Open Space Preservation Program

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1 Open Space Preservation Program Open Space Purchase of Development Right Program Deadline: June 1, 2016 at 11:00 a.m. Ingham County Purchasing Department c/o Farmland and Open Space Preservation Board 121 E. Maple 2 nd Floor P.O. Box 319 Mason, MI Applications must be received in a sealed envelope! Section I Landowner Information Ingham County Farmland and Open Space Preservation Board P.O. Box 319 Mason, MI (517) Name (list all) (include all persons recorded on the deed(s), i.e. spouses, partners, siblings, parents etc.) (preferred form of communication) Address Telephone (Street/Rd) (City) (State) (Zip) (Daytime) (Evening) (Cell) Section II Property Information 1.) Do you own all mineral rights on the Nominated Property? If No, who owns them? (name) (address) (phone) 2.) Is the nominated property already restricted from being developed? (yes / no) If yes, please explain 3.) Tax Parcel ID # and acreage for each: Acres: Parcel ID Number: / / / / / 1

2 4.) How is your land currently zoned? (circle one) Agricultural Agricultural Residential Residential Commercial Commercial/Industrial Other 5.) Do you have a USDA/NRCS Soil Conservation Plan? If yes, what year was it developed? 6..) To the best of your knowledge does the property border water on any side? No: Yes: If yes, approximately how many feet of frontage borders the property? 7.) Is the nominated property in the 100-year flood plain? No: Yes: If yes, approximately how many acres are in the 100-year flood plain? 8.) To the best of your knowledge, is the property a wetland? No: Yes: If yes, approximately how many acres are wetland? 9.) To the best of your knowledge, is any of the land an aquifer recharge area? No: Yes: If yes, approximately how many acres are in the aquifer recharge area? 10.) How many acres of the nominated property is forestland? 11.) How many acres of the nominate property is shrub land, grassland etc.? 12.) To the best of your knowledge, are there any rare or endangered species on the nominated property? No Yes If yes, please describe: 13.) Are there any geologically important features present on the property, i.e. No: Yes: If yes, please describe: 14.) Please describe any scenic value the property may have: 2

3 Section III. Certification All (deeded) landowners must sign the application. I certify that the statements made above are a true and accurate representation of the facts regarding the nominated property. X Print Name Date X Signature X Print Name Date X Signature (signature of applicant(s) 3

4 Ingham County PDR Application Parcel Worksheet (RETURN WITH APPLICATION) Parcel ID Township Acres Tillable Acres Wood Acres (if any) Type of Ag Practiced (if applicable) Cash Crop, specialty, Christmas trees, livestock, # of head Block Application (include all parcels applying together as a block) Parcel ID Township Acres Landowner Name Address 4

5 INGHAM COUNTY FARMLAND AND OPEN SPACE PRESERVATION BOARD P.O. Box 319, Suite 104, Hilliard Building, Mason, MI Ph: Fax: Dr. Paul K. Kindel, Chairperson Dr. Gabriel Biber, Vice-Chairperson Dr. Kirk Heinze, Secretary Laurie Koelling, Treasurer Members Dr. Kirk Heinze Wendy Villarreal Jeanie Igl Gabriel Biber Dr. Paul K. Kindel Laurie Koelling Randy Maiville To: Interested Landowner From: Ingham County Farmland and Open Space Preservation Board Date: February 28 th, to June 1 st, 2016 (open application period) Re: Request for Information on County PDR program and a PDR application We are pleased with your interest in the Ingham County Farmland and Open Space Preservation Program. The following enclosed items will provide you with information about the program: Ingham County Open-Space Preservation Application Form Parcel Worksheet Steps to Completing the Ingham County Purchase of Development Rights Application What is a PDR Program? Ingham County PDR Program: Potential Questions and Answers Selection Criteria for Open Space Land Preservation Program After reading the enclosed material, fill out the application and send it to the following address along with all related material by the application deadline of June 1, 2016 at 11:00 a.m.: Ingham County Purchasing Department c/o Farmland and Open Space Preservation Board 121 E. Maple 2 nd Floor P.O. Box 319 Mason, MI Applications must be received in a sealed envelope! The Farmland and Open Space Preservation Board will host a work session for landowners who wish to apply to the County PDR program and want additional assistance filling out the application. You will receive a postcard in the mail notifying you of the date, time and location of the workshop. The Ingham County Farmland and Open Space Preservation Board will score and rank all applications received. After all applications have been scored, you will receive notification of the status of your application. Again, we are delighted with your interest in the Ingham County Farmland and Open Space Preservation Program. Contact the Board office by at ( is preferred) or Stacy Byers at (517) , or Jessica Huegli at , or Christian Smith at if you have any questions. 5

