Land Use Prof Blog

Land Use and the Law of Armed Conflict

What does the law of land warfare have to do with the law of land use? Quite a lot, actually. Greetings from the Clara Barton International Humanitarian Law Competition,  sponsored by the American Red Cross and its IHL Section. Several property law issues are prevalent in the law of armed conflict.

I’m coaching my South Texas team (sponsored by the Frank Evans Center for Conflict Resolution) in this unique event that challenges students to advocate and role-play in realistic scenarios involving international humanitarian law (IHL), also known as the law of armed conflict (LOAC) or more traditionally, the law of war.

The LOAC/IHL is mostly focused on protection of persons, but it also covers a lot of property law. The bottom line is that wars and armed conflicts involve a lot of property issues—the rules about what actions armed forces can or must take with regard to public and private, real and personal property. There is a complex international law regime, codified through the Geneva and Hague Conventions, the UN Charter, and other treaties and customary international law, that deals with land and property rights.

Here at the American Red Cross IHL competition (named for ARC founder Clara Barton, who performed medical and humanitarian assistance during the Civil War, including a field hospital at the Fairfax church where I was married(!)), the scenarios included detainee interviews, targeting decisions, public relations, and international criminal court arguments. Several of the scenarios involved issues of seizure, occupation, requisition, and cultural protection of property. Other armed conflict issues include claims, restitution, and post-conflict governance questions such as titles, registration, and resolving property disputes. These property issues are governed by the international law of armed conflict.

While most of the public perception of the Red Cross is based on its important missions of disaster relief and blood donations, the movement was founded to establish and enforce international humanitarian law in the wake of disastrous nineteenth-century battles. The ICRC is the world's lead organization on this and you can read its Intercross blog; the ARC also has an important IHL section with the mission to educate, train, and promote IHL, which you can read about at the Humanity in War blog. 

As some of you know, I have been busy over the past few years in my Army Reserve assignment as an Associate Professor of International & Operational Law at the U.S. Army Judge Advocate General’s School in Charlottesville, Virginia. I’ve been focused more on the law of land warfare than the law of land use. That’s why I haven’t been blogging much here at the Land Use Prof Blog, while Stephen Miller has been outstanding in continuing to lead this crucial forum for the land use academic community. Going forward, I plan to contribute some thoughts about the relationship between land use and the law of armed conflict, and more broadly, international property law . . . and also get back to blogging about land use here in the "unzoned city" of Houston.

Matt Festa

Marco Rubio was a land use lawyer

Land Use Prof Blog is a completely non-partisan forum, but I was fascinated to read this recent article in the Colorado Springs Gazette (apparently picked up from AP) about Marco Rubio's early career as a land use lawyer.  (I'm guessing the article appeared in a Colorado publication because the Colorado caucuses are on "Super Tuesday," March 1, although the Colorado Republicans will not actually be caucusing for Presidential candidates, leaving that to their delegates at the national convention.)  

It's not often that a zoning lawyer rises to national political prominence.  The article is also interesting because it discusses Rubio's work for clients vis a vis his position in the Florida Legislature, and seems exemplary of the role of politics in local land use decisions.

Jamie Baker Roskie

With Scalia Gone, Pacific Legal Foundation Loses Ally on Property Rights

High Country News is a print and online publication that offers excellent coverage of news related to Western issues.  Yesterday Elizabeth Shogren, their "DC Dispatch" reporter, posted a fascinating article entitled "Scalia was Supreme Court’s leader on limiting environmental rules: A conservative legal foundation fears its winning streak may be over."

In his opinion in the 2006 Clean Water Act case known as Rapanos, one of the Pacific Legal Foundation’s biggest triumphs, Scalia criticized “the immense expansion of federal regulation of land use that has occurred under the Clean Water Act — without any change in the governing statute — during the past five Presidential administrations.”

Scalia’s death dims the Pacific Foundation's chances in a major environmental case on the horizon. The Supreme Court is expected to eventually review Obama’s Clean Water Rule, which has been stayed by a lower court. Significantly for the arid West, the rule would protect tributaries, no matter how frequently water flows in them, as well as some wetlands, ponds and ditches. "With Justice Scalia’s departure, it’s fair to say it’s more likely to be upheld," Schiff says. “The impacts will be principally in the West. It’s precisely in the areas that are dry most of the year that you have the most significant disputes about the Clean Water Act.”

The article also discusses the potential impact to the Clean Power Plan, as well as the impact to administrative-law-related decisions generally.

Jamie Baker Roskie

 

More on Scalia's Land Use Legacy

Yesterday our fearless leader, Stephen R. Miller, blogged about Justice Scalia's three most important land-use-related decisions.  I agree with his assessment that Nollan and Lucas are two of the most influential takings cases ever decided, and certainly Rapanos' change in wetlands regulation are had a dramatic effect on the development industry and control of water quality (although arguably Justice Kennedy's concurrence with its "significant nexus" test is more relied upon by regulators).

Inspired by Stephen, I perused the list of Scalia-authored opinions and found a couple more of interest.  In the vein of my previous post about how Scalia's passing will likely result in the survival of President Obama's Clean Power Plan, I also think Scalia's decision in Michigan v. EPA was highly influential. It held that the EPA must consider cost when deciding whether regulations under the Clean Air Act is "appropriate and necessary." (Bob Sussman wrote about the impact of Michigan v. EPA for the Brookings last summer.)

Also, a somewhat lesser known but important Scalia-authored case was City of Columbia v. Omni Outdoor Advertising (1991), in which the court upheld anti-trust immunity for local governments enacting zoning restrictions - in this case, those that regulated signs. (Linda Greenhouse covered the case for The New York Times.) Although this case lacks the colorful language of some of Scalia's more recent opinions (primarily dissents), it is interesting reading for those of us who care about the limits of local government police power.

Jamie Baker Roskie

 

 

Malheur Occupation/Sagebrush Rebellion Continue

When Stephen Miller blogged a week ago about the implications of the occupation at the Malheur National Wildlife Refuge in Oregon, it seemed like things were winding to a close. Ammon Bundy and the other organizers had been arrested and LaVoy Finicum killed in a confrontation with federal law enforcement personnel, and many of the other occupiers had scattered.  But today, the occupation enters day 35, as four hold-outs remain at the sanctuary.

Whatever the outcome of the occupation, this action has sparked a national examination of the pressures facing ranchers, federal control of land, and the implications to the Western way of life.  However, other writers have noted that Malheur is actually at the center of a collaborative approach to land management that balances the concerns of environmentalists, conservationists, and local land owners, and that the occupiers were completely out of line in their attempt to make the refuge a symbol of federal overreach.

On both sides of my family, I come from stock that is deeply tied to the land and interested in the outcome of these disputes.  My maternal grandfather joined the US Forest Service in the early part of the last century, and spent his career (and his days in the Montana Senate after his retirement) implementing the "Multiple Use" philosophy, which attempted to balance conservation and resource extraction. And my paternal grandparents were ranchers in Eastern Montana until the 1980s, when they lost the ranch due to the collapse of the beef cattle market.

So I've always felt conflicting loyalties in any discussion over management of federal lands in the West.  On the one hand, I recognize that the settlement of the West and the continued viability of the Western economy was and is extremely dependent on federal largess.  It's difficult to find unbiased analysis of whether that largess is a necessary part of the ranching economy, or simply "welfare ranching." There's also the issue that small time ranch owners may be increasingly pushed out by billionaire land owners like the Koch Brothers.  There does seem to be a consensus that absentee ownership of farm and ranchland is on the rise. And some pretty extreme political actors have risen to fill the vacuum.

Some of the best reporting on the Malheur standoff and related issues is being done by High Country News.  In addition to their close coverage of the day-to-day developments, they've also provided a platform for Westerners voices both sympathetic and unsympathetic to the Bundys' concerns. And HCN is doing a terrific series of stories on the revived Sagebrush Rebellion and the complex interplay of politicians, "Constitutional sheriffs" and other players in the drama. You can check it out here.

Jamie Baker Roskie

 

Online Professional Development Course in Adaptive Planning & Resilience

Land Use Prof colleagues -- please share the following information about an online self-paced course in adaptive planning and resilience as broadly as possible.  It's especially relevant for professionals who are engaged in planning and would benefit from skills to make their planning processes more adaptive and resilience-oriented.  Students, professors, and other professionals are welcome too.  Thanks for your interest and help!  All best wishes, Tony Arnold

I’m writing to let you know about an online self-paced professional development course in adaptive planning and resilience.  This course is aimed at any professional who engages in planning under conditions of uncertainty, complexity, or unstable conditions, whether in the public sector, private sector, local community, or multi-stakeholder partnerships. 

