NEWS

Tennessean
Friday, 06/08/07
Her paradise is preserved
Historic farm won't be cut up for homes, mall

By ANNE PAINE
Staff Writer
Developers should quit calling.
Karen Guy's 147-acre Davidson County farm — with a mile of shoreline on Old Hickory Lake — can never be chopped up for subdivisions and new houses.
The farmer has signed a permanent agreement with a conservation group in which she gave up millions of dollars in potential land-sale profits in exchange for peace of mind.
Such an expanse of history-laced land, farmed for more than two centuries, is rare in Davidson County. So are instances where owners abandon development rights on a prized, urban-embedded parcel like this.
"I was probably born 100 years too late," Guy said, standing in the shade of a massive elm once owned by Andrew and Rachel Jackson, from whose adopted son she's descended.
"I don't like change. I don't like development. I'm so lucky I have the opportunity to be the one to save such a lovely piece of ground."
With the Land Trust for Tennessee, she has signed a legally binding conservation agreement that protects the landscape of Hunter's Hill Farm.
In return, Guy gets a tax deduction — the amount to be figured on her income next year. A federal law expiring at the end of the year will give her a larger tax write-off than she would get next year.
"She is a hero to all of us who seek to preserve our state's historic and scenic landscapes and working farms," said Jean C. Nelson, president and executive director of The Land Trust.
Hunter's Hill is the second significant Davidson County preservation project for the group in eight months, she said. The other was the pre-Civil War mansion Glen Leven, and 65 acres of Oak Hill land that was willed outright to the group.
It's hard to lose a cow
Guy spent early morning Tuesday on her farm dealing with a stillborn calf and the calf's mother, who may have been injured.
Later, she greased a mower and cut a field. That was before she weeded her flower garden, where butterflies hovered around pink hollyhocks and bee balm.
In between, she fretted over the lack of rain that could fry the fescue, orchard grass and clover needed for hay this fall. She also worried over her old 2,000-pound bull, which must be replaced.
"He's got to be hamburger," she said in her restful country drawl. "He's got down in his back. He can't do his job with a bad back."
The bull lay in a shed, chewing and looking out at her and her visitor.
In another stall lay Agnes, who had the birthing trouble that morning. (She had to be put down on Thursday.)
In a fenced area across the path hobbled a 20-year-old Hereford named Joyce, the result of Guy's soft heart.
"That's bad business," she said.
A farmer can make $100 selling no-longer-productive livestock or else end up paying what amounts to the same later in a "backhoe burial."
All the stock sired are bound for sale as meat. But Guy, despite a UT degree in animal sciences and years of farming, has a difficult time with it.
"She cries when we sell them," said J.D. Pierce, farm caretaker.
No typical farmer with her blond ponytail and bangs, Guy, 50, worked for the state Agriculture Department for 18 years, dealing mainly with regulating pesticide use.
Now she wants to live out her days working the land for cattle and riding her horse, not wondering whether houses and strip malls will cover the land when she's gone.
Farm is part of childhood
As a youngster, Guy would visit her great-uncle and great-aunt, Aubrey and Louise Maxwell, who then owned the farm.
She rode ponies and swam at a dock built when the area was flooded for Old Hickory Lake, which took 50 acres of their property.
The dock lies today across a small inlet from houses in the Brandywine Pointe subdivision, some worth more than $1.6 million.
"To me they're hideous, but each to their own," she said, glancing at one of the posh structures with multiple levels and masses of windows.
After her great-uncle's death, she helped "Lou" with the farming. Her great-aunt, childless, named her as the heir to the property when she died.
Her scratched-out income from cattle is supplemented by fees from a cellular telephone tower in one field.
That's enough, she said. With its colorful sugar maples in fall and birds and beasts year-round, she prefers the land to mega-wealth.
Jacksons owned the land
Hunter's Hill Farm was part of 640 acres that Andrew Jackson bought in 1796, before he became president. He and his wife, Rachel, lived there for several years before they built their first home, an earlier version of The Hermitage that later burned.
Jackson ran a mercantile store there, too. The Hermitage, where Guy helps cut hay and was head gardener for three years, is across the road.
The Jacksons never had biological children but adopted a nephew of Rachel's, from whom Guy is descended.
A chinkapin oak at her gate has witnessed the comings and goings of many generations of farmers, and Guy would like to keep it that way.
She had been losing sleep over what might happen when she's gone, but she is no longer. She can still sell the land or give it away. While it won't necessarily be farmed, the deed requires it stay green.
Only one new house could be built, and that would be to replace an old tenement house that's in disrepair.
"People need to see 10, 20, 30 years from now what it used to be like," she said. "Thank goodness something like The Land Trust is in place so this place can be saved."

