HomeMy WebLinkAbout1998-01-27; City Council; 14536; Establish Agricultural Mitigation FeeCITY OF CARLSBAD - A&:DA BILL
AB# ,y; .d:Jb TITLE:
ESTABLISHMENT OF THE AGRICULTURAL
MITIGATION FEE AT $5,000 PER ACRE
RECOMMENDED ACTION: r That the City Council ADOPT Resolution No. 9 8 - 2 2 establishing the Carlsbad
Agricultural Mitigation Fee at $5,000 per acre with an automatic annual increase of 1 O%;and
directing staff to work with the California Coastal Conservancy to establish the methodology
for determining the amount of the Carlsbad Agricultural Mitigation Fee.
ITEM EXPLANATION:
The implementing ordinances for the Carlsbad LCP require that the City Council establish
the amount of the Agricultural Mitigation Fee when it considers the Coastal Development
Permit for the urban development of the designated property. Over the last several years,
the Council has approved projects conditioned to pay the subject fee. However, the Council
did not establish the amount of the fee when it approved the projects for two reasons: First,
the Coastal Commission and not the City had coastal permit authority. Second, a study
was needed to determine the cost of the preserving “prime” agricultural land (which is the
basis of the fee) within the coastal zone. The City’s assumption of coastal permit authority
in October 1996, necessitated the establishment of the amount of the Agricultural Mitigation
Fee.
The last time the City was involved in an agricultural mitigation study was in 1985. “Prime”
agricultural land in Monterey County was selected by the Coastal Conservancy. Based on
acquisition costs of the development rights on that land (approximately $4,600 per acre) the
fee was set at the $5,000 minimum. Assuming that land values had significantly increased
since 1985, staff estimated the current fee at $10,000 per acre pending Council approval of
a study supporting some other fee value. Some developers have paid the $10,000
maximum fee while others have paid the minimum $5,000 fee and entered into secured
agreements to pay the balance pending Council action on the fee.
In April, 1997, Carltas (developers of Carlsbad Ranch) submitted a fee study for staff
review. Based on a number of factors (see attached memo to City Manager dated August
4, 1997) the Hulburg Study (Exhibit 3) determined that the approximate cost preserving
“prime” agricultural land in the state’s coastal zone is $4,300, thus justifying setting the fee
at the minimum of $5,000 per acre. Staff, not having expertise in farm land appraisal,
contracted with Hanna and Associates to conduct a peer review. The Hanna Report
(Exhibit 4) concluded that establishing the fee at $5,000 per acre “appears to be
supportable.”
The Hanna Report did point out some shortcomings in the Hulburg Study and it also
suggested modifications in the methodology employed by future reports.
PAGE 2 OF AGEhA BILL NO. J’i g 3 (;7
The Hanna Report supports the requirement for Coastal Conservancy selection of the areas
to be targeted for preservation. The Hanna Report further recommends that the prime
agricultural land used to establish the fee be a size comparable to the land being converted
in Carlsbad and that potential conservation easement costs be increased by approximately
15 percent to account for acquisition costs. Finally, the Report recommends that the
properties used to establish the preservation costs have some minimum development
potential relative to the level development beinq proposed in Carlsbad.
Although the Hulburg Study did not follow the above recommended methodology, it appears
to have been prepared consistent with the requirements of the City’s implementing
ordinances for the LCP. Hulburg was required to contact the Conservancy to determine
which coastal prime agricultural lands were acceptable for inclusion in the report. Staff has
requested Conservancy verification that the lands used in the Study were acceptable to the
Conservancy. The criteria for determining which properties are acceptable is contained in
the City’s LCP implementing ordinance. §21.202.070.A.5. requires Council to find that
property selected for preservation (or to qualify as a comparable) would contribute to limiting
urban conversions of prime agricultural lands and would create a stable urban/rural
boundary. Staff is awaiting a response and will present that either as a subsequent memo
or as part of its presentation on this matter before Council.
Staff concurs with the Hanna Report recommendations to modify the methodology
employed by future reports. However, as an alternative, the Council could establish the
amount of the fee at $5,000 based on the Hulburg Study and allow the fee to automatically
increase 10% per year. Based on conversations with agricultural land appraisers and the
staff of the Coastal Conservancy the 10% annual increase is reasonable. Establishing the
fee with an escalator recognizes the fact that the study required to establish the fee amount
is very difficult to prepare, time consuming for both staff and the developer and expensive
($20,000 to $30,000 per study). The automatic escalator also provides some certainty for
proforma planning purposes and it would assist the property owners of small holdings
where the fee could be less than the cost of the study.
If a developer were to protest the then current fee, the developer would be required to
submit a fee study that complied with the modified guidelines. The Coastal Conservancy
has offered to assist the City in developing such a methodology. Staff has determined that
establishing a revised and more detailed methodology is consistent with the current
implementing ordinances of the LCP and no amendments are necessary. The revised
methodology would simply address which lands are acceptable to the City Council for
inclusion in subsequent fee studies.
Finally, staff is recommending that the agricultural mitigation fee be paid only after receiving
approval of a Coastal Development Permit and prior to the approval of the relevant final
map or issuance of a grading permit (whichever comes first). This procedure addresses the
concern that early payment may encourage a premature removal of land from agricultural
potential. This would not only be inconsistent with the Coastal Act, it would be inconsistent
with the General Plan policy to encourage Agriculture for as long as it is feasible. It also
addresses the issue that the code requirement of payment prior to issuance of building
PAGE 3 OF AGENL BILL NO. 1% 5 3 6
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permits is mitigation that is not concurrent with the impacts (i.e., impacts occur when the
land receives its entitlement and is graded.
ENVIRONMENTAL:
The establishment of this fee is categorically exempt from environmental review pursuant to
Section 15307 of the California Environmental Quality Act guidelines because it involves an
action authorized by State Law and Local Ordinance to assure maintenance, restoration or
enhancement of coastal resources.
FISCAL IMPACT:
Establishment of the fee amount will have no direct impact on the City.
EXHIBITS:
1. City Council Resolution No. 9 8-XL
2. Memo to the City Manager, dated December 4, 1997
3. Hulburg Study, previously distributed
4. Hanna Report, previously distributed.
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I RESOLUTION NO. x3-22
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, ESTABLISHING THE PER ACRE
AMOUNT OF THE AGRICULTURAL MITIGATION FEE AT
$5.000..
WHEREAS, the implementing ordinances of the Carlsbad LCP requires
~ the City Council to establish the amount of said fee at the time when it considers the Coastal
Development Permit; and
WHEREAS, the CITY has received a study (Hulburg) which estimates the
basis for the fee; and
WHEREAS, the (Hulburg) study was subjected to peer review and found
to be adequate; and
WHEREAS, the City recognizes the difficulty involved in preparing future
fee studies and therefore desires to establish a fured fee; and
WHEREAS, it has been determined through discussions with appraisers
and Conservancy staff that a 10% annual increase in the fee is fair and reasonable; and
WHEREAS, the City desires having future studies reflect modified
methodology; and
WHEREAS, any developer who wishes to protest the fee must submit a
fee study based on the modified methodology.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City
of Carlsbad, California as follows:
1. That the above recitations are true and correct.
2. The Carlsbad Agricultural Mitigation Fee is set at $5,000 per acre.
3. The fee shall be in effect until June 30, 1998 and shall be applicable to the
projects that have received a valid Coastal development permit with an
entitlement to either grade or to build structures where no grading is necessary.
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Projects that have such entitlement shall pay the fee pursuant to applicable law by
June 30,1998 or be subject to a 10% increase per year in the amount of the fee.
On July 1, 1998, and subsequently thereafter, the fee shall increase by 10% every
July 1”‘.
Projects that protest the fee amount will be required to submit a fee study
acceptable to the City Council under guidelines established by the City Manager
to justify an alternate fee.
Staff is directed to work with the staff of the California Coastal Conservancy to
develop a revised methodology for preparing studies used to establish the amount
of the fee.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Carlsbad on the 27th day of Januarv 1998, by the following vote, to wit:
AYES: Council Members Lewis, Nygaard, Kulchin, Finnila & Hall
NOES: None
ABSENT: None
ATTEST:
wfw
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DECEMBER 4,1997
h EXHIBIT 2
TO: CITY MANAGER
FROM: Assistant Planning Director
SET AGRICULTURAL MITIGATION FEES
The various segments of Carlsbad’s Local Coastal Program (LCP) require mitigation for the conversion
of designated coastal agricultural land to urban uses. One manner in which to mitigate is the payment of
a fee that is between $5,000 and $10,000 per acre of converted land. The regulatory authority to assess
the mitigation fee is the Mello 1 and 2 LCP segments (Mello Fee) or Section 30171.5 of the Public
Resources Code (Statutory Fee).
The “statutory fee” is administered by the California Coastal Conservancy. Section 30171.5 (PRC) does
not provide any guidance on how to establish the amount of the fee. The Mello fee is currently also
administered by the Conservancy. However, the methodology for establishing the amount of the fee is
contained in the City’s Mello LCP and its implementing ordinances. Specifically, the fee shall be not
less than $5,000 and not more than $10,000 per converted acre. Moreover, the fee shall reflect the
approximate cost of preserving “prime” agricultural land in the coastal zone. The key requirement is that
the land to be preserved (or to be used in calculating the amount of the fee) shall be selected by the
Conservancy and approved by the City Council. Finally, the amount of the fee is to be established by the
City Council when it considers the coastal development permit for the urban development of the
property.
Over the last several years Council has approved projects that have been conditioned to pay Agricultural
Mitigation Fees. However, the City Council did not establish the amount of the fee at the approval of the
project because of two reasons. First, the Coastal Commission and not the City had the authority to issue
the Coastal Development Permit. Second, a study was needed to determine the cost of preserving
“prime” coastal zone agricultural land.
The last time a fee study has been conducted was in 1985. Prime agricultural land selected by the
California Coastal Conservancy in Monterey County established the fee at $5,000 per acre. Based on the
assumption that land values have increased substantially since 1985, staff estimated the fee at $10,000
per acre pending Council approval of a study establishing some other fee value.
In April, 1997, Carltas submitted the requisite study for staff review. The Hulburg Study (Exhibit 3)
determined that in general the cost of preserving prime agricultural land in the coastal zone is influenced
by the unencumbered fee value of the land, the potential for development beyond agricultural use, and
the degree of governmental restrictions on non-agricultural development. The Hulburg Study further
found that although there was a wide range of unencumbered fee values and development potential based
on agricultural yields and location, that the severe governmental restrictions placed on the development
potential of prime ag-land in the Coastal Zone (i.e., it is protected by the Coastal Act) suppressed the
cost of purchasing conservation easements to preserve this land. The Hulburg Study concluded that the
per acre cost of preserving prime coastal ag-land was $4,300. This is less than cost calculated in 1985.
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MEMO TO CITY MANA&R
SET AGRICULTURAL MITIGATION FEES
DECEMBER 4, 1997
PAGE 2
Since staff did not have the technical expertise to critically evaluate the Hulburg Study, it hired Hanna
and Associates to conduct an independent review of the Hulburg Study, In June 1997, the Hanna Report
(Exhibit 4) was submitted to the City. The Hanna Report determined that Hulburg Study actually
overstates the “value of conservation easements in most cases.. .” (i.e., its value is & than the $4,300
estimate). The Hanna Report concluded that establishing the fee at $5,000 per acre “appears to be
supportable and reasonable based on the information contained in the Hulburg Study.”
The Hanna Report recognized that using all potential acquisitions of coastal ag-land includes properties
with little to no development potential and therefore, the value of the conservation easements would
generally be below $1,000 per acre. With respect to methodology, the Harma Report recommends that
future studies estimate the cost of preserving prime coastal ag-land based on the following criteria:
1. The prime ag-land should be the same size as the land in Carlsbad that is being converted.
2. The cost of the conservation easements should include related costs associated with acquisition
(usually 15% plus).
3. Production and rental income should be considered in valuing the property for agricultural use.
4. Comparables shall be selected in areas defined by the Coastal Conservancy and the property
should have some assumed minimum development potential.
Staff would recommend that a fifth criteria must be included. Section 21.202.070 (CMC) requires
Council to make specific findings prior to approving the conversion of Carlsbad agricultural land to
urban uses. Of particular importance is finding A. 5. Which states “... conversion would contribute to
limiting conversions of prime agricultural land and create stable urban/rural boundaries within prime
agricultural lands located elsewhere in the coastal zone.” Although this is a finding associated with
“preserving” land elsewhere, the fee amount is based on such preservation. This is actually the single
most important criterion for the Conservancy’s selection and the City’s approval of the land to be used in
calculating the fee.
It is important to note that the fourth criteria is a requirement of the Carlsbad’s LCP implementing
ordinance. Consistent with the ordinance requirements, staff requested that the Conservancy review the
Hulburg Report. As of the date of this memo, the Conservancy has not submitted a formal response to
staffs request.
Conclusion:
Absent a response from the Conservancy, it appears that the per acre cost of preserving prime coastal ag-
land is generally less than $5,000. Therefore, staff recommends that Council establish the Mitigation Fee
at $5,000 per acre (the minimum) and that the fee be in effect until June 30, 1998. On July 1, 1998 and
subsequently thereafter the amount of the fee would increase by 10% per year. The 10% annual increase
is reasonable based on discussions with agricultural land appraisers and with Conservancy staff. The fee
would apply to projects having an approved coastal development permit requiring the payment of the
fees and that the fees be paid in full within the six month period for those eligible to pay the fees.
MEMO TO CITY MANA-ER
SET AGRICULTURAL MITIGATION FEES
DECEMBER 4, 1997
PAGE 3
If a developer were to protest the then current fee, the developer would be required to submit a fee study.
that complied with the modified guidelines. The Coastal Conservancy has offered to assist the City in
developing such a methodology (i.e., modified guidelines). Staff has determined that establishing a
revised and more detailed methodology is consistent with the current implementing ordinances of the
LCP and no amendments are necessary. The revised methodology would simply address which lands are
acceptable to the City Council for inclusion in subsequent fee studies or to qualify for off-site (and out of
Carlsbad) preservation.
Finally, staff is recommending that the agricultural mitigation fee be paid only after receiving approval of
a Coastal Development Permit and prior to the approval of the relevant final map or issuance of a grading
permit (whichever occurs first). This procedure addresses the concern that early payment may encourage
a premature removal of land from agricultural potential. This would not only be inconsistent with the
Coastal Act, it would be inconsistent with the General Plan policy to encourage Agriculture for as long as
it is feasible. It also addresses the issue that the code requirement of payment prior to issuance of
building permits is mitigation that is not concurrent with the impacts (i.e., impacts occur when the land
receives its entitlement and is graded.
GARY E. WAYNE
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HANNA & ASSOCIATES
Real Estate Appraisers & Consultants
REVIEW
SUMMARY REPORT
Document Reviewed
Prepared for
Mr. Gary E. Wayne
Assistant Planning Director
Planning Department
CITY OF CARLSBAD
2075 Las Palmas Dr.
Carlsbad, CA 92009
June 1997
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HANNA&ASSOCIATES John C. Hanna, MAI
Real Estate Appraisers & Consultants President
June 6, 1997
Mr. Gary E. Wayne
Assistant Planning Director
Planning Department
CITY OF CARLSBAD
2075 Las Palmas Dr.
Carlsbad, CA 92009
(619) 438-l 161
(619) 438-0894 fax
Re: Review - Consultation
Agricultural Mitigation Fee Study
Dear Mr. Wayne:
Pursuant to your request, I have completed a review of the document entitled me of Cost tQ . . . . eserve Pnm m Callfornla & Ass-es- JWMQLL
1997.
The attached review report provides a summary of my analysis and conclusions. Chapter I sets
forth the scope of this review along with reporting standards, and limiting conditions.
The purpose of this third party review is to analyze the report to determine whether the
methodology and conclusions are valid and reasonable in the context of the Code of Ethics and
Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of the
Appraisal Foundation (USPAP).
This review report and the conclusions stated herein are made in conformity with and is subject to
the Code of Ethics and Standards of Professional Practice of the Appraisal Institute and the
Uniform Standards of the Appraisal Foundation (USPAP).
I am pleased to have the opportunity to work the City of Carlsbad. If you have any questions
ent, please contact me.
23 SeascaPe Village l Aptos, CA 95003-6102
l (408) 688-1145 l Fax (408) 688-1243
Monterey l (408) 647-9305
Review - Estimation of Cost to Preserve Rime Ag. Land in Coastal Zone, Carlshad, CA. Page i
TABLE OF CONTENTS
I.
II.
III.
Iv.
. .
‘.
SCOPE OF R~?www ASSIGNMENT ......................
A. Source Dmnm3 Reviewed .........................
B. ......
c. ...............................
D. l&&&o- ...............................
~TIONFEE CRlT&&) . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. . . . . . . . . . . . .
B. . . . . . . . . . . .
C. California Public Rgsources Code (Sec. 30171.5) . . . . . . . . .
D. CaliforniaState Coastal CoBSCC) . . . . . . . . . , . . . F. --Land- . . . . . . . . . . . . . . . . . .
G. . . . esewmn - De&ton/ Ma . . . . . . . . . . . . . . . . . . . .
H. . . . . . . PreservatlonLand . . . . .
I. . Cost of Preservation v. Market Value . . . . . . . . . . . . . . . . . .
COST / VATSJE CR.lTERJ.A . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . .
A. Method of ReseaLC,h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. ket Data Co&&&
C. AcouisitionC*.....:::::::::::::::::::::::::IlI
........ 1
........ 1
........ 1
........ 2
........ 2
........ 4
........ 4
........ 4
........ 5
........ 5
........ 6
........ 6
........ 7
....... 11
....... 12
....... 12
....... 12
....... 14
, SUMMARY OF ~vm&’ ~PUISJ- S CONCLMIQNS ............. 15
A. Code ............................. 15
B. Qpinion of Hulbe&&port Concw ........................ 15
Addenda: Review Appraiser Certification
Review Appaiser’s Qualifications
Review - Estimntion of Cost to Preserve prime Ag. Lad in Coastal Zone, Carlsbad, CA. Page I
OPE -REVIEW
A.
The following report is the subject of this review:
. . . . e of Cost to Preserve Pnv In CallfornlaCoastal
l_ 1997. Carltas Corooany
This document will be referred hereafter as the “Hulberg Report” in this review.
Further, the following documents were cited in the Hulberg Report and are the subject of our
review:
* California Coastal Act (Section 30171.5(a), PRC) * Williamson Act (Sections 512Ol(c),CGC) * Carl&d Local Coastal Program (LCP) - Mello II (Sections 21.202.060@)
& @.I, CMC) * Policy 2- 1 Conversion of &&&al J ,a
B. erlt - Scope
The purpose of this third party review is to analyze the report to determine whether the
methodology and conclusions are valid and reasonable in the context of the Code of Ethics
and Standards of Professional Practice of the Appraisal Institute and the Uniform Standards
of the Appraisal Foundation (USPAP).
The review will also address the issue of using comparable sales with sufficient development
potential (i.e., zoning and general plan designations, lack or relative lack of restrictive
regulations, location within an urban sphere of influence, etc.).
Per contract directive, it is not intended that the review involve generating new data unless
that data is easily obtainable. This work involved discussions with statI’ of the California State
Coastal Conservancy, administrators of agricultural land trusts, planning officials and other
knowledgeable persons as deemed appropriate in context of the review.
The Hulberg Report applies interpretations of Section 21.202.060(b) of the Carlsbad
Municipal Code and other land use legal documents as they relate to applied appraisal
research and methodology.
Hanm & Associates
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Review - &tindoo of Cost to kesemo prime Ag. Land in &a~~ &me, C&S&K& CA. Page 2
The review appraiser is not an Attorney at Law. The review involves interpretation of
the code and related documents only as deemed appropriate from the perspective of a
qualified real estate appraiser. The Hulberg Report is reviewed in the context of the relative
consistency of interpretation of the said code in applied research and methodology. Further
legal interpretation requiring qualified legal experts is outside the scope of this assignment.
This review has been conducted from the appraisers office and did not involve inspection of
the subject property or comparable properties cited in the appraisal.
C.
The appraisal review was conducted by John C. Hanna, MAI.
The report and the conclusions stated therein are made in conformity with and is subject to
the Code of Ethics and Standards of Professional Practice of the Appraisal Institute and the
Uniform Standards of the Appraisal Foundation (USPAP).
The conclusions and analysis of the review are submitted in summary format. All other
support information is kept in the appraisers file.
D. Limitine
This review is subject to the following limiting conditions.
1. No opinion is intended to be expressed on matters which require legal expertise or
special&d investigation or knowledge beyond that customarily employed by real
estate appraisers..
2. The statements of value and all conclusions shall apply as of the date shown herein. .
3. Jnformation, estimates and opinions contained in this report are obtained from sources
considered reliable; however, no liability for them can be assumed by the appraiser.
4. ., We reserve the right to make adjustments to conclusions herein reported, as may be
required by the consideration of additional data or more reliable data that may become
available.
5. The appraiser may not be required to give testimony or to appear in court by reason
of this review, unless prior arrangements have been made.
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Review - Estimation of Cost to hesome prime Ap. Land in Coastal Zone, Carlshd, CA. .’ Page 3
6. The appraiser has no present or contemplated future interest in the’property.
7. This report shall be used for its intended purpose only and by the parties to whom it
is addressed. Possession ofthis report does not caq with it the right of publication.
Neither ail nor any part of the contents of this report shall be conveyed to the public
through advertising, public relations, news, sales, or other media without the written
consent or approval of the author. This applies particularly to value conclusions, the
identity of the appraiser or firm with which it is connected, and any reference to the
American Institute of Real Estate Appraisers, the Appraisal Institute, or the MAI
designation.
Review - Estimatioo of Cost to Preserve Prime Ag. Land in Coastal Zone, CarMad, CA. : Pap 4
II. MITIGATION
A.
As stated in the Hulberg Report the purpose of the study is:
. .
‘... to establish the qvproximate current per acre cost of petianentiy preserving prime
agricultural land within the statewiak Caltfomia Coastal Zone in accoraknce and consistent
with the Agricultural Conversion Mitigation Fee provisions of the Califomia Coastal Act,
and the Carisbad Local Coastal Program (Mello II). ”
Code [Sec. 7 1.202.060&))
As stated in this document development, of lands zoned coastal agriculture shall include the
following:
“. ..An enforceable, non-revocable commitment by the properv owner to preserve
permanently one acre of prime aficultural hmd within the Catlfomia Coastal Zone for each
net impacted acre of non-prime coastal agricultural land in the Local Coastal Program
proposedfor development,.. ”
This provision specifically requires that “prime agricultural land” be preserved. This is
important in that the impacted acreage is “w agricultural land”. Therefore, the cost
of preserving the &iect lana for agricultural use ti the stated mechanism of mitigation.
. *An appraisal of the subject land in a bejiwe condition (preserved non-prime ag. land), and an
after condition (as entitled for planned development) would indicate a value to development
rights which in my opinion would nat be consistent with the directive stated in the Municipal
code.
It is my opinion that the Hulberg Report is generally consistent with the Municipal Code in
consideration of prime agricultural lands located within the California Coastal Zone. It is
also consistent in providing a specific appraisal of the subject property in a “before” and
“tier” condition as a basis for mitigation fees.
The Municipal Code fkther specifies that:
‘... i%e presem>d kmdshaI/ be located in an area Elected by the State Coastal Conservancy
and approved by the City Council... ”
Hmna & Astiociates
Review - E.dnmtion of Cost to Preserve Prime Ag. Land in Coastal Zone, G&&J, CA. : Page 5
In this instance, the “in lieu” provisions for an “agricultural conversion mitigation fee” of the
Municipal Code were reportedly enacted. To our knowledge, no specific “prime agricultural”
land holding was required or obtained for preservation. Further, according to my discussion
with Carol Arnold, California State Coastal Conservancy, their organization provided no
direction to the city regarding the specific location of mitigation lands to be considered for
cost of preservation ( mitigation fees) pertinent to this application.
