The More Things Change

BY Bill Walsh

Coastal North Carolina is under a good deal of development pressure and if you’re beginning to think that lending support to one of the various conservation groups hereabouts might not be a bad idea Camilla Herlevich wants a word with you.

The word is Airlie.

“People who enjoy spending time at Airlie Gardens can thank the Coastal Land Trust ” the land trust’s executive director says in addition to the usual thanks they proffer to the county commissioners.

“There was plenty of development pressure on Airlie and the Corbett family actually had engineers submit preliminary [development] plans to the New Hanover County planning office ” Herlevich says. “One of the county commissioners called me and said can’t you do something about this? I said ‘no sir but you can. If you want this to be protected the county can buy it.’”

There was a generalized uproar over the possibility of Airlie’s disappearance Herlevich recalls. “Airlie is one of the places that give us a sense of community.”

Herlevich met with county staffers and helped develop a possible funding strategy the money to come primarily from the county but also from the state’s Clean Water Management Trust Fund which was pretty new then but with which Herlevich had some experience — experience that expanded exponentially in subsequent years.

“The owners did not want to negotiate in public so the county asked the Coastal Land Trust to commission the appraisals and to have the preliminary discussions so that those numbers wouldn’t be played out in public ” Herlevich says. “If I was successful in getting a deal then it would be entirely appropriate for the public to be involved and for the appropriate scrutiny to take place. But the owners didn’t want to get ‘out there’ … if it didn’t go through.

“We were happy to do it ” Herlevich says looking back at the transaction from her modest office off Racine Drive in a building that her organization shares with North Carolina Coastal Federation and The Nature Conservancy. “My dad had been a forester and had worked with some of the Corbetts so there was some mutual trust there. We were able to negotiate a deal that the county felt comfortable with and we were able to get money from the state so the county was able to close the deal. We were not actually in the chain of title but we facilitated the transaction.”

North Carolina Coastal Land Trust which Herlevich founded about 15 years ago scours the coastal plain for land that deserves protection from development — in North Carolina as its name implies but also in South Carolina and Virginia. Though the organization will occasionally buy development rights or even purchase a piece of property outright its central thrust is working with owners to put land under permanent conservation easement.

A conservation easement is a gift of specific development rights which once given becomes a permanent recorded part of the deed. In order to protect a parcel of land the owner can deed any future development rights to one of several state and private agencies the Coastal Land Trust among them. The agency then holds those rights in perpetuity thereby preventing the land from ever undergoing development.

While an easement is a gift it is an irrevocable one. It doesn’t prevent the owner from selling the property or handing it down to heirs but the easement stays with the land forever.

“We are interested in protecting a number of different kinds of habitats ” Herlevich said. “We protect iconic coastal landscapes like barrier island beaches. The work we have done on [undeveloped] Lee Island is a good example. We protect bottomland hardwood forests river corridors longleaf pine forests. We have even worked on places that are going to be public parks.”

Public support for public parks is generally an easy sell. But apparently generous tax incentives to landowners when there is no immediate and visible benefit to the common good sometimes takes a bit more explaining.

Granting an easement does not necessitate granting public access. While the Coastal Land Trust arranges periodic inspections to make sure that the easement agreement is being followed the land is not open to the public to any greater degree than unprotected land.

But the tax incentives that reward putting land in a perpetual conservation easement have reached fairly significant proportions. President Bush signed legislation in August that raised the deduction a landowner can take for donating a conservation agreement from 30 percent of adjusted gross income in any year to 50 percent. The new law also increases from six to 16 the number of years over which the donor can claim these deductions. And that’s just the feds.

In North Carolina there is a tax credit against what you might owe in state income tax up to 25 percent of the value of the easement capped at $250 000 for individuals.

Meanwhile property taxes are usually reduced to reflect the restriction on the property. County real estate appraisers must take easements into account and when development rights are conceded the value of the property can decrease significantly. Property taxes stabilize usually because the land does not appreciate in value to anywhere near the extent of surrounding unprotected properties. While tax levels plateau the cost of serving conservation easements is considerably lower for local government.

Given all that if your goal is to make money then you develop land says Nelson MacRae who put a Brunswick County property along the western bank of the Cape Fear River across from Wilmington into permanent conservation easement with the Coastal Land Trust.

“The number-one reason for doing this is to preserve land in its natural state ” MacRae says. “The benefits through tax breaks and that kind of thing will never represent the true value of the property especially in this area.

“We have been property owners in this area for a long time ” MacRae says of his family’s Oleander Co. “We are a development company a land-management company but I have always had a true love for the outdoors and beautiful land and feel that some of it shouldn’t be developed.”

Decreasing the value of land does help heirs keep the property in the family. Because land value does not balloon under easement protection heirs are in a better position to pay estate taxes without having to sell the land to meet the debt.

“That’s a big one ” MacRae agrees. “If you want to try and preserve ownership and pass it on to the next generation you basically would have to pony up 50 percent of its value in cash just for the right to pass it down to the next generation. That’s the biggest financial reason for doing something like [easements].”

“Conservation agreements enable landowners to preserve their land maintain ownership of it and usually realize significant tax savings or other financial incentives ” a Coastal Land Trust brochure notes. Additionally this is real estate and every deal is negotiated. The only caveat isthat theconservation values must remain protected.

“If someone wants to reserve a few home sites hunting rights and fishing rights and some timbering rights all of that has to be negotiated based on the size of the property type of land and the conservation values ” Herlevich says.

