Fish & Wildlife Announces Endangered Species Candidates

In October, U.S. Fish and Wildlife Service identified three new candidate species for protection under the Endangered Species Act. They are the bracted twistflower, a Texas flower found primarily in the Austin area; the Poweshiek skipperling (see photo above), a butterfly found in the upper Midwest; and the magnificent ramshorn, a snail found in North Carolina. In addition, three species were removed from the candidate list: the Wekiu bug, which lives atop Hawaii’s Mauna Kea volcano, and the Gila and the New Mexico springsnails.

Click here to download a copy of the November 2011 newsletter.

Record 17% Jump in Farmland Values

Farmland values in the Federal Reserve’s Seventh District climbed a record 17 percent during the second quarter of 2011, according to the Chicago Fed’s Farmland Values and Agricultural Credit Conditions Report. This economic shot in the arm marks the largest year-over-year gain since the 1970s for the District’s five-state area—one of the most productive regions in the Midwest. The value of “good” farmland increased 4 percent during the second quarter, compared with the first quarter of this year.

The report was compiled from the Chicago Fed’s survey of 226 bankers in the District, which includes Iowa, Illinois, Indiana, Wisconsin, and Michigan. Findings revealed that higher revenues for crops and livestock, coupled with growing investor demand, fueled the rural real estate roll. Agricultural mortgage rates averaged 5.62 percent—a record low that also contributed to the surge in District farmland values. Some respondents cited a higher-than-usual number of summer auctions as a factor.

“The combination of higher revenues for crop and livestock production has been an impetus for the significant increases in agricultural land values seen this year in the District,” the Fed reported in its newsletter. “Demand for farmland remained strong from both farmers and investors.”
Among the District states, only Wisconsin had a smaller year-over-year increase in farmland values in the second quarter of 2011 than in the first. Year-over-year land values in Indiana and Iowa climbed 21 and 20 percent respectively, while values in Wisconsin rose a modest 8 percent. Fewer than 2 percent of the survey respondents expect farmland values to decline in the third quarter of 2011.

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David Oppedahl, a business economist for the Chicago Fed, shares the bankers’ notion that the spike is no fluke. “Overall, the higher level of corn and soybean prices looks to be something that will continue through the end of the year,” he said early this week. “I think that over the next year we aren’t going to see any declines, and we are going to see continued increases, though probably not as strong as over the past year.”

On November 15, 2011, the Federal Reserve Bank of Chicago will hold a conference to explore the factors contributing to large increases in agricultural land values and cash rental rates in the Midwest. The details and agenda are available HERE.

Ashe Takes Oath as Fish & Wildlife Director

Dan Ashe was sworn in as the 16th director of the U.S. Fish and Wildlife Service on June 30. President Obama had nominated Ashe to head up the nation’s principal federal agency dedicated to the conservation of fish and wildlife and their habitats last December. Thanks to his father’s 37-year career at Fish and Wildlife, Ashe is in fact a lifelong veteran of the service. After receiving his Master’s degree from the University of Washington, the Atlanta native spent 13 years working on Capitol Hill before joining Fish and Wildlife. He subsequently served as the service’s assistant director for external affairs from 1995 to 1998, as the chief of the National Wildlife Refuge System from 1998 to 2003, as science advisor to the director of the service from 2003 to 2009, and, most recently, as the service’s deputy director for policy.

Said Interior Secretary Ken Salazar, “Dan Ashe has served with distinction and integrity in the Fish and Wildlife Service for more than 15 years. He has worked tirelessly to prepare the Service to meet the resource challenges of the 21st century, and his leadership and vision have never been more necessary. I’m excited to work with him to foster innovative science-driven conservation programs and policies to benefit our nation’s fish and wildlife and its habitat.”

Said Ashe, “I’m humbled by the trust that the Secretary and the President have placed in me, and most of all, by the responsibility of leading the finest wildlife conservation organization in the world. As director, I will strive to create an atmosphere where we can bring to bear our collective imagination, our tenacity, and our commitment to public service to address today’s challenges to the future of our nation’s fish and wildlife heritage.”