6 Steps to Completing the 2016 Ingham County Purchase of Development Rights Application Application Deadline: June 1, 2016 at 11:00 a.m. Step 1: Step 2: Step 3: Read through all materials. Many of the questions you may have are answered in the written material provided. This section will give you a background of the PDR Program in Michigan. Fill out the application as best you can. Be sure to print clearly. If you don t know answers to some of the questions, simply indicate you are unsure. However, the more information we have, the better, even if you are unsure whether it is pertinent or not, it will still be helpful. You will be asked to provide supporting documentation such as recent tax bills for a current legal description. Be sure to include all applicable documentation before submitting the application. Items to be submitted with the application Current tax bill for all applicable parcels Completed Parcel Worksheet Copy of PA 116 contract number (if applicable), wetland verification (if applicable) Before you turn in the application make sure you have. Signed the application in all applicable places. Included a current tax bill for all applied parcels. Application Deadline: June 1 st, 2016 by 11:00 a.m. Ingham County Purchasing Department c/o Farmland and Open Space Preservation Board 121 E. Maple St., 2 nd Floor P.O. Box 319 Mason, MI Applications must be received in a sealed envelope! 6

7 I What is a Purchase of Development Rights Program? A purchase of development rights (PDR) program is a means of compensating landowners for their willingness to accept a deed restriction on their land that limits future development of the land to preserve its natural and open space value. Landowners are compensated for the fair market value of their land, based on the difference between what it can be sold for on the open market with no restrictions and what it can be sold for once an easement is placed on the land. State certified appraisers determine these values and the agreement is negotiated on an individual basis with the landowner in a willing seller, willing buyer atmosphere. Permanent protection of natural land community benefits from the increased resiliency and health of local ecosystems, stable land use patterns, fewer infrastructure needs, lower cost of community services and from enhanced rural character. Participation is completely voluntary and landowners receive fair market value for development rights. All private property rights remain intact. Cash from sale of development rights can be used for reducing debt, managing the land, college educations, retirement, etc. Proceeds from easement sales are often recycled back into local economy. Landowner can access portion of land equity while still maintaining ownership and use of land and without having to sell it for development. Property taxes and inheritance taxes based only on residual value of the land rather than the full developmental value. Landowner can still borrow against reduced equity in their land. Other states track records show remaining land retains excellent (and increasing) resale value. 7

