If funds are available and the property is suitable, ASA may purchase the conservation easement (also called purchase of development rights, or PDR). The purchase price of the easement is determined by an appraisal conducted by New York State-certified appraiser. The appraisal uses comparable sales and includes a “before” easement valuation and an “after” easement valuation. The difference between the values is the amount the landowner would be paid.
State Funding for PDRs
Most purchased easements are funded through the New York State Farmland Implementation Protection Program, administered by the Department of Agriculture and Markets. This is a highly competitive grant program that typically focuses on larger-scale, commercially viable farming operations with good soil resources.
The state ranking criteria consider development pressure; whether the property adjoins public resources, important ecosystems or habitat characteristics; total acreage; the amount of acreage in production; demonstrated farm management; farms with business or succession plans, proximity to other protected farms and municipalities’ commitment to maintaining local agricultural viability.
The grant provides 75% of the total cost of the project, defined as the cost to purchase the development rights plus project-related expenses, such as survey, title report, appraisal, staff time and recording fees. The remaining 25% must come from a local match. ASA will attempt to secure funding for the match, either from our own reserves or from a federal grant (detailed below). If the local match cannot be organized, the landowner must be willing to do a bargain sale to make up the difference.
PDRs require time, considerable paperwork and patience. The state grant process can take up to two years to complete once the grant announcement is made.
Federal Funding for PDRs
The Federal Farm and Ranchland Protection Program (FRPP) is administered by the Natural Resources Conservation Service of the U.S. Department of Agriculture. FRPP is also highly competitive and provides 50% of the cost to purchase the development rights but does not apply funding toward project-related expenses. A 25% cash match is also required. Due to the constrictions of this program, it is often best used as the local match with the state program, if permitted.
How ASA can help
ASA administers both the Washington County and Rensselaer County Purchase of Development Rights Programs. In this role, we offer guidance for farmers interested in applying for the state farmland protection program.
Interested landowners are asked to submit a pre-application to ASA with information about their property and, if relevant, their farming operation. Pre-applications are accepted once a year, usually in the spring. The county Agricultural and Farmland Protection Board, in consultation with ASA, select one or two farms that they feel best meet the state criteria and will be competitive for state funding. ASA then writes the grant on behalf of the county and, if awarded, administers the grant and holds the easement.
Some towns in Washington and Rensselaer Counties are eligible for the state grants as well. ASA provides the same support to those towns that apply for a grant as we do for individuals.
Pre-Emptive Right to Purchase
A Pre-Emptive Right to Purchase is an agreement that allows ASA the option of purchasing a property at the agricultural value (plus improvements with limitations) if the seller contracts to sell the land to a non-farmer. ASA may choose to exercise its right to purchase the property and will then find a farmer to sell the land to at the agricultural value. This agreement is entered into voluntarily and is done simultaneously when granting a conservation easement.
The idea behind this type of development rights sale is to keep conserved land affordable for farmers to purchase, especially in areas where real estate prices are skyrocketing.
Landowners opting for the Pre-emptive Right to Purchase will be paid a sum determined by an appraisal prepared by a New York State-certified appraiser. Click here for a sample Pre-emptive Right to Purchase document.