Without more specific directive from the Coastal Conservancy according to the location of
preservation lands, the broader municipal Code requirement that mitigation lands be “@me
agricultural land within the Caltfomia C’oastaZ Zone” applies. Therefore, the Hulberg
Report’s consideration of such land throughout the larger California coastal region is in my
opinion is supportable and appropriate.
C. Califotia Public Resources Code (Sec. 30171.5)
As stated in this section of this code (Coastal Act) the amount of mitigation fee for
development on non-prime agricultural lands in Carlsbad shall:
“-not be less than five thousand dollars ($5,000), nor more than ten thousand (UO, 000),
per acre. All mitigation fees collected under this section shall be deposited in the State
Coastal Conservancy Fund.. ”
The Hulberg Report states an opinion that the representative per acre cost of preserving
Prime Agricultural Coastal Zone land through conservation easement is $4,300 per acre. This
would indicate that the mitigation fee would be fixed at the minimum $5,000 per acre.
These “in lieu” funds are in-turn appropriated to 4 categories or civic projects of priority as
stated in the code. Properties within these areas have no stated relevance in determination
of per acre mitigation fees.
. D. CaliforniaState Coaervancv (CSCC]
As discussed above, this organization is assigned the authority to select the location of
“preserved land” with the approval of the Carlsbad City Council. This further implies that a
specific site be located and rights secured to mitigate the impacted acreage. As such, it is our
assumption that a purchase of land for mitigation would be of a similar size compared to the
impacted parcel.
Hnnna & Associates
Review - Estimdion of Cost to Fhservc Prime Ag. bnd in Con& Zone, Carlshad, CA. _’ Page 6
However, it remains unclear whether “in lieu” mitigation fees shall be determined by
consideration of prime agricultural lands in the Coastal Zone which are more narrowly
defined in location and other characteristics by the CSCC. If the CSCC is to determine
locational criteria, then such lands would be selected based upon CSCC goals and acquisition
priorities for prime agricultural land preservation statewide.
Further, the CSCC is apparently to act as the “escrow agent” for such mitigation funds. It
is also unclear whether the CSCC is required to participate in this process at all and if so,
what administrative compensation is required to be paid by the city or applicant.
As of the date of this review, the CSCC had not specified locations or area(s) for preservation
lands to be considered in mitigation fee determination.
The Hulberg report in my opinion does not adequately address the implied control of the
CSCC in the mitigation process and the administrative costs associated with mitigation land
acquisition
F. . . Prime &&&u&& - De
The Hulberg Report correctly identifies the applied definition of Prime Agricultural Land per
the Government Code Sections 5 12010 (Williamson Act).
This definition is paramount in determining which lands would qualie for mitigation
acquisition. Comparable sales of development easements must also be of prime agricultural
land, located in the Coastal Zone to warrant consideration.
G. presentation - Definition/ Metho&
Permanent preservation is defined by Section 21.202.060 of the Carsbad Municipal Code.
The ultimate form of preservation would be acquisition of fee simple title followed by the
recordation of a deed restriction. I concur with the Hulberg Report opinion that the most
reasonable and effective form of permanent preservation is the conservation easement. Such
easements have become a preservation industry standard of sorts as illustrated in the Hulberg
Report.
It should .be noted however, that within the context of the Williamson Act, that some forms
of development may occur. This is subject to an agricultural viability study which confirms
that the agricultural use of the property would not be unduly impaired. In many instances this
Hannn & Associates
Review - Estimation of Cost to Preserve Prime Ap. Land in Coastd Zone, Gdhd, CA. Page 7
allows construction of a coastal oriented single family residence on a prime agricultural
holding without violation of an industry recognized land preservation contract. In these
instances the preservation contract may result in only a minor impairment of the highest and
best use of the site and much of its value would be in the tax savings the contract offers the
owner.
While fee acquisition is the most absolute assurance of preservation, it is the most costly.
Preservation as enacted by a loosely restricted conservation easement is only a minor
impairment on development and is of little market value. A reasonable appraisal would
consider the purchase of easements which clearly protect the holding from any non-
agricultural related uses.
H. . . . . . . Presewatm J.md Glazt~on Cntm - Valuation
In the absence of specific site location directives from the CSCC, one must consider more
general criteria typically employed by the land preservation industry. The Hulberg Report
includes information and acquisition data from 11 land trust and conservancy organizations
which are recognized through-out the state. The goals and priorities of these individual
organizations vary yet, they apply similar methods of preservation which include fee
acquisitions and purchase or donation of conservation easements.
These organizations pursue a wide variety of property types for preservation. Much of the
data listed in the report includes non-prime agricultural land located outside of the Coastal
Zone. Acquisitions within the Coastal Zone have often included non-prime lands or only a
portion of prime agricultural acreage.
According to my professional experience and in my review of the Hulberg Report, I concur
with the following statement:
* Conservation Easements on prime agricultural land outside of the Coastal
Zone are often more expensive than land within the Coastal Zone.
Further it is my opinion that
* Within the Coastal Zone, Conservation Easements on non-prime agricultural
land are often more expensive than Conservation Easements on prime
agricultural land.
Prime agricultural land within the Coastal Zone is typically designated with protective
Hauna h Associates
Review - Estimation of Cost to Preserve Prime Ag. Land in Coastal Zone, Carlshad, CA. : Page 8
agricultural zoning either at the county or city jurisdictional level. In most instances
annexation and/or rezoning may be subject to California Coastal Commission approval or
appeal requiring public hearings. Annexation policies as administered by LAFCO have strict
guidelines which regulate the annexation of prime agricultural land for urban development.
The rate of annexation of prime agricultural lands within the Coastal Zone is very small
compared to communities located outside the Coastal Zone. Non-prime agricultural land in
the Coastal Zone is typically assigned less restrictive zoning and is considered for annexation
before prime land is committed to urbanization.
Further, much of prime agricultural land in the Coastal Zone is highly productive specialty
row crop land. Its pricing at between $10,000 to $35,000 per acre is driven by crop yield
potential, capital&d rental value and scarcity rather than its potential for urban development.
Therefore,’ its potential for development is a relatively small component of total land value.
Non-prime agricultural land has little crop production revenue and a higher potential for urban
development. Lands may have physical characteristics such as slope, views and coastal
orientation which further contribute to its value for development. Therefore, the cost of a
conservation easement on such property may be high compared to that of conventional prime
row crop land.
Lands which conform to the “Fjrime” agricultural definition CCC Sec. 5 12010 yet, are zoned
or entitled for urban development are on occasion pursued by land preservation interests.
However, they represent the most costly circumstances in which to accomplish agricultural
land preservation. These transactions typically include other motivations for preservation
such as public coastal access, viewshed, habitat or the like.
According to my review ofthe stated source documents, the following include criteria for site
selections which are of primary influence on conversation easement value (cost).
Size of Easement/Source Property:
The implied goal of the mitigation provisions are to preserve a like sized acreage of prime
agricultural land. If the subject site is 300 acres, then one would pursue the opportunity to
preseive this amount of land in the most affordable and expeditious manner. These options
are’listed in order of increasing likely costs.
Option 1: Find a larger holding of prime land (say 1,000 acres), and negotiate with the
owner to encumber 300 acres with a conservation easement in the least
valuable (from a development potential standpoint) area of the holding.
H~MII & Associates
Review - Estimation of Cost to Preserve Prime Ag. Land in Coastd Zone, Carlshad, CA. _. Page 9
Option 2: Find a like sized holding of prime land and purchase a conservation easement
on the entire property,
Option 3: Obtain the total required acreage through an assemblage of development
easements on several smaller non-related holdings.
Pursuit of an easement according to the above options may result in a wide variance in the
value and resulting cost of securing these rights.
Zoning - Entitkmcntk
Prime land with less restrictive zoning may have more development potential compared to a
similar highly restricted site. This may result in a greater value of the conservation easement.
These parameters are briefly discussed below:
Prime Land with Non- Agricultural Zoning:
This condition is unusual because it would appear to be inconsistent with basic coastal
land use planning theory applied over the last twenty years. However, small infill sites
which technically comply with the definition of “prime agricultural land” exist in some
areas. The issue remains whether these sites are actually economically viable
agricultural lands even with protective easement in place. Therefore, such sites may
be excluded from acquisition priority by many land preservation organizations.
Entitled property may have conditions of approval which include some form of
mitigation which would influence the value of an additional conservation easement.
Approved coastal development on a given holding may include portions of land
deemed as “prime” agriculture while other areas within the site include non-prime
lands. This allows development to be massed on the non-prime area of the site and
the balance dedicated as open space or committed to farming. An example of this is
the Odello Property (not included in Hulberg Report) located at the mouth of the
Carmel River, opposite Highway 1 in Monterey County. The 134.2 acre site is
approved for a 76 single family home lot development. Approximately 45.7 acres the
site are to include residential development, 54.4 acres area to be retained in perpetuity
as row crop lands (artichokes) and the remaining 34.1 acres as openspace
(creekbank, grazing slopes).
Hanm L Associates
Review - Estimation of Cost to Preserve Prime Ag. hnd in Con&l Zone. Ctuisbnd, CA. Page IQ
This site was considered on a preliminary basis for acquisition by local land trust
organizations for viewshed/ openspace considerations rather than agricultural land
p&on (which is largely accomplished according to its conditions of approval).
However, it was ultimately purchased by a local developer who intends to construct
homes on the designated Dortion of the site.
Prime Land with Agricultural Zoning:
Prime agricultural land includes a variety of crop lands with differing yield
characteristics and land rental rates. Agricultural zoning varies within each
jurisdiction yet, must be consistent with the Coastal Act. In many instances low
density development may be allowed in the context of existing zoning and legal lot
status. This opportunity for development is reflected in the value of purchased
conservation easements.
Speculative development potential may exist in the opportunity to re-zone the
property for subdivision or more intensive urban uses. This is also reflected in the
price paid for the easement.
It is very important to isolate the development potential inherent in “prime” verse
“non-prime” land in the analysis of any easement purchase which involves both land
types. An averaging of easement price per acre among both types is inaccurate and
unacceptable in determining mitigation costs specific to prime agricultural land.
Prime Land with Agricultural Zoning and Restrictive Conservation Easements:
As previously discussed, Williamson Act contracts may allow for significant
development of individual parcels. The Hulberg Report (page 3 1 - 23) identifies 10
Marin County sales ranging from 166 acres to 1,241.93 which involved purchase of . . conservation easements with pLeviouslv recorded W-n Act contracts m.
Easement values ranged from $354 to $1,377 per acre. It was not made clear how
much of this land was defined as prime.
This illustrates the variety of interpretation concerning the degree of preservation
desired for agricultural lands.
C
Review - Ednation of Cost to hrve prime Ag. Lad in Coastal tine, C&&d, CA. Page 1 I
I.
The Hulberg Report concludes an estimate of the “representative per acre cost of preserving
Prime Agricultural Coastal Zone land through Conservation Easement”. Conclusions are
based on analysis of purchases (Market Value) of conservation easements. However, the
report does include consideration of additional costs associated with site location, legal
consultation, acquisition and recordation of the conservation easement.
According to Carlsbad Municipal Code, the State Coastal Conservancy is named with the
responsibility of defining site location, and acting as an escrow agent in the distribution of
in-lieu fees.
As learned in our conversations with private land trusts directors, it is common for these
organizations to charge up to 15% for administrative fees to locate and consummate similar
preservation acquisitions.
If in- lieu mitigation fees are paid, they should reflect both the value of the conservation
easement and costs of acquisition for a hypothetical purchase of conservation easement rights.
-
III. COST I VALUE Cm
Review - Estimation of Cost to Preserve Prime A& Land in Coastal Zone, Cdsbnd, CA. _’ Page 11
A Method
The Hulberg Report includes a broad selection of data obtained from various land
conservation organizations. This helps define the general parameters of conservation .
easement acquisitions. It also brings to light various misconceptions and market
inconsistencies pertaining to the valuation of such easements.
In reviewing the Hulberg Report is my opinion that from this data, more specific selection and
analysis of comparable sales is required to render an accurate and reliable basis of value for
the subject mitigation fee.
The directive provided by the code is specific to inclusion of only Prime Agricultural Land
located in the Coastal Zone for preservation. Sales data should be preened to isolate only
properties which conform to this criteria.
Further, the characteristics of remaining prime agricultural land in the coastal zone should be
quantified to a degree which provides a market background for potential acquisition.
The California State Coastal Conservancy is named with the responsibility to select the
location of the preserved land. Therefore, specific acquisition priorities and agricultural
preservation policies of the organization are of paramount importance.
B.
The Hulberg report includes interviews with a number of land conservation trust directors
along with listings of sales accomplished by their organizations. Many of these sales
included property which is located outside of the Coastal Zone and/or land which has been
utilized for agriculture yet, does not conform to the “prime” definition.
Opinions regarding values of easements are often casually expressed in terms of per acre
values or as percentages of total unincumbered values. These opinions are misleading in that
the majority of sales include both prime and non-prime lands. These statements (relative to
values of exclusively prime agricultural land located in the Coastal Zone) are contradicted
by sales often accomplished by their own organizations.
The Hulberg Report includes a table summary of 4 sales (page 33) which include Agricultural
Conservation Easements in Various Counties within the Coastal Zone. These are apparently
Review - Estimation of Cost to Pmerve Prime Ap. Land in Cocrstd Zone, C~risbnd, CA. Pape 13
the primary comparables of the report.
Within this group, one of the clearest indications of values for like sized acreage of prime
agricultural row crop land is Sale 3. This is a Land Conservancy of San Luis Obispo County
easement purchase including 200.2 acres of prime agricultural land in the Coastal Zone
planted in row crops. The conservation easement was purchased for $2,647 per acre.
Another 33.72 acre site (Campinotti) in San Mateo County was purchased in fee for $15,465
per acre. It was resold with the conservation easement in place for $3,900 per acre.
The largest and most costly purchase of a development easement on the coast ispresently the
El Sur Ranch, described on page 15 of the Hulberg Report. The purchase of the El Sur
Ranch Conservation Easement included the most visually spectacular 3,550 acres of the 7,100
acre ranch. The area affected by the development easement included irrigated grazing land
(230 acres), 5 miles of private beach and coastal bluffs, coastal dunes, sloping grazing lands
and watershed of the Little Sur River. Only the 230 acres .of irrigated grazing land fits the
definition of “prime” agricultural land. None of the past development applications or
present development analysis proposed structures to be located on the prime agricultural
portions of this property. In fact, the most desirable building sites were located on “non-
prime” areas of the holding.
The Hulberg Report incorrectly states terms of this sale. The purchase was negotiated
according to values established by independent appraisal and review. The value of the holding
as unincumbered was estimated at $16,960,000 or $4,777 per acre.. The value of the property
based solely on its agricultural income as a portion of the larger cattle ranch was estimated
at $1,520,000 or only $428 per acre. The difference in the two values is $15,440,000 or
$4,349 per acre which represents the value of the underlying development rights.
The wunty agreed to pay %11,500,000 for the development rights to 3,550 acres or $3,239
per acre. The seller agreed to this price yet, recognizes the transaction as a “bargain sale”
with the opportunity to claim further tax deductions for the difference in price v. market
value. The value of the property as unencumbered reflects the opportunity for high value
coastal fronting estates based on existing parcels of record (each with potential for further
division). The agricultural value of the ranch was limited by its overall carrying capacity of
1 animal unit per 6.58 acres. The difference in the two values reflects the value of the
development rights.
This sale is not in my opinion, reflective of easement values paid for sole preservation of
“prime” agricultural land in the Coastal Zone.
Hmnn & Associntes
-
Review - Esttition of Cost to Preserve Prime Ag. Land in Coastal Zone, Carlsbd. CA. . . Page 14
The other large transactions cited in the Hulberg Report in this grouping includes the Cowell
Ranch purchase which included 1,300 acres which only included 200 acres ( 15%) of mime
cultural m. The sale of the unincumbered property compared to the subsequent
encumbered purchase of the land reflects an average acreage value of $3,850 per acre for the
development rights. However, this sale also remains skewed by the influence of the “non-
prime” land on total property value.
I disagree with the land trust directors who were reportedly “pressed for an opinion”
regarding the easement value allocation of the small component of prime land in these sales.
SpeciGcally, any premium attributable to conservation easements on prime agricultural land
within the larger holding would be diminished by the agricultural value of the land verses the
development potential of this portion of the property. Therefore, values adjusted upwards
by 50% are in my opinion unsupported and actually may require a net deduction.
As discussed previously, the Hulberg Report excludes consideration of additional costs
associated with location of a mitigation property, negotiation of terms, legal costs associated
with easement documentation, closing costs and commissions. It is my opinion that such
costs should be include in mitigation fees.
HtUUNl&ASSt!CilltOS
-
Review - Estimation of Cost to Preserve Prime Ag. hd in Coastnl Zone, Cdsbrul. CA. Pap I5
IV. 9 STMMARYW APPRAISER s CONcIJJs~oN~
A.
Based on the review of the stated source documents, it is my apinion and recommendation
that mitigation fees be determined according to the following criteria:
1. The cost of securing a preservation easement(s) encumbering prime agricultural land
of m acreage within the Coastal Zone.
2. This cost shall be defined as the purchase price of the conservation easement(s), and
related costs associated with location, negotiation, and acquisition.
3. The potential purchase price shall be determined by analysis of comparable sales
which meet criteria of Prime agricultural land within the Coastal Zone. This shall
include analysis of both fee simple interest land purchases and the purchases of
conservation easements. The agricultural production (yield) and land rental income
shall be considered in estimation of the value of the property for restricted agricultural
use.
4. Comparable sales shall be selected to appraise the value of a potential purchase of a
hypothetical conservation easement in an area(s) defined by the California State
Coastal Conservancy. Other criteria or directives pertaining to this hypothetical
property may include the following:
::
Assumed specific regional location
Assumed zoning/ parcel size
iii:
Assumed crop production/ yield
Assumed terms of conservation easement
B. . Q&ion of&&&&port ConcllylPtlS
The Hulberg Report includes a compilation of data concerning conservation easements. From
a general analysis of this data and discussion with preservation industry participants the report
concludes an opinion that the representative per acre cost of preserving Prime Agricultural
Coastal Zone land through Conservation Easement is $4,300 per acre.
Review - Estimation of Cost to Preserve prime Ap. hnd in ConstnI Zone, Carlshad, CA. Page 16
Based on my review analysis and according to previously discussed conditions, it is my
opinion that the Hulberg estimate represents an overstated value of conservation easements
for prime agricultural land in the Coastal Zone in most instances.
Even if $4,300 per acre was a reasonable estimate of value, additional acquisition costs of
15% would bring total costs to !§4,945 per acre. This remains below the $5,000 per acre
minimum mitigation fee. Therefore, it is my opinion that the payment of an in - lieu mitigation
fee of $5,000 per acre appears to be supportable and reasonable based on information
contained within the Hulberg Report.
More specific appraisal analysis would be required following further input from the California
State Coastal Conservancy to determine costs to acquire easements in a given area. If a
specific site is identified for purchase, the requirement could be satisfied by easement
acquisition.
Hanna & Associates
CFRTIFJCATE OF REVIEW
The undersigned certi@ to the best of their knowledge and belief
the facts and data reported by the review appraiser and used in the review process are true
and correct
the analysis, opinions, and conclusions in this review report are limited only by the
assumptions and limiting condiions stated in the review report, and are my personal, unbiased
professional analysis, opinions, and conclusions.
I have no present or prospective interest in the property that is the subject of this report, and
I have no personal interest or bias with respect to the parties involved.
my compensation is not contingent on an action or event resulting from the analyses, opinions
or conclusions in, or the use of this review report.
my analysis, opinions, and conclusions were developed and this review report was prepared
in conformity with the Uniform Standards of Professional Appraisal Practice.
I have not conducted an authorized and complete inspection of the property for purposes of
this review assignment.
no one provided significant professional assistance to the person signing this review report.
eal Estate Appraiser
No. AGO05798
HANNA &I ASSOCIATES
Real Estate Appraisers & Consultants
OUAl,IFICATTONS OF JOHN C. HANNA. MA1
John C. Hanna is a Member of the Appraisal Institute (MAI) and President of Hanna & Associates,
Inc. a real estate and consulting firm.
Mr. Hanna has more than 18 years of experience in the fields of real estate valuation, land use
planning and environmental analysis. Hanna & Associates was formed in 1987 to specifically provide i
services to the Santa Cruz area, South Santa Clara Valley, Salinas Valley and the Greater Monterey
Bay Area. Mr. Hanna and members of the firm are experienced in the valuation of improved
residential, agricultural, office, retail and hotel real estate and urban and rural vacant land. Under Mr.
Hanna’s direction, the company has become known for quality consulting services among a broad
base of clients including federal and state agencies, local counties and municipalities, financial
corporations and lending institutions, law firms and private interests.
Mr. Hanna’s personal background includes approximately ten years of real estate consulting based
in the San Francisco Financial District, beginning with his position as appraiser with Wells Fargo
Bank (Real Estate Industries Group) followed by his association with Fullerton-Mills Incorporated
(Mills-Cameghi, Inc.). As Senior Project Manager and Associate of the firm for more than seven
years, Mr. Hanna performed appraisal and consulting work on a wide variety of commercial real
estate located in the San Francisco Financial District and Bay Area, as well as properties located
within major urban areas throughout the United States.
In 1985 Mr. Hanna joined as principal in the formation of Clifford, Tattersall & Hanna, Incorporated.
While with the firm he continued to provide analysis and valuation services for investment grade real
estate in Northern California and concentrated on expanding his experience and market knowledge
to the Monterey Bay Area.
Mr. Hanna also has educational and professional experience in the environmental impact analysis, land
use and planning studies. He has specific expertise in the valuation of complex coastal sites and open
space acquisitions. These assignments draw on his experience with and knowledge of overlapping
governmental and land use planning jurisdictions and the analysis of physical and environmental
constraints in the context of property valuation.
He is also highly regarded for his understanding of lease interests in income properties. This includes
the valuation of leased fee and leasehold interests, subtenants, lease options and the impact of land
leases,
Mr. Hanna is qualified as an expert witness in the Superior Courts of San Benito, Santa Clara and
Monterey Counties.
HANNA 6s ASSOCIATES Real Estate Appraisers & Consultants
-
UCATION @ID PRQEESSIONSONS
Bachelor of Science, Natural Resources Management with specialty in City and Regional Planning,
California Polytechnic State University, San Luis Obispo, 1976.
Member of the Appraisal Institute #7099, Currently Certified;
“Certified General Real Estate Appraiser” #AGO05798 licensed with the State of California;
Completion of American Institute of Real Estate Appraisers
courses required for designation as well as ongoing educational seminars.
Member, Appraisal Institute Region I Review and Counseling Division, 1993 - present;
Member, AIREA (Appraisal Institute) National Admissions Committee and Report Review
Committee, 1988;
Member, Pajaro Valley Chamber of Commerce;
Afiiliate Member, Santa Cruz County Association of Realtors, Inc.
HANNA 6r ASSOCIATES
Real Estate Appraisers & Consultants
STUDY DATE:
APPRAISED FOR:
APPRAISED BY:
OURFILENUMBERz
ESTIMATION OF COST TO PRESERVE
PRIME AGRICULTURAL LAND IN THE
CALIFORNIA COASTAL ZONE
January 1,1997
Carltas Company
Hulberg & Associates, Inc.
One Almaden Boulevard, Suite 700
San Jose, California 95113
5701 _
HULBERG & ASSOCIATESZ
REAL ESTATE APPRAISERS
Norman C. Huberg, hw
Walter D. Camey, hL4I
Claudia B. Carleton Craig S. hgen Stephen D. Kuhnhoff, MAI, ASA Janis A. Lamer, SRA Charles Ft. Mmquellng, ASA, SRA Yvonne J. Brooms Pad M. Urdnitks William M. Range Terry S. Larson, MAI
January 3,1997
Mr. David C. Meyer
Carltas Company
5600 Avenida En&as, Suite 100
Carlsbad, California 92008
Dear Mr. Meyer:
At your request, Hulberg & Associates has prepared a study to establish the approximate
current per acre cost of permanently preserving prime agricultural land within the statewide
California Coastal Zone in accordance and consistent with the Agricultural Conversion
Mitigation Fee provisions of the California Coastal Act, and the Carlsbad Local Coastal
Program (Mello JI).