8 Ingham County Open Space Preservation Program Frequently Asked Questions What is Open Space? Open space means different things to different people. For the purposes of the Ingham County Open Space Preservation Program, open space land is natural land or farmland or a combination of these. Natural land is undeveloped, uncultivated, non-agricultural land. Farmland is land used for agriculture. Open space land may be public or private. Why is it important to conserve open space land? Natural open space lands have functioning natural ecosystems that yield clean air and clean water. These lands also allow native plant and animal to thrive. In addition they provide recreational opportunities, such as hunting and wildlife observation, and aesthetic beauty. Protection of farmland allows the agricultural industry to thrive thereby providing local food and local jobs. Protecting these types of land enhances the quality of life for all citizens of the county. How is Open Space Protected? Open Space land is protected by placing a conservation easement on the land in perpetuity. Landowners are compensated for the fair market value of their land, based on the difference between what it could be sold for on the open market and no restrictions for development purposes, and what it can be sold for with development restrictions. After an agreement is reached with the landowner, a conservation easement is executed, protecting the land for future generations. Once the easement is in place, the landowner still owns the land, retains all private property rights, can sell the land or pass it onto heirs, and has been fairly compensated for not exercising the development rights. What Is a Conservation Easement? A conservation easement is a written legal agreement between a landowner and a government entity or land conservancy (a private, non-profit conservation organization) that permanently restricts a property s uses to protect its conservation values. Landowners own many rights associated with their property, such as the rights to harvest timber, build structures, and so on. Each of these rights has a monetary value that can be established by real estate appraisers and is recognized by the Internal Revenue Service ( IRS ). When landowners (also called grantors or, in some cases, donors ) donate or sell an easement to a land trust or municipality (also called grantees or easement holders ), they continue to own the property and pay taxes on it, but they permanently give up certain, agreed-upon rights. Compare: When landowners convey property in fee simple, they transfer all of the ownership rights. For example, the landowner might give up the right to build additional houses, while retaining the right to harvest crops. If the landowner has children who may want to live on the property in the future, or if the landowner is not willing to give up all future building rights on the property, an easement could carve out from the development restrictions a limited number of building lots called exemptions that could be built on it in the future. Under this limited (or conservation-based ) development scenario, easements would be placed on the most scenic and environmentally sensitive areas. The easement also might require the landowner or the easement holder to take certain actions, such as restoring a stream bank or removing invasive vegetation. Future owners will be bound by the terms of the easement, which is recorded at the County Register of Deeds Office. The holder of the easement takes on the legal responsibility and right to enforce the easement. If a future owner or other person violates the easement perhaps by building a structure the easement does not permit the easement holder will work to have the violation corrected, if necessary, through legal means. 8

9 What are the property tax implications of accepting a Conservation Easement? Income tax: If the landowner donates or partially donated the value of the conservation easement to the accepting organization, the donor may be eligible to take a deduction on their federal income tax. As long as certain Internal Revenue Service Requirements are met, the reduction in market value attributable to a donated easement may be considered a charitable donation that makes the landowner eligible for a federal income tax deduction and estate tax benefits. Consult a tax advisor about such a donation. Property tax: Since the property that has a conservation easement on it cannot be fully used or developed as zoning would otherwise allow, its market value is lessened. This, in turn, may lower the assessed value of the property, which could have positive tax consequences for the owner. Rights Typically Retained by Landowners As noted above, the landowner continues to own the land conserved by an easement and retains many rights of use. An easement document might specify, for example, that the owner reserves the right to: use, maintain, and expand an existing residence; manage woodlands for timber production or conduct a Christmas tree operation; and/or all other rights and enjoyment of the property Restrictions Typically Placed on Properties A landowner s use of property conserved by an easement might forbid or limit: excessive signage; commercial, industrial, and mining activities; new buildings, except for those specifically negotiated in advance; subdivision; and/or commercial recreational use (this prohibition is required to obtain federal estate tax benefits). Will you respect property rights? The Ingham County Open Space Program respects private property rights and local jurisdictions and will only work with willing landowners, communities and partners to promote voluntary open space protection. Why would landowners voluntarily restrict their property rights? The primary reason is that they love their land. Although they might be responsible stewards of their property, they generally have no control over what subsequent owners will do with the site. Easements permit these conservation-minded landowners to control how the property will be used in perpetuity, no matter who the future owners are. Another important reason that landowners turn to conservation easements is that donations, bargain sales, or bequests of easements can have beneficial tax consequences. In some cases, sale of a conservation easement nets the landowner the same amount as selling to a developer AND helps keep the land in the family. How does the public benefit? Conservation easements on natural land and farmland combat sprawl development and in so doing reduce tax money needed for roads, schools, police, fire protection and other public infrastructure, and help maintain a sense of community in urban and suburban areas. Conservation easements protect rural landscapes and provide the aesthetic beauty sought by citizens. Easements can be placed on private land surrounding public parks to create visual and habitat buffer areas. In addition, 9

