A Purchase of
Development Rights (PDR) program pays you to protect your land from
development and keep it open for agricultural use. Most PDR
programs are flexible and farm-friendly. When you sell your
development rights under a PDR program, you get paid the difference
between the value of your land with restrictions promoting
agriculture and its value for development. A conservation easement
is placed on the property that outlines how your land is
restricted. The conservation easement is a perpetual document that
will protect your farm forever.
How Does the Process Work?
The Dutchess Land
Conservancy has many years of experience working with farmers to
protect their land. DLC works with the State of New York Department
of Agriculture and Markets, Dutchess County, local municipalities
and private individuals to raise funds for farmland protection
projects. The State and County have formal PDR programs, which
include applications and specific grant requirements. DLC, in
partnership with the State, County and others, has successfully
completed many farmland protection projects and has helped raise
millions of dollars to buy development rights on farms. Here’s how
it works:
If you are
interested in protecting your farm, give us a call and we can
discuss your farmland protection options. We can get an idea of
your goals for your farm and the best approach for its protection.
The next
step is to meet with DLC at your farm so we can see the land and get
an idea of your current agricultural use of the farm and your future
plans. We can discuss the various PDR programs and the most
appropriate funding program for your farm given your plans. At this
time, we highly recommend that you consult with your legal and/or
tax professionals. Farmers often incorporate selling development
rights as part of their estate planning process. It is very
important that you understand and consider the financial
implications of selling your development rights. DLC can provide
you with a list of attorneys and other professionals that can assist
you with this important decision.
If after
talking to DLC staff, you determine that you are interested in
selling your development rights, the next step would be to complete
a Dutchess County Farmland Protection Board questionnaire and write
a letter stating that you are interested in selling your development
rights. DLC can provide you with a copy of the questionnaire and an
example of the letter. The questionnaire asks you various questions
about the current and possible future use of your farm. It also
asks you to consider things such as the number of farmstead
complexes you would like on the property, potential reserved sites
for family members, and the interest of family members in continuing
the farming operation. These are all important considerations and
DLC can help you complete the questionnaire.
Once we
have received your questionnaire and letter of intent and we have
determined the best source(s) of funding for your project, we can
proceed with the grant application(s). Most PDR grant programs
require a municipality or land trust to be the grant applicant
rather than the farmer. Therefore, depending upon the source of
funding, DLC will reach out to the County or your town to discuss
the most appropriate entity to be the grant applicant. Dutchess
County and local municipalities have been very supportive of
farmland protection efforts and when necessary have been more than
willing to act as the grant applicant.
DLC will
work with you and the grant applicant (if not DLC) to prepare the
PDR application. Most applications will be submitted to Dutchess
County or to the State of New York Department of Agriculture and
Markets. The County’s farmland protection program deadlines are
currently January 31st and July 31st. The State's deadline varies
but typically it is in the fall.
Depending
upon the grant program, it is typically six months before we will
hear if a grant has been awarded to purchase the development rights
on your farm.
If we
receive notice that a grant has been awarded, DLC will work with you
to prepare and obtain all the necessary documents to complete the
project. With your help, DLC will draft a conservation easement
that reflects your plans for the farm as were stated in the PDR
application. Other documentation to complete the project
includes a survey of the farm, title commitment, and appraisal.
Additionally, depending upon the source of the grant and the amount
awarded, we may need to work together to raise additional funds to
complete the project. Alternatively, some farmers find it
financially beneficial to accept less than the full value of their
development rights in what is called a “bargain sale.” The
bargain sale may be considered a charitable gift and you could
potentially qualify for a tax deduction.
After all
the PDR program requirements are met and we have received funding,
the final step is the closing. At the closing, you will sign the
conservation easement and be paid for your development rights. The
conservation easement is recorded with the County Clerk and runs
with the title of the land so that future owners will abide by the
terms that you set forth and your farm will be protected forever.
How Long Will It Take to Complete the Process?
Most PDR
projects are completed in approximately three years. This may vary
depending upon the number of partners involved and the sources of
funding. DLC will be in touch with you throughout the PDR project
to keep you informed as to where we are in the process. Completing
a PDR project is a very lengthy process and the time to complete the
project should be part of your considerations when deciding whether
to sell your development rights.
If you are
interested in learning more about Purchase of Development Rights
programs or other farmland protection options, please contact us at
(845) 677-3002.
This information does not constitute legal or tax advice and DLC
strongly recommends that you discuss your land conservation options
with legal and tax professionals.
