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PACE raises stakes on preservation

Q: What is PACE?

A: PACE stands for "purchase of agricultural conservation easement" and is the same as a PDR, or purchase of development rights. The state has chosen the PACE acronym for its farmland preservation program.

The PACE program is different from many existing land trusts in Wisconsin because money changes hands. Landowners usually get tax credits if they work with trusts.

Q: How does PACE work?

A: The program pays a landowner to keep his or her property in farmland. Often, the high value of land facing development pressure is an incentive for landowners to sell out of agriculture.

To determine the value of land, some PACE programs require two appraisals. For example, the agricultural value of land might be $5,000 an acre. But a developer might pay $15,000 for that same land. PACE offers an amount to make up at least some of that difference.

With the "sale," the farmer remains the owner and continues to pay property taxes. He or she agrees that the property will remain in agriculture forever.

The land can always be sold. It just must be farmed.

"It's a way for a landowner to recapture the value of their property without actually selling it," said Vicki Elkin, campaign and policy associate for the American Farmland Trust.

Q: What is the goal?

A: The goal is to save farmland. Land sales have a domino effect, so creating a buffer to protect land beyond the fringe is most effective. Continued loss of farmland reduces the farming infrastructure, such as machinery and feed businesses.

Q: Where will the money come from?

A: The state set aside $12 million in the last budget. The county just put aside $700,000 for a farmland preservation program. Other grants and matching funds may be available, including from federal sources.

Fines on people who sell land zoned for agriculture for development will supplement the money available for the program.

The committee is not looking at a county or local tax to augment the money.

"First, you build a program and then go searching for funding," said Al Sweeney, chairman of the Rock County's PACE/PDR Ad Hoc Committee. "Once everyone is convinced of the need for this program and the benefit, then we can look at additional funding mechanics."

Elkin predicted that Wisconsin will see an "incredible amount of movement" to protect farmland now that the state has funding.

Q: Who would qualify?

A: The county's PACE/PDR committee is working out the details and will likely recommend criteria. Those could be ready to bring before the county board in summer. The program is not unique. Communities in the east have had similar programs for more than 30 years. "We're not going to re-create the wheel," said Randy Thompson, dairy and livestock agent for the Rock County UW-Extension. "We may tweak it."

Q: What might the criteria include?

A: Funding will be limited, so a kind of scorecard could be created to take some of the emotion out of decisions, Thompson said.

A landowner who applies for the program might have to meet several criteria. Some, such as the soil quality, would likely be weighed more heavily than others.

Four important factors that would be considered include: soil quality; the easement's designation in the community's land use plan; the size of the tract; and development pressure.

Other factors could include the type of farm operation, the age of the farm and whether children will take over operations.

"Someone in the pathway of potential future development east of Janesville and on very productive land may rank higher than land in a more rural area that doesn't have the potential development pressures that some of the other towns are facing just by their proximity to the major municipalities," Thompson said.

"I don't think a PACE program or a PDR program would be a program that a landowner could use on the outskirts of the county for a while," Sweeney added.

John Lader said the committee would likely negotiate prices rather than set flat fees.

Q: Why might landowners sell their development rights?

A: The money could be used in many ways, and each situation is different.

The landowner could invest in his or her operation, such as buying more land and improving buildings and equipment.

A farmer could buy off siblings who don't plan to farm. He or she could pay off debt or plan for retirement.

"Maybe they're being forced to sell the land and take it out of agriculture because of financial situations out of their control," Lader said. "This will allow them not to take the land out of production."

"For a lot of families, farming for their lifetime, they don't necessarily have a 401K sitting out there," Thompson said.

"Their 401K has been their value in their land. So if they're in the stage in their life where they're looking to retire and looking to take it a little easier than what they may have, they may look at it as an opportunity to build that retirement nest egg."

"Most farmers have almost all their retirement in their land, and so they're faced with a really difficult choice: either keep the farm in the family and not have much of a retirement or a pension, or sell," said Rod Nilsestuen, state Department of Agriculture, Trade and Consumer Protection.

Said Sweeney: "One of the advantages of having an easement program is the younger farmers being able to comfortably build their facilities and infrastructure and be able to count on that land as being farmland versus having it developed out from underneath them."

Q: Will farmers in Janesville's controversial "urban reserve" area be ruled out as applicants?

A: Thompson does not believe so.

The Janesville City Council last year approved a Smart Growth Plan that includes thousands of acres of farmland on the rich Rock Prairie. Some of the land was designated "urban reserve" and is land that might be developed after 20 years.

