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Western groups back non-development program

By Steven D. Vetter
WLJ Editor

A big fear of ranchers across the country, but particularly in the West, is the threat of losing private ranchlands to development and environmentalists efforts to move those lands into more conservation areas.

Recently, the National Cattlemens Beef Association (NCBA), the Western Governors Association and the Trust for Public Land released a report supporting expansion of a public payment program to protect farm and ranch land. The program would also promote the conservation of wildlife habitat in the West.

The program is called Purchase for Development Rights (PDR), which have been in place since the 1970s in some states, and focuses on providing public cash payments to a landowner for the value of the development rights associated with a specific land parcel. Under the program, the owner would still possess the land, but be paid to not only sell the land for
development, but also promote the conservation and/or development of wildlife habitat.

The payments are basically compensation to the landowner for relinquishing the right to develop the land as real estate, while continuing to permit farming and other traditional uses.

Under PDR, a willing landowner can sell the development rights of his property to a qualified conservation entity, such as a non-profit land trust, public agency or historic preservation organization. Development rights are sold and extinguished as part of a PDR transaction that places a conservation easement on the parcel. The landowner retains full ownership
and use of the property for purposes other than real estate development.

The value of the development rights on a parcel is determined by subtracting the estimated sale price of the property with a conservation easement in place from the current market value of the property with its development rights intact, taking into consideration any reserved rights. Since the value of the property is typically reduced by 40 to 75 percent when the
development rights have been extinguished, landowners are finding that PDR can provide a helpful solution to inheritance tax dilemmas.

According to new NCBA President Lynn Cornwell, PDR transactions can help ranchers remain competitive, and help save valuable agricultural land from being developed in the future. The public benefits from PDR transactions by
enabling land conservation and/or wildlife habitat development to occur at a much reduced level of expense, since PDR payments to landowners would be much less than the amount to purchase the land outright. Costs associated
with subsequent management of these lands would be the responsibility of the landowner, but the PDR funds would hopefully be utilized to help pay for that management.

In the case of the sale of a conservation easement, it would go with the land, not the landowner. When the land is sold, the future owners of the land would be bound by the terms of the conservation easement. A major advantage of a PDR payment is that it will keep the land in agriculture production for the future.

In addition, PDR payments are said to open up the availability of these ranchlands for purchase by younger ranchers, or future generations of a family, because of the smaller price tag that would normally be associated with these lands. Open western lands that still have the ability to be fully developed are escalating in price on a daily basis, said Cornwell.
Lands that have had PDR payments made on them don't have the appeal to developers, thus the money needed to buy them is much less than would normally be the case. B WLJ