$500 Million Everglades Deal Postponed Again

Florida Gov. Charlie Christ is getting a lesson that real estate brokers know all too well: big deals take time.

It’s been almost two years since Christ announced the $1.75 billion purchase of 187,000 acres in the Florida Everglades from United States Sugar. Since then the economy has tanked and the purchase price has been lowered twice: to $1.34 billion and now $536 million. In each instance, the number of acres has also fallen: first, to 180,000, and, in the most recent iteration, to 72,500. Faced with a March 30 deadline, the governing board of the South Florida Water Management District voted 9-0 to extend the closing for another six months.

An added element to the high-profile transaction was an in-depth front-page story in The New York Times last week that questioned many deal points, including the cost per acre, which The Times suggested is much too high, the tracts themselves, which The Times suggested include some of the least valuable belonging to U.S. Sugar, and the purpose of buying six separate tracts without reaching out to Florida Crystals, United States Sugar’s chief competitor and the owner of key blocks of adjacent land.

But the principle focus of the article was how Gov. Christ’s plan to save the Everglades will instead rescue United States Sugar. Since its publication, supporters and detractors have descended upon the media with their own interpretations of the deal.

Read more from a gubernatorial candidate who opposes the purchase HERE.

Read more about environmentalists who support the purchase HERE.

Ask the Expert: Scott Jones

The second session of the 111th Congress is already under way, and landowners have a lot at stake. With that in mind, The Land Report turns to Scott Jones to get the inside scoop on Washington’s next steps. Since 2003, Jones has been the CEO of the Forest Landowners Association (FLA), whose members own and operate some 40 million acres of forestland in 48 states. Founded in 1941, FLA offers education, information, and national grassroots advocacy with the goal of sustaining forestlands from one generation to the next.

With so many bold initiatives taken on by the Obama administration, what are the chances of a climate bill passing this year? Would it benefit forest landowners?

American voters believe that a climate/cap-and-trade bill may cost jobs; as a result, I would not be surprised to see the climate portion of the energy bill removed. If crafted properly, an energy bill could benefit private forest landowners by creating new markets for wood. However, the definition of “woody biomass” still needs to be fixed for landowners to truly benefit from the stripped down version of the bill.

The federal estate tax dropped to zero this year. Do you expect it to return to 55 percent with a $1 million exemption as scheduled in 2011?

There do not appear to be enough votes to bring the death tax back to life in 2010. Sen. Scott Brown’s (R-MA) recent election created a political barrier to retroactive death tax reinstatement. Unless legislative action is taken, the tax is scheduled to permanently return at a rate as high as 55 percent in 2011. But this is an election year, so anything is possible. Polls indicate 65 to 70 percent of Americans want the tax repealed.

Name one other issue landowners should follow closely.

The Clean Water Restoration Act is definitely legislation every landowner should keep an eye on. It seeks to expand the jurisdiction of the Clean Water Act by redefining “navigable waters” as “waters of the United States.” The consequences of this bill are enormous, and it has already created a firestorm in the Senate. Strong opposition convinced Rep. James Oberstar (D-MN) to delay introducing the bill on the House side. Oberstar now intends to move the bill through the House by the end of 2010.

Historic Dahlstrom Ranch Conservation Easement Finalized

A conservation easement of historic proportions was purchased in the heart of the Texas Hill Country only a short drive from the Capitol of Texas. Hays County, the City of Austin, and the Hill Country Conservancy (HCC), with funding from the federal Natural Resources Conservation Service (NRCS), came together to purchase a conservation easement on the historic Dahlstrom Ranch, a 2,254-acre privately-owned holding located outside of Buda. This rare collaboration between a private landowner, county, federal agency, and city took shape in 2007 and will be the first private land preservation agreement of its kind. The privately-owned ranch will have the unique distinction of providing a 384-acre area for public education and nature programs proposed by a public access committee led by the National Parks Service and managed by Hays County.

