Council and Land Trust strike deal over leveraging open space

It’s normal business practice

The town of Crested Butte and the Crested Butte Land Trust are clearing the air over what apparently was a bone of contention with some council members past and present.
The Land Trust uses some pieces of its open space portfolio at times as collateral to facilitate more deals. The organization basically leverages its land to buy more open space.
But some council members have expressed discomfort with the idea of using land paid for through the town’s Real Estate Transfer Tax (RETT) as collateral. They wanted the Land Trust to come to them for approval before taking such action in the future.
The Land Trust objected to that request, citing timeliness and privacy concerns of some property sellers.
Town attorney John Belkin advised that the council come up with a policy on the matter that would be included in future funding agreements. He said under the RETT ordinance, the Town Council has the power to use the RETT money for purchasing land as well as paying for the administration management of open space. He said the council could designate the land trust to perform those functions as well.
“Leveraging property is quite common in the real estate and open space business,” said Todd Crossett, town manager.
“The question is, with the public money, how much authority do you want to give the Land Trust?” said Belkin.
“It kind of rubs me the wrong way,” said Councilman Glen Michel. “The public’s money is used to pay off the land and that land could be put at risk if they leverage it.”
“In most cases the conservation easement would remain in effect even if the land was lost for some reason,” said Belkin.
“It sounds more complicated than it really is,” responded CBLT executive director Ann Johnston. “The Land Trust leverages the public money to make it go further. We have done this since the inception of the Land Trust. It has helped preserve a lot of the land. It’s always fully disclosed. It’s a good tool.
“Frankly, as land prices increase, we may need to use it more,” Johnston continued. “The local and state funding sources aren’t generating the percentage of money needed as fast as they used to. Under a lot of properties, you would never ever lose the conservation values. But we need this tool. It is safe and effective. A lot of projects take time and we need bridge loans. Our funders understand this tool and are comfortable with it. We just don’t want to set a bad precedent.”
“I don’t think it is too onerous of a burden for the Land Trust to come to the council and tell us when and why you would do this,” countered Councilman Jim Schmidt. “I’ll compare it to the old chamber of commerce. It got in a position of rolling loans over and over. We had to come down on them to stop that practice. I think it’s an obligation to the public that isn’t onerous. Leveraging the properties is fine but I think the Land Trust should come to the council to explain it.”
“We need to sometimes get things done quickly,” said Johnston. “I think this is confusing to some people. Some sellers want to be very quiet about what they are doing.”
“I think it could lead to a council micro-managing things,” said Mayor Aaron Huckstep. “I could see a council debating the merits of whether or not the land is worth leveraging. The council should focus on policy instead.”
Huckstep said that as a certified land trust, the Crested Butte Land Trust has many requirements and regulations. “There are a lot of other controls besides us and no other entity is asking for this type of control,” he said.
“We are regulated heavily by the state and the IRS,” confirmed Johnston.
“The council is the fiscally responsible steward of the open space money raised through public taxes,” said Lois Rozman, Crested Butte finance director. “I don’t think we need to over-bake this. I love the open space but I don’t think it is asking too much of the Land Trust to have the conversation with the council about potentially leveraging a piece of property. It’s about communication.”
“The timetable issue is the cost of doing business with public funds,” added Councilman Shaun Matusewicz. “Things move slower but we are the stewards of that public money.”
“I think it would be a good precedent that is set,” said Schmidt. “We meet every two weeks and I think it is reasonable to get the town okay.”
“We want to have a conversation with you,” said Johnston. “We don’t want to get crossways over this and we don’t want this to be awkward for either party. We love working with you.”
Councilperson Roland Mason suggested that the Land Trust provide a report if and when they leverage property that has been paid for with town RETT funds. But he said that could be done on an annual basis.
Johnston said that sounded reasonable.
“I just keep looking at the old chamber,” said Schmidt. “I don’t think it would happen while you are there but there are examples of abuse.”
“I’d prefer the report before the fact,” said Matusewicz.
“Roland’s idea provides accountability to the council,” said Crossett. “I don’t see a reason to get involved in the front end.”
 The majority of the council agreed to go with the Mason alternative, provided the council received a report on any such leveraging within 30 days of the leverage.
Johnston said that should be okay with her board and such an agreement will be drawn up for future funding agreements.