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10:46 AM (20 hours ago)
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Corruption is subtle. All the hype events are interesting but usually mean nothing except a few peons are in trouble. The real movers and shakers are protected by more layers of protocol. For instance - who can complain when a land owner decides to take a portion of his/her land and dedicate into perpetuity for public purposes. Who can complain if there is a bit of a tax break so that our children can enjoy ****. Indeed, the fact that conservation easements turn out to be 'welfare for rich political people' is irrelevant.
A big question mark comes to the fore when the laudable purpose is accompanied by tax incentives - such as tax credits - followed by government condemnation of the very same land. Another question arises when the President of the United States suddenly wants to condemn this land for a Federal Monument. Everyone obviously is aware that private land that happens to be taken for a Federal purpose must be condemned and the government has to pay the highest use valuation for the land. Of course everyone also has to be aware that certain Democratic Donors to the Hillary Clinton campaign are very upset that so much money was spent on the campaign with not result. Maybe it is a coincidence that some of the land condemned for the two new Federal Monuments just happens to be suggested to belong to certain of the disenchanted donors to the Democratic campaign.
Of course, I am speculating - I do not know if a single parcel an inch square is part of the conservation easement (or trust) belonging to a donor. It was however interesting that the Wall Street Journal on page 2 of today edition thought that they ought to explain the conservation easement! Maybe that was also a coincidence!
I do know that certain Hollywood people purchased last tracts of land previously referred to as "waste land" and these parcels became conservation trusts or easements.
One media outlet laughed about the purchase of 'death valley' by one of those liberal high minded movie stars!
Maybe - it is time for we - who are the great unwashed - to educate ourselves and stop being naive children. I found an article that casts light on the subject of welfare for the rich and may shed some light on the receive environmental bent of our outgoing President!
PUBLISHED: | UPDATED:
A state investigation into possible abuses of the conservation easement program is focusing on deals involving five ranches and an Arvada land trust.
The investigation aims to ensure that the federal government and cash-strapped Colorado aren’t losing out on millions of dollars in tax revenue.
Documents obtained by The Denver Post show the investigation involves transactions in which Noah Land Conservation, based in Arvada, and Denver tax attorney Rodney Atherton were participants. Of the five ranches, two are in Adams County, and the other three are in Arapahoe, Elbert and Huerfano counties.
The conservation easement program allows landowners to get tax deductions and earn tax credits in exchange for restricting development on their land. Among the reasons for the easements are preserving scenic views, land for outdoor recreation and natural habitat. Such deals can only be done by going through an intermediary, such as a land trust.
Abuse of the program can occur when landowners obtain excessively high appraisals for property they place in easements, allowing them to take higher tax deductions and obtain more tax credits than they would otherwise get.
Last week, the Colorado Division of Real Estate issued about 30 subpoenas to people involved in the deals in an effort to determine whether appraisals of the properties were inflated or other possible violations occurred, said Erin Toll, director of the state Division of Real Estate.
“We expect to receive reams of documents,” she said.
Toll said one reason for the subpoenas is to find out who was involved.
Atherton, of Denver-based Zakhem Atherton LLC, said the subpoenas in connection with the five land deals were unnecessary.
“If they would have asked, (the documents) would have all been supplied,” he said. “Everybody’s pretty confident their appraisals will hold up.”
The Division of Real Estate also subpoenaed records from Noah Land Conservation, now called Colorado Natural Land Trust, which has about 200 parcels under easement, said Paul Geer, president of the trust’s board. “We feel pretty comfortable with everything that is going on,” Geer said. “We’ve got nothing to hide, so it’s fine for someone to come in and look at our records.”
The people being subpoenaed include investors in the five ranches. Each investor bought a ranch parcel sized anywhere from 23 acres to 244 acres between 2005 and 2007.
After their parcels were appraised, the investors put conservation easements on their land through Noah.
Conservation easements have been booming in the state in part because of changes to state law that allow the tax credits to be sold. In 2001, there were $2.3 million in tax credits issued. Last year $85.1 million in tax credits were issued.
Documents obtained by The Post include a list of transactions that are being investigated and a business plan for a company managed by Atherton.
The business plan lays out how the investment process works — and explains the potential for a big payoff. The document shows how the company is seeking investors for a sixth ranch in Adams County, and explains how investors can put land under conservation easements.
Atherton said the previous five deals were structured in a similar way but with less valuable tax credits. In one case, the investment vehicle for an Adams County ranch was a hunting club established through the Bluffs Destination Resorts, Atherton said.
The deal described in the business plan involves a company called Rural Broadband Solutions II LLC. The plan outlines how 16 investors in an Adams County ranch will realize a nearly 400 percent return on an $80,000 investment through the sale of wireless franchises, the sale of water, land development and the use of conservation easement state tax credits.
The $80,000 investment gives each investor about 60 acres of property east of Brighton and north of Bennett.
Rural Broadband, which purchased 1,280 acres in Adams County earlier this year, describes the property as “in the current path for development.”
Investors are encouraged in the document to donate conservation easements to Colorado Natural Land Trust. It also proposes to use a “conservative appraiser that has significant experience with appraising conservation easements and has had IRS scrutiny of its appraisals and appraisal process.”
By putting the easements on their land, investors are told they will receive an $850,000 federal tax deduction and a Colorado tax credit of about $375,000, the maximum allowed under the law, according to the document. The tax credit likely could be sold for about $300,000. The company says the figures used in its calculations are based on preliminary indications from an appraiser.
So far, no conservation easements have been filed by the company or any of its members, and no appraisals have been done, Atherton said.
“We came up with a development concept that was smart for the community,” he said. “We’re going to develop some ground and leave some as open space.”
In order for a member to receive the $850,000 tax deduction on the 60 acres, the land must be appraised at that amount, or about $14,167 an acre.
But Jim Capecelatro, a land broker at Fuller Real Estate, said without unique amenities, it would be difficult to justify prices of more than $5,000 an acre.
“It’s definitely (agriculture) out there,” he said. “That is not in the path of development.”
Colorado Natural Land Trust started in 2000 as Noah’s Crib, a group that mentored children coming out of the juvenile prison system. It received two conservation easements in 2002 and another in 2003. Shortly thereafter, it split into two entities: Noah Land Conservation and Angel Spring Mission, which serves Ridge View Academy, a youth corrections facility near Denver, tax records show.
Noah Land Conservation changed its name to Colorado Natural Land Trust earlier this year.
The Division of Real Estate isn’t the only agency investigating conservation easements.
Of more than 400 tax returns involving conservation easements that the IRS is investigating nationwide, 290 are in Colorado. About 60 of those were initiated at the request of the Colorado Department of Revenue.
Since 2001, there have been about $270 million worth of conservation tax credits taken on about 1,500 donations, according to the Colorado Department of Revenue.
Staff writer David Migoya contributed to this report.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
Ken Ditkowsky
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