The Recreation Land Racket

...Officials are also often offered personal financial incentives to approve zoning changes, a practice that has been voluminously documented in the Ralph Nader task force study, Land and Power in California...

...Several California recreation land subdivisions have sold lots at prices equal to nearly $50,000 an acre...

...Outrageous greed is what fuels the recreation land juggernaut...

...More than 3,500 recreation land developers seeking customers across state lines are now registered with Bernstein's office...

...As developers dredge and fill marshland, pushing the land line farther into the ocean to create more second-home lots, and thrust giant jetties out into the water to protect commercial beaches, as has been done at Ocean City, Maryland, they upset sand-bearing currents in the ocean and force changes in the contour of the coast...

...Elsewhere in Washington the trade association for this suddenly large industry, the American Land Development Association, has enrolled 9,000 member developers who are busily buying up the country's remaining inexpensive open land...

...Speculators who have been buying up 3.7 million acres of private land in the Adirondack State Forest Preserve are pressing local officials to allow "rural residential" development of that land, meaning more subdivisions of vacation-home lots...

...In 1966 the Gulf American Land Corporation, then Florida's largest land speculator, bought up 75,000 acres of swamp just west of the Fakahatchee Strand...

...Representative Morris K. Udall, Arizona Democrat and leading sponsor of the National Land Use and Policy Planning Act, called the Rules Committee's nine-to-four vote to delay action on the bill a "temporary setback," but there are doubts the bill can be revived this year...

...Wolman is staging a comeback in real estate partly on a planned 3,200-acre recreation land subdivision projected for 40,000 people on what are now wedands in Worcester County...

...Three million American families, according to the Census Bureau, already own and use second homes ranging from trailers and cheap A-frames to luxurious ski slope chalets and beachfront condominiums...

...Money is the only consideration at every stage of a project like Lake of the Pines, marketed by Boise-Cascade in the Sierra Nevada mountains in northeastern California...

...To win zoning that allows subdivisions and lot sales, a big company like Boise-Cascade, Horizon, or GAC flies in lawyers and executives with glossy plans, color movies, and consultants' studies of the environmental impact of the proposed project...

...In 1970 GAC's reported sales volume, including the activities of its consumer credit company and a subsidiary insurance company, was $1.8 billion...

...Army Corps of Engineers...

...Recreation land has become a big business, with the giants in the field selling hundreds of millions of dollars' worth of lots each year and starting their own finance companies to service customers who buy on credit...

...When its residents complained about paying for sewers and water lines for all those people, a Horizon executive told them at a public meeting that they had nothing to worry about: His firm's project would depend on wells for drinking water and septic tanks for sewage disposal—a one-two punch that would surely ruin the shallow soil and water table of the rocky Adirondacks...

...Udall originally proposed cutting off some Federal highway, airport, and recreation funds to states that do not develop such plans, but this provision was dropped when the highway lobby and its Congressional allies protested...

...The southern tip of the Assateague National Seashore is disappearing at the rate of sixty feet a year...

...Yet several hundred thousand more families contract to buy recreation land lots every year in what has certainly become the biggest American land rush since 50,000 settlers raced into the Oklahoma Territory at the stroke of noon on April 22, 1889, to stake out homesteads...

...of the state's 290 miles of ocean beaches suitable for swimming, only forty-seven are now open to the general public...

...GAC has expanded its land holdings in Florida to more than 300,000 acres, in addition to other vast recreation land subdivisions it is promoting in Arizona...

...Tourism, which includes recreation land development, has replaced ranching as Colorado's second largest industry (with manufacturing first...

...In many projects the streets, sewers, water lines, wells, reservoirs, or man-made lakes were not put in at the developer's expense at all...

...Augustine and Daytona Beach...

...The conglomerate wound up $85 million in the red in 1971 and wrote off $200 million worth of real estate investments in 1972, when it began to ease out of the recreation land field...

...At that time the firm was marketing land in twenty-nine recreation projects nationally...

...Automobile traffic has become so heavy and the smoke from fireplace chimneys so thick that smog frequently settles into the valley...

