Conservation easements

[sprucebunny]

I want to know more about conservation easements.
I realize that they vary from state to state and from one organization to another.

Could anyone that has any experience arranging them please give a little info

Thanks

[crtreedude]

I know about them in Costa Rica - but I don't know if that would apply.

[jbeat]

If it is a Federal Govt. program such as the Conservation Reserve Program (CRP) or the enhanced version (CREP) then your local Natural Resources Conservation Service will have all the info.. Or, their are several wildlife organizations such as Ducks Unlimited, Pheasants Forever, or the National Wild Turkey Foundation that have similar programs. Most pay the land owner to establish and maintain a conservation practice, usually grassland, for either erosion control or wildlife habitat.

[Larry]

There was some kind of program here few years ago.  Sign up your land for a conservation easement than you receive a government payment...the land could never ever be developed...even after your done gone.  Works much like CRP, except for the contract length.  Never knew all the details but think the land had to have some kind of unique conservation value...such as breeding ground for spotted owls.

Just heard of a new style of program that about half of the states have adopted.  You sign something saying you will never develop your land.  You get in essence conservation credits which you can sell.  When the developer down the road from you wants to build a big subdivision he has to come up with conservation credits...the only way he can get em is to buy them from somebody that has signed up there land in a conservation easement.  Again I don’t know all the details and since it is a state program, guess the details could vary between states.

The government is cranking out these style programs daily, it seems like.  Got my Quail Unlimited newsletter yesterday and it had a new one called CREP...Conservation Reserve Enhancement Program.  It’s intent is to “protect environmentally sensitive land, decrease erosion, restore wildlife habitat, and protect ground and surface water”.  Ain’t that a mouthful?  Rent payments go  to $100/acre with signup bonus of $100 to $350/acre.  And ya wonder why the price of land is so high.

Is this the kind of programs your trying to find out about or something else?

[sprucebunny]

Yes, Larry. That's the sort of thing I'm looking for.

I was thinking I could sell a conservation easement for ( at least )
enough money to buy a running, rolling, will-probably-work-tomorrow skidder of some sort. Have a bunch of land but no money and I would like to see this land protected.

I called the Society for the Protection of NH Forests and they were encouraging. It will take time to see what really happens.

I'm interested in other groups that buy or acquire/manage conservation easements and other people's experience with the process. You can send me a PM if you prefer.

The conservation credits are interesting but I don't see that happening up here... too much land in relation to population/ building pressure.

[Ron Scott]

Some info for New Hampshire

http://www.spnhf.org/pdf/CEQAFact.pdf

[sprucebunny]

Thanks, Ron. I hadn't found that before.

I kind of got to wondering about how this all works and the standard operating procedure. Do land owners solicit bids on thier property from, say, 3 different conservation groups or generally have one that they believe in so strongly that they don't 'comparison shop'

I realize that sooner or later, I will need a lawyer. I know so little and it's a big decision .....

[Ron Scott]

It often depends upon the interests of the landowner and the designated Conservancy as to what special landscapes, ecosystems, habitats; etc. that are of interest to both parties for retention and protection.

Each Conservancy may offer special benefits to the landowner, state and federal tax breaks, etc. depending upon the rules and regulations that they operate under. A special management plan for the designated property is usually a primary requirement.

I would check with the Society for the Protection of New Hampshire Forests for further information etc. as a start as to the specific Conservancys operating in New Hampshire.

[sprucebunny]

Is it fair to ask an agency that holds/encourages conservation easements to tell the names of what might be thier 'competitors' ?

Is there competion amoung these groups to acquire land/easements ?

I realize these are somewhat difficult to answer questions. I put the question in this section because a forester or wildlife management specialist would likely be asked to review a piece of land by each prospective purchaser/recipient.

[Phorester]

Here's 2 groups in Virginia.  http://www.valleyconservation.org/
http://www.pecva.org/

CREP, CRP, are costshare programs, not Conservation Easements.  The legal conclusion to a Conservation Easement is a new deed on a property, with stipulations on what can and cannot be done by the current and future landowners.  Every organization or agency that buys Conservation Easements will have different criteria, although some will be pretty similiar.  Most will limit the number of times a property can be divided in the future.  Provisions can be made for immediate family members to have a future lot, for instance, but they cannot be sold to anyone else, and the familky member cannot sell a lot after they acquire it.  Most Easements will stipulate that the property must remain undeveloped forever.  No new buildings can be built unless they are needed in the farming or forestry operations, like a new barn or a private sawmill for instance.  Some will even limit forestry operations, out of the misconception that cutting trees "ruins" the forest, so steer away from those. Read the fine print and ask a lot of questions.

You yourself can't sell a conservation easement.  They go with the land.

