Roger Rosenblatt

Owning a family forest is a joy and a challenge. We revel in the process of improving our forests, planting and thinning trees, maintaining habitat for the other critters on our land, and selling timber to our local mills. There is no more rewarding activity than helping to maintain sustainable forestry, pass those values on to the next generation, and be a productive part of the larger community.

But will our forests survive? Many powerful forces conspire against the family forest. Development pressures in rural areas lead to forest fragmentation as land is subdivided and developed. Property, income and estate taxes diminish the profit in owning and managing private forests. And it is always a challenge passing our values and aspirations on to the generations that will manage these forests after we have left the scene.

Fortunately, private forest owners have a variety of tools to help them achieve their objectives, from special provisions in the tax code to grants and consultation from governmental agencies. This article is about another powerful tool that has only recently become part of the arsenal of the private landowner: the conservation easement.

What is a conservation easement?

A conservation easement is a legal agreement between a landowner and a nonprofit organization (or governmental agency) that permanently limits some uses of the land to preserve specific conservation values. For most owners of working forests, a conservation easement means restricting future development and subdivision of forestland. Most conservation easements also create a management plan for the land that allows timber harvest while protecting other values such as wildlife habitat, aesthetics, recreation, and clean air and water.

One way to think about conservation easements is to envision land ownership as a bundle of sticks. Each stick represents a specific legal right: the ability to harvest timber, extract minerals, build roads, hunt deer or even build condominiums. When one contributes a conservation easement to an organization, one usually gives away one or more of those sticks, most often the right to subdivide the land. Just like with a road easement, the easements are recorded and become a part of the legal record, applying to future owners of the land as well as those making the contribution.

Typically, forest owners give the conservation easement to a land trust, a qualified charitable organization that agrees to accept the easement. Most forested areas of the United States now have land trusts, and the amount of land they protect has increased rapidly, from 2 million acres in 1995 to 4.7 million acres in 1997. Land trusts tend to be community-based or regional organizations, established by local people who are interested in maintaining open space, preventing fragmentation and development, and encouraging sustainable economic development. Forest owners usually provide a tax-deductible charitable donation to the land trust to help in future management of the easement, although the arrangements vary depending upon the agreement reached between forest owner and land trust.

What are the benefits of establishing a conservation easement?

There are three major benefits to the forest landowner who establishes a conservation easement:

o Conservation easements allow the land to continue as a working forest.

When forestlands get broken up into small chunks-and houses sprout like morels after a spring rain-they cease being working forests. Private forestry can exist only if people are able to manage reasonably large holdings over long periods of time in an environmentally responsible and financially profitable way. Conservation easements make it possible to maintain these woodlots from generation to generation, while allowing private control and decision making.

o Conservation easements can provide substantial tax savings.

Because establishing a conservation easement usually reduces the market value of the land by limiting development rights, the Internal Revenue Service considers it a legitimate charitable tax deduction. For many forest owners-especially those who are still earning incomes from jobs off the family forest or doing extensive harvesting-these tax savings can be substantial. Though few people establish conservation easements for tax savings alone, there's nothing like an income tax deduction to lighten up April 15. In addition, the tax savings can be spread over six calendar years.

o Conservation easements may simplify estate tax planning.

Even though the estate tax looks like it has been substantially amended as of the summer of 2001, the final chapter has not yet been written. Conservation easements reduce the appraised value of a piece of land. In doing so, they reduce the value for estate tax purposes, making it easier to pass the property to the next generation.

Real-life examples: Where the rubber meets the road

Establishing a conservation easement may be one of the best tools for you to meet your family's objectives, but it should not be entered into lightly. Conservation easements are donated "in perpetuity," which is generally considered to be a long time. Creating them involves a certain amount of legal footwork, which requires time and money.

Probably your best source of advice is from fellow forest owners who have actually gone through the process. The following three examples-from quite different parts of our region-are the experiences of three such families.

60 Years on the Dosie: A Western Washington Logging Family

Harry and Ida Bailey live outside of Brinnon, a tiny hamlet on the Olympic Peninsula. Harry is a logger, and his son-in-law has followed in his footsteps. Harry and Ida first purchased 80 acres of land on the magnificent Dosewallips River in 1940, and inherited an additional 120 acres in 1960. The property has second-growth Douglas-fir on the uplands, with alder, cedar, maple and grand fir closer to the river, and about 60 acres in pasture.

The Baileys, with three daughters and eight grandchildren, are passionately committed to the idea of maintaining the parcel in the family. They watched the land around them get carved up by developers, and they feared that their descendents would lose the chance to get to the river, to camp in the forest, and to enjoy the privacy and peace of quiet that had enriched their lives. So in 1994 they approached the Jefferson County Land Trust and created a conservation easement for the entire property.

Their conservation easement is at one end of a spectrum, with very little limitation on the activities of future generations. The easement allows building up to an additional eight single-family residencies, subject only to requesting Jefferson County Land Trust review and approval before starting to build to make sure that the project doesn't irrevocably impair conservation values. The major thrust of the easement is to ensure that the land remains as a single unit, within family ownership, and the Baileys have also established a Family Trust to help achieve this objective.

The conservation easement has had no impact on the use of this property as a working forest. Harry has logged several times on various portions of the parcel, and his son-in-law is currently taking out some of the older maple, for which there is an active market. The income tax deductions that the gift of the conservation easement allowed were very helpful in reducing their tax bill during a period when they were actively selling Douglas-fir in the mid-1990s.

