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Apr 22, 2014 10:25 AMPublication: The Southampton Press

Farmland Preservation Effort Takes A Turn In Southampton By Adding Covenants

Apr 22, 2014 2:12 PM

For all the thousands of acres purchased, and hundreds of millions of dollars spent, to preserve farmland over the last four decades, Southampton Town and the Peconic Land Trust hope that they are about to embark on the first transaction that will actually guarantee that a farm truly will be preserved as a farm.

The town and the Southampton-based Land Trust this week were laboring to close yet another multimillion-dollar deal, this one for the purchase of 33 acres of farmland in Water Mill. Other buyers—developers—are actively trying to scuttle that deal and snatch the hyper-valuable land out from under them.

If the preservation-minded purchase goes as planned, the Peconic Land Trust will buy the land and then sell a package of rights, primarily those allowing residential development of the land, to the town. The trust would then seek to sell the vastly devalued land to a farmer.

The land, in two separate parcels off Head of Pond Road, is owned by the estate of Charlotte Danilevsky, who died late last year. Neither side, the buyers or sellers, will say what the dollar amounts involved in the deal are, for fear of scuttling the agreement or giving a bar for developers to reach for. But both the overall purchase and the resale of rights are likely to have at least seven figures attached to them; the Corcoran Group is presently listing the two parcels for a combined asking price of $11 million.

The town will tap its Community Preservation Fund, or CPF—currently a checkbook with a balance of approximately $60 million—for its role in the acquisition. The town this week set a public hearing on the anticipated purchase for May 27.

“If we’re able to pull this off, it’s going to be a spectacular success story,” said John v.H. Halsey, president of the Peconic Land Trust. “One that will be breaking new ground for a municipality in the state of New York. We need a public partner that understands what is at stake, and I believe Southampton is at that point.”

The purchase of land and resale of rights is an arrangement the trust and the town have partnered in before. The trust, working with its relatively modest funding reserves, is able to compete with developers on the purchase price of land, whereas the town is limited by CPF rules regarding appraised values. By reselling the development rights off the land at the appraised value, typically upward of 80 percent of the land’s total value, the trust is able to recoup much of its private outlay.

What is new and unique about the hoped-for deal in Water Mill is that the rights the trust would be selling to the town this time will include a new layer of restrictions on the property beyond just sterilizing it from housing development. The additional rights, in the form of covenants, would make the land unusable for the variety of non-farming but legal “agricultural” uses that have beset land thought to have been preserved over the last decade.

The covenants would require that at least 60 percent of the land be dedicated at all times to food production; that if the land were to remain fallow for more than two years, the holder of the rights could seek to lease it to a farmer; and that its resale value be capped at whatever the appraised value is as farmland only, at the time of the trust’s purchase.

“What we’d be getting is farmland for farming, as opposed to just protecting farmland from development, which is what I think was the intention from the outset,” Mr. Halsey said this week.

Land preservation efforts and the soaring success of the Community Preservation Fund are well documented on the East End. While much of the hundreds of millions spent on protecting land from residential development has gone to woodland lots for groundwater protection and the simple preservation of public open space, Mr. Halsey maintains that the effort also was founded to keep active farms on the South Fork.

But starting in the 1990s, and more frequently in just the last several years, large parcels of farmland have been re-purposed for uses other than growing crops. Polo clubs were the first iteration, defined as “agriculture” by a 1990s court ruling. Then, sprawling horse riding, boarding and training facilities began sprouting enormous barns and houses for grooms on ostensibly protected land. Most recently, some former farm fields have been bought by wealthy homeowners who live on their borders and simply want to expand their estate’s lawn or landscaped areas.

The demand for these other uses has driven the value of land protected from development up to $100,000 an acre or more—well out of the reach of farmers looking to expand their holdings, and high enough that estate taxes for the land they already own can be crippling to a next generation looking to maintain the farm.

To head off the continued losses of farmland, the Peconic Land Trust and farmers have been lobbying towns on the East End to take a new look at the way they pursue preservation deals, so that land, where appropriate, is stripped of the right to remain fallow or used for something other than food production. The trust has even been urging the town to perhaps revisit some of the lands from which it previously bought development rights, sometimes for millions of dollars, and appeal for another sale of additional rights that would ensure that it remains farmland in perpetuity. The discussion has drifted in and out of the town’s spotlight.

“It’s not just about the open landscape, which is what the CPF was initially trying to protect, because it is part of our community character,” Southampton Town Supervisor Anna Throne-Holst said. “Food production farming is also part of our community character, and that is being increasingly threatened because those who make their living farming can’t afford to purchase land here.”

Mr. Halsey said that the trust won the right to purchase the Danilevsky property in a sealed bidding process earlier this month. But other interests, he said, are making new offers, and the estate’s fiduciary responsibility has the deal on shaky ground.

He harked back to a deal the trust thought it had secured for another Water Mill parcel last year, one that was lost at the last minute: a 20-acre farm owned by the Sikorski family. A deal had been in place to sell to the town and the Peconic Land Trust for $7.2 million, but the deal fell through at the last minute when a private buyer, reportedly a neighboring owner, topped the price.

“The competition is out there, and they are trying to push their way into this deal as we speak,” he said. “Once I have a signed contract, I will breathe a whole lot easier.”

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Please preserve land. Let's work on growing green not growing oversized developments. Let's take back this beautiful place.
By rvs (106), sag harbor on Apr 23, 14 6:11 PM
The old farmers sold off land to developers for summer homes which raised land and house values. They were given tax breaks if they did not develop. Now they are going to get millions for their land and we have to pay the development rights so new farmers can farm. Very ironic.
By AL (83), southampton on Apr 24, 14 7:16 AM