Little orphan easement?

A look at what happens when a land trust dissolves

  • The Durango, Colorado-based Animas Conservancy is dissolving. But it's proven difficult to find a home for the group's conservation easements -- especially two covering 122-acre Animas Meanders.

    Paul Pennington
 

Paul Sugnet is proud of Animas Meanders, a 122-acre stretch of old riverfront farmland just outside Durango, Colo. Since he bought the property in the early 1990s, the environmental consultant says he's transformed it from "thistle patch" to "oasis," restoring 30 acres to wetlands where great blue herons nest. In 1998, he co-founded the Animas Conservancy, a nonprofit land trust designed to preserve open space through conservation easements, which give landowners state and federal tax breaks in exchange for waiving some development rights. If all goes as planned, Animas Meanders -- which is under two easements held by the Animas Conservancy -- will one day host five houses abutting about 100 acres of open space.

"It has been," Sugnet says, "a labor of love."

But that labor of love has created headaches for another group in this corner of Colorado. The second land trust in a small community, the Animas Conservancy never quite achieved financial stability, and in 2006, it asked the older La Plata Open Space Conservancy to take on its 25 easements so that it could dissolve. But that complex transfer has stalled: La Plata worries that it can't enforce Sugnet's two easements because it's unclear what development they allow. And the two organizations still haven't secured the $150,000 or more necessary to help La Plata take care of all of Animas' easements.

Land trusts rarely dissolve, but it's likely to happen more frequently as regulation tightens and the number of groups reaches a critical mass. There's no set process for transferring a trust's easements, and it can get complicated if there are a lot of easements or if some have problems, says Larry Kueter, a conservation attorney and board member of the Land Trust Alliance, an umbrella group. But conservation easements represent a massive public investment, and people expect the land to be protected forever, Kueter says. So it's important that easements aren't orphaned: "We want to make sure there's not an abyss that these public assets fall into."

Conservation easements have become hugely popular in the West in recent years, especially in Colorado. Spurred by state tax credits worth up to $375,000, about 2 million Colorado acres have been protected by 38 land trusts and 12 government programs, according to the Colorado Coalition of Land Trusts. But it's come at a price: In 2008, the state uncovered tens of millions of dollars in questionable deals involving inflated easement appraisals. That summer, the Legislature ordered better regulation of appraisals (which must now be submitted to state real estate officials for review) as well as of the organizations that hold easements. Next year, the tax credit will be restricted to easements held by trusts that have earned the state's new certification. That expensive and onerous process is designed to weed out violators, but it also targets -- and where possible, seeks to strengthen -- groups that don't put together strong conservation deals or lack the capacity to care for their easements properly. The majority of the 30 land trusts that have applied, including La Plata, are expected to be certified by the end of the month. Next year, government programs take their turn.

All this may ultimately eliminate some groups, which means their easements will have to change hands. Easements need to be regularly monitored and defended against violations, and that takes roughly $5,000 to $15,000 per easement -- and a land trust that knows what it's doing. In theory, a faltering trust could ask a court to disperse its easements to qualified groups. But courts are unpredictable, says Kueter, and could end up saddling the receiving organization with something it doesn't want, hasn't had a chance to review or lacks the money to care for.

Hoping for a better solution for the transfer of the Animas Conservancy's easements, the Colorado Conservation Trust gave La Plata $30,000 to do necessary legwork and financed a legal review of Animas' projects. In 2008, La Plata staff began visiting Animas' easements to meet landowners, check for violations and update files. The process uncovered potential problems with Animas Meanders. Most of the land is under a 1979 easement that allows the construction of three homes, and Sugnet has cut that lot into three parcels, two of which he's sold to a partner. But 1978 neighborhood covenants limit division to two parcels, and the easement is unclear on whether the lot can be divided at all. On the rest of the land -- 14-plus acres under a 1998 easement that allows two homes -- Sugnet adjusted the boundary so that it borders the river, likely increasing its value. The easements weren't amended to reflect the changes, and Animas' board never formally approved them, according to one board member and a former staffer.

In late 2008 and early 2009, La Plata suggested to Sugnet that the easements be clarified to account for his changes, resolve conflicts with the covenants and prevent further divisions, among other things. But Sugnet believes that this would restrict his property rights. The covenants don't apply because they've lapsed, he and his lawyer argue. "I feel very strongly that I've done a good job out there," Sugnet says. "If they don't like the easement, then they shouldn't take the easement."

And that's the dilemma: If the issue ends up in court, La Plata could be forced to take Sugnet's easements, amended or not. Since La Plata can't enforce an easement that's unclear, director Katharine Roser says, that could endanger its state certification and its national accreditation with the Land Trust Alliance, and open it up to lawsuits. "When we do one of these deals, we make a promise to the landowner and a promise to taxpayers that the land will be protected. We need to keep those promises."

Despite the current stalemate, Chris Herrman of Colorado Conservation Trust believes that attrition and mergers will result in better land trusts, and better conservation deals. And other states are watching what happens in Colorado. "The thing about the leading edge," he says, "is it's the bleeding edge."

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