“Through this conservation easement, Gay Dahlstrom, in partnership with Hays County, as guided by Precinct 2 Commissioner Jeff Barton, NRCS, HCC, the City of Austin and many others, has ensured that a majestic piece of the Texas Hill Country will not only survive, but allow our native wildlife and natural resources to thrive,” said David Braun of Braun & Associates, attorneys for Gay Dahlstrom. “Gay is an exceedingly modest and private person, but today she and her family have set a proud and important example for all conservation-minded Texas landowners.” The family’s history on the property dates back five generations. The Dahlstrom Ranch on Onion Creek has played an impressive role in Hays County’s heritage. The property also plays a key role in the area’s overal well-being thanks to its abundant aquifer recharge. The historic ranch features an impressive system of caves and sinkholes that directly convey clean water to the aquifer. Also, following a reduction in livestock grazing in 2005, the ranch’s wildlife habitat and native grasses have staged a welcome comeback.

In recent years, the Dahlstroms, like many other Texas families, were faced with the decision on whether to begin selling off their land to developers in order to pay estate taxes. Gay Dahlstrom chose to preserve the family’s heritage and legacy, retaining Braun & Associates to guide her through the process of obtaining a conservation easement that enabled her family to keep the ranch intact. This contract between property owner and conservation organization, while providing critical tax incentives, also allows the owner to protect the water resources, wildlife habitat, natural character, and other conservation values of the land. A conservation easement restricts the amount and type of development allowed on the property, and conveys the right to enforce these restrictions in perpetuity, while preserving the right to traditional agricultural uses and limited residential use.

“This partnership provides multiple benefits, keeping this land intact for the family’s ongoing use and enjoyment while preserving the unique caves and other karst features of the ranch and furthering enhancement of its ecology and wildlife”, said Frank Davis, Director of Land Stewardship at HCC.

“I am very pleased we are able to partner with Hays County and Hill Country Conservancy on this important project,” said City of Austin Mayor Lee Leffingwell, a longtime supporter of the use of voter-approved bonds designated for the acquisition of open space.  “As our region continues to grow, it is important that we lead in the effort to protect our natural resources, and acquisitions like this one ensure we are doing our part to protect and enhance our environment, particularly our water quality, and the heritage of the Aquifer region and Texas Hill Country.”

Gay Dahlstrom’s son, Jack Dahlstrom Jr., has plans for ecotourism and nature and wildlife-related art exhibits on the property, with the ultimate goal to further the community’s understanding of, and respect for, the area’s heritage and environment. The Dahlstrom family has a long-term plan for continuing to restore the land and its native wildlife. “At the end of the day, my mother did this because she loves this land and appreciates all that it has given us,” said Jack Dahlstrom Jr. “Now, it’s our family’s turn to give back to the land, and we appreciate the efforts of everyone who worked so hard to help us make that happen.”

America’s Largest Landowner Announces Renewable Energy Venture

Ted Turner has announced a strategic alliance with Atlanta-based Southern Company to pursue development of renewable energy projects in the Southwestern United States, including his New Mexico land holdings. Turner is the state’s largest landowner.

“I’ve always been passionate about developing renewable energy, and I’m excited to join forces with Southern Company to explore our renewable energy potential,” said Turner, who will pursue the venture through Turner Renewable Energy.

“Southern Company’s experience in power project development, construction and operations, and customer relations help make this a strong alliance, and I look forward to working together,” he added.

Turner Renewable Energy and Southern Company will focus on developing and investing in large scale solar photovoltaic projects in the Desert Southwest with the goal of further commercializing the technology and making it more cost competitive.

“This alliance unites our common goal to explore and develop new renewable energy projects,” said Southern Company CEO David Ratcliffe. “We have said for some time that renewable energy should play an increasing role in this country’s energy mix and that Southern Company would seek opportunities to expand our renewable portfolio where it makes sense. This is evidence of that commitment.”

Library: Working Dogs of Texas

Both the author and the photographer are valued contributors to The Land Report, and there’s no doubt in my mind that landowners from coast to coast will be able to identify with this book. So let’s begin by getting two misconceptions about this book off the table.

First off, Working Dogs is not a tribute to hunting dogs. Yes, there are great chapters on curs and feists, pointers, retrievers, and the fearless breeds that track wild hogs. The authors even tail a pack of hounds that are bona fide man-hunters à la Paul Newman in Cool Hand Luke. But at its core, Working Dogs is about the countless ways man’s best friend has been bred and trained to serve different masters, which is why this book is such a compelling volume.

