Strategies for Funding Farmland Preservation
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1 Strategies fr Funding Farmland Preservatin PA Farmland Preservatin Assciatin Spring Cnference May 2009 Envirnmental Finance Center University f Maryland
2 Financing Truths It is cheaper t prtect than t restre Taking actin tday is cheaper than taking actin tmrrw There is nt, has never been, and never will be enugh grant mney public r private t fund natural resurces prtectin and restratin, including farmland preservatin Envirnmental Finance Center University f Maryland
3 Effective Financing Strategies Cmmunity-based, incrprating all stakehlder grups Integrated, cmbining a variety f surces, instruments, and institutins Mirrr the resurce, incrprating multiple landwners, land uses, and landscapes Envirnmental Finance Center University f Maryland
4 Cmpnents f a Financing Strategy Revenue Generatrs Grants, lans, technical assistance prgrams Sustainable, dedicated revenue streams (taxes, fees, surcharges) Cst Reducers Effective, enfrced regulatins Partnerships Crdinatin with ther cmmunity prgrams and pririties Envirnmental Finance Center University f Maryland
5 Assessing the equity, apprpriateness, and stability f a revenue surce Hw much mney will the surce generate? Will the revenue grw at a rate similar t the grwth in value f remaining farmland? Hw difficult will it be t btain vter apprval fr the revenue surce? Des the mechanism maximize the rati f winners t lsers? Can it be spread ver a brad base t minimize negative impacts per capita? Hw predictable and secure is the funding surce? Des the funding technique have a strng cnnectin t agriculture? Surce: American Farmland Trust and the Michigan State University Land Plicy Institute Envirnmental Finance Center University f Maryland
6 Case Study: Franklin Land Trust, Western MA Lmis Farm plans t purchase farmstead fr 40-lt subdivisin Partnered with state s affrdable husing prgram Used limited develpment ptential strategy t imprve financial viability f prject withut lsing cre cnservatin value Envirnmental Finance Center University f Maryland
7 Case Study: Acme Twnship, MI Vters passed a 10 year, ne mill prperty tax increase fr agricultural cnservatin, pen space, and farmland acquisitin in 2004 Yield: $2.5 millin ver the 10 year perid Extensive ne-n-ne resident educatin Funds used t hire farmland preservatin specialist in partnership with Peninsula Twnship Envirnmental Finance Center University f Maryland
8 Case Study: Granville Twnship, OH Open Space Levies mill levy (renewed nce, up fr secnd renewal) mill levy (renewed nce) Twnship receives $700,000/yr frm the levies dedicated t Open Space Prgram Prtectin f ag lands is ne f the prgram gals Open Space advisry grup guides twnship trustees Envirnmental Finance Center University f Maryland
9 Case Study: Cacapn & Lst Rivers Land Trust, WV 30 cnservatin easements prtecting 9,000 acres in the watershed Diverse financing strategy: Dnated easements Partnerships Ptmac Land Cnservancy State f WV Highway Mitigatin Prgram Vluntary surcharge fr summer campers Envirnmental Finance Center University f Maryland
10 Case Study: Tecumseh Land Trust, Yellw Springs, OH Land Trust prtects abut 10,000 acres via cnservatin easement Mst f OH land is divided int acre farms (sme cunties lsing 1,100 acres per year t residential develpment) Apprximately 40 businesses in the regin participate Envirnmental Finance Center University f Maryland
11 Case Study: Eight-Year Prgram (MAFPP), NJ Vluntary Landwners deed-restrict farms t agricultural use fr 8 years Makes them eligible fr: Matching grants fr sil and water cnservatin prjects Additinal prtectin frm eminent dmain, energy and water restrictins Gd way t start new agricultural districts Benefit PDR applicatins Envirnmental Finance Center University f Maryland
12 Case Study: Lrain Cunty, OH Creatin f Jint Ecnmic Develpment District (JEDD) Lrain Cunty Pittsfield Twnship City f Oberlin 20% f the twnship utside f the city limits designated as develpment zne Twnship receives a share f Oberlin s tax receipts fr 50 years Envirnmental Finance Center University f Maryland
13 Case Study: Planning Incentive Grant (PIG), NJ Seeks t cnserve cntiguus farms Preferably funded by innvative financing: Installment payment (preference given t lngterm payut plan) Optin agreements Dnatins Bargain sales Prvides fr pssibility f nearly instantaneus stabilizatin f an agricultural district Envirnmental Finance Center University f Maryland
14 UMD study (Duke & Lynch 2006) Rights f First Refusal Term Cnservatin Easements Land Preservatin Tntines Agricultural Cnservatin Pensin Envirnmental Finance Center University f Maryland
15 Rights f First Refusal Lets agencies match ffers agricultural landwners receive frm develpers Only parcels actually threatened are targeted Gvernment can resell land fr agricultural use with an easement attached Drawbacks: Threat f cllusin Develper animsity Envirnmental Finance Center University f Maryland
16 Term Cnservatin Easements Gvernment r nnprfit pays landwner a rental fee fr a temprary easement Set f activities prhibited fr a set perid f time May be an effective, temprary slutin in a rapidly develping area Envirnmental Finance Center University f Maryland
17 Land Preservatin Tntines Premise: Cnversin f neighbring farmland reduces the efficiency f remaining farmers Thus, neighbrs enter int a land preservatin tntine t prvide an incentive fr keeping land in agricultural use Tw pssible mdels: Claims t fund that wners frfeit upn cnversin r Claims t a penalty that cnverting wners pay t thse wh stay As pl f wners shrinks, payuts rise and the last wner wins (i.e. incentive t keep land) Essentially a cntract amng landwners, nt between landwners and gvernment Envirnmental Finance Center University f Maryland
18 Agricultural Cnservatin Pensin Premise: land = retirement fund Guarantees retirement incme t farmers wh attach an easement t their land Expected value f pensin may > expected returns t selling the land Annuity versin: pensin runs with the land rather than the wner Owner versin: payments tied t individual/cuple Envirnmental Finance Center University f Maryland
19 Up fr discussin What d yu see as bstacles t the use f Installment Purchase Agreements (IPAs) in PA? Hw well has the farmland preservatin cmmunity cnnected with the lcal farms = lcal fd trend? Culd yu share yur experiences with any f Duke & Lynch s 4 strategies: ROFR, Term Cnservatin Easements, Tntines, r Agricultural Cnservatin Pensins? Envirnmental Finance Center University f Maryland
20 Prtecting Land Cnservatin Funding in Tugh Ecnmic Times 1. Cmmunicate 2. Anticipate the prblem 3. Mnitr the state budget 4. Frm alliances 5. Gather grassrts supprt Envirnmental Finance Center University f Maryland 6. Develp relatinships with state legislatrs 7. Develp an effective message 8. Create n-line advcacy netwrk 9. Develp gd relatinships with media and use them 10. Cmprmise Surce: The Cnservatin Fund, 2003
21 Megan Hughes, MEM Prgram Manager The Envirnmental Finance Center University f Maryland Cllege Park, MD mhughes3@umd.edu Envirnmental Finance Center University f Maryland
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