As the basis for our study, we interviewed the Executive Directors of several Land Trusts,
representatives of the California State Coastal Conservancy, government officials, and real
estate brokers and appraisers with direct knowledge of agricultural land values and public
policy with regard to both pmser&ion, as well as more intensive development of agricultural
land.
Targeting a single representative cost is necessarily difficult due to the numerous variables
involved in Conservation Easement acquisition. The cost to aquire Conservation Easements
is influenced by the unencumbered fee vahre of the land; the potential for development beyond
agricultural use, and the influence of government restrictions. In this report, all sale
comparables referenced are permanent easements,‘or land acquisitions in fee.
: .
i
One Almaden Boulevard, Suite 700 l San Jose, California 95113
(408) 279-1520 l FAX (408) 279-3428
Mr. David C. Meyer
January 3,1997
Page 2
Nonetheless, as of January 1, 1997, it is our opinionjhat the representative per acre cost of
preserving Prime Agricultural Coastal Zone land through Conservation Easement is:
FOUR THOUSAND THREE’HUNDRED DOLLARS PER ACRE
Respectfully submitted,
ms%yJ
Norman C. Hulberg, MAI
&$/&bc&&&& -
Janis A. Lassner, SRA
JALXp
ii
TABLE OF CONTiNTS
LetterofTransmittal ........................................... .
PurposeandJntentofStudy ...................................... 1
MethodofResearch ........................................... 1
DeterminatesofCost ........................................... 2
FormatofReport ............................................. 3
Agricultural Conservation Easements ................................ 3
ResearchFindings ............................................ 7
Marin Agricultural Land Trust .................................... 7
Sonoma County Agricultural Preservation
AndGpenSpaceDistrict.. ........ . ............................. 13
BigSurLandTrust.. ..... . .................................... 15
Land Conservancy of San Luis Obispo County .......................... 15
LandTrustofSantaCruzCounty.. ................................. 16
Ventura County Agricultural Land Trust .............................. 17
California Coastal Conservancy ............. Y ...................... 18
Steele Ranch Acquisition ....................................... .25
Cloverdale Coastal Ranch Acquisition ................................ .26
theRoleofGovemmentinLandPreservation .......................... .26
California Coastal Zone and Proposition 20 ........................... .28
Cost Study Conclusions ........................................ .31
StatementofCost .......................................... ...40
ADDENDA
Information Sources
Relevant Definitionos and Documents
Resource Material - Comparable Sales’
Qualifications of Norman C. Hulberg, MAJ
Qualifications of Jams A. Lassner, SRA
Assumptions and Limiting Conditions
Certification of Cost Study
. .
. . . ill
OF STUDY
Hulberg & Associates has prepared a study .to establish the approximate current per acre cost
of permanently p resewing prime agriculm land within the statewide California Coastal Zone
in accordance and consistent with the Agricultural Conversion Mitigation Fee provisions of
the California Coastal Act, and the Carl&ad Local Coastal Program (Mello II).
During the course of our study we reviewed the following documents, which helped provide
the foundation for our analysis:
. California Coastal Act (Section 30171.5(a), PRC) . Williamson Act (Sections 51201(c), CGC) . Carlsbad Local Coastal Program (LCP)-Mello II (Sections 21.202.06O(B.) &
@*), CMC) a Policy 2-l Conversion of &&r&L&
The relevant sections of these documents are located in the Addenda of this report. The policy
intent of the above-referenced documents is the preservation of prime agricultural land within
California’s Coastal Zone. In the event of conversion of non-prime agricultural land to urban
uses, the developer would be subject to an agricultuml conversion mitigation fee. An alternate
scenario would be the permanent preservation of one acre of prime agricultural land within
the California Coastal Zone for each net impacted acre of non-prime coastal agricultural land
in the Local Coastal Program proposed for development. The preserved land would be located
in an area selected by the State Coastal Conservancy and approved by the City Council.
The cost of preserving agricultural land within the Coastal Zone is the focus of our study. For
this report, we interviewed the Executive Directors from the following Land Trusts:
b
b
b
b
b
b
b
b
b
b
b
Big Sur Land Trust
Coastal Land Trust
Marin Agricultural Land Trust
Peninsula Open Space Trust
Land Conservancy of San Louis Gbispo County
Land Trust of Santa Cruz County
Sonoma County Agricultural Preservation and Open Space District
Monterey County Agriculture & Historical Land Conservancy
Ventura County Agricultural Land Trust
Coastal Land Trust
American Farm Land Trust
In addition, we interviewed government officials including members of the California State
Coastal Conservancy, real estate brokers and appraisers with direct knowledge of agricultural
land values and public policy with regard to both the preservation, as well as more intensive
development of agricultural land.
2
In accordance with and as stated in the City of Carlsbad, Local Coastal Program (Mello IJ),
Section 21.202.060, Subsection B.(~.)(c.) allowable methods of Prime land preservation are
as follows:
Acceptable intewm in&de, but shall not be limited to conservation easements,
transfeers in trust, common law easements, open space eawments, restrictive
covenants, equitable servitudes, fee ownership or any. other permanent
restriction approved by the City Chncil.
Our research shows that land acquisition in fee and voluntary transactions with landowners for
Conservation Easements are the two most common tools for land preservation. In California,
roughly 45 percent of the state is owned by a government agency. Land trusts have also
evolved as conduits of public and private money which is utilized for land preservation. For
example, the Peninsula Open Space Trust, (POST) headquartered in Menlo Park, California,
has undertaken a $28,500,000 campaign to purchase 12 key open-space lands, (including
agricultural land) mostly in San Mateo and Santa Cruz Counties, inclusive of the 5,638 acre
Cloverdale Coastal Ranch. Since 1977, POST, a nonprofit conservancy, has helped preserve
more than 27,000 acres. While the majority of said lands have been acquired in fee, POST
also buys and sells Conservation Easements.
In 1988, California voters passed Proposition 70, a parks bond act that provided $776,00,000
for park and open space acquisition (inclusive of agricultural land). Most of the money has
been spent, and many of the Land Trusts, as well as the State Parks and Recreation
Department are in a cash-poor situation.
The cost of purchasing Conservation Easements is influenced by a variety of factors:
b Underlying fee value of the unencumbered land b Irrigated vs. dry farm land b Location relative to urban services b Pressure from imminent development
The highest value for prime agricultural land reviewed for this report, is located in Ventura,
Monterey and Santa Cruz Counties. The market value of prime agricultural land in the
Coastal Zone in Ventura County is estimated by Ventura County Agricultural Land Trust
director Larry Rose at $22,000 to $35,000 per acre. The range is similar for parts of Santa
Cruz and Monterey Counties. The abundance of local water to support the cultivation of
speciality crops (strawberries can yield as much as $35,000 per acre per year in revenue)
greatly impacts land value. . .
3
Conversely, Marin Agricultural Land Trust Director Bob Bemer estimates Coastal Zone
agricultural land values at $300 to $1,500 per acre. The cost, therefore, of acquiring a
Conservation Easement in Marin County is substantially less than the cost to aquire a
Conservation Easement in Ventura, Monterey, or Santa Cruz Counties.
The first section of our report defines Conservation Basements, their effect on property rights
(inclusive of tax benefits), and methodology of determining their value.
The second section contains the body of our research. We have divided our research into
sections identified by specific Land Trusts. .These sections contain Conservation Easement sale
information provided by each of the Trusts as well as additional information provided by the
specific Director we interviewed for this report. This is followed by information on two
recent sales in fee of ranch properties within the Coastal Zone, as well as our discussion of the
role of government in the land development process.
The third section of our report analyzes the conclusions of our cost study; This is followed
by a references section in which we identify the sources of our data, and the Addenda, which
includes more detailed sales information.
The format of this report is based on the prospectus entitled ‘Request for Consulting Services
for Estimation of Cost to Preserve Prime .Agricultural Iand in the California Coastal Zone
prepared by Carltas Company. This is not an appraisal report, as it does not focus on
individual or specific property valuation. Rather, this report is a cost study; a survey of sale
transactions and interviews with real estate profeonals active in preserving agricultural land.
_. COR
An agricultuml Conservation Easement is a voluntary, legally recorded agreement between a
property owner and a qualified conservation organization or public trust that restricts land to
agriculture and open space uses. The easement generally prohibits or limits any subdivision
or development or any practice that would damage the agricultural value or productivity of the
farm land. By donating these relinquished rights (in this case, the right to develop the land
for non-f&m uses) and by meeting specific conditions, a landowner may become eligible for
certain tax benefits. The organ&ion receiving the easement accepts responsibility for
monitoring and enforcing the use restrictions, and typically seeks an endowment to cover the
costs of these long-term obligations. Although the duration of a Conservation Easement may
vary to suit the needs of the landowner, federal tax dollar benefits are available only on
perpetual easements that subject all future landowners to the easement restrictions. Like the
Williamson Act, the Conservation Easement follows the encumbered property and not the
property owner.
4
. . ofaconserpatlon
A landowner who either donates or sells an agricultural Conservation Easement retains all
rights to use the land for agricultural operations or for any purpose that is not specifically
prohibited by the terms of the easement. While an easement removes the development rights,
the landowner still holds the title to the property, including the right to restrict public access
and the right to sell, donate or transfer the property.
Conservation Easements are flexible documents. Their terms are often tailored to suit the
needs of the landowner. While agricultural easements generally restrict all non-farm use of
the land, some limited development may be allowed. For example, an easement generally
permits the construction of new farm buildings and can allow construction of a carefully
located house for family members or the subdivision of a lot for resale. Subdivided lots in
agricultural property can range in size from 10 acres to 160 acres dependiig on the specifics
of the zoning. This subdivision does not preclude the property from continued agricultural
use. The easement may be written to apply to the entire property or to only a portion of the
property. The flexibility of other restrictions will vary ‘with the characteristics of the property
and the conservation objectives of the easement.
The organization, agency, or trust holding the easement is required to monitor and enforce the
terms of the easement. To accomplish this, a representative of the holding entity is required
to regularly inspect the property to ensure that the terms of the agreement are being upheld.
This does not mean that the easement holder has the right to use the land, nor does it allow
public access for any reason, unless said uses are specified in the terms of the easement.
A Conservation Easement is created by the transfer of a deed of Conservation Easement to a
&alified organ&&ion willing to accepf the easement and enforce its restrictions. The deed
is then recorded in the local land records. If there is a mortgage on the property, the lender
must agree to release or subordinate the-mortgage to the easement. The holder of any
subsurface mineral rights must agree to do the same. These legal steps ensure the easement
is fully enforceable, and the landowner’s conservation objectives are achieved.
Increasingly, over the last 10 to 15 years, the Conservation Easement has evolved as a
growing trend in land conservation. Historically, land conservation has occurred when
governments or private environmental groups have purchased private property for public
recreation. But because of the escalating costs of patrolling, repairing and maintaining vast
acreages, many state and national park agencies are having an increasingly difficult time
keeping up the land.
Conservation Easements essentially purchase development rights. With them, a private tax
base is maintained (albeit at a lower effective rate) and the public does not have to pay the cost
of managing the land.
5
Protecting farm land through conservation can help maintain the viability of a region’s
agricultural economic base. Profitability and economic survival are critical concerns in
farming, particularly with urban sprawl creating upward pressure on land prices.
Donating a Conservation Easement can significantly reduce federal and state income taxes,
local property taxes and estate and inheritance taxes. If an easement qualifies under Internal
Revenue Service Rules, the value of a perpetual easement is deductible from federal income
taxes just like any ,charitable contribution. If the underlying property has been owned for
more than one year, the value of the gift can be deducted at an amount of up to 30 percent of
the donor’s adjusted gross income in the year of the gift. If a corporation is the donor, the
limit is 10 percent of taxable income. If the easement’s value exceeds 30 percent of the
donor’s income, the excess can be carried forward and deducted (subject to the 30 percent
limit) in each of the five succeeding tax years.
he Value
Real property consists of rights in realty. These rights are claims or interests enforceable by
law. The full set of private ownership righti is termed a “bundle.” This is ~&cause the rights
are sepamble and divisible, as parts of a bundle. The basic right of private ownership of real
property includes possession, control, enjoyment, and disposition.
Because these rights are both divisible.and separable, more than one party can have a portion
of any given right. An easement gives the easementholder part of the right to use the real
estate within the limits prescribed by the easement, while the fee owner retains the rest of the
right of use. Such is the case with Conservation Easements.
When an easement restricts full use and enjoyment of a property, the value of the property is
affected. The value of a Conservation Ekement is the difference between the value of
the land without conservation mstridions and the v&e of the land after restrictions have
been imposed. Ekcausk land values differ from location to location, so does the dollar value
of easements. Per Mr. J&n Wade of the Peninsula Open Space Trust, Conservation
Easements can vary anywhere from 25 percent to 85 percent of the unencumbered fee value
of the property, depending on the terms of the easement.
As a practical demonstration of both the mechanics and theory of easement valuation work,
we will discuss two recent transactions involving the Peninsula Open Space Trust, a nonprofit
land conservancy headquartered in Menlo Park, California. POST is an active participant in
land conservation in Santa Crux, Santa Clara and San Mateo Counties. The Bear Creek Road
property is not prime agricultural property in the Coastal Zone. It is referenced only as an
example of how the Conservation Easement valuation process works.
A property owner proposed to donate a Conservation Easement to the Peninsula Open Space
Trust on her 82.84 acre estate, located in the Santa Crux Mountain Range in Santa Clara
6
County near the town of Los Gatos. The proper& included a residential compound and artist’s
center. The 82.84 acres were comprised of seven contiguous parcels of land. The terms of
the contract were fairly standard for the majority of Conservation Easements. The prohibited
uses included:
b Subdivision b Building b Soil erosion or degradation b Disturbance of wetlands and riparian areas b Alteration of streams or ponds b Mineral rights and sale or transfer of water rights b New utilities b Developer’s rights .
The reserved rights included:
b Restoration or rebuilding of existing improvements, not to exceed their current
Sk?
b Continuing conduct of current property use within the guidelines of non-
expansion into the prohibited uses of the property
In order to estimate the value of the C!onsen&ion Easements, it was first necessary to estimate
the value of the land, unencumbered, based on its highest and best use. Given the property’s
“HS” (Hillside) zoning, and physical characteristics (with particular attention to slope factor),
it was determined that highest and best use was for residential subdivision development,
through utihzation of a hillside cluster permit. This would allow subdivision of the property . . into three lots.
The property was valued on a fee simple basis at $7,000 per acre, based on the analysis of
sales of hillside property purchased for residential subdivision development. Most notable was
the sale of the adjacent 1,100 acre Alma College property, which was purchased at the very
top of the speculative land market by an off-shore buyer in 1989. The buyer planned to
develop 400 to 5OJl acres, inclusive of a 200-acre golf course, leaving the balance in open
space.
Among the prohibited uses in the easement, the greatest loss in value was the loss of
subdivision rights. Said rights would become even more valuable with the development of the
Alma College pmperty; allowing the 82 acres to “piggy back” on the infrastructure extension
into the Alma College property.
It was determined that the best measure of the property’s value as a single, non-subdividable
site was to review sales of large hillside parcels that were similarly unsubdividable. These
7
sales reconciled to an indicated value of $3,500 per acre. The value of the land with
subdivision potential was $580,000, or $7,000* per acre. The value of the land with the
easement in place was $290,0, or $3,5OOf per acre. Thus, the estimated market value of
the Conservation Easement was $290,000, ($3,5OOf per acre) or 50 percent of the
unencumbered fee simple value of the property.
. . . . cowc
In 1986, POST began negotiations to purchase the 1,300 acre Cowell Ranch located south of
Half Moon Bay in San Mateo County. The property was purchased in 1987 for $6,7OO,OOO
on a fee simple basis, or roughly $5,150 per acre. In 1989, POST sold the Conservation
Basement rights to the California State Coastal Conservancy for $5,163,0OO, or slightly less
than $4,000 per acre. In 1991 and 1992, POST sold the underlying fee, with the easements
in place, to two farmers (B. Marsh and W. Guisti) for $1,700,000, or approximately $1,300
per acre.
Utilizing the fee purchase with subsequent resale formula yields the following:
Unencumbered fee simple purchase
Resale of Easement encumbered property
Cost of preserving the property
Cost Per Acre
$6,700,000
$5,000,000
$ 3,850_+
Of the total 1,300 acres, approximately 200 acres were prime agricultural. The 200 acres
were planted in artichokes, beans, peas and sprouts. POST did not differentiate zones of
value, but rather viewed the property as a whole. However, when pressed for an opinion,
Mr. Wade said the 200 acres would probably be valued half again above the overall per acre
purchase price ($5,775 per acre).
In the following sections we will discuss our research findings, categorized by individual Land
Trust analysis. Within the framework of the Land Trust discussion, we will analyze
Conservation Basement purchases and provide background information based on interviews
with the various Executive Directors.
Marin Agricultural Land Trust is a membership supported, nonprofit organization created in
1980 by a coalition of environmentalists and agriculturalists to help preserve Marin County’s
agricultural land. MALT Acts as a private conservation alternative to the sale, subdivision,
or development of agricultural land by acquiring Conservation Easements in voluntary
transactions with landowners. MALT Conservation Easements leave the property in private
ownership but permanently eliminate the property’s non-agricultural development potential.
8
MALT also encourages public policies which support and enhance long-term agriculture,
promotes public awareness of the importance of Marin’s Agricultural land and the need to
preserve it, and serves as an advocate for agriculture.
Since 1980, MALT has acquired agricultural Conservation Easements on 38 Marin farms and
ranches totaling 25,504 acres, which accounts for approximately 20 percent of the privately
owned agriculti land in the county. As the first land trust of its kind, MALT has become
a model for agricultural land preservation programs nationwide.
Of the 38 Conservation Easements acquired, 15 are located within the Coastal Zone. On the
following four pages is a list of MALT acquisitions and the terms of sale for each of the
transactions. The properties within the Coastal Zone are noted with an asterisk. We will
discuss two of the Coastal Zone easement purchases in more detail as follows:
Straus Ranch Acquisition:
The Straus Ranch acquisition contains a total of 660 acres, whose easement acquisition was
aquired in two separate transactions; one for 166 acres and one for 494 acres. The properties
are identified as Marin County Assessor’s Parcel Numbers 104-130-01 and 104-130-47 and
48. The properties, which were in the Williamson Act at the time of easement acquisition,
have extensive frontage along Shoreline Highway (State Route l), north of Tomales Ray State
Park and across Tomales Ray from Pelican Point and the Point Reyes National Seashore. The
property identified as the “Home Ranch” had improvements valued at $100,000. The property
had an appraised total “Befm Value” of $650,000, inclusive of improvement value. The land
value was $550,000. MALT acquired a Conservation Easement in July 1992 for $210,000,
or $1,265 per acre based on the 166acre total property size.
The “Dairy Ranch” consisted of 494 acres. The “Before Value” of the land was appraised at
$1,366,000, not including the $234,000 value of the improvements. MALT purchased a
Conservation Easement in July 1992 for $680,000, or $1,377 per acre, based on the 494-acre
property.
For this report, we interviewed Mr. Robert Rerner, the Executive Director of MALT. He said
that over the last seven to eight-years the average price paid per acre for Conservation
Easements was roughly $1,000. This typically represents 46 percent of the unencumbered fee
value of the land. The property acquired is typically zoned one dwelling unit per 60 acres,
with most non-encumbered land selling in the $350 to $1,500 per acre range.
While broad application of the Conservation Easement as a preservation tool has been utilized
over the last 25 to 30 years, its more aggressive use has occurred in the last 10 to 15 years.
In addition, the Conservation Easement is typically used by private as opposed to public
organizations.
DEC- 5-96 THU 12:87 IIALT
Mmza-hrni
125-070-17 & 18
lAfkanchi
121-050-30 & 41
~Chlli 100-09007
Shlbbs
121-010-07 & 08
121-030-01
125-010-lot 11
TtUTlap0
121-050-06
121-060.06
d/ Barboni 106-210-24 & 62
lfPdCU
106-I IO-06
106-210-10
/ BloomlSpalctta
100-010-02 &OS
t0 ParwLcwi
104-040-30
( Spdetta 100-010-01
McIsmc 100-080-23
/ PouiNorth 100-020-20.2 1.22
c/ Popi south
100-040-07,24,27
/ Walcott 100-040-28
160-100-29
Date; Luldw (somw’l Adj.% of Em! ma!
s/83 844 s2!zo,oOcl S2% $633.0000 39’
nB6 477 435,000 912 87VWS) 50
12B6 360 144,000 400 533,000(A) 27’
12/M 1161 320,006 275 WWWN 25’
34 (1)
50 (2)
36 (31 +
SO (4)
3187 463 180.000 385 41S,OOO(s/A) is (3
3i88 823 500,ooo 608 1 JWWE) 41
l/88 826 330,400 400 625,OOO(S/A) 53
3/88 810.6 308,125 374 890,000(s) 3s PI *
1m9 588 208,334 354 ~,WS) 35
639 380,125 595 BWKJW~ 44
991 219.34 326,000 1486 586,ooo<A) 56
6/91 333.48 341.777 102s 73WJWl 46
6/91 232.26 245.737 1058 495.000(A) 50
6/91 412.2 422,486 1024 917PWA) 46
(9) +
(11)
02) *
. , (12) +
(12) +
MMlNAGRICULTUMLL4NDTRUST t Pur&arq
mv 1983-Dmcnmbrr l@&
P. kiz
9
DEC- 5-96 THU 12:88 I’lFILT P,ki3
10
&&
(13)
fVOiCd!N
C. Dolcti
125-050-3.6,
7.8, 10
11191 850 1m*ooo 1187 2,125.ooo(AJ . 47
179.46 200,ooo
3f92 268.55 347,000
6t92 960 765,000
7/92 210.14 22oso
1114
1292
797
1049
415.ooo(AI
670,000(A)
1535PWA)
SoCWW9
48
52
50
44
JeIlseIl 100-090-04
Poncia 100-050-16.38
(16) . L. Dolcini
106-140-5 &6,27
(17) Burbank
100-050-17 100-060-25
1078 667,000(A) 48 08) +
1050 1,98O,OOO(A/s) 51 (19) +
) MtchtIt 1 oo-090~06 7/92
7/92
294.11
952
317,ooo
1mJwJ , BrazilINicbalas
104-050-09 dt 10
104-l 10-03 & 04
(20) +
(21) +
(22)
(231 +
J Straus Home Rnnch
104-130-01 7/92 166 210,000 1265 S5o,ooo(A) 38
7/92 494 680,000 1377 L366,OC’WQ 50
8f92 208.2 330.m 1145 71O,ooO(A) 46
11/92 1241.93 1,240,OOO 998 2,495,000(A) 50
v Straus Dairy Ranch 104-13047 & 48
Maloney ’ 100-030-11 & 12
, Respini .
106-210-I 1
106-230-01 &02
Ellis 106-140-l 1 * 11/92
103
274
645.6
130,000 474
1394
4~,ooo(A)
1,820,000(A)
33
49 SdOti loo-070-17
104-oso-01,02,03.04
WilsOll 100-020-13 & 14 m3
3i93
87ww~ 46 (26)
1,780,000(A) 48 (271
355.67 400,000
856.3 86OJKIO
1125
1004 TOCdiilO 121-100-03,08,14 121-060-03
(28) +
(2%
/Nobmann 119-050-03,07 10193
11/93
1192
151.58
%woQ
130,000
SOS 2,165,000(A)
858 410.000 (Al
44
32 F&b 100-070-16
DEC- 5-96 THU 12:88 FIALT P-b34
-
F. Dolcini 6l94 1003 9ao,ooo 977 2210.~ (A) 44
106-14WJ3.26
Corda 9194 846.87 Ipoo.~ 1.181 2,540.~ (A) 47’
106-l 50-I 1
106-170-18 125-040-3,4,5
Volpi
125-040-16.17
12t94 212.5 320,ooa 196 8 low (4 40
11
(30)
01)
(32)
‘A = Appraisal Average East per acs: S 9%
S= Market Sale
E= E3timate
P = Pending Sale
'Two appraisals were done. One concluded easanent value dS217,000,
34%of nppraised land FMV; the 0th~ concluded casemat v&e of $364.500.