The course is ideal for professionals in sectors such as urban planning, community development water supply, water quality, disasters/hazards, environmental protection, land management, forestry, natural resources management, ecosystem restoration, climate change, public infrastructure, housing, sustainability, community resilience, energy, and many others.  I hope that you and the employees and/or members of your organization will consider enrolling in this course.

 The 12-hour course is offered by the University of Louisville for a cost of $150 and is taught by Professor Tony Arnold, a national expert in adaptive planning and resilience, and a team of professionals engaged in various aspects of adaptive planning.  The online lectures are asynchronous, and the course is self-paced; this offering will last until November 22.

 More information is provided below and at the registration web page: http://louisville.edu/law/flex-courses/adaptive-planning.  This offering of the course begins October 12 but registration will be accepted through November 15 due to the self-pacing of the course.  We are seeking AICP CM credits for the course in partnership with the Kentucky Chapter of the American Planning Association, but cannot make any representations or promises until our application is reviewed. 

Please share this blog post or information with anyone who might be interested.  Please contact me at [email protected], if you have any questions. 

Adaptive Planning and Resilience

Online and self-paced

Oct. 12 – Nov. 22, 2015

Adaptive Planning and Resilience is a professional development course in which professionals will develop the knowledge and skills to design and implement planning processes that will enable their governance systems, organizations, and/or communities to adapt to changing conditions and sudden shocks or disturbances.

Adaptive planning is more flexible and continuous than conventional planning processes, yet involves a greater amount of goal and strategy development than adaptive management methods. It helps communities, organizations, and governance systems to develop resilience and adaptive capacity: the capacity to resist disturbances, bounce back from disasters, and transform themselves under changing and uncertain conditions. Adaptive planning is needed most when systems or communities are vulnerable to surprise catastrophes, unprecedented conditions, or complex and difficult-to-resolve policy choices.

The course will cover the elements of adaptive planning and resilient systems, the legal issues in adaptive planning, how to design and implement adaptive planning processes, and case studies (including guest speakers) from various communities and organizations that are employing adaptive planning methods.  Enrollees will have the opportunity to design or redesign an adaptive planning process for their own professional situation and get feedback from course instructors.

The six-week course totals about 12 hours broken into 30-minute segments. It is conducted online and is asynchronous. Cost is $150.

 About Professor Tony Arnold

Professor Craig Anthony (Tony) Arnold is the Boehl Chair in Property and Land Use at the University of Louisville, where he teaches in both the Brandeis School of Law and the Department of Urban and Public Affairs and directs the interdisciplinary Center for Land Use and Environmental Responsibility. Professor Arnold is an internationally renowned and highly-cited scholar who studies how governance systems and institutions – including planning, law, policy, and resource management – can adapt to changing conditions and disturbances in order to improve social-ecological resilience. He has won numerous teaching awards, including the 2013 Trustee’s Award, the highest award for a faculty member at the University of Louisville.

Professor Arnold has clerked for a federal appellate judge on the 10th Circuit and practiced law in Texas, including serving as a city attorney and representing water districts. He served as Chairman of the Planning Commission of Anaheim, California, and on numerous government task forces and nonprofit boards. He had a land use planning internship with the Boston Redevelopment Authority, did rural poverty work in Kansas, and worked for two members of Congress. Professor Arnold received his Bachelor of Arts, with Highest Distinction, Phi Beta Kappa, in 1987 from the University of Kansas. He received his Doctor of Jurisprudence, with Distinction, in 1990 from Stanford University, where he co-founded the Stanford Law & Policy Review and was a Graduate Student Fellow in the Stanford Center for Conflict and Negotiation. He has affiliations with interdisciplinary research centers at six major universities nationwide and is a part of an interdisciplinary collaboration of scholars studying adaptive governance and resilience.

 Professor Arnold will be joined in co-teaching the course by a team of his former students who are

professionals knowledgeable in adaptive planning. They include:

• Brian      O’Neill, an aquatic ecologist and environmental planner in Chicago
• Heather      Kenny, a local-government and land-use lawyer in California and adjunct      professor at Lincoln Law School of Sacramento
• Sherry      Fuller, a business manager at the Irvine Ranch Conservancy in Orange      County, California, and former community redevelopment project manager
• Andrew      Black, who is Associate Dean of Career Planning and Applied Learning at      Eckerd College in St. Petersburg, Florida, and a former field      representative for two U.S. Senators in New Mexico
• Andrea      Pompei Lacy, AICP, who directs the Center for Hazards Research and Policy      Development at the University of Louisville
• Jennifer-Grace      Ewa, a Postdoctoral Fellow in Inequality and the Provision of Open Space      at the University of Denver
• Alexandra      Chase, a recent graduate of the Brandeis School of Law who has worked on      watershed and urban resilience issues with the Center for Land Use and      Environmental Responsibility and now lives in St. Petersburg, Florida.

Dates

October 12 – November 22, 2015,

Online, asynchronous, and self-paced

Cost

$150

For more information

Visit louisville.edu/law/flex-courses.

 

Only 6 Months Until New FEMA Guidance Requiring Consideration of Future Climate Risks in State HMPs Becomes Agency Policy

In March 2015, FEMA issued a State Mitigation Plan Review Guide, following notice and comment. Under the new guidance, state Hazard Mitigation Plans (HMPs) must consider the probability of future hazards, taking into consideration changing future conditions including changing climate and weather conditions.  And, on March 6, 2016, this new guidance will become the agency’s official policy on the natural hazard mitigation planning requirements of Title 44 of the Code of Federal Regulations (CFR) Part 201, and FEMA’s interpretation of federal regulations for state hazard mitigation plans.

A change in the requirements for state HMPs can mean real money to state governments because these plans are one of the conditions of eligibility for certain federal assistance—for example, Public Assistance Categories C-G and Hazard Mitigation Assistance mitigation project grants. Although states are currently required to adopt HMPs in order to qualify for certain disaster funds, under past FEMA guidelines state governments could assess their potential risks based on historic data. In other words, their HMPs could ignore risks from the foreseeable effects of climate change, including rising sea levels, higher storm surges, and more frequent and intense storms, droughts and heat waves. Expressly recognizing the significance of climate change to risk mitigation planning, the new guidance explains that future climate-change related risks must be considered because

“Past occurrences are important to a factual basis of hazard risk; however, the challenges posed by climate change, such as more intense storms, frequent heavy precipitation, heat waves, drought, extreme flooding, and higher sea levels, could significantly alter the types and magnitudes of hazards impacting states in the future.” (State Mitigation Plan Review Guide § 3.2.)

The new FEMA guidance also recognizes the significance of land use planning to risk reduction. The guidance suggests that to effectively increase community resilience the HMP must be more than an emergency management plan and the planning process must include the full range of effected sectors, including land use, economic development, housing, health and social services, and infrastructure.

In an apparent shot across the bow to state climate change deniers, the new guidance also finds that 44 CFR §201.4(c)(6), which requires state HMPs to “be formally adopted by the State,” means that the plan must be adopted by the highest elected official in the state or his or her designee. The guidance states that

“[Plan adoption by the state’s highest elected official or designee] demonstrates commitment to the mitigation strategy and may serve as a means to communicate priorities to entities within the state agencies regarding vulnerability and mitigation measures . . . [and] may increase awareness of and support from the state agencies with mitigation capabilities and responsibilities, not just the state agency responsible for the mitigation planning program.” (State Mitigation Plan Review Guide § 3.7.)

A survey of state HMPs from the 2010-11 period by Columbia Law School’s Sabin Center for Climate Change Law, found that

• 18 state HMPs had “[n]o discussion of climate change or inaccurate discussion of climate change.” (AL, DE, GA, ID, IN, IA, KT, MS, MO, MT, NE, NV, NM, ND, OK, TN, SD, WY)
• 11 state HMPs had “[m]inimal mention of climate change related issues.” (AZ, AR, IL, KA, LA, OH, PA, SC, TX, UT, VA)
• 10 state HMPs had an “[a]ccurate but limited discussion of climate change and/or brief discussion with acknowledgement of need for future inclusion.” (FL, ME, MI, MN, NJ, NC, OR, RI, WV, WI)
• 11 state HMPs had a “[t]horough discussion of climate change impacts on hazards and climate adaptation actions.” (AK, CA, CO, CT, HI, MD, MA, NH, NY, VT, WA)

Even though it appears 21 states already include at least an accurate, albeit sometimes limited, discussion of climate change, the new FEMA guidance requires significantly more—which raises the question of whether states are equipped to address future hazards, including climate-related hazards, as robustly as the new guidance requires. For example, are states equipped to quantify climate-change related risks at the state level? For most, the answer is probably “no.” The Guide gives a nod to this problem, suggesting that “states are expected to look across the whole community of partners (for example, public, private, academic, non-governmental, etc.) to identify the most relevant data and select the most appropriate methodologies to assess risks and vulnerability.” (State Mitigation Plan Review Guide § 3.2.) However, notwithstanding potential support from community partners, the complexity of scaling global climate data to a regional scale and identifying related risks within a relatively short time frame means that most states will be hard pressed to quantify future hazard probabilities by the time their next HMP update is due.

