Thursday, January 9, 2014
Welll Stephen beat me to the punch in getting his post up about the Town of Hawley Case. I've been ruminating on a bit lately. I have really mixed feelings about how important this case might be. Conservation organizations have long battled with locals (citizens and governments) when they protect land. In some cases, locals may be offended by what might be seen as an outsider coming in and telling them what their town should look like. These complaints have been particularly salient overseas where big US NGOs buy up property for "conservation" and remove the inhabitants or restrict their traditional practices. We see it here in the United States too (not sure everyone in the Catskills is so happy about New York City shaping development trends when it buys conservation easements to protect its water supply). Local land trusts generally face less opposition where they are made up of community members and work closley with other community groups and local goverenments. But there is no question that cash-strapped governments might get ornery when more and more of the landscape is held by tax-exempt organizations hoping to avoid paying property taxes on their parcels.
Let's delve into the Hawley case a little here. First of all,although this case involves a land trust, it is not about conservation easements. (Jess sheds a little tear) Although NEFF (New England Forestry Foundation) holds a lot of conservation easements, the land that is at stake in the case is land that they own outright (or in fee simple as we lawyers like to say). Lots of land trusts do this. For example, I am on the Board of the Western New York Land Conservancy and we own some properties outright and have conservation easements over others (or as they are termed in Massachusetts – conservation restrictions). In the Hawley case, the Town is not seeking to assess taxes on the conservation restriction owner (which I think would be a fascinating idea) but is going after property taxes from a landowner.
Now here is where it gets interesting. The Town is arguing that this supposed conservation land is not really providing much of a public interest. This makes this case very important for people trying to protect conservation land. The Town is not arguing that NEFF shouldn’t qualify as a tax-exempt charitable organization but that this parcel in particular is not worthy of tax-exempt status for purposes of property law. This could be an important result for land trusts and others trying to conserve land. How much do you need to do to prove that you are promoting and protecting the public interest? Is it just enough that it is pretty or that some critters live there? Well, not in Massachusetts. Land trust will have to look carefully at state laws to see what is needed for a property to be exempt. In this case, the court seemed really focused on the lack of public access but we could see other people wondering about how much value “scenic” is worth. This 120-acre parcel purported to be in the public interest because it provided wildlife habitat, scenic vistas, recreational opportunities and sustainable forest products. The appellate court was not persuaded by NEFF's assertion of educational value.
The amount of taxes assessed here were only $172.87 but many conservation properties are worth far more – especially those in areas with strong development pressures (arguably the most important places for conservation easements). The Nature Conservancy and other groups already voluntarily pay fees to municipalities here and there (and have sparked scandals when threatening to cease payments), but it would be pretty pricey for smaller land trusts to do this. It might make land trusts turn more frequently to using conservation easements over buying property outright (which may not be the best move from a conservation standpoint).