Aquidneck Land Trust President Edward Clement Jr. last year closed a deal on a conservation easement covering 126 acres in Portsmouth that left him rubbing his eyes in disbelief.
It was not the fact that the trust blocked 127 houses or even that a trust report showed the town would save money by leaving the land as a golf course. What shocked Clement was the bargain-basement price: $2.56 million.
Thanks to a sagging economy, Clement says the trust scooped up the easement on the Green Valley Country Club for about half the potential asking price during good times. But the successful deal has not been the norm for most conservation groups of late.
The slumping real estate market puts Clement and other conservation officials within reach of properties they could have only dreamed of when the economy boomed. But at the same time, the down economy has proven to be a double-edged sword, with funding limited and sellers often unwilling to let go of suddenly cheap land.
Westerly Land Trust President Harvey Perry said falling, as opposed to rising, land values present challenges unseen in recent memory. Landowners looking to sell to trusts often receive appraisals that value their property below what they consider a fair price and, sometimes, below what they initially paid. That, Perry said, often leaves landowners reconsidering.
Kevin Essington, of The Nature Conservancy’s Rhode Island chapter, said the local nonprofit acquired 300 acres last year, the smallest amount in at least a decade. He attributed that largely to skittish landowners unhappy with appraisal results.
“The conservation community is probably the only potential buyer right now and we are finding [transfers] of land have dropped quite a bit … but it hasn’t yet translated into cheaper deals or more deals” for the Nature Conservancy, said Essington, director of government relations and communications.
Unlike developers, land trusts and conservation groups can dip into financing available only to them and can also offer easements that allow property owners to keep their land but limits development.
Still, land trusts are also struggling with slashed budgets, falling donations and competition from developers looking to snap up cheap land.
“We are seeing unique opportunities we didn’t see years ago in terms of values, but that’s not to say we’re not feeling this economic climate,” Clement said.
The R.I. Department of Environmental Management coordinates the state’s land conservation programs and administers open-space bonds approved by voters. Deputy Chief of the Division of Planning and Development Lisa Primiano expects the bond money to run dry within a year. The division has already informally committed the $2.5 million from the last bond approved by voters in 2008 and expected to be issued this year.
While a dearth of funds could prove a problem in the future, Primiano said it was not a lack of money in 2009 that stopped DEM from purchasing lots of land. Instead, it was unwillingness by landowners to sell at appraised prices they thought far below value and developers wondering whether to sell now or take a gamble and hold their land.
“I have a huge number of projects on my desk I would have loved to close in 2009 but for a variety of reasons, including appraisals, they are just stopped in their tracks,” she said.
The pause has been sudden and dramatic. DEM closed on 405 acres in 2009, paying $3.2 million for land appraised at $4.2 million, Primiano said. In 2008, DEM closed on 3,234 acres for an overall purchase of $37.5 million on property appraised at $41.5 million. In 2007, DEM paid $24.9 million for 1,167 acres appraised at $27.4 million. Purchases in 2007 and 2008 included large properties that bumped up the numbers, but Primiano said there is no doubt that closings are down.
Increasing are inquiries by developers looking to unload failed development projects or private land-owners disappointed with offers from developers. Primiano said her office receives at least a call a week from someone looking to sell the state land. It was not so long ago – before 2007 to be exact – that state officials were chasing developers and pleading with them to consider selling their land to the state.
Rupert Friday, director of the R.I. Land Trust Council, said large and complex purchases that often involve months of negotiations also challenge the state’s roughly 45 land trusts, only five of which include paid staff. Volunteers, many with day jobs, scramble to find alternate sources of funding, write grants and piece together an offer.
But some, like the Block Island Land Trust, have nowhere to turn. The trust is one of two in the state, the other being Little Compton, that receive its money via a tax on property transfers. That works fine on Block Island when real estate agents sell multimillion dollar homes on a routine basis, but when the market sinks so does the trust’s budget.
Chairwoman Barbara MacMullan said the trust collected the lowest amount in 2009 since 1996. Between January and August of last year the trust brought in $101,024, compared to $565,235 during the same period in 2008. The plunge has left the trust with barely enough money to cover its operating and debt costs and far from considering purchasing land.
“We’re very careful not to commit to something where we may not have the resources on hand because of the uncertainty in the market,” MacMullan said.
Also hesitant to dive into projects is the South Kingstown Land Trust. A nonprofit entity, it has utilized money from municipal bonds in the past to acquire properties. But Joanne Riccitelli, land protection director for the trust, doubts the town will ask voters to approve new bonds in November because of the economy.
Riccitelli, however, remains encouraged by conservation-friendly landowners and a local population seemingly supportive of the trust.
“People are still willing to give money for protecting their neighborhoods and their communities,” Riccitelli said. “But individuals tend not to have the kind of money that we need to do a project from start to finish.” •