New York may be among the few states that are equipped to respond in time. New York’s Department of State and Department of Environmental Conservation began developing statewide climate-related projections earlier this year in response to the newly enacted New York Community Risk and Resiliency Act, which among other things directs the state agencies to prepare climate projections and model municipal laws taking into consideration sea-level rise and other climate-related events.

Given the unmet need for state and local resources to adequately assess, plan and ultimately implement hazard mitigation strategies that account for climate change, as well as the political backlash from the new requirement, is FEMA’s new guidance ill conceived? My answer is “no.” Many resources exist to help states in their hazard mitigation planning process, and I suspect FEMA will accept plans that consider climate change risks even if the supporting climate data are not scaled to the state level, as long as the state risk assessment takes into consideration FEMA's updated flood maps and other available climate-related risk projections.

And, more significantly, the new guidance is a necessary step in closing a troubling gap between climate-related vulnerabilities and preparedness that exists in the United States. Global temperatures are increasing and the rate of increase is accelerating, with corresponding increases in sea levels, acidification of oceans, and losses of flood-mitigating wetlands. Many communities are already experiencing climate change related hazards, including eroding shores, more massive storm surges, more severe storms, salt water intrusion, loss of land, heat waves, wildfires, and droughts. State HMPs based solely on historic data that don’t take into account these changing conditions fail to address the full gambit and magnitude of hazards that are likely to impact the states—with resulting loss of lives, public health and welfare impacts, property damage, and potentially avoidable expenditures of federal disaster funds. Thus, although some lawmakers are charging FEMA with politicizing the hazard mitigation planning process and access to disaster funds, state administrations that are unwilling to fully consider and plan for foreseeable hazards are themselves jeopardizing public health and welfare in order to hold onto a political position that no longer holds water.

For more information check out:

• FEMA’s State Mitigation Plan Review Guide Fact Sheet
• State Hazard Mitigation Plans & Climate Change: Rating the States (Matthew Babcock, Sabin Center for Climate Change Law)
• FEMA to States: Want Disaster Mitigation Funds? Then Plan for Climate Change (Planetizen blog post)

Post by Sarah J. Adams-Schoen, Assistant Professor of Law and Director of Touro Law’s Institute for Land Use & Sustainable Development Law, and managing author of the blog Touro Law Land Use.

Urban Decay Theory v. Broken Windows Theory

Brent White (Arizona) , Simone Sepe (Arizona) and Saura Masconale (AZ-Gov't & PP) have published Urban Decay, Austerity, and the Rule of Law, 64. Emory L.J. 1 (2014).  In the article, the authors offer a "make 'gov', not war" alternative to the Broken Windows Theory (BWT) and its support for order-maintenance policing.  Building upon an intuitively compelling social contract theory insight, the article sets out the theoretical and empirical cases for the authors’ contention that sustained investment in highly visible, essential local public goods provides crucial support for rule of law. Focusing on the refusals of the U.S. and Michigan governments to bail out Detroit and avoid the need for it to file for bankruptcy, the authors use their Urban Decay Theory (UDT) to support their proposal that all municipal governments receive at least some level of fiscal insurance to sustain continuous investment in urban infrastructure, which, according to the UDT is predictive of citizen commitment to rule of law.

At the invitation of the editors of the Emory Law Journal, I wrote a response to Urban Decay for the Emory Law Journal Online.  In "All Good Things Flow . . .":  Rule of Law, Public Goods, and the Divided American Metropolis , 64 Emory L. J. Online 2017 (2014),  I welcome the article’s introduction of the rule of law paradigm to domestic urban policy, find fault with its selection of public goods that purportedly influence rule of law, and contend that the UDT has far greater potential than the poor support it can offer the authors’ flawed policy proposal. By conceptualizing the domestic urban policy goal as rule of law rather than order, the authors open measurements of success to go beyond crime rates and majoritarian perceptions of personal safety. Without losing the groundedness necessary for empirical investigation, rule of law can incorporate ideal aspects of lawful order that address sustainability and inclusion of minority perceptions of legitimacy. While the White/Sepe/Masconale article does not succeed in constructing as compelling an understanding of the most salient public goods, an improved analysis of the root causes of the fiscal degradation of America’s legacy cities can unlock a potentially valuable reframing of urban, metropolitan, and regional policy debates.

In focusing their policy proposal on fiscal guarantees for municipal creditors, the authors, from my perspective, have missed the role that the urban-suburban divide has played in the inability of city governments to provide basic public goods.  But, their expansion of the public policy goal to rule of law allows us to get a more holistic picture of the foundation of a truly inclusive, flourishing community. All in all, I think that, by altering the paradigm from order maintenance to rule of law, the authors have, in formulating the Urban Decay Theory, offered a useful complement to the Broken Windows Theory rather than a truly competitive alternative to it.  

 

Jim K.

Addressing American Indian Land Tenure – by Jessica A. Shoemaker

For my last guest post this month, I want to return to my primary area of research to date: American Indian land tenure. As I’ve written about here already, one of my primary interests is in thinking broadly about the many varied factors that influence landowners’ decision-making about how they use their lands. Our essential land tenure institutions are foundational in this sense and directly impact land use decision-making before anything like zoning or other direct regulation of land use even has a chance to take effect. Nowhere is the influence of the design of foundational property rights more apparent than in the land tenure relationships in the modern American Indian reservation, where significant swaths of Indian-owned lands are currently not used by Indian landowners themselves but instead sit idle or are leased to non-Indian users. In fact, I have a hard time imagining a property system better designed to discourage Indian prosperity on Indian land than the top-down system of property imposed on indigenous people in this country today. 

In this post, I want to give at least an overview of some of what I think are the most important and influential aspects of American Indian land tenure and then talk just a bit about why I think further scholarly engagement in this arena would be incredibly valuable in a range of settings.

    I.    The Indian Land Tenure Challenge

To start, I appreciate that there is a wide spectrum of knowledge regarding the nuances of modern American Indian land tenure. For some of us, it’s just a mystery how land is owned and held within reservation boundaries. For others, the system is so complex that once we start to study it at all, conversations and work regarding indigenous land rights devolve into a level of generality that isn’t as productive as it could be. Thus, a significant part of my current research agenda is trying to do the deep work required to develop a really rigorous understanding of the modern property rights framework within this very complex reservation setting. This post won’t be able to do all of this work justice.  Nonetheless, here is a brief overview.

Two of the biggest and most widely recognized challenges for Indian landowners are the federal trust status on many Indian-owned lands and the fractionation (or extreme co-ownership) conditions within many of those same properties.

Many, but not all, Indian-owned lands within federal Indian reservations are held in a special trust status over which the federal government acts as trustee for the benefit of the individual or tribal landowner. This trust status’s history is complex, but the important point for this purpose is that the trust status has been extended indefinitely and, to many eyes, appears to be perpetual.

This federal trust status certainly has some legal advantages—as evidenced, for example, by ongoing efforts by many Indian tribes to have additional lands taken into trust. The primary benefits include cementing a stronger case for exclusive federal/tribal (as opposed to state) jurisdiction over the space and also clarifying that state property taxes may not be imposed on that trust land. (The property tax issue is not quite that black and white. Many tribes still make special payments in lieu of taxes to state and local government in exchange for services and to help eliminate conflicts over fee-to-trust conversions.)

The trust status, however, also has significant disadvantages for Indian landowners. It is restrictive and extremely bureaucratic. The federal government exercises significant land management control, and most Indian-owned trust lands cannot be sold, mortgaged, leased, or otherwise developed or used without a formal approval from the Department of Interior after a cumbersome process of appraisals, oversight, and multi-level review. This trust system very dramatically increases the transaction costs for any land use and is often inefficient and even demoralizing for Indian landowners (not to mention extremely expensive for the federal government to maintain).

The second problem, fractionation, is closely related to the trust status issues. Fractionation refers to the fact that many individually owned Indian trust lands (often called allotments) are now jointly owned by many, many co-owners—sometimes as many as several hundred or more. Fractionation makes any kind of coordinated decision-making among all of these co-owners practically difficult and, as an individual co-owner’s interest size diminishes, reduces the likelihood that the co-owners will so cooperate. This then increases co-owners’ reliance on the federal government’s ongoing trust management role over these lands.  All of these tiny interests, in turn, overwhelm the federal trust system, as evidenced by the recent Cobell class action litigation which uncovered the federal government’s gross inability even to account accurately for all of these small interests. 