The Baileys are delighted with the easement and enjoy the annual visits from the land trust. Ida told me, "I know that we lose value by not subdividing, but that's alright too. The conservation easement has provided us with great peace of mind, knowing that this place will never be subdivided."

The Best View on the West Coast: The Kittels of Yachats, Oregon

Joanne and Norman Kittel moved from the cold of Minnesota to the pounding surf and high winds of Oregon's coast. In 1986, they purchased 27-plus acres bordering Cape Perpetua Scenic Area, one of the most dramatic places on the entire coast. The wooded bluff near where the house was situated was slowly caving into the ocean, partially because of earlier disturbances to the Sitka spruce and hemlock that had stabilized the precarious slopes.

The Kittels wanted to do something to make sure that the public could also share some of the views that they cherished. They initiated a project to tie their property into the neighboring park trails. An earlier attempt to extend the Oregon Coast Trail had foundered because of problems finding an appropriate location, and the Kittels contacted the state in 1989, offering to allow a half-mile of the trail to traverse their property.

Despite the generosity of the offer, the state parks department was slow to respond. Joanne and Norm kept exploring their options, and found out that it was more difficult than one might think to actually give something to the state. Oregon has a rather archaic set of statutes that discourages conservation easements per se because they are sometimes construed by county assessors as voiding the forest tax deferral status of the land. The Kittels managed to accomplish their aims by creating a permanent irrevocable easement, which they donated to Oregon State Parks in 1997. A pair of bills currently in the Oregon Legislature is expected to remedy the current legal uncertainties, and spur the creation of conservation easements in Oregon.

Since their donation, the Kittels have assisted volunteers in building the trail and a 60-foot bridge across their creek, discovered historic Native American artifacts on their land and planted thousands of trees. Their pleasure in their property has been amplified by the joy that others receive because of the generosity of their easement.

The Kittels are strong advocates of community service and social responsibility. They encourage others with forestlands to consider donating easements for public hiking trails and for the use of teaching land stewardship practices. "We have received so much pleasure in the knowledge that others enjoy hiking and experiencing a part of our heaven."

The Interior West: The Rosenblatts in Okanogan County

Our family has owned and managed a ponderosa pine forest in Okanogan County since the early 1970s. Our proximity to the Methow Valley-a part of our state rapidly becoming the Aspen of Washington-made it painfully clear that traditional rural areas could be transformed into instant subdivisions by development, and we resolved to create a conservation easement to guarantee that such a fate would never befall our land. Our desire to help restore some of the damage done to the property by over-grazing and opportunistic and poorly planned logging led us to create a detailed forest management plan as part of the easement. The plan is designed to foster environmentally responsible timber harvests while protecting the beauty and biological diversity of the riparian area and uplands.

We contributed our conservation easement to the Methow Conservancy, which decided to enlarge its stewardship responsibilities by extending itself into our half of the county. Our easement prohibits any subdivision of the 450 acres, but will allow our descendants to build on three separate "house sites" around the property if they so choose. The forest management plan encourages pre-commercial thinning, uneven-aged management, longer rotations and sensitive logging, but the only real absolute is a prohibition on removing more than 20 percent of the timber volume on the entire property in any single decade. In addition, we created 100-foot riparian buffers on either side of our stream, which we've been working to restore with the help of both the Natural Resources Conservation Service and the Stewardship Program of the Washington State Department of Natural Resources. These agencies have provided both valuable consultation and some cost-sharing opportunities.

We have involved our four boys in this adventure since the start, and they realize both the rewards and responsibilities that go along with forest ownership. At their suggestion we wrote an estate plan that creates a trust to cover the costs of forest stewardship activities and property taxes so that our desires for managing the property don't fall too heavily on our heirs. Creating the easement has not only helped us crystallize our objectives for the property, but has increased our involvement with others in our county who share our interests and goals.

What approach is right for you?

These three examples illustrate just how flexible conservation easements can be. A conservation easement is like a family partnership or a limited liability corporation-it is a legal tool to help you accomplish your long-term objectives. If ensuring that your land remains an intact forest is high on your list of dreams, a conservation easement may be the most powerful tool at your disposal.

To learn more about conservation easements for your property, contact your local land trust. If you're not sure where the nearest trust is, call the Northwest Office Land Trust Alliance at 206-522-3134, or check out their web site at www.lta.org/regionallta/northwest.htm. I am also in the process of creating a web site specifically for private forest owners that can be found at www.conservationforestry.org.

Roger and Fernne Rosenblatt own and operate the Rosenblatt Stewardship Forest in Okanogan County, Washington. Dr. Rosenblatt is a family physician who has been involved in creating the rural health program at the University of Washington School of Medicine since 1971, when he first began to buy forestland near one of the medical school's teaching sites in Omak, Wash. The Rosenblatts have a Wildlife Habitat Incentive Program grant from their local Natural Resources Conservation Service, and their working forest has been certified both by the American Tree Farm System and Washington State's Stewardship Forest program. Dr. Rosenblatt is in the processing of finishing a master's degree at the University of Washington, College of Forest Resources.

This article appeared in the Northwest Woodlands Magazine, Summer 2001- Published quarterly by the World Forestry Center as a benefit of membership in the Oregon Small Woodlands Association, Washington Farm Forestry Association, Idaho Forest Owners Association and Montana Forest Owners Association.