PDRs give taxpayers much in return

By JOHN TORINUS

February 21, 2007

As the April 3 referendum approaches for the preservation of land and water resources, there is a lot of both good and bad information floating out there.

This is understandable, because PDRs - purchase of development rights - are a relatively new tool for preservation in the Midwest.

It’s not like the use of easements (the essence of a PDR program) hasn’t been around for a while. The first one I experienced was right here in Washington County. Back in 1984, the Cedar Lakes Conservation Foundation (CLCF) bought the development rights on 16 acres of property known as Fox Hill. The Milwaukee Ski Club continues to own the land, but there is an easement that restricts development in perpetuity.

As one wag said, "Perpetuity is a long time."

The price of the PDR on the 16 acres was $15,000. That wouldn’t cut it today. That land, augmented by another CLCF purchase of surrounding lands, is now home to 8 kilometers of Nordic skiing and hiking trails. It gets intense use.

So, there’s an example of how PDRs work. The Fox Hill kame, one of the distinctive geological features of the county, has been permanently protected. And the Milwaukee Ski Club, which, incidentally, dates back to 1903 when it was named the Scandinavian Ski Club, is happy with the arrangement.

Farm land preservation would work much the same way.

The land owner, sometimes a farmer, sometimes not, voluntarily sells the development rights, but keeps the land, which is restricted to farming or to other allowable noncommercial uses in perpetuity.

Contrary to some of the scuttlebutt out there, the whole program is neutral to farmers in terms of money. Some critics say the PDR program is nothing but a sweetheart deal for "rich farmers."

First of all, I don’t know any "rich" farmers. They may be land "rich," but most are cash poor. If farming is so lucrative, as the critics (often city boys) insist, why are so many farmers getting out of farming?

And, why do so many have second jobs? (We have a bunch of those very hard-working folks at Serigraph.)

Second, if the farmer does decide to cash in on his or her land assets, it is a horse apiece whether the sale goes to a developer or to a PDR program run by the county or a land trust.

Let’s take a simple example. Say a farmer owns 100 acres, and a developer makes an offer of $10,000 an acre. The farmer would get $1 million. Pretty hard to turn down, especially if the farmer is near retirement.

What the PDR program does in this situation is to offer the farmer an alternative.

Say, also, that the value of the land as farm land is $5,000 an acre. The county or land trust steps in and offers to buy the difference, namely $5,000 an acre.

If the farmer chooses to sell the development rights for $5,000 an acre, he gets a check for $500,000. That’s the retirement money. But, the farmer still owns the farm land at $5,000 an acre.

So the farmer gets the $1 million one way or the other. It’s either $1 million in cash from the developer or a combination of $500,000 in cash and $500,000 in retained farm land.

But the citizens of the county, also the taxpayers, get a lot for their investment of $500,000 in the deal. They get:

- Lower property taxes, because residential developments almost always raise municipal costs beyond what the property taxes bring in. Note: rural tax rates are always lower than urban rates.

- The rural character of large parts of the county is saved.

- Prime soils, which we all know will be precious for future generations, are saved.

- An option is kept open for the coming biomass fuels.

- The important farm economy is affirmed. The farm with a PDR easement can be sold to a young farmer at a price that allows him or her to make it. All the spin-off jobs from food production are also protected.

- Hunters and fishers, snowmobilers, bikers and hikers keep the habitat necessary for their recreational pursuits. Critters need habitat.

- Underground water sources continue to be recharged, a huge issue in a county where wells are having to be drilled deeper and deeper. Germantown is now past 1,200 feet. Blacktop prevents recharge.

As for questions on the funding, the $800,000 being proposed is not a lot of money, but it must be matched by private, state or federal funds. For instance, the federal Farm and Ranch Lands Protection program has already provided funds to buy PDR easements on 10,800 acres in Wisconsin. At two times $800,000, or $1.6 million, the Washington County program, that would be a great start.

The $800,000 is less than 10 percent of the county sales tax, which was put into place for capital investments, not county operating costs. If ever there were a capital investment with a huge payback, preserving our prime farm lands sure looks to be such an investment.

 

(John Torinus is CEO of Serigraph, Inc. in West Bend and a past general manager of the Daily News.)