But as had been said, every State is different.

[farmerdoug]

Sprucebunny,
I do not think you will have to worry about competition between groups.  Around here there is way more land available for easement than money so I think they should be willing to work together.  Make sure you can live with easement and get a lawyer to read it and inform you of the contract before signing.

In Michigan there is a push to buy development rights but no money.  The laws are in place but noone wants to pay for it.  We are trying to find a money source within our county but it is slow with the economy the way it is.  I am on our township planning comission and we talk about it regularly.  I hope you can find someone with the money.  You may have better luck closer to the east coast too.

Farmerdoug

[Ron Wenrich]

Put this in the "For what its worth" department.  I talked to one of the local farmers today about conservation easements.  His take is that it is a condemnation to farm.  You sell your development rights, then your property loses value.  Development pops up around you and you're the only green island or open space that's available.  Eventually, the newcomers take over the area and slowly squeeze you out of farming or logging.  Farms eventually revert to the government because no one can make a living out of farming.

Now, that's not to say that it is or isn't a good idea in your case.  Your property value will drop.  Perpetuity is a really long time.

Too bad they don't sell one that has a time limit. 

[dsk]

Ron's observations are pretty right on when you ask the question "what's the downside of a conservation easement". I considered this for some of my own property and the more I looked, the more it took on the appearance of selling some of the rights to my land (e.g. mineral rights, water rights, timber rights, hunting rights, etc.).

Here's an extreme, but real, example...

A neighbor of mine had a million dollar farm ten years ago (almost 600 acres) when he sold the subsurface limestone and mining rights for $300,000. Thought he was clever by keeping control of the surface. Nowadays his property would be worth about $1.5 million if the rights were intact, but as it is, he couldn't interest a single buyer in his 600 acres of "surface". Last year he finally got a bid for $1000/acre, and the quarry who owns the subsurface exercised their right of first refusal and bought the surface for that price.

So in the end, the guy got just $900,000 for a property that was worth $1,000,000 ten years ago, and $1,500,000 today. Crying shame too, cause I would have gone way into debt to own that piece of West Virginia.

Moral of the story, if you don't mind losing property value, want to prevent development, or are feeling philanthropic... then an easement is the way to go. But if you want your land to be an asset to yourself and your heirs, then do everything you can to protect and improve its market value.

[grassfed]

I spoke with the people at the Vermont Land Trust  a few years ago.  As far as how much they will pay, they told me that they use real-estate appraisers to try to determine the fair market value and then determine the value of the conservation easement based on the potential of the property to be developed.

 In other words things like road frontage soil types access to utilities ... come into play.

The land owner pays for the appraisal and then a conservation easement proposal is put together.

This proposal may contain other aspects such as public access for hunting and recreation… and any other things that the land owner is willing to accept. Once the proposal is completed it competes with other land owner proposals for the available funding that year.   

So in the end, the guy got just $900,000 for a property that was worth $1,000,000 ten years ago, and $1,500,000 today. Crying shame too, cause I would have gone way into debt to own that piece of West Virginia.

You have to calculate the value of $300,000 compounded over ten years in order to judge whether or not it was a good deal 

[Phorester]

The whole idea behind Conservation Easements is that the landowner does not want the property to be developed.  Therefore he or she is already willing to accept a lower price for their property in the future. In other words, not selling it for development, but selling it for farming or forestry.  To such a landowner, keeping it undeveloped forever is more important than getting the highest price for the property.  That also has value, although not monetary value.

So if a landowner is interested in getting top dollar for his wooded property or farm, then he should not get a Conservation Easement on it.  It's a matter of ownership philosophy. What is an asset to one person is a liability to another. Personal philosophy.

In Virginia there is no Conservation Easement that requires the landowner to open his land to public use.  Most Easement holding organizations emphatically make that point. You don't "lose control" of your property if you put it under an Easement. That's one of the mis-understandings of a Conservation Easement.

But another point is that just because somebody wants to put their land into an Easement doesn't mean that Easement holders will flock to their door.  If the land has no redeeming factors for keeping it undeveloped, you will not be able to get a Conservation Easement on your property.

For instance, a 100 acre piece of woods in the middle of 1000's of acres of woods will probably not qualify for an Easement.  But 100 acres of woods or a farm on the edge of a developing area might, because it might be considered a stopgap to uncontrolled development in that location.

[Brian Beauchamp]

HFRP and WRP offer time-limited easements. They vary on each, but a 99 year easement on HFRP will pay 75-100% of the value of the land and approved costs and a 30-year easement will pay '75 percent of the fair market value of the land, less the fair market value of the land encumbered by the easement' and 75% of the approved management costs.

Your property may or may not qualify for one of these programs, but they are definitely worth looking into with your consultant.