, Keenberg said the report could not be released because Streisand intended to attach it to her tax returns.

“We must, therefore, vociferously deny your request to release this document to anyone,” Keenberg wrote.

The conservancy then obtained a legal opinion from the state attorney general’s office supporting the decision to withhold the appraisal. But the conservancy changed its mind and surrendered a copy after discussions between lawyers for the state and for The Times.

Keenberg said she tried to keep the appraisal under wraps only because “Ms. Streisand is a very private person.”

Meanwhile, confusion has surfaced in recent weeks about the actual size of the donation.

Conservancy officials and a Streisand spokesman last November said the gift involved the whole acreage and all five of the houses.

Subsequently, however, the actual deed transferred 20.5 acres and the four main houses--omitting two acres and the caretaker’s residence.

Edmiston said “sensitive negotiations” are under way to resolve a “misunderstanding” about the caretaker’s parcel. He said the conservancy may yet obtain it by purchase or donation.