SUSAN ARBETTER ON ccSCOOP

A Tale of Two Land Purchases

Photograph on opening page by Jackie Weisberg

In 2005, The Nature Conservancy bought 20,000 acres in the Adirondacks from Domtar Industries. In the fall of 2008, The Nature Conservancy sold the land to the state for a profit.

This week, the so-called "Domtar deal" has been ridiculed by critics of New York's land conservation policies as another example of the cozy relationship between New York and The Nature Conservancy.

From Monday's New York Post:

ALBANY—The little-noticed green giveaway of taxpayer cash occurred in October 2008, as the state Department of Environmental Conservation paid The Nature Conservancy nearly $10 million for 20,000 acres of Adirondack wilderness that the group purchased for $6.3 million just a few years earlier. Adirondack Park Local Government Review Board Executive Director Frederick Monroe said the state "grossly overpaid" for the property.

As you may know because other media outlets picked it up, the Post story was effective at fanning the flames of populist anger. So successful, in fact, that Attorney General Andrew Cuomo requested Governor Paterson give him the power to look into the details of the Domtar sale. Paterson granted him that authority during a press conference on Wednesday.

But, according to a variety of sources in the environmental, hunting, and regulatory communities, the $9.8 million transaction isn't the main target of this hunt. Instead , the Domtar deal is simply a convenient avenue by which to scuttle a much larger, more important deal: the State's purchase of 161,000 acres of land formerly owned by Finch Pruyn—a deal said to be worth north of $100 million.

History of the Finch Pruyn Land Deal

From the Adirondack Enterprise:

The Nature Conservancy bought 161,000 acres from Finch, Pruyn and Co. for $110 million in June 2007. In February 2008, the DEC and Nature Conservancy announced they had a conceptual plan for 134,000 of the acres: some for the Forest Preserve, some private with conservation easements.

In the highly regulated universe of the Adirondack Park, land-use designation is critical. It could mean the difference between land a buyer can build on, and land that must remain "Forever Wild."

The land that Finch Pruyn sold to TNC was partitioned into three designations:

1.  A small portion of land to be used by twenty-seven individual communities for things like new visitors' centers, snowmobile trails, and dorms.

2.  A much larger portion of land encompassing 92,000 acres to be designated "commercial timberland."

From the Adirondack Enterprise: "The Conservancy sold the timber rights to this parcel to a Danish pension fund for $32.88 million. It is still negotiating with the state to secure a working forest conservation easement that could happen this spring."

             
3.  The third portion of the land is a 67,000 acre parcel that has been designated "Forever Wild."

Here's the crux of the conflict:

According to John Sheehan of the Adirondack Council, this 67,000 acres is considered "biologically important." It encompasses five river corridors, including the Hudson, the Cedar, the Rock, the Indian, and the Boreas rivers. Parts of the tract are considered "virgin" land never touched by development. Lovers of the Adirondacks may recognize some of the natural highlights the region features, including the Blue Ledges, OK Slip Falls, and the Hudson River Gorge.

While The Nature Conservancy had a deal in the works with the State of New York to sell the land, no contracts have yet been signed. According to a government source, over the last few weeks, the deal was moving toward resolution—until the Post's story about the profits TNC made in the Domtar deal. As of today, TNC still owns this 67,000 acres.

History of Conservation and Private Use

For over sixty years there have been more than twenty private hunting clubs that have had exclusive use of much of this pristine tract currently owned by The Nature Conservancy. Under a pattern begun under Finch Pruyn, the hunting clubs would lease the property for cash, enabling Finch to pay local property taxes.

However, under this new deal TNC is working with the State of New York, the tract's land-use designation would change. In other words, these private hunt clubs would no longer be allowed to operate. Their membership would no longer have exclusive rights to the land. Instead, the land would be open to the public for hunting, fishing, boating, and other recreation.

According to Patrick Mannix of the Gooley Club, one of the oldest private hunt clubs on the property, his organization has been given ten years of "transitional occupancy" by The Nature Conservancy. Here's how it breaks down: For three years, the Gooleys have exclusive use of the property (the deal is currently in its second year). For two years after that, the Club would be required to offer the public limited use. During the final five years of the transition, the Gooleys would have to share everything from cabins to bathrooms with the general public.

After the tenth year, the Club would have no special rights to the land.

On the other hand, private hunt clubs on the 97,000 acres of Finch land designated "commercial timber" may continue to operate.

Unhappy Gooleys

But, again, not the Gooley Club, which costs $1,875 per year to join and pays about $150,000 a year to the TNC in lease payments.

Donald MacElroy of Clifton Park, a member of one of the clubs that may be eliminated, says the economic impact of a land purchase of this magnitude will only lead to job losses and financial strain. His reasoning: Hunt club members are long-termers. They come to stay with their families every year, and have an investment in the community. Tourists are not invested in the property, won't stay as long, or spend as freely as members of the old hunt clubs.

