Property Rights Foundation of America®
Founded 1994

The Nature Conservancy, Other Non-profits Attack Senators' Tax Reform Bills
Senators Betty Little & John Bonacic Stand Firm
Washington Post Article Exposes Conservancy Corruption

State Senators John J. Bonacic and Elizabeth O'C. Little are not taking a broadside from The Nature Conservancy and other non-profit organizations sitting down. In response to the non-profits' attack on the bills that the two Senators are sponsoring to reform the law related to non-profit real estate tax exemptions, the Senators sent a "Dear Colleague" letter to the entire Legislature on September 16 to set the record straight.

This is the letter in full:

"Dear Colleague:

"In a letter being distributed today by various 'non-profits', legislation we are sponsoring is decried as an assault on the proverbial 'motherhood and apple pie.'

"If a municipality - run by elected representatives, wants to alienate even a small amount of parkland, they must ask the approval of the Senate, Assembly, and Governor. If The Nature Conservancy wants to sell prime real estate while creating tax deductions for their executives, they are not held accountable.

"As public officials, we are subject (appropriately) to significant scrutiny. If we took advantage of a deal like the Nature Conservancy's executives have, we would appropriately be drummed out of office, if not indicted.

"If the Nature Conservancy can get away with what is outlined in this article, how dare we not step in and demand reform!

"Sincerely,

JOHN J. BONACIC
State Senator
ELIZABETH O'C. LITTLE
State Senator

"P.S. Lest you think we are 'beating up on the little guy', the Nature Conservancy has more than $3 Billion in assets!"

With their "Dear Colleague" letter, the Senators attached a seven-page Washington Post web site article by Joe Stephens and David B. Ottaway entitled "Nonprofit Sells Scenic Acreage to Allies at a Loss," which was originally published on May 6. Below are the opening paragraphs of the scathing article:

"On New York's Shelter Island, the Nature Conservancy three years ago bought an undeveloped, 10-acre tract overlooking its Mashomack Preserve, an oasis of hardwoods and tidal pools located just a stone's skip from the exclusive Hamptons. Cost to the charity: $2.1 million.

"Seven weeks later, it resold the land, with some development restrictions, to James Dougherty, former chairman of the charity's regional chapter, and his wife, Nancy, a trustee at the Conservancy's preserve. Cost to the Dougherty's: $500,000.

"The transaction follows a pattern seen in Conservancy land deals across the nation. Time and again, the nonprofit has bought raw land and resold it at a loss to a trustee or supporter. The sales are part of a program to limit intrusive development, but generally allow buyers to construct homes on the environmentally sensitive sites.

"The buyers, in turn, cover the Conservancy's costs by giving the charity cash gifts in amounts roughly equal to the organization's loss on the sale — $1.6 million in the Shelter Island deal. The donations benefit the buyers, allowing them to take significant tax deductions – just as if they had given money to their local charity."

The article quotes a Conservancy trustee Philip Reed, Jr., saying that the transactions are "not legal." The article explains how the conservation easements attached to the properties when The Nature Conservancy sells them are tailored to the tastes of the individual buyers, who do not want to develop the tracts anyway, except for their own personal use.

According to the Washington Post, the Shelter Island conservation easement allows "a single family house of unrestricted size, garages, a swimming pool, a tennis court, a home office, a guest cottage and a writer's cabin. It allows relocation of an access road, installation of septic facilities, construction of foot trails and related excavating, filling and bulldozing. It permits outside benches, tables, chairs, gazebos, birdbaths and screened tents. It allows cutting of firewood for personal use and, on a particular portion of the property, it authorizes tree cutting, hillside terracing, gardening and lawn planting all to provide the owners with 'enjoyment of views.' It approves construction of a dock on an ocean cove." The article details other sales of world-class real estate by the Conservancy reminiscent of the Shelter Island sale, where the conservation easement did not alter the millionaires' plans in any way.

What is the legislation that The Nature Conservancy, et al. protested so angrily? This year, Senators Betty Little (R-I-C, Queensbury) and John Bonacic (R-C, Mt. Hope) have introduced several bills to tighten the definitions and requirements for tax-exempt status of real estate. Early this year, the legislators pointed out, "People are being 'taxed out' of the ability to share in the American dream of home ownership in some localities because of the extreme levels of tax-exempt land." In their bill memo, they stated that the reforms are needed because the courts have softened the meaning of the statutory term "used exclusively" for tax exempt purposes to mean "principal" or "primary." This happened in 1979 when the Mohonk Trust sued the Town of Gardiner and succeeded in preserving the tax-exempt status of its vacant land.

The Nature Conservancy and other wealthy land trusts own a great deal of tax-exempt acreage in New York. However, an estimate of the total amount of "open space" land owned by environmental non-profits in this state is unavailable. Property owners along the lower Hudson River, for instance, experience an increased tax burden related to the amount of land that organizations like Scenic Hudson are acquiring. When non-profit organizations own significant land in a town, the reduction in land that is on the tax rolls shifts the taxes to the remaining private landowners. The effect is exacerbated because the price of land (and its real estate tax assessment) is driven up by high prices the land trusts can afford to pay and by the scarcity of remaining land.

Back to:
Real Estate Tax and Assessments - New York Land Trusts PRFA Home Page
     

© 2003 Property Rights Foundation of America ®
All rights reserved. This material may not be broadcast, published, rewritten or redistributed without written permission.