Home & Design July 29, 2008
A Gift for All Time
Diligence, Donations Save Land

Where private property is concerned, whether and how a piece of land will be conserved is usually dictated by the circumstances of the property and its owner.

Most properties are not appropriate for conservation; zoning designation (itself a conservation tool) often has precluded this. But when a parcel is suitable, the first tool out of the kit more often than not is a conservation easement_—also described as a voluntary conservation agreement.

“It [a conservation easement] is the most effective and most powerful mechanism we have to save desirable tracts of land from undesirable consequences,” says Matt Miller of The Nature Conservancy.

A conservation easement is a legally binding agreement voluntarily initiated by a landowner with either a government agency or a qualified conservation organization (the easement holder) and designed to restrict in perpetuity certain land(s) to a set of mutually-agreed-upon uses and conditions. Prime candidates for such easements are farmlands, significant natural habitat, scenic open spaces, areas of historic importance and properties with valuable or critical natural resources such as timber or water.

The power of the conservation easement as a tool lies with its versatility and permanence; the agreement can be tailored to meet the needs of the owner at the same time as it preserves the land’s intrinsic value through restrictions that are deemed perpetual. The effectiveness of the arrangement derives from its potential monetary reward. A conservation easement can be sold or donated, but in either case a financial benefit can accrue to the landowner.

Most conservation easements are donated. All 22 easements in The Nature Conservancy’s Silver Creek area, for instance, were donated, and the great majority of easements handled by the local restorative and conservation-inclined Wood River Land Trust are donations. Depending on the importance and nature of the resources being protected, easement donations can qualify as current tax-deductible events, will normally reduce estate taxes, sometimes significantly, and can lower property taxes. The determining factor in all these potential benefits is the officially appraised difference in the value of the land before and after an easement is placed on it. The same factor is also the basis of an easement sale, but the financial repercussions of a sale can affect more parties. >>>

 

 

 The Barbara Farm, which since 1996 has been certified organic, comprises roughly 1,800 acres about three miles west of Shoshone. The core farming operation takes place on 300 irrigated acres and the Little Wood River winds through another 100 acres. In 2005, the then-owner completed an application process through the Farm and Ranchlands Protection Program (FRPP), an arm of the federal National Resources Conservation Service, for the granting of a permanent conservation easement on these critical portions of his property. Because of the desirable aspects of the farmland, including its productive soils, the sustainable farming practices, and the healthy riparian habitat, and because of its eminent development potential, the owner was able both to meet the FRPP’s criteria for an easement and to sell the easement to a partnership of the National Resources Conservation Service and the Wood River Land Trust as the qualified holder of the easement.

Not only did this transaction forever save from development an extraordinary, productive oasis in the midst of a basalt and sagebrush desert, it also generated for the owner an immediate payoff reflecting the difference in the appraised values of the land as a farm and as a development. Furthermore, by removing the market premium attached to the prime developable portion of the land, the easement reduced the potential sales price for the whole property and consequently enabled its purchase by the managers and stewards of the farm, Judy and Fred Brossy, who had spent 22 years preparing Barbara Farm for this opportunity.

“Working family farms such as Barbara Farm provide the healthy foods and land stewardship that give Idaho a unique quality of life that we hope to see passed on to our children and grandchildren,” states Heather Kimmel, program and membership coordinator at the Wood River Land Trust. “Partnering with working farmers like Fred and Judy Brossy provides exciting opportunities to both maintain Idaho’s agricultural traditions and protect the area’s wildlife habitat and clean water.”

Whether donated or sold, a conservation easement has to be monitored and that responsibility falls to the easement holder. In addition to identifying restricted uses, the language in the easement agreement typically spells out specific maintenance criteria to be met, and it is up to the easement holder to verify that proper stewardship is being practiced. This can encompass anything from annual photo-point documentation to a much more frequent involvement in restoration programs, maintenance efforts and long-term research projects.

