POT MAY BE PROPPING UP MENDOCINO'S RURAL LAND VALUES

Land prices in Mendocino County's rural northeastern region have
weathered the recession better than other areas, the result many
believe that has more than a little to do with marijuana production.

"Of course, i"s a factor," said county Supervisor John Pinches, whose
district includes the area.

Overall, the value of Mendocino County real estate has declined by
1.4 pecent, or $140 million, in the last year, said county
Assessor-Clerk-Recorder Sue Ranochak. That translates to a property
tax loss of $1.4 million. The county's share of the loss is about
$420,000, she said.

Many homeowners in the county have been seeking reductions in their
property taxes as their home values have plummeted. But there have
been few requests in the northeastern county, Ranochak said.

"We haven't seen the drop in values in that area. I'll let you decide
why that is," she said.

Foreclosures also are rare in that area, Ranochak said.

The rugged territory stretching from Laytonville to Covelo is known
for its pot production.

"That's the major economy in the northern part of the county. That's
no secret," Pinches said.

But he doesn't believe it's the only thing buffering land prices
there. Property values in the area did not skyrocket the way they did
in some areas of Mendocino County, so they didn't suffer the same declines.

"The property in the north county has never been oversold like some
of the properties have," Pinches said.

Ukiah real estate broker Dick Selzer agreed but said it's clear the
land values have been propped up by the money made from marijuana production.

"It's income property," he said. "It's a profitable business to own
real estate and to grow dope and sell dope. That's just the way it is."

Some in the marijuana industry fear that may not last as a glut of
marijuana continues to lower prices. At a forum on the future of
marijuana, growers reported many people are having a hard time
finding outlets for their crops.

Many were conflicted about an ballot initiative that would have
legalized marijuana for all uses in California because it could have
created greater competition. The November ballot measure failed.

The price of North Coast marijuana already has dropped to about
$2,000 a pound, down from $4,000 to $5,000 a pound several years ago.
Prices can vary dramatically, depending on quality, growers say.

Jim Hill, a member of the Mendocino Medical Marijuana Advisory Board,
said he's heard land prices already are declining in the north county.

Some rural landowners already may be having trouble paying their
bills, he said.

Many of them purchased owner-financed properties because it's nearly
impossible to obtain regular loans for bare land, Hill noted.

One thing is clear, Hill said. "When these land prices do come down,
we're going to lose a lot of value to the county."