Redwood Forest Foundation

Spring 2009 Newsletter

What's All This About Conservation Easements?

Tom Tuchmann, President, US Forest Capital

The conservation movement began in the late 1800's with a simple premise that certain areas deserved to be protected and/or managed for their natural, resource or open space values. This led to the establishment of a system of National Forests, National Parks, Fish and Wildlife Refuges and other public lands and parks which are the envy of many across the world. These select areas are considered a part of our national heritage and held in trust for our citizens and future generations.

While public ownership provides appropriate protection for some sites, its costs are substantial, especially when applied across a broad landscape. Public ownership can reduce or revoke the control of resources for those whose livelihoods are tied to the land and in some cases can deprive local communities of needed property tax revenues. Moreover, in the case of forest and agricultural lands, it is much more difficult to pay the high price tag of large working properties, especially when prices have been driven up by adjacent development values. Finally, and perhaps most importantly, there are different levels of conservation, and in many cases, it just does not make sense for a public agency to buy the land outright when what environmental and industry supporters really want is to keep working lands productive and in private hands.

Over the last two decades, landowners and conservationists have begun working together to use conservation easements as a means to address some of these issues. According to the Land Trust Alliance, a conservation easement (also referred to as a conservation restriction) is a voluntary, legal agreement between a landowner and a nonprofit or government organization that permanently limits certain uses of the land in order to protect its conservation values. Conservation easements are based on the premise that a landowner's rights of ownership consist of a bundle of individual rights - like a "bundle of sticks" - including the right to develop, farm, cut timber, or use property in other ways as governed by local, state and federal laws and land-use regulations. A conservation easement typically separates some of the "sticks" from this bundle of rights, one of which is often the right to develop or subdivide.

While conservation easements can be donated, they are often sold on larger properties in order to compensate the landowner for giving up certain economic rights to the land. For example, a property owner may sell an easement in return for giving up the right to develop the property or sell portions of the property. In another example, a property owner may sell an easement in return for giving up the right to pursue certain otherwise permissible forestry practices on the land. In either case, the easement seller is financially compensated for restricting his future economic activities on the land.

The price of an easement is determined by taking the commercial value of a property (assuming no restrictions) and subtracting the value of the property with a conservation easement in place. For example, let's say an appraiser estimates the commercial value of a property is $20 million and the value of a property without development rights to be $12.5 million. In this case, it would cost the buyer $7.5 million to purchase the easement and prevent the possibility of future development. (A landowner can also donate the easement and take a take a tax deduction for a charitable contribution.) The easement buyer would have the right and responsibility to monitor the property to make sure their acquired rights were protected, and the landowner could continue to manage and even sell the property at their own discretion, so long as the terms of the easement are not violated.

The sale of a conservation easement is an important part of RFFI's effort to protect the Usal Redwood Forest. Easement restrictions are "in perpetuity" and provide protection beyond any individual owner, even RFFI. In RFFI's case, the funds received through the sale of such an easement will be used to reduce the debt on the property; thereby permitting RFFI more latitude in its silvicultural practices. RFFI has chosen to sell the easement to The Conservation Fund, a national group that specializes in acquiring such easements, and we are currently in the process of working with the Fund and state funding agencies to determine the value of selling certain development and forestry rights.

More information:

• Conservation Easements - LandTrust.org
• Conservation Easements - Texas Parks & Wildlife
• Conservation Easements - Ohio State University
• Conservation Easements:
  Conserving Land, Water and a Way of Life - The Nature Conservancy

General descriptions:

• Easement - Wikipedia
• Easements - FindLaw
• Easement - Answers.com

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