Who Pays the Price for Preservation?

From Mike Rizzo at the Unbroken Window:

Here is a recent example of the sorts of ways that this success has been enabled. Rather than entirely depending on the political process to get things done, environmental advocacy groups, recreation groups, conservation groups and private interests have frequently put their money where their mouths are and taken up the role of conservation themselves. Private landowners on a famous canoe carry to Raquette Lake around the Marion River rapids were planning on selling property for development purposes (why is another story). Rather than use the town zoning thugs or some obscure environmental law to prevent the sale and development, concerned groups who claimed the land was more valuable in recreation use took it upon themselves to purchase the land and keep it in its natural state:

The Open Space Institute has acquired the historic Marion River canoe carry and 295 surrounding acres in Hamilton County.  There has been concern about preserving access to the canoe carry in recent years, after the owner announced plans to build several homes along Utowana Lake. The acquisition will ensure the carry remains open to the public.

“The potential for development made the Marion River Carry a higher, more immediate priority for conservation,” said Kim Elliman, president and CEO of the private non-profi t land preservation organization.

The OSI is paying $2 million for the land …

A couple of months ago a local resident was going to tear down a Frank Lloyd Wright house for development.  Outrage poured from all quarters of this town that was once Wright's winter residence.  We have got to stop this!  So seemingly everyone in the area rushed to the city council to force this guy to keep his house intact.

I am a fan of the old master, though I also think (gasp!) he built a lot of crap, too.  I personally would never live in one of his houses.  Not even Falling Water, which is beautiful but not very liveable (and FLW definitely had a bias against tall people).

My argument all along was, well, if this house's continued existence is so valuable to so many people, why don't you buy it?  After all, shouldn't the people who value the house pay for the cost, including the opportunity cost, of its preservation?  Why should this guy who does not value the house be forced to bear a lot of the cost of its preservation?  Most people looked at me as if I was from Mars.

Eventually, someone who wanted to preserve the house made an offer for $2 million.  The buyer rejected it as less than what he would make from development.  Everyone went nuts again - they said the $2 million was more than the owner paid for the house, he should accept it.  Why?  He's held this house through the downturn and born the holding costs to make a profit, not just get his money back.  If supporters can't come up with another half million, is it really worth saving?

I actually missed the ultimate resolution.   A few weeks ago the city council was gearing up to "protect" the house, meaning that supporters could have the house without actually paying for it, a sort of eminent domain seizure this guy likely will never be compensated for.

PS- I love FLW's theaters.  He had a home theater in Taliesen West where all the chairs are skewed facing a bit right of the screen.  He observed people like to put their legs off to the side when they face the screen and tilt at the waist a bit.  He built the theater to match this position.  It is a very comfortable way to watch a film.  ASU's Gammage auditorium, originally designed for Bagdad I think, is not very attractive from the outside but is an incredibly comfortable place to see a show.  It has the widest spacing between rows of seats I have ever seen in a theater.  You do not have to stand up for people to move down the aisle.  Acoustics there are not great, but a lot of auditoriums of that era screwed up their acoustics.  LOL, until a recent renovation it had about 2 women's bathroom stalls for the whole place.   The lines for the women's room were the worst I have ever seen.  My son and I used to sing a song there (to the tune of the Village People's YMCA): "I'm glad I have a Y chromosome...."  I wonder if this was due to the original specs being from Iran?

  • bigmaq1980

    These are probably the same kinds of people who show up to protest Walmart from coming to their town/city. They claim it will destroy the mom and pop stores they so love. When Walmart opens for business (often the outcome), it seems the local population vote with their dollars and Walmart seems to have a thriving store. Some smaller stores adapt and survive. Others don't. It seems that the love for the mom and pop stores only goes so far when it comes to spending their own money.

  • marque2

    In my town the Target decided to expand to a Super Target, with groceries - not a word - even though there were grocery stores in the area near Target (right next door). Walmart to compete decided to do the same about a year later, there was outcry, All the other grocery stores in the area would go bankrupt / or be hurt. Part of the concessions was for the Walmart to get rid of the auto center to allow them to expand.
    I really didn't understand the double standard. It is not like Target pays employees any better, or sells more US made merchandise (I would guess Walmart actually sells more made in the USA than Target) and Target's prices are higher to boot.

  • marque2

    The only beef I have with private orgs buying land and setting it aside, is that since they have tax free status, I think they can avoid paying property tax. This takes the property off the tax rolls, and we all end up subsidizing the tax free charity, even if some of us do not want to subsidize the charity.

