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Land Report 100: No. 62 Clayton Williams Jr.

Land Report Editors — Thu, 21 Jan 2010 19:54:48 +0000

OF THE COUNTRY’S 100 LARGEST LANDOWNERS, FEW ARE AS COLORFUL AS CLAYTIE.

A passionate approach to land stewardship is but one of Clayton Williams’s claims to fame. The diehard Texas Aggie is a born entrepreneur whose many pursuits have ranged from insurance salesman to banker, farmer, rancher, real estate developer, big-game hunter, philanthropist, conservationist, and, at one pivotal point in his career, front-running gubernatorial candidate. And like any self-made man, he can ride out tough times with the best of them—even down to his last bullet.

Williams’s trailblazing traits date to his colorful forebears, who mixed it up with the likes of Kit Carson, Billy the Kid, and Geronimo. The native Texan was born in Alpine in 1931 and raised in Fort Stockton. After attending Texas A&M and fulfilling his military obligations, he cut his teeth selling life insurance in Mineral Wells. But fate called him back to West Texas, where in a Fort Stockton coffee shop he learned about a farm for sale. He struck a deal with its owner to form an oil and gas partnership, and the cornerstone of his career was set. From that small start, his financial empire eventually grew to include a host of companies, from cow-calf operations to a safari company to several entities bearing the ClayDesta moniker, a nod to himself and wife Modesta.

It was in Modesta that the wildcatter found a soul mate who shared his love of the land and sense of adventure. In his book Claytie: The Roller-Coaster Life of a Texas Wildcatter, Mike Cochran describes Williams’s run as “an exciting mix of hard work and great fun, building pipelines and drilling wells one day and branding calves and working cows the next—all embellished with a spectacular marriage. Claytie and Modesta really are bigger than life.”

After an unsuccessful run for governor of Texas in 1990, Claytie turned his considerable energies on going public with Clayton Williams Energy Inc. (CWEI). With an estimated net worth of $100 million, his name was added to the Forbes Four Hundred. Today, he is a fixture on the Land Report 100 and ranked No. 62 in 2009 with 146,655 acres. During the past decade, CWEI has drilled 167 horizontal wells, mostly in the Austin Chalk formation as well as the Cotton Valley Reef in Texas, in Louisiana, in Mississippi, and in New Mexico.

“Claytie is, by all measures, one of a kind,” says Cochran. “He’s an absolutely wonderful character. With his ranch he’s been really innovative and was recognized nationally for some of the innovations to trap water and to get the best use of the land.”

Crossing the Divide with Al Biernat

Trey Garrison — Mon, 19 Oct 2009 07:00:35 +0000

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?”

For Sale: 19,079-Acre Pineywoods Mitigation Bank in East Texas

Eric OKeefe — Tue, 25 Aug 2009 22:00:47 +0000

One of the largest wetland mitigation banks in the nation is on the market. Located in Angelina, Jasper, and Polk Counties, the Pineywoods Mitigation Bank is currently the largest wetland mitigation bank in Texas and is fully permitted with the US Army Corps of Engineers.

The Pineywoods Mitigation Bank is the result of six years of cooperation between The Conservation Fund and GMO Renewable Resources, entities that have spent more than $2 million extracting all of the permitting and execution risk out of the project.

A contiguous block of 19,079 acres of valuable habitat, the bank is located in the middle of the Neches River basin and provides a corridor between the Davy Crocket and the Angelina National Forests. Its large size and the concentration of sensitive wetland habitat on 13,000 acres are two of its many distinctions.

The Conservation Fund and GMO Renewable Resources seek to sell the bank as a whole to a buyer who can fully focus on the monetization of the $85 million in potential credit value. The estimated net present value of the wetland mitigation credits is about $40 million with an 18% discount rate.

“Pineywoods Mitigation Bank is truly a unique piece of property managed for the conservation of natural resources while providing mitigation opportunities,” says Tom Margo, Director of Real Estate Sales at AFM Real Estate, the listing broker. The owners recognized the importance of this area and put a plan in place focused on conservation and enhancement. All of the necessary approvals and permits are in place, a rare find for a property of this size and with these characteristics.”

The timeline for the bidding process is as follows:
• Indicative offers due September 1, 2009.
• Binding offers with deposit due November 1, 2009
• Closing prior to December 31, 2009.

For additional information, go to the Pineywoods Mitigation Bank website. For details of the sale, review the following letter from GMO Renewable Resources. For more information about AFM Real Estate, visit their website.

Partner Profile: Holistic Management International

Eddie Lee — Sun, 10 May 2009 13:00:05 +0000

Peter Holter and the fine folks at Holistic Management International (HMI) are valuable partners of The Land Report. We believe in their mission, and once you learn more about them we think you will be supportive as well.

HMI is a non-profit based in Albuquerque that dates back to 1984. Its goal is to restore damaged grasslands while positively impacting land health and productivity. HMI has done this with public land, communal lands, and on private property not just in the U.S. but around the world.

Recently, while on a call with Peter, he told me about an HMI client in West Texas. In 1999, Chris and Laura Gill and their family bought the Circle Ranch in Hudspeth County. They considered the 32,000-acre, high-desert property an investment, and they wanted to improve it through increased wildlife habitat, health, diversity, and number.

