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EASEMENTS 101

HOW DOES A CONSERVATION EASEMENT WORK?

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Legal Agreement A landowner and an easement

holder enter into a binding agreement to preserve a property’s natural value.

Cost-Effective The upfront cost of a con-servation easement may be a fraction of the full

value of the land.

EnforcementA government or nonprofit group holds the easement and is responsible for en-

forcing its conditions.

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Permanent Protection Land-use restrictions remain in place even

if the property changes ownership.

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Financial IncentiveThe landowner gets tax benefits or payments for giving up development or

other land-use rights.

Estimated private land protected through conservation easements in the United States by local and regional land trusts, national conservation groups, and state and federal agencies as of June 2014.

Across the country and around the world, private landowners armed with conservation easements have become a powerful and growing force for protecting nature. by Madeline Bodin

The Nature Conservancy is the largest non-profit easement holder in the United States.

TOTAL ACRES PROTECTED BY THE CONSERVANCY:

20 MILLION

119 MILLION

6.6 MILLION OF THOSE ACRES HAVE BEEN PROTECTED WITH CONSERVATION EASEMENTS*

3.9 million acres: easements granted to the Conservancy

Easements between 1954 and 2003

2.7 million acres: easements the Conservancy helped other land trusts and public agencies obtain

Outright purchases between 1954 and 2003

*As of March 31, 2014

IN THE UNITED STATES

WORLDWIDE

1891 A Massachusetts land trust creates the country’s first conservation ease-ment in Boston.

1961 The Conservancy’s first easement pro-tects 6 acres of the Gallup Salt Marsh in Connecticut.

1976 Federal tax reform allows landowners to begin reporting the value of an easement as a tax deduction.

1980 The U.S. Congress codifies the tax deductions, making them permanent.

1997 A new federal law passes that reduces the estate tax bur-den for properties under easement.

2006 Congress raises limits on the amount landowners can deduct from income taxes and the num-ber of years they can carry over any remaining value.

2013 The Enhanced Easement Incen-tive, which raised deduction limits in 2006, expires. Conservation groups are still pushing for re-authorization.

FINDING FROM A STUDY OF CONSERVANCY TRANSACTIONS, 1954-2003

Between 1954 and 2003, the Conservancy spent nearly a billion dollars to protect 3.1 million acres using conservation easements. During that period, the organization spent about five times as much to protect 5.3 million acres through direct purchases.

0 1 2 3 4 5($) BILLIONS

EASEMENTS VS. OUTRIGHT PURCHASES

$0.92

$4.8

for 3.1 million acres

for 5.3 million acres

40 MILLION ACRES

6.2

2.5

9

2000 2005 2010

Millions of U.S. acres protected by state and local land trusts, 2000-2010

SOURCE: LAND TRUST ALLIANCE

SOURCE: NATIONAL CONSERVATION EASEMENT DATABASE

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44 MAGAZINE.NATURE.ORG 45NATURE CONSERVANCY OCTOBER / NOVEMBER 2014

is the difference between the appraised market value of the land with and without the ease-ment in place.) In the following year alone, the Conservancy protected more land with ease-ments than in the previous 15 years combined. A broad analysis of the Conservancy’s transactions between 1954 and 2003, published in the Public Library of Science’s online journal, PLOS ONE, found that easements grew more and more popular at the Conservancy each year, accounting for 70 percent of the land protected through traditional transac-tions in 2003. (Outright land purchases made up the other 30 percent that year and ac-counted for half the money spent on habitat protection.)

As the nation’s largest non-profit easement holder, the Conservancy leads a trend that can be seen across the country: Land trusts are increasingly using easements as a conservation strategy. Between 2000 and 2005, state and local trusts increased the amount of land protected through easements by 148 percent, from about 2.5 million acres to more than 6.2 million, according

In the half century since, the Conservancy has protected nearly 6.6 million acres using conservation easements. Although that is a small portion of the more than 119 mil-lion acres the Conservancy has helped preserve since it was founded in 1951, the share of land protected by easements has grown rapidly. In 2013, easements accounted for more than half the land area the Conservancy helped protect.

Easements are legal agreements by which landowners permanently sign away certain property rights—typically the ability to subdivide their land or construct new build-ings on it. The other party to the agreement, the easement holder, is responsible for monitoring and enforcement, which includes visiting the property and defending the easement if compliance issues arise.

“A conservation easement is a partnership between the easement holder and the property owner,” says Philip Tabas, a Conservancy senior advisor who has counseled on hundreds of easement deals. It’s a partnership that benefits both parties. Landowners keep ownership of the land, can continue to live and work on it, and, in exchange for giving up development rights, may qualify for federal or state tax incentives and reduced local property taxes. Conservation groups protect habitat without paying a property’s full price tag. And once in place, a donated easement provides the public with conservation protection in perpetuity.