Read more HERE.

 

Land Report July 2011 Newsletter

There’s a lot of ground to cover in the July edition of The Land Report newsletter: auctions, equities, timberland, and several political developments affecting landowners, ranging from the passage of key legislation by the Texas Legislature to the appointment of Dan Ashe to head the federal agency that many landowners know on a firsthand basis, the U.S. Fish and Wildlife Service.

From a research standpoint, a new frontrunner has emerged atop The Land Report Top Ten, which features the country’s leading investment quality land listings. Count on The Magazine of the American Landowner to follow the $100 million listing of Wyoming’s Walton Ranch by Ranch Marketing Associates in the months ahead.

For more up to the minute reports on listings, sales, and countless other stories pertaining to land and landowners, be sure to follow The Magazine of the American Landowner on Facebook and Twitter.

P.S. Our award-winning quarterly magazine is available in a print version via subscription.

 

Southwestern States Enduring Extreme Drought

More than three-quarters of the Lone Star State is enduring extreme or exceptional drought conditions. Parts of the Oklahoma panhandle have gone without rain for over eight months. Some 9,000 wildfires have ravaged 2+ million acres of Texas terrain, including a substantial amount of pasture land.

Old timers are saying that the only difference between today’s drought conditions and the Dust Bowl days is they had water back in the 1930s.

“You hope God gives you the strength to get over the drought,” Matt Farmer, 51, told the Los Angeles Times. “If I fail, I’ve let my father and my father-in-law down. They all made it.”

Climatologists are blaming the current conditions on shifting rainfall patterns.

“‘Global weirding’ is the best way to describe what we are seeing,” said Katharine Hayhoe, a climate scientist at Texas Tech University. “There is a lot going on these days that’s not what we are used to seeing. What’s happening is our rainfall patterns are shifting. In some places it means more heavy rainfall, in some places it means more drought, in some places it means both.”

Read the complete story HERE.

$5 Million Hilton Head Easement Acquisition

Several funding entities, including Beaufort County and the U.S. Department of Agriculture, have pooled resources to acquire several key conservation easements on St. Helena Island as well as outright ownership of 19 acres on Hilton Head. According to news releases, these acquisitions will keep these lands from being turned into developments that would include some 300+ homes. In addition, the three easements allow the current property owners to continue farming the historic Beaufort County lands. More details of the transaction are available HERE.

Adults Only – The New Interior Department Reality Show

Update: In a report to Congress on September 24, the Department of the Interior confirmed that the controversial Royalty in Kind Program will be phased out this Thursday, September 30. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEM) announced that the agency is successfully completing the orderly close-out of the Royalty in Kind Program, which accepted oil and gas in lieu of cash as royalty payments on federal energy resources. Interior Secretary Ken Salazar (shown here with BOEM Director Michael Bromwich) stated that all existing contracts would be allowed to expire and no further Royalty in Kind sales would take place.

Download the complete report to Congress HERE.

Originally posted September 12, 2008: The fine folks who gave America the Teapot Dome Scandal are pleased to bring their fellow citizens a sizzling new take on government outreach, including sex, drugs, and lucrative consulting contracts. The lurid scandal, which centers on Interior’s Royalty in Kind program, was co-produced by Chevron, Shell, Gary Williams Energy, and Hess Corporation. Hundreds of articles covering this topic are available via Google News, but consider this post at SLATE, which has hyperlinks to the internal investigations by Interior’s Office of Inspector General.

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.

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.

Crossing the Divide with Al Biernat

When it came to the Colorado hamlet of Creede, it was love at first sight for Dallas restaurateur Al Biernat (standing front and center with wife Jeannie and writer Trey Garrison). And what’s not to love about Creede? Nestled among high rocky cliffs on the eastern side of the Continental Divide, the historic mining town is the picture-perfect home of just 400 year-round residents. The rest of the year, tens of thousands of tourists and part-timers cruise through. Best of all, it’s not a ski town. Unlike Vail or Aspen, there’s no crush of obnoxious fashionistas clamoring for lattes or sashimi. Consequently, snug cabins and larger retreats range in price from ridiculously affordable to seven-figure splendor.