A more proactive, less common method for preserving environmentally important lands is with conservation buyer programs. These projects originate with a conservation organization, like The Nature Conservancy in Blaine County, which first identifies a uniquely positioned or ecologically sensitive property, buys it, and then seeks to resell it to a buyer who will commit to establishing a relevant conservation easement on it. This course of action is most useful when a target property is coming on the market and quick action is needed to avert its falling into the “wrong” hands. It does require, however, that the conservation group have the financial backing to sit with the property in case a desirable conservation buyer is not immediately forthcoming.

A strong balance sheet and well-heeled backers are even more critical when circumstances indicate that buying and holding is the best long-term strategy. Not everyone, however, can afford this tool. For qualified organizations with less robust financial resources, but healthy appetites for conservation properties, there are still ways to be effective. That is where an organization like the Wood River Land Trust figures in.

A land trust can acquire land through a bargain sale. As the name indicates, this transaction, viewed by the IRS as a combination sale and donation, requires less money than the property’s full market value would otherwise command. The seller, meanwhile, benefits from both current income and the potential tax advantages associated with a charitable donation (equivalent to the difference between the sales price and the appraised value).

Another way to effect the same ownership transfer is with a simple donation. In this case, the benefactor’s economic incentive, if even considered, would come solely from the tax treatment. In either scenario, it is not uncommon for a land trust to ask for a cash contribution to help offset monitorial and maintenance expenses; and in both cases the seller/donor and the buyer/donee should have an agreement establishing the best disposition for the land—staying under the land trust’s care or selling to a private conservation buyer after protecting it with appropriate restrictions. >>>

 

 

Conservation tools, of course, are not exclusively for the use of conservation groups and private landowners. Public entities have been actively engaged in land conservation for more than a century, though in Blaine County, which is both graced and besieged by state and federal lands bringing their own set of management challenges, local government participation in conservation efforts has been until recently relatively passive. In the last several years that posture has changed. Increasing collaboration with local environmental groups, partnering on specific restoration projects, and encouraging greater community input on planning issues have all created a more productive atmosphere for solving the problems that come with population growth in an historically rural area.

This more enterprising approach carried through the Blaine County 2025 discussions and in turn precipitated two new initiatives that could have lasting impacts on the landscape of the county. The first, Transfer of Development Rights (TDRs), is a conservation mechanism that has been widely used across the country and which, when effective, successfully allows public oversight of a private property process. Authorized by local ordinance and managed by municipal or county officials, voluntary (they can also be mandatory) TDR programs aim to establish an incentive-based market for the movement of development from areas judged worthy of protection (sending areas) to areas more suitably situated for growth (receiving areas). Merging public and private interests in this fashion requires not only a timely concurrence of market conditions and agreeably matched participants but also a persuasive advocate to carefully guide the program. That job has fallen to Jeffrey Adams.

In the opinion of Citizens for Smart Growth executive director Vanessa Crossgrove Fry, the most important part of the 2025 process was the formation of the Office of Regional Planning. Under the guidance of Adams, this department, which reports directly to the Blaine County Commissioners, is both a guiding force in comprehensive planning and an intermediary for private and public concerns. Adams’ eagerness to listen to the whole community and willingness to consider all the available tools has already (the office is only a few months old) informed aspects of a big picture view. And, in the middle of it all is an emphasis on procedure and transparency.

Starting from the top down, Adams sees comprehensive land use planning “driving everything, and it needs to become more responsive, more dynamic . . . we have to adopt legislation and practices based on greater public involvement, frequent meetings and visioning . . . interjurisdictional planning between municipalities and the county,” and, more particularly, “we have to look at zoning considerations that emphasize a locational approach and costs of services . . . continue to involve critical government agencies, such as Fish and Game, early on to help establish standards . . . stay up-to-date with technological aids and make greater use of mapping tools . . . and go to the table and talk to the cities about TDRs and the advantages of thriving receiving areas.”

Consolidating the issues of growth in an open forum that values learning and teaching and that honors the past and future equally helps keep the big picture in focus.

This article appears in the Fall 2007 Issue of Sun Valley Magazine.