...A year later he sent the Congress a national land use bill to help the states regulate areas of critical environmental concern...

...In the mountains popular with skiers in Colorado, Idaho, Utah, California, and New England, the mountainsides themselves and the valleys between them are being subdivided and developed...

...The public also is losing large chunks of its precious shoreline in such parks as the Assateague National Seashore to the worsening erosion caused by nearby private development...

...Gore Valley meadow land that sold for $50 an acre in the 1950s is now downtown Vail footage selling at the equivalent of more than $250,000 an acre for commercial and condominium use...

...In Riverside County, for instance, three county supervisors who had previously defeated rezoning for a 4,000-lot recreation land project, approved it after each received cash political campaign contributions of from $750 to $3,500 from the developer's attorney...

...These marshes, swamps, and mud flats are highly efficient in converting the sun's energy into growing plants, which provide food for microorganisms...

...NIXON'S SWITCH While huge corporate developers ravage what's left of the nation's open space, ripping off thousands of vacation-home customers and hundreds of communities as well, the House Rules Committee has bottled up a bill to protect some part of the people's heritage—the land...

...While battles are still being fought over the nation's mountainsides, the war with speculators seems to have already been lost on its beaches...

...Matters worsened when, beginning in 1970, consumer advocates like the Nader task force, public officials like California's Nevada County district attorney Harold Berliner, and the Maryland real estate commission began investigating sales practices at various Boise-Cascade projects...

...In the southern part of Worcester County, dominated by chicken farmers and shell fishermen until recently, the real estate speculators are now moving in...

...Occasionally, the projects backfire for the greedy speculators...

...The Committee deferred the matter indefinitely...

...In upper New York State the forested Adirondacks have become another battleground...

...Representative Sam Steiger, Arizona Republican, offered a feeble bill, drafted by the U. S. Chamber of Commerce, that would give grants to the states for land use planning without Federal guidelines...

...Those who are already there, and thus part of the problem themselves, have suddenly become worried about the state's environment—"Don't Californicate Colorado," warns one bumper sticker—but eager real estate speculators pay attention only to the spectacular increase in land prices...

...That profit can be sizable for any investor with enough capital or borrowing capacity to make the initial outlay for the land, a minimum of improvements, and a promotional campaign, which is why recreation land sales have recently attracted so many big companies^—from land specialists like GAC and Horizon to other corporations like Westinghouse (in Florida), Ral-ston-Purina (in Colorado), and Boise-Cascade...

...Childs says that another Arizonan, House minority leader John J. Rhodes, recommended to the House Rules Committee that it shelve the land use bill in favor of the Steiger bill...

...Unlike the occasional promoter who sold desert lots to city slickers in years past, today's big recreation land speculators are threatening to monopolize and despoil all of the nation's remaining open land...

...Promised country clubs are seldom built...

...Boise-Cascade, for example, launched too many projects in too short a time, tying up so much money in land acquisition and sales promotion that the incoming flow of cash from the lot buyers, small down payments and monthly installments, could not meet the over-extended conglomerate's needs after the first couple of years...

...The way all recreation land speculators operate, and the effect they have on the landscape, can perhaps best be summarized by the ironic telegram that, according to Nader's California report, the sales manager at the Lake Wildwood project in Nevada County, California, sent to Boise-Cascade's headquarters in the days of the big profits after the last Lake Wildwood lot was sold: mission accomplished, wildwood is dead...

...In New Mexico, for instance, one hundred companies now control more than one million acres of open land and have subdivided it into enough lots to triple the state's population in the unlikely event that every buyer built on and moved to his property...

...Other speculators, however, are challenging the Vermont laws in court...

...in many places this could mean the extermination of deer, mountain lions, and sheep, just as the great California grizzly bear was killed off before them...

...Berliner has been trying to police speculators who have already subdivided 58,000 acres of his mountainous county, whose population has never much exceeded 25,000 people...

...Russell E. Train, his man at the head of the Environmental Protection Agency, until recently had said that the land use bill was as important as any legislation before Congress...

