Conservation Easements: A Proactive Solution for Landfill Buffering

Complaints, which can become litigious, from neighbouring residents and businesses are a very real concern for many landfill operators. Malodourous gas emissions are the primary concern, but toxic gas and liquid releases are also a concern and a potential threat to public safety. One solution is the implementation of compatible land use buffer zones. By Drew Troyer and Robert Gregory Clearly, the first line of defence is to contain emissions completely, but effectiveness of fluid containment and collections systems is affected by many variables. If your neighbours happen to sniff a foul odour – they are likely to blame you no matter the source. A sound strategy is to create a land compatible land use buffer around the landfill that will assure compatible land use, which won't interfere with waste management operations. In addition to keeping incompatible neighbours from moving near a landfill, if it's properly defined, the compatible land use buffer can provide watershed protection and win some public relations points as a good environmental citizen for the operator. Many organisations, such as military installations and airports have successfully employed land compatible land use buffers to assure compatible land use and to maintain peaceful community relations. The Nuts and Bolts of Landfill Buffering The first question that arises is how big should the compatible land use buffer be? A good rule of thumb is that you want a buffer to extend at least 1500 feet (450 metres) beyond the landfill perimeter. Remember, this is a minimum. Average wind velocity, humidity, the sensitivity of the population you serve and more are all factors to consider. But, for example, if your landfill is 70 acres, you're going to require a minimum of about 375 acres as a compatible land use buffer. The next question is how to implement a compatible land use buffer? In the U.S. you really have four options: property condemnation, zoning laws, conservation easements or a fee simple purchase of the property - an estate in land and a form of freehold ownership. Condemnation offers a permanent buffering solution, but it is often a very contentious affair. America was founded on the inalienable right to own property. Americans, for the most part, don't appreciate government entities taking their land. If you're a private waste management company, you'll have to make the case with your municipal, county or state government to condemn the property for you. Waste management firms have to work hard enough to create the perception of being good community citizens, so condemning property is a sure-fire way to derail your community relations efforts. As a rule, condemnation is not a great option for buffering operations. Zoning is another potential political landmine. Land owners, by and large, don't like being told what they can and can't do with their land. And, much like condemnation, you'll have to have your municipal, county or state government pass the zoning laws. Making matters worse, zoning does not offer a permanent solution. If there is a changing of the guard, the new legislators can reverse the zoning laws and restore full property rights to the owners. Figure 1 - Landfill with incompatible land use around its borders. Fee simple purchase is simply buying the land outright at fair market value (FMV), which offers a permanent solution for landfill buffering and it is not political and contentious. However, it can be very expensive. For example, if the land surrounding the landfill has a fair market value of $2000 per acre, it will cost you $750,000 to purchase the minimum 375 acres in the example previously discussed plus all the real estate and closing costs. But that's just the tip of the iceberg. First, property owners may not be willing to sell just the amount of land you require for a compatible land use buffer. They may want you to buy it all or nothing, which can substantially increase your cost. Or, they may not be willing to sell at all. Then, once you've bought the land, you'll have maintenance and upkeep costs and property taxes to pay each year. Also, you'll be tying up working capital, which could be deployed elsewhere. You may be able to generate some value from the land by leasing it, but it's probably not going to be anywhere near the level of returns you could generate from your operations. And, to top it all off, in most cases, real property purchases must be capitalised and can't be depreciated – so you can't even get a tax deduction. Conservation Easements is a novel option is to acquire voluntary conservation or restricted use easements on the targeted properties (in most instances, due to the potential environmental impact, the land surrounding a landfill would qualify as a conservation easement). Conservation easements are either permanent or term, non-political and, because they're voluntary, non-contentious. Only qualified entities, such as non-profit conservation organisations or public agencies, may acquire and hold conservation easements. As a result, this approach requires a partnership between the landfill operator and a partner organisation qualified to hold easements. When you acquire a conservation easement you're purchasing the incompatible development rights from the owner, but the owner continues to own and use the property in its now restricted state. Restrictions might include no housing or shopping developments, limited re-parcelling of the property, no clear cutting of trees - really, anything you desire. The waste management firms need only to decide what kind of land uses they can and can't tolerate. Then, with the list of encumbering restrictions in hand, a certified appraiser determines both the unencumbered fair market value and the value of the property with the defined restrictions. You then pay the difference to a non-profit land trust organisation or public agency to acquire, hold, monitor and enforce the easement. For example, if the FMV of the property is $2000 per acre, and the encumbered