Susan didn’t touch on this directly but $9,000/acre is consistent with land values of agricultural land with limited development potential due to AG zoning. While property values are down due to the economy, I can’t think of any properties, farmland or otherwise, that could be had for $3,500/acre as Mr. Vestergaard was hoping to pay. Land with development potential due to zoning or location has in the past fetched far more than $9,000/acre. It’s not uncommon for land with water and sewer access and residential zoning to have fetched upwards of $50,000/acre. Whether those prices will return when the economy turns around remains to be seen. But the $9,000/acre value is reasonable and consistent for agricultural property.

Sounds like that may be the key. Thanks again.

Zoning is part of the consideration in the valuation. However, ag zoning doesn’t prohibit residential development. It may limit lot sizes to five or 10 acres, but that is still going to net the landowner a great deal more than land sold for purely agricultural purposes.

Without looking at an individual appraisal, it is hard to determine what ‘lower’ is. Each property is different. I’ve seen development rights valued from a ‘whole lot of money’ to ‘not very much’, depending on a lot of factors — soils, proximity to town, etc. etc.

The point, I think, is that the seller doesn’t set the price. All they can do is agree to the terms or not. And, often, those terms include a less than market value (as established by the appraisal) sale of the development rights.

Anything more technical than this and I’ll have to defer to an appraiser.

I think, though, that Jonathan’s question, which I’ll phrase in my own words, remains unaddressed: if zoning prohibits development of the land in question, some of those considerations (owner donation, etc.), while helpful and appreciated, are irrelevant, and “comparable sales” would be those of properties with similar restrictions, so wouldn’t the value be lower?

If the case is that the owner is willing to take the risk that the property won’t sell for a higher value for development in the future and demands more today than we might be willing to pay, that’s not a market or an appraised valuation, that’s the owner setting the price. I hope you (or a commissioner) can clarify this for us as well.

I can’t speak for the Greenbelt Commission’s rationale, but I can speak to the broad issue of valuing development rights.

When any of us purchase development rights, we do so with the guidance of an appraiser. Most of us are prohibited from paying above appraised value. Briefly, we have a qualified appraiser determine the value of the land, based on comparable sales. The appraiser then does a second appraisal that establishes the value of the land with the conservation easement in place. (Generally, the value of the land for housing in the first instance; the value for farming or recreation in the second instance.) The difference between those two values represents what the landowner gives up by establishing the conservation easement, and is the value of the development right.

This process is more complicated, but not significantly different, than what a private buyer would probably use to establish the value they’d be willing to pay.

Frequently, the landowner does not receive the full amount of that value, and chooses to donate some portion of the value, meaning that, in total, they receive less cash for the land than they would receive if they sold it outright.

That said, timing is everything in life.

On the one hand, a few years ago, when competition for land was higher, it was far easier – if more costly – to draw a direct line between an immediate threat of development and protecting a specific parcel of property.

On the other hand – and this is important – the goal of good conservation is to protect land that is important to advancing other public policies (clean air, clean water, recreation, wildlife habitat, farming, among others.) In that regard, while the direct line may be a little blurrier today, the opportunities to advance those public policies by land protection come at a much lower cost in this economy.

If we wait until the threat of development is immediate, the costs of land protection will be significantly higher than they are now.

Don’t know if this helps, or simply confuses things further. In short – the amount paid for development rights is, to the degree humanly possible – driven by market forces.

The Legacy Land Conservancy board meets in early November, and I’m hopeful they will agree to participate in this project. It fits our priorities.

That being the case, we will start a fund raising campaign to support our portion of it. So — yes! You can certainly make targeted donations. If you’d like to start the fund, we’d certainly be honored to take your contribution.

Susan