U.S. inclined to keep Nevada lake dry over debts

For a second straight summer, a once-scenic mountain lake in Nevada— acquired by the federal government for $46 million in 2008 for public recreation — will remain drained and its future in limbo until a complex case over the final price tag is resolved in federal court. Incline Lake, on a ridge above Lake Tahoe near the California state line, was drained by its owners, the Incline Lake Corp., last year after a seismic safety study suggested its dam might fail during an earthquake, said Cheva Heck, a U.S. Forest Service spokeswoman. A one-time gathering spot for Nevada's rich and famous, the 720-acre parcel was transferred to the Forest Service with a $46 million payment to the Incline Lake Corp. Cabins around the lake were torn down and a private observatory relocated to Reno in 2008. The corporation and federal government are in U.S. District Court in Las Vegas to determine whether its sellers are owed more money through a "friendly condemnation" proceeding. The corporation had sought as much as $75 million but could not reach agreement with federal appraisers, said Glen Williams, a representative of the former landowners. Sen. John Ensign, R-Nev., secured more than $5 million in federal funds to rebuild the dam, which would allow the lake to be refilled. But the Forest Service will not do so until the legal case is resolved, Heck said...more