A conservation easement could settle some land-swap issues, but it's complicated 

Easing the transition

click to enlarge The 1,066-acre Pineries Open Space in El Paso County is under a conservation easement. - COURTESY EL PASO COUNTY
  • Courtesy El Paso County
  • The 1,066-acre Pineries Open Space in El Paso County is under a conservation easement.

At the heart of Colorado Springs' proposed land swap with The Broadmoor lies a conservation easement.

Aimed at quelling opposition to trading the city's 189-acre Strawberry Fields open space, the easement would preserve most of the land for public use permanently.

The Broadmoor and city are working with Palmer Land Trust on a contract for the easement, a requirement of the proposed land exchange.

While there's no evidence the easement would not function as intended, easements in general have proven to be a controversial topic over the past 10 to 15 years, including in El Paso County, where two conservation easements in the Black Forest area later had their boundaries changed.

In addition, state and federal governments have wrestled for years over how to prevent easements from being exploited as tax havens, though that seems to be a non-issue in the Strawberry Fields case.

In an April 6 letter to city Parks Director Karen Palus, Broadmoor Chairman Steve Bartolin wrote, "The Broadmoor will not pursue a tax credit for placing a conservation easement on the Strawberry Hill property."

But given that thousands of people oppose the swap, with some questioning every aspect of the deal, it's likely the conservation easement itself will come under scrutiny.

As much as it possibly can, that is. The easement will be imposed by its owner — eventually The Broadmoor — in cooperation with Palmer Land Trust, a nonprofit agency that's not subject to government disclosure laws, so there's no mandate for public oversight.

The Palmer Land Trust defines a conservation easement as a voluntary legal agreement between a landowner and a land trust that protects land in perpetuity. An easement places permanent restrictions on the use or development of the land in order to protect specific conservation values unique to the property, and it doesn't transfer ownership. Rather, it locks in a landowner's commitment to protect the property's character.

Conservation easements were developed in the 1980s, and it's worth noting that Sue Anschutz-Rodgers, sister of The Broadmoor's owner, billionaire Philip Anschutz, helped establish the legal concept in Colorado.

Since then, the number of easements nationwide has exploded, from 128 in 1980 to 6,246 in 2005, according to a report published in 2008 by the National Center for Public Policy Research. The report also noted 37 million acres across the country were under the control of land trusts; national environmental organizations, such as the Trust for Public Land and The Nature Conservancy, control about two-thirds of that land.

Palmer Land Trust holds 118 conservation easements that cover roughly 103,000 acres; of those, 5,900 acres are in El Paso County.

One driver of the growth in easements nationwide was their attractive tax benefit. It's well-documented that the Internal Revenue Service has rejected some conservation easements and challenged others after discovering values assigned to easements proved to be wildly inflated, leading to similarly inflated tax credits. In addition, a 2006 law was adopted stipulating that a qualified appraiser must "demonstrate verifiable education and experience in valuing the type of property subject to the appraisal."

The state, too, cracked the whip after The Denver Post reported in 2007 that conservation easements were being set up based on "excessively high appraisals." Eventually, the Colorado Department of Revenue disallowed more than 600 easements and required landowners to repay about $130 million in state tax credits. But in 2012 the Colorado Office of the State Auditor reported that more changes are needed to legitimize credits. Auditors also noted the Attorney General's Office found that some landowners and conservation easement holders later amended or dissolved the easements.

El Paso County Assessor Steve Schleiker says via email that while the abuse across the state was mostly for tax credit purposes, it also led to property tax reductions. (An easement usually causes property values to drop, because land-use options are severely curtailed.) Schleiker also notes the "ridiculous appraisals" being made led to some appraisers losing their licenses. Reforms adopted in the face of the scandal include a new state rule requiring appraisers to become certified specifically in conservation easements.

"Since the crackdown, the donation of conservation easements has dropped dramatically, because it is not the 99 percent write-off it used to be," Schleiker says, "and the appraisals we get now are more reasonable."

Palmer Land Trust reports that "extinguishment" of easements requires a judge's ruling, which is a difficult maneuver. But changing the boundaries might not be as arduous. In El Paso County, it appears two easements have gone through such a change.

The 2,500-acre Shamrock Ranch in the Black Forest area was believed to be under a conservation easement, based on media reports, but earlier this year developer Classic Companies paid $13 million for 1,400 acres of the Shamrock Ranch. Classic envisions about 280 homes on the property, the Gazette reported in March.

That surprised some residents, who recalled a conservation easement being placed on the property. As KOAA-TV reported in February, the previous owner, David Wismer, moved the easement to the original homestead about five years ago. (The Independent couldn't reach Wismer for comment.)

A resident of the area, Marci Twombly, told KOAA she didn't know about the change. "The wildlife preserve signs are still up, so no one is really aware this is happening," she said. "I thought [what] I was getting was 50 years of the gorgeous view out my front window."

