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Utahn fighting U.S. over land liability

Deseret Morning News graphic

WASHINGTON — Utah land developer James Doyle once had it all: a thriving business, a fair amount of money in his pocket and dreams of developing a golf course community near St. George that would have made him a small fortune.

Today, Doyle lives with a friend in Arizona as he works through the details of his Chapter 11 bankruptcy. He has been forced to sell his home, business and about everything he owns.

His land — technically it's still his — is fenced off with a sign that reads Red Cliffs Desert Reserve. The future golf course, taken by the federal government without compensation, has become a preserve for the desert tortoise.

"I had my own jet and helicopter when I started this," Doyle said. Adding insult to injury, he still has to pay $112,000 a year in property taxes on the land he cannot use.

For years, Utah's congressional delegation has been trying to force the Department of Interior to pay Doyle for the land that is now part of the Washington County Habitat Conservation Plan (HCP) to save the dwindling populations of desert tortoises.

All other landowners affected by the HCP have been compensated.

"It's terrible; it's been just devastating to him," said David Lee, Doyle's Washington, D.C., attorney.

Efforts by Sen. Bob Bennett, R-Utah, to have Doyle paid for his land are again on hold, a victim of the short time remaining in the current congressional session and an abundance of other priority legislation.

Even though the bill is listed for possible consideration, "there is no way it will be on the short list of priority bills" to be considered by the Senate Energy and Natural Resources Committee this session, said one committee staffer.

Interior acknowledges that Doyle should be paid for the land, but how much remains an issue. Testifying earlier this year, Jim Hughes, deputy director of the Bureau of Land Management, said the most recent BLM appraisal set the value at $28 million.

Bennett's bill calls for an immediate $15 million payment to Doyle, after which a negotiated settlement would determine the balance owing, plus interest. It could be $40 million to $50 million, or more.

But there is concern at Interior that a negotiated settlement is different from how all other landowners are compensated when the federal government takes land, and that could set a bad precedent.

Doyle is tired of waiting. If the bill does not pass when Congress reconvenes in November for a lame-duck session, he says he will assemble the lawyers to "evaluate our choices, and we have very few. I will have no recourse but to sue."

Another option, Lee said, is to have the federal government simply condemn the land and let the courts decide what it is worth.

The problem all along has been how much Doyle, who bought the land at bargain prices, should be compensated.

"He didn't pay $15 million for it, but where in the law does it say that you take that into account how much you paid for the property?" Bennett said. "It is worth what it is worth, and how he got the land is irrelevant to the principle. It is not fair to take a man's land."

Doyle originally purchased 2,400 acres of state trust lands in 1990 for about $330 an acre under provisions of a 1988 state law that gave a preference to current lease holders. That law was deemed unconstitutional, and Doyle agreed to pay the state an additional $1 million, less $290,000 in interest.

The Utah Education Association sued the state in 1993, charging Doyle should have paid $10 million to the state. To settle the case, Doyle agreed to pay the state 30 percent of proceeds up to $3 million, and 12.5 percent thereafter.

Hence the state has a financial interest in the outcome of Doyle's case.

Since 1990, when the government declared his lands as critical tortoise habitat, Doyle has been trying to get fair compensation for the 1,516 acres "taken" by the government.

The government paid other landowners, some a little less than $10,000 an acre, others more. Doyle, who at the time had an option to purchase an adjacent 10,000 acres that would have been part of the development, insisted his land was worth about $30,000 an acre, or roughly $45 million, because the planning and zoning had already been paid for, the utilities installed and the golf course designed.

At the time, the federal government said the lands were worthless because the critical habitat designation made them undevelopable. Officials have since backed away from that position, but Doyle believes they are still far below what is fair.

Bennett said the federal government would have been further ahead to have settled the matter years ago. And considering today's soaring land values in Washington County, "it would have been a good deal."

Bennett said his legislation would give Doyle something to get on his feet and force the Department of Interior to settle the matter once and for all.

"I'm not sure $15 million would cover his legal expenses," he said. "It's not going to make him rich."