“The one thing these dogs all have in common is that each has a job to perform,” Wyman Meinzer says. “It might be highly specialized task that requires enormous amounts of training like search and rescue or detector dogs. It could be a more traditional one such as herding cattle or guarding against predators. It could even be as important as providing friendship to an elderly person.” To that end the final chapter is titled “The Caretakers.”

The second element that needs to be dismissed is that Working Dogs of Texas suffers from geographic limitations because of its focus on the Lone Star State. On the water, in the woods, on ranches and farms, and at border checkpoint and international airports – Chappell and Meinzer covered an enormous amount of terrain researching this compelling project.

Available online at Amazon.com

Ask the Expert: Greg Fay

As 2010 approaches, landowners coast to coast are eager to get a bead on pricing and trends for recreational properties. Here’s a heads up from an industry icon, Greg Fay, who founded Fay Ranches in Bozeman, Montana in 1992. Fay and his partners have built a reputation for themselves that is recognized not only nationwide but internationally as well. In addition to brokering some of the best-known properties across the American West, their ranch management company, Fay Management, has advised landowners for over a decade, maximizing their clients’ investments by creating and restoring habitat, agricultural resources, and structural improvements.

When it comes to big ranches, has there been a major adjustment in prices similar to what we’ve seen in the residential and commercial sectors?

The speculative sector of the market has evaporated. Investors who planned to do “shared ranch” developments now need to get out from under those investments. For the ranches we focus on, those with high recreational and aesthetic attributes, there has been some adjustment but nothing close to what we’ve seen in the residential market and commercial sectors. There are specific examples right now of owners who need to sell, and we can direct buyers to those opportunities. But as a whole the ranch market has not shown the urgency that has afflicted the residential and commercial sectors.

Let’s go back to a point you just made. Why do great recreational ranches hold their value so well?

It’s a supply and demand situation. There is a finite amount of ranches to begin with and even fewer ranches that have the highest quality recreational amenities, such as great trout fishing, beautiful scenery, great bird hunting, or big game hunting. The rampant development we’ve seen over the past five years in the residential market simply will never happen with this product. As a matter of fact there are fewer and fewer ranches every year. The other reason is the ranches are generally held by strong hands, either modern buyers who are financially secure or multi-generational owners.

So you disagree with the statement that markets have seen a 15 to 25 percent adjustment downward?
Not completely. As I mentioned, there are specific examples of great opportunities within the ranch market, but there just hasn’t been enough data to substantiate a market-wide diminution in value. Even in a great year, very few ranches change hands relative to the residential market. This is even more pronounced in 2009. So I just don’t think there is enough data to point to a specific percentage of adjustment. I will say, however, that some buyers are getting some darn good deals right now in those instances in which the owners need to sell.

Have things slowed down for you and your brokerage?

2009 has been tough. Thank goodness for the relationships we’ve built over the years because those relationships have helped tremendously in this market. The first two quarters of the year were particularly challenging, but this fall we’ve seen a flurry of activity and have closed some large transactions. The tone of the conversations we’re having with our clients is much more positive. We are seeing an increase in active buyers looking for value, and we’re happy to help them find it.

Nebraska Governor to Address Wind Conference

Gov. Dave Heineman is slated as one of the keynote speakers next month at the Nebraska Wind Power 2009 Conference. Scheduled for Nov. 9-10 in Kearney, the conference will feature nationally known experts on wind and wind power and focus on numerous issues of vital interest to landowners seeking to capitalize on this opportunity to generate revenues from renewable energy.

According to the National Renewable Energy Laboratory, wind energy is one of the fastest-growing forms of electricity generation in the world. The United States can currently generate more than 25,000 megawatts (MW) of electricity from the wind, which is enough to power about 7 million average American homes. Industry experts predict that, with proper development, wind energy could provide 20 percent of U.S. energy needs.

For more information on the Nebraska Wind Power 2009 Conference, read HERE.

Northeastern Landowners Get $165M For Natural Gas Rights

A coalition of landowners in one of the country’s emerging natural gas hot spots has reached an agreement to lease 30,000 acres to Fortuna Energy for natural gas drilling rights. The $165-million, five-year deal for Marcellus Shale drilling rights comes out to $5,500 per acre, plus royalties.

