VERNON - The state is buying back a vast stretch of parkland atop Hamburg Mountain that was sold to a ski area more than a decade ago and was later targeted for vacation housing, according to sources familiar with a $7 million deal expected to be announced today by Governor McGreevey.

Intrawest, a Canadian-based resort company, had planned to convert the 1,800-acre Sussex County mountaintop into an 833-unit condominium village and 18-hole golf course as part of a massive expansion of the Mountain Creek ski area.

Under the agreement expected to be announced today, Intrawest instead will sell 400 acres to the state's Green Acres program for $7.15 million. The other 1,400 acres will be donated to Green Acres.

The donation clause amplifies the agreement's value for Intrawest by making the company eligible for state and federal tax breaks.

It also saves face for state officials, who had sold 1,200 acres of the land for only $837,000 in 1986 and might be hard-pressed to justify paying almost six times that much on a per-acre basis to buy the land back.

Brokered by Michael Catania, executive director of the Nature Conservancy of New Jersey, the deal is meant to balance preservation and economic development in one of the state's last outposts of pristine woodlands.

Intrawest will keep pushing its expansion plans, though now primarily in the Black Creek Valley at the mountain's base. At least 300 condominium units and the golf course will be added to 900 housing units, retail stores, and hotels already proposed there, said Intrawest attorney Edward Trawinski.

The state gets back what was once the Hamburg Mountain Wildlife Management Area - visible from High Point State Park. The mountain forms the headwaters of the Pequannock River, a major water supply source for North Jersey.

"There's going to be a substantial economic development taking place in Vernon Township that is not going to impact upon environmentally sensitive lands," Trawinski said. "There was a give-and-take on both sides."

A state Superior Court ruling last year said housing on the mountaintop would violate a conservation easement on the property, enacted when the state sold it in 1986 to Intrawest's predecessor, Great American Recreation.

The state Attorney General's Office had joined several environmental and civic groups in the lawsuit. Judge Reginald Stanton in Morristown eventually ruled in their favor.

That setback for Intrawest accelerated negotiations over a possible sale of the property during the administration of former acting Gov. Donald T. DiFrancesco.

The deal had been held up in recent months by Intrawest's demands that environmental groups pledge not to block other portions of its expansion if the mountaintop was returned to the state.

A representative of the New Jersey chapter of the Sierra Club said Monday that there is no such condition in the final agreement.

"Both the state and any party related to the litigation have said the mountain is the mountain," said Sierra Club spokesman Jeff Tittel. "It has nothing to do with anything down below. We've not signed away any rights to do with the valley."

The proposed shift in construction to the Black Creek Valley belies earlier statements by Intrawest executives while they were fighting the environmentalists' lawsuit. Intrawest Vice President Donald Ross - a former Vernon Planning Board attorney hired to shepherd the project through the local approval process - had said the mountaintop resort was key to the company's $500 million expansion. Without the luxury mountaintop community, Ross said, the company might reconsider its entire project, leaving Vernon with only a struggling ski area in an area with limited snowfall.

Trawinski said Monday that executives at Intrawest's Vancouver headquarters had a change of heart after the lawsuit setback.

"While they would have preferred to develop the mountaintop," he said, "they came to the realization that with the population base that is within an hour's drive of Vernon Township, it still could make economic sense and still be a viable project without the mountaintop."

The 1986 sale of the land was backed by state Sen. Robert E. Littell, R-Sussex, who also helped negotiate the agreement with Intrawest, according to Trawinski.

When asked Monday about McGreevey's expected announcement, Littell said: "The governor's coming up to Sussex tomorrow, and he's going to do several things. That's one of the things we're hopeful for."

Staff Writer Matthew Brown's e-mail address is brownma@northjersey.com

© 2002 North Jersey Media Group Inc.