After exploring a wide variety of tools to improve their ranch, the family found what they consider to be a sound process by utilizing a planned grazing approach advocated by HMI.

“I was anti-cattle and thought desert grasslands could best be restored by de-stocking,” Gill says. That changed when he learned about HMI planning and practices. Holistic Planned Grazing is “all about getting animals to the right place at the right time for the right reason.” The right reason is to improve desert grassland ecology by concentrating cattle herds, rather than dispersing them, which is the norm in conventional desert range management.

“This intense grazing,” Gill explains, “must always be followed by long-enough periods without grazing to allow complete plant and soil life recovery.” This high-concentration, long-recovery is better for plants since it mimics the natural behavior of large herds of wild herbivores in the presence of their predators, who existed on grasslands and high deserts for millennia until humans arrived.

Gill reports strong, positive results from using planned grazing over the past decade. The animals usually graze about half the ranch, moderately, as the rest recovers from grazing during the previous year. “We have experienced huge gains in stocking rate and range productivity,” while at the same time, achieving “consistent improvements in habitat, which we measure by changes in forage production.”

Bottom line? Thanks to Holistic Management, the Circle Ranch almost tripled its forage production over five years. These Texas landowners increased productivity and wildlife habitat 35 percent or better on an annual basis.

For Sale: Montana’s Sun Ranch

Grant Gannon — Tue, 28 Apr 2009 17:27:40 +0000

The jury is still out on my definition of dream property, but I’ll tell you this: Montana’s Sun Ranch is definitely in the running.

Nestled on 18,000 acres just outside of Yellowstone National Park in the Madison Valley, the Sun Ranch ranges from 5,700 feet to over 10,000 and is a sterling example of what a true steward of the land can do with a spectacular piece of property. Almost 100 percent of the ranch is protected by conservation easements.

Three creeks – Sun, Moose, and Wolf – nurture more than a mile of the Madison River, which weaves its way through the property. Needless to say the fishing is out of this world. Elk, deer, bear, antelope, and sheep cross this country going to and from Yellowstone. Throw in a beautiful main residence, and this prime parcel is for sale at $55 million. Fay Ranches has the listing.

According to New West,the owner, Roger Lang, is looking to unload the ranch and free up capital for other conservation projects. According to the article, it looks like he has in mind a development similar to what Russ Maytag has done in Colorado at Maytag Mountain Ranch.

For Sale: Bell Ranch Gets Bigger

Eric OKeefe — Thu, 16 Apr 2009 23:00:37 +0000

The biggest ranch on the market in America just got bigger. The heirs of William Lane, who assembled New Mexico’s Bell Ranch 40 years ago, have elected to include an additional 40,100 acres of canyon country and pastureland in the offering, which now totals 290,100 contiguous deeded acres or 453 square miles. Carrying capacity for the ranch is 5,000AU.

The new price for the Bell is $103 million – $99 million for the land and $4 million for the livestock and equipment – or $341 per acre, according to the Orvis/Cushman & Wakefield website. The price represents a 22 percent reduction below the original asking price. Contact John Watson or Rye Austin at 888-541-4300 for additional details.

Property Details include:

290,100(+/-) deeded acres in northeastern New Mexico featuring Bell Mountain, a dramatic butte punctuating the landscape.

Located east of Santa Fe primarily in San Miguel County.

The Canadian River flows through the ranch for over 13 river miles.

Ranch is adjacent to 9,600-acre Conchas Lake with lake house and boat storage.

Carrying capacity for cattle operation is 5,000AU.

Headquarters includes general manager residence, ranch offices, stables, barns, garage and storage facilities.

10,832-square foot, 8-bedroom Hacienda with swimming pool and tennis court.

Four cowboy camps across the property.

Bell Ranch airfield has storage for 100LL avgas and a large hangar for its 8,200′ x 75′ lighted dirt airstrip.

For Sale: Lance Armstrong’s Texas Ranch

Grant Gannon — Mon, 06 Apr 2009 13:00:34 +0000

Apparently retirement was just too boring for Lance Armstrong. The seven-time Tour de France winner ended his hiatus from cycling earlier this year and is currently in training for a shot at his eighth Tour title later this year. (Although that training had a setback with a nasty crash a few weeks ago.)

Armstrong’s return to cycling may be the reason why the Texan’s 447-acre ranch outside of Austin has been on the market for a few months. The ranch, according to the popular men’s gadget blog Uncrate, features more than seven miles of mountain biking trails, 1,886 feet of Pedernales River frontage, and ownership in Dead Man’s Hole, a private swimming hole shared by area landowners.

The asking price? $12 million.

Along with the land you’ll get a modestly sized 4,241-square-foot home. The interior, however, is far from modest as it appears more resort living than a home.

Keep in mind if you plan to move there, the neighbors are quick to keep their little corner of heaven in pristine condition. A rmstrong found himself in a tiff with his neighbors over Dead Man’s Hole. It cost him $850,000 to clean up the clear-watered retreat after a dam built on his property leaked sediment into the water.

