Lake above Tahoe to stay drained for safety reasons

RENO -- A small lake overlooking Lake Tahoe that the U.S. Forest Service bought as part of a $46 million land deal will remain drained because of concerns about the safety of a dam, the Reno Gazette-Journal reported Tuesday.

Incline Lake near the summit of Mount Rose southwest of Reno was once the playground of some of Nevada's wealthiest residents.

The lake is on a 750-acre parcel the Forest Service bought in July 2008. Experts have since decided a dam built in 1942 is unstable and could fail in an earthquake, the paper reported.

The land is open to the public, but it's just a sandy stretch of land studded with shallow pools, said Rex Norman, Forest Service spokesman. He said developing a restoration plan will take a year or more, and it might never happen because there's a dispute over some details of the land sale.

The former owner, Incline Lake Corp., maintains the property is worth $75 million. Whether it's entitled to more than the $46 million already paid will be determined in U.S. District Court in Reno.

Dam reconstruction money is being kept in reserve until the Forest Service decides what to do with the property, Norman said. It won't initiate that process until the court determines the land value, he said.

The Forest Service required the corporation to drain the lake last summer, and the agency kept the dam open during the winter, keeping the lake dry.

Sen. John Ensign, R-Nev., secured more than $5 million through the Southern Nevada Public Land Management Act to rebuild the dam. The act also was used to raise the $46 million to buy Incline Lake.

Glen Williams of Terra Firma Associates, representing Incline Lake Corp., said the government and corporation are exchanging and rebutting evidence and expert reports on land appraisals, water rights, zoning and other issues.