10 protecting open space land provides recreational opportunities for all citizens, both urban and rural. In short, protecting open space land helps maintain a community s qualify of life. Can easements ever be changed? No. Once the conservation easement is recorded at the Register of Deeds Office no alterations or changes may be made. Open Space Conservation Easements ride with the deed in perpetuity. Can easements ever be terminated? Although most conservation easements are granted to run in perpetuity, easements can be terminated under certain circumstances, many of which are not under the control of the grantor or grantee. Easement restrictions may be terminated by condemnation of the underlying land by a government agency. IRS regulations require the easement document to address the distribution of proceeds that result from the condemnation. Easement Pros and Cons For the County and/or Township: Easements are flexible tools. They can be written to achieve specific goals such as preserving scenic view sheds along a country road. Easements are perpetual. The restrictions will remain in force even when the property changes ownership. Easements can conserve scenic beauty and environmentally sensitive areas at a lower cost to the municipality than fee simple acquisition. Eased property remains on the tax rolls. Responsibility for maintaining the eased property typically remains with the landowner, yielding an additional savings to the municipality over fee simple acquisition. Easements may increase property values on surrounding properties. For the Landowner: Landowners can be assured that the eased portions of their property will be conserved forever. Easements remain in force even when political leadership and zoning ordinances change in the municipality. Placing a conservation easement on the property may significantly lower estate taxes. The tax savings could spell the difference between being able to keep the land in the family and needing to sell it to pay estate taxes. An easement may lower property taxes due to a reduction in the property s assessed vaue. The easement may provide significant federal income tax benefits if the landowner donates the easement to the municipality or land trust (rather than selling it at fair market value). The reduction in an eased property s market value may be partially made up for through money gained from sale of the easement and/or through tax savings. A combination of conservation easements and limited development on the property may well provide a net gain to the landowner equivalent to an outright sale to a developer who fully develops the property. Landowners can continue to live on their properties and may sell it or pass it on to heirs. An easement can be tailored to a landowner s particular needs by using exemptions (such as reserving three acres for a future residence for the landowner s heir or keep out an existing home or structure). 10

11 (last revised February 9 th, 2016) Selection Criteria for Open Space Land Preservation Program 2016 Application Cycle ) Tier I Criteria Sections Ecological, scenic, geological criteria 56 points Property size and location criteria 70 points ECOLOGICAL, Maximum Total Points SCENIC, GEOLOGICAL 126 CRITERIA points (60 points) I. ECOLOGICAL, SCENIC AND GEOLOGICAL CRITERIA (Maximum 56 POINTS) 1. Potential Conservation Area(s) (from the Greening Mid-Michigan Project) maximum points: High Potential 10 points 2. Medium Potential 8 points 3. Low Potential 6 points Example: parcel fall within a Medium Potential Conservation Area = 8 points 2. Water quality values 1. Riparian land maximum points: 5 Property with a water frontage of 200 linear feet or greater receives 5 points. Points for a property with water frontage of less than 200 linear feet are: 5 x linear feet of water frontage/200 = points. Example: parcel has 75 feet of water frontage on the Red Cedar River: 5 x 75 = 375/200 = points 2. Land in the 100-year flood plain maximum points: 8 Property that is 100% in the flood plain receives 8 points. Points for a property with less than 100% in the flood plain are: 8 x percent in flood plain = points. Example: 20 acres of an 80 acre parcel is in the 100-year flood plain: 8 x 25/100 (20/80 = 0.25) = 200/100 = 2 points 3. Wetlands, including buffer area maximum points: 4 Property that is 100% wetland receives 4 points. Points for a property with less than 100% wetland are: 4 x percent in wetland = points. Example: 5 acres of an 40 acre parcel is wetland: 4 x 12.5/100 (5/40= 0.125) = 50/100 =0.5 points 4. Aquifer recharge land maximum points: 8 Property that is qualified by the MSU RS&GIS model as aquifer recharge land will receive points based on the following formula; Eight x percent aquifer recharge land = points. Example: 10 acres of a 20 acre parcel is aquifer recharge land: 8 x 50/100 (10/20= 0.50) = 400/100 = 4 points 3. Habitats 1. Forestland maximum points: 5 Property that is 100% forest land receives 5 points. Points for a property with less than 100% forest land are: 5 x percent in forest land = points. Example: 15 acres of a 20 acres parcel is wooded: 5 x 75/100 (15/20 = 0.75) = 375/100 = 3.75 points 2. Others grassland, shrub land, etc. maximum points: 3 Property that is 100% in other types of natural habitat receives 3 points. Points for a property with less than 100% in other types of habitat are: 3 x percent in other types of habitat = points. Example: 10 acres of a 15 acre parcel is grassland: 3 x 66/100 (10/15= 0.66) = 198/100 = 1.98 points 4. Rare species maximum points: State and federal threatened and endangered species on the property Up to 10 points may be given depending on rarity category; the higher the rarity category the more points given. Example: Parcel has a Copperbelly water snake on the property: =10 points 11