Billion-Dollar Everglades Sale Drastically Downsized

Eric OKeefe — Fri, 03 Apr 2009 07:00:48 +0000

Florida’s ambitious Everglades restoration plan has been drastically scaled back, a victim of the economic recession. Originally slated to be a 187,000-acre, $1.75 billion deal when announced in June 2008, the deal has gone back to the drawing board on two occasions. On Wednesday, April 1, Florida Gov. Charlie Christ announced the most recent revision of the ambitious plan: $533 million for 72,500 acres of citrus and sugar cane fields that presently belong to U.S. Sugar.

Read more at:
“Crist Announces Scaled-Back U.S. Sugar Land Deal,” The News-Press, April 1, 2009.

Behind the Woodshed: TVA

Eric OKeefe — Fri, 02 Jan 2009 19:00:49 +0000

OK, let’s face facts. When it comes to bad neighbors, there are horror stories and then there’s TVA. What these guys have done make a crooked fenceline or stray livestock look like the county fair. Can anyone imagine what it must be like to have 1 billion gallons of coal ash sludge running loose on their property? I can’t, but there are plenty of people in Roane County downriver from TVA’s Kingston Steam Plant who can. And they filed a $165 million suit to prove it. Here’s the AP story:

A group of land owners sued the Tennessee Valley Authority for $165 million on Tuesday over a dike burst that spilled more than a billion gallons of coal ash sludge.

The six-page lawsuit was filed in state court by Jot and Brenda Raymond, owners and developers of North Lake Estates in eastern Tennessee’s Roane County.

It claims a creek running through the development has been damaged and is backed up as a result of the Dec. 22 spill from a power plant.

The Raymonds said in the suit that they can’t show prospective buyers their property, which they describe as suffering “significant and immediate damage” to its value.

Also named as plaintiffs are Lea Ann Raymond and Chris Raymond, who own property in the subdivision. The lawsuit doesn’t say if the four plaintiffs are related.

TVA spokesman John Moulton declined to comment saying the federal utility hadn’t yet reviewed the lawsuit.

“Normally we respond through the courts,” he said.

The ash sludge from the storage pond at TVA’s Kingston Steam Plant spilled over roughly 300 acres and into the Emory River.

The North Lake Estates subdivision is near but not inside the area that has been closed off because of the ash sludge.

A sign at the development says lot prices start at $20,000. No sludge was apparent from the subdivision road on Tuesday, but the creek at the back of the development wasn’t visible.

“TVA possessed or reasonably should have possessed knowledge and data which indicated the retention pond was subject to collapse or breach,” the lawsuit says.

Attorneys for the plaintiffs didn’t immediately return calls seeking comment on the lawsuit.

TVA, its board of directors, President and CEO Tom Kilgore and other TVA executives are named as defendants. The suit asks for $15 million in compensatory damages and $150 million in punitive damages.

The nonprofit Southern Alliance for Clean Energy said it also notified TVA on Tuesday that it intends to sue under the federal Clean Water Act and the Resource Conservation and Recovery Act.

TVA has said it is investigating what caused the dike to fail and has speculated that cold weather and heavy rainfall were factors.

The deluge destroyed three houses, displaced a dozen families and damaged 42 parcels of land, but there were no serious injuries.

TVA has begun cleaning up the sludge and taking air, soil and water samples because of potentially hazardous materials in the fly ash, the waste from burning coal to produce electricity.

Federal officials have cautioned residents who use private wells or springs to stop drinking the water pending more tests because of high levels of arsenic.

Samples taken near the spill slightly exceed drinking water standards for toxic substances, and arsenic in one sample was higher than the maximum level allowed for drinking water, authorities said.

Officials also are concerned about air quality as the sludge containing the fly ash, a fine powdery material, dries out. The dust can contain metals, including arsenic, that can irritate the skin and aggravate pre-existing conditions like asthma.

A large pile of ash still at the power plant may be covered with mulch or a calcium carbonate spray that would dry like a thin cap of concrete and prevent it from blowing away, Neil Carriker, an environmental official with TVA, said Tuesday.

Knoxville-based TVA supplies electricity to Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina and Virginia.

Obama to Nominate Salazar for Interior

Grant Gannon — Tue, 16 Dec 2008 13:00:34 +0000

Landowners in the West will have one of their own heading up the Interior Department in the new Obama Administration. According to published reports, Sen. Ken Salazar (D-CO) will be named the 50th Secretary of the U.S. Department of the Interior later this week by President-elect Barack Obama.

Salazar is no stranger to readers of The Land Report. As you may recall, the Colorado native has been one of the staunchest opponents of the Pinon Canyon expansion in the southeast portion of the Centennial State. The proposed expansion of the Fort Carson training ground includes doubling the size of a military exercise area by acquiring land owned primarily by locally owned cattle operations.

Salazar and his brother John, a U.S. congressman, are fifth-generation Coloradans who grew up working on a family-owned ranch in the San Luis Valley of Southern Colorado. After studying political science at Colorado College and earning a law degree from Michigan, he rose to political prominence as Colorado’s attorney general. He won his Senate seat in 2004.