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Tuesday, May 3, 2005
Lands lose guardian when trust goes bust
Bad investments leave little money for dozens of small preserves
SAN DIEGO -- For years, the fate of some of this region's rarest creatures -- and the fragile lands where they live -- rested with a non-profit group called The Environmental Trust.
Its mission: Protect and nurture dozens of preserves spread around San Diego and Riverside counties.
It seemed like a noble cause -- until the truth came out.
The trust, mired in debt, had quietly abandoned many of the preserves. They sat untended for years -- vulnerable to invasion by weeds, pets, trash dumpers and dirt bikers. At one preserve, a county inspector found a creekside tire swing local kids had been using.
Years after promising to maintain the lands "in perpetuity," the trust in March filed for Chapter 11 bankruptcy protection. Its latest tax return lists "unperformed obligations" of more than $2 million.
The failure of The Environmental Trust in one of the nation's most biologically diverse counties epitomizes the government's hands-off attitude in sizing up the financial stability of the managers of preserved lands.
The trust was responsible for managing more than 90 properties covering roughly 4,600 acres, according to preliminary estimates, including a handful of habitat plans approved by the U.S. Fish and Wildlife Service. Those plans required developers to hand over dozens or hundreds of acres to help endangered species in exchange for approval to build housing projects. Other properties were preserved to offset development allowed under larger habitat plans by the city or county.
Taken aback by the bankruptcy, Fish and Wildlife officials are looking for answers. The agency has taken no action to date to ensure that the preserves are being properly managed.
"We're still at the understanding-what-happened stage," said Susan Wynn, a Fish and Wildlife biologist who worked on the plans.
Management of the preserves was supposed to have been paid for by obtaining endowments from developers. The money was to have been invested, with the interest paying for the upkeep.
But costs for labor and equipment far outpaced the endowment, according to the trust's bankruptcy lawyer, Michael Breslauer.
"There are some fundamental flaws and assumptions people make in what it takes to maintain these properties," he said.
Trust founder Don "Doc" Hunsaker II, a Texas-educated biology professor, said in a recent interview that the idea was to do "passive management. We didn't want to do any heroic work. ... Basically, we were protectionists who wanted to grab land and save it."
The group was granted non-profit tax status in 1990. Sinking much of the endowment in the stock market, Hunsaker counted on a return of at least 5 percent. In the turbulent economy of the late '90s, real earnings fell well short.
"We're sitting here with a 5 percent budget, making 2 percent," he said.
The Environmental Trust's assets plunged from $18.2 million in 1999 to just under $7.9 million in 2003, tax returns show. Recent court records put the organization's net worth at $3.7 million, with debt exceeding $13 million.
Hunsaker resigned in the wake of the financial meltdown, handing control of the trust to Brad Thornburgh, whose expertise is commercial real estate.
When Breslauer came into the picture, he found the trust's books "maintained in a rather haphazard form."
"We can't even identify the flaws now," he said, "but the evidence is there -- the fact that the trust has failed."
Hunsaker said he thinks that other organizations charged with managing wildlife areas are also struggling financially: "We're just a little microcosm of what's happening."
Many preserves are being managed on a shoestring, said Sherry Teresa of the Center for Natural Lands Management, another non-profit in Southern California.
And some of the lands are being watched over by people with little or no expertise -- from homeowners associations to parks departments to flood-control districts, she said.
"Half the places turn into motorcycle parks, or they get overrun by invasive plants. ... If you don't take care of it, what's the point? All of this was for naught."
| LIVE CHAT | |
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Reporter Robert McClure answered readers' questions about this special report in a live chat on Thursday, May 5, 2005. Read the transcript. | |
| HEADLINES | |
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PART ONE
PART TWO
PART THREE | |
| SOUND OFF! | |
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What are your thoughts on the issues raised in this report? Share them now. | |
| PHOTO GALLERIES | |
See a collection of watercolors of endangered species by P-I graphic artist David Badders. Text by researcher Marsha Milroy.
Gallery 1: Endangered species in the Northwest/West Coast, Interior West and South/Southwest 
Gallery 2: Endangered species in the Southeast and Great Lakes | |
| PUBLIC INPUT | |
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May 12 is the deadline for the public to deliver comments on Washington's proposed Forest Practices Habitat Conservation Plan, also known as Forests and Fish. | |
| ABOUT THIS SERIES | |
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This project was led by P-I environment reporters Robert McClure and Lisa Stiffler, who reviewed more than 10,000 pages of documents and conducted hundreds of interviews involving sensitive lands in Washington, Oregon, Montana, California, Arizona, Texas, Alabama and Florida. Read more about this project. | |
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