Gustavus land legacy ownership options
As Gustavus works to preserve traditional community use of undeveloped, unprotected lands in our community, one approach we are considering is to purchase either use rights (easements) or outright ownership of some important lands. This raises two basic questions. What type of purchase should we pursue, easement or outright ownership? How should we hold title and maintain our purchases? In other words, what might we purchase and how should we manage ownership after purchase in order to ensure our desired, long term traditional use of these lands.
Types of purchase
There are two basic ways to purchase rights to use land. The most familiar is to simply purchase the land outright, often called a fee-simple purchase. This is exactly what most individual homeowners have purchased, the right to develop and control access to the land as they wish, subject to state, borough, and city law. Here in Gustavus that means owners can do practically whatever they want on their land, regardless of what their neighbors or the person who sold them the land might want.
The other way to purchase and preserve the right to use land is to buy an easement from the owner of the land. An easement is an agreement between the land owner and a second party that grants the second party rights to use the land . Or an easement can state that the owner will not develop the land in ways prohibited by the agreement. Basically the owner is paid for their agreement to allow others some specific use of the land or for their agreement not to develop the land in certain ways. A common example of an easement is a right-of-way granting a neighbor permission to cross the owner's private land in order to reach their own land. Another example might be an easement in which a property owner agrees not to build any structures that block their neighbor's view. Easements can be sold for just about any purpose as long as the two parties agree on the terms. The owner of the land is generally paid for the easement because they are giving up some of their rights to use or control their own land.
Easements are often purchased with no ending date, essentially making the agreement perpetual. If the original owner sells the land, any easements on that land continue between the new owner and the holder of the easement rights. However, because an easement is simply a legal contract between two parties, it can be changed or cancelled any time that both parties agree to the change. Contracts can always be dissolved or renegotiated when the involved parties agree to the change.
The Mental Health Lands Trust (MHLT) has indicated that they are interested in selling some of their lands to the community outright. Other lands they want to retain ownership of but are interested in selling some type of easement to provide continued community use. Thus we need to understand both types of purchase and must be prepared to manage both for the long term use of the community.
Managing our purchases
Whether we purchase land outright or purchase easements, we must make long term plans to manage these valuable possessions according to the community's present wishes. If we purchase and then ignore these lands, we cannot assume that the traditional uses we are trying to preserve will be able to continue. From the beginning, we will need to protect our lands or easements from future uses that conflict with the goals we define at the time of purchase. For example, if we purchase easements that require MHLT to leave certain moose habitat undeveloped and accessible for community hunting, we will need to monitor MHLT actions in that area for conflicting developments. Similarly, if Gustavus purchases land outright, future Gustavus residents may want to sell, develop, or restrict these lands in ways that conflict with the traditional uses we are seeking to preserve. We must be prepared to protect our traditional uses.
In addition, we need to plan for the maintenance costs for lands we own. Possible costs include boundary surveys, signs, monitoring, pest control, and property taxes. We may also want to educate future community members on how and why traditional uses of these lands are protected.
Simply purchasing land outright does not guarantee continued management according to our present goals. The ongoing management issues fall into two main categories
- Protecting our rights
- Maintaining our property
Both of these issues have solutions that work for other communities and organizations -- we don't need to reinvent the wheel, just build on the approaches used elsewhere.
Protecting our rights
There are two types of property to consider, outright ownership and easements. There are also several possible owners for these types of property:
- the current land owner (MHLT)
- the community of Gustavus
- a third party, non-profit organization that supports the community's continued traditional land use
Together, these choices combine to give us several possibilities for how we might manage legacy lands:
- MHLT owns the land (but grants no easements)
- Gustavus owns the land (but grants no easements)
- A third party non-profit organization owns the land (but grants no easements)
- MHLT owns the land and grants Gustavus or a third party easements protecting traditional uses
- Gustavus owns the land and grants protective easements to a third party organization
- A third party organization owns the land and grants protective easements to Gustavus
The first three options are simple to set up but do not protect our traditional community uses of the land from changes the owner might make. The second does not necessarily offer any better protection of traditional use than the first though it would put decisions directly in the hands of the community. The third option could protect the land from development but doesn't necessarily guarantee continued traditional uses by the community; the details of this would depend greatly on the specific third party owner. Examples of possible third party owners that have been discussed include Ducks Unlimited, The Nature Conservancy, and Southeast Alaska Land Trust (SEALTrust).
The last three options represent a protection approach that has proven effective for other communities -- two organizations each hold part of the rights and responsibilities for the land. The two organizations then check and balance each other, much as the legislative and executive branches of the government are meant to check and balance each other. One organization owns the land and the other owns easements that preserve and protect the continued use of that land. This prevents the owners from violating the original intent of the land purchase.
In all options that include Gustavus as owning land or easements, there remains the very significant question of what organization in Gustavus would be the actual owner. The two possibilities discussed so far are the Gustavus Community Association (GCA) or a non-profit foundation, separate from GCA, set up specifically for this purpose.
Because the MHLT is offering to sell only easements for some parcels, some form of option four will be necessary for these parcels. This implies that we must seek a two-owner, balanced management plan for at least some lands, as recommended by other experienced communities. That in turn means that a two-owner, balanced arrangement for lands that we do purchase outright doesn't add much management complexity -- we already have to set up a dual ownership system for some parcels. One management structure that takes all this into account would be for Gustavus to own easements granting continued traditional uses on all legacy lands but the ownership of the land would rest with the MHLT for some parcels and with a third party, non-profit organization for the others. The other consistent management structure would be for a third party, non-profit organization to own all easements granting continued traditional uses with the land ownership resting with MHLT for some parcels and with Gustavus for the rest.
No mater which of these options is implemented, ownership of land or easements will entail management costs that must be planned for before the purchase.
Maintaining our property
A successful property maintenance approach that has worked for others is to endow a management fund at the time that land or easements are purchased. Before purchase, a management plan is created and annual costs are estimated. The estimated annual management costs determine the size of the endowment necessary. Such a management plan should address both regular maintenance of the property and protection for the use rights. If a management plan is not available, a rule of thumb is that the endowment should be 20 percent of the fair market value of the property. A specific management plan may indicate the need for a smaller endowment.
The Nature Conservancy requires that fifty percent of the calculated endowment be available at the time of purchase to show the ability to raise the remainder of the endowment in a reasonable amount of time.
If ownership is held separately from protective easements, then the maintenance funds may need to be split between the two holding organizations. Each will have expenses associated with managing their part of the responsibilities for the land and its uses.
Further information
As we proceed with the Gustavus Lands Legacy initiative, the following people can offer useful information about our ownership options:
Bruce Talbot, AK State Dept. of Natural Resources (DNR), Anchorage. Also founder of The Great Land Trust. (907) 269-8536.
Randy Hagenstein, The Nature Conservancy, (907) 235-9731, fax: (907) 235-9732.
Pat Harris, SEALTrust, board president, Juneau.
Bruce Baker, SEALTrust, project manager, Juneau (costs SEALTrust because he's a consultant; be cost conscious in contacting him.) (907) 789-9354.
Deborah Marshall, SEALTrust, board member, Juneau.
Nina Faust (spelling?), Overlook Trust (?), (907) 235-6262.
Prepared by Tom McCabe, January 16, 2001.