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CONSERVATION EASEMENTS
What They Are and How They May Impact Eastern Hardwoods
A Speech to the
National Hardwood Lumber Association
27th Annual Hardwood Symposium
May 21, l999

Carol W. LaGrasse
President, Property Rights Foundation of America

Introduction: Environmentalists, government and sectors of the forest industry laud conservation easements as a permanent means by which to maintain "working forests" while protecting the environment. Under these transactions, the title to the base land remains in the hands of a company which intends to continue to practice forestry, while the State or a land
trust acquires a perpetual conservation easement which prohibits other uses and gives the grantee certain powers to enforce the easement and manage the land. The government pays big money for the easements and they are considered to be worth as much as 90 percent of the overall land value.

In December, Governor George E. Pataki announced that New York State planned to acquire conservation easements in 110,000 acres of forest land in the Adirondack region from Champion International Corporation. The media reported universal praise for the far-reaching plan, which is said to protect working forests while preserving nature. At the same time, many local towns and the regional association of land-based industries, the New York Blue Line Council, tried to register their opposition to a relatively "small" fee simple State acquisition of 29,000 acres from Champion as part of the same agreement.

The 139,000-acre acquisition plan was the largest ever negotiated by New York State. Such accolades were attached to the easement plan that it eclipsed opposition to the fee simple acquisition of the 29,000 acres, even though the latter area is just under twice as large as the previous year's State acquisition of 15,000 acres from the Whitney estate, a controversial
sale that was debated publicly at great length.

Nationally, little criticism has been raised until recently about these transactions. On the contrary, the very conservative Goldwater Institute, based in Phoenix, Arizona, recently published a glowing issue analysis about conservation easements entitled "Preserving Open Space-The Private Alternative." The report stated that the use of land trusts to purchase easements in land and either hold them or transfer them to the government is private conservation which ensures the long-term preservation of open space by protecting range land and providing "grass banking."(1)

The study reached the following conclusion:

"There is a vast literature written by philosophers, economists, political scientists and others on the moral and material superiority of voluntary, private actions over a system based on politics and government commands. Private conservation efforts, like land trusts, embody these virtues.
Landowners are compensated for their land, instead of having its value taken out from under them. Taxpayers are not asked to finance amenities they neither want nor need. Private conservation preserves both the environment and individual liberty." (2)

The Goldwater report, however, leaves a misimpression by stating that the land trusts are mainly involved in private conservation and misses the picture that the land trusts are largely acquiring land on a prearranged flip to government. It fails to deal with tax impact issues accurately and
completely. It states that the land trusts are decentralized and small, leaving out the reality of the enormous wealth and concentration of power in the land trust movement. It fails to discuss the monopoly and secretive, biased arrangements in the relationships land trusts enjoy with government. It fails to discuss the use of litigation by land trusts to obstruct the use of land they wish to acquire for government. The report fails to discuss the valuable free services the government performs at taxpayer expense for land trusts without open consideration or competition. And the report fails to report the millions of dollars of grants received by the land trusts from government.

The Goldwater report fails to note the 30-year evolution of conservation easements toward tighter restrictions of the original owner and a balance of power weighted to the easement buyer. For example, in 1971, a model conservation easement advocated by the National Audubon Society, which was used by the State of Wisconsin, specifically protected the right to farm
with an all-inclusive clause, that "this indenture poses no other... restrictions on the parties of the first part... that they... shall in any way be restricted from carrying out farming practices..."(3) By contrast, in the 1990's, Bart Dye, a farmer in Shoals, Indiana, attempting to buy back his 150-year-old family farm from the USDA Farm Services Agency, found that government's nebulous conservation easements leave the power of decision making with the government to such an extent that the land is of such questionable value for farming that he cannot secure a mortgage.(4)

The Goldwater report also fails to compare the government and land trust conservation easement arrangements with innovative enterprises that are fully within the private sector. The real estate division of Sotheby's in New York has a program to preserve ranches in conjunction with the Sand Creek Co. in Buffalo, Wyoming, by offering cooperative ranch ownership to
multiple wealthy buyers without the involvement of the government or land trusts. This commercial undertaking, sells "ranch-steads" of 40 acre building lots for approximately $1 million each, along with membership in a ranch preservation association limited to the ranch-stead buyers.(5)

Considering that such glowing reports about conservation easements predominate even though serious questions can be raised without looking further than the issues related to the use of land trusts, the need obviously exists to ask exactly what are the pros and cons of conservation
easements.