...In New England, where vacationers go to ski in the winter and escape the hot, grimy cities of the East Coast in the summer, New Hampshire has counted at least 60,000 vacation homes inside its borders, with two more recreation land projects of 1,000 acres each now being developed...

...Copyright © 1974 by Leonard Downie, Jr...

...The eventual discovery that Antelope Valley is really the Mojave Desert is only one of many disillusion-ments suffered by those who blindly and greedily sign to buy recreation land lots without investigating the project first...

...Liens and taxes levied on the property itself mean little, when no one will pay them and no one else can be found to buy the property should the authorities want to confiscate and sell it to satisfy the debt...

...Shortly thereafter Gulf American was taken over by new investors who created the GAC Corporation, which added to it a consumer credit company to collect finance charges on the notes signed by land buyers who make their purchases on credit...

...instead, the developer had local authorities sell public bonds to finance the improvements at the expense of the lot buyers, who will have to pay off those bonds in the future...

...The HUD report for the Brooktrails project in northern California states that each lot buyer there is liable for a $2,000 lien on his property and a special tax levy of up to ten cents per $100 of assessed valuation to pay off nearly $5 million worth of bonds for public improvements, mostly water and sewer lines required by state law...

...The Senate, under the leadership of Senator Henry M. Jackson, twice passed the land use bill...

...One of those in Goldwater's "orbit," columnist Marquis Childs wrote recently, is Steiger...

...The Fakahatchee Strand was first raped just after World War II by a New York lumber company that logged most of its 600-year-old cypress trees...

...where do you want us next...

...And Boise-Cascade is pulling out of these projects too soon to correct the damage it has done or to finish the expensive improvements it promised those who bought lots...

...This article is adapted from his book, "Mortgage on America," published April 26 by Praeger Publishers, Inc...

...Other speculators have moved into the swamps of the interior and onto the slightly higher ground Floridians call the "ridge" in the center of the state...

...This chain of life is destroyed when developers dredge or cover over wetlands, as they are doing up and down the Atlantic Coast...

...Mortgage interest, finance charges, and property taxes on these lots and second homes are deductible on Federal income tax returns...

...Some speculators even sell lots from counters at Denver's Staple-ton airport...

...People come from many miles to the shore," one observer noted, "to live ten feet apart in metal boxes...

...Among them is Jerry Wolman, who made a fortune strewing suburban Prince George's County, Maryland, with apartment developments and then lost much of his money when his paper empire of high-rise downtown buildings collapsed...

...Subdivision permits have become much harder to obtain under these laws, and many recreation land speculators have been discouraged from buying Vermont land by the prospect of huge expenditures for sewage treatment, site grading, and the like...

...These, in turn, are food for larger water creatures, which, finally, are food for fish, oysters, crabs, and waterfowl...

...The giant firms send out scouts to buy up land under a variety of names, so that no one else will know an assembly is under way...

...Wolman had to weather a thus far unsuccessful legal challenge by fifty angry nearby residents before getting preliminary rezoning and dredging permission for his proposed "Harbour Towne...

...Feeding and breeding areas for wild animals have been destroyed, and their migration routes interrupted...

...Full-page newspaper advertisements artfully combine misleading impressions of the subdivision's recreational attractions with outlandish exaggerations of its investment potential...

...Department of Housing and Urban Development (HUD) official who tries to police recreation land sales, "and you can hardly miss having the blue skies, clear waters, and virgin woodlands of 'Lake Euphoria' extolled to you...

...The Corps of Engineers has estimated that a total of 180 miles of beach on the meandering Atlantic coastline is presently being eaten away by erosion...

...Boise-Cascade's withdrawal did not come soon enough to save Maryland's coastal wetlands from dredging and filling at the Ocean Pines project, or the foothills of the Sierra Nevadas from erosion and water pollution at Lake of the Pines in Nevada County, California, or the landscape in other places from the gravel roads, bulldozed lots, septic tanks, and other trappings of Boise-Cascade's two dozen recreation land ventures...

...Polluted ground water is also seeping into those streams, and the once-clear mountain air is being darkened by auto fumes and soot...

