Conservationists Make Most of Real Estate Crisis

May 9, 2008 — -- Plummeting real estate values and demand for new housing are hammering developers but helping conservationists, enabling land trusts to buy thousands of acres that were slated for development and preserve them as open space.Land prices are dropping and there is more land for sale when developers halt plans to build.

"You can call it a green lining in the cloud of real estate distress across the country," says Will Rogers, president of the Trust for Public Land. "Some properties that were headed for development can now be purchased for conservation."

The best deals are happening on the fringe of metropolitan areas, says Rand Wentworth, president of the Land Trust Alliance, a group that represents the USA's 1,700 land trusts. "Land that would've been converted in 2008 and 2009 into subdivisions is now on the market because developers can't pay their debt," he says. "Here's the plain fact: Land will never be as cheap as it is right now."

The city of Austin, with the help of local conservancies, bought a 3,058-acre parcel for $30 million that will be preserved. "The slowdown in the home construction market gave us an opportunity that definitely might have been closed last year," says Jeff Francell, director of land protection for the Texas chapter of the Nature Conservancy.

Public support for open space has been on the rise. Since 2000, voters have approved $30 billion in bond measures for conservation, Wentworth says. A change in the tax code last year sharply raised the incentive for landowners to donate development rights on their property and contributed to a record year.

In 2007, conservation groups preserved more than 2 million acres — more land than was developed in the USA. The real estate crisis may result in another banner year for conservationists, especially if Congress renews the tax break for landowners.

Some of the land deals by the Trust for Public Land:

•North of St. Paul, the Minnesota Council of Camp Fire USA, a youth development group, owned 70-acre Camp Ojiketa but could no longer afford to maintain or upgrade the site. It decided to sell the land for $5 million to a developer who was planning a resort spa. "The deal fell through when he failed to secure financing for the project," says Marnie Wells, interim CEO at Camp Fire. Two months ago, Camp Fire sold the land to the trust for $3.8 million. The group will transfer it to Chisago City, which will turn it into a regional park. "We're pleased it'll be conserved," Wells says.

•In Resaca, Ga., a 541-acre farm in the middle of a Civil War battlefield was in foreclosure, and the bank wants to auction the property for development. The trust wants to buy the $3.9 million site.

•In suburban Portland, Ore., 65 homes were planned for a 27-acre parcel. When the market tumbled, the land went on the market for $4 million — about $1 million below previous fair market value. The trust bought it and added it to a city park.

•In New Smyrna Beach, Fla., almost 3 acres of undeveloped beachfront property surrounded by condos is for sale. The asking price in 2005 was $6.2 million. The developer who had planned to build about 20 condominiums is selling the land now for $4.4 million. The land trust is negotiating to buy.

•In Groton, Mass., part of a 360-acre farm fronting the Nashua River had been slated for a 130-unit residential development, but the plan was abandoned when the market soured. The land trust bought it in 2007. None of it will be developed.