Bill Koch's Wild West Adventure

The controversial businessman is building an Old West town near Paonia that’s a full-scale reproduction of a 19th-century settlement. But is the town simply the project of an eccentric billionaire, or is there more to the story? 5280 got an exclusive look at the controversial project—and spoke with the man behind the classic Western dustup.

Of course, Bill Koch is not any other cowboy, and his land is not any other estate: Bear Ranch is at the center of a bitter dispute that has divided Paonia’s eclectic community of ranchers, miners, New Agers, and farmers for two years. Koch wants to trade the federal government 911 acres of land he owns in Gunnison County, along with 80 acres in Utah’s Dinosaur National Monument, for 1,846 acres of less valuable public land in and around Paonia. Proposed in 2010 by then Congressman John Salazar, a Democrat who lost his bid for re-election that same year, the Central Rockies Land Exchange, as the swap is called, aims to connect the two disparate sides of Bear Ranch into one contiguous piece of property via a Bureau of Land Management parcel.

The federal government and private entities—ski resorts, developments, individuals—execute land exchanges all the time (typically more than 300 a year) to consolidate properties, and some observers have been surprised at the uproar Koch’s swap ignited. Although this swath of BLM open space is dotted with aspens and offers views of three 12,000-foot peaks, BLM land traditionally is at the bottom of the public-land food chain. As one of the least protected categories of federal land, the government often leases BLM parcels to mining, drilling, timber, and grazing operations for profit. The Central Rockies Land Exchange, which has been approved by the Delta County and Gunnison County commissioners, must now go before the 113th Congress.

Paonia resident Ed Marston, the former publisher of High Country News, is one of the swap’s most vocal opponents. Marston claims the deal reeks of political cronyism: Since 2006, Koch and various Oxbow entities donated more than $40,000 to Salazar, and Koch hosted Salazar on his ranch for several elk-hunting outings. But, more important, Marston believes the deal will rob Paonia of access to the Raggeds. “The land Koch is seeking provides the best existing access to 40 square miles of Forest Service and Wilderness land,” he told me.

In September, Marston led a group of locals up the contested BLM strip. Dawn Ullrey, an avid horseback rider who has lived in Paonia for 53 years, and whose husband works for the Forest Service, was on the tour, as was Frank Mastrullo, who videotaped the outing. (Mastrullo’s stepson works in Koch’s Elk Creek Mine.) When the group reached a point that overlooks Koch’s ranch, they stopped to take in the view, and a chorus of anti-Koch rants began: “It’s by invitation only,” one hiker said. Another chimed in, “A peasant like you isn’t going to give him your few pennies and get in there.” Marston added, “People like us are never considered to be fully human by him.”

Ullrey, who’s never met or worked for Koch, and does not have any family that’s ever been employed by him, says, “There is a lot of emotion involved in this, and the emotion is irrelevant. Is this a good thing for the American people, or is it not a good thing? My husband and I are of the opinion that the American people will win. In fact, we think the people in Paonia are actually going to be better off.”

Since the swap was proposed, Koch has added what he and his team consider to be several improvements to the original exchange bill. Koch has offered to build a new trailhead and improved access to the Ragged Mountain Wilderness through the acquisition of Buck Creek Ranch, an old homestead. (Marston argues the Buck Creek access is “far inferior” to the existing option.) Koch also bought a 21-acre lot on Jumbo Mountain, a popular recreation area outside of Paonia, which he plans to convey to the BLM to provide permanent public access to Jumbo; currently, a landowner allows people to cross his property to get to the mountain. And Koch’s offered to build a mountain bike trail connecting Crested Butte to Carbondale. Altogether, Koch has spent, or committed, roughly $7 million to the exchange.

Koch’s natural gas activities in the area may also be muddying the waters of the debate. Gunnison Energy Corporation, an Oxbow company, leases nearly 150,000 acres of mineral rights from the BLM and private mineral owners. One theory floating around Paonia posits the various BLM parcels included in the exchange, beyond the one that would unite Koch’s ranch, are strategic locations that provide resources for drilling and hydraulic fracturing infrastructure. Another contention is that Koch purchased Buck Creek Ranch so the land could be used for a compressor station, a condenser station, or a pipeline. “That’s absolutely false,” says Brad Goldstein, Oxbow’s spokesperson. “We bought Buck Creek for access. Period.”

No matter what Koch does, he seems to kick up dust in his wake. Conspiracy theories about him ripple through Paonia: One suggests that he (or his staff) flies his helicopter over his enemies’ homes, running surveillance or trying to scare his opposition. People say Koch’s team shows up at the homes of his opponents and asks what will quiet their discontent. Some fear their email has been hacked by Koch operatives, and rumors abound that former FBI agents pose as workers on his ranch in order to gather intel on what the employees are saying amongst themselves. “I don’t understand why there is so much antagonism and anger toward me from people in Paonia who have never met me, especially since we’ve been trying to make a lot of contributions to the community,” Koch says. Through his various companies—he owns the Elk Creek coal mine in Somerset, about 15 minutes from his ranch; Gunnison Energy, a major player in natural gas development in the area; and Bear Ranch—Koch pays more than $38 million a year in employee salaries. In 2012, he donated more than half a million dollars to charities in the region. But can Koch, the history buff, really be surprised at the local reaction? After all, the West has always loved its villains.