Monday, December 9, 2013

Golf Courses and Conservation Easements

Over the weekend the listserves for land trusts were abuzz with the validity of conservation easements on golf courses due to a New York Times Op-Ed piece.  Apparently the NYT thinks that conservation easements on golf courses should not be eligible for the conservation easement deduction.  Seems like class warfare extends even to the out-of-doors.  For some reason they believe golf courses are the domain of the privileged, the affluent, and those evil with such wealth shouldn't be given a "tax-break".  I beg to differ.  The grand standing on important issues like the environment needs to stop.

We must all recognize that easements are a voluntary action for which the ONLY incentive is the income tax deduction.  I cannot accommodate the notion that conservation easements are a "cost" to the government or tax payers - if we want to argue about costs, benefits, value to the tax payers there are much much bigger issues to address than conservation.  the CE  choice made by the benefitting taxpayer costs them far more than the value of the incentive - it is forever - the value of the highest and best use has nothing to do with the centuries of benefit in the future.  central park is a great example of the long term benefit of greenspace.  We need to band together and demand more incentives, not gripe about who gets them.  It took Rockefeller thirty years and the threat of development to convince government of the value of jackson hole.  Seems like we ought to be beyond this by now - conservation easement incentives approximate less than a thousandth of a percent of the federal budget - less than 2 hours a year of government spending if you must view them as an "expenditure", which they are not.  We don't work for the government, what we pay them is an informed consent and by common agreement.  We all agreed over 40 years ago we could choose to give away our stuff and deduct it from our income.  If someone chooses to give away their building rights on a golf course that is their right - and the cockaded woodpeckers who particularly enjoy the open habitat next to their homes are grateful I'm sure.

Wednesday, November 13, 2013

Private Land is Sacred

  One of the best aspects of conservation easements is that the preserved land remains in private hands.  In this age of centralized government, controlled by the few and powerful, it is important to remember that every powerful nation in history at some point loses its leadership role.  Maintaining private land ownership is central to our history and our success.  Where national leadership has exerted their power in the taking of private land, invariable disaster occurs.  The largest organizations in conservation are sustained by land sales to the government.  This is not healthy long term.  Private land is sacred.  The right to preserve it and claim the opportunity lost for tax purposes is also right, good, and the law.  
  At its core, the conservation easement fiscal incentive celebrates all that is good in America.  Individual freedom, exercising our rights to exploit our resources or not to, is what makes our country great.  Through proper use of the fiscal incentives provided by Congress, Americans can create a greener, healthier, and more sustainable future.  While the National Park Service wonders how it will pay for its $12 billion of deferred maintenance, we must wonder how can we protect the landscapes and wildlife we love, for future generations.  Conservation easements are the one tool available to every land owner to do their part for the future.
  The purpose of the Preservation Group is to bring the benefits of conservation incentives to a wider and wider audience of investors.  Without the work of PG, the transaction costs and access to this type of real estate investing prevents many investors from participating.  Utilizing the strategies outlined in our book investors can understand that their income can be increased, that land can be preserved, and that future profitability of land ownership can be enhanced.  This is a new and better way to invest for the future.

Thank you John Muir for this quote:

In every walk with nature one receives far more than he seeks.

Saturday, September 28, 2013

Do Well and Do Good, there is a way

If you want to do well and do good, there is a way.  Preserving land can provide significant protection for your personal income and wealth.  Over the past 3 years my partner and I have been developing strategies and financial structures to capitalize on what I like to call ultra-smart land development.  We call our operation The Preservation Group, and you can learn a bit about what we're doing at our website

The strategy is outlined in our iBook, Conservation Easements: From the End to the Beginning.  Its on the iBookstore, and you can get the PDF or the iBook on our website at this link: 

Thursday, June 6, 2013

A Summer of Discontent

We live in a world overwhelmed with information and a lack of discernment.  As I poll the most astute investors I know, they are all concerned with the troubles of the industrialized economies, the credibility gaps of most information services, and the lack of high ground for anyone in a position of leadership.  Expectations are this ends with blood in the streets.

Without doubt the scandals that currently rock the Obama Administration will be with us for a while.  The polarity of opinions and the submersion of honest debate reflects a real loss of respect, an essential American characteristic.  While I am sick over the destruction of basic American liberties by our leaders, I am equally sick at how our society is not enraged over the injustices of both parties for the last decade.

It stems from a loss of belief in truth.  Sometime ago we decided that the truth was what you make it.  If you applied enough marketing and spin, you could create your own truth, and with that, we have created our current environment.   A "What does it Matter?" mentality.

We really don't know what the truth is about the IRS, Benghazi, the government budget, Julian Assange, and I'm afraid we never will.  Our future decisions will be made on a basis of mood measurement, and what leaders think they can get away with.  Its really a game of snooker - no one plays to win, they play to make the other guy lose.

The truth is what matters, and until we return to that basic human requirement we will live in discontent.  

Tuesday, April 17, 2012

Tatters and Fringe

When you cannot tell the difference between the carpet and the carpet fringe, the carpet is in tatters. I used to describe the process of asset allocation as "managing the edges", the fringe, if you will. Adding value through small adjustments to the portfolio kept costs low, minimized tax erosion, and gave the largest allocations time to perform. While the board debated between strategies, it was not realistic to choose only growth, or only value; only equity or debt; only public or only private, only alternative or traditional managers. Ranges for each source of return were set and then we "managed the edges" to achieve the best relative return possible.

The great assumption was that the strategies were uncorrelated, and would not all move in the same direction at once. If they did it was called an anomaly and discarded as an unreliable data point. Its remarkable how many investment advisors still subscribe to this. In fact, investment advisors who don't are regarded as "the Fringe".

Today managing the edges is not enough. There are no edges to manage, and its time to reweave the carpet.

Tuesday, April 10, 2012

A Must Read

Michael Hudson gives us a terrific history lesson and view into our future in this analysis. I urge you to read this and think beyond relative returns and spreads, beyond probability theory, and consider the writing on the wall.

Here's a notable excerpt:

In the Great Depression, high finance and other investors lost fortunes (paper fortunes, to be sure) as stock market and real estate prices plunged and debtors defaulted. But there was a silver lining. The liquidations of wealth wiped out debts. This freed the economy from interest and principal obligations, enabling recovery to take place. But unlike the case in the 1930s, today’s 1% are unwilling to absorb a loss. They have used government agencies originally created to regulate high finance to enforce harsh creditor terms and make the economy’s nonfinancial sectors absorb the losses, partly by foreclosure and partly by taking bad debts onto the government’s balance sheet (“taxpayers”). As a bonus, banks (most notoriously Bank of America) and A.I.G. received long-term tax credits that render them largely tax-free institutions.