3 Reasons to Set Up a Conservation Easement

Why agricultural, industrial and environmental projects might seek one

G. Braiden Chadwick has established countless conservation easements for a wide assortment of clients in California and beyond. The legal agreement between landowners and government agencies not only protects the land, but has cost benefits as well.

“The drivers for looking into doing a conservation easement are varied and many, as are the benefits,” the Roseville land use attorney says. “It could be from a landowner side of things, for tax write-offs or a profit. It could be on the project proponent side of things for mitigation for a project. Or, it could be on the environmental side of things, for habitat restoration, or preservation of a property. I've seen motivations running the gamut from all kinds of situations. It might seem big and scary, but if you get the right person and the right team together, it's something that could provide great value to a project proponent or property owner in a litany of ways.”

Most of Chadwick clients fall into one of three categories:

  1. agricultural conservation operations
  2. part of an industrial project, such as mining
  3. environmental mitigation and/or habitat restoration

Agricultural Purposes

“I've worked with a lot of farming interests, especially in California, who have used conservation easements to great effect to provide a long-term permanent assurance that the land that they are currently farming will remain forever an agricultural operation,” Chadwick says, citing Napa wine operations, Central Valley stone fruit and almond producers, and more.

Often, he says, they sell the easement to a third party for a mitigation project, or they create it for an income tax write-off. “You could work miracles on your bottom line, because you are taking a reduction in the value of that land, while continuing to farm in the same manner you always have,” Chadwick says.

“I've done this for several large farming operators and what they've done is they've had a bumper year in production and sales profits and what they will do, they will put a conservation easement on large chunks of their agricultural land that they have no intention of ever abandoning and what that does is, it limits the use of that land to agricultural operations and buildings.”

Industrial Purposes (such as mining projects)

Creating easements in conjunction with sand and gravel mining is common, Chadwick says, because it is allowed on agricultural land. “Despite requiring all the materials to build roads, schools, buildings and everything else, no one like a mine in their backyard,” he says. “So if they’re pushed further out, that sometimes will be in agricultural land.”

Areas such as Fresno County, he says, have created ordinances that mandate mitigation be established to mitigate the impact of the mining on that farmland. “Then, under the California Environmental Quality Act, you have that same obligation to analyze and mitigate impacts to agricultural uses, if you're going to impact them at all,” Chadwick adds. “You’ll see that in a very similar situation for biological impacts, for riparian and stream impacts, for impacts to species and habitat.”

Environmental Purposes

Conservation easements are an integral part of habitat restoration, including mitigation and conservation banking.

“A mitigation bank will go out and purchase a property. Let's say it's a big section of land, 640 acres. They will have to go through an entitlement process, with the alphabet soup of state and federal agencies,” Chadwick says, citing the EPA, California Fish and Wildlife, U.S. Fish and Wildlife, regional water quality control boards, and more. “They'll undergo a permitting process, much like any other project. As part of that, they will place a conservation easement over that 640 acres, for example.”

At the conclusion of permitting, it will vest that property with a number of credits in accordance with the habitat conservation value of the property. What that does, Chadwick explains, is allow the mitigation banking company to sell credits to developers who need to mitigate impact for situations such as those mentioned with mining.

In the cases of habitat restoration, Chadwick continues, often a client will pair up with a state and/or federal agency.

“For example, I'm working on a couple right now in the Delta, restoring tidal slews there, to benefit the Delta smelt and other fish species. They have plans, with the Department of Water Resources in California, to take thousands of acres and restore the tidal habitat, including contouring of the land. They go through same permitting processes, and then they will place a conservation easement over all of that property where it will remain in perpetuity, as that habitat.”

Conservation Easements Work Much Like a Trust

When Chadwick works with landowners, it’s not uncommon for them to seek an easement much like an estate planning tool—meaning, they want to ensure the land will remain for their children, children’s children, and so on.

“It happens all the time—especially with intergenerational families who do, for example, farming,” he says.

“I'm going through it right now with a client who is purchasing easements for farmland, because the land provides habitat for snakes, hawks and burrowing owls. The family who is selling the easement to my client, one of their motivations in addition to the financial rewards they're reaping from it, they want to keep that land in their family for agricultural use forever,” Chadwick continues. “They said, ‘We can cash this out and still provide the type of living we want to provide our family, but it will provide our family with the wherewithal to be able to continue the practices, whether it's open space, or whether it's grazing or farming, forever.’”

Like a lot of things, conservation easements sound a bit scary on the surface, Chadwick says. “It seems like a cart full of weeds. But it can be explained in context in a much simpler way: that it's definitely something that shouldn't be out of the conversation when you're looking at estate planning, when you're looking at how to keep a family farm in business and profitable, or any of those things. It's worth a conversation.”

For more information on land use and zoning law, see our overview. For more information on conservation easements, and what you can expect from working with an attorney on one, read this article.

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