Pros and Cons

The Arguments in Favor of Conservation Easements

Conservation easements are primarily valued because they are said to be essential to preserve working forests. It is said that the easements are necessary because one or more of the following conditions hold true:


The land would otherwise revert to subdivision and development.


The land would be unaffordable for forest use because of taxes on real
estate.


Industry could not survive against global competition or have a positive balance sheet, considering its financial assets tied up in land holdings, without an immediate infusion of capital to realize equity.

Without the easements, industry would exploit the forests to such a degree as to cause ecological harm, or, at a minimum, industry would not practice sustainable forestry.

Because of the economic and environmental issues at stake, rural communities based on the forest industry need the protection of conservation easements to survive into the future.

Forest owners are said to prohibit recreational access to their vast holdings, which should be opened to the public.

In addition, it is said that even if the cash flow to sell the conservation easements is not essential to assure the survival of any sector of the timber industry, the sale of the easements provides a fair realization of equity that is desirable to improve profitability.

It is further argued that conservation easements, being negotiated with willing sellers, are a fair means of government acquisition of interests in land, being respectful of private property rights without using coercive eminent domain.

Finally, and most importantly, conservation easements are valued because they purportedly rely on the private sector and retain land in private hands.

Weaknesses of Arguments in Favor of the Use of Conservation Easements

The above-stated arguments in favor of conservation easements have many weaknesses.

Subdivision and Development.

On the broad scale, in New York State, forestland is not reverting to subdivision and development. Sixty-two percent of the land area of the state is forested, totaling 18.6 million acres, of which 15.4 million acres is timberland. At the turn of the century, less than twenty percent of the state was forested, but the forests returned as farms grew up with trees.
The state's forest acreage continues to increase.(6)

Beginning in l990, the federal government spent $4.5 million for five years of studies commissioned by the Northern Forest Lands Council, to determine whether privately owned forests in 26,000,000 acres of northern New York, Vermont, New Hampshire and Maine were threatened by development and how to save them. James W. Sewall Co., of Old Town, Maine, the consultant hired by the Council to determine the extent of forest land conversion, concluded
that the only significant transfers of large parcels of land out of the forest industry was 6 percent of the total acreage of these tracts (granted as either easements or fee simple) to government for conservation purposes during the 11 years under consideration. Transfers of large tracts to other non-forestry purposes were negligible.(7)

Real Estate Taxes

Real estate taxes are unquestionably a burden to the forest industry in New York, Vermont, New Hampshire and Maine, according to the Northern Forest Lands Council's report issued in l994.

"Rising property taxes have severe impacts on the ability of landowners to own and manage forest land," reported the Northern Forest Lands Council, urging local governments to tax the land based on current use rather than development potential.(8)

The economist's report prepared for the Council stated, "It appears that timber management in the Northern Forest Lands Region is only profitable at low taxes per acre (generally under $2 per acre) and even at that level, only the better sites are profitable."(9)

The Northern Forest Lands Council called for tax relief from both real estate and federal inheritance taxes to preserve forestlands. It urged estate tax reforms to eliminate the pressure on heirs to sell forest land they inherit.

In New York, forest real estate tax exemptions are available, but the harvest plans required by statute restrict harvest scheduling, making it more difficult to harvest when demand and pricing are most favorable. Yet, some spokesmen for the timber industry in New York have said that they could live with the current level of taxation if regulatory certainty and fairness prevailed.

