A Practitioner’s Guide to Conservation and Limited Development Projects Page 2 of 7: Selecting the right CLDP structure
Once it has been determined that limited development is economically feasible and compatible with the site’s conservation targets, it is time to consider the appropriate project structure. Through my interviews with CLDP proponents, I identified four common CLDP structures—i.e., four different approaches to land ownership, financing, project planning, and involvement by various parties. In all four structures, land trusts play a central role. Structure 1: Buy, Restrict, and Sell. This is the classic CLDP structure wherein a land trust purchases a property, retains or places a conservation easement over the areas of conservation interest, and sells the remaining portions for development to raise money to finance the project. Funding for the initial land purchase may come from the land trust’s endowment or capital fund, from “charitable financing” provided by donors, or from commercial lenders.		A Practitioner’s Guide to CLDPs Page 1: Deciding when to do a CLDP „ Page 2: Selecting the right CLDP structure Page 3: Forming a project team Page 4: Designing the development program and site layout Page 5: Minimizing financial risk Page 6: Minimizing perception risk Page 7: Planning for land stewardship
Structure 2: Landowner Easement. Landowner easements are a common technique whereby a landowner donates an easement to a land trust but retains some development rights on the property. For some land trusts, especially in regions where land values are high, the majority of easements have some provision for retained development rights. In this structure, the land trust does not purchase the land. Instead it helps the landowner with site planning and/or estate planning, and then receives a donation of, or easement over, the portion of the site that is selected for conservation. Many landowners who pursue a CLDP using this structure are genuinely interested in conserving their property but are unwilling to part with its entire economic value. For the land trust, this can be a lower-risk CLDP structure since the land trust never actually purchases the land.
House and grounds in the Knights Island CLDP, Cecil County, Maryland.	Structure 3: Partner with a Developer. In this structure, a land trust and a private developer partner to conduct a CLDP. To ensure a successful conservation outcome, the land trust should be actively involved in conceptualizing and/or planning the project. (By contrast, “developer easements,” wherein a land trust accepts an easement over unbuilt land within a development, are often problematic because the land trust may have little input as to the location and extent of the easement areas.) This structure has a few advantages for the land trust. First, the developer provides the capital for site acquisition, permitting, engineering, and other costs. The developer also assumes the market risk and is the public face associated with the development, an arrangement that reduces the chance that the land trust’s image will be tarnished by its association with land development. From a conservation standpoint, one potential drawback of this structure is that the land trust may have less control over the site layout.
Structure 4: Conservation Investors. In this structure, the land trust works with a group of conservation investors, who help finance the project and also share in its benefits. Conservation investors are individuals or businesses who are motivated to participate in the project for at least one of three reasons: 1) the prospect of profit and/or income tax deductions; 2) the desire to obtain an attractive piece of property on which to build a house; or 3) the desire to protect their neighborhood or community through land conservation. Under this structure, the land trust may bring the conservation investors together to form a business entity such as a limited partnership or limited liability corporation, which then delegates control to the land trust to implement the project. The business entity purchases the site, subdivides the land, restricts the conservation areas, and sells or transfers the development tracts. Conservation investors may or may not obtain one of the development lots, depending on how the project is structured. Overall, the Conservation Investors approach can reduce the land trust’s financial risk without sacrificing a large degree of site control. Which Structure is the Right One? A key factor in selecting the best structure is the degree of site planning control necessary to conserve the site’s conservation values. If the site contains conservation resources that are very sensitive to the development layout or are complex to plan around—such as scenic viewsheds or animal species that utilize multiple habitats—then the land trust may want to choose a structure where it retains considerable site planning control. Some conservation values—such as active pasture or recreation land—may be less sensitive to the particular layout of development. Other factors to consider when selecting a project structure include the landowner’s needs and wishes, the skills and capacity of the land trust, and the availability of different types of financing. These factors are shown in the following decision tree.
Decision Tree: Selecting the Right CLDP Structure
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