The federal government has explicitly acknowledged that this fractionation problem is a direct consequence of its own failed federal policies on Indian lands. For example, historic prohibitions on will writing for Indian landowners and the modern alienation restraints on Indian trust land have all exacerbated fractionation. Implementing any kind of solution to consolidate these small interests has been exceedingly difficult. This is true both because of the general idea that it’s much harder to reassemble property than it is to disassemble it and because of a host of other political, legal, economic, and even moral issues. Possible solutions do exist, and part of the Cobell settlement funds are currently going to fund a limited buy-back program that will purchase some individual small interests from willing sellers and re-consolidate them in tribal ownership. However, the general trend has been that any such effort at a solution moves so slowly and addresses such a small proportion of the problem that new tiers of fractionation outpace any improvements, with exponentially more small interests continually being created through further subdivision of already small interests over new generations of heirs. 

While these two issues—the federal trust status and the fractionated ownership patterns—are complex enough, I don’t think they give a complete picture of all of the issues going on in American Indian land tenure. For example, in a piece called No Sticks in My Bundle: Rethinking the American Indian Land Tenure Problem that I’m currently wrapping up edits on for the Kansas Law Review, I argue that a third significant problem for Indian land use is the gradual elimination over time of any informal use and possession right for co-owners of Indian trust land. Although co-owners in any non-Indian tenancy in common would have a default right to use and possess their own jointly owned land presumptively and informally and without any prior permission from their other co-owners, that is not the case in fractionated Indian lands. Modern federal regulations have recently evolved to require Indian co-owners to get permission or a formal lease from co-owners before taking possession of their own land and also to pay those co-owners rent. I think preserving some route for direct owner’s use of jointly owned land is important and valuable, even in highly fractionated properties, and as noted, I am writing about this more here. 

In addition, in another piece I’m currently writing and calling Emulsified Property, I am exploring the problem of uncertain and sometimes overlapping jurisdictional authorities within Indian Country as it relates to land use. This piece explores new dimensions of these property-related jurisdictional issues, but at a high level, the fact is that modern Indian reservation are uniquely plagued by a mind boggling array of unsettled, case-specific, or otherwise unresolved jurisdictional questions. Part of this stems from the fact that most reservations include not only Indian-owned trust lands but also fee lands, which might be owned by non-Indians, Indians of another tribe, tribal citizens, or the governing tribe itself. The state or local government is likely to assert jurisdiction at least over the non-Indian fee properties, but where that state and local jurisdiction ends, and when and if it overlaps with tribal or federal jurisdiction as well, turns on a complex balancing of multiple factors, depending on the type of jurisdiction being asserted. It continually shocks me (and my research assistants) how many unresolved questions there are in terms of who governs what in Indian Country.  In my property law class, we often talk about the importance of certainty in property rules. So many of our social and economic institutions rely on having clearly established, easily communicated entitlements and responsibilities with respect to a given thing. In Indian law, there is often very, very little of that certainty.

This just scratches the surface of the American Indian land tenure paradigm, but it is already easy to see why land use is such a challenge in Indian Country. Despite significant reserved lands and natural resources, Indian people suffer some of the worst poverty in the United States.

    II.    Why It Matters

Now for my plug for why I think more of us should be engaging in this important work around Indian property and land use. Of course, immediately and most importantly, there is the compelling problem of justice and fairness for indigenous people, who suffer the consequences of these failed property systems most directly. The Harvard Project on American Indian Economic Development has found repeatedly that Indian people having the power and the liberty to make their own decisions with respect to their resources and their futures is the best and most effective solution to the persistent problems, including persistent poverty, in Indian Country. In many respects, it is the law that stands most in the way of this, and it will take legal minds to dismantle the current ineffective system. And legal minds who are uniquely interested in the transformative potential of property institutions are especially well suited to begin this task. 

On another practical note, the problem of American Indian land tenure also matters economically for all of us. The federal government has acknowledged again and again that it using (wasting) incredible resources continuing to maintain this broken property system.

However, as land use legal scholars, there are other important reasons to work in this rich area. I believe a sustained and careful understanding of these unique Indian property institutions, and the evolution of these property relationships through various federal land reforms over time, can help us address property and land use challenges not only in Indian Country but in other venues as well. Other scholars have sometimes analogized to Indian land tenure issues for this kind of purpose, but that work has sometimes lacked a real detailed and deep understanding of how complex Indian land tenure issues actually are. However, with more careful analysis, there could be very fruitful comparative work.  Let me give just two immediate examples, both of which I'm just beginning to work on.  

First, the co-ownership institutions in Indian Country are unique, but the fractionation (or heir property) issues are not. Paying attention to the default co-ownership rules for individually owned Indian lands can help us learn about and address co-ownership challenges in other settings—such as the role of default co-tenancy rules in balancing flexible use arrangements with land preservation strategies for at-risk communities. It can also inform property theory and practice on how co-ownership institutions can best be designed to promote coowner cooperation and efficient use of resources more generally, how anticommons properties actually work, and what methods are most useful to re-aggregate overly fractionated property rights.

Second, I am also excited about how learning from indigenous land planning practices across multiple potential stakeholder jurisdictions within a given reservation (i.e., local municipalities and county governments, state governments, federal governments, and the tribe itself) may translate to inform other work on moving land use planning more generally to more regional, cross-jurisdictional models. Cooperation among multiple levels of government is a persistent challenge in efforts to plan more broadly on a regional, resource-based, or ecosystem level, and yet almost any natural resources or planning person would tell us that this is the kind of decision-making we must do. These kinds of jurisdictional conflicts are being addressed at the reservation level on an ongoing basis, and work on indigenous planning may teach us a lot about how we can plan across jurisdictional boundaries in wider settings. (This is not to suggest that there is a broad literature on indigenous planning or land use issues within reservation legal settings that already exists. There is not. However, for anyone looking to start to review the literature, I recently read an interesting dissertation on comprehensive planning on American Indian reservations and on the Oneida reservation in Wisconsin specifically by Dr. Rebecca Webster, a former law school classmate of mine, that provides a nice place to start and can be found here.) The challenges of planning within a reservation are different and, in some ways, arguably even more complex than the challenges of regional planning generally. Notably, within reservation boundaries, jurisdictional uncertainty may increase concerns about any decision that would jeopardize a future case for asserting jurisdiction, and there are long conflicted histories between neighboring sovereigns. Still, it is a comparison I hope to continue to explore.

This long post only barely skims the surface of all the rich and fascinating land use issues at play in American Indian land tenure. Please consider this an invitation to reach out any time for further discussions on this subject. I would love to continue to engage with more colleagues in this critical subject area and to build more critical learning connections across subject areas and disciplines.

Thanks again for the opportunity to discuss this and other issues here this month.

-          Jessica A. Shoemaker

Turning Lemons into Lemonade: Resilience, Smart Growth and Equitable Development on Long Island

Check out EPA's Greening The Apple blog, which reported today on a collaboration between Touro Law Center's Land Use & Sustainable Development Institute and the Long Island Smart Growth and Resiliency Partnership (LISGRP):  Turning Lemons into Lemonade: Resilience, Smart Growth and Equitable Development on Long Island | Greening The Apple. LISGRP is partnership of EPA, FEMA, New York State Department of State, Suffolk County, Nassau County and the Metropolitan Transit Authority (MTA) formed shortly after Super Storm Sandy to help Long Island rebuild in a smarter, stronger and more resilient fashion. 

Among other projects that focus on the intersection of climate resiliency and smart growth, LISGRP is working with Touro Law Center to place law students with the City of Long Beach to support sustainable rebuilding. Consistent with priorities identified in the City's recently completed NY Rising Community Reconstruction Plan, the City is implementing recommendations from a Global Green Technical Assistance project (funded through a grant from EPA’s Building Blocks for Sustainable Communities program) and a New York University study on green infrastructure and storm water management.

Thus, according EPA Greening the Apple bloggers Joe Siegel and Rabi Kieber, LISGRP and its collaborators are "turning lemons into lemonade" in the wake of the devestation of Super Storm Sandy.

...Long Island Smart Growth Resiliency Partnership has turned lemons into lemonade by incorporating not only climate change resilience but smart growth and equitable development into long term planning on Long Island. The groundbreaking work of the Partnership will no doubt serve as a model for other recovery efforts in Region 2 and beyond.

Posted by Professor Sarah J. Adams-Schoen, Director of Touro Law's Land Use & Sustainable Development Law Institute. You can follow the Institute's blog here, and contact Professor Adams-Schoen by email or phone ([email protected], (631)761-7137).

