Open space, open wallet

Open space, open wallet
: Where I live, open space purchases by the town, county, and state are often a waste and often a scam.

They raise lots of taxes on a separate levy to support a cause everybody supports — open space; I, too, love a meadow carpeted with waving grasses. But then they use it to buy property next to the interstate (who cares if that gets developed?) or property that’s undevelopable anyway or property that just happens to back up to the house of a local government official. Almost none of this is turned into parkland the public and taxpayers can enjoy; it just sits there, sometimes derelict, often gathering trash, and never producing tax revenue. It’s not all a crock but a helluva lot of it is. Two out of three purchases in my neighborhood were a waste of money.

And it’s done in the service of a political truism that development is bad (the development that built the house you live in was fine but the development that brings in a new neighbor, well, that’s a different matter).

This is a damned good story I’ve never seen done.

This morning, I read a good bit of reporting in the Washington Post story about the Nature Conservancy and a scam that uses yet more tax dollars to support the cause open space while also helping rich people build big houses.

Here’s how it works: The Conservancy buys a juicy piece of property, purportedly to save it from devil developers, for $2.1 million. It then sells it to a rich donor — with some restrictions on the use of the property but with no limits on building a huge, private home — who pays only $500,000 for the property because the donor also contributes $1.6 million to the Conservancy — which is a big tax deducation for the donor, which means that we the taxpayers subsidized this deal to the tune of almost $800,000 (and because there’s a restriction on the use of the land, the assessment is reduced and with it the local property taxes: an ongoing subsidy).

The sacred cow of open space hides many a scam and many a good story.

  • http://spleenville.com/ Andrea Harris

    Oh crap. And I thought at least the Nature Conservancy were a legit charitable enterprise. Grrr.

  • Richard Webster

    Unfortunately the only thing this article will do is increase the number of deals like this with a variety of groups. The only losers will be the builders of double wides. After all the people who live in those aren’t of the same quality as those of us who can afford big ticket purchases. What would have made these deals really interesting would have been a connection between the seller and the Nature Conservancy and/or the final buyer.

  • Soren Ryherd

    You glossed over a whole lot of stuff here. The ‘some restrictions’ is the heart of the matter. To sum up, the owner (and yours is the first example I’ve heard where there is a buyer who is also a NC donor) is signing over the development rights in perpetuity, which are still owned by either the Nature Conservancy or a local land trust. Typically this covenant covers 90% or more of the property. Yes, the tax base is reduced because the property can no longer be taxed as developable land. In theory, the community wins because the farmland, wetland, forest, whatever, stays in that state and enhances the overall value of the community.
    I happen to know this because family members got a tax break on their farm by signing away the development rights to a local land trust. The surrounding properties became more valuable because the rolling farmland is protected, and my relatives are able to support a 25 acre farm that otherwise would have been taxed as 50 1/2 acre developable lots.
    Everyone will have a different take on whether this is good or not. But, wouldn’t you rather be taxed on what *you* plan to do with your property rather than what someone else thinks would make you the most profit?

  • Scott Harris

    Hmm. Damning for a scam the tax deduction one is not eligible to take.
    Developers must really be gunning for the Nature Conservancy. Y’know, public trusts are usually pretty easy to get at, cheap when not free, and at actual taxpayer expense. Private trusts are out of the market .
    There’s a scam going on alright, but it ain’t at the NC.

  • Richard Webster

    The point Soren and Scott are missing is that when the Conservancy owns the land, they open the land up to for public use by hikers and others. The public for whom it is the intention to protect the land for gets the use of it. Even if they live in doublewides. When it is privately owned (Look at my Bay! It’s mine, mine, mine!), up go the ‘No Trespassing’ signs.
    Furthermore, the land IS developed. The deed has fewer of the restrictions than the normal land conservation conveyances.
    In the world of scams, this is “half-a-scam.” They’re using a creative way to dodge paying the full tax on a piece of property. Technically this is fraud and conspiracy to commit fraud.
    On the upside … they are creating these huge privately-held estates like those that blossomed through the middle to late ninteenth century into the early twentieth century. And where are those estates now for the most part? National Parks like the VanderBilt Mansion which are open to the public.
    So if we just wait and let this inner circle of the elite have their way with this land our grandchildren will get to walk about on and enjoy what had been wild lands but which through collusion and elitism, became a sculpted landscape surrounding someone’s ego-palace.
    The peasants are revolting! Death before Doublewide!!!!

  • Soren Ryherd

    Richard,
    I’m not sure the goal of the NC is to provide public access. My understanding is that they are trying to protect land from development or overuse. Often this involves buying land and selling to some other entity (which could be a private landowner, a private or public trust, or a government agency) with the developable rights removed.
    If you want to believe that not taxing non-developable land at the value it would be *if* it were developed is a scam, go crazy.
    Now, if you really want to talk property scams, how about the ongoing trend of governments using eminent domain to acquire land they feel could be more heavily utilized (like farmland that could be an office park) but whose owners don’t want to sell, then turning around and selling it back to private developers. Here’s a good example. I mean, I’m not a property rights wingnut, but I think this goes against the spirit of what eminent domain is all about.

  • Katherine

    Soren, the main objection to this setup is not that people’s property tax is lowered. That would happen with or without the NC’s involvement, as long as there’s an easement. But in addition, people are getting to deduct from their income taxes a big chunk of what they spend to buy the property, because it shows up as a charitable contribution instead of as payment for the land. If things are really as the Post article says they are, there’s an income tax evasion scam going on here, and that’s the objectionable part.

  • Soren Ryherd

    Katherine,
    I agree that 1) the trustees of the NC should not be allowed to sell themselves land, and 2) that payment by the property buyer to the NC to cover the NC’s ‘loss’ on land that they are buying should not be allowed to be tax deductable as it is part of the payment for the property.
    I realize that it will be harder for the NC to find buyers if it excludes its own trustees and major donors, but it will also be a much more reputable organization.
    The point of my earlier posts was not to defend the NC’s actions on Shelter Island, but to provide more general information on how land is protected and taxed through the use of land trusts and delegation of development rights.