29%ofFMV includinq improvements.
‘Bargein-sale. Appraised value of easGmen t was $190,000,36% of
appraisedland FMV. .
‘Bargain sale. Appraised value of casement was S645,000,
50% of eppraised land Fh4V.
’ Bargain sale. Appraised value of easement was S1,200.000.
(1)
ta (3)
(41
g;
(7)
(s)
(91
(10) (11)
(12)
(13)
(14) (13
(16)
07)
081
(1%
(20)
Ag Contrnct. Easement permitted 4 additional reaidmces and division into 2 parcelq land division approved 12/87; 340 acres
sold to Levi0 z/s8 fcu $340,000.
Ag Contract. Nica&o Valley location, road ftontage.
Ag Contract
Ag Contract. 2 &velopment rights retained, emma& pem&ed division into 2 pmuelq land divided and 559 mea aold to Regan
12187 fur $645,000 iacl. improvemenh
Ag Contract. No Ag Contract Huy 1 haage. No Ag Contract.
Coast and Esbq &ontqe. Split into plrrt pumhasc & part opti=, option price as+atu.
Ag Contract Coxnpletion of 2 phase project, p&e deumiml by optim, land FMV ~wucd b sale 1 O/S7 IS ma. prior to
eosernent purchax.
Ag Contract. Land FMV aouree &om aalc 2I89 10 mm prior to -tplrrrhase. Ag Contract. S400,OOO improvcrnenls = total Bcfbrc Value ofS986,OOO. Pctaluma-Ton&s Road .
Ag Contracts. Single pmject involving MAL.T purchase of Wol+ fbr St million and exohange fob three easemem ts. Franklin Scbol Roed. .
& Contract. Pt Ryes-Pet&ma Rand, Hicks Valley.
Ag Contract. bin Road behind Tomales High Wool. S2SS.000 impmementa - totalBeh-evalucofs7oo.ooo.
Ag Contract Highway 1 no& of Tombs. S500.000 improvcrnenb = ti Bcforo Vahe of $1,170,000. k&&way t spliti pm-.
Two rcsidcncea and small dairy futility.
Ag Contract. Bisected by Chileno VaUq Road near Laguna Lake. $150,000 improvements - total B&e Value of ~1,68S,WO. Ag Contract. Soulh of intersection of Burbank Lane and Fallon-Two Rock Road. Sl25,OOO impmvement - total B&m Value of
$S7O.o00.
Ag Contract. S 125,000 improveme& = total B&m Value of $192,000. North- Marin Couty. cme mile west of Tcxnales, tPntnge on Dillon Beach Road,
’ Ag Contract S220.000 improvements - total Before Value of S2,200,000. Northern Ma&, 4 milea SE of Tomales.
Ag Contract Extensive fbnbgc on State Rt. 1. Sl 00,000 impmvcmcnts = total B&-e Value of S650.000.
UEC- 3-96 1 nu 12 'Id3 PIHI- I
12
(21)
(22)
(231
(24)
(25)
lm
(27)
w4)
(291
g:;
(32)
Ag Conbect. $234,000 improvemeats = total Before Value ofS920,OOO. Extensive hntage on State Rt 1. Bisehd by cl&~ Rod
AgCtmhnct. S150.000improvlcments=tolrlBeforsV~~dS860.000. BiscctedbyGaickRo~iaNwM&neartbs 8onama
county boudaly, 14 Eli. west afPcrahna
Ag Contract S235.060 improvattcnts = total Behe Value of$2,840,000. Fronts Measbell-petalurns Road, overlool6ng Tom&s
!&ntmLct s4o,oooimpfov~-totd~vdu8ofsd4o,ooo. wesrcnr~chilcm,vdlcy.
Ag Contract. f600.000 jrqmmm& - tad Bcforc hhu of ~d20,~. &ocb ~canabPetrlurm bad. working d&y, four
residences.
AgCodtractS350,000~~b=totnl~V~~af$1~0,000~~byMiddleRbrdinNWMPrin. .
AgConhcr. S20.000i1qwcm cnts - total Bcfbm Vdue dS1.800,ooo. se
Hills Golfcourse.
bypublicqpenspaa,s~cdLpke.l.ndiM
Ag Contract. 8outhW flank of Black UountJa an Pctahma Rd. just west of Pt. Reym Station S375,OW impswmmb *
total Bcfom Value of$2&0$00.
Ag Contract. Adjoins Sahri Ranch S420,OOO improvements = total Befom Vdue ofS830,OOO.
Agcanh.act,cbilenovdlyRond(daby).$53o.oooimpmvcmcn ts-t.otdE&oreVducd52,740.000.
Ag Contract Chileno Valley Raad. Bargnin sale - see note 5. S1.400.000 illqmame=~tolplvdueaf$3~40,000.
AgContract S850,OOfJ improw - total Before Vduc dS1,660,0OO. Point byes-PctalumaRd near Sonomm Co. lie.
I 13
In 1988, California voters passed Proposition 70, a par& bond which provided $776,fKKl,OOO for land acquisition. While most of the funding went to buy new state and county parks, a portion was devoted to buying development rights through Conservation Easements. MALT was the beneficiary of some of this money, and 22 of the Trust’s land acquisitions were acquired after the bond’s passage. However, Mr. Berner said that MALT is low on acquisition funds. A recent Marin County ballot measure for a l/4 percent sales tax hike earmarked for open space acquisition failed to pass by the requisite 2/3’s majority.
Funding is not a problem for the Sonoma County Agricultural Preservation and Open Space
District. Sonoma County voters approved their l/4 percent sales tax and we are advised the SCAPOSD has a several million-dollar acquisition fund.
COUNTY AGRN!UL~ON AND OPEN SPU
In the Addenda of this report is a copy of the Land Rights Inventory for SCAPOSD. This includes the rights acquired by the District directly as well as the rights protected by the District through the Planning Process.
Below is a list of three Conservation Easements of note. While none of the properties are
located within the Coastal Zone, all are active use agrhhnd properties. St. Francis and De Loach are well-known wineries. The properties over which the Conservation Easements were acquired produce cash crops of high value. The unusually high cost of the Conservation Easements is an acknowledgment of that factor. Over the last few years, due to escalating land prices in the San Francisco Bay Area as well as the demand for more affordable housing, there has been increasing pressure in the North Bay Counties to rezone agricultural land for residential subdivision development. The Nicholas Turkey Farm is another case in point. Located along Highway 121, the farm is in the path of development as well. The prices paid for these easements represent the top of the market in our research.
It should be noted here that development tends to follow the path of least resistance. Because * there are so many government layers to keep prime agricultural land in the Coastal Zone in agricultural use, development has been pushed inland, away from the coast. As a result, it
often costs more to preserve agricultural land outside of the Coastal Zone than within it.
1 CONSERVATION m PURCHASED BY THE
SONOMA COUNTY AGRICULTURAL PRESERVATION
AND OPEN SPACE DISTRICT I
St. Francis Vineyards
(installment purchase)
De Loach Vineyards
Nicholas Turkey
Breeding Farms
LOCl9tlOfl
Highway 12 at Sonoma-
Creek, Kenwood
Purchese
Date
9193
Purchase fbke
size PriCe Per Acre
92 acres 875,000 $9,510
North of Arala Lane on
Highway 101, Windsor
8194 75 acres 535,000 87,133
14
SCAPOSD also produced a sale/resale transaction for our review. The St. Lukes property,
located at 411 Old Redwood Highway at Alba Lane in the vicinity of Santa Rosa was
purchased on a fee basis in two transactions in 199311994. The 63 acres were purchased in
fee for a total price of $985,000. The District recorded a nondevelopment Conservation
Easement on the property, and sold the encumbered fee for $680,000. The value of the
easement was $305,000, or $4,841 per acre. The St. Lukes property is in the path of the
northerly expansion of the City of Santa Rosa. In addition, the property consists of a wetland
area and has visibility from Highway 101. The St. Luke’s property was further viewed as a
“community separator.” None of the above-referenced properties are in the Coastal Zone.
We also interviewed Mr. David Hansen, General wager of SCAPOSD, at length. He
referenced three other easements the district has acquired during 1996. These included 200
acres of second growth forest at $500,000 ($2,500 per acre); the Hepper Property, which is
86 acres in the Ester-o American area ne& the Marin/Sonoma border and is steep pasture
gmiing land, for $450,000 ($5,233 per acre); and a 1,500 acre ranch in a scenic area above
the California Coast, north of Rodega Ray on Coleman Valley Road, for $1,135,000 ($757
per acre).
Mr. Hansen said that the cost to acquire Conservation Easements is typically 40 percent to 60
percent of the fee simple value for agricultural properties. For Sonoma County, the price per
acre for prime agricultural land is $20,000 in fee. This is typically land adjacent to urban city
limits. The cost of an agricultural easement for this land is roughly $10,000 per acre. The
majority of agricultural land in the County, however, is $2,ooO to $4,000 per acre in fee. The cost of conservation easements for the majority of land is $500 to $2,000 per acre.
.
Of the 40 Conservation Easement purchases by the District; without special circumstances of
sale, the breakdown of cost categories is as follows:
Under $2,500 per acre: 16 easements _.
$2,500 to $5,000 per acre: 10 easements
$5,000 to $7,500 per acr& 6 easements
$7,500 to $10,000 per acre:
Above $10,000 per acre:
3 easements
5 casements
These figures show that 65 percent of the easements acquired were $5,000 per acre or less,
while 35 percent had costs above $5,000 per acre. As is obvious from our analysis,
agricultural land prices in Sonoma County are generally higher than in Marin County.
Nonetheless, as a percentage of underlying fee value, the 40 percent to 60 percent easement
acquisition cost range holds true for both counties.
. .
15
When Proposition 70 passed in 1988, roughly $25,000,000 was expressly devoted to buying
development rights along the Big Sur coastline. In the largest land deal of its kind ever
completed in California, the Monterey County Board of Supervisors agreed to pay
$11,500,000 for the development rights to 3,550 acres of the El Sur Ranch, inclusive of 5
for a 100 room hotel and 98 houses. Mr. Brian Steen, Executive Director of the Big Sur Land
Trust, helped broker the deal. Mr. Steen said that the El Sur property was the largest single
Conservation Easement purchase in the history of California. Roughly 1,400 acres of the
aquisition is located between Highway 1 and the coasthne and is in agricultural use. The land
is virtually level and is in the Coastal Zone.
Once a Spanish land grant, the El Sur Ranch totals 7,100 acres, the largest piece of private
property along the 70 mile Big Sur coastline between the Carmel Highlands and Hearst Castle
in San Simeon. Half of the ranch is visible from Highway 1, while the remainder sits behind
a ridge line. Under existing zoning, the property owner could have built up to 53 homes on
the 3,550 acres of Coastal Zone land. . .
.
In the early 1980’s, the property owner, Mr. Jim Hill, proposed building a 100 room hotel,
a restaurant and 98 luxury homes. That idea stalled in 1984 when the California Coastal
Commission rejected a development agreement Mr. Hill had reached with Monterey County.
The sale of development rights came after two years of negotiation.
Prior to the aquisition of the Conservation Easement, the 3,550 acres was appraised for
$15400,000, or $4,338 per acre. The Conservation Easement was purchased for a,240 per
acre, or 75 percent of the fee value. The easement cost as a percentage of fee is higher than
the majority of easements we reviewed for this report. This is likely due to the motivation of
the buyer, the availability of funds, the desirability of the property, and its potential for
commercial development. Mr. Steen stated that escrow on the sale is scheduled to close in
January, 1997 as an all cash transaction. .
CONSEWANCY OF SAN CO-
We interviewed Mr. Ray Belknap, Executive Director of the Land Conservancy of San Luis
Obispo County for this report. Mr. Belknap provided us with one recent Conservation
Easement transaction, plus one referral of a property owner who would consider selling a
Conservation Easement. Per Mr. Be&nap, the California Coastal Conservancy purchased a
Conservation Easement for San Luis Obii, in the Lower Arroyo Grande area of the Sienega
Valley. The property consists of 200.2 acres of prime agricultural land in the Coastal Zone,
planted in row crops. The purchase price was $530,000, or $2,647 per acre.
In addition, Mr. Be&nap stated that property owner John Hayashi, who owns rough 1,000
acres in the San Luis Obispo County, has 120 acres in truck crops within the Coastal Zone,
16
over which he is willing to sell a Conservation Easement. Per Mr. Beknap, Mr. Hayashi’s
“starting” price is $10,000 per acre. This, then, would represent the very top of the market.
Based upon past transactions, it is likely that an actual purchase price could be negotiated
below this figure.
The value of agricultuml land in San Luis Obispo County is less than Ventura County, largely
because of the availability of water. PrimeJand in San Luis Obispo County typically sells in
the$7,OOOto$15,000peracrerange,perappraiserChrismpherSmith,MAI,alocalappraiser
active in the agricultural land appraisal field. Southern San Luis Obispo and North Santa
Barbara Counties are the best for agriculture. But Oxnard’s good weather, abundant water,
and the fact that three to four crops per year can be grown accounts for Ventura County’s
higher land prices.
OF -UZ COUNTY
We interviewed Ms. Laura Perry, Executive Director of the Land Trust of Santa Cruz County
to determine the viability of acquiring Conservation Easements on prime agricultural land in
both Santa Cruz and Monterey Counties.. She said the difficulty was in qualifying willing
sellers. Both Monterey County and Santa Cruz County have roughly $l,OOO,ooO in funds
from Proposition 70. Ms. Perry stated that for land in the Coastal Zone close to development
pressure, the majority of landowners are requesting a minimum of $5,000 per acre for
agricultural easements.
At Ms. Perry’s suggestion, we also interviewed Ms. Donna Bradford, of the Santa Cruz
County Planning Department. The County, per Ms. Bradford, would like to purchase
agricultural easements, but two recent failed transactions underscore the difficulty of the . . . . Y )I ‘process. s IS that devv on CA . . are s dev: . m In order to subdivide and develop property within CA zoning, the
property owner must be able to prove that subdividing the land would make it more
agriculturally viable than maintaining the property as a single parcel. Obviously, this is very
difficult to do.
Santa CTUZ County attempted to pmchase an agricuItural easement on 90 acres of land located
near the intersection of Lakeview and College Road in Watsonville. Of the 90 acres, 60 were
planted in organic greens. This is prime agricultural land, although not directly located in the
Coastal Zone. The property is bordered on one side by high density residential and on the
remaining three sides by prime agricultural land. There is a lake on the property, with some
wildlife value as well.
Thepropertywasappraisedinthe%efore” conditi0nat$1,050,000, or $l1,667peracre. The
property was appraised in the ‘aftef condition at $740,000, with the easement value being
17
$310,000, or $3,445 per acre. At 29.5 percent of the value of the unencumbered fee, the
property owner declined the offer as too low.
Similarly, a 130-acre parcel located on Casserly Road in Watsonville was appraised in the
“before” condition at !#2,455,750 ($18,890 per acre), and in the “after” condition at $2,240,500
($17,235 per acre). The easement value, at $205,250 ($1,579 per acre) is only 8 percent of
underlying fee. This assessment appears unusually low given that the property consists of five
legal parcels, all of which could accommodate, under existing zoning, a single-family
residence. The pmperty is level and traversed by three creek The net 123 acres are planted
in strawberries (high value cash crop) and there is an apple orchard as well. The property
owner canceled the transaction stating that there was no incentive to sell at $1,579 per acre.
Santa Cruz County is a prime example of how governments restrict development through
zoning limitations. This factor will be discussed in greater detail later in the report.
For this report we interviewed Mr. Larry Rose, Executive Director of the Ventura County
Agricultural Land Trust. Ventura County is home to the Oxnard Plain, considered by many
to be the premiere prime agricultural area in the entire California Coastal Zone. This is due
both to prime soil and weather conditions, as well as to the presence of the Oxnard Aquifer,
which supplies abundant, relatively inexpensive water for speciality crops. Per Mr. Rose,
prime irrigated land has a market value of between $22,000 to $35,000 per acre. Mr. Rose
stated that there are 70,000 acres of agricultural land in Ventura County, and most of it is in
private ownership. While the Ventura Trust has not yet purchased any Conservation
Easements, Mr. Rose said there are several farmers that he thinks would be interested in
pursuing a possible sale. Mr. Rose’s opinion is that the owners would expect a price of 50
percent to 75 percent of underlying fee for the easement, and that the range of cost for
Conservation Easements in Ventura County would be $5,000 to $20,000 per acre, with the
predominant range beiig $lO$OO to $15,000 per acre for very prime irrigated land.
The prime agricultural land in Ventura County is not typical of California as a whole. As we
previously stated, Ventura County, Monterey and Santa Crux Counties have the highest priced
coastal agricultural land in the state. However, the zoning restrictions in Santa Crux and
Monterey Counties for agricultural land are already so restrictive, that it is difficult to get
property owners to voluntarily participate in the Conservation Ekisement program.
Ms. Carol Arnold of the Califomia Coastal Conservancy stated that, in looking at California
as a whole, the cost to conserve prime agricultural land, through the easement tool, has an
overall range of $3,000 to $15,000 per acre.
One final comment should be made about the Ventura County land. Due to climate, water and
soil conditions, it is possible to produce three to four crops per year.
18
Per Mr. Rose, some strawberry farmers gross $35,ooO annually per acre. This is why the
Ventura land is so valuable. What the re+der must also be aware of, however, is that the value
of a Conservation Easement is the difference in property value before the easement is imposed
and after the easement is imposed. If the zoning restrictions on the Ventura land from the
County, the City of Oxnard, or the Coastal Commission are limiting in terms of development
potential, the value of the Conservation Easement could be less than anticipated.
On the following four pages is a list of agricultural projects in which the California Coastal
Conservancy has fmancially participated; The projects include acquisition of land in fee, the
purchase of Conservation Easements (or a combination of both easement and fee) as well as
financial participation in community and land trust support to deal with the loss or threat of
loss of agricultural land.
Following the list are summaries of the various easement and fee transactions. Certain of
these transactions are discussed in other sections of our report, and thus were excluded from
these summaries. The Coastal Conservancy transactions further support our assertion that the
cost of acquiring a conservation is dictated by location, the special use nature of the property,
pressure from urban expansion, and underlying unencumbered fee value of the property.
.
The two obvious examples of atypical, special use properties here are theCabral Ranch in
Napa County and the Carlsbad Flower Fields in San Diego County. The Cabral Ranch is 19
acres of vineyards which will be used for long-term demonstration to test the economic
viability of environmentally sensitive farming methods and to educate other growers about
these properties. Similarly, the Carl&ad Flower Fields in San Diego County are a landmark
for Carlsbad and an important component of the city’s image and tourism economy. The
Conservancy provided $420,000 as areimbursable grant to the Paul and Magdalena E&e
Poinsettia Foundation to assist in ~maintaining the continued production of some 40 acres of
ranuculus bulbs and cut flowers on historic flower fields in Carlsbad along the Highway.
. . of 1. The funds
allocated for the Carlsbad Flower Fields were not for fee or easement purchase, but were
given in the form of a reimbursable grant. The Cabral Ranch is a fee purchase property, not
within the Coastal Zone.
The Coastal Conservancy properties acquired in fee range in cost per acre, excluding the
Cabral Ranch, from $1,849 to $6,000. The Easement Acquisition properties range in cost
from $433 to $5,ooO per acre (however, the Morro Ray Watershed property was purchased
* as a combination of fee and easement).
DEC 30 ‘96 03:lt3PM CORSTFIL CONSERWNCY
.-
P.2/5
19
MEMORANDUM
DATE: November 7, 1995
TO: Michael FJscher
FROM: Carol Arnold
RE: Agricultural Projects
Following is a list of agricultural projects the Conservancy has completed or is
currently completing. Most of the projects resulted in preservation of
agricultural land. Some of them al so deal with the issue of agricultural impacts
on natural resources, several provide technical assistance to help local communities deal with the loss or threat of loss of ag land, and one developed infrastructure that supports the local ag industry.
NORTH COAST AND BAY:
Eel River Enhancement and Aariculture Manaaement Plan. Humboldt County
In 1993, The Conservancy negotiated with the local RCD to set up a Sustainable
,' Agriculture Committee to address the problem of dairy waste contamination in the
Eel River Delta. The Conservancy also provided a $30,000 grant to assist in
developing economically feasible, on-farm alternatives for storing and/or
treating dairy wastes in order to meet nonpoint-source pollution control
requirements and enhance the natural resources of the Eel River Delta. In
partnership with the Humboldt County RCD, the Conservancy has applied for a Clean Water Act Section 319 grant to implement the plan.
Herzoq Prooertv. Sonoma County
In 1986, the Conservancy provided the Sonoma Land Trust with $995,000 to purchase a 538 acre hay farm. The Trust resold the property protected with a conservation easement and the proceeds were returned to the Conservancy. This property is an important source of feed for the regional dairy industry, and had been the target of major development efforts-
Cloudy Bend. Sonoma County
In 1993, the Conservancy granted $247,500 to the Sonoma County Agricultural Preservation & Open Space Distriet for the acquisition on an agricultural conservation easement on a 368 acre farm located on the southeast side of the City of Petaluma in an area where there is considerable development pressure. The District contributed $100,000 to the project.
Cabral Ranch. Naea County
In 1990, the Conservancy granted $345,000 to the Napa County RCD for acquisition
of a 19 acre site to use as a long-term demonstration vineyard to test the
economic viability of environmentally sensitive farming methods ahd to educate
DEC 30 ‘96 03:llPM COFISTF\L CONSERWNCY P.3/5
20
other growers about these practices.
Wuichica Creek Watershed Pl;oaram. NaDa County
In 1990, the Conservancy granted $75,000 to the Napa County RCD to prepare a
watershed plan and undertake projects that demonstrate methods to improve water
quality, reduce soil erosion and enhance wildlife and fisheries habitat on
vineyard land. Private vineyard owners implemented the plan.
Marin County Dairy and Sheep Ranches. Marin County
Between 1984 and 1987, the Conservancy awarded the Marin Agricultural Land Trust $1,3OO,OOO in grants for the purchase of development rights from farmers on three dairies and one sheep ranch. Using these grants and additional local funds, MALT purchased development rights to almost 3,000 acres in West Marin, These projects
got HALT started on its successful agricultural conservation program which has
become a model for agricultural land trusts nationwide.
Tomales Bav Watershed Program. Marin County
Beginning in 1983, the Conservancy provided funds to the Marin County Resource Conservation District to reduce erosion In the Tomales Bay Watershed, thereby slowing the accelerated sedimentation rate in the Bay. To date, aboutS1,500,000 has been granted to the RCD to work with farmers and ranchers to repair gullies, improve stream crossings, install culverts, revegetate stream banks and other work that not only helped the Bay, but reduced farmers' soil loss.
Sonoma Coast Watershed Program. Sonoma Countv
In 1987, the Conservancy granted S1,200,000 to the Gold Ridge Resource Conservation District to implement a five-year erosion control program in the watersheds of two coastal wetlands, the Ester0 Americano and Salmon Creek. Working with private ranchers and farmers, the projects were similar to the Tomales Bay program.
