Review of the Cost of the Redwood National Park Expansion

Gao ID: CED-79-34 January 15, 1979

Redwood National Park, in northern California, was established in two legislative increments. Since March 1978, the National Park Service and the Department of Justice have been involved in a complicated process to determine the cost of the acquisition. A review was made, from August through December 1978, to examine: the status of the 1978 legislative taking, including steps involved in settling the claims of previous owners; the original cost estimate for the additional acres taken; and trends in the redwood lumber industry, focusing on the reasons for decreased production and increased prices.

Settlement of the compensation claims will be complex; the ultimate question of value probably will be resolved in U.S. District Court after protracted litigation. The initial cost estimate for the expansion was developed without benefit of comparable sales prices and did not include such costs as severance and interest. Loss of trees due to park expansion was countered by industry adjustments which resulted in decreased production to provide for long-term, sustained operations. Little public information is available regarding industry price structure or practices. Industry sources attribute dramatic price increases to the forces of supply and demand.

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