Blankets and Belts and Suspenders

2. Blankets and Belts and Suspenders • Using protective overlays to ensure permanent conservation of land trust properties

3. Presenters: Mark H. Robinson The Compact of Cape Cod Conservation Trusts, Inc. Richard Johnston, Esq. Dennis Conservation Trust Gregory Bialecki, Esq. Beth Finch Brewster Conservation Trust PRESENTER:

4. Mortmain: Possession of lands or conveyance to dead hands, or hands that cannot alienate. Examples: a Perpetual Conservation Restriction a Charitable Trust provision

5. “I like the concept of not-for-profit owners encumbering ‘open space.’ I have always said, never trust an unrestricted piece of land!!” . Stephen J. Small, Esq.

6. Our Dirty Little Secrets A Land Trust property is not preserved simply by the fact of it being owned by a Land Trust. Most Land Trusts are in the business of simply promoting conservation in their community. No Land Trust has a specific organizational duty to keep its landholdings in permanent conservation status. All Land Trusts have the power to “sell and exchange any real or personal property for such consideration as the board deems advisable.”

7. How do we know? “One should not assume that land conveyed to a charitable or public entity [i.e., land trust] with the unwritten intention that it will be preserved in its natural or open state must be so preserved by the grantee. As long as the land is used for a charitable or public purpose, which may include sale for development with the proceeds used for other charitable or public purposes, there may be no legal constraint on conversion or disposition.” www.massland.org: “Legal Advisory: Public or Charitable Trusts and Protection against Disposition of Conservation Lands” Gregory P. Bialecki, Esq.

8. What are we talking about? Lands conveyed to a land trust: • Without a deed restriction • Without a conservation restriction • Without anything more than a desire and expectation by the donor or seller that the land will be preserved

9. What we are not talking about • Conservation restrictions held by Land Trusts • Trade lands (intended to be convertible assets) • Pass-through parcels • Land owned by governments (they have their own problems keeping land under Article 97)

10. Can you look a land donor in the eye? How do I know you will preserve my land forever? Well, that sure is our intention!

11. Conversion Threats to Land Trust Properties Internal: • Rogue board • Fundraising needs • Management headaches • Swap for “better” land • External: • Lawsuit • Eminent domain • Importuning by heirs, neighbors

12. Has it happened? • The Nature Conservancy, NY • Management headache; rare species left • Mass. Audubon Society, Sandwich MA • Sold bequest land to state DFW with restrictions • hunting now allowed • New England Forestry Foundation, NH • Sold house lot on a lake; $100,000 lawsuit • Sheriff’s Meadow Foundation, MV • Swapped for better land but enabled golf course development • Friends of Wisconsin Preservation, Inc. - 2006: Judge ruled that 150-acre preserve could be sold to developers

13. Conversion Considerations • Political • Public relations, community perception • Legal • AG Public Charities Division • IRS Form 8282 (3-year look-back) • Moral • Duty to Land Donors (past and future) • Duty to Members • Duty to Public

14. Two different issues • Promising to keep the land Is the land trust obligated to retain title forever? Land trust could sell land to another conservation organization or agency w/ CR • Promising to preserve the land Is the land trust obligated to preserve it? Land trust could sell land without restrictions or develop it itself (e.g., HQ)

15. Gotta trust the Trust • Track record in community • One bad apple spoils our bunch • Society for Protection of NH Forests: • Letter to donor, saying “It is our intention to hold and manage the land for conservation purposes for the long term. But, owing to unforeseen circumstances, we may convey the land to another conservation entity. If we do, we will ensure its permanent protection.”

16. A Call to Duty for Land Trusts TO BE A LAND TRUST IS TO BE ENTRUSTED WITH LAND. EVERY LAND TRUST’S PORTFOLIO OF LAND HAS A PARCEL LESS WORTHY OF PROTECTION. SO? LIVE WITH IT. OPEN SPACE. YOU BOUGHT IT. YOU OWN IT. IF OUR LANDS ARE FREE TO COME AND GO, THEN WE ARE NO BETTER THAN OUR FRIENDS AT TOWN HALL. IF YOU VIEW YOUR LAND AS A CONVERTIBLE ASSET, THEN SURELY IT WILL BECOME SO. .

17. The Ways Out Pre-acquisition protection The old days: donor puts in deed restriction Since 1985: no can do, says IRS; use separate CR instead to preserve land and tax deduction Post-acquisition protection You’ll see

18. IRS charitable deduction rules! • Rev. Rul. 85-99 (1985) “… the amount of the taxpayer donor's charitable contribution deduction is the fair market value of the property at the time of the contribution determined in the light of the restriction placed by the donor on the use of the property.”