Conservation easements may not relieve the tax burden. In the case of Adirondack Park Mountain Reserve v. Board of Assessors of the Town of North Hudson, the second highest court in the state ruled that the property value was not diminished by the sale of conservation easement to New York State, where the State forever acquired the development rights. The land had been assessed for its current use for recreation before the transaction and there had been no development plans. The court ruled in favor of North Hudson that no reduction in assessment was required after the development rights were sold.(10)

The statute provides for it, and a proposal was floated this year to have New York State impose distribution factors that local assessors would apply uniformly to divide the tax burden between the base land and the easement. Local assessors have been heading this off, and may continue to assess the land as a whole, undivided entity, allowing the easement parties to divide the tax burden among themselves.(11)

In other states it may be that different law prevails. But there is a fundamental inequity in reducing the taxes on certain parcels on the basis of what have been classically considered "self-serving" easement sales. After the easement is sold, the land is to be used in the same way by the same type of owner as was the case before the transaction.

In Maine, the nation's largest land trust, The Nature Conservancy, announced in March that it had bought a tract of 186,000 acres of land from International Paper and others in the industry with the intention of becoming a forest harvester itself. The tract in the Upper St. John River region, is larger than Baxter State Park. It is widely suspected that a grandiose tax exemption may be applied to this and additional large tracts now being sold outright or divided in title through easements.

Communities may be concerned about the immediate effect on their tax base, but in New York and other states, property owned by a non-profit corporation or a church loses its tax-exempt status when the property is not used for tax exempt purposes. It is hard to imagine that land in forestry by a non-profit can be tax exempt.

In summary, it is uncertain whether, in the absence of a legislative directive, businesses practicing forestry on lands from which conservation easements have been sold can count on the real estate tax break they seek. Land which may be expensive to hold because of real estate taxes may remain under the same pressure

The Burden of Land Ownership to Competitiveness.

A forest owner may find that the rate of return on investment may be low enough that other investments have a greater rate of return. The present worth of this investment will be increased as a result of the purchase price of the easement and by the tax reduction, if granted, during future years. Moreover, the owner may not be able to sell the land to invest in other enterprises and he may not be able to develop the land-either choice being foreclosed in the Adirondacks and in certain other regions by the regulatory impositions on property owners.

Only a specific case study will reveal whether the burden of forest land ownership is excessive. A case study would also reveal whether any excessively low rate of return is predominantly due to the cost of taxation or the burden of regulations.

It should be kept in mind that even if taxes were lowered and the regulatory burden eased, land may still be subdivided and sold, as a result of market considerations.

Therefore, assuming that the important factors to be discussed below do not intervene, the landowner's choice of whether to sell easements could be compelled by the limited issue of the financial burden of land ownership but could be just as likely to be based more broadly on profitability considerations.

Environmental Protection And Sustainability

Contrary to claims, government easements and fee acquisitions may actually reduce environmental protection and sustainability.

In New York's Adirondacks, forestry experts observe that making large amounts of public money available for acquisition, either in fee or easement, encourages poor stewardship by rural owners. This is because the State may pay a premium price for lands that have been stripped of all timber value. In fact, many rural private owners in the past 30 years have cut their properties prior to selling to the State (i.e. the Whitney's and Champion). In the absence of State acquisition pressure and in a market system of knowledgeable buyers, owners would receive less money for their properties if they liquidated timber resources before selling.

After acquiring the land, government management may be inferior to that by private landowners, since private parties appreciate the market value of the resources to be produced. Federal and state government are shifting policies in the direction of extreme non-management of land, and even widely favoring policies that encourage wildfires. Much has been written about the federal
mismanagement that has encouraged millions of acres to burn in the West. Less has been said about New York State's mismanagement. The most extreme example was after the l995 Adirondack blowdown, which leveled about 400,000 acres of State-owned land. According to the computer model study commissioned by the State, the fire hazard conditions caused by the fuel
buildup were such that normal weather and commonplace conditions could produce a fire of the worst severity possible. The State's study pointed out that firestorms could generate their own weather conditions and the fire could not be subdued by available means.(12) The State disregarded the study and let the timber lie after environmentalists protested the supposed
"threat" posed by salvage logging. Wet summers fortunately blessed the region for the next three years.

