Chesterton Tribune

Leasebacks expiring: Long chapter in National Lakeshore story coming to an end

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A long chapter in the history of Indiana Dunes National Lakeshore will come to a close this September, when the terms of residence for 45 homes sold years ago to the federal government and then incorporated into the park expire.

In common parlance the homes are known as “leasebacks,” a misnomer because the homes’ occupants do not actually lease the property nor pay the government anything at all for it.

More technically, the homes are called “reservations of use” or ROUs, because their former owners retained the right to live in them for a specified length of time after selling the property to the government at a reduced amount, usually 1 percent for each year of retained use. Thus, under a 25-year ROU, the seller would have been paid 75 percent of the market value.

(Many other owners sold their homes for full market value and vacated them immediately. Those structures were demolished, the natural resources of the property restored, and the land opened to the public for recreational use. Since the National Lakeshore was authorized by Congress in 1966, the government has purchased more than 6,100 tracts of land to incorporate into the park.)

Now, though, of the more than 350 ROUs at one time in effect in the National Lakeshore, only a few remain, and of those nearly all expire on September 30: 26 to be exact. According to a letter from Superintendent Constantine Dillon to the Chesterton Town Council—dated March 4 and made available to the Chesterton Tribune—of those 26 ROUs, 12 are occupied by the original sellers, 14 by persons who purchased the years remaining on the ROUs from the original sellers.

Of the 12 original sellers still occupying the ROUs, eight were willing sellers at the time, Dillon noted, while the four remaining properties were condemnations.

As part of the negotiated sales contract, the National Park Service (NPS) will pay —come September— “the majority of the moving expenses” of those 12 original sellers if they request, Dillon stated. Or those 12 may opt to move their home to a site outside the National Lakeshore—if the re-location itself does not damage park resources—at their own expense.

ROU occupants pay a reduced Indiana property tax “based on the value of the improvements to the property,” Dillon observed, but “do not pay property tax for the land value.”

The oldest ROU was purchased by the government in 1969, Dillon stated, and 23 of the 26 ROUs which expire in September were purchased prior to 1991.

Meanwhile, another 19 special use permits (SUPs) also expire on September 30. SUPs have allowed the occupants of ROUs which previously expired to continue living in the homes when it “was demonstrably” to the government’s advantage to let them do so. Permittees pay NPS an average monthly rental fee of $425—some with a lake view are higher—but nevertheless “rates are way below the average rental rates charged for the area,” Dillon stated.

All SUP occupants “knew when they moved into the SUP unit that they could not stay beyond Sept. 30, 2010, and that moving expenses would not be covered by the NPS,” Dillon added.

“NPS is sympathetic to the people in these properties,” Dillon stated. “Any move is stressful. We have been in regular contact with all ROU and permit holders over the years and provide information to them on a regular basis. Last year, as a reminder, we sent letters to all ROU and permit holders regarding the Sept. 30, 2010, contract date and procedures for vacating. We have provided details on how to contact us with any questions, information on relocation costs for those who were eligible, and contacts for social services and government agencies that assist relocation and adjustment.”

What’s Next

Once vacated, 39 of the 45 ROUs and SPUs will be demolished, Assistant Superintendent Gary Traynham told the Tribune. “We’ll start the process as shortly after Oct. 1 as possible, as soon as the folks move out,” he said. “I can’t tell you we’ll get them all in the first shot but we’ll get a significant number of them.”

None of the 39 will be used as private residences for federal employees, Traynham added.

The homes on the other six properties, on the other hand, are eligible for inclusion on the National Register of Historic Places and are currently under review. “We will look at those properties for administrative use,” Traynham said.

When the homes on the 39 properties have been razed, NPS will restore the natural resources on the sites, Traynham noted, although it’s unclear when exactly those sites will be opened to the public for recreation. “Many of those properties are off roads owned by local townships,” Traynham said. “Getting the homes removed is one thing. Getting the roads vacated is something else. Some areas may become hiking trails. First we get the homes removed and the natural resources restored. Then we get the roads vacated. Then we look at the General Management Plan.”

After Sept. 30, only nine ROUs will remain occupied in the National Lakeshore, eight of them in Lake County, one in Porter County. Of those nine, four—including the one in Porter County—are “life estates,” under which the original seller may remain in the house until his or her death.


Meanwhile, NPS has filed suit against the occupant of a ROU which expired June 20, 2009 but who has not vacated the home.

In a letter dated Jan. 6, 2009, NPS informed Deborah Pavel, who resides at the ROU at 260 S. Prospect in Beverly Shores, that her reserved interest expired on June 20. On May 26, 2009, NPS gave Pavel an extension of 60 days, to Aug. 20, 2009, and informed her that “No other extensions will be granted.” On Aug. 7, 2009, NPS reminded Pavel by letter of the expiration of that extension.

Then, on Aug. 21, 2009—the day after the extension had expired—NPS advised Pavel, still in residence at 260 S. Prospect, that she was now “illegally trespassing on National Park Service federal property” and that she “must take immediate steps to relocate, including removing all of your personal property” from the home.

She did not and NPS filed suit.

Traynham said that this is the only suit currently pending related to ROUs.


Posted 5/13/2010