19. Important words Forever or In perpetuity • “I donate this land to be used for conservation purposes.” (states a use, may not create a trust obligation) • “I donate this land to be used solely for conservation purposes forever.” (creates a charitable trust duty)

20. Charitable Trust Definition • Fiduciary duty to the property • For a charitable purpose • Of benefit to the community • For an unlimited period • Enforceable by the Attorney General

21. Effect of 1985 IRS Ruling • 1) 10 acres donated to land trust = $500,000 FMV charitable deduction • 2) 10 acres donated to land trust with deed restriction requiring land must be kept in open space = $70,000 deduction = (FMV – value of development rights = deduction)

22. Examples • Donor gives fee simple to a land trust Land Donor 10 acres worth $500,000 Fee simple $500,000 Deduction Land Trust A Problem: full deduction but no guarantee land will be protected

23. Examples 2. Donor gives fee simple to a land trust with deed restriction requiring land must be kept in open space forever Land Donor 10 acres worth $500,000 Fee simple $70,000 Deduction Land Trust A Problem: land has guarantee of protection but deduction severely reduced

24. The Ways Out: Pre-acquisition • Donor gives CR to one land trust and fee simple to another land trust Land Donor 10 acres worth $500,000 “Stephen J. Small’s traditional recommendation” Conservation Restriction $430,000 $70,000 Fee simple Land Trust B Land Trust A Issue: Lots of extra time and paperwork and expense

25. The Ways Out: Post-acquisition 2. Donor gives fee simple to land trust and land trust later grants CR to another land trust Land Donor 10 acres worth $500,000 Issue: Donor hopes land trust will follow through $500,000 Fee simple Land Trust A Land Trust B Conservation Restriction

26. In 2004 the Barnstable Land Trust conveyed a conservation restriction on 208 acres of our land in West Barnstable. Jaci Barton, Barnstable Land Trust, Inc.

27. The Ways Out: Post-acquisition 3. Donor gives fee simple to land trust, then land trust later creates charitable trust with another land trust Land Donor 10 acres worth $500,000 “The Mark Robinson suggestion” Step 1: Fee simple $500,000 Land Trust B Step 2: Fee simple Land Trust A Step 3: Fee simple with charitable trust Issue: Donor hopes land trust will follow through

28. In 2006 the Yarmouth Conservation Trust dedicated all of its 25 parcels to charitable trust protection

29. Following Through • This post-acquisition protective overlay is not a promise, not a policy of the land trust. • It may be an occasional practice.

30. Beth Finch, Brewster Conservation Trust In 2005, we arranged to place all 64 parcels owned by the Brewster Conservation Trust under a charitable trust, including our Windmill Meadows parcel on Route 6A.

31. Examples (2003 – 2007) Completed: Charitable Trust Transfer Deeds OwnerHolderParcels Orleans Conservation Trust The Compact of Cape Cod Cons. Trusts All Brewster Conservation Trust The Compact of Cape Cod Cons. Trusts All but one Wellfleet Conservation Trust Orenda Wildlife Land Trust Most Bourne Conservation Trust Orenda Wildlife Land Trust All Yarmouth Conservation Trust Orenda Wildlife Land Trust All Dennis Conservation Trust Orenda Wildlife Land Trust All Harwich Conservation Trust The Compact of Cape Cod Cons. Trusts All Blanket Conservation Restrictions Barnstable Land Trust The Compact & Mass. DCR Several Wings Neck Cons. Fdn. Orenda Wildlife Land Trust All Orenda Wildlife Land Trust The Compact of Cape Cod Cons. Trusts One Brewster Conservation Trust Mass. DCR One CC Museum of Natural History Brewster Conservation Trust All but one Pending: (2007) Charitable Trust Transfer Deeds OwnerHolderParcels Truro Conservation Trust The Compact of Cape Cod Cons. Trusts Most Sandwich Conservation Trust The Compact of Cape Cod Cons. Trusts All/Most Orenda Wildlife Land Trust Humane Society of US Wildlife Land Trust All/Most Sippican Land Trust Coalition for Buzzards Bay All/Most Blanket Conservation Restrictions Wellfleet Conservation Trust Mass. DFW Some Cape Cod Horticultural Society The Compact of Cape Cod Cons. Trusts All

32. Which is better? Charitable trust deeds • Two-party private transaction • Ease of drafting • No required annual monitoring implied Conservation Restriction - More familiarity - More detail

33. Which is Better? “It is not clear whether the imposition of a CR or the creation of a charitable trust obligation provides more effective protection against the charitable or public owner of the land taking action to convert or dispose of the property. The Attorney General has an express role by statute in the case of charitable/public trusts, but has so far acted vigorously in Massachusetts in the enforcement of CRs as well.”

34. Rich Johnston, Dennis Conservation Trust In 2006 the Dennis Conservation Trust arranged for charitable trust protection for its 50 parcels of land.