Sometimes, when environmentalists offer an explanation for the need to use easements to protect sustainability, they hearken back to antiquated forestry practices that are no longer in use, and pretend that normal modern forestry in the United States is not sustainable. But, contrary to the assertions of some environmentalists, modern forest practice is highly
cognizant of the importance of balancing production and environmental factors, and even "growth equals harvest" is practiced over the long-term by some companies in industry.(13)


Easements are said to be necessary to protect rural communities

It is hard to see any rationale for the argument that the sale of
conservation easements serves to protect rural communities.

By encouraging non-sustainable harvesting, easements serve to diminish the
stability of the forest-based industry.

By encouraging poor management of the land, considering that the government
will become the easement owner in most cases, the easements will increase
the chances that the land will be subject to fire hazard.

By subjecting the timber harvests to management conditions that place recreation, wildlife management, and scenic issues above forestry, the easements will reduce the rural timber-based economy to one dependant upon the whims of the environmental community.

The purchase of conservation easements means that the State withdraws land from the housing market, making remaining land more expensive for building lots.

By transferring the equity in the land to the easement holder, the easement may actually discourage the landowner's long-term commitment to the land. With little investment remaining in the land, if forestry becomes unprofitable (perhaps because the easement holder has power over the management of the operation), the forest owner may sell the remaining title to the government (assuming the government wants to acquire the residual title), or the forest owner may forfeit the land.

Thus, from the community's viewpoint, the long-term impact of conservation easements may be that the forest industry is less economically stable, land is less well preserved for future harvest, timber is subservient to other values, land is less affordable for home building, and in the end the
government may acquire the full title and retire the forest from production.

Easements are said to increase recreational access

Because forest industry lands have often been posted, the perception is exploited that people have been denied access to the lands and that more use of the land will take place after the government "opens" up the land. Often, however, the lands were utilized by many private hunting groups which owned small camps on leased parcels. With the Champion easement sale, all of these 45 leases will be phased out and these hunters will no longer be able to rent such camp spots. Three hundred hunting cabins will be demolished. Furthermore, if roads are not maintained, the perception of additional public "access" will be promoted by the government, but in reality less real, usable access will be available because people use roads for access, and rarely hike the back country.

There is no basis to assert that Adirondack tourism increases proportionately with an increase in state acquisition. Instead, it is true that tourism and use of public lands depend upon current economic climate, availability of services such as motels and restaurants, and competition
from other tourist attractions.

In addition to those arguments above that easements are essential to solve supposedly intractable problems for the forest industry, environment and community, other arguments are raised in favor of conservation easements:

Is cash flow from conservation easements a good way to increase profitability?

It cannot be denied that cash flow derives from the sale of an easement. Whether profitability will increase as claimed cannot be assumed, because the terms of the easement may be quite restrictive. The easement contract must be scrutinized for its actual wording, not for the impressions and word of mouth assurances between the parties and intermediaries. The realization of equity may be outbalanced by the negative present worth of the loss in harvest volume and by the cost of other impositions for environmental purposes.

Are conservation easements respectful of private property rights?

Since conservation easements deal strictly with willing sellers and do not involve eminent domain, they are considered respectful of private property rights. This is an oversimplification.

Rather than being respectful of private property rights, agencies such as the Adirondack Park Agency sometimes actually require that applicants deal with land trusts in order to process a permit through the agency.

From another point of view, the government's purchase of easements may give a competitive advantage to one company over another.

Putting aside the fact that many sellers are driven to dealing with the easements by the problem of dealing with regulators and by the taxes imposed by government, it should also be noted that the easements are themselves very destructive or private property rights. The point is quite simple: By removing property from the private sector and transferring rights in property to government or a non-profit broker for government, the easements destroy private property.

Do conservation easements rely on the private sector and retain land in private hands?

One example of the elimination of the private sector by the execution of conservation easements is the phasing out of recreational leases, which is a loss to the hunting community.

Furthermore, the widely accepted idea that the deals with and through the land trusts are private sector transactions is incorrect. With their many favored interrelationships with government, the major regional and national land trusts can be seen to actually be quasi-government agencies.

