AGENDA #5c
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
Ralph D. Karpinos, Town Attorney
SUBJECT: Response to Petition Regarding Placing Conservation Easements on Town-Owned Open Space
DATE: March 22, 2004
This memorandum provides information in response to a petition asking the Council to consider placing a conservation easement on recently acquired land along Morgan Creek. We recommend that the Council take no action at this time.
BACKGROUND
In December 2003, the Town completed the steps to purchase 22.65 acres of open space along Morgan Creek across from Frank Porter Graham Elementary School. The tract adjoins other open space the Town has either purchased or acquired through dedication in connection with approved development along Morgan Creek between Smith Level Road and U.S. 15-501, south of N.C. 54 and is near other Town-owned open space along Morgan Creek.
On February 9, 2004, the Council received and referred to the Manager and Attorney a petition proposing that the Council consider placing a conservation easement on some or all of the 32 contiguous acres of property it owns in this area. A copy of the petition is attached (Attachment 1).
DISCUSSION
The petition proposes that the Council place a conservation easement upon the Morgan Creek tract “in order to protect, in perpetuity, an important block of forested open space for its wildlife and human recreation value.” Approximately 50% of the tract in question is located in the floodplain and Resource Conservation District and has limited development potential for the Town or a private developer. The remaining 50% would be developable once access could be provided. If joined with other nearby lands it could add potential density, for example, by providing additional land to meet floor area ratios.
Typically, conservation easements are placed on land in private ownership in order to assure protection of those properties. Private property owners granting such conservation easements to public agencies or non-profit conservation organizations can realize some private tax benefits from the granting such easements and the community receives the benefit of an enhanced assurance that the property will remain undeveloped.
When property has already been acquired by a public agency for open space purposes, the reasoning in support of transferring such a conservation easement to a private non-profit agency or other public agency would appear less compelling. The petition states that “current Town Council members are particularly conscientious of environmental protection” but that such an easement would protect, in perpetuity, this valuable open space as a safeguard to development regardless of changes in Council membership and philosophy.” Thus, the purported justification for conveying such an easement would seem to be the need to limit a future Town Council’s authority to decide if a change in use of the property is in the community’s best interest. This poses essentially a policy question for the Council to consider: whether there is sufficient reason to warrant encumbering publicly-owned property in order to avoid the potential that a future Council would consider putting the property to a more active use or, perhaps determining that some other public purpose warranted selling the property to a private interest for private development.
In considering such a policy question, some factors may merit consideration by the Council:
1. The Council can transfer real property and interests in real property by private sale to a public entity or a private entity which carries out a public purpose. (General State law would not allow property acquired by the exercise of eminent domain to be so conveyed, but in Chapel Hill there are few parcels that have been so acquired.) Thus, by following certain procedures, such a transfer of an interest in most Town property could be completed.
2. The transfer of an interest in real property to a non-profit agency would make more difficult the future use or development of the property by the Town, but would not protect it “in perpetuity.” The Town, the State, or a public utility could acquire the property or the conservation easement previously conveyed, if needed for a lawful public purpose, even if it were subject to such an easement or deed restriction, by purchase or, if necessary, by the exercise of the agency’s power of eminent domain and paying just compensation for the interests acquired as established by law.
3. The transfer of a conservation easement in real property to another public agency with the power of eminent domain could actually afford greater protection, because ownership of an interest by an agency with such power makes it more difficult (but not necessarily impossible) for another agency with the power of eminent domain to acquire the property or cancel the conservation easement. Thus, a conservation easement held by a public agency still would not assure the property’s protection in perpetuity.
4. The Town presently owns other parcels of land subject to use restrictions. These restrictions have been established in different ways:
a. The Town owns some parcels along Bolin Creek and Booker Creek acquired with financial assistance from the Federal Emergency Management Agency. As part of those transactions the Town was required to place restrictive covenants on the properties dedicating them for open space purposes in perpetuity.
b. The Town has acquired some land by purchase and some as part of a development permit approval in Meadowmont. Both properties are subject to the U.S. Army Corps of Engineers Flowage Easement for Jordan Lake.
c. The Town has purchased property near I-40 and Erwin Road with funds from the Clean Water Management Trust Fund (CWMTF). A condition of the grant is that an easement to the CWMTF be placed on the property limiting what the Town uses the property for.
d. The Town has received other grant funds for construction of certain park improvements with the expectation that the properties would be maintained for park purposes for the useful life of the improvements constructed with such funds.
We would expect that the Town would continue to act in conformance with the restrictions that are on these properties. However, the enforceability and continuation of these restrictions could vary. In some cases, these restrictions have been imposed due to the location of the specific property. For example, land in the flowage easement of Jordan Lake is not property that could or would be considered by the Town for any significant active development except for activities that could be accomplished without fill or structures. Examples might include fields, parking lots, and trails. In other cases, land that has been restricted in use because of the acceptance of grant monies might be useable for more active purposes. If such conversion of use were ever to be considered, the specific restrictions would have to be reviewed to determine what, if any, action could be taken by the Town (such as repayment of the grant funds) to allow more active use of the property. At the discretion of the granting agency in at least some instances, action could be taken by that agency to prevent such use by the Town.
5. Many of the parcels of open space and park land in Town ownership were acquired with proceeds of Town Bond sales, approved by the voters in Bond referenda. The expectation of the citizens and Town Council is that such purchases were for the express purposes authorized by the citizens of Chapel Hill and that the land would remain in the use (or non-use) as so authorized. There does not appear to be any North Carolina Court decision directly on this point regarding whether property acquired through one bond-financed transaction could be used for another purpose. A decision by the Georgia Supreme Court held that a local government could change the use of a bond-financed facility, as long as the change was not an abuse of discretion. North Carolina case law does not contradict this decision, according to UNC-CH Professor David Lawrence. (Local Government Property Transactions in North Carolina, 2nd Ed., 2000, UNC-CH Inst. of Gov’t.) (pp68-70). However, the Council would go through a public process before such a change were made.
6. The Town has on occasion transferred small parcels of park land purchased with bond funds to private owners. For example, in 1998 the Council approved the sale of .2 acres of property adjacent to the Bolin Creek Trail to a business. In 2002 the Council approved the sale of .04 acres of Cedar Falls Park to a private landowner in order to resolve a driveway conflict.
The Town has also exchanged park property on several occasions. The two most recent exchanges of Town property for other nearby property of value to the Town have taken place to resolve boundary issues between a property owner and the Town at Cedar Falls Park and to allow the extension of the Booker Creek Greenway Trail.
These transfers of small parcels were due to special circumstances and do not indicate a trend on the part of the Town to dispose of public park land. Moreover, we believe that future special circumstances could arise supporting the transfer of interests in Town-owned property for purposes which the Town would want to approve. Such transfers could be hampered if property were encumbered by conservation easements held by third parties.
CONCLUSION
We believe that maintaining Town-owned property in the control of the Town Council is sufficient to ensure that such properties are protected and preserved while at the same time affording the Town more flexibility if circumstances change and some change in use or transfer of interest is deemed to be in the public interest. We therefore recommend no further action on this petition. However, we also understand that the question posed by this petition is essentially a policy matter for the Council. We are ready to assist the Council in any further discussion the Council wishes to have on this matter.
ATTACHMENT
1. February 9, 2004 Petition (p. 5).