35. QUITCLAIM DEED The Compact of Cape Cod Conservation Trusts, Inc., a Massachusetts non-profit corporation having an address at 3239 Main Street, P.O. Box 443, Barnstable, Massachusetts 02630, for consideration of ONE DOLLAR ($1.00), hereby grants, with quitclaim covenants, to Elliott G. Carr, Elizabeth W. Finch, Peter Herrmann, Debra L. Johnson, Peter Johnson, Robert Lindgren, James W. Maddocks, Roger V. O’Day, Keith Rupert, Peter W. Soule, and Robert M. Williams, as Trustees of Brewster Conservation Trust, under a Declaration of Trust dated June 22, 1983 and recorded with Barnstable Registry of Deeds in Book 3791, Page 25, and in the Barnstable Registry District of the Land Court as Document No. 325,521 on Certificate #94635, having an address at P.O. Box 268, Brewster, Massachusetts 02631 (“BCT”), those certain parcels of land located in Brewster, MA and more particularly described in Exhibit A attached hereto. This conveyance is made subject to the express condition and limitation that the premises to be conveyed shall be held in an open and natural condition exclusively for conservation purposes forever. It is the Grantor’s intention that the foregoing shall create an obligation in the nature of a charitable trust. Executed under seal as of , 2005. THE COMPACT OF CAPE COD CONSERVATION TRUSTS, INC. By: Richard A. Johnston, President By: ________________________________ Stephen H. Anthony, Treasurer

36. QUITCLAIM DEED Orenda Wildlife Land Trust, Inc., a Massachusetts charitable corporation with an office at 1000 Main Street, West Barnstable, Massachusetts, and a mailing address at P.O. Box 669, West Barnstable, Massachusetts, 02668 (“Grantor”), for consideration of ONE DOLLAR ($1.00), hereby grants, with quitclaim covenants, to Stephen H. Anthony, Richard Ciotti, Herbert E. Daitch, Virginia G. Page, Robert G. Hankey, Gary J. Joseph, R. Dennis O’Connell, Alan Platt, James Quigley, Edward Simon, Marcia Seeler, and Peter R. Hall, as TRUSTEES of theWELLFLEET CONSERVATION TRUSTunder a Declaration of Trust dated September 5, 1984 and recorded with the Barnstable County Registry of Deeds in Book 4811, Page 281, as amended, with an address at P.O. Box 84, Wellfleet MA 02667 (“Grantee”), those certain parcels of land located in Wellfleet, MA and more particularly described in Exhibit A attached hereto. This conveyance is made subject to the express conditions and limitations that (1) the premises to be conveyed shall be held in an open and natural condition exclusively for conservation purposes forever, (2) wildlife habitat protection and enhancement on such premises specifically shall be promoted, and (3) hunting, the discharge of firearms and trapping on such premises shall be and are prohibited. Grantor and Grantee agree that for the purposes of this paragraph, walking trails may be created, maintained and used and the Grantee is not obligated to post the premises in conjunction with limitation (3) above. It is the Grantor’s intention that the foregoing shall create an obligation in the nature of a charitable trust.   The premises are conveyed subject to and with the benefit of all matters of record insofar as in force and applicable.  For Grantor’s title, see deed from the Trustees of the Wellfleet Conservation Trust recorded in Barnstable County Registry of Deeds in Book ____Page herewith. Executed under seal as of __________________, 2005. ORENDA WILDLIFE LAND TRUST, INC. By: ___________________________ Ralph Herbst, President By: ___________________________ Kenneth Burnes, Treasurer Charitable Trust provisions

37. …NOW, THEREFORE, the terms of this Conservation Restriction are as follows: A. Uses: The Grantor covenants for itself and its legal representatives, mortgages, successors and assigns that the Premises will at all times be held, used and conveyed subject to and not in violation of this Conservation Restriction. The Grantor shall refrain from and will not permit any activity that shall be inconsistent with the aforestated purposes of this grant. Grantor may develop, manage, lease and use the Premises only for purposes consistent with conservation values and passive recreation. For clarification of management objectives, the Grantee should review any pertinent baseline information or land management plans on file with the Grantor. For the purposes of this Conservation Restriction, “conservation values” shall mean all those natural, scenic, aesthetic, open space, ecological, plant and wildlife habitat, soil and water resource quality, watershed, floodplain, wetland, and similar features and values which characterize or are associated with the Premises. For the purposes of this Conservation Restriction, “passive recreation” shall mean any non-commercial activity of quiet enjoyment that can be casually performed outdoors with limited facilities and minimum disturbance of an area’s natural condition. Passive recreation may include, but is not strictly limited to, hiking, picnicking, canoeing, ice skating, nature study, horseback riding, kayaking, cross country skiing, swimming, jogging or walking. Development of facilities on the Premises shall be limited to such items necessary for designated passive recreation, such as trails, fencing, limited parking areas, informational kiosks, boardwalks over wet areas, or wildlife habitat enhancement. Grantor agrees that all future residential or commercial development rights in the Premises are terminated and extinguished by this Conservation Restriction and that the Premises may not be used for the purpose of calculating the amount of Grantor’s land available for subdivision or calculating the number of dwelling units permitted on other land owned by the Grantor or by any other person. …

38. Why would you not use a protectiveoverlay? • Concern about donor’s tax deduction • (wait three years) • Using land portfolio as collateral • (TNC does this) • Flexibility: leveraging state and federal grants • Barnstable Land Trust approach

39. Now, you can you look a donor in the eye. How do I know you will preserve my land forever? Look at what we have done to protect other land given to us.

40. Mark Robinson, having preserved the last undeveloped parcel of land on Cape Cod with a charitable trust, goes in peace to meet his maker circa 2040 AD K R.