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CONSERVATION EASEMENTS
A Second Look
By Carol W. LaGrasse, lagrasse@mybizz.net
Address to
Boone and Crockett Club Annual Meeting

Hilton Rye Town
Rye Brook, New York
November 30, 2001

 

 About twelve years ago, I observed that the enemies of hunting, private property rights and private land ownership were concentrating on a new preservation device that I had first read about as a young civil and environmental engineer interested in land use planning in the 1960's.

The device was reputed to save land and wildlife for future generations; to save farms, ranches, and the rural economy; to preserve private property and property rights, to protect land from estate, income, and real estate taxes; and to do all this forever.

This device is a conservation easement.

It was being used by some of the most powerful environmental groups in the world: The Nature Conservancy (TNC, the largest environmental organization in the world), the Trust for Public Land, The Conservation Fund, and other wealthy land trusts.

Third party intermediaries acquire land from a split title, or split it later. Sixty to ninety percent of the title goes to government in a flip as a conservation easement, and the remaining forty to ten percent to a rancher, a farmer, or, perhaps, a new timber investment group.

The name, "conservation easement," is a misnomer. In reality, these lands are not analogous to an easement, but are really holdings in an estate in land leaving a small residual, which is subservient in nature, with the original owner, who supposedly will keep on "working" the forest, ranch, farm, etc., in perpetuity.

Just as large national hunting groups such as the NRA could never be persuaded to stand up against government's large scale land acquisition, they remain silent or supportive about conservation easements to this day.

But on a local level, perhaps, hunting groups are waking up. In upstate New York, the region of the Adirondack Mountains with six million acres known as the "Adirondack Park" contains one-half private land. In the northwest, it slopes gently down to the St. Lawrence River valley and north to Canada. It is also an economic backwater. Timber and hunting are a large part of the economy. St. Lawrence County has more forest land than any other county in New York.

In 1999, New York State acquired its largest preservation tract in history — 139,000 acres from Champion International in four adjacent counties including St. Lawrence County. Of the total, 29,000 acres were acquired in fee simple, all of this land along rivers, and alone the largest acquisition in the State's history, and 110,000 acres in conservation easements.

At the same time, the State announced that 298 hunting camps, all of the lodges and cabins of the 45 major hunting clubs on the land, are to be demolished.

The hunting camps are a large part of the local economy and culture and the State was supposed to do a cultural, social and economic impact study under New York environmental law. This was never done.

Under state funding laws, local town approval was required. But about 25 towns passed resolutions in opposition. Other important state laws were violated, also.

The hunters spent $10,000 trying to organize, but their lawyers apparently did not know about these laws.

I organized a litigation group, found money, and we filed suit to challenge the acquisition on the date the statute of limitations ended. Then St. Lawrence County itself joined us, all in October and November 1999.

This lawsuit was dismissed on technical grounds in the lower court, appealed, and all but one of the original points against us were rejected. The lawsuit is now a stack of over twelve inches of papers, without ever facing the actual merits of the case. We are waiting hopefully to receive permission to appeal to the New York State Court of Appeals on a technical point of timeliness of service. The outcome of the suit is unknown.

In New York State, the suit has already had two results:

1. The State now seeks local approval for land acquisition in the Adirondack region.
2. Hunting clubs are beginning to try to buy land and get out of their reliance on the lease arrangement. One club bought a key "eco-parcel" out from under the nose of the enviros in St. Lawrence County and is seeking more members.

Nationally, this lawsuit brought publicity to the inherent opposition between government land ownership—either fee simple or conservation easements—and hunting. The Adirondack Champion acquisition was widely cited in the battle in Congress over CARA, the Conservation and Reinvestment Act.

The groups that promote government land acquisition are anti-hunting. The leader is The Nature Conservancy. That organization doesn't allow any hunting or fishing on its private reserves.

Today, most of its $2 billion assets are applied to buying and flipping land to government, to promote "biodiversity." TNC is not sympathetic to hunting. Hunting maintains a balance of species that they don't agree with and puts too much emphasis on man-the-predator. They believe in "natural predators" like wolves.

TNC is the original funder of the Wildlands program to restore fully 90 percent of the coterminous United States of America to a pre-human "pristine" state. They want to start with core wildlands and land bridges, and buffers; the core expands to buffers, which expand to transition zones. They speak of "re-wilding" the "mid-western tillage plains," as they call them. They dream of wolves and grizzlies hunting on their original range, not humans as hunters.