The Friendsville Group is made up of 600 property owners in Susquehanna and Bradford counties in Pennsylvania, and in Broome County, New York. Individual owners will have the option to extend the lease for another three years, making it a “one-size-fits-all” deal, according to Pat Flaherty, who helped negotiate the deal.

Other perks to landowners were included in the deal, including approval of developmental plans and retaining rights to other minerals on the property.

“It’s by far the best offer we’ve seen,” said Larry Barrack, a Pennsylvania property owner who spoke with Gannett reporter George Basler.

Fortuna , a subsidiary of Calgary-based Talisman Energy, is one of North America’s largest independent producers with more than 22,000 oil and gas leases.

Landowners in Pennsylvania can expect payment within 90 days of signing the agreement, Fortuna officials said. Given the current moratorium on oil-and-gas drilling in New York, the Broome County leases – primarily in Binghamton and Vestal – will be structured differently, giving landowners $500 per acre when the lease is signed and the remaining $5,000 per acre once the moratorium is lifted. The New York Department of Environmental Conservation (DEC) plans to release results from an environmental impact report this fall.

Join The Land Report at Al Biernat’s This Thursday Night

Come join The Land Report as we celebrate one of America’s great landowners: Al Biernat!

From the Continental Divide down to the Colorado town of Creede, the adventures of the Dallas restaurateur were chronicled in a compelling narrative by Trey Garrison and documented with lush photography by Gustav Schmiege.

Enjoy a cocktail. Grab a magazine. Sample passed hors do’oeuvres prepared by the inimitable Michael Weinstein and his kitchen staff. And congratulate Al and Jeannie on trading the summer heat of Dallas for the cool breezes of Colorado!

Date: Thursday, September 17
Location: Al Biernat’s Private Dining Room
Address: 4217 Oak Lawn Ave Dallas 75219
Hosts: Editor Eric O’Keefe and Publisher Eddie Lee Rider

Doors Open: 5:30
Presentation: 6:15
Lock Down: 7:30

RSVP to (214) 219-2201 or to brad@albiernats.com

Sonia Sotomayor & Property Rights

The current issue of The Land Report takes an in-depth look at Obama Administration and the American Landowner. Since that issue came off the press, the President has already been faced with a crucial task: nominating a replacement for Supreme Court Associate Justice David Souter. His choice? Federal appeals court judge Sonia Sotomayor.

Next Monday, July 13, the Senate Judiciary Committee will begin her confirmation hearings. Landowners will be paying particular attention to Judge Sotomayor regarding property rights, in particular, Kelo v. City of New London, the controversial 2005 decision that sparked a national uproar. What will her stance be? Insight can be gleaned from her role in an important test of Kelo that took place in 2006: Didden v. Village of Port Chester.

According to The New York Times:

The case arose from a meeting in 2003 between Mr. Didden, who owned property in Port Chester, N.Y., and an executive of a company that had been designated by the village to develop a 27-acre urban renewal area that included part of the property. What happened at that meeting, Mr. Didden said, amounted to extortion.

Mr. Didden had made arrangements to put a CVS drug store on his lot. At the meeting, the executive, Gregg Wasser, demanded $800,000 as the price for permission to proceed with that project, Mr. Didden said in court papers. The alternative, Mr. Wasser said, according to the papers, was to have the village condemn Mr. Didden’s property so that Mr. Wasser’s company could put a Walgreen’s in the same place.

“Here is a private person standing in the shoes of the government with the power to condemn or not condemn,” Mr. Didden said. “The $800,000 wasn’t going to rehabilitate a public park or build a soccer stadium. It was going into his pocket.”

Mr. Didden refused. The next day the village condemned his property.

As The Times points out, when Didden’s appeal reached the Court of Appeals for the Second Circuit, his case was rejected with a terse, unsigned decision. The response has not been favorable:

The ruling in Didden is not popular among some property rights and constitutional law professors. Eight of them filed a brief in 2006 unsuccessfully urging the Supreme Court to hear an appeal.

“This is the worst federal court takings decision since Kelo,” said Ilya Somin, who teaches property law at George Mason University and helped write the brief. “It’s very extreme, and it is significant as a window into Judge Sotomayor’s attitudes toward private property.”

Read more at:

“Issue of Property Rights Is Likely to Arise in Sotomayor’s Confirmation Hearings,” New York Times, June 15, 2009

Next Page »