Concern #8: Additional Payments if Expanded Use is Denied

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Concern #8: May 1998 Workshop

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Concern #8: Additional payments to landowners if expanded use of land is denied. (The following is excerpted from a March 3, 1998 letter by Dennis B. Jordan, Florida Panther Coordinator, U.S. Fish & Wildlife Service)

"Since 1993, Fish and Wildlife Service staff have been involved as reviewers and workshop participants in Phases 1 and 2 of the 'Panthers & Private Lands' project.... The original project's basic concept of providing economic incentive/compensation to private landowners for protecting and maintaining panther habitat on their lands has been wholeheartedly endorsed by the Service.... Any program that results in a private landowner viewing an endangered species on his or her land as an asset rather than a perceived liability is a plus.

"The goal of the expanded Phase 3 effort is the, 'protection of essential habitat for threatened and endangered species on private agricultural and forestry lands throughout Florida and the U.S.' The Service certainly supports this goal and we clearly understand that most of the processes that will be required to achieve project success are yet to be finalized.

"However, we would be remiss if we did not make clear our position on one of the processes being discussed. Specifically, the concept of providing payment to landowners in the event of permit denial because of adverse impacts to the Florida panther (Lease, Paragraphs 2.04(a) and 3.04(i)), causes us great concern. This appears in essence to be a payment for the takings of certain property rights. Because of the legal and policy ramifications, it is a process we cannot support. These issues are of such significance that they would have to be approved by our Director and perhaps the Department."

Response #8: How do we resolve this? Your suggestions are welcomed and encouraged.

Workshop Responses (agreeing with concern):

Green: 2 -- 1 government, 1 conservation

Yellow: 4 -- 1 landowner, 2 government, 1 other

Orange: 3 -- 1 landowner, 1 landowner/government, 3 government

Comments Offered:

I like the whole Farm Plan idea. If the expanded use is included in the Plan, which is incorporated in the lease, then additional compensation would be warranted if expanded use is denied. However, the landowner should not be permitted to enter into a lease and then expand his land use and claim additional compensation when that expanded use is denied.

Specify what can and cannot be done under the lease -- which will address permit applications. If permits are denied for other reasons, this should not affect the lease.

This issue needs to be negotiated within the context of the lease and the specific operating plan in place for each property.

It depends on how the expanded activities affect panthers. If the activities are non-ag, use should be denied and no additional payments made.

One way to resolve this is to not fight this battle now (and, possibly, risk losing the opportunity to advance the rest of the project forward). This reason for compensation can be removed from the current project. Landowners can bring it up as a separate issue later.

Additional payment with federal money would equate to payment for property takings. It is unacceptable and feds will not do this.

Before this process proceeds any further, the Florida Stewardship Foundation should have a meeting designed specifically to educate project participants on the constitutional definition of "takings" and the governments' powers to regulate.

Tell me more.

Review permitting parameters in concert with lease or service contract. Holistic agency involvement.

Break-Out Group Suggestions:

The breakout group considering this issue proposed that the following language be considered:

"If lessor is denied the opportunity to expand or escalate a land use, a lease amendment will need to be negotiated. At the time of renegotiation, the lessee needs to determine whether additional compensation will be paid to the lessor [to preclude the proposed use]. The other option will be for the lessee to terminate the lease on that portion of the property affected."

Additional payments -- including payments for a permanent conservation easement or fee-simple purchase -- may be considered if expanded use is denied.

This issue was deferred to Web/committee for further discussion. To post a comment to the web discussion group, click: Post Comment.

Additional Proposal for Consideration:

Incorporate "Comments Offered" numbers 1-4, above, into lease/management agreement:

Include description in "Attachment 3: Farm Operation Document" of expanded ag uses that are most likely to receive serious consideration by Landowner during the term of the agreement. This would cover uses that are the "best prospects" for expansion, based on the Landowner's "best estimate" of future conditions (for example, the Landowner may already have permits to convert native or improve pastures to citrus).

Also: include description in "Attachment 3" of other expanded uses that Landowner might entertain. This would cover uses that are less likely to occur but, depending on market conditions and other factors, could conceivably be considered at some date in the future.

Uses that are not acceptable to the Agency would be discussed during negotiations for the agreement. In this way, uses that may have been contemplated by the Landowner, but will not be permitted by the Agency under the terms of the agreement can be spelled out right up front in "Attachment 3" of the agreement. The results of this negotiation also will have a direct effect on the compensation that the landowner receives under the lease. The Landowner will know at the onset which expanded uses of the property will not be allowed. The payment per acre that is negotiated will be arrived at by mutual consent with this consideration in mind. In accepting the agreed-upon payment (as a lump sum, as an annual payment, or as a base annual payment for X years, with an escalated annual payment beginning in year X, when the proposed expansion for a use that was "seriously considered" would have occurred, had it been allowed to go forward), the Landowner also will accept the restrictions on expanded uses that have been negotiated.

All potential uses of the property that are listed in "Attachment 3" will include uses that the Agency is either willing to accept or entertain, contingent upon further research and consideration and final approval at the time that Landowner asks to move forward with expanded use.

If any of these uses are denied, then the Landowner will receive additional compensation, which will be negotiated at the time the parties enter into the agreement and which will be spelled out in "Attachment 5: Additional Rent Sums."

If the Landowner wishes to pursue any other agricultural use that was not contemplated or for which no viable market existed at the time the agreement was executed, the Landowner can request that "Attachment 3: Farm Operation Document" be amended, and the parties can discuss whether this use will be allowed or, if it is denied, if the Landowner will receive any additional compensation.

A basic premise of this agreement is that the Landowner will give up all non-ag uses of the property for the term of the agreement. Expansions of ag use, however, are an important consideration since agricultural operations must be profitable to survive, and it is very difficult in today's market to predict which crops are going to remain profitable and can be reliable mainstays of an ag operation over the next 20 years.

If the ag operations participating in these agreements cannot remain profitable, they will no longer be able to afford to maintain the habitats on their properties, and a change to a more intense use will become likely. In this case, the lease will prevent any non-ag use from occurring during the term of the lease, but the Agency will be faced with either having to purchase the property to protect its habitat or allowing the property to convert to a more intense use after the lease expires.

The advantages offered by the lease/management agreement in this case is that: (a) the Landowner and Agency already will have a working relationship and agreement in place; (b) the Landowner and Agency can work through the agreement to find ag uses, management services and/or a combination of the two to help keep the operation profitable; (c) the Agency will have the right of first refusal, should the Landowner find it necessary to sell the property; and (d) the agreement will provide ample time for the Landowner and Agency to discuss the future disposition of the property, and to make arrangements to ensure its wildlife habitats and other natural values are protected. None of these opportunities exist today for a Landowner and Agency to work together in this way prior to the sale of a parcel of ag land for conversion to another use.

Conservation easements will provide greater assurance and protection. But landowners who are willing consider conservation easements will do so anyway. The lease/management agreements are aimed primarily at landowners who do not want to consider conservation easements, but are willing to participate in arrangements that will result in additional sources of revenue. That could be a potentially large number of landowners, if the documents are crafted so they appeal to landowners.

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