"Colorado’s troubled conservation easement program was a “bait-and-switch scheme” that violated due process and the U.S. Constitution, hundreds of the program’s former participants allege." The Denver Post, March 28, 2016. (Link below.)
How do I tell the harrowing story of Colorado’s disastrous conservation easement program? In my recollection, things began to fall apart as early as 2005, although we didn’t realize it until 2007 when we started seeing nasty articles in the newspapers. Even then, we didn’t understand what was happening – or that it was happening to us personally -- until we got notices from the IRS in 2008 and notices from the state in 2011.
But, before you can understand how things fell apart, and why hundreds of landowners just filed a suit against the State of Colorado, you have to understand the whole conservation easement program. My goal is to 1) tell story of the misunderstood conservation easement (hereinafter C.E.) scandal in Colorado, 2) tell the stories of the citizen/landowners who have been harmed and who have taken on the Goliath of the State of Colorado, and 3) to shed light on what it cost both the state and the landowners financially, the personal cost in emotional harm to the landowners, the brain damage for everyone involved, the shame of Colorado’s greedy and unjust war on its own citizens, and the staggering indifference of public officials to the constitutional rights of its citizens.
Over the years I’ve watched as various headlines have popped up, only to dwindle away with no public outcry. Why so little compassion from the public? Why so little interest? I don’t think I can answer that, but I think one reason is that this subject is so complicated that the newspapers were not able to adequately capture the story and the facts eluded the public’s understanding because it was never fully and fairly explained. Friends frequently ask me about it, so I’ve decided it’s time to set the record straight.
So, what makes me an expert? Who am I to tell this story? I was thrust unwittingly and unwillingly into the eye of the storm, along with my business partners. We were front and center in the preliminary skirmishes, which bloomed into war, and it nearly ruined my life. There is no amount of money that can ever pay us back for the financial and emotional toll this experience took. At times I was unable to work because managing the ensuing lawsuits became a full-time job. I lived it, breathed it, suffered it. Yes, I am an expert. I am also a professional writer. Who better to tell the story?
So let’s start at the beginning.
What Is a Conservation Easement?
Many of you are already familiar with the notion that there are certain rights associated with a parcel of land, such as mineral rights, that you can sell to someone else even though you still own the land. In other words, you “sever” those particular rights from your parcel, and sell or assign them to someone else and they no longer belong to you. So far, so good.
One of the severable rights that belong to landowners is development rights: the right for the land to be developed now or in the future into something other than what it currently is. A conservation easement means that you, as a landowner, give up your rights to the future development of your land and donate those rights to a land trust (a charitable organization) that exists to protect the land. When you give your development rights away to a land trust, you give them away FOREVER, and that creates a conservation easement on your land that is recorded as part of the legal description of your parcel. You still own your land, and can do what you’ve been doing with it (e.g., running cattle, or growing hay), but you can never build a housing development on it. This DEVALUES your land because, even if you sell it to someone else, they can’t develop it either. EVER! Wow, why would anyone do that?
Why Would Anyone Put their Land into a Conservation Easement?
Why would anyone deliberately devalue their land and give up potentially huge future profits? If you have a large parcel of land, you probably worked darn hard to buy it and pay for it; or maybe you still have a mortgage on it! If you have a large parcel of land, it may have been in your family for generations. You love it, you need it, and you treasure it. Your land is everything to you – your way of life, your financial future, and it has a huge place in your heart.
“Estate planning was a driving force behind Mike and Cathy McNeil’s decision to put the bulk of their 3,033-acre ranch in the San Luis Valley into conservation easements. The primary reason ranchers like the McNeils put their properties into conservation easements is love of the land. ‘If money is the only, or primary deciding factor, then a landowner is better off to just sell their land outright,’ Cathy McNeil said. ‘That would be the better economic decision.’” By Margaret Jackson, The Denver Post, November 4, 2007.
You may have absolutely no intention of ever developing your land. In fact, you may be opposed to it ever being developed. But, unless you are stinking rich, there is no reason to deliberately devalue your land and put it into a conservation easement. Except that the State of Colorado created an incentive for landowners to give up their development rights. We’ll get to that in a minute. But first, why would they do that at all?
Benefits of Conservation Easements to the State and Citizens of Colorado
Have you noticed you cannot manufacture land? You can’t import it, either. There is a finite amount, and you’ve probably noticed it’s being gobbled up for development. And, if you love Colorado for its natural beauty, you’ve probably noticed that a lot of development is just plain ugly. A few specific Colorado eyesores come to mind, but I won’t list them here.
So, putting land into a conservation easement has the following benefits for both the State and the citizens of Colorado:
- It helps the citizens of Colorado to preserve large tracts of land in pristine, open condition that maintains the character of the state;
- It preserves habitats and historically significant land areas and structures;
- It provides scenic access for the public (in other words, it protects the views);
- Colorado’s tourism industry depends on the existence and preservation of large amounts of beautiful, preserved open space;
- And if landowners donate the easements, the State of Colorado does not need to purchase the land at fair market value. Wow. Important Insight! Hold that thought.
In this post, I’ve laid out the definition of a conservation easement in my own words, raised the question of why anyone would devalue their land by donating it to a conservation easement, and the benefits of conservation easements to the citizens and to the State of Colorado. Come back soon to find out how Colorado baited hundreds of landowners and then – wait for it – switched the plan after it was too late. Do you believe me? Don’t believe me? Just keep reading the rest of the story…I’ll post again soon, God willing. © Sharon Cairns Mann