  • bigmaq1980

    I think the Walmart protests are more "organized" than they appear to be, or would have us believe.

  • BAT1

    I agree, if the community wanted to protect the FLW house they can buy it and it definitely shouldn't be a sort of eminent domain situation, however, I don't know all the facts. Did the current owner know this house is or would be a "landmark protect" house? Did he do any due diligence on previous FLW properties and if there were protection battles? $2 million sounds like a lot for the purchase, but was it actually a good deal because the previous owner tried to re-purpose and got blocked so just sold on the cheap? If that's the case, then the current owner has maybe already been compensated.

  • Incunabulum

    Me personally - I think my house might have a fiery accident in that situation. Kind of like when "Old Tucson's" owners were looking at renovations and changes to the place that had a lot of the locals up in arms about "historical preservation" and then suddenly the place caught fire.

  • herdgadfly

    The FLW house in Phoenix sold for $2.38 million, so the developer made $538,000 on the sale. Now the Mayor can turn his attention to the new owners to get another $2 million spent on preservation and renewal of the property.

    http://www.kpho.com/story/20395274/historic-frank-lloyd-wright-home-sold

  • Reformed Republican

    (and FLW definitely had a bias against tall people).
    I noticed this whenever I went visited Florida Southern College. I would constantly have to stoop or duck to avoid hitting my head on things. Was FLW a short guy himself?

  • LarryGross

    this is old hat for the Nature Conservancy who has pissed off some members by accepting land then selling it or a portion of it to finance the purchase of other land deemed more significant and important to "save" now.

    But I do have a question for folks.

    What do you think of owner-invoked Conservation Easements? That would be land that they promise never to develop and to maintain only for certain passive or light ag/forest use in return for dramatically lower taxes - and tax credits - essentially money from the state to reward the set-aside, money from tax revenues.

    any thoughts, ideas, opinions on govt enabled conservation easements?

  • marque2

    Why would I subsidize that? Let the Nature Conservancy pay the guys taxes if he is willing to leave the land fallow. We need the taxes for schools and things no?

  • marque2

    Nature conservancy also has some dubious claims. They got me a few years ago, when they told me they needed money to purchase the last of the native California Oak groves - I didn't know any better at the time - so I gave them 50 bucks. I got more into nature after that and learned more about fauna and flora, and discovered California scrub oak, and tan oaks is everywhere - it is almost a weed. Haven't trusted them since.

  • Goober

    I’ve always thought that this desire to preserve the
    historical buildings and places is kind of ass-backwards. These old, abandoned buildings are old and
    abandoned for a reason – they suck. I
    just renovated a 100 year old building that had burned down 3 times during its
    lifespan, leaving the structural brick brittle and crumbling. I put 2.3 million dollars of my client’s
    money into this building, so he could build a retail building with apartments above
    it, and when we were done, he had a 110 year old, musty, broken down old
    building with seismic retrofits to tie the floors into crumbling, old, rotten
    brick walls and rubble-rock foundations (so they are essentially doing nothing). In my opinion, the building is unsafe, poorly
    laid out, has a lot of floor space lost to the massive, thick structural brick
    walls, and for the same money, I could have knocked it down and built him a
    building that LOOKED exactly the same, with the historical theme so it fit into
    the old downtown area, with modern structures, 20% more floor space, better
    layout, and modern mechanical systems that is safer, more environmentally
    friendly, less prone to sick building issues, and looked exactly the same. I told him all of this, but he would have
    missed out on a huge tax subsidy from the historical buildings folks in the
    state and federal government that he would not have gotten had we re-built the
    building from the ground up using modern techniques. So our government subsidized this unsafe Frankenstein,
    and now families are living there with their children, likely unaware of the
    fact that the building is a huge pile of crap.

    Needless to say, I’m not proud of this particular accomplishment.

  • Goober

    All this does is pass the burden for the preservation of that land on to the taxpayers in the area, which is not right. If a group wants to preserve a piece of property, they need to buy it. THat's all there is to it.

  • marque2

    Or Nature conservancy can pay the taxes or a rental stipend to the owner to leave the land fallow. They wouldn't do that though because if they purchase it outright, they don't pay property taxes since they are non profit. Then we all subsidize the land since the land goes off the tax base.

  • LarryGross

    how about land? how do you feel about govt policies to lower the tax rate on land that is set aside and not developed?

  • mesocyclone

    I've read that they used some pretty awful tactics to force owners to sell below value by lobbying government agencies to take actions to make land unusable. I'm leery of these groups, although NC at least *claims* to use a reasonable approach - protecting property rights.

