Agenda - 06-21-2011 - 5l - Laserfiche WebLink

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2 For this Phase 2 project, Colonel Breeze intends to grant a permanent conservation easement on approximately 153 acres of the 400-acre farm. DEAPR Staff and the County Attorney have worked with Colonel Breeze and his children to prepare an agreement that meets their needs and the County's interests. This eastern portion of the farm has no existing residence, but the easement will allow construction of one future home site and agricultural buildings within a "Future Farmstead Area" as shown on the attached site map. It will also allow the continued use of two historic structures located within a "Historic Building Envelope" also shown on the site map. All other non-agricultural development will be prohibited by the conservation easement. Future farm activities will continue in accordance with a Conservation Plan prepared for this farm by the Orange NRCS/Soil & Water Conservation District. DEAPR staff will monitor the property on an annual basis. A copy of the draft deed of conservation easement is attached. The Breeze farm is located within the Little River Protected Watershed, which the County identified as a priority watershed for acquiring farmland easements in a dual effort to protect prime farmland and drinking water quality. Two creeks flow through the farm on the way to nearby South Fork Little River - a principal source of drinking water for Durham County. The conservation easement conforms to Federal and State guidelines from the Federal FRPP and State ADFP Trust Fund, which will contribute matching funds to complete this project. The Federal FRPP and NC ADFP Trust Fund are in the process of reviewing the appraisal, deed of easement, and other documents required for grant program approval. FINANCIAL IMPACT: The fair market value of the conservation easement is $536,500, which was determined by an appraisal. The purchase price for the easement is $472,000, which is 88 percent of the appraised value. Colonel Breeze intends to donate 12 percent of the easement value ($64,500) and take advantage of Federal and State tax benefits available for easement donations. Funds for the easement purchase would come from three sources: $150,000 (32% of the purchase price) from Orange County, $172,000 (36%) from the Federal Farm & Ranch Land Protection Program, and $150,000 (32%) from the North Carolina Agricultural Development and Farmland Preservation Trust Fund. Including survey and other transaction costs, the total cost of the project (without the landowner's 12% donation) is approximately $490,000. The County's share of the total cost will be approximately $168,000 (the $150,000 plus the survey and closing costs), and would come from existing funds budgeted in the Conservation Easement Fund approved by the Board of Commissioners in FY 2002-03 and appropriated previously . The subject property is enrolled in the Present Use Value taxation program, so the acceptance of the conservation easement would not lessen the amount of property taxes paid to the County. The decrease in the property's market value caused by the conservation easement would not lower the property value to a level that is less than present use value. RECOMMENDATION: The Manager recommends that the Board adopt the resolution approving the acceptance by Orange County of the conservation easement and authorize the Chair and the Clerk to sign the conservation easement agreement, subject to final review by the staff and County Attorney, with a closing and recordation of the document expected to occur on or about September 30, 2011.