"Big Box" Costco agrees to cut greenhouse gas refrigerant emissions nationwide

EPA describes this week's settlement between the United States and Costco as indicative of a more aggressive policy by the federal government to use the Clean Air Act to prosecute the largest GHG emitters, including grocery stores -- a continuing shift in federal priorities that will be of interest to state and local government law practitioners and scholars, as well as those of us who focus on the intersection of local land use law and climate change.

In a settlement announced on Wednesday by the DOJ and EPA, Costco agreed to cut its emissions of GHGs from refrigeration equipment at more than half of its stores nationwide. Costco will also pay $335,000 in penalties for CAA violations and improve refrigerant management at 274 stores at an estimated cost of $2 million over the next three years.

Sam Hirsch, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division, responded to the settlement, saying

"Industry needs to lead the way in abandoning harmful chemicals in favor of using and developing greener, environmentally friendly alternatives to protect our health and our climate."

EPA and DOJ announced that the measures required by the settlement are expected to reduce Costco’s GHG emissions by the equivalent of approximately 30,000 metric tons of carbon dioxide per year. The GHG at issue in the settlement is actually hydrochlorofluorocarbon (from leaks of the refrigerant R-22), which is a more potent GHG than carbon dioxide.

Some may question whether the settlement requires enough of Costco, the nation's second largest retailer, given annual revenues of over $100 billion (in 2013, as reported by EPA).  

The proposed settlement is subject to a 30-day public comment period and final court approval.

Read the proposed settlement and related documents here.

By Professor Sarah J. Adams-Schoen, Director of Touro Law's Land Use & Sustainable Development Institute. You can follow the Institute's blog here, and contact Professor Adams-Schoen by email or phone ([email protected], (631)761-7137).

Posting from New Orleans (No. 3) -- Forging Successful Non-Profit Partnerships Following Crisis and Disaster: O.C. Haley Boulevard's Story

This blog post follows-up a pair of August 5^th and August 12^th New Orleans posts.  Although I’m home in Atlanta getting ready to begin the new school year, I’m continuing an observance of Katrina’s 9^th anniversary by ‘walking’ O.C. Haley Boulevard and looking at one of the city’s emerging post-storm neighborhood revitalization stories. 

At the outset of this post, it is important to note that there are many more neighborhood stories that deserved to be told, ranging from stretches of St. Claude, Carrollton, and Claiborne Avenues to Freret and lower Magazine Streets.  There are also many neighborhood corridors still struggling to come back all over the city, but particularly neighborhoods lying generally east and a little north of the French Quarter, including the vast area of New Orleans East as well as the Upper Ninth Ward and the Lower Ninth Ward. 

As the son of an architect, I’m always ready to begin discussion of any neighborhood transformation by flashing slides of the ‘bricks and mortar’ improvements.  Those are also the improvements that we as lawyers are most directly involved in supporting: the land acquisitions, the tax credit financings, the bridge loans, the condo documents, the parking easements.  But to get any neighborhood to the point where it can provide the social and economic buttressing to support significant private market transactions, there’s often a foundation of community activism and advocacy.  O.C. Haley Boulevard is no exception.   

Very rarely is any one individual or organization the sole ‘mover’ behind a neighborhood’s re-emergence.  Long before the levees and flood walls breached, non-profit, business owner, and neighborhood advocacy groups were working to lay the groundwork for O.C. Haley Boulevard’s resurgence.  Carol Bebelle, co-founder of the Ashé Cultural Arts Center, moved the Center onto the Boulevard in 1998 in order to sustain and nurture  the stories and traditions of New Orleans’ African American community.  The Cultural Arts Center’s historic building, an adaptive use of a former department store, became a foothold for the Boulevard’s resurgence, supporting non-profit office space, exhibit and meeting space, and 29 apartments.

About the same time, O.C. Haley Boulevard Merchants and Business Association gathered local businesses to spearhead creation of a strategic plan for the Boulevard’s revitalization. 

A couple of years later, in 2000, Café Reconcile opened across the street as an adaptive use of another large historic commercial building, housing a full-service restaurant dedicated to providing culinary training and life skills development to young men and women from the surrounding neighborhoods. 

Along the way, the Boulevard attracted key regional community development partners, and led them to call the Boulevard ‘home.’  These partners included Hope Federal Credit Union (http://www.hopecu.org/) and Good Work Network (http://www.goodworknetwork.org/), both of which concentrate their resources on serving low and moderate income families and developing opportunities for minority and women-owned businesses. 

In short, the Boulevard’s momentum had already been triggered when Katrina’s storm surge filled-up 80 percent of city, leaving the Boulevard and only a handful of other major corridors navigable by car as opposed to boat.  (A relatively current map of the businesses that have grown-up on the Boulevard in the last fifteen years is found on the Merchants and Business Association’s website, http://ochaleyblvd.org/?page_id=5).

Lawyers – often community development lawyers – figure critically in these first stages of a neighborhood’s redevelopment, well before building projects begin ‘going vertical.’  Lawyers are counseling neighborhood groups and businesses on drafting their articles of incorporation and their bylaws or preparing their Form 1029 to seek IRS 501(c)(3) status.  They are helping review applications seeking funding from foundations for planning and predevelopment award monies.  They may be advising their clients to seek funds for a market study to help give current and future businesses a sense of where and how they might invest their capital and other resources.  Or, they may be advocating at city hall for stricter enforcement of health and safety code violations affecting vacant or abandoned properties.  Law students interested in pursuing urban and community development work should gain an appreciation in law school of these critical supporting and counseling roles that lawyers play for community groups.

Earlier this month, I visited with Kathy Laborde, President and CEO of the non-profit Gulf Coast Housing Partnership (GCHP).  Laborde, who has worked on the Boulevard for almost two decades, described the factors that convinced her and the neighborhood’s stakeholders that they could turn around the Boulevard’s fortunes.  GCHP has been a main driver of redevelopment on and around the corridor since Katrina.  In sharing her thoughts and recollections concerning the Boulevard’s rebirth, Laborde described not only the last nine years’ key redevelopment projects, but at the same time she highlighted additional pieces of the urban redevelopment ‘puzzle’ that successful urban and community development lawyers need to appreciate to serve their clients well.

(Photo:  Gulf Coast Housing Partnership offices (gray building) at 1610 O.C. Haley Blvd.)

Location is an essential consideration for any urban redevelopment project.  Against the essential backdrop of an engaged group of neighborhood stakeholders, Laborde outlined the following factors as critical:

1. The O.C. Haley corridor’s historic status as the one of the chief commercial centers for the city’s African American community;
2. The corridor’s proximity to New Orleans’ Central Business District (separated only by the elevated U.S. 90, The Pontchartrain Expressway);
3. The corridor’s proximity to St. Charles Avenue, one of nation’s great historic streets, which runs just 3 blocks to the corridor’s southeast; and
4. The presence of historic commercial buildings fronting O.C. Haley Boulevard and stakeholders’ initial investment in rehabilitation of those structures.

These four areas of strength formed a sort of superstructure for the corridor’s redevelopment; however, by themselves, these four factors were not sufficient to draw significant investment to the corridor.  The challenge for GCHP and the corridor’s stakeholders was how to connect O.C. Haley’s assets to the city’s surrounding areas of strength and investment while maintaining the corridor’s character.  It was at this juncture, nine years ago, Hurricane Katrina unleashed its destructive forces.

Katrina fundamentally altered the way those inside and outside New Orleans viewed the city.  To those living in New Orleans, the telltale watermark stains left by the epic flooding clearly distinguished O.C. Haley Boulevard as ‘high ground’ that did not flood.  To those outside New Orleans, particularly local and national foundations and philanthropies, O.C. Haley Boulevard bordered one of the city’s toughest neighborhoods with one of its deepest pockets of poverty.  Outsiders also appreciated that the Boulevard was surrounded by areas of significant strength, including the city’s wealthier Uptown neighborhoods, the Central Business District, St. Charles Avenue, and the former C.J. Peete (Magnolia) development which was a 1930s-era public housing development then-slated to receive millions of dollars in HUD funds for complete redevelopment into the new mixed-income Harmony Oaks community. 

Outside funders immediately saw the Boulevard in a new way.  It stood out not only as a neighborhood where the private foundations and philanthropic funders saw they could achieve programmatic goals of creating more equitable, inclusive, and prosperous inner-city neighborhoods, but also these private funders were buoyed by the fact that high levels of investment were occurring all around the Boulevard.  Further, just as foundations and philanthropies were looking to leverage their investments, so too was the New Orleans Redevelopment Authority (NORA), which was responsible for making decisions about deployment of a tranche of federal disaster block grant monies for commercial corridor investments.  It was a ‘no brainer’ for NORA to join the catalytic investments of the Greater New Orleans Foundation, Kellogg, Rockefeller, Ford, Surdna, and the J.P. Morgan Chase Foundations.

