[Distressedproperties] Welcome to the listserv on Conservation Opportunities for Distressed Properties.

[Rand Wentworth]

In October 2008, the Alliance co-hosted a conference call with the Triangle Land Conservancy (Raleigh, NC) to share ideas on how land trusts can raise new capital, implement strategies and acquire land from distressed sellers.

The audio from that session was posted on our public website and divided up into three files:
Introduction from Rand Wentworth and prepared comments by invited speakers <http://www.landtrustalliance.org/resources/webcasts-audio/call-intro.mp3> (mp3, 22MB)
Q&A session - part 1<http://www.landtrustalliance.org/resources/webcasts-audio/call-q-1.mp3> (mp3, 14MB)
Q&A session - part 2<http://www.landtrustalliance.org/resources/webcasts-audio/call-q-2.mp3> (mp3, 17MB)
Below are suggestions from participants on the call.  Please feel free to use this listserv to comment further on these, make your own suggestions, or contribute to the conversation.

Sincerely,

Rand

*        Create "conservation REIT's" [Real Estate Investment Trust] - private equity funds that would invest in conservation. Land conservation groups would raise funds to acquire conservation land and easements and resell as market improves.
*        Ask land trust board members to guarantee bank loans for acquisitions or use PRI's [Program Related Investment] from foundations to use in acquisitions and ask board members to cover interest on PRI's.
*        Create national fund for option money for big deals.
*        Create an inventory of top priority properties to attract big foundations.
*        Use tax exempt financing for long-term land acquisition, but you will need an endowment or guarantees to establish credit-worthiness.
*        We are not at the bottom yet in real estate values. There may be another 20 percent decline and it may take 6-12 months to get there.
*        It will be difficult to get capital at this time - especially for raw land.
*        Consider structuring tax advantaged transactions for REITs and TIMOs [Timberland Investment Management Organization].
*        Reach out to local and national banks and developers that have distressed properties. Get list of potential properties.
*        Lessons from the Savings and Loan RTC [Resolution Trust Corporation] - We were successful getting more time to raise capital and to win some prioritized treatment for conservation uses.
*        The best borrowing opportunities are with local banks but you will pay 5 percent or more.
*        Look at financing from the landowner. Negotiate terms - long-term options - offer some cash flow. There may be opportunities to get the properties donated if they do not have cash flow to cover the debt service.
*        Promote mitigation funding for conservation as part of the construction of green energy infrastructure
*        Consider a debt for nature swap - bank accepts a conservation easement in return for the release of debt.
*        Larger land trusts could get investment grade ratings from Moodys to access the market for debt, but they will need strong assets to serve as collateral. If a land trust is considering this financing, land trusts should routinely pass a resolution stating its intention to use tax exempt financing in order to qualify for tax exempt financing at a later date.
*        Land trusts are disadvantaged in offering a net operating loss for developers. Developers can carry back losses up to two years to offset gains in a previous year, but a loss transaction with a charity may be treated as a charitable gift in the current year.
*        Investors are more likely to work at regional investment strategies not a big national fund.
*        Many oil and gas entrepreneurs still have money to invest.
*        Look at three-way land exchanges with REITs.
*        Look at opportunities for TIMOs to sell easements as social investments while they continue to harvest timber.
*        Take a portion of a portion of a large parcel for conservation development and do a conservation easement allowing sustainable timber harvesting on the rest.
*        There will be more investment in public infrastructure to help create jobs. Advocate for federal investments in "green infrastructure" - restoring wetlands, acquire and improve park lands, erosion control projects.
*        Look at "greening" the federal bailout. Change banking regulations to require banks to invest in climate change, land conservation and the environment in exchange for receiving an equity investment from the federal government.


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