Hearst Ranch
Cost Determination

View of Hearst Ranch from San Simeon Point

Overview:

When determining the the cost of the project there are two types of appraisals.

• Before Market Appraisal -This is the value of the property before any conservation easement or development reductions are applied.

• After Market Appraisal - This is the value of the property after the conservation easement and/or development reductions have been applied.

• Value of Conservation Easement - The difference between the Before Market Appraisal and After Market Appraisal is what the conservation easement is worth.

Current Status:

• ALC has retained an independent third-party appraisal team, and the State is in the process of commissioning its own appraisal. The first appraisal phase determines the “before” value. This is the value of the ranch today, including the 271 existing legal lots and the existing resort zoning, unencumbered by the conservation easement and before the sale portions of the ranch on the west side of the highway are conveyed.

• The second phase of the appraisal will determine the “after” value which is the restricted value of the remaining portions after the easement is in effect—including the elimination of all owner homesite rights other than the 27 retained owner homesites.

• The value of the conservation transaction is the difference between the “before” value and the “after” value.

• Funding for the conservation transaction will require approval of appraisals by all agencies or organizations involved. It will also require one or more public hearings prior to allocating any funds towards the Hearst Ranch Conservation Project.

• On February 3, 2004 the American Land Conservancy has disclosed the agreed upon price of $80 million, a $15 million tax credit and a substantial donation of property value given by the Hearst Corporation, based on the difference between the appraised value of the land and the selling price. This equates to about $1000 per acre. In comparison, the 2800-acre Ahmanson Ranch was purchased for $150 million -- a cost of about $50,000 per acre.

• The appraisal commissioned by ALC is complete and the Hearst Ranch Conservation Project value is more that twice the option price. The appraisal also indicates the value of the Ranch is going up $2 - $3 million every month in today's real estate market. This confirms that the Hearst’s proposed donations will bring the publicly funded price significantly below the fair market value.

• On March 26, 2004, Caltrans announced it is considering a grant of $23 million of mostly Federal Funds towards the Hearst Ranch Conservation Project. Final approval for the grant will occur at a meeting to be held May 13, 2004. This money must be allocated prior to July 1, 2004. This leaves only $57 million to be funded by State from prop 40 and 50 bonds, or other sources. Hearst must also donate more than 500-acres as part of this transaction.

• As part of the conservation project a $15 million tax credit may be given in conjunction with the "California Natural Heritage Preservation Tax Credit program."

• On May 5, 2004, SLOCOG approved the first phase of the funding process and Caltrans announced it will be performing its own appraisal for the values west of Highway 1.

• On May 13, 2004, the CTC unanimously approved a grant for the $23 million from Caltrans for the Hearst Ranch Conservation Project.

• On August 12, 2004, the Wildlife Conservation Board unanimously approved its portion of the grant funding for the project

• On September 15, 2004, the State Coastal Conservancy will consider the approval of the final funding for the project. To send a letter of support for this grant <Click Here>.

 

View of San Simeon Point

---

We urge you to gather information from this web site and other sources and decide for yourself whether preserving this extraordinary piece of California is important. If you decide it is, please join our effort to support this project and preserve the Hearst Ranch. If you have questions we will try to answer them if we can.

To join the effort to preserve the Hearst Ranch
<Click Here>

To ask questions or make comments
<Click Here>