The Washington-Baltimore Newspaper Guild

TNG-CWA, Local 32035

Distinguished Local News Reporting

Honorable Mention:
Jamie Smith Hopkins, Baltimore Sun
“Md. Farmland Now Preserved Could Soon Raise Crop of Houses”

Md. Farmland Now Preserved Could Soon Raise Crop of Houses --
State Program Allows Buyback of Development Rights after 25 Years

For 22 years the state has saved farmland - more than 200,000 acres of it - by paying owners not to develop. Now, some who own farms that were protected in the program's early years have visions of a cash crop of houses. They are eyeing a provision in their contracts with the state that offers the possibility of buying their way out of the preservation deal after 25 years.

Such escape attempts would be fraught with bureaucratic and financial hurdles. But the idea is tempting, because land values have skyrocketed. And if any farmer is successful in winning back development rights on protected land, the ripples are likely to create turmoil for Maryland's hard-fought effort to protect its rural heritage against the encroachment of suburbia.

"It's really a house of cards statewide," said Joseph W. Rutter Jr., Howard County's planning director, who said he'll fight to keep local land in the program. "Once they make the decision in one place, it's going to be very difficult in other jurisdictions to stop it. ... You can't say yes to one
and no to the rest."

In the next five years, the door to development could be opened for nearly 10,000 acres now under preservation. Developers own some of the farms. The contracts drawn up by the Maryland Agricultural Land Preservation Foundation specify that landowners can buy back development rights after a quarter-century by paying the difference between the current appraised value of the land and its value for agriculture - if a bevy of state and local officials agree that profitable farming is no longer possible.

Some landowners say they've got years' worth of bills as proof.

"There's nothing you can do with the farm," said Michael Pishvaian, 65, who owns one in Montgomery County that he says has never paid for itself. "I could get the development rights back, divide the land and sell it as eight parcels of 25 acres."

As the moment of truth approaches, state officials say they do not expect an exodus from the program because the buyback clause was meant for extreme cases. But conservationists and planners warn that if property owners do get out: County and state officials will spend their days fighting to save land they thought already had been preserved rather than looking for more land to
save.

As it is, thousands of agricultural acres are converted to housing every year.

Farmers could end up stuck near subdivisions they thought would never be built, and owners of farms adjacent to those in the state program could decide not to preserve their property.

Owners who believed they were protecting their land forever will find that guarantee gone.

Bitter Battle Looms

It is shaping up to be a bitter battle between farmers - some of whom say they thought the commitment was 25 years, period - and preservationists, who see a slippery slope.

"It'll be bad if anybody gets out," said Ned Halle, vice president of the Baltimore County-based Land Preservation Trust. "People ... are going to be in there making sure the good fight is fought and that the system is not manipulated."

State, who argue that the clear intent of the program is permanent preservation, aren't wringing their hands, because they believe it will be difficult to meet the requirements of the buyback clause.

"I always tell farmers: `Don't think about getting out in 25 years; this is forever,'" said Craig Nielsen, the assistant attorney general who counsels the state Department of Agriculture. "You couldn't come in and say, `I'm sorry, I can't farm.' It's whether anybody could farm that."

Roy W. Kienitz, the state's secretary of planning, points out that many preserved acres are not at much risk for now, because farming still dominates in Western Maryland and on the Eastern Shore.

"The great majority of tracts are not going to have a developer knocking on the door," he said.
But some parcels are tucked in places where open land is scarce, valuable and surrounded by development. Many local preservationists expect the test case to come from Howard County, because expensive subdivisions have brought more than 14,000 people to the rural west since 1980 and clogged the roads that farmers use.

"I'm afraid it'll go to court, and Lord only knows what will happen when something goes to court," said Ann Jones, vice president of the Howard County Conservancy.

"You hire the right attorney, he keeps arguing and eventually he's going to get it out," agreed Bill Amoss, who administers land preservation efforts in Harford County.

Amoss supported unsuccessful state legislation last year that would have eliminated the 25-year clause for future purchases, bringing it in line with local efforts. He wishes that property owners had the right to waive the buyback option - before more land is willed to descendants or sold to people who are less preservation-minded.

"Now is the time to do something about it, and not wait until they start pulling out," Amoss said. "When you leave it up in the air like that, and there's so much money to be made ... it's kind of scary."

`The Land is a Trust'

Maryland's agricultural land preservation program, which along with Massachusetts' is the oldest such statewide effort, has consistently been among the most successful in protecting the countryside, according to the American Farmland Trust.

The program purchases development rights, not the land, which means farmers can continue using their property, with some restrictions. State officials pay the difference between the appraised market value and the agricultural value, which in the early years was generally $1,000 an acre or less.

Nielsen said the $258 million spent so far has saved citizens money, because farmers pay more in taxes than they receive in services while houses do not.