As much as all this looks like more tax breaks for the wealthy this is not another example of tax code manipulation to favor those at the top as some have charged Herlevich says.

“First of all we don’t do just conservation easements ” Herlevich says. “We also do projects where property is open to the public. In Brunswick County for example we recently transferred 900 acres to the county as a nature preserve. We helped New Hanover County get money for its Tidal Creeks Program as well as Airlie Gardens. We are actively involved in getting lands open to the public.” The Coastal Land Trust can claim some roundabout credit for opening Masonboro Island to the public; it merged with the group that spearheaded that effort the Society for Masonboro Island Inc.

“But the other thing is private landowners are among the best stewards there are of significant conservation land. Whenever you put land in public ownership you then have to pay someone to manage it. In some ways having land conserved by the owner is like the taxpayer having the cake and eating it too because the conservation resources are protected the wildlife value is there quality of life is enhanced but the public doesn’t have to invest any more in annual upkeep or maintenance. I think that conservation easements are a wise investment for the taxpayer.”

Herlevich trained as a lawyer with an eye to protecting people from criminals not protecting property from concrete. She wanted to work as a prosecutor but instead went to work for The Nature Conservancy after graduating from Duke and finishing law school at Boston University. During her 11-year stint with the national conservation organization she worked in Virginia in the Research Triangle and in Orlando a concrete nightmare that could drive many another conservation advocate to give up the game as briefly it did Herlevich.

She returned to her native Wilmington and went to work for a law firm for a year before teaming up with fellow local attorneys Bill Raney and Michael Murchison and with Chuck Roe who works in Raleigh as the southeast program director of theLand Trust Alliance to incorporate Coastal Land Trust in 1992.

“It has just taken off ” she says; “it was the right thing at the right time. Almost from the beginning there has been more demand for our services than we have the ability to supply ” with a staff that now numbers nine and with satellite offices in New Bern and on the Outer Banks.

“We have a great staff which has been a real key ingredient to our success ” Herlevich says. “It seems that every time we hire someone we make a giant leap forward. And we have fabulous volunteers.”

So far Coastal Land Trust has protected about 36 000 acres in North Carolina through outright purchase through purchase of development rights through conservation easements.

There are financial incentives to be sure but “the people we work with have to be interested in more than money ” Herlevich says. “If not we never get past the first conversation. If they are only interested in money we can’t make it attractive enough and we can’t make it happen quickly.”

That said a situation that is tailor-made for the trust according to Herlevich involves land that has been passed down to heirs some of whom want to keep the property others who want to liquidate.

“The nice thing about buying development rights in a situation like that is we can get money to the family members who need money and we can help those who don’t want to sell the land actually stay on the land. That situation comes up a lot and we can be the only good solution ” Herlevich explains.

Coastal Land Trust gets operational money from members — there are currently some 1 500 — from corporate and individual donations and from a smattering of fund-raisers such as the Wrightsville Beach Sea Kayak Race in November. Money to purchase land or its development rights comes from grants mostly resulting from the Clean Water Management Trust Fund Act passed by the North Carolina legislature some few years ago. “We can apply for competitive grants ” Herlevich says “and there are millions of dollars available to protect land that has a water-quality component ” such as river corridors. Grants are also available through other funds notably the Natural Heritage Trust and the Parks and Recreation Trust.

Some other conservation-minded folks like to sound a note of caution in concluding: The tax and other financial considerations that encourage the donation of conservation easements that designate money for the Clean Water Management Trust Fund and others of its ilk the laws that enable localities to buy land and to take conservation easements into consideration in property tax assessments were all created through the legislative process and it’s possible they can be changed in like manner. Those who support the programs advocates say have to be constantly vigilant to protect them from being gutted.

Three of a Kind

N.C. Coastal Land Trust shares the first floor of the office building at 131 Racine Drive with The Nature Conservancy and North Carolina Coastal Federation. “We all have the same goal and that is protecting the environment ” says Land Trust executive director Camilla Herlevich. “The Coastal Federation and the Coastal Land Trust are both focused solely on the coastal plain of North Carolina. The difference between us is the tools that we use.

“The Coastal Federation is an environmental-advocacy organization. What that means is they are very interested in development laws and regulations. They take an active role in policy issues they have grassroots lobbying to reach out to people and they will become involved in particular development issues. They have more scientists than we do they have access to attorneys and most of their people are planners. They have conferences and do a lot of public education about environmental issues.

“The particular tool that we use is real estate ” she continues. “We basically buy land protect land. We do very little lobbying. If we do lobbying at all it’s primarily to get money to buy property. The Federation is much more advocacy- and policy-oriented; they are interested in making sure that we have good laws. We’re interested in protecting land so we have biologists instead of geologists and water chemists. We have biologists and people who know wildlife and people who know real estate.

“The Nature Conservancy really has the same skill sets and uses the same tools but is more interested in diversity. I think they are currently working on seven projects in North Carolina. We have more of a patchwork-quilt kind of thing going on. We have a broader palette of projects that we are interested in and we are more likely to be doing something closer to people’s neighborhoods that they will actually use. The tag line for the Land Trust is ‘saving the lands that you love ’ so there is that connection to people and to neighborhoods. The Land Trust’s idea is let’s take Sitime to figure out places that are really special and that mean something to people the lands that communities love and make a real effort to protect them.”
— Bill Walsh

For more on North Carolina Coastal Federation see the story in the September 2006 issue.