CONSERVATION EASEMENTS ON TIMBERLANDS: AN OREGON

CONSERVATION EASEMENTS ON
TIMBERLANDS: AN OREGON CASE STUDY
www.masonbruce.com
CONSERVATION EASEMENT
BASIC DEFINITION
A conservation easement is a legally
binding agreement between a
property owner and a nonprofit
organization (typically a land trust) or a
government agency that permanently
restricts certain uses on the land
included in the easement with a focus
on resource conservation.
www.masonbruce.com
CONSERVATION EASEMENT USES
• Open space preservation:
– Forestry, ranching, and farming
• Ecosystem Services
– Fish and wildlife habitat
– Carbon retention/sequestration
• Recreation
• Scenic/historic values
www.masonbruce.com
www.masonbruce.com
CONSERVATION EASEMENT
BENEFITS
• Tax benefits
• Payments for large scale mitigation or
restoration programs
• Shield property from development
• Threat of go
government
ernment regulation
reg lation or
land-use rule changes
• Fostering a landowner’s ecological
legacy
www.masonbruce.com
FOREST EASEMENT FUNDING
• Endowments/donations
• Government
G
t grantt programs
– USFS Forest Legacy Program
– USFS Forest Stewardship Program
www.masonbruce.com
FORESTERS AND CONSERVATION
EASEMENTS
• Easement land management
– Timber management to achieve desired
easement functions
• Timber harvest
• Recreation/hunting
• Fish and wildlife habitat restoration/preservation
• Timber
i b appraisals
i l
– Valuation of timberlands for easement
transactions
www.masonbruce.com
OREGON CONSERVATION
EASEMENT CASE STUDY
• 12
12,600
600-acre
acre family trust property
managed by MB&G for 60 years
• Various timber harvest schedules
primarily on longer rotations
• Several
S
l property
t tracts
t
t contain
t i old
ld
growth Douglas-fir dominated stands
• Broad family management opinions
and view points
www.masonbruce.com
CONSERVATION EASEMENT SITE
CHARACTERISTICS
• 132-acre tract with old
growth Douglas-fir
• Site also includes
wetlands, beaver pond,
talus slopes, and stream
headwaters
• Limited site access and
steep/wet
t
/ t topography
t
h
• Has been designated a
“no
no cut”
cut area for years
www.masonbruce.com
CONSERVATION EASEMENT SITE
CHARACTERISTICS
www.masonbruce.com
CONSERVATION EASEMENT SITE
CHARACTERISTICS
www.masonbruce.com
ODFW WILLAMETTE WILDLIFE MITIGATION
PROGRAM
• 2010 agreement between
ODFW and Bonneville Power
Administration
• Addresses wildlife habitat
conservation and restoration
within the Willamette River
basin
• $177 Million program ($2,000 $8,000 per acre)
• 132-acre tract qualifies for the
program
www.masonbruce.com
ODFW WILLAMETTE WILDLIFE
MITIGATION PROGRAM TO DATE
• 14 easements established since 2010
• Easements on public and private land,
title holders include land trusts
trusts, ODFW
ODFW,
SWCDs, and tribes
• High quality habitat = higher program per
acre payout
• Average easement size = 236 acres
• Average per acre payout = $5,245
www.masonbruce.com
BASIC EASEMENT REQUIREMENTS
• Land in easement has to be dedicated to
agreed-upon conservation uses in perpetuity
• Easement held by third party – land trust, etc.
• No acreage limitations as long as habitat
provided
id d clearly
l
l b
benefits
fit native
ti wildlife
ildlif
• Easement can be adjacent to other land uses
• A monitoring and maintenance plan is required,
land owner can self perform
www.masonbruce.com
CHALLENGES
• Broad family and trustee management
objectives
bj ti
and
d philosophies
hil
hi
• Suitable third party easement holder
• Financial justification
• Tax implications
– Property currently leveraging Oregon’s
small tree farm tax deferral program
www.masonbruce.com
EASEMENT VS. HARVEST REVENUE
ANALYSIS
• High quality habitat = higher program per
acre payout (up to $8,000/acre)
• Approximately $1,056,000 for easement
payout
• Site challenges and average tree age limit
potential harvest revenue
• Rough harvest net revenue estimate
– Total cost to log
g approx.
pp
$
$291,000 ((road
improvements, trucking, low level of recoverable
material – saw log/chip material)
– Gross revenue $117,000
www.masonbruce.com
NEXT STEPS
• Obtain property owners’ approval to move
forward
• Further assess property tax Implications
• Determine potential third party title holder
• Define desirable easement boundary
• Perform detailed site evaluation
• Initiate easement application process with
ODFW
www.masonbruce.com
IN SUMMARY…
• Conservation easements are real estate
instruments that establish permanent
conservation-related uses on land
• Easements are established for many uses
and provide opportunities for foresters
• Easements can provide revenue from
land; however, they have to be wellplanned and managed to realize
management and revenue goals
www.masonbruce.com
QUESTIONS?
www.masonbruce.com