The demand for land for development – and, subsequently, the value of the land itself – may be in a slump, but for the Delaware Agricultural Lands Preservation Foundation (DALPF) that could mean it’s time to strike while the iron’s hot.
DALPF’s Mike McGrath presented the foundation’s request for funding to the Sussex County Council at the council’s Jan. 6 meeting, accompanied by Dennis Forney of the Sussex County Land Trust (SCLT).
“Let’s be as aggressive as we possibly can this year,” Forney said of the Land Trust’s recommendation to the council to again fund $900,000, to be combined with $300,000 from the SCLT, “because we know that values are down, and we have an opportunity to build up the amounts of preserved lands.”
Thus far in the history of the program, Sussex County has directly provided $2.6 million for the outright purchase of land and the purchase of preservation easements that protect land from being developed.
Sussex County was, in fact, the first county in the state to participate in the program as a partner with the quasi-independent DALPF. Together with the Land Trust – which is a public-private partnership that aims to preserve open space – the county has directly or indirectly provided $8 million in funds that have been spent on preserving open space throughout the state.
Under statewide funding, the effort accounts for 392 farms – 51,500 acres of land – preserved as agricultural districts, to date. Of those, 178 farms and 28,000 acres – at a cost of $53 million – are now permanently preserved through easements.
All of the land in these agricultural districts starts off the process with a 10-year commitment from the farm owner. McGrath said current requests to enter the program include 58 farms in Sussex County, totaling about 7,000 acres, with the value of their development rights estimated to be about $79 million altogether.
“You can see that the interest from land owners remains high,” McGrath emphasized. “I would tell you that the current real estate market situation, as you are aware of, is in difficulty, but we have had one of the strongest sign-up periods ever in the last year. … Interest remains high.”
McGrath said DALPF is currently finishing up 140 appraisals, statewide, of land proposed to enter the program. Once the appraisals are completed, the owners then review DALPF’s proposal so they can establish full fair market value of the rights. Then, McGrath said, the owners can meet with their attorneys and make an offer to DALPF.
“We can’t pay any more than 100 percent of appraised value, but we can pay less,” he said, if the owners want to ask for less. The county is then presented with a list of properties, and prices, that it can choose to fund for the purchase of rights.
“The county is free to choose as you see fit,” McGrath emphasized.
Once the county has made its selections, the foundation will choose which purchases it wishes to make on a statewide basis. The foundation then advances the agreed-upon payment to the owners and requests payment from the county once the documents are signed.
“Only once you choose the farms is the county committed,” said McGrath.
Thus it was that McGrath came to the council on a preliminary basis this week, asking for a commitment to the program and an idea of how much they might be willing to give this year. Only later in the spring, once those appraisals and offers are complete, would the county have to make its commitment of a particular dollar amount concrete.
Dim financial picture looms over program
But the issue of how much – if any – the county can afford to fund the program this year was a shadow over Tuesday’s presentation.
County Administrator David Baker told the council – full of fresh faces after the retirement of three Democratic council members on Dec. 31 – that funds have been set aside in the county’s budget for the purchase of open space, either directly or with the purchase of development rights through the DALPF.
That didn’t fully assuage the concerns of new Councilwoman Joan Deaver (D-3rd), who was newly appointed to serve on the SCLT earlier at Tuesdays meeting and received a warm welcome from fellow SCLT member Forney.
“Knowing we have a deficit here in the county, I don’t know where the money is going to come from,” she said.
“I share the same concerns,” added Councilman George Cole (R-4th). “We need to know what state has, what funds the Land Trust appears to have and look at our budget. Everybody seems to be having problems.”
Baker noted that the SCLT had requested the county fund the same $900,000 amount as last year, with the SCLT to provide its own $300,000 contribution. Other funding for the DALPF comes from the other two Delaware counties, state funding and even federal funds.
McGrath said the DALPF has around $7 million in state funds for the current round of purchases, from both the 2009 fiscal-year budget and funds remaining from prior funding rounds. He said the foundation is expecting as much as $6 million in federal funding.
Forney was particularly passionate in his urging of the council to fund the full $900,000 recommended by the SCLT.
“Literally thousands of acres of Sussex have been preserved as a result of the Land Trust,” he said, again noting that while the SCLT’s board had voted to recommend to the county that $900,000 amount, “You all have the ultimate say.”
Forney said the recommendation from the SCLT was that the county use $300,000 of its funding as a straight agricultural preservation contribution and take $600,000 out of funds allocated from previous percentages of county surpluses set aside for agricultural preservation, totaling $900,000.
“And the Land Trust would kick in an additional $300,000 of privately raised funds [from individuals and businesses] who understand value of having open space preserved,” he added, urging an aggressive participation in the program while land values are down.
“That’s $1.2 million total. And if the state matches it, that’s $2.4 million. If the feds match it, that’s $3.6 million total.”
McGrath and Forney also noted a new preservation initiative called the Sussex County Grand Preservation Loop, in which, they said, the rationale for preserving open space is to purchase lands or development rights that in an effort to connect new parcels of open land with existing parcels of open space.
“Our goal for wildlife habitat preservation and open space is to have a loop that is contiguous, using farmland preservation and outright purchase,” Forney said.
Deaver asked about whether the program aims to preserve forestland, as well as working farmland.
McGrath said there is now a separate state program for preserving true forestland – mostly targeting Kent county this far, with $1 million in state funds and more promised by the Nature Conservancy – but the DALPF’s work preserving farms as whole entities includes the farmland, forestland and wetlands on the properties.
“About 28 percent of the land so far is forestland,” he noted. But lands eligible for the agricultural preservation program must be considered a working farm under the state tax code.
Deaver also inquired as to how the program operates in respect to the county’s investigation of programs that focus on transfer of development rights.
