NEW YORK TIMES PHOTO Jonathan Rothberg's property, the subject of a tree-cutting lawsuit from the Vermont Land Trust that was settled out of court, in Wilmington, Vt. The Land Trust Alliance has won nonprofit status from the Internal Revenue Service for an insurance company it is creating.
NEW LONDON, Conn. — The $4 million estate on the Connecticut River in Lyme had everything: a six-bedroom home, a pool and a dock, all surrounded by 17 acres of native meadows, brush and woodlands. It also had a decades-old conservation restriction, held by the local land trust, requiring the property to remain largely in its “natural wilderness” state.
But after buying the land in 2007, Brian and Beverly Platner went for a more manicured look, installing a sweeping lawn and gardens with sculptured borders.
The Lyme Land Conservation Trust was not pleased, and in 2009, it sued to enforce the restrictions, which were adopted in the 1980s. In turn, the Platners sued the trust’s president, accusing him of defaming them.
When landowners defy established conservation restrictions — and informal resolution efforts fail — the country’s 1,700 or so land trusts find that they have little option but to take them to court. “Whoever holds the easement has an absolute responsibility to defend it,” said Darla Guenzler, executive director of the California Council of Land Trusts.
But some trust officials worry that the litigation costs could ruin their largely volunteer organizations and erode their ability to protect land. The national Land Trust Alliance came up with the idea of creating an insurance company to help trusts with legal costs, and it petitioned the IRS to grant the new company, called Terra Firma, nonprofit status. On Thursday, the IRS approval came through.
In East Haddam, Conn., defending one case against a landowner took almost a decade and cost the local trust $415,000, about half of which was covered by insurance. “It nearly brought us to our knees,” said Anita Ballek, a co-founder of the East Haddam Land Trust.
The wave of lawsuits is rooted partly in the rapid expansion of the trusts. Many took advantage of bargain prices during the recession and significantly increased their holdings — with the total protected acreage nearly doubling to 47 million acres in the decade ending in 2010, according to a census by the Land Trust Alliance. At the same time, trust officials said they began noticing a new disregard for their covenants, particularly among the wealthy.
“It’s unfortunate that this is happening more often,” Leslie Ratley-Beach, the conservation director of the national alliance, said in a recent interview. “But that is something we expected as the land that’s conserved changes hands.”
Mobilized by its California members, the alliance began raising money to start the insurance company. So far it has raised $3 million of the $4 million required.
Terra Firma will sell policies providing up to $500,000 in legal coverage to 1,000 or more small trusts around the country. Annual premiums for land trusts would be $60 per landholding or easement. More than 460 smaller trusts have already signed up.
An exact count of legal challenges around the country is not kept. But a 2009 poll by Adena R. Rissman, an assistant professor of forest and wildlife ecology at the University of Wisconsin, showed that about 47 percent of trusts surveyed had faced a significant legal challenge or easement violation. She found that the average cost of such legal challenges for trusts was $37,700.
A Land Trust Alliance fact sheet said that 85 percent of trusts had budgets under $250,000; fewer than 20 had legal defense funds of $70,000 or more.
The idea of land trusts dates back a century, but it was after World War II, when housing development surged, that the practice of private groups preserving native landscapes took off. In the past three decades, hundreds of new trusts have been created.
Among the incentives for donors of conservation easements are one-time tax deductions. In return, the IRS seeks to ensure that the land is conserved “in perpetuity.” The consequences of breached conservation easements are far reaching, experts say. If too many are abrogated, future proposals may face more skepticism from the tax authorities.
Land trusts usually win in court — though many cases are settled, according to alliance records. One common denominator: the wealth of the property owners challenging restrictions.
In 2001, Timothy Mellon, the owner of the small Goodspeed Airport in East Haddam, cut down 300 trees on conserved wetlands near his runway, according to a judicial ruling in the case.
Mellon, the son of the philanthropist Paul Mellon, argued in court papers that federal aviation laws regarding runway obstacles trumped conservation restrictions. Despite a decade of litigation, his argument did not prevail. Mellon’s defamation claims against land trust officials were also dismissed.
Battles are inevitable, said Annette Lorraine, a lawyer with the Land as Legacy consultants group in Montpelier, Vt. “Even an easement written today with the best knowledge that land trusts have will be challenged, just because some lawyer will tell a client that they can beat this,” she said.MORE IN World/National BusinessSAN FRANCISCO ó Yahoo is buying online blogging forum Tumblr for $1. Full StoryUnited Airlines is getting its 787s back in the air. Full Story
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