The official organ of the Wildlands proponents, called Wild Earth, now advocates, in their words, conservation easements, not confrontation. In your packet are three related articles from AgriNews containing a debate on land trusts, Pew Charitable Trusts, and Wildlands. The trilogy begins with a digest of an Insight magazine interview of me and others about Wildlands and conservation easements, then Pew Charitable Trusts' angry letter of response, and ends with my Op Ed, "Pew Took a Public Mis-step." According to Ron Arnold, Pew is the largest funder of radical environmental programs.

This is TNC, the big conservation easement proponent—the advocate of "balance," the moderate" environmental group—, and some often overlooked radical background about conservation easements.

Under President Bush, the U. S. Forest Service has just signed a memo of understanding with TNC to manage U. S. National Forests. Central goals will be to protect biodiversity, to eliminate "intrusive species." A focus against intrusive species means that you can't have roads to get into forests because roads carry in weeds such as garlic weed and purple loosestripe, to mention ones that are receiving a focus from environmentalists here in upstate New York.

The Mellon's Conservation Fund, the third party intermediary for the Champion International deal, is actually an offshoot of TNC. It was created for Pat Noonan to pursue his biodiversity work that he'd started at TNC when he transformed the group twenty to thirty years ago.

This is just a little background on these so-called "friends" of hunters, timber industry, ranchers, and farmers.

Their programs are equally transparent. The only thing about the programs of conservation easements that can't be refuted is cash flow.

But there is another side to the cash movement. In New York's Champion International transaction, $25 million was paid out by the State to Champion and the Conservation Fund, who, according to our attorneys at a press conference, made a $5 million markup. That's good cash.

Generally, when the land trust pays to a so-called willing seller, government reimburses the land trust, and then some.

Other aspects are more insidious, not just for the long term.

A farmer in Chester County, Pennsylvania, bought land encumbered by a conservation easement. When he applied for a permit to build a farmhouse, the land trust holding the conservation easement sued. The farmer won in the lower court and went ahead with construction. After nine years of litigation, the elderly farmer watched with stooped shoulders as his dream farmhouse was bulldozed to the ground. Both the lower court and the bank approved the right of the farmer to build the house in spite of the encumbrance. In fact, the farmer's family is still paying a mortgage on the non-existent house.

This saga illustrates the difficulty in interpreting conservation easements.

This was a simple conservation easement. Some are thirty to fifty pages long. They may have complicated override terms where natural resource considerations dominate irrespective of the stated written goals to preserve ranching, farming, or forestry.

Unlike many states, Pennsylvania doesn't have a third party enforcement provision in their conservation easement law. This provision is missing because I warned the timber industry in time for them to eliminate it from the bill before passage. In most states, even if both parties to the conservation easement are satisfied with its implementation, third parties can come and sue to reinterpret a biodiversity/natural resources clause in court, five, ten, twenty years later, and perhaps turn the conservation easement lands into a "no hunting" area.

Informed consent is a problem with conservation easement transactions. In our journal Positions on Property, we published an exploratory list of issues designed for farmers, ranchers, and timber owners to check off to protect themselves somewhat against unforeseen consequences of conservation easements. Generally speaking, the landowner is up against very sophisticated professionals and is less likely to thoroughly explore his interests when he is in the negotiating stage. Although the wealthy land trusts would be in the logical position to create an informed consent situation for the landowners, ours is the first and still, to my knowledge, the only checklist of this nature.

Considerations such as whether the landowner would like to build another structure, divide out small parcels of a limited nature, exploit a gravel deposit for road building, or even build more roads, need to be faced in black and white at the negotiation stage. The landowner's interests in these details need explicit protection. The landowner should be able to build in protections such as a reversionary clause to protect him from the land trust flipping the conservation easement to government.

The land trusts, on the other hand, are careful to protect their interests from future changes in circumstances. One major land trust operating in the West provides in the conservation easement that if policies change so that the conservation easement is no longer exempt from real estate taxes the cost of the taxes reverts to the landowner.

The conservation easements are perpetual. They are harder to reverse than law. Changes may require action by the court, the legislature, and bringing all the owners together.

The fact that conservation easements are perpetual is artificial. The conservation easement should be for a term of ten, twenty years, or more, or it should be a lease.

But the IRS law requires that conservation easements be perpetual.

The federal tax law works to the advantage of the land trusts. It can drive land into their pockets.

Financially sophisticated, they can create inflated appraisals for tax write-offs for the landowner. They can demonstrate favorable valuation of donations or below-market sales for income tax and estate tax purposes.

In Washington, D. C, where a debate has been taking place about the estate tax, land trusts are conspicuously silent. If they were really concerned about the wellbeing of the landowner, they would be lobbying for the elimination of the estate tax.