Thompson called that far-reaching look into the future "arbitrary" planning.

Nilsestuen, the state's secretary of agriculture, wrote a letter in opposition to the urban reserve designation. He reminded council members that "Wisconsin farmland is being permanently lost at an alarming rate" and that losing highly fertile soils adjacent to Janesville and in Rock County is "particularly troublesome … The prairie soils in this area are some of the most productive agricultural soils in the world."

Nilsestuen noted that the plan includes more than 9,800 acres of farmland for new residential, commercial and industrial development—more than 3,000 of which are on the fertile Rock Prairie.

"I must ask if the conversion of 9,800 acres of farmland, even over a 20-year period, is efficient development?" he wrote.

The council approved the comprehensive plan and the urban reserve.

Thompson said that much can change over 20 years. A lot can change in even one year, he said, pointing to the recession and the closing of Janesville's General Motors plant.

Thompson considers the comprehensive plan more of a guide that the city looks to follow.

Q: Are other tools available to protect farmland?

A: Yes. They include agricultural enterprise areas, where farmers enter into agreements with the state that their land remain in agriculture for at least 15 years in exchange for tax credits. That tool is effective when farmers in a certain area band together to create large swaths of protected land. Tools also include cluster zoning, which requires that housing be grouped together on small lots to protect open land; land trusts; right-to-farm laws; and transfer of development rights, when landowners transfer the right to develop one parcel of land to a different parcel.

Q: How might the PACE program work here in Rock County?

A: A landowner would apply for the PACE program through the local committee. That committee would evaluate the application using its established criteria. If it believes the land fits the criteria, the potential purchase would be forwarded to the state. The state would consider that property for matching funds. Rock County's PACE committee hopes to have criteria ready by summer.

On Planning and PACE

"Once we've drawn a fine line to (halt development), we've essentially told whoever the property owners are, ‘We don't care what you want to do. We've made that decision for you.' In some aspects, I think that's very wrong. I understand very much about farmland preservation … What we need to look at is ‘controlled growth' rather than saying ‘no growth.'"—Russ Steeber, Janesville city council member

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"I understand there is valuable farmland that needs to be protected. Agriculture has a lot of historic and economic value to this state. It's an important economic driver. But so is housing, and so are a lot of other things. It's all about balance."—Patrick Stevens, Wisconsin Builders Association

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"If this (PACE) program can really give agriculture a competitive equal footing with development, then it will have served its purpose. There's a real revulsion that comes from seeing good farmland not being farmed anymore."—Kirk Leach, Rock County farmer

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"Zoning is never forever. Easements are forever."—John Lader, town of La Prairie supervisor, Rock County Towns Association member and owner of Lader's Tiffany Feed and Supply

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"I think that the city is going to be strongly encouraged to come and work with the townships (with a PACE program). It gets their attention. We've tried to sit down with Janesville, and it's just pointless … Now, all of the sudden, if you've got land preservation, they are sitting at the table (thinking), ‘We should probably take a look at some of those boundaries.'"—Bill Barlass, farmer and town of Harmony board member

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"(A PACE program) might help (preserve farmland). Elderly people, they've got to have money to live in their retirement. (PACE) gets in between the person who has the emotional tie to the land and the heir who doesn't. You can give $5,000 an acre to your heirs, and they can have the money. You can rest in your grave knowing there's still seeds growing above your head.

"You're always one death, one divorce, one job loss away from losing the commitment that any particular land is protected by."—Allan Arndt, La Prairie Township farmer

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"Growth versus no growth, property rights—those are dead-end streets. Let's start where people can see the need, where there are a number of people who want to raise the issues. Let's work with those communities that have and want to do a good job. There are a lot of them around the state. It is working out east, and success breeds success."—Rod Nilsestuen, secretary of the state Department of Agriculture, Trade and Consumer Protection

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"It is absolutely essential that this program be built into a comprehensive plan for the community. They should be planning for both economic and land-use needs. There's way too many land use plans where farmland is just land waiting for a better and higher use. Farmland is a developed use. It is a higher and best use for that land and shouldn't always mean traditional, urban-style development."—Bob Wagner, American Farmland Trust

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"If Janesville is going to grow, we're going to be growing into some farmland."—Brad Cantrell, Janesville community development director

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"If we would work with our Smart Plans hashed out with lots of citizen involvement, we can move out efficiently from the city."—Doug Marklein, Janesville builder