- Associated Press - Monday, February 20, 2017

LANSING, Mich. (AP) - Mel Koelling considers Sandhill Road a “red line” between sleek office space and weathered farm houses, between rows of parking spaces and rows of vegetation, between sprawl and serenity.

Koelling’s Tannenbaum Farms sits at the corner of Sandhill and Okemos roads in Alaiedon Township, directly south of the sprawling Jackson National Life headquarters at Interstate 96 and Okemos Road.

For people driving south on Okemos Road, Koelling’s land marks the end of commercial property and the beginning of farm country.

Koelling hopes it stays that way. Forever.

And, legally, parts of it could.

The Lansing State Journal (https://on.lsj.com/2lQj4AS ) reports that the county has spent about $6.6 million on conservation easements that limit future development on nearly 5,500 acres of farmland scattered along Okemos Road and elsewhere in Ingham County.

The Farmland and Open Space Preservation program promises a future for agricultural lands that would otherwise be gobbled up by development, advocates say.

But the concept also raises questions about the future of those easements should the taxes supporting the program disappear and legal challenges arise.

“We have not in Ingham County encountered that yet,” said Stacy Byers, director of the program. “In my opinion, I think it’s just a matter of time.”

In the 40 years he’s owned the tree farm on Sandhill Road, Mel Koelling has gradually added to the property, building it up to the 180-acre Tannenbaum Farms.

His most recent purchase of 20 acres at the corner of Okemos and Sandhill roads was the first piece of property he put in the county’s preservation program. He eventually wants to put in the whole farm.

Koelling, a former professor in MSU’s department of forestry, bought the 20 acres with farmer Rick Fogle - who purchased and preserved an adjacent 80 acres - when the men heard a housing developer was interested in the land.

The more than $510,000 the county paid for development rights on the 100 acres helped the men to afford the land and develop another wall to developments like Jackson National Life and a growing commercial district on the north side of Interstate 96.

The easements prevent property owners from building commercial, residential or industrial developments on the land, or changing it significantly from the features outlined in the easement, Byers said. The easements can only be broken through eminent domain.

“We have in this country a culture that says land use is determined by its highest economic value,” Koelling said. “I think that’s wrong.

“I’m all for development, but let’s do it in the right spot.”

The county was able to purchase Koelling’s development rights thanks to a 0.14 cent mill tax approved by voters in 2008. The tax, which brings in a little less than $1 million a year, sunsets in 2018.

Besides the $6.6 million already spent on conservation easements, officials expect to spend another $1.1 million on three purchases later this month, decisions made by the Farmland and Open Space Preservation Board.

The conservation easements the county has purchased so far have largely been located in Alaiedon Township, Aurelius Township between Mason and Holt, and Leslie.

Koelling’s wife, Laurie Koellling, was on the board at the time of the purchase. Byers said Laurie Koelling was recused from the meetings dealing with her property and, before the purchase, the county attorney wrote a letter attesting that there was no conflict of interest.

Rick Fogle’s family has farmed land on Okemos Road, south of Sandhill Road, in Alaiedon Township since the 1920s. Fogle Farms includes a 110-cow dairy farm and a maple syrup supply company called Sugar Bush Supplies.

When Koelling approached Fogle about the property at the corner of Okemos and Sandhill roads, Fogle saw an opportunity to protect the land while using it to grow feed for his cows.

But the cost of the land was steep, especially after the value climbed with the potential for development. The sale of the property’s development rights made the purchase manageable, Fogle said.

“It keeps it in farmland and I’ve got a nephew here that’s interested in the dairy farm,” Fogle said. “This is one way we can protect it so we can have the farmland to cultivate.”

When Wendy Villarreal sold the county development rights for 80 acres of her Onondaga Township farm in 2012, her property became the first entered into the open space program.

Villarreal bought the property - which includes about 2,000 feet of frontage along the Grand River - in 2008 as a first-time sheep farmer.

Byers said the property was attractive for its mixture of wooded and tillable acres. The county paid $59,000 for development rights on the land.

“I used the money for debt reduction, but it’s not the primary reason,” Villarreal said. “We’re preserving nature, yes. But we’re also preserving our food source.”

Villarreal has since been appointed to the Farmland and Open Space Preservation board.

Programs like the one in Ingham County are present in different forms throughout the state, with one of the oldest located on Old Mission Peninsula near Traverse City.

Since 1994, Peninsula Township has spent about $16 million to purchase development rights for more than 6,000 of the 9,200 acres zoned agricultural in the township.

The program aims to preserve the peninsula’s unique microclimate for cherries and vineyards, Peninsula Township Supervisor Rob Manigold said. His goal is to preserve all 9,200 acres.

“Every one of those guys said we would be willing to get an appraisal and join the program,” Manigold said, of the remaining unprotected land. “People like the ambiance of living in a rural agricultural community and they were willing to step up twice to support it.”

Closer to home, Meridian Township has spent about $11.1 million purchasing approximately 760 acres of land through a 0.33 cent mill tax that’s been in place since 2010, and a 0.75 cent mill tax in place between 2000 and 2010, according to township Treasurer Julie Brixie. Donations and grants have helped to leverage the township’s spending on the land.