  • Ron H.

    "Did the current owner know this house is or would be a "landmark protect" house?"

    What difference does it make? The current owner is the current owner, period. It makes no difference why he bought the house or what his plans are. If someone wants to preserve the house they can offer to buy it.

  • Ron H.

    Your beef, then, is with the taxing authority.

  • Ron H.

    You are absolutely right. Anyone who wants to preserve a mom & pop store is free to spend their money there instead of elsewhere.

  • marque2

    Yes - let groups buy land if they want, but non-profits shouldn't necessarily have be allowed to avoid paying taxes because they are non-profit. Part of the reason we have so many dopey non-profits is that we give so many incentives to non-profitable work.

  • Bat1

    It makes a difference because if he knew or had reason to believe it would be difficult to tear down due to Conservation battle, then he would have offered less for the house. When calculating a purchase price I know I would have factored in the risk of being blocked from doing what I wanted with the property.

  • Ron H.

    OK, so what? If you are now the owner of the house and have paid a low price for it, for whatever reason, does someone else now get to determine for you what price you should ask? Who can decide that the current owner has already been compensated, as you put it? What difference does anything in the past make to a current negotiation between the current owner and a potential buyer?

  • Ron H.

    This is a difficult subject for me, because as a first principle I believe taxation is theft. Then, I believe in fairness, as I think most people do, so it's troublesome to see people treated differently by the tax code, which in my opinion amounts to social engineering. I guess the bottom line for me is that if someone can pay less taxes for any reason, they should do so. The fact that everyone can't take advantage of a reduced tax bill doesn't mean that no one should. I don't fault anyone for taking something that's offered to them.

  • Goober

    If it needs to be preserved then buy it and preserve it. Dont force others to pay for it.

  • Mike

    Nature Conservancy has a pretty neat little scam running.

    I always thought they were the "good guys", using their own money to preserve the environment as they thought best. Even moreso because I live in New Jersey and crave some undeveloped nature.

    Turns out they actually just front-run the government. They buy the land and then are reimbursed by our taxes - turning a voluntary donation into a forced extraction. NC considers links with government and reimbursement an important "force multiplier".

    Please note: this information comes from a donors' brochure a few years ago - I couldn't find any linkable articles to substantiate my information.

  • Larryg

    NC uses any/all laws and regs that benefit their mission - just like others do including businesses and corporations.

    What I like about them more than other preservation groups is that they build and maintain a revolving fund that can be deployed for any property that presents itself available even if not currently threatened - as opposed to waiting until a property is threatened then launching a last ditch fight that uses much much resources and often fails.

    So NC is proactive rather than reactionary....

    Second they are pragmatic and realistic and recognize up front that they cannot save everything and that "significance" is an important criteria.

    Someone may want to donate land to the NC to preserve and the NC might look at that parcel and
    determine that it is not really "significant" or unique but it has other areas that are so one approach
    is to accept the donation but disclose to the donors that it will be sold all or in part to generate funds
    to buy more significant and at-risk properties. This is pro-active strategic thinking that basically prioritizes
    their actions and preserves their revolving fund rather than blowing it all and then operating in a reactive crisis mode to ongoing threats.

    They do use whatever laws that can help them but if those laws went away - they'd still be in business doing what they do.

    They also tend to have many more business people on their board and they tend to run more like a business than many advocacy groups.

  • marque2

    Good point - but if you are not paying taxes to the city, you should be expected to pay for your own private fire service, your own access maintenance, and for anything else the city would normally provide that the non-profit uses.

  • Ron H.

    "Good point - but if you are not paying taxes to the city, you should be
    expected to pay for your own private fire service, your own access
    maintenance, and for anything else the city would normally provide that
    the non-profit uses.
    "

    I would love to have a choice among private businesses competing for my dollars for fire service, security, utilities, road maintenance, and every other service various levels of government now have a monopoly on providing for me.

    "I understand at a Federal level, it is mostly transfer of payments
    here and there, but esp at the local level, the tax money goes for
    necessary services (not that they couldn't be farmed out to private
    companies - but they are needed by most folks and folks would have to
    find a way to get the services if the city didn't provide)
    "

    If there is a market for something, it will be supplied.

    "And it isn't just the Nature Conservancy that I have issue with. If
    your church catches fire - should the city really have to put out the
    fire for free when the church isn't contributing taxes to the fire
    service?
    "

    Good point. In a freer market, I would expect fire services to be provided by my insurance carrier as they have a direct interest in minimizing damage.