...The vast area around Albuquerque is ringed by staked-out subdivisions containing a total of more than 200,000 lots...

...This land rush is much less a necessity or a pioneer search for opportunity than it is a hedonistic impulse to escape today's cities and suburbs or a greedy desire to multiply extra money through individual real estate speculation...

...Expensive reclamation of this land is not in the plans of any of the speculators...

...Instead, available land everywhere is being assembled by professional real estate speculators who depend on their control of the market and high-pressure advertising and sales campaigns to sell subdivided sites at highly inflated prices and finance charges...

...Recreation subdivisions can prove costly to the communities in which they are located...

...Most recreation land subdivisions in California lack sewers...

...another third pays for advertising and sales expenses...

...Worried state officials and legislators, who want to keep Vermont the "state in a very natural state" once described by Robert Frost, have responded by enacting and vigorously enforcing new laws setting strict guidelines for the preservation of the quality of the air, water, and soil in the area...

...The point most often stressed in the advertisements is that available land is growing scarcer, especially where the advertised project is located, so it is certain to increase dramatically in price...

...Wetlands are the nurseries of sea life and among the most naturally productive areas on earth...

...Only the tiny town of Col ton, population 1,200, now stands in the middle of the otherwise undisturbed woodlands...

...The generosity of Boise-Cascade, in particular, is detailed in the Nader report...

...Most of this New Mexico land is dried-out, overgrazed range sold to the speculators by ranchers who could no longer use it...

...Some of these "vacation communities" are nothing more than miles and miles of barren land, much of it desert, where numbered stakes delineating individual lots are all that the lot buyers have, besides pieces of paper, to show for their investments...

...the House Interior Committee approved it two-to-one...

...Trees have been felled by the thousands and hillsides bulldozed for roads to newly subdivided lots...

...Many more lot buyers were first attracted by mailed circulars, telephone canvasses, door-to-door salesmen, and media advertising...

...To make big money, each project has to be large enough to justify an expensive promotion campaign and to give the speculator a monopoly on land in the area, so that the inflated lot prices he charges will not be undercut by smaller landowners nearby...

...Thus Nixon, as he has so often done in the past, abandoned a program he once had urged upon Congress...

...In Florida, almost all of the land along the coastal beaches is being developed into giant subdivisions by huge corporations...

...Each year the company sells an estimated $80 million worth of lots in New Mexico, Arizona, Texas, and Florida, among other places...

...Each year vast numbers of recruits are lured into the army of Americans who have bought land in vacation-home communities in every region and nearly every state of the United States...

...The time has almost passed, however, when people with a little extra money are able to drive out into the countryside and pick up a little land themselves from some individual who wants to sell part or all of his property at a mutually agreeable price...

...In 1971 Horizon Corporation bought 25,000 acres in the Adirondacks to accommodate 5,000 to 10,000 or more vacation homes, which could bring 40,000 seasonal residents to the area...

...ARNOLD SERWER...

...That was back in 1969, when that company sold $164 million worth of lots...

...Of course, the lot buyers themselves hope eventually to make a profit reselling their parcels...

...Public access to California's Pacific coastline and inland lakes and streams has been lost...

...Like other speculators, the firm went into recreation land only for the money, and when it did not come fast enough Boise literally pulled up stakes and moved out in a hurry, leaving behind land that will never be the same again...

...And, of course, the water in Gore Creek is polluted now...

...Several times that many are making payments on vacant lots staked out in recreation land subdivisions along seashores, around lakes, in forests, on mountainsides, in what had been wilderness areas on the marshes of the East Coast, in the swamps of Florida, and all across the great deserts of the West...

...The land's condition is not helped much by the cutting of dirt subdivision roads, especially in hilly areas, where the removal of the bristly ground cover leaves the dusty ground vulnerable to flash floods in the brief rainy seasons and wind storms the rest of the year...

...vacation homes there use septic tanks or the alternative method of spraying sewage over open land, both of which pollute ground water, farm ponds, streams, rivers, lakes, and reservoirs...