Make no mistake – even with this level of interest, the Boulevard was hardly awash in cash.  In a post-Lehman Brothers world, banks had a low temperature for risk, and in post-Katrina New Orleans where the levee and flood control system rebuilding was not yet complete, caution was the rule for commercial lenders.  But what the philanthropic and government funding accomplished was to make the development ‘math’ work for deals dependent on tax credits and tax exempt bonds.  A non-profit developer could run a development pro forma that now yielded at least a sliver of a development fee.  The challenge for those developers and their clients was to complete successful residential and commercial development projects that would help New Orleanians and visitors alike see O.C. Haley Boulevard as a safe place to live and work.  As Laborde explains, this was the “show me stage” of the corridor’s redevelopment.  Beginning in 2007, this is exactly what the Boulevard’s stakeholders began to do.

Over the last seven years, GCHP and the Boulevard’s other stakeholders have completed a steady stream of housing, restaurant, office and retail projects.  The first pivotal project was GCHP’s completion of The Muses, a 263-unit mixed-income apartment community, which opened in 2009.  This project brought hundreds of new residents to the Boulevard and helped bridge the three-block real estate market 'canyon' between St. Charles Avenue and the Boulevard.

(The Muses is located a block off of O.C. Haley at 1720 Baronne Street).

The tipping point project may have been GCHP’s redevelopment of almost an entire city block between Martin Luther King, Jr., Boulevard, Thalia Street, O.C. Haley, and Rampart Street.   GCHP convinced the New Orleans Redevelopment Authority to move its 45 employees from its downtown rented office space to become the anchor tenant of an office building with ground floor commercial space.  This office and retail building were funded with New Markets Tax Credits, NORA’s investment of $2 Million in disaster Community Development Block Grant (dCDBG) funds, and private financing.  The office building, in turn, helped secure financing for an adjacent 75-unit affordable senior housing development. 

 

(Photo: New Orleans Redevelopment Authority office building, 1409 O.C. Haley Blvd.; 75-unit senior housing development can be seen to the right and to the rear of NORA's building.)

Another important project was Café Reconcile’s expansion and rehabilitation of its existing restaurant and training space.

(Photo:  Café Reconcile restaurant and training facility at 1631 O.C. Haley Blvd.; the recently completed expansion occupies the two-story light tan brick building.)

Café Reconcile’s $6.5 Million expansion was funded by private donations, NORA dCDBG funds, and state and federal tax credits.

“Success in community development,” Laborde stresses, “is about getting people to follow.”  And they are doing so on the Boulevard.  More projects are just weeks and months from completion, including the adaptive use of an historic school as a grocery store and offices, the renovation of two large retail buildings into the Southern Food and Beverage Museum (SoFAB), including The Museum of the American Cocktail, as well as the first home of the New Orleans Jazz Orchestra (NOJO), including its 360-seat performance venue.  The projects soon coming on-line include:

 

(Photo: the former Myrtle Banks School at 1307 O.C. Haley Blvd., which is being redeveloped by Jonathan Leit of Alembic Community Development.)

The school’s $17 million renovation is financed by New Markets Tax Credits, historic tax credits, $1 Million from the City’s dCDBG-funded Fresh Food Retailer Initiative, $900k from the New Orleans Redevelopment Authority, and $300k from the Foundation for Louisiana.

(Photo:  Currently under construction are (left) New Orleans Jazz Orchestra (NOJO) Market at 1436 O.C. Haley Blvd. and (right) the Southern Food and Beverage Museum (SoFAB) at 1504 O.C. Haley Blvd.)

The NOJO Market and SoFAB redevelopment projects critically anchor two separate O.C. Haley Boulevard blocks where the Boulevard meets Martin Luther King, Jr., Boulevard.  NOJO’s development is financed by State of Louisiana historic tax credits, State of Louisiana theater, musical, and theatrical production tax credits, $10 Million from Goldman Sachs’ Urban Investment Fund, an $800k loan from NORA’s commercial revitalization gap loan fund, and a bridge loan from Prudential Insurance Company.  NOJO will open in the spring of 2015.  A ribbon cutting for the SoFAB redevelopment is set for September 29, 2014.

Next week we will wrap-up our discussion of O.C. Haley and Katrina’s 9^th anniversary with a discussion of what urban redevelopment professionals are looking for in the attorneys they hire.   

John Travis Marshall, Georgia State University College of Law

Snapshots from New Orleans' Long-Term Recovery -- Katrina at 9

This August marks the ninth anniversary of Hurricane Katrina’s devastating collision with the Gulf Coast. New Orleans, of course, did not suffer the direct hit that submerged and leveled the Mississippi Gulf Coast, but the hurricane’s historic tidal surge overwhelmed a poorly maintained and engineered Orleans Parish flood protection system. Lake Pontchartrain’s brackish muddy waters poured through gaping holes in flood walls and levees and submerged 80 percent of the city.

The disaster’s immediate aftermath has been described in thousands of blogs, maps, documentaries, songs, books, articles, and deeply disturbing pictures that are seared into the collective American consciousness. The shockingly poor government agency response at every level has earned “Katrina” a place not only in the American political lexicon, but also in international discourse, alongside “Waterloo”, “Watergate”, and “9.11.” For the past nine years, however, an equally compelling but far less “photogenic” story of long-term recovery has unfolded – glacially at first, then haltingly, and over the past four years at a steadier pace. The flood waters inundated the city in just hours, but the long-term recovery has proceeded as a kind of community development ‘trench warfare’, advancing one street and one block at a time.

Nine years later there are still neighborhoods that show only a faint pulse of life amid boarded houses, car-eating potholes, and jungle-like yards. These are particularly the lower income neighborhoods with pre-storm populations that were predominantly African American. These include neighborhoods such as the Upper Ninth Ward and the Lower Ninth Ward. At the same time, the redevelopment slog that has characterized the long-term recovery has been the catalyst for instances of remarkable investment in, and revitalization of, moribund neighborhood commercial corridors.

Many of the law teachers and development practitioners reading this entry have one or more former students or protégés who have sought out opportunities over the past twenty years in New Orleans or Gulfport, Cedar Rapids or Grand Forks, Tuscaloosa or Galveston, or most recently New York City, New Jersey and Detroit to work with federal, state, and local government agencies and, perhaps even more important, with non-profit and philanthropic organizations who often spearhead long-term recovery and revitalization efforts. The next couple of New Orleans dispatches are intended to serve less as a land use travel log than as a discussion of what
happens during a community's long-term recovery as well as the key skills and proficiencies that our students must have in order to contribute to rebuilding cities. It is no coincidence that non-profit and local government executives point to legal capacity and sophistication as critical and also troublesome components of New Orleans’ long-term recovery. The refrain not infrequently heard is that ‘we lost thousands of dollars’ or ‘weeks of time’ because a developer did not challenge an informal government interpretation of a federal regulation that turned out to be incomplete or based solely on anecdotal experience from a disaster in another jurisdiction. There is no substitute for learning how to read and carefully analyze agreements, local code provisions, or federal regulations.

Over the next few weeks, there will be at least two more dispatches from New Orleans. The first dispatch will be from the Oretha Castle Haley Boulevard (“O.C. Haley”), which begins just a football field’s length from the edge of the New Orleans' Central Business District (CBD) and travels southwest towards the Central City neighborhood, which prior to Katrina reported some of the city’s highest poverty and crime rates. You can follow along by entering the intersection of Martin Luther King, Jr., Boulevard and O.C. Haley Boulevard into your favorite mapping application.

Whitehouse v. CIR. 5th Circuit Upholds Major Deduction in Conservation Easement Valuation

No one is more surprised than I with how much time I spend reading about tax law these days, but I wanted to alert folks to another case regarding the valuation of historic conservation easements. This time, we are talking about Maison Blanche - a fancy former department store now an even fancier Ritz Carlton on Canal Street in New Orleans.

In 1997, the Whitehouse Hotel Ltd. (owner of the property) donated an historic preservation conservation easement to protect the facade to the Preservation Resource Center. Whitehouse's appraiser estimated the value of the conservation easement at $7.445 million (not $7,445 million as the 5th Circuit opinion mistates). The IRS cried foul and valued the conservation easement at $1.15 million and also dinged Whitehouse for an extra 40% for underpaying by more than 400%.

Unsurprisingly, litigation ensued. Whitehouse v. CIR,  2014 WL 2609866 (5th Cir. 2014), decided on June 11th is the second time the case has made it up to the 5th Circuit. The disputes have generally been battles of appraisals and valuation methods. I am not going to express any opinion about the appraisal methods but thought I'd point out a few things.

What does the conservation easement allow?