While the Conservancy piloted its first easement in 1961, the tactic didn’t gain much momentum until 1976, when Congress reworked the federal tax code to allow landowners to report easements as charitable deductions to their federal income tax. (Typically, the deduction amount

to the Land Trust Alliance. By 2010, that number jumped again, to nearly 9 million acres.

Today, state and local land trusts, government agencies, and national conservation groups use conservation ease-ments to protect an estimated 40 million acres of private land in the United States, with most of that area having been secured in just the past few decades. While this kind of private land conservation is an increasingly important tool for protecting lands and building private support for conservation, it is not replacing more traditional strategies. In the United States alone there are nearly 650 million acres of federally protected lands, such as national parks and wildlife refuges.

Other countries are adapting easements to their land-scapes as well. The Conservancy has helped pioneer the use of these legal agreements in Canada, Latin America and, most recently, the Asia-Pacific region, which saw its first easement this year in Micronesia. Internationally, the Conservancy has protected nearly 110,000 acres through conservation easement transactions.

As they have become more popular, the agreements have evolved. Early easements primarily shielded land-scapes from development and other types of human im-pact; today, they are increasingly being tailored to specific conservation objectives. For instance, whereas an early easement may have prohibited herbicide use, a newer ease-ment might instead include a management plan that more clearly articulates a conservation objective—such as pre-serving native plant species—and allows more flexibility in the way that goal is achieved, potentially including herbicides to combat invasive species.

Newer easements also might consider compatible uses. By investing more research in the conservation objective, the Conservancy can help determine whether an ecosystem can tolerate human uses, such as low-impact logging, and may include provisions for certain sustainable practices.

“Fifty years ago, we thought of easements as simply freezing the landscape,” says Tabas. “There’s a lot of poten-tial for innovation as we learn more about ecological pro-cesses and what it really means to protect habitat.” •

In 1961, a developer announced plans to construct a marina on the 6-acre site of the Gallup Salt Marsh in New London, Connecticut.

The marsh sits at an inland point of Mystic Bay, an estuary that provides

valuable wetland habitat in a busy seaboard. But a rare transaction—

well, rare at the time—took place before builders sank a single piling. The

Nature Conservancy secured an easement on the marsh to safeguard its

future as a natural area and, in the process, introduced a powerful new

tool for the organization to protect private lands.

ACRES THAT CONSERVANCY EASEMENTS COVER

AVERAGE SIZE IN ACRES OF A CONSERVANCY EASEMENT

U.S. STATES THAT HAVE CONSERVANCY EASEMENTS

3.1 MILLION

BY THE NUMBERS

OVERVIEW

EASEMENTS THE CONSERVANCY CURRENTLY HOLDS

2,475

1,250

49Easements in ActionConservation easements can take many forms. Turn the page for three examples of easementstailored to fit different landscapes.

While easements are sometimes transferred to other holders, most that have been granted to the Conservancy remain under its watch today.

Thousands of people have protected their lands using conservationeasements.

CLICK: Contact a local office to learn more at nature.org/localoffice.

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to conservation-minded individuals to pay for the entire purchase. Through a combination of purchases and easement donations, the Conservancy has subse-quently expanded the Davis Mountains Preserve to 33,075 acres and conserved 69,600 acres of privately owned land with 20 easements.

“The deal was innovative not just because of the conservation buyer strategy,” says Jeff Francell, the Con-servancy’s associate director of land protection in Texas, “but because of the scale of the project, which allowed the Davis Mountains to become the largest privately protected area in the state.”

And for Deaderick, who purchased land and placed it in a conservation easement, it was a chance to have a hand in saving a cherished place. “This is the last frontier of Texas,” he says. “To preserve that for my family and for everyone was very important to me.”

Frank Deaderick fell in love with the Davis Mountains in West Texas as a child. The mountains here, known as sky islands, rise

thousands of feet from the Chihuahuan Desert, providing a cool oasis of pon-derosa pine and scattered aspen stands.

The Conservancy had been protect-ing and purchasing property in the Davis Mountains for several years when a 39,000-acre property that included the summit of Mount Livermore—the high-est point in the Davis Mountains—came on the market. The Conservancy’s team in Texas knew they couldn’t afford to buy the whole ranch, but came up with a plan to purchase 32,413 acres of it.

The team carved off a chunk of the land to create an 11,803-acre preserve protecting the sky-island habitat at the summit. Then they placed easements on the rest of the land, divided it into six smaller parcels and sold the parcels

International easements held by the Conservancy

IN GUATEMALA

IN COSTA RICA

GLOBAL AGREEMENTS

8

23Number of countries the Conservancy has worked with to help create international easements

South Dakota’s PrairiesPreserving a Way of Life for Generations

The Sky Islands of West TexasFostering Conservation Buyers

The Northern Plains’ prairie pothole ecosystem, some-times called America’s duck factory, “is one of the most

diverse wetland-grassland ecosystems in the world,” says Mary Miller, who manages the Conservancy’s 7,800- acre Samuel H. Ordway Jr. Memorial Preserve in South Dakota.