...Harold Berliner, district attorney of Nevada County, has estimated that an average project yields $50 million worth of lot sales in a few years' time...

...But with the threat of House impeachment, and possible Senate conviction thereafter, Richard Nixon needs all the support he can get from Senator Barry Goldwater and his wing of the GOP...

...Buyers told by salesmen that they could use their lots for camping until they can build on them find out that state or local laws prohibit camping everywhere but in designated public campgrounds...

...A surprising number of them were approached by promoters working during the vacation seasons in European cities and Caribbean resorts or at conventions back home in places like the French Quarter of New Orleans, where college students hand out the free dinner invitations on nearly every street corner around the most popular restaurants, night clubs, and hotels...

...Indeed, there are few middle-income citizens in the country who have not, in one way or another, been invited to invest...

...Yet of all of that shoreline, only eight per cent has been reserved for public use...

...The swamps, of course, had been the last refuge for Florida's remaining exotic wildlife: alligators, otters, panthers, black bear, and deer among the animals, and cypress trees, royal palms, and wild orchids among the tropical plants...

...Local officials soon find that instead of the promised expanded property tax base, they are faced with a mounting debt for the public improvements and services needed at these projects, for which it is difficult to make either the developer or the lot buyers pay...

...Second-home subdividers looking for cheaper land with which to make the next killing are now buying up other valleys and mountainsides around Vail, in a process being repeated all over Colorado...

...much of the rest is being ravaged by real estate speculators...

...Bureau of Sport Fisheries and Wildlife found eighty-two places where the tidal marshlands, which are supposed to be under Federal protection, were being illegally dredged and filled...

...International Telephone and Telegraph's ITT Community Development Corporation, for example, has mounted a nationwide campaign to sell lots at its 100,000-acre Palm Coast subdivision between St...

...The advertising and sales promotion of the projects are intended to convince prospective lot buyers that they, too, stand a good chance of making some fast money...

...They are subLeonard Downie, Jr., deputy metropolitan editor of The Washington Post, spent a year traveling in the United States and Europe to study urban growth trends...

...All of this has now been threatened by the development of subdivisions of lots for vacation and retirement homes and trailers...

...The lifeline of Big Cypress is the Fakahatchee Strand, a ten-mile-wide, two-foot-deep, fresh-water channel lined with cypress trees that winds through the swamp, feeding its hidden lakes and sustaining its wildlife...

...In a July 1972 survey of various portions of the Atlantic shoreline adding up to about half the coast, the U.S...

...Conservationists, governors, mayors, the Association of Counties and the League of Cities applauded his action...

...The ads for one California project were highlighted by a large picture of Yose-mite Falls, which are located twenty-six miles away in a national park...

...The Atlantic coastline is becoming one long strip city...

...A mountain lake encircled by trees and grassy banks is pictured in ads for Brooktrails, north of San Francisco, although the project's only lake is a small man-made reservoir surrounded by huge, sharp-edged rocks bulldozed from its bottom...

...For lots in what the speculators refer to as Antelope Valley, actually part of the hot, dry Mojave Desert northeast of Los Angeles, the scarcity of land elsewhere around the Los Angeles area is the primary selling point...

...In 1970 alone, 650,000 recreation land lots were sold for $5.5 billion, according to the American Land Development Association, with the average quarter-acre lot selling for $7,300...

...Before 1960 only a few ranchers and their grazing cattle and sheep moved through the meadows along the creek, while elk, deer, and an occasional mountain lion inhabited the aspen, balsam, and pine woods on the mountainsides flanking the valley...

...The Udall bill, similar to one passed by the Senate last June, would provide funds to states to help develop land use plans subject to Federal standards...

...In Maryland, where the dredging of boat canals and filling of land for Boise-Cascade's giant Ocean Pines seashore development are helping to destroy that state's Atlantic Coast wetlands, the firm has made campaign contributions to Maryland Governor Marvin Mandel, including one $2,000 contribution made at a Mandel fund-raising dinner in 1969...

...and the final third is profit...