There was a big dispute here as to whether the conservation easement actually had any value. One of the appraisers suggested that because the conservation easement would not actually prevent Ritz Carlton from building what it want to build, the value should be zero. The highest and best use of the property is unchanged by the conservation easement. This conclusion turned in part on the language of the conservation easement and whether it actually prohibited the potential building of 60 additional rooms on part of the hotel complex. The Tax Court agreed with the appraiser that the conservation easement did not have such a prohibition. Whitehouse I, 131 T.C. 112 (Tax Ct. 2010). The Fifth Circuit disagreed. Whitehouse II, 615 F.3d 321 (5th Cir. 2010). On remand to the same judge, the Tax Court reviewed Louisiana servitude law and again stated its belief that the conservation easement did not restrict the additional building and should not have value BUT the Tax Court acknowledged that it was bound by the 5th Circuit's precedent and estimated the conservation easement value based on that assumption (coming up with as the 5th Circuit said "merely $1,867,716"). Whitehouse III, 139 T.C. 304 (Tax Ct. 2012).

Undoubtedly feeling that it got a raw deal from an unbiased judge, Whitehouse appealed but the 5th Circuit upheld the Tax Court stating that even though the Tax Court went out of its way to voice its disagreement with the 5th Circuit that was allowed as long as it actually followed the 5th Circuit.

Can you rely on tax professionals' assessments of your conservation easements?

Well, at first blush the answer to this question looks like "no" because the appraiser was so wrong. But the key question to consider for this case is whether Whitehouse's reliance on its appraiser and other professional should protect it from the penalty for gross underpayment (the 400% thing I mention above). There is a reasonable cause exception that allows taxpayers to get out from under this rather steep penalty. This issue is important for people interested in conservation easements because we see over and over again how far apart the private appraisals can be from those the IRS calculates. How much should we penalize landowners for their underpayments made in reliance on qualified professionals? The Tax Court imposed a 40% gross underpayment penalty, holding that Whitehouse had not done enough to demonstrate that it had reasonable cause to believe the appraisal. The court may have been particularly persuaded by the fact that the appraisal of the conservation easement exceeded the price actually paid for the property. The 5th Circuit reversed on this issue because Whitehouse had consulted with more than one appraiser and consulted other tax professionals. The 5th Circuit found this to be adequate.

I am really torn on this one. We want landowners to be able to rely on qualified appraisers and to impose a 40% tax penalty could be particularly painful to small landowners. But there have been repeated examples of bad appraisals around and it seems like there has got to be some type of smell test. Where a conservation easement is valued so much higher than the purchase price of the property, I hesitate too. Of course, I understand that the purchase price doesn't really tell you the value of the property and the value of what an entity like Ritz Carlton can get out of a property, but at the end of the day as a taxpayer, I don't even like the fact that the landowners here got a $1.8 million dollar charitable tax credit to build a big fancy hotel and condo complex that will make them oodles of dollars. Arguing that they lost $1.8 million because they couldn't make it as absolutely big as they might have just leaves a bad taste in my mouth.

Tax Deductible Exacted Conservation Easements: That's an oxymoron isn't it?

As long-time readers know, I have an obsession with interest in conservation easements. In particular, I have been intrigued with a category I call "exacted conservation easements," which I view as any conservation easements that have been created in exchange for some type of land-use permit or development benefit.

Many conservation easements are donated to land trusts and government entities. Those landowners are then able to seek deductions for charitable contributions on their federal tax returns based on the fair market value of the conservation easement. Of course, calculating the fair market value of a conservation easement may not be a simple task, but we can leave that discussion for another day. Today, I want to talk about the potential for tax deductions on exacted conservation easements.

Exacted conservation easements exist because a landowner is seeking the right to develop or change her land in a way currently restricted by law. For example, where a landowner wants to convert endangered species habitat into a residential development, the landowner often agrees to burden other land with conservation easements in exchange for an incidental take permit. Now, in what I hope is an uncontroversial statement, I often assert that such conservation easements should not garner landowners any charitable tax benefits. Unfortunately, I heard many stories of landowners seeking and obtaining tax deductions for such properties.

In a recent tax court opinion, we see an example from Colorado. In Seventeen Seventy Sherman Street, LLC [SSSS] v. CIR, T.C. Memo 2014-124, the Tax Court examined the deductibility of historic facade and interior conservation easements. SSSS wanted to develop an historic site (the Mosque of the El Jebel Shrine of the Ancient Arabic Order of Nobles of the Mystic Shrine) in Denver into condos. Because the property is a designated landmark, the architect proposed building in the parking lot and preserving the shrine "as leverage to induce the city of Denver to modify the zoning restrictions governing the use and development of the [property,]" which at that time was not zoned for residential development (T.C. Memo at 5-6). SSSS then entered into negotiations with the city's Community Planning and Development Agency regarding changes to the Planned Unit Development (PUD) for the area, the conservation easements, height variance, etc. The Agency asserted that it would not recommend any changes to the PUD or granting of the height variances without the conservation easements.

Hopefully, you see quickly why I label these exacted conservation easements (or I sometimes call them "coerced conservation easements") and why they differ from the vision most folks have of conservation easements protecting the family homestead and helping farmers keep the property in the family. Here, we have a developer with no emotional connection to the property simply making a deal to obtain the development rights that the developer sets as its goal. This doesn't mean that the developer doesn't value the historic, scenic, and cultural benefits of this property. Indeed, a developer may purchase an important or beautiful site exactly because it believes those features are important, BUT we may not have the same ideas of freedom of contract or donative intent involved. We might want to view such conservation easements differently, more critically.

So what kind of tax break should SSSS be able to get here? My initial take on these has always just been zero. The conservation easements were exchanged for a varaince and favorable development measures; they are not donations. But as the Tax Court points out, we may be able to find some instances where some of an exacted conservation easement was done in exchange for a permit or some other benefit, but the value of the restriction actually exceeds the value of the permit. Frankly, while I agree generally with that sentiment, I have trouble picturing where that might occur. How do we calculate that? Without the conservation easements here, we know there would have been no permit. So can we really say that the value of the conservation easements exceeds the value of the permit? If so, are there ways to confine the conservation easement to bring it in line with the value of the permit? They have to be perpetual, so we could only change other characteristics. Suddenly I feel like we are immersed in some Dolan-like analysis of value and proportionality.

The conservation easements in this case were first valued at over $7 million. On its tax forms, SSSS did not indicate that it had received anything of value in exchange for the conveyance of the conservation easements (to Historic Denver). The IRS responded that SSSS had failed to meet some filing and appraisal requirements and asserted that the conservation easements should only be valued at a little over $2 million but claimed that the interior CEs were not deductible at all, leaving the potentially deductible amount at $400,000. Here, the Tax Court did not need to determine the value of the conservation easements or the value of the development benefits SSSS received in exchange for them because SSSS failed to identify that it received consideration for the CEs as required by the Tax Code. The court continued to explain that the exchange sure looked like a quid pro quo one with SSSS agreeing to the CEs (whatever their value) in exchange for the Planning Agency's support (whatever its value).

I am glad to see the IRS taking a careful look at these conservation easements. Generally, I think we should be wary of any conservation easements emerging from development schemes.

McLaughlin on Perpetual Conservation Easements in the 21st Century

Nancy McLaughlin (Utah) has posted Perpetual Conservation Easements in the 21st Century: What Have We Learned and Where Should We Go from Here?, 2013 Utah L. Rev. 687.  Here's the abstract:

The public is investing billions of dollars in conservation easements, which now protect an estimated 40 million acres throughout the United States. But all is not well. Uncertainties in the law and abusive practices threaten to undermine public confidence in and the effectiveness of conservation easements as a land protection tool. This short article is part of a series of articles published in the law review discussing conservation easements, with a focus on what we have learned thus far and where we should go from here. This article sets the stage by describing the dramatic growth in the use of conservation easements, the various laws that impact easement creation and administration, a timeline of important legal and policy developments, and the recent surprising lack of certainty and consensus regarding what it means to protect land “in perpetuity” or “forever” with a conservation easement. The article concludes by discussing how the perpetuity issue might be productively resolved.

 

Jim K.

Will the generous tax deductions for conservation easements stick around?

Potential tax deductions are one of the driving forces behind creation of conservation easements. The exact contours of the tax deduction (how much can you deduct and over how many years can you stretch your donation) has varied over the years. For the past several years, the deductions have been particularly generous.

Under standard law, individuals can deduct the value of the donated property up to 30 percent of their adjusted gross income, and any excess value can be carried forward for 5 years. But in 2006, Congress passed the enhanced landowner incentive. It allows deductions up 50 percent of donors’ adjusted gross income and over a 15-year carry-forward period. That incentive ended this past December. The consistent support of this tax deduction by Congress led many to people the enhanced version would be extended without struggle.