Real estate taxes can be reduced indefinitely as a result of the relationship of the conservation easement, or can be eliminated under land trust ownership of the land. We need a movement to put into the tax-exempt category the fee simple, ordinary landowners who are doing the same thing with their property as the current beneficiaries of tax policy.

The tax structure—involving the estate tax, real estate tax and income tax—suits the land trusts. It should be overhauled so that taxes no longer work against the national public interest of preserving private land.

Conservation easements destroy the value of land. People think that they are free cash flow. But equity is gone. It is obvious that the farmer needs equity, for new construction for operations. Less obvious is the conclusion that the rancher and the timber industry should preserve equity.

But instances are beginning in the timber industry in New York State, where companies with less than ten years in conservation easements are seeking to sell the bare land, but there is no buyer. The enviros are trying to start a second-time-around panic that land is threatened with development, without mentioning that it is already tied up.

There's no equity. This hurts the timber industry, also.

Hunters need equity, too. They need to build lodges— sell bonds, mortgage land; pay taxes.

Everyone is against hunters. In New York, the legislature and state bureaucrats are promoting rules to restrict use of lodges to three months of the year. A formal bill to that effect is now under discussion.

I advise hunters, keep your land. It's your best bet for a hostile future. Don't be a "partner" with groups and agencies that are working against hunters.

By standing for what's good for you, you will also have preserved the fundamental American tradition of private land ownership and the private property rights attaching to it. Remember, the Bill of Rights is a seamless garment. Freedom of speech, the right to bear arms, privacy, private property: These are all fundamental, interrelated rights of the individual.

These rights were asserted in recognition of the (1) existence of the individual as a self-determining human being, and (2) the rights to exert and fulfill one's property in one's self and one's labor.

The more property that we turn over to government or to agencies like land trusts, which are really arms of government, the less is our potential to be free.

###


Questions and Answers

First Questioner (Woman from Black Hills Nature Conservancy)

She said that they allow hunting on their land, stating that the speaker was incorrect to claim that The Nature Conservancy did not allow hunting on its land.

Answer: LaGrasse asked if they were actually part of TNC.

Questioner: Said, "We're close," which seemed to imply that they and TNC were one group.

LaGrasse: Asked whether their corporation was structured separately from TNC, which is in Arlington, Virginia.

Questioner: Couldn't answer this inquiry.

LaGrasse: Said that this group was most likely a separate legal entity from TNC. She couldn't speak for all of the affiliates and groups with which TNC has working relationships around the country. She added that TNC, of which she spoke, and which has $2 billion of assets, does not allow fishing and hunting on their reserves as a matter of policy. LaGrasse said that she has a relatively recent letter from TNC confirming this.

Second Questioner (Formerly a high official in U. S. Forest Service)

He said that it is not possible that the U. S. Forest Service has signed a memorandum of understanding with TNC to manage the National Forests. The U. S. Forest Service has hundreds of memos of understanding for every sort of purpose. This was just one of many for many different areas. Just one of many.

Answer: LaGrasse said that her source for this information was a scholar at the Center for Private Conservation at Competitive Enterprise Institute, who had called just two days ago. This is a far-reaching new memo of understanding between the U. S. Forest Service and TNC, where the U.S. Forest Service and TNC are to jointly manage the National Forests for biodiversity and the like.

Questioner: Repeated his assertion that any memorandum of understanding would be of little consequence, just one of hundreds.

LaGrasse: Said that she appreciates his willingness to comment. She said that she'll make a correction if when she sees the that in the written document the statement she made is not borne out. The source for the information was R. J. Smith at the Center for Private Conservation, she said.

Questioner: "Well, I'm correcting you!"

Note: The official U. S. Forest Service press release dated November 16, 2001 announcing the memorandum of understanding with TNC is posted on the PRFA web site: www.prfamerica.org

Third Questioner (Individual landowner)

He said that he likes the conservation easements. He cannot understand why a person involved in an organization that states that it is for private property owners and private property rights would be interfering with private property owners selling their property.

Answer: LaGrasse said that if he were selling a conservation easement to another private individual, that not be a matter of as great public interest, although the common law would historically have prohibited this type of negative encumbrance, which is only recently allowed because the Uniform Conservation Easement Act is passing in many states. But the situation here is not that of a private individual selling to another private individual. In reality the landowner is selling the conservation easement to either the government or to a land trust, which is actually, in LaGrasse's opinion, a quasi-government agency, and will flip the easement to the government, anyway. This purchase becomes a matter of public policy. Citizens have a right and duty to comment about matters of government actions, including the government purchase of land and conservation easements.