...Another $4 million in improvement bonds can still be issued in the future without a vote of Brooktrails's lot owners...

...then the original seller of the land receives from the speculator a prorated portion of his payment as each lot is sold...

...A spirited battle is now being fought over what remains of the once-plentiful coastal wetlands of Worcester County, Maryland, and adjoining Accomack County, Virginia...

...The profit for the original landowner in the end usually exceeds even his most optimistic assessments of the land's worth...

...The great earnings faucet in the sky" eventually produced only a trickle, compared to what Boise-Cascade executives had expected...

...If local officials harbor doubts about the extravagant plans and grand assurances that the project will protect the natural environment, expand the locality's property tax base, and enrich its merchants, they are usually unable to afford expert studies of their own...

...Horizon, the largest landowner in New Mexico—$220 million worth—is a recreation land giant with 2,500 employes in sixty offices throughout the United States and abroad...

...Court suits and judgments against the firm followed, and some of its sales offices were shut down...

...The resulting erosion has filled streams with silt that smothers the spawning beds of fish, as well as the aquatic insects and plankton on which the fish feed...

...Where there are not metropolises like New York, there are overgrown resort towns like Ocean City, Maryland, and back-to-back recreation land subdivisions, many of them tightly packed mobile home parks on the beach...

...Eighteen of them, covering 71,000 acres, were in California...

...This Administration reversal came four years after the President, in an environmental message to Congress, called for a new national land use policy...

...When possible, these agents pay only for options on the land, with final payment to be made after the assembly is complete, the land is rezoned and subdivided, and the lots are being sold...

...Berliner's investigations have shown that one-third of a project's income is spent on the cost of the land, subdividing it, laying out roads, and putting in a man-made lake or other sales attraction...

...To the south, Horizon Corporation is marketing more than 160,000 acres—the equivalent of 250 square miles—parceled out in several subdivisions...

...A project's man-made lake turns out, like the one at Boise-Cascade's Lake of the Pines in California, to be accessible only to those families who pay, on top of the price of their lots, expensive dues to a swimming or country club owned by the developer...

...Tree-cutting and earth-moving are causing erosion of the steep slopes and filling once-clear mountain streams with silt...

...The land on the ridge had been covered with forests, citrus groves, and rich pastures for cattle...

...One of the state's most dramatically changed places is Vail, the crowded ski resort and second-home community crammed into the narrow, eleven-mile-long Gore Creek Valley high in the Rockies...

...One Boise-Cascade executive called recreation land sales "the great earnings faucet in the sky...

...Pick up any newspaper, turn on any radio or TV station," says George K. Bernstein, the U.S...

...That destruction was finally stopped in 1954, and new trees have miraculously sprouted from the huge stumps of those that were cut down and have already grown to heights of a hundred feet and more...

...One of the most seriously threatened of Florida's irreplaceable swamps is Big Cypress in the Everglades near the southern tip of the state...

...The White House then switched its support from the Udall bill to Steiger's toothless version...

...The Atlantic Coast is about 1,500 miles long as the crow flies, but it has 17,864 miles of shore, counting the rims of all the bays and estuaries that reach inland from the ocean, according to the U.S...

...North of Albuquerque, American Petroleum (AMREP) owns the hundred-square-mile Rio Rancho subdivision, where many of the lots have been sold sight unseen to New Yorkers at Manhattan sales dinners...

...The rugged, remote land for the project had been appraised by Nevada County tax assessors at $88 an acre, so the ranchers who owned it were grateful to receive $876 an acre from Boise-Cascade, which subdivided and sold it for the equivalent of $12,000 to $36,000 an acre...

...dividing it into lots averaging a quarter-acre in size to be sold at big markups, usually on credit, to city dwellers seeking vacation and retirement homes or just looking for a get-rich-quick investment in real estate...

...Today, open land on the valley floor is so scarce that skiers' cottages built during the 1960s are already being torn down to make room for multi-story condominiums...

...Then there are the financial pitfalls...

...Three projects of 2,000 lots each are under way in Vermont, where at least 25,000 vacation homes already exist...