The favored interrelationships which land trusts enjoy with government include The Nature Conservancy's monopoly of the Natural Heritage program in every state of the Union; non-competitive land acquisition contracts, whether by easement or fee simple, usually for a flip to government; sweetheart land deals where prices and expenses bear little scrutiny;
non-competitive contracts to do maintenance of government nature preserves; provision of free government maintenance and improvements of land trust parks; and even sharing of personnel and office space.(14)

Furthermore, the use of conservation easements builds unwarranted financial and other interrelationships among land trusts, the forest industry and government, which is the opposite of privatization. These relationships, involving interdependency and favored status (such as tax breaks and the above discussed cash infusions), erode competitive free enterprise and equal
protections of representative government. When subject to normal public scrutiny these relationships are referred to in financial circles as "corporatism." (15) In analysis of failed governments in less developed countries, these extremes of these relationships, typically unscrutinized, are referred to as "cronyism."(16)

The easements may also contain provisions or be tied to provisions in the environmental law allowing for that nemesis of the resource industry, citizen enforcement lawsuits.

Contrary to the supposedly most compelling claim by the proponents of conservation easements, the easements do not, on balance, retain land in private hands.

James Burling, senior counsel for the Pacific Legal Foundation in Sacramento, California, pointed out earlier this month that "Conservation easements work by splitting an estate in real property into two or more parts and throwing one of those parts into the dustbin of history."(17)

Burling pointed out that "every attempt to restrict the ability of present generations to put property to productive use has been eliminated or watered down in short order." Tracing seven centuries of history of real property, he explained how the movement has always been, in spite of some temporary back steps, towards the free alienability of land.(18) This means that the
centuries have brought the ability to acquire land outright without obligations to the king, nobles, or even the family. In the United States, Gray's Rule Against Perpetuities in l886 limits ability of testators to control use of land for a period of time longer than the last life in being plus 21 years. There is a well-used expression in law, Burling points out, that the "dead hand cannot reach beyond the grave to control the living."

Burling points out that, in view of the principles of property law, there were serious questions about the viability of conservation easements, which "destroy the economic utility of the underlying fee."(19)

Common law does not allow certain easements such as those that put a negative burden on real property or that are not appurtenant to an interest in real property. In l983, New York passed a body of conservation easement law, specifically sweeping away most, if not all, common law impediments to conservation easements. Centuries of protections for private property
relationships were eliminated to create conservation easements.(20)

New York law does conceive of the modification or extinguishment of the conservation easement. But another problem enters here: the State has failed in the 16 years since enactment of the conservation law to promulgate regulations required by the law to put it into effect!

It has been pointed out that conservation easement lands in New York are even more binding than Constitutionally protected Article l4 "forever wild" State-owned forest preserve lands. Even forest preserve lands can be returned to private hands with two successive votes of the State legislature and a popular vote.(21)

Burling asks whether the creators of the modern conservation easement have truly created a mechanism that will allow the dead hand to reach beyond the grave. "Or will the common law ultimately repeal even this attempt?" he asks, citing courts' willingness to alter trusts if the purpose of the trust is no longer applicable and other possibilities.(22)

William Sayre, of Associated Industries of Vermont, a forest industry group in Montpelier, analyzed the model Vermont Land Trust easement being considered in connection with the conservation easements in that state tied to the Champion transactions in New York. Speaking at the Fourth Annual Property Rights Conference just held in April by our organization, the
Property Rights Foundation of America, Sayre warned that the acceptance of these easements would ultimately place forest land owners in the same vulnerable legal position as timber harvesters on National Forests.

"Every page of the easement has verbal land mines, which can explode years from now," he said. If the landowner selects the easement option to manage with working forests as the highest priority, he will find that elsewhere in the eleven-page easement that scenic values, recreation and wildlife have ascendance anyway. "Forest easements pose a genuine threat to the future of
the working forests, to the communities who depend on these forests, and to all of us who cherish the freedom to do the things we believe in," said Sayre.(23)

Bill Sayre had better luck than I did. He was allowed to peruse the Vermont conservation easement while it is under consideration. On the basis of a technicality in the law, New York State's Department of Environmental Conservation disallowed my Freedom of Information request to see the Champion easement.

