What is a conservation easement?
From a practical matter, a conservation easement is a negotiated reduction in development density where a number of potential home sites are donated to a conservation organization; thereby, reducing the ability to divide the land in the future. The result is that the speculator/developer’s premium is removed from the land’s value. The market bases the value on the properties location and recreational quality not development density. Today, this area is leading the nation in properties under conservation easement with approximately 30% of all the plantations in the belt now under easement with this amount growing monthly.
There is no change to the land nor does land management usually change. A common provision is that hardwood swamps can be thinned but cannot be clearcut. The use of controlled burns is usually recommended. The most invasive requirement is that there is usually a short annual inspection to ensure the land has not been subdivided or degraded.
How does it benefit the buyer looking for a recreational plantation/property?
It allows recreational investors the opportunity to buy higher-quality larger properties than they would otherwise be able to purchase for the same investment dollar. Land prices in North Florida are looked at as a bargain based on values in the rest of the state. Another problem is that land is being subdivided at a very rapid rate making it difficult to find quality tracts. For example, in rural Suwannee County there are only two tracts of land, not owned by the government, larger than 1,000 acres in the entire county.
From an investor/recreational buyer’s perspective, a conservation easement does two important things; first, it keeps the price per acre of high quality land in check with recreational values by removing the investor/speculator from the equation. With the easement in place a buyer can oftentimes purchase a high caliber property with a great location for the same price as a less desirable property.
How does it benefit the Seller/landowner?
In order for the math to work out for both parties, the seller either sells the easement or takes a tax deduction for the difference in the appraised value before the easement and after the easement. For the 2006 and 2007 tax years (and expected to be extended) the landowner is able to deduct the appraised amount of the donation up to 50% of his adjusted gross income per year over 16 years as a charitable deduction.
A common misperception is that the person who placed the easement on the land made a better deal than the person buying the land with the easement already in place. This is not the case. With approximately 30% of the Red Hills already under conservation easement and with another 100,000 acres estimated to be placed under easement in the next few years the market has valued these properties below what it would be worth without an easement depending on the location and quality of the land. This usually equates to the amount of savings the landowner has made by placing the easement itself and no more. The principal difference is that the value was received through tax savings or sale of an easement and the landowner did not have to sell the land to harvest that value.
How does it impact the property value now or in the future?
The market has proven that properties with an easement continue to appreciate at the same rate as the overall real estate market, the only difference is the cost basis has been artificially lowered by the easement. From a liquidity standpoint, properties tend to be on the market longer as the investor/speculator has been removed as a potential buyer. The landowner has incentive to have the highest quality recreational/investment property he can.
This firm has the sales information on every quality recreational and development sale in the Tallahassee/Thomasville area going back seven years. We are intimately familiar with almost every sale. We have found that the market values a quality property with a conservation easement the same as it would a remotely situated property with little development pressure. What we are unable to quantify with sales numbers is the fact that these easement properties as a whole have a much greater recreational quality than other unencumbered properties but are selling for the same prices as otherwise inferior but non-easement properties. The hidden value and result we are seeing is that buyers are receiving a premium quality property but not paying for that premium.
How many properties in the Red Hills are under easement?
The Red Hills run approximately between the Ochlocknee River west of Tallahassee to just east the Aucilla River and contain about 300,000 acres of the best quality soils, timber, water and recreation in the southeast. As such, the recreational lifestyle and demand for these properties is strong and conservation easements work exceptionally well. To date, 100,000 acres (1/3 of the total area) is already under conservation easement with another 100,000 projected in the next few years. The popularity is growing at a rapid rate, some conservation organizations have an approval list and others a waiting list. The primary organizations involved include Tall Timbers, The Appalachee Land Conservancy, The Nature Conservancy, The Suwannee River Water Management District and the Florida Department of Environmental Protection.
The most comparable recent sales in the area are:
Alligood, 385 acres, between Monticello and Boston, sold March 2007 for $6,500 per acre, under Conservation Easement
Moreland Place, 272 acres, between Monticello and Quitman, sold June 2006 for $6,200 per acre.
Hamrick Place, 158 acres, between Monticello and Greenville, sold March 2006 for $6,850 per acre.
South Blair, 743 acres, between Monticello and Quitman, sold October 2007 for $5,400 per acre
Church Tract, 365 acres, between Monticello and Boston, sold November 2007 for $9,050 per acre. Development deed restricted
Cooksey Place, 328 acres, sold May of 2006 for $7,370 per acre, located three miles from Lamont and Old Hornsby on US 19.
May’s Place, 1,251 acres, sold April 2006 for $5,100 per acre, offer May 2006 for $7,500 per acre, located 7 miles from Lamont and Old Hornsby on US 19.
Hawkins Piece, 112 acres sold 2005, less than 4 miles from Old Hornsby, back roads, sold for $6,058 per acre.
Chemonie Plantation, 2,407 acres, between Monticello and Tallahassee sold April 2006 for $5,500 acre, A little over 66% in conservation easement with Tall Timbers, same as subject.
Disston/Wood, 363 acres, between Monticello and Boston, sold in an nondevelopment area in 2005 for $6,464 per acre.
Tahlequa, 520 acres, located off dirt road between Monticello and Thomasville in a nondevelopment area, sold 2005 for $5,850 per acre.
Bailey’s Mill, 446 acres, located west of Monticello on US 90, sold 2006 for $7007 per acre.
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©2012 Jon Kohler 
850-508-2999 • jon@jonkohler.com