For generations, the region’s rocky soil sustained a ranching culture, where cattle grazed on native grasses and migratory birds foraged in the wetlands. But rising prices for corn and soybeans have driven many landowners to plow the grass and plant crops.

To protect the prairie and its current population of breeding waterfowl, the Conservancy, Ducks Unlimited, the Northern Prairies Land Trust and other conservation organizations have joined together to support the U.S. Fish and Wildlife Service’s Dakota Grassland

Conservation Area. The partnership aims to preserve 1.7 million acres of grasslands and 240,000 acres of wet-lands in South Dakota and North Dakota with conservation easements. In South Dakota, the Conservancy is helping to sign up landowners for the federally held easements.

For many ranchers, the two-year-old program is a way to preserve their own way of life on the prairie. Cash from an easement sale or a reduced tax burden can help pay off a mortgage, lowering the overhead of a ranch so the rancher doesn’t have to raise crops to make up the difference. And the easement keeps the land intact for the next generation of ranchers.

“It’s a tool to bring the next generation into the operation,” says South Dakota rancher and farmer Jim Faulstich. Ease-ments, he says, have ensured his daugh-ter and son-in-law a place on the land.

AMERICAN EASEMENTS

SMALLEST EASEMENT

ACRES

0.08LOCATIONMontauk Peninsula, New York

LARGEST EASEMENT

ACRES

201,560LOCATIONDiamond A Ranch, New Mexico

The Conservancy has helped introduce easements to many parts of the world, including by facilitating the first easement in Latin America in 1990 with a deal in Costa Rica. More re-cently, the Conservancy helped create the first easement in the Asia-Pacific region with a deal this year in Micronesia.

Conserving almost 3 million acres with 2,475 easements makes the Conservancy the largest nonprofit easement holder in the United States.

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STATE: South Dakota

STATE: Texas

CONSERVANCY EASEMENTS: 22

CONSERVANCYEASEMENTS: 131

ACRES COVERED:35,820

ACRES COVERED:346,291

STATES WITH THE MOST CONSERVANCY EASEMENTS

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NORTHERN PLAINS

INTERNATIONAL ACRES PROTECTED

SOUTHERN PLAINS

48 NATURE CONSERVANCY OCTOBER / NOVEMBER 2014

Leave a lasting legacy for conservation.

The NaTure CoNservaNCy CaNNoT reNder Tax or LegaL adviCe. PLease CoNsuLT your fiNaNCiaL advisor before makiNg a gifT. PhoPm141001001

For more information:(877) 812-3698 | legacy@tnc.org | nature.org/bequestad

Making a bequest to The Nature Conservancy is a simple way to protect the places you value. You can name the Conservancy as a beneficiary of your will, trust, retirement plan, life insurance policy or financial accounts. Anyone can make a bequest and no amount is too small.

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Ten years ago, some people questioned whether the tim-berland in Northern California’s Garcia River watershed had

a future as a forest or good habitat for endangered salmon. Heavily logged for more than 50 years, the damaged land-scape seemed destined to become a vineyard or housing development.

But when timber company Coastal Forestlands Ltd. decided to sell the land, the Conservancy and The Con-servation Fund came up with an idea to restore the forest. Chris Kelly, the Fund’s California program director, says his organization saw a way to arrest fragmentation of the landscape, restore salmon and trout habitat, and reduce carbon in the atmosphere while sustaining a low-impact local logging economy. Kelly and his team partnered with the Conservancy to test a new, multiple-benefit conservation model.

The Conservation Fund bought the Garcia River forest property and held it, recouping part of the purchase price by selling a 23,780-acre easement to the Conservancy. The Conservancy then helped The Conservation Fund create a conservation plan for the property.

Since the purchase 10 years ago, the forest’s rebounding stands of redwood and Douglas fir have stored an aver-age of 175,000 tons of carbon per year, earning the fund payments from California’s new carbon market. The Conservation Fund plans to hold the property while it restores the forest. Then it may resell the land to a timber company—with the easement in place. The easement sets aside a third of the land as a forest reserve; on the rest of the land it calls for a management plan that will allow limited logging and ensure that future owners protect both the forest and the stream habitat.

“ There’s a lot of potential for innovation as we learn more about what it really means to protect habitat.”

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Timberland in Northern CaliforniaMaking Room for Low-Impact Logging

— PHILIP TABAS, CONSERVANCY EASEMENT EXPERT

4,000 acresOpen space that the United States loses daily2005 USDA STUDY

50 acresAgricultural land that was developed per hour between 2007 and 20102010 USDA STUDY

57%Growth in developed land in the 25 years from 1982 to 2007, despite the country’s population increasing only 30 percent2007 USDA STUDY

THE PACE OF DEVELOPMENTConservation easements are often used to direct development away from critical land. Department of Agriculture data document the rate of change.

STATE:California

CONSERVANCY EASEMENTS: 125

ACRES COVERED:339,123

PACIFIC COAST