Perhaps the terms of conservation easements are shielded from debate because the public would advocate that more functional terms be substituted. In my estimation, the easements are not transactable without such restrictive clauses because that's what the environmentalists want. The elimination of these extreme, impractical, inflexible clauses would go against the
environmentalists' unstated intent to ultimately restore land to wilderness.

For several years I have called for more legislative and public participation and for competition in the land acquisition process in New York. The shielding of the Champion conservation easement draft from public discussion is another indication of the urgent need to reform the process.

Why are there no conservation easement regulations yet promulgated in New York?

Why are conservation easement purchases not open to a bid process?

Why are the conservation easements being restricted to perpetual easements?

Why not test the conservation easement tool out on a temporary basis to evaluate its economic viability, considering the absence of income from recreation or asset appreciation?

Why the hurry to consummate these giant conservation easement transactions? After all, the easements have far-reaching implications and there are no significant development pressures on these large tracts.

Summary:

Although much excitement about conservation easements exists, long-term benefits may be missing. Use of the land for working forests in the future is questionable and environmental benefits appear to be negative. There is a basic inconsistency between the support which conservation easements receive in the environmental industry and the absence of environmental benefits. The only benefits to the timber industry, which are not insubstantial, seem to be immediate cash flow, and perhaps, also, real estate tax reduction.

Conservation easements are not a private conservation achievement, but instead are based on fundamental changes in the structure of private property to abandon a large proportion of the split title to perpetual government ownership and all to government control. Conservation easements tie up property indefinitely, and do not allow flexibility for future change in needs or values.

Furthermore, considering that the lands may become a burden because of the conservation easements, the future of ownership of these lands is uncertain and they may end up entirely owned by government.

Since the acreages involved are monumental, the economic impact of these changes in land ownership patterns as a result of the imposition of conservation easements could be very negative for industry, rural communities and the nation.

(1) "Grass banking" is a term used by the Malpai Borderlands Group in New Mexico to mean that a rancher can permit only sporadic grazing, to return grassland to a condition more natural than that of typically grazed lands. See Goldwater Institute report referred to in note 2, p. 8.

(2) Robert Franciosi, Ph. D., "Preserving Open Space-The Private Alternative," Goldwater Institute, February 1999, p.8

(3) "Wisconsin Conservation Easement," Conservation Department of the State of Wisconsin, Appendix 4, Joseph James Shomon, Open Land for Urban America, an Audubon book, The Johns Hopkins Press, Baltimore, 1971, p. 156

(4) Carol W. LaGrasse, "Unrepentant Congress," Positions on Property, July 1995. This exposť called attention to the problem of conservation easements imposed on farms by the Farmer's Home Administration (now Farm Services Agency). As a result in 1996, an act of Congress repealed the ability of the Secretary of Agriculture to impose wetlands easements, but vaguely worded wildlife habitat easements must still be imposed. Because of the easements, the farm purchase cannot be financed.

(5) "Buffalo developers sell pieces of ranch ownership," Wyoming Livestock Roundup May l6, l998, p. l. Eighteen forty-acre "ranchsteads," totaling 720 acres, would raise $18 million, leaving the great expanse of the 10,400 acre Waggonhead Ranch, 22 miles from Douglas, largely open for grazing.

(6) Hugh O. Canham, Ph. D. and Kevin S. King, Just the Facts - An Overview of New York's Wood-Based Economy and Forest Resource, Empire State Forest Products Association and New York Center for Forestry Research and Development, SUNY-ESF, l998, pp. 6, l7

(7) James W. Sewall Company, "Northern Forest Lands Council Land Conversion Study," Old Towne Maine, April 9, l993

(8) John H. Cushman, Jr., "Property Tax Changes Are Urged To Help Preserve Northeast Forest," New York Times, March 4, l994.

(9) Hugh O. Canham, Ph. D., Forest Economist, "Property Taxes and Economics of Timberland Management in the Northern Forest Lands Region," February l992, p. 15.