“In the late ‘90s there was a lot of development pressure and the people in our community continued to be kind of vocal that they wanted to preserve land,” Brixie said. “The renewal I think was especially remarkable because it was in the middle of the recession.”

Similar programs supported by local taxes exist in clusters in the Grand Rapids, Traverse City and southeast Michigan areas.

Washtenaw County has a county-wide tax that allows for the purchase of actual property or just the development rights. The 0.25 cent mill tax was passed in 2000 and renewed in 2010. The county has spent about $30 million so far to preserve about 4,900 acres.

Washtenaw County is setting up a $15 million endowment fund to finance the long-term costs of maintaining the land, said Bob Tetens, director for the county’s parks and recreation commission.

“If the millage money goes away or we don’t have enough money to take care of the land that we purchased then the whole program would be in jeopardy,” Tetens said.

“Sooner or later, you may have to enforce a conservation easement. There’s a possibility that you could end up in court.”

In addition to the county’s program, Scio, Webster and Ann Arbor townships also have local tax programs for land preservation. So does the city of Ann Arbor.

Ruth Thornton, program manager for the Ann Arbor Greenbelt program, said the city’s 0.50 cent mill tax pays for conservation easements in the city and in the eight townships considered part of the “greenbelt” surrounding the city.

The city’s spent $54.6 million since 2003 preserving 4,700 acres in the greenbelt district and 73 acres within the city limits.

“What they wanted to do was kind of preserve that unique feeling of Ann Arbor, so once you leave the city limits it really feels like you’re in the middle of nowhere,” Thornton said.

The state also has a tax credit program that gives farmers tax breaks in exchange for temporary conservation easements on their properties. Funding for state grants to help local communities with conservation purchases has been non-existent for the past decade, but could return in 2018, according to Richard Harlow, program manager for the state’s Farmland and Open Space Preservation program.

“For us, the issue ends up being funding,” Harlow said. “If there was greater funding I think you would see greater participation from local units of government.”

Though they plan to ask for a renewal in 2018, Ingham County officials are preparing for ongoing expenses should it fail.

They want to set up an endowment fund to pay for ongoing monitoring of the easements, Byers said. After it spends the $1.1 million later this month, officials plan to spend the same amount later this year, leaving about $1 million available before the millage expires in 2018.

Byers said she’s unsure how much will be set aside for an endowment fund but it will likely be much less than the $15 million Washtenaw plans to use.

The county plans to include money in the endowment fund that would pay for any future legal costs.

“Any program that’s ever been established, they have had to go to court to defend an easement,” Byers said. “Especially when we get into the second or third generation of easement holders.”

But Byers said she has faith in the legal strength of those easements.

Officials in more mature programs in Peninsula Township, Washtenaw County and Ann Arbor expressed similar confidence.

“It’s pretty well scrutinized, actually, because it’s a real estate transaction with some real legal rights that are being bought,” Ann Arbor’s Thornton said. “If the future land owner doesn’t like the easement terms - well, the terms are what they are.”

The agreements between government and property owners are stronger than zoning regulations, which can only limit so many land uses before they begin to impose on property rights, said Catherine Mullhaupt, a staff attorney for the Michigan Township Association. And zoning ordinances don’t have the same permanence.

“Zoning can change,” Mullhaupt said. “A board today could adopt a zoning ordinance that the next board could change tomorrow.”

Mullhaupt said her own family made the decision decades ago to sell development rights through the Green Acres programs in New York and New Jersey. Mullhaupt’s grandmother and aunt spent years in the 60s and 70s securing conservation easements for the family horse farm that straddled the New York, New Jersey state line.

“People don’t enter into this lightly,” Mullhaupt said. “The people who enter into these programs believe in it. They believe in it that strongly that they’re willing to bind not only themselves but any of their heirs to this contract.”

Though the preservation programs could limit their location options, housing developers say they don’t mind the program, as long as it’s voluntary, said local developer Brent Forsberg.

“We need to find a balance between protecting and preserving our farmland, but also not hurting the value and the rights of those people who saw their eventual exit program as selling some of that land off,” said Forsberg, president of land development company P.A. Forsberg.

Jackson National Life, for its part, said land preservation is considered when the company expands, as it did at its Alaiedon Township headquarters near Koelling’s farm. Of the 450 acres that Jackson owns near the corner of Okemos and Sandhill roads, about 120 acres are leased to local farmers, according to a statement from Dennis Blue, vice president of Corporate Support Services for Jackson.

“The land around our headquarters is typically purchased so that we can preserve the surroundings and protect our investment - it’s not used for development,” Blue said.

Jackson National Life has been a good neighbor, Koelling agreed.

But the pressure from that property and other interested developers was enough that he was willing to limit future options on his land in exchange for the assurance that future would include farming.

“People are reluctant to put limits on what they see as the potential increase in value; they need to look beyond that,” Koelling said. “I want generations unborn to be able to see this.”

___

Information from: Lansing State Journal, https://www.lansingstatejournal.com


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