News-Record.com

Taft's story about the conservation easement in Guilford County raises many questions.

Interesting issues are addressed in "Conservation Easements: Windfall or Straitjacket?" in Real Estate Issues (Fall 2007) by James D. Timmons and Lara Daniel. An excerpt:

"The UCEA (Uniform Conservation Easement Act) provides a meaningful framework for the creation of conservation easements, primarily by removing the common law threats to their perpetual existence. But the omissions from that statute, the state statutes that are based upon it, and the lack of guidance from courts on the meaning of the terms used in conservation easements make it imperative that landowners carefully consider the consequences of their actions. In areas where development seems to be suffocating green pastures and, where the owners of pastures feel their convictions about open space are becoming more and more expensive to maintain, the conservation easement is a tempting solution. It allows the landowner to realize a financial advantage now and ensures that their property will remain the same forever.

"However, conservation easements represent a departure from the traditional approach that attempts to strike a balance between the interests of today's landowners and those that might arise in the future. They seem instead to assume that what is good today will always be so. If the interests of future landowners have not been estimated accurately by those creating conservation easements, the results may create more problems than would otherwise have occurred. The attractiveness of conservation easements is obvious by the explosive growth of land trusts established to accept easements. Land trusts have become big business based on their enormous land holdings, increasing membership and finances. You and I as taxpayers, and therefore government at all levels, should care about how conservation easements are created and managed. Although most easements are donated by private landowners to private land trusts, they almost always result in public subsidies in the form of income tax deductions to the easement donors. Also in many cases, a further subsidy comes in the form of reduced estate and property taxes. Additionally, much of the funding used to purchase conservation easements is increasingly coming from public money."

(Timmons is associate professor of finance with the Department of Economics and Finance at the Jennings A. Jones College of Business, Middle Tennessee State University in Murfreesboro. Daniel is professor of business law with the Department of Accounting and Business Law at Jennings A. Jones College of Business, Middle Tennessee State University.)

My thoughts about this are fairly random.

* The easement places extraordinary power in the hands of the landowner. He can sign away, forever, the right of his heirs or other owners to use this property in any other way but agriculture. His great-great-granddaughter might have no interest in farming; farming might not be economically feasible; and no one else might be willing to purchase the property for farming purposes. The property's value to the owner, therefore, will be greatly diminished. Yet the benefit -- the proceeds from the purchase of the easement -- may be long gone, spent generations earlier. That's one possible family legacy.

* On the other hand, a decision by the current landowner to sell the property for development also denies his descendents or other owners the option of farming the land. It won't be farmland anymore but, most likely, a residential area. And the proceeds of the sale also could be spent in a generation or two.

* The environmental value could be overstated. The idea is to preserve open space and protect it from residential uses. But the population is increasing and people are going to live somewhere. If not there, where? Very likely on some other property currently being used for agriculture purposes -- although maybe farther away from employment centers, which could require more driving to get to work.

* Removing land from the marketplace has an economic impact. It increases demand for the remaining land and consequently increases cost. In turn, this may put more pressure on other farmers to sell their land if developers offer them more money for it.

* It seems ironic that Greensboro has millions in bond money available that's meant to provide or prepare land for economic development while the commissioners have bond money available that's meant to protect land from economic development. The taxpayers are paying both ways.

* It's also ironic that, when Toyota was scouting farmland in Davidson County for a possible manufacturing plant, the owners made clear they had no intention of selling. Does anyone believe that the state, which is backing this conservation easement program, wouldn't have done everything in its power -- which is practically unlimited -- to make sure Toyota got whatever land it wanted?

* Forever is a long, long time. What happens if it seems to future policymakers that land set aside "in perpetuity" really ought to be used for something else?