Preservation Methods

This is a listing of tools available to preserve open space. The list is not exhaustive, but includes the most commonly used and most successful techniques.
Delaware Valley Regional Planning Commission's open space and farmland preservation resource information*

* used by permission

MUNICIPAL PRESERVATION TOOLS

• Fee Simple Acquisition
• Easements
• Bonding
• Installment Purchases
• Lease-Back Agreement
• Donation/Bargain Sale
• Long-Term Lease
• Eminent Domain
• Zoning
• Other Municipal Preservation Tools
  

Fee Simple Acquisition
Usually, the most expensive way to preserve property is direct acquisition through fee simple. The title to the property changes hands from one owner to another. This places the property entirely within the ownership of a municipality or other public entity. The property is usually added to the park system or wildlife management system of the governing group. For farmland, fee simple can be used to acquire a farm where the landowner does not wish to remain on the property or to continue farming. A municipality (or county or state) can then permanently preserve the property by severing the development rights and can sell the property lands to another farmer or owner. This has the advantage of recouping much, if not all, of the cost of acquiring the property. A disadvantage to this approach is the need to have the full purchase price available at the closing. Government agencies may not be able to raise the funds in time before an owner decides to sell the property to another buyer.

Easements
Another effective tool for preserving land is an easement. An easement grants an entity such as the township the right to use another's property for a specific purpose. There are many kinds of easements designed for many purposes, including:

• Trail easements: the right to traverse a specific path through a property
• Scenic easements: the right to maintain a view and ensure that view is maintained
• Conservation easements: purchases the development rights to a property to preserve the natural landscape of the site
• Agriculture easements: purchases the development rights to the property to preserve the agricultural use of the site

The advantages of easements include the lower costs to the buyer to acquire a particular use on a piece of property. Conservation easements generally cost from 70 percent to 80 percent of the fair market value of the land. Trail easements may be used appropriately to create greenways along and around water bodies. Farmland easements permit a farmer to continue owning and farming the land and to sell the land rights, but the property is permanently preserved.

Another advantage of easements is that the land remains in private ownership. The township will still collect property taxes from the owner. The amount and type of easement right that is sold will typically lessen theowner's tax liability.

Written into the deed, an easement will be associated with a tract of land despite any ownership change. Public access is not necessarily a condition for an easement.
Easements can provide a conservation solution for the municipality and the private landowner. They represent a flexible tool that can be written to satisfy public uses as well as a private landowner's needs.

Bonding
A municipality can issue bonds to borrow money to pay for acquisitions. Funds from a Township Open Space Trust or the Farmland Preservation Trust can be used for the five percent down payment to issue bonds as well as for debt service over time. General obligation bonds require voter approval and can impair the tax credit of the municipality. The consistent, dedicated revenue from the Open Space and Farmland Preservation Trusts make revenue bonds an attractive alternative, but these bonds typically have a higher interest rate than the general obligation bonds.

Installment Purchases
For large purchases of land, the municipality may work out an arrangement with a landowner that allows an incremental purchase over time. The property owner receives the purchase price over a specified time period, as well as interest on the unpaid, negotiated balance. Funds from the municipal Open Space or Farmland Preservation Trusts can be committed for this payment. This arrangement may result in tax benefits for the seller. The township benefits by not being obligated to pay the full price of the land in one payment.

Lease-Back Agreement
If the land is not needed for immediate use, the township can purchase a piece of property and lease it back to the owner or another entity for use. Partial reimbursement of the purchase price can be repaid through rental fees, and maintenance costs are reduced. A variation of this technique is the use of life estate rights. The township would purchase a piece of property and allow the seller to continue to live on the property for a specified amount of time or until death. This technique is most useful when the township identifies an important tract and wants to ensure its availability in the future. The landowner may realize estate tax advantages through these methods.

Donation/Bargain Sale
Selling land to a nonprofit organization or to a municipality will provide tax advantages to the owner. Landowners who own property that has escalated in value may reduce their capital gains liabilities through donating the property or selling it at a bargain sale for less than the appraised value. Estate taxes may also be reduced with proper planning. Conservation easements are effective tools for estate planning. The township may want to discuss land priorities with a nonprofit land trust. The land trust can contact owners to discuss general tax advantages of donations and bargain sales. These are cost effective methods of obtaining open space.

Long-term Lease
The township may be able to negotiate a long-term lease with a landowner unwilling to transfer complete ownership. This method may be a useful option for trail easements or athletic fields. The township will have to weigh the cost advantages of long-term rental payments over outright acquisition costs against lack of full and long-term control of the property.

Eminent Domain
The township has the right to condemn and acquire privately owned property for a public purpose. This technique should be considered only when negotiation options have been exhausted. The total cost of the property is likely to be considerably higher than a negotiated price because of increased legal fees and court determination of the land value.

Zoning
Open space benefits may be achieved through the use of municipal tools, such as cluster zoning and mandatory conservation design. These techniques allow the same or greater density on a tract of land but reduce individual lot sizes. They can be an attractive incentive to developers since they will spend less on construction and infrastructure costs. The remaining land becomes dedicated open space at no cost to the municipality. The dedicated open space resulting from these techniques should be monitored to ensure that the open space values are maintained. If these lands are not under conservation easement restrictions, the township should consider that action. Any open space dedicated as part of a developer's agreement should be placed under a conservation easement. The township may also want to require the establishment of an endowment or trust supplied with funds, to be used to maintain the easement.

Protective zoning is another tool that can be used to limit development in environmentally sensitive areas, such as aquifer recharge zones, wetlands, steep slopes, stream corridors, and natural and historic sites. See the DVRPC website for a description of municipal natural resource protection tools and sample ordinances from within the region:

Other Municipal Preservation Tools
One preservation tool at the disposal of the municipality is tax foreclosure. If a parcel falls under a township's ownership through tax foreclosure, the municipality may want to consider holding the property as part of its lands for recreation and conservation purposes if it falls within an identified greenway corridor. Periodic examination of properties with tax liens upon them may also yield opportunities for the municipality to purchase the lien and preserve the land for environmental or recreational uses.

An official greenways map is another tool available to a municipality. An official greenways map is essentially an ordinance, in map form, that designates existing and proposed areas for protection. Once adopted, the official greenways map gives notice to property owners and developers of the municipality's intentions to preserve the areas for flood control, streambank stabilization, provision of wildlife habitat, and/or recreational facilities. The official map usually comes into play at the time a land development or subdivision is proposed. The municipality than has the option, for up to one year after final plan approval, to negotiate various ways to keep the land open, using all the conventional land preservation methods. However, unless otherwise agreed upon, the law specifically states that the property owner is entitled to full market compensation.

A township may want to develop educational materials that target large property owners to describe various financial approaches to preserving land. For example, some owners may want to work out an arrangement where they sell blocks of their land over time (installment sale) to the township or to some other preservation partner. Other landowners may sell their land to the township at a bargain sale to receive deductions for a charitable contribution on federal income tax. Donations of property may also be considered charitable contributions. Leasing arrangements with the owner allows the municipality to purchase the property and lease it back to the owner. This arrangement works when the property is not needed for immediate public use. Owners who want to remain on their property can sell a life estate. All of these techniques accomplish the township's goal of retaining large properties without the prohibitive expenses of direct acquisition.