Ranch broker Woody Beardsley specializes in conservation land for sale in Colorado. As an expert in all things related to land conservation finance and easements, he offers his views on the potential of profitable conservation.
Colorado Conservation: An Opportunity for Profit
verb, protect from harm or destruction
noun, sweet food made by preserving fruit with sugar; jam
Sheltered in place during this first very weird week of the corona virus pandemic, I’m humored by the unobvious confluence of these two definitions and find myself inspired at the notion of the sweet fruit of protecting some gorgeous place from harm.
Just yesterday over the phone and via email, (Google Earth is still an amazing miracle to me), I found myself helping a landowner client understand and negotiate the terms of a Deed of Conservation Easement on a ranch he inherited from his father. With any luck, it will soon be recorded with the San Isabel Land Protection Trust, a small local land trust located in the spectacular Wet Mountain Valley that I’ve had the privilege of being involved with for the better part of 20 years.
When I reread that last paragraph, I realized it’s full of esoteric terms that perhaps I should explain.
What is a Conservation Easement?
noun, in law, a right to cross or otherwise use someone else’s land for a specified purpose
In real estate, a conservation easement is a lot like, (in fact just like), any other legal easement on a property. It is a form of deed restriction, usually a written document, that spells out specific prescriptions intended to preserve or enhance the ecological integrity of a piece of land.
And just like a public utility (electric, gas, water), rail road, highway department, or neighbor might hold a right-of-way easement for a power line, a pipeline, or road access across a portion of a property, a land trust or land conservancy will hold a deed of conservation easement.
A few examples of the kinds of prescriptions identified in conservation easements include:
- Building setbacks from creeks or rivers/riparian areas,
- Wildlife habitat protections (nesting/calving/winter ground),
- Safeguards on working landscapes (croplands and irrigated ground,
- And community viewshed protections.
Land trusts or land conservancies, are typically non-profit organizations set up with the specific task of owning and holding these rights, and seeing to it that they are lived up to or enforced over time, in perpetuity.
Many conservation easements entail a landowner either selling or giving away (donating) future development rights on their property to a land trust. The property can no longer be developed to the full extent otherwise allowed under current entitlement/zoning or law.
A landowner might do this because they see development changing the inherent nature and feel of their community. They might do this because they love the place and they want to pass it on to their heirs or loved ones knowing that it can never be damaged or harmed by certain uses or types of development in the future.
All of this can be very off-putting for the uninitiated. Many buyers’ eyes start to cross the minute you even mention conservation easements.
Many real estate brokers have little experience reading and understanding conservation documents, much less an ability to explain the inherent value of land conservation to clients. A broker with specific conservation experience can make all the difference when it comes to understanding the value sustainable management and conservation can bring to a property.
verb, obtain a financial advantage or benefit
noun, a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
I have been very fortunate to be involved with Mirr Ranch Group (MRG) over the last five years. This team of brokers and the professional marketing staff at MRG all have a deep and abiding interest in land and progressive land stewardship, and are all well versed in land conservation principles.
We work with a wide variety of conservation professionals ranging from individuals, government agencies, non-profit organizations and private conservation investment groups. We work hard to make sure our clients understand the full set of resources and tools available to landowners interested in long-term stewardship and sustainable management practices. Practices which recent market trends indicate can be quite profitable.
Profitable Conservation in Action
A new listing I’m quite pleased to be involved with is the BX Ranch, a perfect case in point. The 25,000-acre BX Ranch is a spectacularly located expanse of shortgrass prairie east of Pueblo, Colorado and is owned by the Lyme Timber Company, a private timber investment fund manager located in New Hampshire.
You might ask why a sophisticated Timber Investment Fund with more than 1.5 million acres in timber assets across the country (they recently acquired more than 650,000 acres in Michigan and Wisconsin from Wyerhauser) would be interested in a 25,000 acre expanse of shortgrass prairie in Colorado? It’s because the BX Ranch fit their unique for-profit conservation investment model.
How does BX Ranch fit a for-profit conservation investment model?
As early as 2003, the BX was identified by The Nature Conservancy (TNC) and the State of Colorado as some of the last intact native shortgrass prairie in the state. Shortgrass prairies are uniquely important ecosystems (for wildlife and climate resiliency) which are also one of the most imperiled on the planet. The BX is part of the unique Huerfano Uplands, an area of critical concern identified in the Colorado Shortgrass Prairie Initiative.
Having endured the ravages of a decade of drought, the BX had been severely overgrazed under conventional management and was in danger of literally blowing away in the wind. After nearly a decade of advocacy by TNC and the state, in 2014 Lyme Timber stepped in, bought the BX, and made an investment in the long-term conservation of the ranch.
Working with the Savory Institute, Round River Resources, and the Palmer Land Trust, Lyme Timber made a significant investment to rebuild the ranch infrastructure (water delivery and fencing). This allowed initiation of a high-intensity short-rotation grazing practice, often referred to as the “Savory method,” named after pioneering grassland conservationist, Alan Savory.
These practices were allowed and encouraged under the progressive terms of Deed of Conservation Easement recorded in 2015 with the Palmer Land Trust that covers the entire 25,000 acre ranch.
The prescriptions of the conservation easement (which will survive a sale) and the renewed sustainable management put in place on the ranch has made great gains. Six years later, the ranch is now in remarkable condition; carrying capacity is much improved, nearly double neighboring properties without the same grazing improvements.
A model of land conservation success, the enhanced range condition of the BX and the significant increase to agricultural productivity should prove very attractive to buyers looking for productive rangeland, and in the end, this was a profitable enterprise for Lyme Timber.
A potential win win for all parties involved.