Conservation Easements: “Century 21” of the Environmental Movement;IUCN and IRS

October, 2001

by Jay Zane Walley Lincoln, NM

The Nature Conservancy (TNC) owns a conservation easement (CE) that encumbers the small Wilson, Wyoming ranch belonging to former Minnesotans, Ken and Pat Snyder. They purchased the ranch in 1977 with the easement, one of the first in the state, attached to the property. “We had no idea what we were getting into! We didn’t really know what a CE could do to private property,” Ken explained in a telephone interview. “Looking back, buying this ranch is the worst decision we could have made. I’m 64, Pat is 65, and we’d simply like to sell it, but because of the easement, there are no buyers. We have had it listed now for seven years and can’t sell it.”

Ken further reported that after acquiring the ranch in 1977, they didn’t move from Minnesota until 1979. “When we arrived, we found that our ‘neighbors’ in an adjacent subdivision had cut six separate gates onto our land.” Because a CE was in place, they thought the land had become public property. Later a lot-line correction was needed to solve an [access] easement problem. “I was going to sell land to accomplish the adjustment,” Ken said, “but TNC refused to allow me to do so unless I gave up rights equivalent to the land that I would sell. They wanted me to give up the home sites reserved in the easement in return for them releasing the land.”

“The problems go on constantly,” Ken angrily remembers. “In 1982, TNC sent me a letter stating that we did not have proper haying machinery and that we weren’t taking care of our property to their standards. For instance, no snowmobile use is allowed on the property. We have a lake on our land that is in full view of the highway. It is dry part of the year, and the public, believes they have an input into how we manage our ranch, so they constantly call complaining about the lack of water and the fact they cannot see wild swans. This CE has not only made my property worthless, but also hell to live on!”

It is almost impossible for landowners like the Snyders to grapple with the colossal TNC and achieve a measure of justice. Any landowner faces an uphill battle against TNC’s immense assets. Their 1997 tax record indicate assets of $1.6 billion, including a book value of $784.5 million invested in nature reserves and CEs.

The non-profit organization’s tactics for acquiring property and rights, then reselling it at a profit have been questioned both by the US Government Accounting Office (GAO) and the private sector. According to a 1996 GAO report - Land Ownership: Information on the Acreage, Management, and Use of Federal and Other Lands - TNC acquired 3,051,730 acres and transferred 2,295,366 acres from July 1, 1964 through September 30, 1994.

As an example, TNC recently obtained CEs near Ebey’s Landing, Puget Sound, Washington. A June 2, 2000 press release announced, “The [WA State] Conservancy is supporting the Park Service’s request for federal Land and Water Conservation Funds for Ebey’s Landing. An appropriation of $2 million will enable the Park Service to purchase conservation easements from the Conservancy.”

In a 1992 report, Land Acquisition Conducted with the Assistance of Nonprofit Organizations - the Interior Dept’s Inspector General reported problems found with land acquisition between nonprofit organizations (The Nature Conservancy, Conservation Fund, and Trust for Public Land) and three federal agencies: Bureau of Land Management, US Fish & Wildlife Service, and National Park Service. The IG reported that non-profits reaped financial windfalls on Interior Dept land acquisitions.

This year, farmers on the Darby Creeks in Central Ohio have been unwilling to become “willing sellers.” Many refused to encumber their land with either TNC or USFWS conservation easements. They presented written testimony to the US House Resources Committee stating: “Our area is under threat of being declared a National Wildlife Refuge by the actions of currupt officials of the US Fish & Wildlife Service, acting in collusion with The Nature Conservancy, which is attempting to impose one of their restrictive ‘bioreserve’ projects on our farming community.”

The Maine News-Observer aptly observed, “Environmental groups in Maine are becoming as numerous and irritating as black flies, but one is emerging as the most wealthy and powerful of them all. TNC is called the Century 21 of the environmental movement because it has become the real estate broker for government. It’s time we find out more about this influential 50-state orgainzation. If TNC is going to continue to exercise its influence over public policy and tax dollars in the State of Maine, surely it’s reasonable for them to publicly disclose how they operate.”

The former Attorney of Texas, Dan Morales found out how TNC operates. After hearing evidence detailing TNC financial activities, he stripped them of the Texas tax-exempt status on February 28, 1997.

CEs were largely unheard of until the Tax Reform Act of 1976, except for small acquisitions of about 40 acres in North Dakota, which were committed in 1933 to the Biological Survey, the forerunner of the USFWS. These were called “small wetlands” and were non-productive farmland set aside for ducks.

There was one notable exception. In the early 60's hundreds of Cuyahoga Valley, Ohio residents voluntarily gave CEs on their land to the National Park Service. Over a period of years, NPS used these binding documents to force over 500 residents from their lands creating the Cuyahoga Valley National Recreation Area.

A concept of CEs as a tool for government and non-governmental organizations (NGOs) to control private land was advanced in a 1972 environmental law paper by the International Union for Conservation of Nature and Natural Resources (IUCN) in Morges, Switzerland. IUCN’s The Easement as a Conservation Technique, chapter two entitled “The Need for Conservation Easements in the United States” explains how governmental agencies can regulate private property without owning or paying for it, and suggests that CEs are a method for NGOs to achieve regulatory authority.

The IUCN document reads verbatim: “The Need to Regulate: Broadly speaking, the need for an approach like that permitted by conservation easements is occasioned by limited objective of land-use control, the achievement of which does not require assumption of full proprietary ownership of the land. This need arises for governmental agencies when the objectives are beyond their power to impose sufficient restrictions on property without compensation and in all cases for private organizations having no regulatory authority... In the United States it is the governmental need that is particularly acute because traditionally a choice must be made between a limited regulation, which may not be sufficient to the purpose, and acquisition of full title to land, which may not be necessary.”

The IUCN document further explains that CEs can be used to avoid expensive condemnation takings: “The United States federal and state constitutions require ‘just compensation’ to be paid to a landowner whose property has been expropriated or condemned for public purposes. The cost to the government for paying the full value of land (particularly in areas most critically in need of preserving for scenic purposes, namely, agricultural or undeveloped land located in prime areas for development) can be prohibitive; and, in addition to the high cost of acquiring full title, full acquisition may clearly not be needed to accomplish the governmental objective of preserving the land in its present state. On the other hand, if land is so situated as to be at once both ripe for development and in need of preservation for scenic or conservation purposes, the government may well be precluded from simply enacting a law to prohibit changing its natural state. This too is because the courts have held that the general rule is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. This rule perhaps reflects the strong disposition of American law toward development and economic exploitation of land.” [Emphasis added]

The Tax Reform Act of 1976 incorporated principles favorable to the IUCN vision of making the contribution of a conservation easement tax-deductible by the appraised amount of the donated easement.

Carol W. LaGrasse, Property Rights Foundation of America, in her research paper, Conservation Easements, A Critical Commentary contends, “Land trusts pressure property owners to sell below market and claim a tax deduction on their income tax return. It is widely said that inflated current appraisals are used to claim or decrease these deductions, and that the IRS ignores the inaccuracy of the inflated appraisals because of the influence of land trusts.”

Inflated appraisals and CEs based on false premises are a dangerous device. In future years when the IRS conducts an audit of tax deductions based on CEs and the property does not rise to the threshold of the tax code, the property owner, not the government agency or land trust, will be held responsible for back taxes and penalties.

Excerpts; Conservation Easements Part 5 and 6. By J. Zane Walley; Paragon Foundation


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