(10) This l984 ruling by the Appellate Division Third Department is the most recent ruling on this subject

(11) Others have postulated that since development value has been "created" by the purchase of it through a conservation easement, the "value" could be assessed and added to the previous current use assessment. In this way, it is further postulated, one result could be that tax-exempt statuses that the state or land trust may enjoy would then strip the tax off the development
"value" and the local tax receipts would be unaffected. Or, it is speculated, since the State of New York pays taxes on Forest Preserve lands, the tax receipts would be greatly increased. It is speculated that these questions amount to litigation waiting to happen.

(12) New York State Department of Environmental Conservation, Division of Lands and Forests, Assessment Report, Adirondack Windstorm, July l5, l995, Draft November 20, l995, pp 23 & 25.

(13) Purchase of large timberland tracts by investment groups appears to indicate a lack of long-term commitment to the land. The trend is to sell easements to government. This minimizes investment. The land, which may have been stripped physically as well, can sit and wait 70 years for harvest, essentially a government holding. It will finally reforest and be harvested. What is touted as a deliberate, environmentally motivated long period between harvests, is necessity. Everything that is worth harvesting is gone for almost two generations. This is a possible explanation for why the investment groups have done little to manage their land.

(14) Carol W. LaGrasse, The Property Owner's Experience, Property Rights Foundation of America, March l998. See chapters 14, 15 and 16. Certain abuses are not discussed in the Experience because information is undocumented. An important omission for that reason is that it is said that in connection with the selling of fee simple or conservation easements at "below market" to obtain a deduction of the difference between the appraised value and the sale value for estate and income tax purposes, the land trusts have a prearrangements with the IRS whereby appraisals are routinely pumped up and not subject to question.

(15) Edmund S. Phelps, "The Global Crisis of Corporatism" The Wall Street Journal, March 25, l999. In corporatism, "private corporate interests are reconciled and coordinated by the central government," Columbia University Professor Phelps states.

(16) An extreme, therefore crystal clear, example of the crony relationships of business and government was reported by Peter Waldman and Jay Solomon in "How U. S. Companies And Suharto's Circle Electrified Indonesia - Power Deals That Cut In First Family and Friends Are Now Under Attack," The Wall Street Journal, Dec. 23, l998, p. 1. With the land trusts, examples seem
less blatant, but consider: "Personal relationships are critical to the success of partnerships. The Nature Conservancy and the Trust for Public Land have systematized their relationships with state government." -Robert L. Bendick, Jr., in "State and Local Partnerships," Land Conservation Through Public/Private Partnerships, publ. by Lincoln Institute of Land Policy/Island Press l992, pp. 164-165. Mr. Bendick was then N. Y. Department of Environmental Conservation's Deputy Commissioner in charge of lands and natural resources, and went on to be an official in The Nature Conservancy.

(17) "Conservation Easements," Comments by James Burling, Pacific Legal Foundation, Sacramento, California, at the Wise Use Conference, Reno, Nevada, May l999, pre-publication copy, p. 1.

(18) Alienability is the ability to transfer property to the ownership of another.

(19) Burling, ibid, p. 6

(20) Environmental Conservation Law, Art. 49, Title 3; 49-0301 through 49-0311, McKinney's Consolidated Laws of New York. See especially 49-0305, "Conservation easements; certain common law rules not applicable."

(21) Can the State of New York buy easements and allow forestry, or is this contrary to Article 14? This concern is the reason, at least in part, for land trust intermediaries. If the State's ownership of the conservation easement on active timberland is found unconstitutional, title to the
easement will revert to the land trust, not the forest industry. See "The Constitution Question," Conservation Easements-Too Good to be True? Adirondack Fairness Coalition, Keene Valley, N. Y., c. 1992 pp. 31-32.

(22) Burling, ibid p. 9.

(23) William R. Sayre, Chairman, Forest Policy Task Force, Associated Industries of Vermont, "Forest Land Easements - Freezing the Future," Fourth Annual New York Conference on Private Property Rights, Albany, N. Y., April 10, l999.

Permission from Carol W. LaGrasse for Reprint.

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