"When it's done carefully, it's a win-win situation," said Mildred Kreider of Churchville, one of the first to preserve land under the state program. "The land is a trust, and I think we have to be concerned about stewardship and the uses of land in the future when we're not around to protect it."

It's too early to gauge the full impact of buyback clauses. But Mary Heinricht, mid-Atlantic director for the American Farmland Trust, does not see them as a threat because they're designed as a method of correcting mistakes.

She says she can think of only one farm in the nation that's been bought back so far - one that became surrounded by development.

Maryland's rules appear to be a tremendous disincentive to buybacks, because property owners would have to pay the difference between the current appraised market value and the agricultural value, not what the state paid originally.

"I don't see any logical reason why very many people would want to come out," said Walter Bay, a retired Cooperative Extension agent whose Carroll County farm is in the program. "All you are going to get as a landowner [is] the farm's agricultural value."

Room for Profit

But developers say there's plenty of room for landowners to make money on the deal because the appraised value is generally less than actual value.

The most recent Howard agricultural property considered for preservation was appraised at about $9,000 an acre. Developers say they're now paying $30,000 an acre in the area.

"There's a recognizable lag that is not the fault of the appraiser," said Russ Dickens, vice president of the Virginia-based Elm Street Development, which does business in Maryland. "They have to base it not on contracts that are in play but actual settlements. I know a [property that] was very
recently appraised at roughly 25 percent of what the actual contract ended up being. That's a huge gap."

Owners stand to gain even more if they subdivide the land themselves, something some are clearly capable of doing. Seven years ago, developer Donald R. Reuwer Jr. bought 295 preserved acres
in Glenwood that will have been in the program for 25 years in 2007. Last year, Steve Breeden - named 2001 Developer of the Year by the Home Builders Association of Maryland - bought a 96-acre farm in Clarksville that will become eligible for a buyback in 2009.

Reuwer lives on his land and insists that he has no intention of developing it.

"How can you prove that farming's not economically viable?" he asked. "They've bought an easement in perpetuity. I can't see anything in any shape or form that anybody's going to be able to get out of it."

Breeden, who lives in Sykesville, said he's leaving his options open. The program's not truly eternal, he said, because the people who crafted it included a way out. And "in Clarksville, it's getting more and more difficult to farm."

"If the program were perpetual, I don't think I would have made a different decision," said Breeden, who spent his youth working at a neighboring farm that's also under preservation. "I think I would have still bought it."

Pishvaian is sure that he wants to buy his property out of the program when eligible in five years. He thought his Poolesville farm would pay its own expenses, but says it never has. He's switched crops five times - from strawberries to corn to wheat to Christmas trees to beans to hay. He said he's poured more than $1 million into the operation, paid for by rent from apartments he owns in Frederick and Washington counties. He spent $400,000 more for the land, which he bought two years after it was preserved.

He said he makes $100 an acre in a good year. With 150 tillable acres, that's $15,000 - and property taxes (the bulk of which are assessed on his house) eat up $8,000 of that, he said. Other costs overwhelm the rest.

"The farmers around here, they all say they make like 11 cents an hour," Pishvaian said, laughing sadly.

Differing Views

He says 214 acres is much too small a farm from which to make a living. He'd like to subdivide into eight lots, keep the one with his house and sell the rest.

He said he might let a developer deal with the state for him - several called a few years ago and promised to get back in touch when his land is closer to its buyout date.

Ask him, and he'll tell you he's not a fan of the state preservation program.

"To pay the farmer a little money, just because he needs a little money right now, and basically take over his property, that doesn't make sense," Pishvaian said. "What you're doing is worse than loan sharks."

Supporters see the preservation program as salvation - for farmers in need of money to buy more land and for heirs who don't want to sell the family homestead. Blocks of preserved parcels serve as a buffer to subdivisions, cutting down on clashes between country and suburbs, said Heinricht of the American Farmland Trust.

"I hate development," said John Myers Sr., 67, a dairy farmer who was paid about $800 an acre as the first in Kent County to preserve. "It's just selling part of your soul to survive. I say, you'd better get into preservation."

But most, including Myers, expect that some landowners will fight to get out. The Maryland Agricultural Land Preservation Foundation plans to prepare soon for whatever may come. Administrator Jim Conrad wants to know how many landowners are planning their exits, and how to handle it.

"Whatever happens early on is obviously going to set precedents," he said.

And make no mistake, the challenges will come, said Wayne McGinnis, a White Hall farmer and former chairman of the foundation's board.

"I have no idea how soon it'll happen," he said. "I just know that it will. "The developers ... can't stand to see an open farm."

© 2002 The Baltimore Sun

The Guild thanks the Baltimore Sun for permission to reproduce the winning entry.

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