Perhaps not. The most recent tax-extension proposal from the Senate Finance Committee does not extend the enhanced tax deduction for conservation easements. Russ Shay at the Land Trust Alliance has hypothesized that the bill drafters may want to change the nature of the deduction, but are still likely to keep the enhanced deduction available to some extent. In particular, this might appear an attractive opportunity to remove deductions for conservation easements over golf courses, something both parties (and the IRS) have indicated their support for. Others suggest that a better approach would be to craft legislation making the enhanced deduction permanent so it does not require periodic extensions.

Is a Right-of-Way an Easement?

Turning old railroad lines into parks and bike paths seems like a great idea. When it results in things like NYC's Highline Park who can complain, but not everyone is happy about these rail to trail projects. In fact, it is the subject of a case currently pending before the Supreme Court. (This is not a case under the Rails-to-Trails Act but implicated perhaps thousands of miles of trails that came from rails).

Marvin Brandt is upset about the bike trail built by the Forest Service on an abandoned railway through his land. Brandt argues that the when the railroad abandoned the government-issued right-of-way, the feds did not have the right to create a new right-of-way in the form of the trail.

The tricky issue here is determining what exactly a railroad right-of-way is. When I hear the term ROW, I envision an easement. But as we all know there are some things out there that sound like easements but aren’t actually easements. The government argues here that these railroad ROWs were not easements in the traditional sense. However, nor were they fee simple strips of land given to the railroad. Instead they are some third category of property law that no one can quite figure out how to define. A surface defeasible fee subject to a reverter perhaps? Let’s break it down.

If it’s an easement: The federal government gives the railroad an easement through public land. The common law rules of easements apply. This means that when the railroad abandons the track in the 1980s (or whenever it was), the easement is extinguished and full unencumbered fee simple title goes back to the underlying landowner. This particular parcel is no longer federal land because the Forest Service swapped it with the Brandt family. Traditional run of the mill easement law tells us that the Brandt family (owner of the servient estate) should have this land with no dominant easement holder left around to bug them (or ride bikes through their property). This is what Brandt’s attorney argues. Not argued, but hinted at by Justice Sotomayor is that the easement holder was really the US and it temporarily transferred its easement rights to the railroad. Now that the railroad is done, it can keep using the easement for similar (transportation) uses through the Forest Service bike trail.

If it was a patent (i.e., fee simple absolute): The federal government gave the railroad a strip of land and the railroad owned that strip (or spaghetti noodle as the court seemed to like envisioning it). This would mean that the railroad owns the land for any purpose and once it stops using the railroad tracks for trains, it could use them for something else or it could sell them to the underlying landowner (or lose ownership via adverse possession if it stands by and does nothing while the forest service or underlying landowner makes use of the land). No one actually argues that the railroad had an unrestricted fee simple though. Instead, it might be that they had a type of defeasible fee (starting to give you flashbacks of your 1L property class yet?). That’s right, the railroad had a fee interest subject to the possibility of reverter. That is, the federal government had a reversionary interest and would get the land back if the railroad stopped using it for railroad purposes.

Now of course, it is not as simple as just reading over the grant to the railroad and figuring out what it said. Instead, we have several wrinkles. For example, there is an 1922 Act (postdating the grant to the railroad) explaining that when the railroad stops using the land for railroad purposes and it reverts to the feds, the feds should first use the land for roads and streets, then consider giving to municipalities, and if that doesn’t pan out give the land to neighboring landowners. There is a more recent statute adjusting that order of priority, but these statutes sure make it sound like the US had a reversionary interest. Of course, Justice Scalia pointed out that he doesn’t care very much about how a subsequent Congress interpreted the railroad’s property right. He is only interest in looking at the 1875 Act enabling grants of ROWs the railroad to try and figure out the property right.

There are some cases muddying the water including a 1942 case interpreting the 1875 Act, concluding that the railroad in question there had not gotten subsurface rights and instead had gotten something akin to an easement.  

There is also the tricky part of the land conveyance to the Brandts. The Forest Service swapped some land with Brandt’s father back in 1976. While the land conveyance noted the railroad’s ROW, it did not mention any reversionary interest. Leading the Brandts (quite reasonably) to believe that the ROW was just a standard run of the mill easement. Can an underlying federal law be in trouble where the forest service neglected to mention it in a land conveyance? Perhaps Brandt’s property lawyer should have researched more and tried to determine what was really going on…

The oral argument in this case is fun for land geeks, especially those of us who teach or study property and/or federal lands. The Court seemed particularly interested in figuring out how much lands the feds own and how much has been converted to other uses -- and what the implications of allowing such reversions would be. Several justices pushed the parties to try and explain how many acres or how many landowners were at stake. No one dared to put forth an estimate. I actually laughed out loud when the justices were shocked that the federal government didn’t keep good track of its land holdings and dispersals. They are so cute sometimes.

 

Professor's Corner on Koontz

This month's ABA Real Property "Professors' Corner" teleconference will focus on Koontz, the end-of-Term exactions that is one of the most significant Supreme Court property-rights cases in recent years.  (Jessie Owley has discussed it here, and Tim Mulvaney and others have weighed in around the net).  This Professor's Corner session should be a good one with several leading scholars participating.  Here's the announcement:

Professors’ Corner:  Wednesday, July 10, 2013:  Koontz v. St. John’s River Water Management District:  A Significant Victory for Property Rights?

Professors’ Corner is a monthly free teleconference sponsored by the ABA Real Property, Trust and Estate Law Section's Legal Education and Uniform Laws Group. Each month’s call features a panel of law professors who discuss recent cases or issues of interest to real estate practitioners and scholars.   Members of the AALS Property Section are invited to participate in the call (as well as to join and become involved in the ABA Real Property, Trust and Estate Law Section).

Wednesday, July 10, 2013

12:30 p.m. Eastern time (11:30 a.m. Central, 9:30 a.m. Pacific). Call is ONE HOUR in length.

Call-in number: 866-646-6488

Passcode: 5577419753

This program will feature a roundtable discussion breaking down the Supreme Court’s important June 25 decision in Koontz v. St. John’s River Water Management District. If “monetary exactions” have always seemed a little untamed to you, you’re not alone. The 5-4 decision in Koontz leaves a lot of room for analysis, and this month’s panel is prepared to guide you through it by parsing the decision and the dissent.  Our distinguished panel will include Professor Jonathan H. Adler, who is the Johan Verheij Memorial Professor of Law and Director of the Center for Business Law and Regulation at Case Western Reserve University School of Law; John D. Echeverria, Professor of Law at Vermont Law School; and David L. Callies, who is the Benjamin A. Kudo Professor of Law at the University of Hawai’i. 

For those that haven’t already seen it, here’s a link to the opinion:

http://www.supremecourt.gov/opinions/12pdf/11-1447_4e46.pdf

Please join us Wednesday for this great program!

Matt Festa

Blumm & Erickson on Wild Lands Policy in the Twenty-First Century

Michael C. Blumm (Lewis & Clark) and Andrew B. Erickson (Lewis & Clark) have posted Wild Lands Policy in the Twenty-First Century: What a Long, Strange Trip It's Been.  The abstract:

The protection of federally owned wild lands, including but not limited to designated wilderness areas, has long been a cardinal element of the American character. For a variety of reasons, designating wild lands for protection under the Wilderness Act has proved difficult, increasingly so in recent years. Thus, attention has focused on undesignated wild lands, that is, unroaded areas managed by the principal federal land managers, the U.S. Forest Service and the Bureau of Land Management (BLM). These areas can benefit from a kind of de facto protected status if they are Forest Service areas that have been inventoried for wilderness suitability and not released to multiple use or are wilderness study areas managed by BLM. In the last two decades, considerable controversy has surrounded roadless areas in both national forests and BLM lands because protecting their wild land characteristics may foreclose development, such as oil and gas leasing or timber harvesting. Recently, the courts have settled longstanding litigation by upholding roadless rule protection in the national forests. But BLM wild land protection has remained more unsettled, as Congress recently rejected a Wild Lands Policy adopted by the Obama Administration. Despite this political setback, current policy is to survey and consider wild lands in all BLM land plans and project approvals. This promised consideration, however, leaves the fate of such lands in the hands of local BLM officials and to the political vicissitudes of future administrations. 

This article traces the evolution of federal wild lands policy from its beginnings in the 1920s to the enactment of the Wilderness Act in 1964 and the Federal Land Management and Policy Act in 1976 to the longstanding dispute over the Forest Service's roadless rule to the present controversy over BLM wild lands policy. We maintain that, pending congressional decisions on wilderness status, the best way to protect wild lands in the 21st century is through administrative rule, as in the case of national forest lands. Such protection, however, will require at least acquiescence from Congress, which has not been evident in the case of BLM lands in recent years.

Matt Festa