CENTRAL COAST
Cowelf Ranch. San Mateo County
In 1989, the Conservancy purchased $5,400,000 worth of easements and fee title
interests in a 1,297 acre farm directly south of Half Moon Bay. The property was seriously threatened with development and included not only productive row crops, but nearly two miles of shoreline with three beaches, riparian habitat and an
historic town site. The Peninsula Open Space Trust and the Conservancy constructed a stairway to the beach which was recently opened to the public. The property continues to be farmed. .
Cascade Ranch. San Mateo Countv
In 1985, the Conservancy purchased this 700 acres of crop land and grazing land for $2,000,000. It has been leased to farmers ever since who grow artichokes and
brussels sprouts. amoung other vegetables, and graze cattle. The property was threatened with a proposed residential development and limited water for crop irrigation. The Conservancy has developed plans to build one water impoundment
DEC 30 ‘96 03:llPM COFISTRL CONSERWNCY P.415
21
on part of the property and will soon sell the property protected with an agricultural conservation easement.
Steele Ranch. San Mateo Countv
In 1986, the Conservancy purchased this m acre farm to protect it from a proposed residential development. The six lots on the property have since been
merged into one and the property will soon be sold protected with a conservation
easement. Because of environmental and safety concerns over a four mile,
decrepid pipeline, irrigation from a creek containing endangered and threatened species was terminated which has reduced the amount of acreage in production. Almost one-half of the property, however, has continued to be farmed
West Armstronq Ranch. Monterev County
In 1991, the Conservancy approved the expenditure of $995,000 by the Monterey County Agricultural &Historic Lahd Conservancy to purchase an undivided interest in the 192 acre West Armstrong Ranch, an artichoke and brussels sprout farm in
northern Monterey County. The property is near the City of Marina and was
threatened with development. This project helped the new land trust get up and
running.
Azevedo Probertv. Monterev County
In 1990, the Conservancy provided $900,000 toward the acquisition of the Azevedo Ranch next to Elkhorn Slough, one of the most important coastal wetlands in the state. The Conservancy, The Nature Conservancy and the Monterey County Agricultural & Historic Land Conservancy are jointly working together to preserve and restore wetlands on 67 acres of the property while preserving 83 acres permanently in agriculture. The 83 acres will be used to test economically
viable techniques that reduce pesticide use.
frlorro Bav Watershed. San Luis ObisDO County
In I991 and 1994, the Conservancy granted about $1,500,000 ($835,000 from California Department of Transportation Environmental Enhancement and Mitigation Fund grant) to the Coastal San Luis Resource Conservation District, to purchase fee title and conservation, easement interests in over 300 acres of farmed wetlands in the lower Morro Bay Watershed. About 80 acres will remain in agricultural production. The remaining acreage will be restored to floodplain to trap sediment upstream of Morro Bay and expand riparian habitat. The Conservancy also has provided $400,000 to the RCDto work with private landowners to control erosion on agricultural lands, reducing sedimentation of Morro Bay.
Nipomo Dunes. San Luis Obispo County
In 1995, as part of a larger project to protect important habitat in these coastal dunes, the Conservancy provided $2,000,000 of funds specifically designated for this project area to acquire 1,400 acres of important wetland and dune habitat, and an agricultural easement over 200 acres of prime agricultural land adjacent to the dunes.
Arrovo Grande Vallev As Conservation Plan. San Luis Obisno County
DEC 30 ‘96 03:llPM COQSTW CONSERVANCY P.5/5
22
In 1990, the Conservancy provided a 528,000 grant to the City of Arroyo Grande to develop a plan that will describe the area's important agricultural resources and identify methods to preserve them. Implementation will likely be through a
locally administered program to acquire conservation easements, possibly funded through transfers of development rights.
SOUTH COAST
Ventura County A4 Conservation Plan
Because the fertile Ventura coastal plain is threatened with conversion to urban development and loss of the regional agricultural industry, the Ventura County Board of Supervisors asked the Conservancy to provide technical assistance to help them establish an agricultural conservation program. The Conservancy has organised workshops to educate farmers and the public on tax incentives for
protection of farmlands and helped establish the Agricultural Land Trust of Ventura County. The Conservancy also guided a study, funded by The Hansen Trust, an endowment fund set up to support Ventura agriculture, to examfne the trends of farmland conversion in Ventura County and 3ts economic consequences.
Carlsbad Aoricultural Grant Proqrams. San Dieoo County
In 1988, and again in 1992, the Conservancy authorized a total of almost one million dollars to establish grant programs to benefit agriculture in Carlsbad. The funding is provided by mitigation fees, collected in the early 1980's, that were levied on developers who converted Carlsbad farmland to nonagricultural uses. The program, administered by the Resource Conservation District of Greater San Diego County, allows farmers, researchers, and marketers of agricultural
products to receive grants for projects that will contribute to the long-term viability of agriculture in the area,
rlsbad Flower Fields. San Dieao County
In 1993, the Conservancy provided $420,000 as'a reimbursable grant to the Paul & Magdalena Ecke Poinsettia Foundation to assist in maintaining the continued production of over 40 acres of ranuculus bulbs and cut flowers on historic flower fields in Carlsbad along the Highway 5 corridor. The fields are a landmark for Carlsbad and an important component of the city's image and tourism economy.
Mitigation fees also covered the cost of this project. The funds will be repaid
annually from 1995 to 2000.
San Dieso International Floral Trade Center, San Dieso County
In 1989, the Conservancy awarded a $1,200,000 grant to help construct the San
Diego International Floral Trade tenter in Carlsbad. The grant, administered by the Resource Conservation District of Greater San Diego County, was used in conjunction with S9,700,000 of private financing. The Trade Center promotes and
facilitates sales of local floriculture products in an area where sellers had been pressured by short-term leases and high rental rates.
23
SUMMARY DF AGRlCULTURAL PROJECTS
CAlJFmlA COASTAL CONSERVANCY
EAsEMENT AcclUlSmDN
Sale
No. fi0P-v Sale Date size Easement Co& Coat Per Acre
1 Cloudy Band 1993 368 ac. 247,600 5673
Sonoma County
2 II I Marin County Dairy 81
Sheep Ranches
Marin Countv
3 Morro Bay Watershed
San Luis Obispo County
4 Nipomo Dunes
San Luis Obispo County
1984-l 987
1991-1994
1995
3,000 ac.
300 ec.
1,600 ac.
II HULSERG & ASSGCIATES INC. II
.
24
SUMMARY GF AGRICULTURAL PROJECTS
CAUFORNIA COASTAL CONSERVANCY
ACQUlSrnGN IN Egg
‘undivided interest
157OltblJp) HULSERG & ASSOClAlES. INC.
-.
25
While Ms. Carol Arnold of the Coastal Conservancy has estimated a range of cost for
Conservation Easements at $3,000 to $15,000 per acre for California as a whole, except for
the special circumstances of the Cabral Ranch and &&bad Flower Fields contributions, all
of the completed transactions refaced in the Conservancy’s list are $6,000 per acre or less.
In Policy 2-1, Conversion of Agricultural Lands, there is an option for mitigation through a
Prime Land Exchange. A prime example of this process is a pending transaction in the Aiio
Nuevo area of San Mateo County.
A portion of the Steele Ranch is being acquired in fee by the Bay Area Rapid Transit District
from the California Coastal Conservancy. The 220 acre property consists of San Mateo
County Assessor’s Parcel Numbers 089-230-030, 040, 070, 300, 320 and 330. The
characteristics of the property are as follows:
. 50 acres irrigated cropland . 130 acres dry farm land . 40 acres wetlands
The proper@ is ocean front land, westerly of the Cabrillo Highway at Aiio Nuevo Island, just
north of the Santa Crux County border. The contract is for $900,000, or $3,782 per acre.
This is a mitigation through prime land exchange due to BART’s right-of-way across Bay
frontage land to extend transit service to San Francisco International Airport. The majority
of the property is considered prime agricultural land and has a location within the Coastal
Zone between State Route l (Cabrillo Highway) and the Pac.& Ocean. Per Ms. Carol Arnold
of the Coastal Conservancy, the sale has been approved by the Conservancy Board of
Directors, and will close escrow in 1997. The land purchase, which will be encumbered with I
a Conservation Easement, will maintain the property as a restoration area for endangered
species protection. The Steele Ranch property was purchased by the Coastal Conservancy in
fee for $1,500,000 in 1986. This is a per acre cost of $6,818. As the property is being
resold, encumbered with a Conservation Easement at $900,000, the value of the easement is
$600,000, or $2,727 per acre. Based upon the upcoming Campinotti sale and other easement
sales researched for this report, the probable breakdown of zones of easement cost are as
follows:
50 acres irrigated cropland: $4,OOO/acre
130 acres of dry farm land: $2,8OOkicre
40 acres of wetlands: $l,OOO/acre
26
Cloverdale Coastal Ranch is a 5,638 acre property located along the San Mateo County
co&line between Pescadero and Aiio Nuevo, in the vicinity of the Pigeon Point Lighthouse.
The Peninsula Open Space Trust has acquired a three year option to buy the land in fee (the
largest undeveloped privately owned property in San Mateo County) for $7,000,000. This
yields a fee price per acre of $1,242. POST intends to donate or sell the land to the California
State Parks Department in about three years when the payments are finali&. The property
includes 1.5 miles of beaches, rolling pasture land, streams with steelhead trout and more than ’
1,000 acres of redwood forests. Per Ms. Carol “Arnold of the Coastal Conservancy,
approximately 700 acres of the purchase is in prime agricultural land, much of which is
currently planted in row crops such as brussel sprouts and pumpkins.
In past years, several developers expressed interest in building housing subdivisions or golf
courses on the property. But the Coastal Commission and environmental groups, as well as
the owner’s heirs, wanted the property preserved in pristine condition.
The land had been for sale for approximately four years, with an original list price of
$19,500,000 ($3,450 per acre). This sale appears to represent a below market price.
Given the Steele Ranch and Campinotti sales (see Zoning section of report), the easement
values of the 700 prime acres is probably !§4,000 per acre.
.
The issue of growth has social, environmental and economic dimensions. There are costs
associated with growth, as well as the lack of growth. The vehicle for planning the future,
‘for making choices between conservation and development, and for defining the desirable
balance between social, environmental, and economic costs is the General Plan.
A General Plan is an adopted statement of policy for the physical development of a
community. As such, it represents the official policy regarding the amount, type, and phasing
of development needed to achieve the region, or community’s goals. The plan is typically
flexible. General Plan policies specifically address issues related to efficiency in resource
consumption. For these reasons, governments enact zoning laws, inclusive of building and
site design, to improve energy and water efticiency. Water msoumes policies address the need
for the coIlservation and pro&t-ion of watershed and groundwater recharge areas. Air quality
policies require the governmental to regulate the sources of air pollution and monitor the
cumulative impacts of development on air quality. Urban service and natural resource policies
promote the efficient use of land and prevent urban sprawl, conserve open spaces and preserve
pristine natural habitats. .
This desire for balance is refleeted in Land Use Designations, or zoning. In estimating the
market value of land, one of the key tests of highest and best use is legal permissibility.
27
Private restriction, zoning, building codes, historic district controls and environmental
regulations arc considered because they may preclude many possible highest and best uses.
Increasing concern over the effects of land use has made consistency with environmental
regulations an additional consideration in highest and best use analysis.
The reader will recall the two failed examples of Conservation Easement attempts on farms
in Watsonville. The College Road property was directly bordered by high density residential
use land. Yet the planning goals of Santa Crux County specified that the 90 acres be zoned
“CA,” commercial agriculture, and the County was unwilling to consider an application for
rezoning. High density residential land is-worth many times more than agricultural land.
The question has arisen as to the feasibility of purchasing a Conservation Easement across
agricultural use land that has a General Plan designation for residential or commercial
development. We remind the reader here the sale of a-Conservation Easement is a a
action. Say a property owner has several acres of row crops in an area where the governing
entity wants to see residential development. For the sake of this hypothesis, we will assume
that an acre of residential subdivision land is selling for $300,000. Agricultural land is selling
for $20,000 per acre. As the value of a Conservation Easement is the difference between the
before and after value of the proper&, the value of the Conservation Easement in this scenario
is $280,000 per acre. The property owner would expect this type of compensation for giving
up development rights to his property. We could find no actual purchases of Conservation
Easements under this scenario during the course of our research. If any exist, they do not
represent a class of transactions, but rather are special circumstance situations.
Utilizing this same scenario, say the farmer’s land is located.next to a new residential
subdivision. However, the governing entity’s General Plan has drawn a ‘greenline,” a
boundary beyond which residential development is not allowed to occur. The probability of
a rezoning application being approved is unlikely. Therefore, despite the farmer’s proximity
to suburban development, the legal permissibility of developing his land is limited to existing
agriculture use. The value of the land is reduced accordingly.
In many instances, governments work with Land Trusts, so that the relationship is not
n-y adversarial. The Big Sur Land Trust worked in concert with the owner of the El
Sur Ranch and Monterey County to preserve 3,550 acres along the Big Sur coastline after the
coastalcommissi on stepped in to limit development of the property.. In Sonoma County, of
the 77 transadons participated in by SCAPGSD, since 1991,27 were of land secured through
the planning process.
Through the General Plan, a government makes decisions on the course of development that
best meets the planning goals of the community or region. The General Plan is the vision for
orderly development. If government decides that an existing corn field is better suited for the
development of an auto mall to increase the employment and tax base of the community,
government will rezone the land to allow this type of development to occur. As a result, the
28
value of the corn field increases, bad on its ultimate highest and best use. The rezoned corn
field is not the type of land targeted by Land Trusts for conservation. Rather, Land Trusts
will target the corn fields five miles outside of the governments sphere of influence and then . work m , to define and protect the interim buffer zone.
In the Addenda of this report is a Land Rights Inventory secured by the Sonoma County
Agricultural preservation and Open Space District There are 50 transactions for review. The
array of transactions shows how the District works in conjunction with property owners and
the various communities within Sonoma County to achieve the mutually beneficial goals of
agricultural land and open space preservation.
There are, of course, multiple layers of government. For land within the Coastal Zone, the
1972 passage of the California Coastal Zone Conservation Act had a huge impact on the
development of land within the Coastal Zone. We will discuss the Coastal Act in the next
section of our report. We will suffice it here to say that local government autonomy on land
management within the Coastal Zone was severely restricted by the passage of Proposition 20.
Thus, the sellers of agricultural easements are either people with little expectation of increased
development potential in the future, owners who want equity value on the land witbout
borrowing money or selhng the underlying fee, owners..who want a lower tax base (much like
the Williamson Act), or owners interested in the long-term protection of land beyond their
lifetime. It would be rare, indeed, to find a property owner holding land with imminent
development potential, who would encumber that land with a Conservation Easement not
compensatory with the property’s ‘before” value.
Another layer of land development control by government is the California Coastal Zone
Conservation Act.
Historically, land use in the CalZomia Coastal Zone has been regulated by local governments
under the provisions of State Planning and Zoning Law. This enabling legislation mandates
local governments to prepare general plans and zoning to ensure orderly physical growth and
development within their jurisdictions as well as the protection of public health, safety and
welfare.
Traditional local control over regulation of land use in the Coastal Zone was substantially
modified with the passage of the California Coastal Zone Conservation Act (Proposition 20)
by the voters of California on November 7, 1972. --Under Proposition 20, the California
Coastal Zone Conservation Commission and six Regional Coastal Commissions were created
and given a dual mandate of preparing a statewide ‘comprehensive enforceable plan for the
orderly, long-range conservation and management of the coasr and regulating development
while this plan was being prepared. ‘The California Coastal Plan was submitted to the
29
legislature on December 1, 1975. During the 1976 legislative session, several coastal bills
were introduced, all modifying to some extent the Coastal Plan. By the summer of 1976, SB
1277, the California Coastal Act, emerged from both houses as the basis of California’s
Coastal Zone Management Program. SB 1277 was amended by a trailer bill, AB 2948, which
was itself amended by AB 400. On January 1, 1977, the Coastal Act and other legislation
came into effect, establishing a permanent coastal management program for California.
In enacting the Coastal Act, the LegkMme established (3ooo1.5 of Coastal Act) the following
goals for future activity in the Coastal Zone:
GO
00
00
(e)
Protect, maintain, and, where feasible, enhance and restore the overall quality
of the Coastal Zone environment and its natural and man-made resources.
Assure orderly, balanced utilization and conservation of Coastal Zone
resources, taking into account the social and economic needs of the people of
the State.
. . Maxmnzepublicaccesstoandalongthecoastand maxim& public recreational
opportunities in the Coastal Zone consistent with sound resources conservation
principles and constitutionally protected rights of private property owners.
Assure priority for coastalkpendent and coastal-related development over
other development on the coast.
Encourage State and local initiatives and cooperation in preparing procedures
to implement coordinated planning and development for mutually beneficial
uses, including educational uses, in the Coastal Zone.
With regard to prime agricultural land, Section 30241 of the Act states that the maximum
amount of prime agricultural land shall be maintained in agricultural production to assure the
protection of an area’s agricultural economy.
Thus, between the State of California, the Regional Coastal Commissions, the Counties and
the Cities that occupy the Coastal Zone, there are multiple levels of bureaucracy to prevent
the removal of prime agricultuml land from agricultural production. The State of California,
alone, has over 30 public and private land trusts whose sole purpose is to prevent land from
being developed beyond low intensity agriculture compatible use and to preserve open space. ;
In addition, the November, 1996 election returned the Democratic party to control of both
houses of the state 1~. One of the first acts of the new maj’ority was to repk current
members of the Coastal Commission with more environmentally conscious new members.
As was previously discussed, value in land is based on its highest and best use. The more
restrictions on land, whether physical, legal, or financial, typically the less value it has. The
30
essence of this section of our report is that there is intense support for keeping agricultural
land in agricultural use. The political will for increased urbanization in California is directed
more toward the interior of the state rather than the coastal areas. By contrast, the Act policy
of preserving prime agricultural land appears to be an ‘absolute.”
Zoning The Conservation Easements referenced in this report were all qoned for agricultural use,
although witbin that zoning residential subdivision development was allowed within certain
guidelines. Occasionally, Conservation Easements are acquired in urban areas as buffer strips
for open space. For example, in September, 1993, the Sonoma County Land Trust purchased
a Conservation Easement across the White property. Located along Highway 101, the
property is a ‘sqxuatof between the communities of Santa Rosa and Larkfield. The 41 acre
site had the potential of certificates of compliance to subdivide the property into six residential
lots. The trust paid $448,000 for an agricultural easement on the property, or $10,927 per
acre. The anticipation of receipt of certificates of compliance for residential subdivision was
apparently strong enough to effect the highest and best use conclusion in the ‘before”
condition. This yielded a higher penalty. to the land for continued agricultural use, and thus,
a higher price paid for the Conservation Easement. While the White property is notlocated
Cm , it does show the impact that development potential has on the value of
land.
In interviewing the various Land Trust Executive Directors for this report, we asked if any of
their acquisitions were of land in agricultural use but zonexi for commercial or residential
subdivision development. The answer was negative. While certain purchases were in the
parth of development or had the potential for more intensive development, the buyer of the
property would have had to petition the controlling government entity for a zone or General
Plan change. In fact, the greatest conservationists are often local governments. Private and
Public land trusts regularly joint venture With government (and vice versa) to preserve land.
It is our opinion that if agricultural use land were ulned for commercial or residential
development, preservation would likely require acquisition in fee.
Another example is 33.72 acres of land purchased by Peninsula Open Space Trust from
Edward and Diana Campinotti in 1993. The property is prime agricultural land in the Coastal
Zone, located on Water Lane in Pescadem. ‘The proper@ was planted in artichokes at the time
of sale. The property is further identified as San Mateo County Assessor’s Parcel Numbers
086112-010 and 086-111~10. The owners had applied to San Mateo County for subdivision
rights and were granted three density credits. A density credit allows for development of a
home site (much like the certificate of compliance referenced above) in San Mateo County.
POST purchased the land in for a total of $521,500, or $15,465 per acre. Subsequent to
the purchase, POST reportedly put a Conservation Easement on the property and resold the
property to Better Blankets, Inc., in early 1994 for $390,000. The value of the Conservation
Easement is $13 1,500, or $3,900 per acre.
31
. .
POST paid above market for the land based on agricultural usage. By comparison, 22.37
acres on Reservoir Road was purchased in fee by a flower grower at roughly the same time
for $28o,ooO, or $12,5OOf per acre. The& tmnsadions ate practical market examples of how
anticipation of imminent development potential can impact the value of land. Interestingly,
however, is that the cost of the Conservation Easement remains fairly consistent on a per acre
basis with other sales in the midcoastal area we reviewed for tbis report.
The nature of our study is a necessary blend of opinion and transaction. The granting of a
Conservation Basement is a voluntary action between buyer and seller, and is not the product
of eminent domain. Therefore, the efforts at negotiation, including both failed and successful
transactions are elements of our study that required investigation. That is why we included
the opinions of the Executive Directors of the various Land Trusts we interviewed for this
report. In areas like Ventura County where no prime agricultural land Conservation
Easements have been successfully negotiated to date, the opinion of Mr. Larry Rose on land
value, anticipation by property owners, and background negotiations is’ as valuable to our
study as the sale configurations on the El Sur and Cowell Ranches.
We have reconciled the conclusions of our cost study into a series of summaries located on the
following several pages. Bach of these summaries will be addressed in the paragraphs below.
The fifteen sales referenced in our summary are ranches and farms located in the Coastal Zone.
in Marin County, many in the area of Tomales Bay. While none of the properties are row
crop land, several of the sales are dairy and orchard properties and cattle ranches. We have
noted with an asteri& the sales that were contracted to the Williamson Act at the time of sale.
Many of the properties were improved with multiple homes, farms and farm buildings. The
value of the improvements were excluded, so that the percentage of underlying fee refers to
the land value only. The cost per acre of the easements ranges from $354 to $1,377 per acre
and percentage of underlying fee from 27 percent to 51 percent.
The MALT Conservation Easement purchases are the most cost effective of all the counties
we reviewed for this report. That is because the fee value of the agricultural land is typically
below $2,000 per acre. In addition, the political mood of Marin County is very pro-
environment, so there have been a number of willing sellers. MALT is also low on land
acquisition funds, having exhausted most of their Proposition 70 money.
This would be a good avenue of investment for developers looking to participate in purchasing
Conservation Basements in acmality as opposed to paying in-lieu fees.
32
AGRICULTURAL =NSFRVAllo PURCHASED BY
MARIN AGRICULTURAL LAND TRUST
LOCATED IN THE COASTAL ZONE
Sd4
No.
1*
pt0P-W
Cerini Ranch
APN 100-090-07
Sale SK0 Eaeermnt coet Easement % of
Date (Acrd coet PWIAOr8 Fair Market V&M
12/m 360 ac. 144,wo 8400 27%
2 Berboni Ranch
APN 106-210-24 and 62
3ta3 823 ac. 500,ooo 8608 41%
3 Parker Ranch
APN 106-l 10-06
APN 106-210-10
1188 826 330.400 5400 53%
4 Bloom/Spaletta
APN 100-010-02 end 05
3t88 810.6 308,125 $374 35%
5* Parks/Lewis
APN 104-040-30
12/89 588 $208,344 $354 35%
6’ Spaletta Ranch
APN 100-010-01
2l90 639 ac. 380,125 $595 44%
7’ Pozzi North
APN 100-020-20,21,22
6l91 333.48 341,777 $1,025 46%
8” Pod South
APN 100-040-07,24,27
6/91 232.26 245.737 81.058 50%
3 Wolcott Ranch
APN 100-040-28
APN 100-100-29
6/91 412.5 422,486 6 1,024 46%
1-O* Mitchell Ranch 7i92. 234.11 8317,000 8 1,078 48%
APN 100-090-06
~ 11. Brazil/Nicholss 7/32 352 8 1 ,OOO,OOO 81,050 51%
, APN 104-050-09 8110
APN 104-110-03 &04
12’ Straus Home Ranch
APN 104-130-01
7l92 168 8210,000 81,265 38%
13* Straus Dairy Ranch 7I92 434 b680,OOC $1,377 50%
APN 104-l 30-47 & 48
14’ Respini Ranch
APN 106-210-l 1
APN 106-230-01 & 02
lll62 1,241.93 8 1,240,OOO 8998 50%
15 Nobman Ranch lo/33 1,192 8960,ooo 8805 44%
APN 119-050-03.07
.