Yet Gooley Club member Patrick Mannix didn't seem worried about the impending sale when a reporter spoke with him on Thursday morning. "The state doesn't have it on the radar to purchase this land."

That sentiment was not corroborated by anyone in state government or by MacElroy, who wondered out loud on Thursday how New York could think about spending $100 million on a land purchase during a year when teachers are being laid off and construction projects delayed.

In response, the Adirondack Council's John Sheehan says, "The money to purchase land for conservation comes from a designated Real Estate Transfer Tax that was established to fund the Environmental Protection Fund." In other words, it's purchased with money earmarked for the environment, which wouldn't go toward other needs anyway.

But that didn't satisfy one executive who pointed his finger at the organization behind many of New York's land purchases:

The Nature Conservancy has been in trouble with back door deals around the country. They have been manipulating the price of land it bought for cheap and then turning it around to sell for quick profit.

Back to Domtar

During an appearance on The Capitol Pressroom on Wednesday, TNC's Government Relations Director Jessica Ottney denied any wrongdoing on the part of her organization relating to its purchase of the Domtar property. In turn, she questioned the Post's accuracy.

Specifically, said Ottney, the Post leaves out several layers of bureaucratic due diligence the deal had to undergo before the Domtar sale was green-lighted by Governor Paterson.

Some of those checks are discussed in this blog post from North Country Public Radio.

Ironically, one of those layers went straight through the office of Attorney General Andrew Cuomo. While the AG's office acknowledges reviewing the contract in July of 2008, it characterized the once-over to me as a simple verification of contractual legality.

Under terms of a new investigation granted by the Governor on Wednesday, the AG will be looking at a more substantive question: Did the state pay too much for the Domtar property?

From the Environmentalists' Perspective

It should be noted that several environmental advocates from three different organizations that support this kind of land purchase have indicated that they believe the private hunt clubs affected by eviction simply don't want to relinquish the hold they have on some of the most beautiful wilderness in the high peaks. One advocate told me that many of the hunt clubs are for the "well-heeled," and they are simply trying to retain what has become for them a state-subsidized summer camp for their families.

Donald McElroy bristles at that description.

"It's an area that should be protected," he said," and we [hunt club members] have been the exceptional stewards of the land. The DEC doesn't have the kind of staff it needs for all the upkeep involved."

MacElroy also insisted that the policy of purchasing more and more land by the state is "eliminating" the private sector from the Adirondack Park, which has played a role in its economic collapse. As for well-heeled? MacElroy says perhaps that was the case at one time years ago, but no more. "We have teachers as members. We are middle class."

They Say That Timing Is Everything

As you may know, the state has implemented a moratorium on land acquisitions because of the budget crisis. However, a few already-in-the-works acquisitions have been allowed to move forward. One is located outside of Rochester to protect the city's drinking water. Another is the Finch deal that would displace several hunt clubs.

Environmentalists have a lot invested in this deal both figuratively and literally. So, it's not surprising that the environmental community is looking askance at the timing of the NY Post's story about the Domtar sale. Individuals from three statewide groups, as well as others who are critics of the state's land acquisition policies, told me they think the story was planted for one reason: To scuttle the much bigger, more important Finch Pruyn land deal—worth ten times the amount the state paid for the Domtar property.

According to longtime Adirondack resident and public relations maven Mark Behan, whether forces are trying to quash the Finch deal or not (and Behan wasn't aware of any such attempts, and assured the reporter that he didn't suggest to to the New York Post that the Domtar story could be used as a way to focus publicity on the process and stymie the larger deal), reporters should consider digging into the state's policy of purchasing land for conservation for some important reasons:

•   The close relationship between TNC and the DEC
•   The impact of land acquisition has had in the Park
•   Why The Nature Conservancy is always the DEC's handpicked "realtor"

It may ultimately be Andrew Cuomo who looks into these questions.

When asked "Was the investigation at all prompted by the $100 million Finch Pruyn land deal in which The Nature Conservancy is involved?"—the AG's office declined to comment, citing the fact this is an ongoing investigation.

Where We Are Now

Regarding the Domtar land purchase: The State could have halted the proceedings at any point before the final signatures were affixed, even four years after the state verbally committed to buy it. The prices paid for the land have been published and publicly available for months.

Regarding the Finch land purchase: Before the final signatures go on the contract—the Comptroller's and the AG's—the deal can fall apart.

Here are a few of the proposals, made by Governor Paterson, that could affect the Adirondacks:

•   That the state stop paying taxes on the Forest Preserve
•   That thirteen positions be cut from the Adirondack Park Agency, closing its two visitors' centers and further reducing staff
•   That further cuts be made at DEC regional offices
•   That four popular state-run campgrounds be closed
•   That the John Brown Farm State Historic Site in Lake Placid be closed

Considering the state's fiscal health, it would be logical to wonder if the Governor may be looking for reasons not to complete the land purchases described above.

Susan_Arbetter@wcny.org

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