value is $1000 per acre, you pay only the difference of $1000 per acre – or $375,000 plus fees to the land trust to complete the transaction and to support the monitoring and enforcement of the property in perpetuity or for the term of the easement. Conservation easements offer a number of very significant advantages to the waste management firm: They are usually much less costly per acre than fee simple land acquisition –working capital is preserved for high return investments in your operations Because they work through a non-profit land trust or public agency, all costs associated with creating the compatible land use buffer are typically tax deductible It is often possible negotiate to place the easement just on the acreage required for the compatible land use buffer In some instances, federal, state, local and/or private funding might be available to help with the acquisition of the easement, particularly if there are environmental or archaeological issues involved The land owner may be willing to sell the land for less than the difference of the appraised value. The difference between purchase price and FMV is viewed as a charitable contribution on the part of the land owner, which can qualify for tax deductions. This deduction, however, only applies to permanent rather than term easements The land owner may receive significant estate tax benefits when the encumbered FMV is reduced by the conservation easement No need to pay for property maintenance, upkeep and taxes The landowner continues to operate the land just as he or she did prior to the easement, but with a nice bit of cash in pocket Elevates your community profile as a good environmental neighbour by sponsoring and supporting conservation easements. Once landowners understand how conservation easements work and the benefits they provide to them, they usually come on board. In fact, in some communities, once the word gets around other land owners are eager to be next, particularly in rural areas. Conservation easements, however, don't work in all instances. For example, if encroachment has already occurred, it may be too late. But, if the land surrounding the landfill is undeveloped and rural, conservation easements are usually your best bet – often reducing your cost to buffer your operations by 50-70% or more. As a side note, if the landfill already owns buffer land that's not required for current or planned operations, a conservation easement may be placed on the land and the land can be sold in its encumbered state, which enables the landfill owner to recover some working capital and typically receive a tax deduction for the difference between the fair market and encumbered state values on the property and any associated expenses to facilitate the transaction. Creating a Compatible Land Use Buffer Step I – Find a partner to assist in creating a suitable compatible land use buffer around your landfill. Step II – Perform a detailed analysis of your direct use and compatible land use buffer land requirements. Identify long-term land required to expand landfill operations, to generate power, to manage leachate, to farm algae, etc. Determine the required compatible land use buffer – again, a minimum of 1500 feet around the landfill operating area Determine compatible land use restrictions that you'll require Create an overhead map of the area surrounding the landfill and define property lines Perform a parcel-by-parcel prioritisation analysis, considering (the map in figure 1 illustrates where incompatible development has already occurred at a landfill site): The importance of each parcel to current or planned operations. The degree of encroachment that has occurred, is occurring, or might occur in the future. Suitability of the property for a conservation easement. On a parcel-by-parcel basis, determine what outside funding sources might be available to support the acquisition of conservation easements Create a compatible land use master plan, to include: Prioritised list of properties to acquire fee simple to support future expansion or are not suitable for conservation easements. Prioritised list of properties to target for conservation easements based upon the location and the number of acres that fall within the desired compatible land use buffer. Preliminary financial analysis considering several plausible combinations of fee simple and conservation easement acquisition. Step III: Landowner outreach. Once the master plan is in place, it's time to reach out to the landowners and begin the education process. This step is generally performed by your partner, who will almost certainly be experienced in reaching out to landowners. As you might expect, some say no and some say yes. However, particularly with conservation easements, once word gets around that the property owner gets to pocket some money, possibly get some tax advantages and still keep and use his or her land, a lot of the preliminary no responses become yes answers. Step IV: Buy the properties and easements. This requires appraisals, due diligence and all the other typical requirements for a real property transaction. In the case of the conservation easement, your land trust partner will purchase and hold the conservation easement. Step V: For purchased property, take it over and make whatever modifications you require. For conservation easements, your land trust partner will begin the monitoring process and enforce any occurrence of misuse that violates the terms of the conservation easement. Conclusion In conclusion, compatible land use buffers enable waste management firms to proactively manage against incompatible developments that cause people to complain and, in some case, take legal action. Conservation easements can help you achieve your compatible land use goals while saving money and elevating your profile as a good environmental citizen in your community. Drew Troyer is chairman and director and Robert Gregory is vice president and director of the Compatible Lands Foundation. More Waste Management World Articles Waste Management World Issue Archives