*Indicates property in Williamson Act et the time of easement purchase.
1 f57OltblJp) HULB-G Q ASSOCIATES, INC.
33
SUMMARY OF AGRlCULlURAf. mERV=
F&m H VARIOUS COUNllES
WllHlN THE COASTAL ZONE
Sale
No.
Sale SKe Eeeement Easenmnt % of
Fair Msrket Valus
75% Cowell Ranch
San Mate0 County
El Sur Ranch
Monterey County
75%
3 Sienega Valley 1996 200.2 8530,Wo 92,647 Unknown
Lower Arroyo Grands
San Luis Obispo County
4 Campinotti Property 1994 33.72 8131.5W 83,900 25%
Note: In terms of prime agricultural land, the following is a breakdown by individual property:
- Cowell Ranch: 200 f acres: cost of prime land 55,769 ac.
- El Sur Ranch: 1,400 f acres; cost of prime land 84,856 ac.
- Sienega Valley:
- Cempinotti:
f!i7fllthl ml
200.2 ewes; cost of prime land $2,647 ac.
33.72 acres; cost of prime land 83,900 ac.
l.llll RFRG IL-ASSGCIATFS INC
34
(5701tbl.rp) HULBERG & ABBOCIATES, HC.
SUMAAARY DF AGRICULTURAL CGNSERVATIDN m
ON PRIME AGRfCULTURAL LAND m
jNTHEC~BUT#
THE PATH OF DEVELOPMENT
Sab Sab she fheenmnt coet
No. f+wrry Date (Acrd coet Per/Au. Commente
1 St. Francis Vineyards 9t33 32 $875.000 89,511 Visual resource -
Sonoma County adjacent to Sonoma
Creek - active
vineyard operation.
2 De Loach Vineyards 8t64 75 s535,ooo 87,133 Scenic agriculturel
Sonoma County resource - active
vineyard operation.
3 Nicholas Turkey 11195 306 81400,000 $4,575 Scenic agricultural
Breeding Farms resource - Visual
(Arbor Farms, Inc.) Backdrop -
Sonorna County conservation of
natural resources.
4 White Conservation 9t93 41 $448,050 510,927 Scenic agricultural
Easement resource - Highway
Sonoma County visibility - potential
certificates of
complianoe.
35
5 Grey Whale Ranch Between Wilder Ranch 2,319 ac. lOl66 $14,DDD,wD’ $6,037
State Park & University of
California, Santa Cm2 .
6 Portion of Steele Ranch Vicinity Afro Nuevo 220 ac. 11196 5900.000 $3,782
San Mateo County (with easement)
‘Estimated
Ui7fll thl m\ Hill RFRG & ASSGCIATFS lNC
’ COASTAL ZONE - m IN P5B
RECENT RANCH SALE IN SAN MAT50 AND SANTA CRUZ COUNTlEG
.
Sab SOb Sab
No. Rwrty Location SKe Date Prioe RiCO/ACtO
1 Cloverdale Coastal 15 miles south of Hdf 5,638 acras 5lS6 57.000,OOO $1,242
Ranch Moon Bay between Pigeon
Point and Butano St. Park
2 Portion of Butano SW of Pescadero Creek & 1.105.73 12192 S2.375.000 82,146
Ranch0 Cloverdsle Rds., Pescadero
3 Cowell-Torello Ranch East of Cabdllo Highway a( 3,200 7l93 87.500.000 52,344
Etheldorf St., Moss Baach
4 McNee Ranch North of Kanoff Ave. B 823.34 ac. 2133 83.000900 83.641
Tamarind St., Montara
Note: In terms of prime egrfcultural land, the following is a breakdown by individud property:
Cloverdale Ranch: see eadier narra&e.
2. Butano Ranch:
3. Cowell-Torello Ranch:
4. MoNee Ranch:
5. Grey Whale Ranch:
6. Steele Ranch:
200 acres: oost of prime land @ $3,222 acre
1,800 acres; cost of prime land @ 83,516 ao.
275 acres; cost of prime land @ $5,462 ac.
All non-prime land.
see earlier narrative.
(5701 tbl.rp) HULBBRG & ASSOCIATES, INC.
36
SUMMARY OF DPlNlONS OF VALUE
BYEXECUTlVEDlRECTORS OF
VARIOUS CAIJFORNIA LAND TRUSTS
I.
2.
3.
6.
5.
8.
7.
Es&nated Cost Estimated % of
Land Trust Executive Direotor Per Acre Undarfying Pae
Merin Agricultural Land Trust Robert Bemar 81,DCKJ 46%
Sonoma County Agricultural David Hansen 65% below 65,WQ per acre 40%-W%
Preservation and Open Space District 35% above 85,WO per acre
Big Sur Land Trust Brian Steen Sl,DcKl- $5,Doo 40%-W%
Peninsula Open Space Trust John Wade 81,wo - 85,Wo 25% - 85%
Land Conservancy of San Luis Ray Belknap 82,500 - $lO,DOO 40%-W%
Obispo County
Land Trust of Santa CNZ County Laura Perry 85,WO minimum 25% - 85%
Ventura County Agricultural Land Larry Rose SlO,wo - s15,DOO 50% - 75%
Trust
California Coastal Conservancy Carol Arnold 83,Wo - s15,ODo
IWLRERG IL ASSOCIATES. INC
25% - 85%
37
The four sales referenced in this section are from the San Mateo, Monterey and San Luis
Obispo Counties. The Sienega Valley Ranch and the Campinotti Ranch are all prime
agricultural land planted in row or truck crops at the time of sale. only a portion of the El
Sur and Cowell Ranches were in prime land. When we interviewed the Executive Directors
of POST and the Big Sur Land Trust, both said that they viewed the land purchases as a whole
property rather than segregating costs into zones of value. However, when pressed for an
opinion of value, both said that the prime land would garner a 50 percent premium on a per
acre basis relative to the entire land purchase. We have noted the adjustment at the bottom
of our summary. The adjusted price per acre range of these sales is $2,647 to $5,769 per
acre, or 25 percent to 75 percent of underlying fee value.
eCm . Our research shows that, at least in certain counties in Northern California, more money is
paid for prime agricultural land outside the Coastal Zone than inside the Coastal Zone. Land
producing high value cash crops (like grape@ and land acting as community separators in the
path of development, are generating the largest Conservation Easement acquisition costs.
As we discussed earlier in this report, much of the agricultural land in the Coastal Zone is
already regulated by the Coastal Commission, the Williamson Act, and the various city and
county governments. These layers of bureaucracy and government impact both zoning and
highest and best use of the property within the contines of the various General Plans. The
more restrictive the zoning, the less potential for development. The less potential for
development, the less valuable is the Conservation Easement, because the margin of the
“before” and “after” condition is reduced.
The fourth Summary is the recent land sales of ranches in the Coastal Zone. The
circumstan~ of sales of the Cloverdale Coastal Ranch and the Steele Ranch were discussed
in the body of our report. The Gray Whale Ranch is being purchased by a group called the
Save-The-Redwoods League. The property had been purchased in 1988 for $5,000,000
($2,156 per acre). The buyer logged a portion of the property and then attempted to gain
approvals to subdivide 73 residential lots plus build a swimtig complex and equestrian
center. The property became a political issue in Santa Cruz County elections, the result of
which placed a moratorium on development. The property will be annexed into the State
Parks system. While located in the Coastal Zone, none of the Gray whale Ranch is
considered prime agricultural land. .-
The remaining three ranches were purchased by land speculators. Roughly 50 percent of
Cowell-Torello is in level row crop land (adjusted price per acre $3,516), and roughly 30
percent of McNee is in row crop land (adjusted price per acre is $5,462). Roughly 200 acres
of Butano is planted in artichokes (adjusted price per acre is $3,222).
38
Our research shows that the majority of Conservation Easements are acquired at 40 percent
to 60 percent of underlying fee. The probable range of cost if Conservation Easements were
purchased on these ranches would probably be $1,000 to $3,500 per acre.
. . of Ow of cQ&
Finally, we summarized the opinions of the cost to acquire Conservation Easements across
prime agricultural land in the Coastal Zone of the Executive Dkctors of eight California Land I
Trusts. These opinions are particularly necessary because the areas in California where the
agricultural land is the most expensive have been the areas where buying Conservation
Easements have, to date, been the least successful.
The estimates of cost range is $1,000 to $15,000 per acre. Once again, the range is largely
tied to the underlying fee value of the unencumbered land. The broad opinion of percentage
of fee is 25 percent to 85 percent. This is because the terms of a Conservation Easement can
vary. The more restrictive the conditions of the easement, the higher the percentage in terms
of acquisition cost. The more development rights the property owner retains, the less value
the easement has, and therefore the cost is lower. All of the Conservation Easements
referenced in this report are permanent easements. All were zoned agriculture at the time of
sale. .
The reader will note that the highest opinions of value come from those counties with the
highest price agricultural land. These counties are also the least successful in acquiring
Conservation Easements. The most successful Land Trusts are in counties where the property
values are lower, where there is a renewable source of income to the trust (Sonoma County
sales tax) and where the political will is supportive of conservation.
. l-w
The purpose of this study is to investigate and establish the representative per acre current cost
of permanently preservin g Prime Agricultural Coastal Zone land within the parameters
outlined in the opening paragraphs of this report. Our study concludes the following:
. The cost to acquire Conservation Easements is influenced by the unencumbered
fee value of the land, the potential for development beyond agricultural use,
and the influence of government restrictions.
l Acquisition of a Conservation Easement is a voluntary transaction, not a
mandated transaction through eminent domain. .
. In some counties, there is more money to buy Conservation Easements than
there are willing sellers to sell them.
. Conservation Easements on prime agricultural land outside of the Coastal Zone
are often more expensive than land within the Coastal Zone.
39
0 The more restrictive the Conxzvation Easement, the higher the cost to acquire
it. Conversely, the more development rights retained by the seller, the lower . the cost of the Conservation Easement. All of the
Targeting a single representative cost is very difficult due to the numerous variables involved
in Conservation Easement acquisition. Nonetheless, we are of the opinion that:
. The average cost to acquire Conservation Easements in the San Francisco Bay
Area counties is estimated at $lJXlO to $v
. The average cost to acquire Conservation Easements in Santa Cruz County
south to San Luis Obispo County is estimated at m to %7,5OO m
. The average cost to acquire Conservation Easements in Ventura County is
estimated at $lO,OOO to $15,000 per a However, Ventura County is not
representative of California as a whole. The special soil, water and weather
conditions arc more location specific than indicative of a general pattern of
environmental conditions.
The most probable cost range based on the data researched for this study is $3,500 to $5,000
per acre, which would place our reconciled number at !$4,OOO to $4,500 per acre.
We strongly considered the transactions par+ipated in by the California Coastal Conservancy,
and found that the actual costs to protect land in the Coastal Zone were weighted toward the
lower end of Ms. Arnold’s projected cost range of $3,000 to $15,000 per acre. In fact, the
upper end of the cost projections by the various Land Trust Directors have few actual
transactions to support ‘their opinions. The reader wilI recall that in Sonoma County 65
percent of the Conservation Easements were acquired atprices below $5,000, while 35 percent
were acquired at prices above $5,000.
The conchisions of our cost study must takeinto consideration the relatively low cost of prime
agricultural land in the Coastal Zone in Marin County, the high cost of land in Ventura County
and the more generally representative costs of land in San Mate-o and portions of Santa Cruz
and Monterey Counties. The reader will also note the sale transactions referenced in this cost
study have ouxrred from the early 1980’s to the present. We have not made adjustments for
the time of sale factor, although the argument could be made that agricultural land values have
declined since the market peak in 1989. For example, POST paid $6,7OO,ooO for the 1,300
acre Cowell Ranch in 1987. In 1996, POST has agreed to pay $7,000,000 for the 5,638 acre
Cloverdale Coastal Ranch, which is fairly proximate to the Cowell Ranch and has similar
characteristics. It was our intention to show a pattern of sales activity rather than adjust each
transaction to a single set of predetermined cost variables.
. . 40
Our representative per acre cost figure does take into consideration the variables of location,
fee value, permanent agricultural casement status, as well as the necessary inducement to
motivate a property owner to agree to & a Conservation Easement. We wilI reconcile toward
the middle of our indicated predominant value zone.
Therefore, based on our research into the Cost of acquiring Conservation Easements across
prime agricultural land within the California Coastal Zone, it is our opinion that the current
overall representative cost is $4,300 per acre.
It is our opinion, as of January 1, 1997, that the representative per acre cost of preserving
Prime Agricultural Coastal Zone land Mgh Conservation Easement is:
FOUR THOUSAND THRFXEIUNDRED DOLLARS PER ACRE
@4,300 per acre)
.
ADDENDA .
Big Sur Land Trust
Coastal Land Trust
Marin Agricultural Land Trust
- . Brian Steen
RixanneWehren
Robert Bemer
Peninsula Open Space Trust
Land Conservancy of San Louis Obispo
County
Land Trust of Santa Cruz County
Sonoma County Agricultural Preservation
and Open Space District
Monterey County Agriculture & Historical
Land Conservancy
Ventura County Agricultural Land Trust
California State Coastal Conservancy .
American Farm Land Trust
County of Santa Cruz
California Nature Conservancy
Bureau of Land Management
John ‘Wade
Ray B&nap
Laura Perry (408) 429-6116
David Hansen (707) 524-7360
Craig Pritchard
Larry Rose
Carol Arnold
E&Vi&
Donna Bradford
Jennifer Johnson
Frank Hilfer
(408) 625-5523
(707) 937-2709
(415) 663-l 158
(4 15) 854-7696
(805) 5449096
(408) 422-5868
(805) 647-2262
(510) 2864173
(916) 753-1073
(408) 454-3 105
(415) 777-0487
(916) 257-0456
-
RELEVANTDJWINITI ONS AND DOCUMENTS
Purpose and Intent of Study
To establish the approximate current per acre cost of
permanently preserving prime agricultural land within the
statewide Coastal Zone in accordance and consistent with the
Agricultural Conversion Mitigation Fee provisions of the
California Coastal Act, and the Carlsbad Local Coastal
Program (Mello II).
Definitions
“Prime U Pursuant to Section 51201 (c), of the California Government
agricultural /and Code “Prime” agricultural land means any of the following:
(1) All land which qualifies for rating as Class I or Class II in the Soil Conservation Service land use capability classifications.
(2) Land which qualifies for rating 80 through 100 in the
Storie Index Rating.
(3) Land which supports livestock used for the production
of food and fiber and which has an annual carrying capacity
equivalent to at least one animal unit per acre as defmed by the
United States Department of Agriculture.
(4) Land planted with fruit- or nut-bearing trees, vines, bushes or crops which have a nonbearing period of less than five years and which will normally return during the commercial bearing period on an annual basis from the production of unprocessed agricultural plant production not less than two hundred dollars ($200) per acre.
(5) Land .which has returned from the production of unprocessed agricultural plant products an annual gross value of not less than two hundred dollars ($200) per acre for three of the previous five years.
Coastal Zone The Coastal Zone is defined in detail on maps prepared by the
Coastal Commission.
Pursuant to Section 30103, Public Resource Code, “Coastal Zone” me,ans that land and water area of the State of
California extending seaward to the state’s outer limit of
jurisdiction, including all offshore islands, and extending inland generally 1,000 yards from the mean -high tide line of
the sea. In significant coastal estuarine, habitat, and
recreational areas it extends inland to the first major ridgeline
paralleling the sea or five miles from the mean high tide line of the sea, whichever is less, and in developed urban areas the zone generally extends inland less than 1,000 yards.
Permanent
Preservation
Pursuant to Section 21.202.060 of the Carlsbad
Municipal Code, permanent preservation shall mean an
enforceable, non-recoverable commitment by the property owner to preserve prime agricultural. land. Further, acceptable means of permanent preservation include, but are not limited to, conservation easements, transfers in trust, common law easements, open space easements, restrictive covenants, equitable servitudes, fee ownership or any other permanent restriction
approved by the City Council [of Carlsbad].
Scope of Services and Schedule
This following describes the specific tasks required of the
consultant and the schedule to be followed in preparing a , report. Task objectives, work products and methods are described for each work task.
List of Tasks
Task 1. Project Descrimion
Task 2. Code & Lepislation Review
Task 4. Study Methodoloa
Task 4. Information Gathering
Task 5. Establishment of Preservation Cost
Task 6. Renort Production & Format
Task 7. Renort Deliverv & Review Meeting
Page 2 of 10 Noverhber 6,1996
CALIFORNIA PUBLIC RESOURCES CODE
SECTION 30171.5 .
(COASTAL ACT)
30171.5. (a) The amount of the mitigation fee for development on
nonprime agricultural lands in the coastal zone in the City of
Carlsbad that lie outside of the areas described in subdivision (f) of Section 30170 and subdivision (b) of Section 30171 shall be
determined in the applicable segment of the local coastal program of
the City of Carlsbad, but shall not be less than five thousand dollars ($5,000), nor more than ten thousand dollars ($lO,OOO), per acre. All mitigation fees collected under this section shall be
deposited in the State Coastal Conservancy Fund.
(b) All mitigation fees collected pursuant to this section are hereby appropriated to, and shall be expended by, the State Coastal
Conservancy in the following order of priority:
(1) Restoration of natural resources and wildlife habitat in
Batiquitos Lagoon. .
(2) Development of an interpretive.center at Buena Vista Lagoon.
(3) Provision of access to public beaches in the City of Carlsbad.
(4) Any other project or activity benefiting natural resources in the coastal zone in the City of Carlsbad that is provided for in the local coastal program of the City of Carl&ad.
(c) Not less than 50 percent of collected and bonded mitigation
fees shall be expended for the purpose specified in paragraph (1) of
subdivision (b).
(d) Other than to mitigate the agricultural conversion impacts for which they are collected, none of the mitigation fees collected pursuant to this section shall be used for elements of a project
which cause that project to be in compliance with this division or to
mitigate a project which would otherwise be inconsistent with this
division. When reviewing a potential project for consistency with
this subdivision, the State Coastal Conservancy shall consult with the commission.
GOVERNMENT CODE (WILLIAMSON ACT)
SECTION 51201(c) .
51201.(c) “Prime agricultural land” means any of the following:
(1) All land which qualifies for rating as class I or class II in
the Soil Conservation Service land use capability class~cations. (2) Land which qualifies for rating 80 through 100 in the Storie
Index Rating. (3) Land which supports livestock used for the production of food and fiber and which has an annual carrying capacity equivalent to at least one animal unit per acre as defined by the United States
Department of Agriculture.
(4) Land planted with fruit- or nut-bearing trees, vines, bushes or crops which have a nonbearing period of less than five years and which will normally return during the commercial bearing period on an
annual basis from the production of unprocessed agricultural plant
production not less than two hundred dollars ($200) per acre.
(5) Land which has returned from the production of unprocessed
agricultural plant products an annual gross value of not less than two hundred dollars ($200) per acre for three of the previous five
years.
-
Impiemenrarion - Mel10 Ii . Chapter w-3
required lot area of any newly created lot shall not be lee than ten acres unless the city
that smaller parcel sizes will not adversely affect the a,oricuInual use of the property.
2. Every newly cr 1 ed lot shall have a minimum width of the rear line of the required front yard of not
less than three
-i
3. Every lot shall have a re
21.202.050 no building o
4. Every lot and building sit
fifteen feet in width unle
5. Every lot and building s
permitted by Section 21.202.050.
6. No building or structure shall exceed th& five feet in height.
7. Buildings and structures shall not cover more than forty percent of a lot.
front yard of fov feet. Except as otherwise provided in Section
on each side of the lot or building site not less than
21.202.060 Development of Coastgl Agricultural Land
1. For property over hall be submitted and processed according
uses pemlitted pursuant to the master plan
ad General Plan and certified Local
Coastal Program in effect at the time the appli
t :’ i.. ; .
Implemerua lion - Mello II Chaprer IV-3
I>. i:- ;
:L “.
Residential Low ~Medium
Residential Medium Dens
Residential Medium to High Density
Planned Industrial
(Map Y of the Certified Local Coastal Pro,- shows exis
B. Development permitted based upon mitigation of lands zoned coastal agricultura1.
A master plan or planned development permit for urban development of lands zoned coastal
agriculture shall, in addition to complying with all aspects of the City’s General Plan, shaI1 include
the following items:
1.
.
An enforceable, non-revocable commitment by the property owner to preserve permanently one
acre of prime agricultural land within the California Coastal Zone for each net impacted acre of
non-prime coastal agricultural land in the Local Coastal Program proposed for development.
The preserved land shall be located in an area selected by the State Coastal Conservancy and
approved by the City Council. This enforceable commitment shall require, prior to issuance of
a building permit, the permanent transfer or dedication of interest in the prime agricultural land
to a grantee that is a local or state agency, or a tax exempt organ&ion quallling under Section
501(c)(3) of the U.S. Internal Revenue Code. Grantees also shall be limited to organizations and
agencies whose principal purposes’are consistent with the preservation of agriculture.
2. The following documentation pertaining to the prime agricultural land outside the Local Coastal
Program that is being permanently preserved:
a. &r&s. Identifkation of the grantor and grantee (i.e. property owner, and government
agency or tax exempt organization having a letter determination from the IRS documenting
qualification per Section 501(c)(3) of the Internal Revenue’Code).
t , . . b. I&&Des- . A legal description of the prime agricultural lands being preserved.
c. wandj* A clear statement defining the type and purpose of the
easamt or other form of property interest beii used to protect prime agricuhme.
Acceptable interests include, but shall not be limited to, conservation easements, transfers
in trust, common Iaw easements, open space easements, restrictive covenants, equitable
servitudes, fee ownership or any other permanent restriction approved by the City COUIE~L
* _.
d. Statement. A statement of intent by the grantor shall be submitted declaring an
intent to protect agricultural land through the creation of easements or other interests
m&g with the property, and a declaration of intent by the grantee to honor such grantor
. .
Implementalion - Mel10 II Chapter IV-3
intent in perpetuity. . .
. :
Implemenration - Mello II Chapter N-3
.:y
:. . : -i ‘7
a.
b.
C.
d.
e.
y includin,o discussions of land capabilities, crop
nd for agricultura1 purposes.
sts, income, etc.).
market competition.
in water cost and availability, land and labor costs, and
3. Upon completion, the agricuitural study to the City for review and approval
concurrent with the fiiing of a master permit.
.
a. If the study finds that continue or renewed a ture is feasible, the property owner has
__
D.
the choice of: (1) maintaining agricultural uses, ) proceeding with conversion and
mitigation pursuant to the procedures set forth in su . nb.ofthissection.
b.. If the feasibiiity study fmds that continued or renewed a not feasible and City
Council concurs, the City shall review the submitted planned development
this Code and the
approved without mitigation for conversion of agricuitural land. The
study and master plan or planned development permit approved by
preparedasaLocalCoastalProgramamerzdmcntandsubmitcedtothe
for cer&cation. The master plan, planned development permit or co
Agricultural conversion mitigation fee. In lieu of the procedures established by subsection b. or
subsection c., property may be converted to urban uses upon payment of an Agricultural Conversion
Mitigation Fee. The amount of the fee shaii be determined by the City Council at the time it considers
a Coastal Development permit for urban development of the properly. The fee shall not be less than
five thousand dollars nor more than ten thousand doilars per net converted acre of agricuiturai land
and shah reflect the approximate cost of preserving prime agricultural iand pursuant to subsection b.