BY TREY GARRISON
PHOTOGRAPHY BY GUSTAV SCHMIEGE
PUBLISHED SUMMER 2009

But Creede is no backcountry village. A tiny little Whoville of sorts, Creede boasts a slew of incredible little restaurants, art galleries, and the Creede Repertory Theatre, which has won acclaim from high-minded New York drama critics. The hunting is so rewarding that people wait years to get a permit to stalk elk, moose, and other trophy critters. The fly-fishing on the Rio Grande and its tributaries attracts anglers from around the world. And just four percent of the land in Mineral County is privately owned. The rest is controlled by the U.S. Forest Service.

Enter Al Biernat, a self-made success who worked his way up from bussing tables at the Palm Restaurant in Los Angeles to running the Palm’s Dallas locale as its GM. When a lease came up on a prime piece of Dallas real estate, he signed on the dotted line and created the dining establishment that now bears his name.

Creede was a dream come true—a place of solace, relaxation, and recreation to share with his family and friends—so he and his wife, Jeannie, bought a 30-acre plot in a delicate Alpine zone at 10,600 feet. The land is regulated by the Mineral County Alpine Zoning Commission, and Biernat has a thick stack of regulations to prove it. Everything from the size of structures to the materials he could use is spelled out. Surrounded on three sides by Forest Service land, he believed his cherished investment would be protected from the over development that has plagued other Colorado towns.

Since 2005, Biernat has put a substantial amount of his hard-earned cash into his cabin and the surrounding property. “It seemed the perfect little secret place,” Biernat says. “I had no idea what could be coming.”

But he should have.

Until the mid-1980s, Creede was a mining town, site of Colorado’s last big silver strike. Since then, however, the only miners have been tourists, picking up bits of quartz and the occasional fleck of pyrite (better known as fool’s gold). Biernat was positive this peaceful oasis was immutable.

He was so sure of it that he believed mining could never come back. That’s why he signed his deed, despite a standard print disclaimer and warning right above the signature line stating that he was not buying the patented mineral rights to his land. And yet, from 2007 through the end of 2008, mining returned—exploratory mining for untapped veins of nickel, silver, lead, and gold.

The prospect sent Biernat and a good number of local landowners into a tailspin of worry and doubt. They weren’t just concerned about the light and noise pollution from drilling operations or the heavy truck traffic on narrow, winding passes. Biernat was in a bind because while he owned the surface rights to his property, someone else owned the patented mineral rights. And the implications are enormous.

Different parties often own the surface and the subsurface rights. These interests may have been created through the reservation of the minerals by the government or may result from a decision by a landowner to sell their mineral interests.

Mining claims are initially unpatented claims, which give the right only for those activities necessary to explore and mine. Much as farmers could obtain title under the Homestead Act, miners can obtain a patent (a deed from the government). The owner of a patented claim can put it to any legal use. Bottom line? If extractable ore were found beneath his property, the subsurface rights owner can force landowners such as Biernat to sell.

Beyond that, full-scale mining would shatter the sanctity of the Continental Divide. Biernat’s 1,000-square-foot, loft-style cabin is something out of a Ralph Lauren catalog. It’s cozy, rustic, gorgeously decorated, and at night you get a better view of the stars than the Hubble telescope.

Biernat had planned to build a larger cabin and turn his existing one into a guest house. He had already added a barn-style garage for his truck, his ATVs, and the snowmobiles that are the only way to and from the cabin in winter. Needless to say, the return of mining put an end to Biernat’s construction plans. But to many longtime locals, another possibility loomed:

Was their dream of mining going to come true?

After the closure of the last active mine in 1985, Creede recreated itself as a tourism hub. But tourism is a fickle trade, which even opponents of mining admit. Ed Vita, an ex-techie who moved to Creede to get away from the rat race, owns two businesses in Creede. In the winters he runs San Juan Snowcat, and he owns the popular Old Miners Inn, where you can enjoy a mean pizza and the requisite adult beverage.