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Land Trust is now accepting Glen Leven Estate Proposals
Giving thoughtful consideration to ideas for this Nashville treasure

In an incredibly generous gift, The Land Trust for Tennessee was bequeathed the historic Glen Leven home and its surrounding sixty-five acres from Susan M. West.  The property is located in Nashville, Tennessee at 4000 Franklin Road.  In fulfilling Ms. West’s wishes for her property, The Land Trust is giving thoughtful consideration to ideas on what to do with this treasure in Davidson County.  We will begin accepting proposals for the property on June 1, 2007.  When reviewing the offers, The Land Trust will have two primary guiding principles:  (1) Ms. West’s will and (2) the mission of The Land Trust for Tennessee. 

We encourage you to think of other groups or individuals who may work well with you in a combined effort to fill any potential gaps in the use of the property.  Additionally, we will look favorably on proposals that allow for the history of the property to be appropriately captured and enjoyed by the general public.  It is also important to consider that the Glen Leven Property is located within the City of Oak Hill, so your proposal should take any associated municipal restrictions into consideration.  The final decision of the use of the Glen Leven Property lies solely with The Land Trust for Tennessee.  We retain the discretion to reject any proposal submitted for any reason whatsoever and we are not required to accept the highest offer.    

All proposals, including price and terms, must be submitted to the offices of The Land Trust for Tennessee located at 209 10th Ave South, Suite 530, Nashville, TN, 37203, Attention: Janet Henderson by August 31, 2007.  The property will be available for viewing on June 21 and 22 and July 12 and 13.  Participation by realtors is welcome.  If you have further questions please contact Rebecca Howard at 615-479-1153, the office at 615-244-5263 or email: glenleven@landtrusttn.org.

Please refer to this proposal packet for more detailed information.

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Conservation Tax Incentives Pass Senate, Helping Tennessee Landowners Conserve Family Land

New land conservation tax benefits for family farmers and landowners are included in recent legislation passed by the U.S Senate and House of Representatives.  Tennessee landowners will now be able to voluntarily opt for significant tax benefits in exchange for donating a conservation easement that restricts future development of their land.  

The bill, applicable for 2006-07 benefits:

• Raises the deduction a landowner can take for donating a conservation easement from 30% of their income in any year to 50%;
• Allows qualifying farmers and ranchers to deduct up to 100% of their income; and
• Increases the number of years over which a donor can take those deductions from 6 years to 16 years.

The Pension Protection Act of 2006, which contains the new conservation tax incentives, is now headed to the White House for President Bush’s signature.
"We hear from many family farmers who want to protect the land that they have lived and worked on for generations, as well and individuals who have recently purchased land to start a new family legacy." said Jeanie Nelson, executive director of the Land Trust for Tennessee. “This new bill will help make permanent land conservation more financially possible for all of them.”

The Land Trust for Tennessee, like other conservation organizations nationwide, is thrilled by the new legislation. Since its founding, The Land Trust has been working with landowners and families in Tennessee to help them accomplish their conservation goals, often through individual conservation easement donations. They see the tax incentives as a way to thank landowners who sometimes give up millions of dollars in development rights to protect land that is special to them and their communities.

For more information, visit the Land Trust Alliance Website

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Tax Break with a View

Wall Street Journal, By Rachel Emma Silverman

Muscoe R.H. Garnett Jr.'s farm in Loretto, Va., hasn't changed much since the family acquired it in the 1600s. Now, the retired insurance executive has made sure it will stay that way.

Encouraged by recent tax legislation, Mr. Garnett has placed a "conservation easement" on much of his property, located about 80 miles from Washington, D.C. The move permanently shields the rolling pastures, timber forests and croplands from being turned into a housing subdivision or business park. Under the easement, which is a binding agreement typically made with a land trust, the Garnett family still owns the land and can continue to use it for farming and timber but most of it can never be developed.

Landowners who place conservation easements on their scenic, environmentally sensitive or historic properties have long been able to get tax breaks from the federal government, and some states have also begun offering tax incentives. Now, a little-noticed provision in the wide-ranging pension law Congress passed last summer has made the federal tax breaks even more generous. Conservation groups say this has spurred a sharp increase in the number of landowners interested in placing easements on their property.

"The incentives are fantastic, and I don't think a lot of people realize it," Mr. Garnett says.

But the expanded federal incentives, backed by some influential lawmakers from agricultural states, are due to expire at the end of this year, unless Congress acts to extend them. (A bill recently introduced in the Senate would make the changes permanent, and President Bush also called for them to be made permanent in this week's budget proposal.) For now, landowners might need to act quickly, since conservation easements can take several months to put together.

Here's how it works: A landowner typically donates a conservation easement to a land trust, a type of non-profit organization that helps put together the easement and monitors its restrictions over time. The value of the donation for income-tax purposes generally is the difference between the land's unrestricted value and its new value with limited development or usage rights.