The fees shall be paid prior to the issuance of buiidiig permits for the project. Aii mitigation fees
collected under this section shail be deposited in the State Coastal Conservancy Fund and shail be
expended by the State Coastal Conservancy in the following order of priority:
1. Restoration of natural resources and wildlife habitat in Batiquitos Lagoon including but not
limited to, continued funding of any maintenance, operation or enhancement costs necessary t0
c- I _ ^ -I PnnrtnI PTnnrnm
Impiementarion - Mello II Chapter IV-~
: il.
.:. ;;r-l
.:;i
implement any la,ooon enhancement progam approved by the City Council.
7 -. Development of an interpretive center at Buena Vista Lagoon.
3. Restoration of beaches managed for public use in the coasti zone in the City of Carlsbad.
4. Any other project or activity benefit& natural or agricultural resources in the coastal zone in
-6 the City of Carlsbad that is provided for in the certified Local Coastal Program.
provisions for urban development of Site
Findings Required Before Conversion to Urban Uses
aDoreed to preserve prime agriculrural land elsewhere in the state coasta
.202.060 thti the City Council prior to approval of a master plan or
t must fmd that:
The conversion w serve prime agricultural land in a manner consistent with Section
30242 of the Public es Code, the certified L&al Coastal Plan and this chapter.
2. The master plan or planne opment permit is consistent with the certified Local Coastal
3. Conversion would concentrate urban pment consistent with Section 30250 in areas able
to accommodate it, and within 6r adjace
B.
4. Conversion would be compatible with c culture on adjacent agricuitural lands.
5. Consistent with the certified Local Coastal Pro 1 of the Coastal Act,
conversion would contriiute to limiting conversions o land and create stable
urban/rural boundariq within prime agricultural 1 ewhere in the coastal zone.
Where a prop& owner has elected to complete an agricultural feas ysis, and the propeaY
owner and City agree, based on that analysis, that continued or renewed is not feasible on
the subject lands, and a City Council approved feasibility analysis
development permit must incorporate City findings declaring that:
1. Continued or renewed agriculture is not feasible on the subject parcel(s) and,
Section 30242 of the Coastal Act, conversion of the parcels designated coastal agri
Land Use Plan shall not require the preservation of prime agricultural lands elsew
coastal zone.
2. AGRICULTURE
policy 2-l CONSERVATION OP AGRICULTURAL LANDS
A. Baric Agricultural Polici@a
1. Coastal Agriculture:
Consistent with the prOVfsiOn8 of sections 30241 and
30242 of the Coastal Act, it is the policy of the city
to contribute to the preservation of the maximum amount
of prime agricultural land throughout the Coastal Zone
by providing for the balanced, orderly converafon of
designated non-prime coastal agricultural lands. Non-
prime agricultural lands identified on Map X (See
Exhibit 3.3, Coaaial Agriculture Overlay Zone) are .
designated Coastal Agriculture and shall be permitted to
convert to urban uses subject to the agricultural prime
land exchange mitigation, infeasibility determination,
or conversion fee mitigation provisions set forth in the
Local Coastal Program (LCP),
2. Conversion of Coastal Agriculture:
Conversion of designated coastal agricultural lands
shall be permitted provided that: a) conversion would
preserve prime agricultural lands within the statewide
coastal zone consistent with aections 30241 and 30242 Or
concentrate new developraent consistent with Section
30250 of the Coastal Act; or b) continued or renewed
agricultural use is not feasible: or c) payment Of an
agricultural Conversion mitigation fee in an amount not
less than $5,000 and not more than $10,000 per converted
acre has been made.
3. Conversion Options:
Converafon of non-prime coastal agricultural lands shall
be permitted pursuant to either Option 1 - Xftfgation,
Option 2 - Feasibility Analysis Or Option 3 - Conversion
Pee as set forth below in this POlfcYe Conaistent with
Section 30242 of the Act, no feasfbiiity analysis shall
be required if a landowner select8 Option 1 or Option
Option 7 - Mitigation (Prime Land Bxchange) .
Non-prime coastal agricultural lands shall be converted
to urban use conststent withh the Carlsbad General Plan. .
if, prior to approval of a subdivision mapl a mitigation
program is in effect that permanently preserve6 oae acre
of prime agricultural land vithin the statewide Coastal
Zone for each acre of net impacted agricultural land in
the LCP that is c&veried. For purposes of CalCUhtfng
required mitigation acreage, net impacted agricultural
lands are the parcels and acreages designated on Map X
(Se& Exhibit 3.31, minus the acreages in steep slopes
(See Eihibit 4-l) (25% or greater) and areas contafning
sensitive coastal resources that would preclude
development,
The standards and procedures for such a mitigation
program shall be set forth in LCP implementing
ordinances. Recipients of prime agricultural Land
interests pursuant to this policy shall be limited to:
1) local or state agencies; or, 2) tax exempt
organisations whose principal charitable purposes are
consistent with the agricultural mitigation program and
qualify under Section 501(~)(3) of the U.S. Internal
Revenue Code. Further, mitigation priority shall be
given to preserving prime agricultural lands in the
coastal zones of counties selected by the State Coastal
Conservancy for pilot programs funding, and other
counties with similarly qualified programs.
aaibflity of continued agriculture is
either the City or involved landowners may
complete an CtiltUrtil f666ibilfty study for: a) all
coastal agricul 1 lands in the LCP: b) 3 or 4
subareas (See Exh 3.3) which constitute logical
SUbUnitS; or, C) Cat 6 landholdings in a Single
ownership of at least 100 If Option 2 i6
selected; that portion of the a&a determined to
be feasible for continued agrfcu , if anye may be
converted upon request of the landow o urban use
subject to compliance with the provfsio
or 3. That portion of the Study area deter
be feasible for continued agriculture could be
only after: a) the City approves the feasibility
b) an LCP amendment fS prepared and submitted to the
provides for the conversion; and
Option 3 - Agricultural COnVOrSiOn Mitigation Pee
Conversion of non-prime.agricultural lands shall be
permitted upon payment of an agricultural Conversion
mitigation fee which shall mitigate the loss of
agricultural resources by preserving or enhancing other .
important coastal ‘resources. The amount of the fee
shall be determined by the City Council at the time it
considers the proposal for development'and Shall reflect
the per acre cost of preserving prime agricultural land
pursuant to Option 1 but shall not be less than $5,000
nor more than $10,000 per acre. All mitigation fees
collected under this section shall be deposited in the
State Coastal Conservancy Fund and shall be expended by
the State Coastal Conservancy in the following order of
priority:
1. ReStOratiOn of natural resources and wildlife
habitat in Batfqaitos Lagoon.
2. Development of an interpretive canter at Buena
Vista Lagoon.
3. Restoration of beaches managed for public use in
- . . the coastal zone in the City of Carlsbad.
-5-
-
4. pur~has.3 of agricultural lands for Continued
agricultural production within the Carlshad Coastal
Zone gg'dgternined by the Carlsbad City Council,
5. Agricultural improvenents which will aid in
contiauat,ion of agricultural production within the
Carlsbad Coastal Zone as determined by the Carlsbad
City Council.
Por purposes of implementation no Option shall have
priority over any other Option.
o maximize and expedite the preservation of prime
icultural 1andLthroughout the state coastal zone, .
eels designated coastal agriculture (See Exhibit
ble S.l)in the LCP shall have an underlying
urban lan e designation identified on Map Y (See
Exhibit 1.2)
permitted by th ty in cotiformance with either Option
1 or Option 2 a3 3e th in Policy 2 shall be
consistent with the lan se designations on Map Y (See
Exhibit 1.2).
5. Converrick8 of Coastal Agricaltu Inconsistent with
Underlying Urban Designations:
Conversions of parcels designated coas
that are requested for uses other than th
land use designation on Map Y (See Exhibit 1.
subject to an LCP amendment to allow the City a
Coastal Commission to determine the consistency of
proposed urban ugeg with other applicable Provision3
PUBLIC RESOURCES CODE SECTION 3024 l-30242 (Coastal Act)
30241. The maximum amount of prime agricultural land shall be maintained in agricultural production to assure the protection of the areas’ agricultural economy, and conflicts shall be minimized between agricultural and urban land uses through all of the following: (a) By establishing stable boundaries separating urban and rural areas, including, where necessary, clearly defined buffer areas to minimize conflicts between agricultural and urban land uses. (b) By limiting conversions of agricultural lands around the periphery of urban areas to the lands where the viability of existing agricultural use is already severely limited by conflicts with urban uses or where the conversion of the lands would complete a 1ogicaI and viable neighborhood and contribute to the establishment of a stable limit to urban development. (c) By permitting the conversion of agricultural land surrounded by urban uses where the conversion of the land would be consistent with Section 30250. (d) By developing available lands not suited for agriculture prior to the conversion of agricultural lands. .* (e) By assuring that public service and facility expansions and nonagricultural development do not impair agricultural viability, either through increased assessment costs or degraded air and water quality. (f) By assuring that all divisions of prime agricultural lands, except those conversions approved pursuant to subdivision (b), and all development adjacent to prime agricultural lands shall not diminish the productivity of prime agricultural lands.
30241.5. [intentionally deleted] .’
30242. All other lands suitable for agricuhural use shall not be converted to nonagricultural uses unless (1) continued or renewed agricultural use is not feasible, or (2) such conversion would preserve prime agricultural land or concentrate development consistent with Section 30250. Any such permitted conversion shall be compatible with continued agricultural use on surrounding lands. *mm--- Y------ -------
RESOURCEMATERI&- COMPARABLE SALES
DEC 38 ‘96 03: lBPt+l COQXRL CON!XF!VQNCY P.225
MEMORANDUM
DATE: November 7, 1995
TO: Michael Fischer
FROM: Carol Arnold
RE: Agricultural Projects
Following is a list of agricultural projects the Conservancy has completed or is
currently completing. Most of the projects resulted in preservation of
agricultural land. Some of them also deal wfth the issue of agricultural impacts on natural resources, several provide technical assistance to help local communities deal with the loss or threat of loss of ag land, and one developed infrastructure that supports the local ag industry.
NORTH COAST AND BAY:
'Eel River Enhancemerit and Aqriculture Manaoement Plan. Humboldt County
In 1993, The Conservancy negotiated with the local RCD to set up a Sustainable Agriculture Committee to address the problem of dairy waste contamination in the .' Eel River Delta. The Conservancy also provided a $30,000 grant to assist in developing economically feasible, on-farm alternatives for storing and/or treating dairy wastes in order to meet nonpoint-source pollution control requirements and enhance the natural resources of the Eel River Delta. In
partnership with the Humboldt County RCD, the Conservancy has applted for a Clean
Water Act Section 319 grant to implement the plan.
Herzos Propertv. Sonoma Countv
In 1986, the Conservancy provided the Sonoma Land Trust with $995,000 to purchase a 538 acre hay farm. The Trust resold the property protected with a conservation easement and the proceeds were returned to the Conservancy. This property is an important source of feed forth& regional dairy industry, and had been the target of major development efforts- *
(Z&Q! Bend. Sonoma County
fh 1993, the Conservancy granted' $247,50d to the Sonoma County Agricultural Preservation & Open Space District for the acquisition on an agricultural
cohservation easement on a 368 acre farm located on the southeast side of the
City of Petaluma in an area where there is considerable development pressure.
The District contributed $100,000 to the project.
Cabral Ranch, Naea County
In 1990, the Conservancy granted $345,000 to the Napa County RCD for acquisition
of a 19 acre site to use as a Tong-term demonstration vineyard to test the
economic viability of environmentally sensitive farming methods and to educate
EC 38 ‘96 El3:llpM CoFlsfw- CONSERVWJC( P.36
other growers about these practlces.
Jiuichica Creek-Watershed Prouram. Naoa County
In 1990, the Conservancy granted $75,000 to the Napa County RCD to prepare a
watershed plan and undertake projects that demonstrate methods to improve water
quality, reduce soil erosion and enhance wildlife and fisheries habitat on
vineyard land. Private vineyard owners implemented the plan.
MaYin Countv Dairv and Sheep Ranches. Harin County
Between 1984 and 1987, the Conservancy awarded the Marin Agricultural Land Trust $1,300,000 in grants for the purchase of development rights from farmers on three dairies and one sheep ranch. Usingthqse grants and additional local funds, MALT
purchased development rights to almost 3,000 acres in West Marin, These projects got HALT started on its successful agricultural conservation' program which has become .a model for agricultural land trusts nationwide.
Tomales Biv Watershed Proqram. Marin County
Beginning in 1983, the Conservancy provided funds to the Marin County Resource Conservation District to reduce erosion in the Tomales Bay Watershed, thereby slowing the accelerated sedimentation rate in the Bay. To date, about S1,500,000 has been granted to the RCD to work with farmers and ranchers to repair gullies, improve stream crossings, install culverts, revegetate stream..banks and other work that not only helped the Bay, but reduced farmers' soil loss.
Sonoma Coast Watershed Program. Sonoma County
In 1987, the Conservancy granted S1,200,000 to the 6o'ld Ridge Resource
Conservation District to implement a five-year erosion control program in the
watersheds of two coastal wetlands, the Ester0 Americana and Salmon Creek. Working with prSvate ranchers and farmers, the projects were similar to the
Tomales Bay program.
CENTRAL COAST
Cowell Ranch. San Mateo County
In 1989, the Conservancy purchased $5,400,000 worth of easements and.fee title interests jn a 1,297 acre farm directly south of Half Moon Bay. The property was seriously threatened wSth development ahd included not only productive row crops,
but nearly two miles of shoreline with three beaches, riparian habitat ahd an
historic town site. The Peninsula Open' Space Trust and the Conservancy constructed a stairway to the beach which was recently opened to the public. The property continues to be fa?ed. s
Cascade Ranch. San Mateo County
In 1985, the Conservancy purchased this 700 acres of crop land and grazing land for $2;000,000. It has been leased to farmers ever since who grow artichokes and brussels sprouts. amoung other vegetables, and graze cattle. The property was threatened with a proposed residential development ahd limited water for crop irrigation. The Conservancy has developed plans to build one water impoundment
EC 30 '96 83:llpM Co@@- CoNsERwy*(c( P.46
on part of the property and will soon sell the property protected with an agricultural conservation easement.
Steele Ranch. San Mateo County .
In 1986, the Conservancy purchased this ,!&.acre farm to protect it from a proposed residential development. The six lots on the property have since been
merged into one and the property will soon be sold protected with a conservation easement. Because of environmental and safety concerns over a four mile,
. decrepid pipeline, irrigation from a creek containing endangered and threatened species was terminated which has reduced the amount of acreage in production. Almost one-half of the property, however, has continued to be farmed
West Annstronq Ranch. Monterev Countv
In 1991, the Conservancy approved the expenditure of $995,000 by the Monterey * County Agricultura'l & HistorSc Land Conser#ancyto purchase an undivided interest in the 192 acre West Arinstrohg Ranch, an artichoke ahd brussels sprout farm in northern Monterey County. The property is near the City of Marina and was
threatened with development. This project helped the new land trust get up and
running. - .
_ Azevedo Propettv. Monterev County .
In 199,0, the Conservancy provided $900,000 toward the acquisition'of the Azevedo Ranch next to Elkhorn Slough, one of the most important coastal wetlands in the - state. The Conservancy, The Nature Conservancy .and the Monterey County Agricultural 8 Historic Land Conservancy are joihtlyworking,together to preserve and restore wetlands on 67 acres of the property while preserving 83 acres permanently in agriculture. The 83 acres wjll be used to test economically viable techniques that reduce pesticide use.
Morro Bav Watershed. San tuis Obispo County
In 1991 and 1994, the Conservancy granted about j1,500,000 ($835,000 from California Department of Transportati.on Environmental Enhancement and Mitigation Fund grant) to the Coastal San Luis Resource Conservation District, to purchase fee title and conservation easement Interests in over 300 acres of farmed wetlands in the lower Morro Bay Watershed. About 80 acres will remain in
agricultural production. The remaining acreage will be restored to floodplain
to trap sediment upstream of Morro Bay and expand .riparian habitat. The
Conservancy also has provided $400,000 to the RCDto work with private landowners to control erosion on agricultural lands, reducing sedimentation-of Morfo Bay.
-is Obi SDO Countv .
In 1995, ai part of a larger project to protect important habitat in these coastal dunes, the Conservancy provided $2,000,000 of funds specifically designated for this project area to acquire 1,400 acres of important wet‘land and dune habitat, and an agricultural easement over 200 acres of prime agricultural land adjacent to the dunes.
Arrovo Grande Vallev As Conservation Plan. San Luis Obisno County
DEC 38 '96 03:11Fw CoRsJRl cv P.5/5
In 1990, the Conservancy provided a 528,000 grant to the City of Arroyo Grande
to develop a plan that will describe the area's important agricultural resources and identify methods to preserve them. Implementation will likely be through a locally administered program to acquire conservation easements, possibly funded through transfers of development rights.
SOUTH COAST
Ventura County Aq Conservation Plan
Because the fertile Ventura coastal plain is threatened with conversion to urban development and loss of the regional agricultural industry, the Ventura County Board of Supervisors asked the Conservancy to provide technical assistance to help them establish an agricultural conservation program. The Conservancy has
organized workshops to educate farmers and the public on tax incentives for
protection of farmlands and helped establish the Agricultural Land Trust of
Ventura County. The Conservancy also guided a study, funded by The Hansen Trust,
an endowment fund set up to support Ventura agriculture, to examine the trends
of farmland conversion in Ventura County and its economic consequences.
Carlsbad Acrricultural Grant Prourams. San Dieqo County
In 1988, and again in 1992, the Conservancy authorized a total of almost one ' million dollars to establish grant programs to benefit agriculture in Carlsbad. The funding is provided by mitigation fees, collected in the early 1980's, that were levied on developers who converted Carlsbad farmland to nonagricultural uses. The program, administered by the Resource Conservation District of Greater
San Diego County, allows farmers, researchers, and marketers of agricultural
products to receive grants for projects that will contribute to the long-term viability of agriculture in the area..
Carlsbad Flower Fields. San Dieuo County
In 1993, the Conseivancy provided $420,000 as a reimbursable grant to the Paul & Magdalena Ecke Poinsettia Foundation to assist .in maintaining the continued production of over 40 acres of ranuculus bulbs and cut flowers on historic flower fields in Carlsbad along the Highway 5 corridor. The fields are a landmark for Carlsbad and an important component of the city's image and tourism economy. . Mitigation'fees also covered the cost of this project. The funds will be repaid
annually from 1995 to 2000. .
San Dieso International Floral Trade Center. .San Diecto County
In 1989, the Conservancy awarded a $1,200,000 grant to help construct the San Diego International Floral Trade Center in Carlsbad. The grant, administered by the Resource Conservation District of Greater San Diego County, was used in conjunction with 59,700,OOO of private financing. The Trade Center promotes and facilitates sales of local floriculture products in an area where sellers had been pressured by short-term leases and high rental rates.
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DEC- 5-96 THU 12:87 TLT P. 82
mv 1983-Dceansbcr 199%
Mazza-Pomi
m-070-17 & 18
Lsfblchi
121-05030k41
/w
100-090-07
Stubbs 121-010-07 8z 08
121-030-01
125-010-lot 11
TIWlgIlo
121-OSO-06
121-060-06
TBal-boni
106-210-24&62
/Parka 106-l lo-06
106-210-10
0 BlooadSpalctta
100-010-02 &OS
’ PalwLmii
104-040-30
R Speletta
loo-OlM31
MClS~C
100-080-23
PozziNorh
100-020-20.21.22
‘Pod south
100-040-07,24,27
4 WoIcoa
100-040-28
100-100-29 .
z/83
12B6
12186
12/x5
3/x8
l/%8
ma
12i89
2m
991
6/91
6/91
6/91
844
477
360
1161
468
823
826
810.6
588
639
219.34
333.48
232.26
412.5
.
Easunua
cost
s250.000
435,ooo
144,000
320.000
t80.000
500,ooo
330,400
3ti8.125
208,334
380,125
326,000
341,777
245,737
422.486
J’cr AC-
6296
912
400
275
385
608
400
374
354
59.5
1486
1025
1058
1024
LandW
o
%533.000(A)
870,000(S)
533.000(A)
I ,293,000(A)
4 1 S,OOO(s/A)
1.23 4m-a
625,OOO(S/A)
~wJws)
600,000(S)
586*000(A)
73%,000(A)
495,000(A)
917,000(A)
Eascolent Adj.% of
%ofFKv fJ!+jy b
39’ 34 (1)
50 50 (2)
27' 36 (31
25' 50 (4)
43 (3
41 (61
53 (7)
3s (8)
35
44
56
46
50
46
(‘0)
(9)
0 1)
PI
. WI
(12)
DEC- 5-96 THU 12:GlS I%~.T P- 83
Elkmalt Cost Ldw fisz!Ea
2,125.WN 1187
Na
(131
Aaes
850 c. Dolcti 12SQ50-3.6.
7.8.10 8
J- 100-090-04
47 1 II91 1,009,ooo
4 15.WA~
670,000(A)
48
52
50
44
179.46 200,000
3192 268.55 347,000
6f92 960 765,000
7192 210.14 220,500
1114
1292
797
1049
(15)
06)
Poncia
lOO-050-16.38
L. Dolt-ti
106-I 40-S & 6.27
(17) Burbank
100-050-17 100-060-25
1078 667,000(A) 48
1050 1,980@0(A/S) 51
(18)
(1%
MitcheIt
1 W-090-06
7192 294.11
7#2 952
3 17,ooo
1 .~.ooo * Brazil/Nicholas
104-050-09 & 10
104-l 10-03 % 04
550,000(A) 38
1,366,000(A) so
7 10,000(A) 46
2,495,000(A) 50
(201
(21)
(22)
(231
Strnus Home Ranch
104-130-01
7/92 166 210,000
7/92 494 680,000
S/92 288.2 330.000
11192 1241.93 I ,240,OOO
1265
1377
1145
998
Y Sraus DajRanoh 104-13047 & 48
Maioney 100-030-11 & 12
J Respini
106:210-l 1
106-236-O 1 8t 02
Ellis
106-140-l 1
Iv92
II93
274
645.6
130,000
900,000
474
1394 1,820,000(A)
33
49 S& 100-070-17
104-050-01.02.03,04
WilSOll
100-020-13 & 14 m3
3193
355.67
856.3
400,000
860.000
1125
1004
46 (261
48 (27) To&no 121-100-03.08.14 121-060-03
WI
960,000
130,ooo
805
858
2,165,OOO (A)
410.000 (A)
44
32
f Nobmaru 119-050-03.07 10193
I1193
1192
151.58 Faith 100-070-16
DEC- 5-96 THU 12:88 M”T P. la4
F. Dolchi 6f94 1003 980,000 977 221fL~ (4 44
106-l 46-03.26
cot-da Q/94 846.87 lpoo.~ 1.181 ~540.~ (A) 47’
106-150-l 1
106-170-18
125-040-3,4,s
Volpi 12/94 212.5 320,000 1.506 810.000 (A) 40
125-040-16.17
(30)
01)
(32)
‘A = Appraisal Average cost pa acn: S 9%
S = Market Sale
E= Estimate
P = Pending Sal6
‘Two appraisals were done. One conch&d cascaras t value of S217.000,
34%of appraised Itid Fh4V; the 0th concluded casement value of ~364.500.
29%of FMV including improvements.
‘Bargain-sale. Appraised value of easement was $190,000,36% of
appraisedland FMV.
‘Bargain sale. Appraised value of easement was S6dS,OOO,
SO%of appraised land FMV.
’ Bargain sale. Appraised value of casement was S1,200.000.
(2)
(3)
(41
(5)
6)
(7)
@I (9)
(10) (11)
(12)
(13)
(14)
(15)
(161
(17)
ufo
09)
W-J)
Ag Contract. Easement permitted 4 additiod residences and division into 2 parcels; land division approved 12/87; 340 acres
sold to Lavio 2/88 for S340,OOO.
Ag Convact. Nicasio Valley location, mad frontage.
Ag Contrnct.
Ag Controct. 2 dbelopment rights retied, easemmt pzmaittcd division into 2 parcels; Iand divided and 559 acres sold to Regan
12/87 for $645.000 incl. irnprov~cnts.