That lends irony to a comment made to the Gazette in 2009 for a story about the Shamrock Ranch and a possible easement. "He [Wismer] clearly saved the ranch from development," John Cassiani, later associated with Banning Lewis Ranch Co., told the newspaper. "It is such a gorgeous piece of ground, someone would have tried to develop it. ... It would have made a phenomenal golf course, but I'm glad he kept it the way it is."

Classic plans to build a golf course in the new subdivision.

click to enlarge The Pineries features a lake and Ponderosa pines. - COURTESY EL PASO COUNTY
  • Courtesy El Paso County
  • The Pineries features a lake and Ponderosa pines.

The Pineries Open Space, also near Black Forest, comprises the county's largest open space. At 1,066 acres, it contains a variety of unique vegetation, including rare plants and a mature ponderosa pine forest classified as old growth, according to El Paso County's 2010 master plan for the parcel.

The land was acquired by the county through dedication by the developer of adjacent land, which is subject to an easement held by the Palmer Land Trust.

The ranch, at one time 16,000 acres, was owned by the Farrar family and used for ranching and later for sale of forestry products, according to the master plan. In 1985, the ranch was divided into four parcels, and the master plan refers to them as two halves: The south half was held by some family members who imposed a conservation easement that same year. A decade later, the other part was placed in an easement. Both were held by the Palmer Land Trust.

"The location of the easements was changed in 2006 as a part of a development proposal by Morley-Howard Investments, which purchased the property for residential subdivision," the master plan says. "In conjunction with approval of the subdivision, the conservation easement land and approximately 30 additional acres were transferred to the El Paso County Parks Department in 2010 for establishment of an open space park."

When the dust cleared on those changes, the open space encircled 389 home sites, none of which have been developed so far. "The bottom line was, it was clearly in the economic interest of the developer to have that open space around the development," says open space advocate Kent Obee, who recalls the change.

Tim Wolken, the county's director of community services, can't shed light on the details of those changes, other than to say it was a laborious process. "When we obtained The Pineries, the conservation easement had to be moved to protect more valuable areas," he says. "That was quite a challenge. It took six months to a year just to move the conservation easement."

Wolken says the county plans to open The Pineries for public access this year. While certain areas will remain off-limits due to their sensitive nature, the county has built eight to 10 miles of trails winding through the open space, he says.

In addition to those 1,066 acres, Wolken says the county has imposed conservation easements on county-owned Bear Creek Regional Park (545 acres), Christian Open Space in Fountain (76 acres), Freeman-Paint Mines (275 acres), and a 12-acre parcel called Schreder, for a total of 1,948 acres. All are controlled by Palmer Land Trust.

The county itself acts as a certified conservation easement holder for 38 other tracts owned by individuals or nonprofits scattered throughout the county, ranging from 1 to 859 acres and totaling about 2,500 acres. "In most cases, they usually do not allow public access, because people are living on the property itself," Wolken says.

Given that easements can endure for decades or longer, "it's a challenging decision to make for the county and landowner," he says. "Anybody interested in buying the property has to realize the conservation easement stays with the property."

As an easement holder, the county monitors the condition of the parcels, with annual inspections for such things as over-grazing or invasive species. "We want to make sure the soils and grass stay in good condition," he says. "If we determine there's a violation, we will notify that landowner and go through a corrections process."

As for Strawberry Fields, the Palmer Land Trust board approved conservation values — preservation of open space and preservation of public access for recreation — for the parcel on March 17.

On March 30 the trust's executive director, Rebecca Jewett, wrote a letter to the city and The Broadmoor explaining the procedure. The letter noted that if the city or The Broadmoor decides at some point the easement doesn't best serve the needs of the property, the proposal could be withdrawn. It also noted that while the trust would work on the project, "please understand that Palmer also reserves the right to terminate the project at any time during this process."

Costs associated with the easement procedure — including title insurance, a geology report on mineral rights, legal fees, an appraisal for easement purposes and the trust's administrative expenses — are estimated at about $22,000. The Broadmoor will fund those costs, Palus says.

In response to questions the Indy sent via email, Jewett says approving an easement involves six steps: visiting the site; identifying and approving conservation values; reviewing due diligence documentation; negotiating terms with the landowner; board approval of terms; and signing and recording the easement itself.

The first two steps have taken place on Strawberry Fields, she says. A meeting of officials from the trust, the city and The Broadmoor was to take place on May 16 to work on terms of the easement, according to documents obtained by the Indy.

Among the decisions yet to be made is how much land the easement will cover, and whether The Broadmoor's stable and picnic pavilion will be included in the easement, Jewett says.

The Broadmoor didn't respond to the Indy's questions, but resort officials have said the easement guarantees sound management, such as trail-building, erosion control and forest fire mitigation.

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