Be careful, though. The Internal Revenue Service and Congress in recent years have been concerned with easement abuses in which donors have taken inflated deductions or placed restrictions on land with little conservation value, such as golf courses. The new law includes stiffer rules and penalties regarding appraisals, to prevent donors from overstating the deduction for their land. The IRS says it is currently auditing hundreds of easements.

But the law is designed to encourage easement donations by allowing larger tax deductions. Landowners can now deduct the value of a donation up to 50% of their adjusted gross income per year, up from the previous ceiling of 30%. That means if your adjusted gross income is $100,000, you are now eligible for as much as a $50,000 tax deduction a year, instead of $30,000. And if your income is too low to deduct the full amount of your gift in one year, you can now carry forward the deduction for 15 additional years, up from five years previously.

Property held in family limited partnerships, limited liability companies and some types of corporations may also be able to take advantage of the increased deduction limits, says Stephen J. Small, a Boston tax lawyer who specializes in conservation easements.

The law is even more generous for career farmers and ranchers who earn at least half their income from their land. These property owners, who are often land-rich, but cash-poor, can now deduct up to 100% of their income. "If you're a farmer you could pay no federal income taxes for 16 years," says Rand Wentworth, president of the Land Trust Alliance, a coalition of 1,600 land trusts across the country.

Colorado rancher Jay Fetcher in recent years placed conservation easements on two large parcels of his 2,000-acre cattle ranch near ski resort Steamboat Springs. The first donation, on 1,350 acres, was worth about $1.1 million for tax purposes. But Mr. Fetcher, limited at the time to deducting a small portion of his income, was able to take only about $60,000 of that donation in deductions over six years. "We left almost all of the donation on the table," he says.

Mr. Fetcher is planning this year to make another easement donation on 270 acres to a Colorado land trust. He expects the value of the donation will be about $1.2 million, and thinks he will be able to recoup roughly half that amount because of the higher federal tax deductions and an increase in state tax credits. "The changes helped us," says Mr. Fetcher. Still, he says the financial incentives are secondary to his desire to preserve the land, in his family since 1949, with its sweeping views of mountains and pine forest. "Our family has no desire to ever see the ranch developed. That's at the beginning of it all," says Mr. Fetcher.

The tax-rule change has generated sharply increased interest in conservation easements, say land trust officials from Washington and Wyoming to Georgia. "Some landowners whom we've been talking to for five or almost 10 years say that now it makes economic sense for them," says Laurie Wayburn, president of the Pacific Forest Trust in San Francisco.

Conservation easements can generate other tax benefits, too. They can cut estate taxes, because the land is considered to be worth less under an easement. A growing number of states offer a range of income tax breaks. Colorado and Virginia, for example, give donors state income tax credits that are transferable, which means that landowners who don't need the tax credits can sell the credits to other taxpayers for instant cash. You may even get a property tax break, depending on where you live.

Conservation easements can vary. A farm owner, for instance, could still retain the right to farm the land and to build a couple additional homes or barns, but could limit the land from being further subdivided. Property owners can sell their land, but buyers are obligated to honor the easement.

Peter Bance recently placed a conservation easement on 65 acres of the Virginia farmland that has been in his family since 1840. The property was zoned to allow construction of six housing sites, and he donated the rights to five of those sites to a state-run land trust. (He kept one site in case a descendant wanted to build a house in the future.) "We think we have a piece of heaven and we hope to keep it that way for generations to come," says Mr. Bance, 55, who is an executive with Wachovia Corp.

If you're thinking of doing a conservation easement, it's best to contact a land trust in your area to find out if your property qualifies. (Try www.lta.org, the Web site of the Land Trust Alliance.) There's no minimum size, but in order to get a tax deduction the property has to meet certain criteria, such as having significant environmental, scenic or historic value. Also, be sure to work with a tax and legal adviser familiar with local applicable laws.

The land has to be appraised (try www.appraisers.org, the Web site of the American Society of Appraisers) and may need to be surveyed, which can cost a few thousand dollars. There are also legal fees to draw up the easement, which can cost several thousand dollars, depending on the complexity of the deal. Some land trusts also recommend landowners make cash donations to the land trust to help fund the organization's future monitoring of the easement.

Because easements are placed in perpetuity, a family has to be sure it wants to permanently restrict development — and the potential for a big windfall — before committing.

Several months ago, after discussions with his wife, children and grandchildren, Eslick Daniel placed a conservation easement on his 200-acre farm in Columbia, Tenn., near Nashville. The easement on the farm, called "Sweet Easy," limits development, except for a couple of building sites that Dr. Daniel's descendants could use for housing. For Dr. Daniel, 65 years old and a retired orthopedic surgeon, the tax incentives weren't a factor. "We wanted to keep it where it would be open land for our family and for other people," he says.

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Tiffany Foundation Will Back Preservation on Natchez Trace

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Land Trust Studies Duck River Watershed

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