Ag Contract.
No Ag Contract Hwy 1 hntagc.
No Ag Contract.
Coast and Estuary frontage. Split iato pilrt purohase & part option: option price escalates.
Ag Contract Completion of 2 phase project, price detam&d by option; land FMVbourw &om sale 1 O/87 15 mos. prior to
easement purcbse.
Ag Contract. Land FMV r4ourw~sale2#9lOmos.priorto wemeHpul+sc. Ag Contrnct. S400,OOO improvemcnt~ = total Before Value ofS986,OoO. Petaluma-Tomales Raad .
Ag Contracts. Single project involving MALT purohase of Wol+ for S 1 million dnd exchange fm thr# ca~naents. Franklin
School Road.
Ag Contract. Pt Rcyes-Pet&ma Rood, Hicks Valley.
Ag Contract. I&I Road behind TOIWJCS High School. $285,000 improvements = total Before Value of S700.000.
Ag Contract. Highway 1 north of Tamales. S500.000 impruvcmcnts = total Bcfora Value of $1,170,000. I-&hway 1 splits pr~pcrty.
Two raidcncs and small dairy fuciIity.
Ag Contrxt. Bisected by Chileno Vallq Road near Laguna Lake. SlSO,OOO improvemah = total B&-c Value of S1.68S.000.
Ag Contract SOI& of intersection of Burbank Lane and FallowTwo Rock Road. S12S,OOO improvement - total Beh‘e V&c of
s57o.ooc.
Ag Contract. % 125,000 improvements = total &for-c Value of $792.000. Northwcstcm Marin County, one mile west of Tomales,
imntnge on Dillon Beach Road
Ag Car&act. S;220,000 improvements = total Before Value of %2,200,000. Northern MR&I, 4 miles SE of Tom&s.
Ag Contract. Extensive frontage OI-J Shtc Rt. 1. %I 00,000 improvements = total Before Value of S65O.W.
DEC- 5-96 THU X2:89 -LT
(211 (221
(23)
(24)
vs)
WI
(27)
(29) (30)
(31)
02)
Ag Co&act. $234,000 bIlplUVCUlt&3 T tod &fbm value of$920,666. E-k hw On St& Rt 1. Bisectad by hktt Reed
Ag ContrncL Sl 50,000 imprcwcmcats = tohl Bc$ore Value of S860,OOO. Bkckd by kkke bad in Nui uarin neer the b
County boun*, 14 mi. west of Pctiurna
Ag Contrad. S235.000 improvemuds = total Before Value of S2,840,000. Fronts Marshall-Pet&ma Road, overlwlcing Tornales
Bay. Ag Chtrna. S40,OOO impmvmncab - total hfbre value of $440,000. ‘hs?mn &tin, Chiteno v&y.
Ag Contract. S600.000 impmvemcnls = total Bcfart Value of S262.420,000. Fmnts Tanaka-Petdumr Road. Working dairy, fota
residences.
Ag Contract S350.000 impmvemcnls - total B&ore Value af $1,220,000.Bisectcd by Mid&e Road in NW Maxin. -
Ag Contract. S20,OOO imptu~cmcnts = total Bcfii Value of S I .SOO,OOO. Shed by public open space, Sufford I&e. Indian
wsGQIfcoursc~
Ag coatract. Southwwtem flnnk of Black Mountain cm Petaluma Rd. jusr west ctf Pt. Reye!~ Station S375,OCKl improvanents a
t&t1 Before Value of $2,540,000.
Ag Contract. Adjoins Sbori Ranch $420,000 improvema~ts - total Before Value of 5830,000.
Ag Contract. Chileno Valley Road (&by). $530,000 impmvernents = total Before VI&K of S2,740.000.
Ag Contract Chileno Valley Road Bargnin sale - see note 5. S1,400,000 impmvcrn~ts = total Betom Value afE3,940,000.
AgContract S8SO,OCKl improvements = total Bcfw V&c of S1,660,000. Point Rrycs-PctalumnRb near Sonoma Co. lib.
NORMAN C. HULBERG, MAI
QUALIFICATION STATEMENT
EXPERIENCE
Mr. Hulberg is president of Hulberg & Associates, Inc. Based in San Jose, Hulberg &
Associates is the largest appraisal firm in the South Bay, and one of the largest in Northern
California. Since 1974, the firm has appraised over $18 billion in real estate.
Independent real estate appraiser and consultant since 1974.
Served as chairman of the Admissions Committee of the Northern California Chapter of the
Appraisal Institute. Served on Board of Directors. ,_
EDUCATION
Masters of Business Administration from San Jose State University.
Bachelor of Science from San Jose State University. Major in Real Estate. Graduated
with honors.
Continuing education courses taken through the Appraisal Institute and other real estate
organizations.
MEMBERSHIPS
Member, Appraisal Institute, Number 6468 (MAI)
Member, International Right of Way Association
Member, Urban Land Institute
State of California “Certified-General” Appraiser Certificate No. AGO03542
APPRAISAL ASSIGNMENTS
Employed in all phases of real estate consulting and appraisal. Some of the types of properties
appraised are outlined below: .-
Residential: Single-family, condominium, apartments, land, mobile home parks
Commercial: Office buildings, hotels/motels, service stations, retail, vacant land
Industrial: Industrial plants, research and development, warehouses, vacant land
Other: Special purpose properties, feasibility studies, market studies, condemnation,
litigation support, mediations, arbitrations and review appraisals
Qualified as an expert witness in the Counties of Santa Clara,
Alameda, Santa Cruz, and Stanislaus, in the U.S. District
Courts in San Jose, San Francisco, Oakland, and Las Vegas,
Provided testimony on over50 occasions.
-
QUALH?lCATJONS (Continued) - NORiWW C. HULBERG, MAI
TEACHING AND SPE4KlNG ENGAGEMENTS
Appraisal Institute, “Introduction to Eminent Domain,”
Sacramento; September 19, 1996
California Society of Certified Public Accountants, San Jose Chapter/
Estate Planning Section, August 28; 1996
“Discounting Fractional Interests”
Appraisal Institute; May 7, 1996, Concord, Calif.:
“Beginning Eminent Domain” _
Appraisal Institute; “Condemnation and Court Testimony;
May 7, 1996
Appraisal Institute; June 22, 1995, Concord, Calif.: __
“Eminent Domain Appraising”
Appraisal Institute; “Valuation of Contaminated Property; April 19, 1995
California Redevelopment Association; January 1995, Concord, Calif. :
“Property Acquisition”
California Redevelopment Association; November 17-18, 1994, Concord, CA
‘Eminent Domain’
Appraisal Institute; “Litigation Workshop;” November 16, 1994
Appraisal Institute and International Right of Way Association
(Monterey Bay Seminars); April 30, 1994:
“Managing an Appraisal Business”
City of San Jose, Housing Department, March 16, 1994
“Status of the Residential Market”
Associated Investment & Exchange Counselors; September 13, 1993:
“Property Value Trends in Silicon .Valley”
International Right of Way Association; June 2, 1993:
“Valuation of Contaminated Property”
Urban Land Institute; June 1993, San Francisco, Calif:
“Asset Management”
QUALJF7CAl7ONS (cOntinued) - NORMAN C. HULBERG, M4I
CLIENTS
Clients of Hulberg & Associates, Inc. include banks, savmgs and loans, insurance companies,
attorneys, public agencies and individuals. A partial list of past clients includes:
Advanced Micro Devices
Aldrich, Eastman & WaItch
Alza Corporation
American Savings Bank
Apple Computer, Inc.
Arnelle, Hastie, McGee,
Willis & Greene
Bank of America
Bank of the West
Barry Swenson Builder
Berliner-Cohen
Blickman-Turkus, Inc.
Brobeck, Phleger & Harrison
caltrans
Castle & Cook, Inc.
Century Partners
Champion International
Chevron U.S.A., Inc.
City of Fremont
City of Milpitas
City of San Jose
City of Santa Clara
Coast Counties Truck &
Equipment Co.
Comerica Bank-California
County of Santa Clara
Cox, Castle & Nicholson
Dai-Ichi Kangyo Bank
Dept. of Housing and Urban Devt.
Federal Home Loan Bank Board -
Federal Home Loan
Mortgage Corp.
Ferrari, Alvarez, Olson &
Ottoboni
Fireman’s Fund Ins. Co.
Gray, Carey, Ware & Freiderich
Griffmger, Levinson, Freed
& Heineman
Grupe Development Co.
Home Savings of America
Hopkins & Corley
Howard, Rice, Nemerovski,
Canady, Robertson, Falk & Rabin
IBM
Intel Corporation
Jackson, Tufts, Cole & Black
The Koll Company
Land&, Ripley, Diamond
Lehmann Brothers
Lincoln Property Co.
McDonald’s Corporation
Merrill Lynch
Metropolitan Life Ins.Co.
Murrary & Murray
Orchard Properties
Pettit and Martin
Prometheus Development Co.
Prudential Ins. Co. of America
Rankin, Oneal, Center,
Luckhardt & Lund
Resolution Trust Corp.
Rolm Corporation
Sanwa Bank
Shea Homes
Shell Oil Company
Sheppard, Mullin, Richter & Hampton
Sobrato Development Co.
South Bay Construction
& Development Co.
Sumitomo Bank
Tandem Computer Co.
United States Postal Service
Wells Fargo Rank
JANIS A. LASSNER, SRA
Qualifications
Associated with Hulberg & Asscciates, Inc. since 1978 as an independent real estate appraiser.
Bachelor of Arts Degree in History from San Jose State University.
Society of Real Estate Appraisers:
Introduction to Appraising Real Property, Course 101; Applied Residential Property
Valuation, Course 102; Introduction to Income Capitalization; Standards of Professional
Practice
The Appraisal Institute:
Residential Case Studies & Report Writing; Standards of Professional Practice &
Ethics of the Appraisal Institute; Appraising the “tough ones” - adjusting for unusual
influences in complex residential properties.
Member of the Appraisal Institute, SRA Designation
State of California “Certified-Residential” Appraiser Certificate No. AR007218
Board of Directors, South Ray Chapter Appraisal Institute
Some of the types of properties appraised in the past are outlined.below:
Residential: Residential Land, Residential Subdivisions, Single-family,
Multi-fkmily (duplex, fourplex, etc.) Condominium/townhouses
Other: Market studies and appraisal reviews
The cost study is subject to the following assumptions and limithg conditions:
We believe the information furnished by others in this report to be reliable, but we assume no
responsibility for its accuracy.
The legal description furnished us is assumed to be correct. We assume no responsibility for
matters legal in chamcter nor do we render any opinion as to the title, which is assumed to be
good. All existing liens and encumbrances have been disregarded and the property is
appraised as though free and clear under responsible ownership and competent management.
We have made no survey of the comparable property and assume no responsibility in
connection with such matters. Stable soil conditions are assumed. Water and mineral rights
have not been valued, unless noted. . .
If this cost study contains a valuation relating to a portion of a larger parcel of real estate, the
value reported for such portion relates the portion only. It should not be construed as applying
with equal validity to other portions of the larger parcel.
Any structure(s) is assumed by the appraiser to have been constructed in accordance with
applicable building code requirements. Any use of the structure(s) is assumed to be in
cmformmtx with applicable zoning ordinances, unless otherwise noted in the cost study. No
specific investigation of these issues has been undertaken by the appraiser. It is recommended
that the client secure appropriate legal opinions if these issues pose any concern.
.The Americans with Disabilities Act (“ADA”) became effective January 26, 1992. The
appraisers have not made a specific compliance survey and analysis of this property to
determine whether or not it is in conformity with the various detailed requirements of the
ADA. It is possible that a compliance survey of the proper&, together with a detailed analysis
of the requirements of the ADA, could reveal that the property is not in compliance with one
or more of the requirements of the Act. If so, this fact could have a negative effect upon the
value of the property. Since the appraisers have no direct evidence relating to this issue,
possible noncompliance with the requirements of ADA in estimating the cost of the property
has not been considered.
Unless otherwise stated in this report, the~existence of hazardous materials, which may or may
not be present on the property, was not observed by the appraiser. The appraiser has no
knowledge of the existence of such materials on or in the property. The appraiser is not
qualified to detect such substances. The presence of substances such as asbestos,
urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the
value of the property. The cost estimate is predicated on the assumption that there is no such
material on or in the property that would cause a loss in value. No responsibility is assumed
for any such conditions, or for any expertise or engineering knowledge required to discover
them. The client is urged to retain an expert in this field, if desired.
This cost study shall be used only for the function outlined in the attached report, unless
expmsly author&d by Hulberg & Associates, Inc. The format and cost reported may or may
not be valid for other purposes.
Distribution of this report is at the sole discretion of the client and we will make no
distribution without the specific direction of the client. However, no reproduction of this
report, in whole or in part, shall be made without our prior approval.
Neither all nor any part of the contents of this report shall be conveyed to the public through
advertising, solicitation materials, public relations, news, sales, or other media without the
written consent and approval of the authors, particularly as to cost conclusions; the identity
of the appraiser or firm with which the appraiser is connected, or any reference to the
Appraisal Institute, or the MAI designation.
The liability of Hulberg & Associates, Inc., .ktd its employees is limited to the client only and
to the fee actually received by the appraiser (total per cost study). Further, Hulberg &
Associates, Inc., assumes no obligation, liability, or accountability to any third party. Client
agrees to hold Hulberg & Associates, Inc. and its employees harmless in the event of lawsuit
brought by any other party. If this report is placed in the hands of anyone but the client, client
shall make such party aware of all the assumptions and limiting conditions of the assignment.
The appraiser is in no way responsible for costs incurred to discover or correct any
deficiencies of any type present in the prom, physically, financially, and/or legally. The
client also agrees that in case of lawsuit arising from or in any way involving this cost study
assignment (brought by lender, partner or part owner in any form of ownership, tenancy or
any other party), client will hold appraisers harmless from and against any liability, loss, cost
or expense incurred or suffered by appraiser in such action, regardless of its outcome.
The value or vahres presented in this report are based on the premises outlined herein and are
valid for the purpose stated.
-
OF COST STUDY
The undersigned does hereby certify that, except as otherwise noted in this cost study:
1.
2.
3.
4.
5.
6.
7.
8.
I have no present or contemplated future interest in the real estate that is the subject of
this cost study.
I have no personal interest or bias with respect to the subject matter of this cost study or
the parties involved. The cost study has not been based on a requested minimum
valuation, specific valuation or the approval of a loan. .
My compensation is not contingent upon the reporting of a predetermined value or
direction in value that favors the cause of the client, the amount of the value estimate,
the attainment of a stipulated result, or.the occurrence of a subsequent event.
To the best of my knowledge and belief, the statement of facts contained in this cost
study, upon which the analysis, opinions, and conclusions expressed herein are based,
are true and correct.
This cost study report sets forth all of the limiting conditions (imposed by the terms of
my assignment or by the undersigned) affecting the analysis, opinions, and conclusions
contained in this report.
No one other than the undersigned prepiired the analysis, conclusions, and opinions
concerning real estate that are set forth in this cost study.
Members of the Appraisal Institute are required to meet certain continuing education
requirements. As of the date of this report, Mr. Hulberg and Ms. Lassner have
completed the requirements of the continuing education program of the Appraisal
IllStitUk.
I certify that the use of this report is subject to the requirements of the Appraisal Institute
relating to review by its duly authorized representatives.
JANUARY 27,1998
TO: CITY MANAGER
FROM: ASSISTANT PLANNING DIRECTOR
ESTABLISHMEWI’ OF THE AGRICULTURAL MITIGATION FEE - ERRATA
Staff is recommending the following changes (depicted in bold) to page 2 of the resolution
establishing the amount of the subject fee:
4. Projects that have such entitlement shall pay the fee pursuant to applicable law by June
30,1998 or be subject to a 10% increase per year in the amount of the fee.
5. On July 1,1998 and subsequently thereafter, the fee shall increase by 10% every July 1”.
6. Projects that protest the fee amount will be required to submit a fee study acceptable
to the City Council under guidelines established by the City Manager to justify an alternate
fee.
7. Staff is directed to work with the staff of the California Coastal Conservancy to develop a
revised methodology for preparing studies used to establish the amount of the fee.
. . .
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Carlsbad on the -daYOf 1998, by the following vote, to wit:
AYES:
NOES:
ABSENT:
CLAUDE A. LEWIS, Mayor
__
c- -
I
I
From: Gary Wayne
To: Ray Patchett
Date: lR3iQ8 11:48AM
Subject: A~ricuttural Miiation Fees
On Monday, January 19.1998, staff held a meeting with interested parties to go over staffs recommendations regarding the amount and the appiiibitii of the fee. Invitations to the meeting ware sent to over 130 addresses. Eight in&rested parties plus Marty, Michael attandad the meeting (David
Meyers, Tom HaQeman, Mr. and Mrs. Tabata, Guy Moore, Yujiyo Yamamoto, Brian Murphy and George
Boutton). The Meeting was very brief. I summarized the main paints of staffs recommendation (the
sama points that were contaiisd in the agenda bill transmittal memo to you dated December 23.1997).
Them wsra onty two items of discussion: first, David Meyers wantsd to know whether Cart@ was eligible
to pay tha fee for the entire Spedfic Plan (not in&ding the portion within SDGIE ‘s property); and
second. Mr. Moore used the meeting to voice hi critk%m of the Cii regarding Blackrail Court.
Subsequent to the meeting it was determined that Carttas, pursuant to staffs racommended Resolution attached to the agenda bill, was diaible to ~av the entire fee. I hava infomxd Mr. Meyers of staffs
interpretation.
Please let me know if you have questions or if you would tike mura infonnatton.
cc: Marty Oranyak, Michael Hotzmilter
.
h h
ladwig besign Group, Inc. 8 mEluMITuI# --
Janwry23,1998 CI WPyor
IidayorLewi8andcolmcilMcmber8 city council
cityof- Wmaaogsr
1200c3rl8badvinagcDrive -YAt-=Y
cerlsbad,a- c#yUM
SURJECP AGENDA BILL NO. 14536, AGENDA ITEM NO. 8
(IADWIG DESIGN GROUP, INC. - J/N - L1033)
LADWIG DE!SIGN GROUP, INC.
RCL:baw.O86
cc GaryWayne,
G mb coastal Conservancy
January 23,1998
Ray Patchett
City Manager
City of Carlsbad 1200 Carlsbad Village Drive
Carlsbad, CA 92008
SUBJECT: Agricultural Conversion Mitigation Fees
Dear Mr. Patchett:
I’m writing to express my concern about the Council Resolution that will be considered
on January 27.
The Resolution indicates that the Coastal Co nservancy has participated in discussions
with City of Carlsbad staffsufllcient to determine that a ten percent annual increase in
the Agricultural Conversion Mitigation Fees would be a reasonable and appropriate
amount. This is not so. Our staff has not had any discussion with City staff regarding an
appropriate fee structure, except to express our concern about the prior lack of
communication on this issue as indicated in my letter-to you of November 4,1997.
I have indicated to Gary Wayne that our staffwould participate with the City and
landowners in a discussion of the current methodology and, ifthe parties felt it
appropriate, the Conservan cy could make some fhnding available to employ additional
consultant services to help reach an acceptable, objective conclusion. That offer remains
open.
The Conservancy does not have any position on the question of what the basic fee should
be or upon what criteria it should be increased, nor do we have any objection to the
annual increase format proposed in the Council Resolution. We do object, however, to
being character&d as the source of these regulatory policies.
Deputy Executive Officer 1330 Broadway, 1 lrb Floor
Oakland, California 94612-2530
510*286*1015 Fax 510*286*470
C alifornia S t a t e Coastal Conservancy
c fQ! b coastal Conservancy
January 23, 1998
Ray Patchett
City Manager
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
SUBJECT: Agricultural Conversion Mitigation Fees
Dear Mr. Patchett:
I’m writing to express my concern about the Council Resolution that will be considered
on January 27.
The Resolution indicates that the Coastal Co nservancy has participated in discussions
with City of Carisbad staff sufficient to determine that a ten percent annual increase in
the Agricultural Conversion Mitigation Fees would be a reasonable and appropriate
amount. This is not so. Cur staff has not had any discussion with City staff regarding an
appropriate fee structure, except to express our concern about the prior lack of communication on this issue as indicated in my letter to you of November 4,1997.
I have indicated to Gary Wayne that our staff would participate with the City and
landowners in a discussion of the current methodology and, if the parties felt it
appropriate, the Conservancy could make some fUnding available to employ additional
consultant services to help reach an acceptable, objective conclusion. That offer remains
open.
The Conservancy does not have any position on the question of what the basic fee should
be or upon what criteria it should be increased, nor do we have any objection to the
annual increase format proposed in the Council Resolution. We do object, however, to
being character&d as the source of these regulatory policies.
Deputy Executive Officer 1330 Broadway, 1 ltk Floor
Oakland, California 94612-2530
510*286*1015 Fax: 510*286.0470
California S t a t e Coastal Conservancy
- h
laduris Design Group, Inc.
January 23, 1998
Mayor Lewis and Council Members
City of Car&ad
1200 Carlsbad Wage Drive
Carlsbad, CA 92008
SUBJECT: AGENDA BILL NO. 14536, AGENDA ITEM NO. 8
(LADWIG DESIGN GROUP, INC. - J/N - L-1033)
Dear Mayor Lewis and Council Members:
ct klayor city council
City Manager City Attorney
city clerk
Tonight the Staff is recommending that you adopt Resolution 98-22, establishing the Carlsbad
Agriculture Mitigation Fee at SS,OOO/per acre with an annual increase of 10%.
I have no arguments with the minimum fee, but I think the annual 10% increase is excessive and
should be reduced to at least half that amount. In addition, the Coastal Act clearly says, the fee
should not be less than $5,000 or more than $lO,OOO/per acre. No where in the proposed resolution
doesitsaythatoncethefkehasreached$10,OOOthatitwillnotescalateanymore. At lO%peryear,
the fee will escalate to over $10,000 in seven years.
Based on the above+ I ask that you reduce the annual increase to 5% or less and also make reference
in the resoWon that once the fee has reached the %lO,OOO/per acre, that it would stop at that point
based on the existing coastal act.
Thank you for your consideration.
Sincerely,
LADWIG DESIGN GROUP, INC.
Robert C. Ladwig
RCL:baw.086
CC: Gary Wayne,
From:
To: Date:
Subject:
Gary Wayne
Ray Patchett l/23/98 11:48AM
Agricultural Mitigation Fees
On Monday, January 19, 1998, staff held a meeting with interested parties to go over staffs
recommendations regarding the amount and the applicability of the fee. Invitations to the meeting were sent to over 130 addresses. EigM interested parties plus Marty, Michael attended the meeting (David
Meyers, Tom Hageman, Mr. and Mrs. Tabata. Guy Moore, Yujiyo Yamamoto. Brian Murphy and George
Boulton). The Meeting was very brief. I summarized the main points of staffs recommendation (the same points that were contained in the agenda bill transmittal memo to you dated December 23, 1997).
There were only two items of discussion: first, David Meyers wanted to know whether Carltas was eligible
to pay the fee for the entire Specific Plan (not including the portion within SDG&E ‘s property); and second, Mr. Moore used the meeting to voice his criticism of the City regarding Blackrail Court.
Subsequent to the meeting it was determined that Carttas, pursuant to staffs recommended Resolution
attached to the agenda bill, was eliqible to pav the entire fee. I have informed Mr. Meyers of staffs interpretation.
Please let me know if you have questions or if you would like more information.
cc: Marty Orenyak, Michael Holzmiller
.- h
DECEMBER 29,1997
TO: LEE RAUTENKRANZ, CITY CLERK
FROM: Val Dinsmore, Administrative Secretary
HANNA REPORT AND HULBERG REPORT FOR AG MITIGATION FEE AB
Attached please find a copy of the Hanna Report and the Hulberg Report per your request. If you
need fixther assistance, please advise.
%? VAL DINSMORE
Attachment