State Land Valuation in the ADK Forest Preserve

1. State Land Valuation in the ADK Forest Preserve David P. Wolff

2. What I’m Going to Tell You • Explain the law covering the valuation of state land • Why should towns care if the state valuation is not correct • Review the current components of the state’s valuation methodology • Highlight impact of key assumptions on the valuation All comparisons are LAND-to-LAND only 2

3. New York State lands in the ADK Forest Preserve are to be “valued as if privately owned” The Law Real Property Tax Law §532(a): “The following state lands shall be subject to taxation for all purposes: All wild or forest lands owned by the state within the forest preserve.” Real Property Tax Law §542(1): “State lands subject to taxation shall bevalued as if privately owned.” 3

4. There is a wide variance in the Section 532 (A) assessed value per acre of state forest land 4

5. If the state’s valuation of shoreline increased consistent with recent marketplace gains, private owners would carry less of the assessment (and tax) load 5

6. The value of state land is the sum of the values ofA) Stumpage, B) Bare Land, and C) Shoreline The value of state land is the sum of the values ofA) Stumpage, B) Bare Land, and C) Shoreline The value of state land is the sum of the values ofA) Stumpage, B) Bare Land, and C) Shoreline The value of state land is the sum of the values ofA) Stumpage, B) Bare Land, and C) Shoreline Sample Parcel of State Land Forest State Land Value Stumpage Shoreline Bare Land = + + Lake 6

7. (A) Stumpage: A function of the type, quantity, & quality of tree, ease of logging, & accessibility 7

8. (A) Stumpage: Modern technology simplifies logging in remote steep terrain Feller Buncher Skidder Loader Heli-logging 8

9. (B) Bare Land: A function of the sales of vacant private land within a Market Area 9

10. (B) Bare Land: The state’s valuation of bare land within the ADK Park varies dramatically from town to town From $250 to $400 per acre From $475 to $900 per acre From $850 to $1265 per acre From $375 to $570 per acre 10

11. (C) State shoreline value is a function of quality and quantity of waterfront; type of lake; & accessibility 11

12. All feet equal State formula Assessor’s formula ( C) Shoreline: The state’s valuation formula gives results that differ from a typical town’s formula Valuation of Parcel Based on Shoreline Feet 12

13. (C) Shoreline: If applied to private land, the state’s formula undervalues the shoreline by 21% while a typical assessor’s formula undervalues state land by 44% (C) Shoreline: If applied to private land, the state’s formula undervalues the shoreline by 21% while a typical assessor’s formula undervalues state land by 44% (C) Shoreline: If applied to private land, the state’s formula undervalues the shoreline by 21% while a typical assessor’s formula undervalues state land by 44% Valuation of Parcel Based on Shoreline Feet State formula 44% Assessor’s formula 21% * When applied to private property on Lake Kiwassa 13

14. (D) Intrinsic Value: The ADK Park is unique in many ways and the components of that uniqueness carry value to all citizens of NYS • Intrinsic Value driven by: • Unique mix of public and private land • Unique collection of wetland types and old growth forests • Unique diversity of open space and recreational lands, of wildlife and flora, and of mountains and meadows • Shrinking supply of private land but increasing demand • Components of Intrinsic Value: • Recreational value for the public • Development restrictions • Creation & maintenance of Infrastructure for recreation by DEC • Carbon credits/offsets thru “forever wild” policy • Environmental value due to improved watershed quality and biodiversity 14

15. (D) Intrinsic Value: Recent state/private land acquisitions have included a value for conservation easements • Conservation easement valuation is evolving • State pays “damages” to private land owners for development and recreation rights • Constitutional protection of land has value • Four recent major public/private deals in ADK Park: • Champion (104,000 acres) • International Paper (257,000 acres) • Domtar (104,000 acres) • Finch Pruyn (160,000) • Value of conservation easements estimated to be: • Lyme Timber purchase = 27% • Finch Pruyn estimate up to 40% • Impact: If a town’s largest land owner’s assessment increased 27% or more, how much would it benefit the other constituents? 15

16. The value of state land should be the sum of the values of A) Stumpage, B) Bare Land, C) Shoreline with updated assumptions, and D)Intrinsic Value Intrinsic Value (Conservation Easements) State Land Value Stumpage Shoreline Bare Land + = + + 16

17. FAQ: Transition Assessments are temporary and occur when taxable state land bears a smaller share of local taxes than the share borne in the preceding year -7 Points • Transition assessments decline over 5 years • In Harrietstown: • $34,000,000 loss in state assessed value in 2 years • Result: Each private property owner paid on average approximately $250 more in taxes per private parcel 17

18. New York pays 5 types of taxes and payments in lieu of taxes in the ADK Park 18

19. Summary: State land should be valued as if privately owned and it is NOT • State methodologies need to be updated • Macro results do not reflect current market reality • Macro results vary between neighboring towns • Methodologies do not reflect current technologies • State & private methodologies differ: • In violation of the law • Results differ between neighboring land • Intrinsic value of state land not considered in assessments of state land • Decline in available private vacant land sales, especially shoreline • Result: Significant and increasingly negative impact on towns 19