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Tax credits for conservation easements

by Larry S. Chowning

The Middlesex Forward citizens group sponsored an informational meeting on conservation easements Monday night at the Christchurch Parish House. A panel of four experts explained how conservation easements work.

A land conservation easement is designed to preserve open space, protect natural habitats for fish, wildlife and plants, preserve historic land and buildings, and preserve land for recreation or education of the general public.

In essence, the primary goal of conservation easements is to protect open land from urban growth.

Attorney J. Brooke Spots-wood said Virginia’s Uniform Conservation Easement Act allows charitable entities such as the Middle Peninsula Land Trust to be the holder and monitor of such easements. The state also allows some governmental agencies, such as the Virginia Outdoors Foundation, to be the holder of easements.

The Middle Peninsula Land Trust was formed in 1997 with a mission to protect and preserve, for the benefit of the public, the natural, scenic and historic resources of Virginia’s Middle Peninsula.

The easements are perpetual and landowners are reimbursed with tax benefits for turning over future development rights to their property.

Mary Helen Morgan of the Middle Peninsula Land Trust; Martha Heric, an appraiser of conservation easements; Spotswood, an attorney who processes easements; and Kevin Schmidt, coordinator of the Office of Farmland Preservation Virginia Department of Agriculture and Consumer Services, all spoke on different aspects of easements at Monday’s meeting.

During the question-and-answer period, Johnny Fleet, whose family recently put land into a conservation easement with the Virginia Outdoor Foundation, said many farmers 65 years and older in Middlesex will soon be getting out of the farming business. So, in the next 10 years there will be a lot of farmland for sale.

“Many retired farmers will not have enough cash money to look after their health needs and the needs of their family,” said Fleet. “They are going to be pressured to sell their land, and once the farmland goes into housing lots, it never goes back to open space.

“The conservation easement will allow them to keep their land in agriculture. Secondly, it allows them to have some income. And thirdly, it allows them to live a better lifestyle at home,” Fleet said.

Tax credits are given in return for conservation easements and if a landowner doesn’t have enough income to utilize tax credits, the credits can be sold for income, said Fleet.

“I can tell you that from working with these folks from the York River to the Potomac, there are literally thousands of acres that fit in this category,” he said. “The amount of land out there in Middlesex and surrounding counties is primarily owned by these folks that I described. If you want to protect it, you’d better educate these folks.”

Garrison Hart questioned whether the state would always “and forever” honor the easement, and whether property owners could be forced by the state to have their land used in ways they do not want, such as the installation of a “bike path.”

State Delegate Harvey Morgan said there may be changes in laws concerning easements, but those conservation easements already approved will be grandfathered and will not be impacted by future laws. The easement will be attached to the property forever.  He noted the state is not in the habit of mandating bike paths on conservation easements.

A question expressed by Middlesex County governmental officials is how real estate tax revenue would be affected if thousands of acres of waterfront property went into conservation easements.

Morgan said over time, as large tracts of property are harder and harder to find, those protected pieces of property will become even more valuable than if the land had been developed.

“How much does a farm cost the county? What kind of schools, law enforcement and fire protection does the county have to provide for open spaces?” asked Morgan. “Very little!”

“Just look at my home county of Gloucester. The tax rate keeps going up and up and up.  The quality of life goes down and down. We’ve got a lot more people but I don’t feel we’ve served the population well by having runaway growth,” said Morgan.

“City taxes are always higher.  People are all hemmed in and it costs more to live. Street lights, water and sewer, and garbage disposal have to be provided.”

Kenneth W. Williams, chairman of the Middlesex Board of Supervisors, said his constituents tell him they want more open and green space, “but when I start talking about their own property, they tell me, ‘Don’t tell me what I can do with my land.’ ”

Williams was referring to recent efforts by Middlesex County to require more open space in major subdivisions.

posted 09.18.2008

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