We sat outside on the inn’s upstairs deck, and Vita admitted he tentatively supports the return of mining. “It’s all exploratory. Until I see the numbers and the contracts, I’m not counting on anything. I know there will be some impact on the tourist industry, but it can be hard surviving here in the winter months when it’s just the 400 locals circulating the same dollars,” Vita says.

But businessmen like Avery Auger, president of Creede America Group, love the idea of mining coming back to Creede. Creede America is developing custom homes that start in the $300,000 range. Auger is not concerned about mining. In fact, he expects to draw potential buyers from the mining operations, at least from among those in management and high-tech positions that command six-figure salaries. His development overlooks Creede and is protected by an earthen berm that blocks sight and dampens noise. “This town needs this kind of business to grow,” Auger says. “This is only going to increase property values and bring money this town needs.”

Brian Egolf agrees. Egolf first came to Creede with his grandfather when he was only two years old. As years passed, Egolf thought someday he would relocate to Creede permanently. After finding his way he watched the mines close. He swore one day he would reopen them.

Over the last decade, Egolf gathered patented mineral rights for large swaths of land around Creede. A savvy businessman, he knew that the depressed price of minerals wouldn’t last forever and approached Idaho-based Hecla Mining. Egolf wanted Hecla to come to Creede, test the mines, and, if profitable, oversee production.

“I’m really hoping that we can revitalize Creede, so that people can stay and earn a good living and that their children won’t leave as soon as they graduate high school, because there will be opportunities here,” Egolf says.

Hecla’s exploratory plans called for three years of exploratory mining in a 36-square-mile area, an investment of more than $12 million. But when mineral prices declined, Hecla suspended operations. Although it promises to resume exploration in the near future, many in Creede are doubtful it will return anytime soon.

That’s no relief to Biernat, who is still considering a new house, a new well, and solar power. If commodity prices rebound, mining could come back. “Do I put the money in and risk losing my investment?” Biernat asks. “I don’t know.”

Active mining operations around a recreational retreat could drive down property values long before Hecla might acquire Biernat’s cabin. Although it’s appraised at $550,000 right now, it would be worth much less if mining resumed.

When Biernat first saw his land, everything convinced him his investment would be protected. Set in an Alpine zone, it is surrounded by Forest Service land. Brokers emphasized how mining was dead and that the town had been reinvented as a cultural and recreation hub. But unless an area is declared a wilderness, the U.S. Forest Service allows activities on federal land like mining, timber harvesting, and grazing.

To be fair, the fact that Biernat would not own the patented mineral rights wasn’t exactly in fine print. Biernat is a smart businessman and took a risk. And, he admits, despite all his anxieties, he doesn’t think he’d do anything different.

“I knew I was taking a little bit of a gamble,” Biernat admits. “I should have read things more closely. But I’ll be honest. If I could go back and do it again, I would, no matter what the stress and worry has been. Just the memories I built with my children and my wife make it worth it. I just wish I could be sure our investment would be safe over the long haul.”

While some of the specifics of his case are unique to Colorado law, the issue of patented mineral rights is a federal one. From coast to coast and everywhere in between, the potential for profit from subsurface minerals means that if a landowner hasn’t secured those rights, it could place their investment at risk.

Caveat emptor should be every landbuyer’s watchwords, even if they have competent lawyers and erstwhile brokers on their side. Should you find that dream spot, it just may not be possible to acquire the mineral rights to go with the surface estate. At that point, you have to measure the risk, and decide if it’s worth it.

For Biernat, it most definitely has been. But it’s not something he takes lightly. Every time he talks about the issue, you can see the concern etched on his face and the troublesome pall on his otherwise optimistic visage.

“I love that town, I love the fact that it’s an artists’ community, and I love the people,” he says. “It’s taken me so long to really start to fit into the town, and I’d hate to have to leave it. But I’m blessed. I have that option. What about the guy who doesn’t have that choice?”

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