McGrath emphasized that the agricultural preservation program aims not to transfer the development rights of these properties but to “extinguish” them by creating permanent easements that simply do not allow future development or changes in use without extensive approvals.
County on the hook for $1.5 million?
Complicating the question of how much the county will provide for the DALPF this year is a verbal agreement with state official.
Baker said representatives of the three counties met with state officials last year, as the counties developed deep concern over the level of transfer tax revenue they might expect from the state.
He said county officials at that time agreed they would contribute money to open-space preservation this year: $1.5 million from Sussex, $1 million from Kent and $3 million from New Castle, on the promise that the state would not be altering the current formula for the deposition of the transfer tax.
However, Baker pointed out that a subsequent addendum to the state’s grant and aid policy, made July 1, 2008, is now expected to reduce paramedic funding for the 2010 fiscal year from 40 percent to 30 percent, at a cost to the county of about $1.3 million – about the same amount the county had verbally agreed to contribute to open-space preservation.
“That was not something we agreed to with the state,” he said.
Cole asked what level of commitment that verbal agreement held in Baker’s mind, particularly with a new administration headed into office.
“No, we didn’t sign anything,” Baker said.
“Are you saying that verbal agreement is null and avoid because the agreement made on the paramedics was changed?” asked new Council President Vance Phillips (R-5th).
“It’s up to us to decide that,” Baker replied. “They did not change the paramedics for 2009. They left the transfer tax alone.”
Cole and Deaver simultaneously said the council should “take it under advisement” when considering the issue in the future.
Deaver, in closing the preliminary discussion of the program and the council’s commitment to it for 2009, noted that, “The demand for development is way, way off. It’s falling further and further off. Some of the pressure is off.”
Council reviews subdivision appeal process
Also on Tuesday, council members were given a refresher course on the county’s subdivision appeal process, ahead of several such appeals set to come before them in the coming weeks and months.
Planning and Zoning Director Lawrence Lank told them that anyone seeking to appeal a subdivision decision from the commission has 30 days to file notice of the plan to appeal. They are required to pay $500 for a transcript of the P&Z hearing on the application, which the county council will then review to see if the commission, in their findings, made a logical decision.
The council has 60 days to respond, at which time they can refer the issue back to the commission for further consideration or can make a decision on their own. Appeals took place “a couple times last year,” Lank said.
“It seems like we’re getting a lot of them, more than in the last couple years,” Cole said.
Lank noted that most of the appeals had not been over the commission’s decision to approve or disapprove a subdivision but on the condition of approval.
“It sounds to me like they’re trying to make the law rather than enforce the law,” put in new Councilman Samuel Wilson (R-2nd).
County Solicitor David Griffin said he felt most of the appeals were reflecting court case law, such as cases filed when the Kent County regional planning commission turned down subdivisions that were allowed as matter of right. He said there had also been some cases the commission approved and the county council turned down, or vice-versa.
Phillips also noted that the county now allows someone other than the applicant in a subdivision request to file an appeal. That means neighbors of a proposed subdivision can now appeal when it is granted over their objections, with the council to review the hearing transcripts for indication of an error by the commission.
“It hasn’t been used yet,” Griffin pointed out, saying the same procedure would apply, including the $500 cost.
“That’s not cheap, is it?” Deaver put in.
Cole said he was concerned that the number of appeals might indicate the county’s system was not working as well as it should, leaving people – likely including Wilson – under the impression that the commissioners were making mistakes in their decisions.
“Do either of you sense a problem with the ordinance that should be amended, corrected, approved, eliminated?” he asked. “What are we doing wrong? Or if we’re not doing anything wrong, is it up to an interpretation of the council?”
“We’re not seeing denials so much as the developer doesn’t like the conditions, such as a cut in density,” Cole emphasized. “We haven’t really denied anything, but we’re making conditions.”
“I think we ought to curtail some of this,” Cole continued. “It gives the impression that P&Z is making mistakes, that they’re not following the law and are making the law,” he said, alluding to the earlier criticisms from Wilson. “I don’t necessarily agree and would like to squash that interpretation.”
Deaver said the particular case that pushed a revisiting of the appeal process – the Ashburn case – left her wondering if the commission did not have the right to deny a subdivision request.
“They can deny them,” answered P&Z Attorney Vince Robertson, “but only if the application does not meet the requirements set out in the code.”
“They can deny it,” Griffin agreed, “but there’s a concern about making a decision… if there’s a room full of people who say, ‘We don’t want it…’”
Cole said he would like Robertson to work with the P&Z and come up with some recommendations to improve the existing system of 17 conditions and related decision-making tools for subdivision approvals by P&Z.
“We’ve given the impression that P&Z is making mistakes, and I don’t know if that’s true,” Cole said.
Wilson left little doubt about his interpretation of the P&Z’s decisions.
“I’d recommend that P&Z follow the ordinance and not their opinions, not be making laws as they give their opinions,” he said. “It’s up to the council to make the ordinances and have public hearings on the ordinances.”
“We’re seeing a rash of appeals,” Cole replied, “and the appeals are from the developers, primarily, concerned about the conditions placed on them, and they come here and get overturned. I’ve heard comments that P&Z has erred in their decision-making, and I don’t think they have, and some here think they have. Let’s try to nip this before it drags on like a festering sore.”
Phillips agreed that Robertson should bring the commission’s recommendations back to the council in the form a memo, saying “The last few months have created a conflict. It may require an ordinance to change our code, tighten it up. Would have a public hearing and discuss any changes. George [Cole] feels there should be some clarification to the process, and I don’t disagree.”
Concluding the discussion, Deaver said she felt the answer was to simplify the process. “That should save some money,” she said. “We need some clarification.”