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A Practitioner’s Guide
to Conservation and Limited Development Projects Page
3 of 7: Forming a project team |
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Opinions differ as to whether a land trust should partner with developers or investors when conducting a CLDP, but most practitioners seem to agree that a land trust can reduce the financial and perception risks of CLDPs and increase project cost-effectiveness by forging favorable partnerships with developers or investors. When entering into any partnership, it is critical that the land trust retain enough project control to safeguard the site’s conservation value. On certain projects, the resource may be so fragile that it is inadvisable to cede any control over the project by entering into a partnership. To safeguard its tax-exempt status, a land trust should never act as—or allow itself to be perceived as—primarily a tool to advance the developer’s agenda. Carrying out a development involves numerous steps such as hiring surveyors and engineers, preparing site plans, seeking subdivision approval and development permits, hiring contractors, marketing development lots, and so forth. These activities generate value by converting raw, undivided land into subdivided, permitted land ready to build on. However, these activities may also be risky for land trusts by exposing them to financial liability, by stretching the capabilities of their staff, or by attracting negative publicity. Therefore, an important question for a land trust seeking revenue from CLDPs is which of these activities to do itself and which to outsource to others (e.g., through partnerships or by selling off development areas without bringing them to their fully marketable retail condition). In
general, land trusts should conduct those activities that will add
substantial value to the development areas and carry low or moderate risk.
They should try to outsource those activities that are likely to be risky or
that add little to the land’s future sale price. For example, a local land
trust that is well-respected in the community may be able to design and
permit a development tract with relatively little risk. At this stage, it can
sell the permitted, ready-to-build project to a developer at a substantial premium
and let the developer install the infrastructure and market the lots. |
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 |
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Houses nestled in the woods at the Acadian Woods
CLDP near Bar Harbor, Maine. |
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Where
to now? |
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Copyright © 2005,
All Rights Reserved. |
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