12 5. Physically (geologically) significant features maximum points: 3 Up to 3 points may be given. Example: property has a terminal marine. II. PROPERTY SIZE and LOCATION CRITERIA (Maximum 70 points) 6. Parcel size maximum points: 25 Parcels of 100 acres or greater receives 25 points. Points for a property of less than 100 acres are: 25 x acreage of parcel/100 = points. Example: Parcel is 40 acres in size: 25 x 40 = 1000/100 = 10 points 7. Proximity to Designated Population Center in Ingham County (As Defined in Regional Growth: Choices For Our Future, Summary Report, Tri-County Regional Planning Commission, Sept. 2005) maximum points:30 Farm boundary is 1 mile from, or within the population center 30 points Farm boundary is within 1 to 2 miles from population center 25points Farm boundary is within 2 to 3 miles from population center 20 points Farm boundary is within 3 to 4 miles from population center 15 points Farm boundary is within 4 to 5 miles from population center 10 points Farm boundary is more than 5 miles from population center 0 points Example: Parcel is located 2 miles from designated population center. Total points= 25 points 8. Location with respect to other protected property maximum points: 10 Permanently protected land is property with a conservation easement or a deed restriction that permanently prohibits development on the property. Linear distance is from nearest land boundaries. Property is adjacent to protected land 10 points Property is not adjacent but within 1/2 mile of protected land 8 points Property is not adjacent but within 1 mile of protected land 6 points Property is not adjacent but within 2 miles of protected land 4 points Example: Parcel is within 1 mile of an already protected property = 6 points 9. Road frontage (paved or gravel) maximum points: 2 Road frontage of 1320 feet (1/4 mile) or greater receives 2 points. Points for road frontage of less than 1320 feet are: 2 x feet of road frontage/1320 = points. Example: Parcel has 500 feet of road frontage: 2 x 500 = 1000/1320 = 0.76 points 10. Block applications maximum points: 3 Properties applying in a block application must be contiguous (they may be separated by a road). Each applicant in the block application will receive the stated points. Two or more landowners applying together and submitting 300 or more contiguous acres each receives 3 points. Points for two or more landowners submitting less than 300 acres are: 3 x number of contiguous acres submitted/300 = points. Example: Parcel is applying with three other landowners to make a 450 acre block of land: 3 x 450 = 1350/300 = 4.5 therefore the points received are 3, the maximum. Note: If only one property in a block application is preserved, the remaining landowners will continue to receive full points for this section of the scoring criteria in future cycles, provided the remaining landowners still wish to participate in the block application. MAXIMUM TOTAL TIER I POINTS POSSIBLE 126 Applicants note: Landowners who accept federal, state or local matching funds to protect their open space land may be selected for the program before landowners who do not accept such funds, regardless of their relative ranking based on the above Selection Criteria for Protection of Open Space Land. 12

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