READ THE FINE PRINT: Conservation easements may not be the answer
One example of a Nature Conservancy conservation easement at work is in the Sandhills of Nebraska, where the Horse Creek Fen Ranch was purchased by the group in 1977.
“It is more than 3,000 acres and has some very important habitat for rare plants and wildlife. We wanted to protect the fen so we acquired the property, explained Conservancy spokesman Chris Anderson.
The Conservancy also recognized the struggle young people have in purchasing a ranching operation, and as a result started a beginning ranching program to look for a family willing to manage the ranch, and potentially own it someday.
“We found a young couple, and they signed a five-year lease agreement with us. They had the option to buy the ranch in 2005 at its appraised value, minus the price of a conservation easement that protects the fen. The couple was able to purchase the property and they continue to own and operate it as a working ranch,”” said Anderson.
He noted that in this instance, the Conservancy helped a young ranching family get started in the agriculture business and protected one of the key natural features of the property with an easement.
A thousand years is a long time. Today’s landowners are making decisions that will affect people on that land for the next 40 generations. That’s something to take pretty seriously, said Harriet Hageman, a Wyoming water and natural resource attorney. A conservation easement, sometimes granted as “perpetual,” which legally means 999 years, is a tool for guaranteeing the future use of a piece of property. It can also be an avenue for federal government agencies to gain control over private property. Hagman provided a critical analysis of easements to landowners during her presentation at the South Dakota, Wyoming joint Farm Bureau Young Farmer and Rancher Conference in Deadwood, South Dakota on Jan. 17.
“Conservation easements are consolidating control over real properties through legally binding contracts. As the property owner, or grantor, you retain partial ownership rights to the land, but you are also relinquishing rights of control and decision-making over future use and development of the property,” Hageman said.
In 1950 there were 53 land trusts involved in purchasing conservation easements. By 2005 that number had jumped to 1,668. In 2010, the National Land Trust Census listed 47 million acres under conservation easements through approximately 1,700 land trusts. Many of the largest land trusts are controlled by environmental organizations such as The Nature Conservancy (TNC), Ducks Unlimited, American Farmland Trust and The Conservation Fund.
“That is a 731 percent increase in conservation easement acres in Wyoming alone,” said Hageman. “More than 10 million total acres were placed in land trusts from 2005 to 2010, and the majority of those acres were in the western U.S., with particular focus on states with less previously controlled federal and state lands, such as Kansas, South Dakota and North Dakota.”
Why the increase? Hageman explained that as government acquisition and regulation of land use have become more prohibitive, costly, and ineffective, those in Washington D.C. have looked to conservation easements as a potentially effective and less expensive way to control lands while also keeping them on the tax bracket.
“These are called pre-acquisitions, or pre-arranged flips. For example, if Congress decides not to give the Forest Service or the BLM (Bureau of Land Management) another $500 million in their budget, and they have a particular piece of property they want to control, they can go to the TNC. They’ll tell them there is this ranch near Alcova, Wyo., we want you to get a conservation easement on. While the BLM may not have the funding, the TNC does, and upon obtaining a conservation easement, they can immediately turn around and sell that easement to a federal agency, putting the landowner in a legally binding contract with a party they did not enter into the contract with, and who many never would,” said Hageman.
The fact that the TNC receives $100 million annually from the federal government, and $262 million from the sale of pre-acquisitioned flips, leaves little doubt in Hageman’s mind who they, and the various other land trusts who are similarly funded, ultimately work for.
“When you think about the magnitude of money, and the corruption that goes with that kind of money, you realize the only entity the TNC is going to answer to is the federal government,” she said.
In one example, the TNC purchased a conservation easement for $1.26 million, and within a short time thereafter sold it to the federal government for $1.4 million.
“Why, if that value was there for the easement, didn’t the landowner receive it? Why is an intermediary group being allowed to make a profit instead of the landowner? It is because a conservation easement has come to not mean protecting private lands through partnerships between and landowner and a land trust, but is today a non-transparent tool for the federal government to obtain private property without public knowledge or approval,” she said.
The limitations and controls placed over lands put into a conservation easement are what Hageman calls the scariest part for the individual who chooses to enter into one.
“Many people do not understand what some of the wording means. These contracts are long and detailed, and that is for a reason. For instance, Ducks Unlimited conservation easements typically state they are to protect the wetlands, waterfowl, habitat and ecological value. To protect open space, natural communities, biological diversity, scientific and natural features, water quality, etc… There are a lot of ‘protects.’ It then says they ‘allow’ compatible outdoor recreation and education, livestock and farming uses.
“Notice the difference in that language. It is not to protect agriculture uses, it tolerates them, and that is significant because the landowner is not the one defining the conservation values that need protected and the agriculture uses that need to be tolerated,” said Hageman.
She said Ducks Unlimited easements also commonly state the property will be protected to maintain, in perpetuity, the property’s natural and scenic conditions and prevent the use of anything that would significantly interfere with the conservation values protected in the easement.
“Guess who defines that? So, when you were told that under no circumstances would ag use ever be stopped on this property, that you’ll always be able to farm and run livestock on it, to irrigate, what the contract you sign actually says is that you can do that until the moment someone with the controlling federal agency or land trust determines such use is no longer compatible with their plans for the land. Language in contracts is very, very important,” said Hageman.
In association with the easement contract is also a baseline study, in which the land trust comes onto the property and identifies everything – ponds, fences, buildings, roads, trees, etc… in a written report and using photographs and other tools. Upon signing a conservation easement, that baseline study becomes the source from which every future decision regarding the property is evaluated.
“These are very important because you need to make sure the baseline study does not limit you. They can eliminate any future development of any kind – fences, water use, corrals in addition to the most well known limitation of housing developments. Or, they can say something like yes, you can fix a fence, but only with all new materials. No rusty staples. We all know that if you’re making your ranch work it isn’t because you’re using all new fencing materials,” she said.
The poison pill
“Despite how it sounds, I am actually not opposed to the concept of conservation easements. What I am opposed to is perpetual conservation easement – which means forever. In Wyoming, that is defined at 999 years. It is wrong that we have government agencies and individuals making decisions today that will be in effect in the year 2593,” said Hageman.
She recalled times in the 1970s and 1980s, when U.S. citizens faced 17-18 percent interest and inflation, and the fact that those who survived in agriculture were the landowners with enough equity built up in their operation.
“Conservation easements are being used to devalue and limit use on approximately 50 percent of the private lands in the western United States. What will happen if we ever face another 17-percent inflationary period? Right now our government is in debt $18.4 trillion dollars, and it is actuarially impossible for them to pay that back. The only way they can accomplish that is to inflate their way out of it. While the immediate tax incentives and lump sum of cash involved in a conservation easement can be appealing, the bottom line is they will limit your equity to the point that your note may very well be called by the bank in such tough times,” said Hageman.
Furthermore, the overall effect a loss of private property rights will have on the United States’ ability to feed itself could easily become an every greater concern.
“The right to make decisions regarding the use of your private property is perhaps the most powerful tool you have. If you don’t like being energy dependent, you do not want to be food dependent. People in 1642 had no idea what we would be doing in 2015, and we have no idea what people will be doing in 2563. For what is a minimal amount of money over that many years, a conservation easement could eliminate your ability to make decisions that ensure your operation, or the agriculture industry as a whole, is able to survive,” she said.