Corporations are long-term stewards of millions of acres of land in the United States. One way to permanently protect land, while potentially realizing significant tax advantages and retaining ownership and rights to use the property, is through conservation easements. 

Conservation easements can protect the character of the land, demonstrate good stewardship, buffer industrial and commercial areas, and gain goodwill within the community. 

What is a Conservation Easement?

A conservation easement is a legal agreement between a landowner and a land trust (a private, nonprofit conservation organization) or government agency that permanently limits use of a tract of land to protect its conservation values, while being flexible to the needs of the landowner. This restriction stays with the title of the land.

Corporate landowners are motivated to place a conservation easement on their lands to:   

• Create significant long-term goodwill in their communities and among employees;        
• Take advantage of favorable state and federal income tax treatment resulting from easement transactions. Deductions are based on the difference between current, highest, and best use market value (not cost basis of property) and the value of the property with development restrictions. Therefore, favorable current tax treatment is available on what would otherwise be an illiquid long-term asset;        
• Create value from land that generally cannot or should not be sold as part of or a buffer to existing operations. Additionally, "open space" that is sold or rumored for sale creates significant public opposition and bad reputations;        
• Reduce or control property taxes and special assessments; and        
• Ensure the long term protection of corporate open space.

How Does An Easement Work? 

• When corporations donate or sell a conservation easement (or a "conservation restriction" in some states) to a land trust, some rights, such as building roads or certain structures on the property, are permanently forfeited. Because each easement is unique, it can allow for particular uses and certain types of structures on the land. Future owners also are bound by the easement's terms.       
• The specific terms of usage are defined in a legal agreement designed to protect the land's conservation values and, at the same time, meet the financial and management needs of the corporation. So, while an easement on property containing rare wildlife habitat might prohibit any kind of development, one on productive timberlands might allow continued harvesting of forest products. Just as no two parcels of land are the same, no two easement documents are the same.       
• The easement also may apply to a portion of the property, leaving the option of development open for the remaining area. For example, wetlands, stream corridors, and buffer areas might be restricted from development, while suitable upland areas would remain fully available for use.       
• The easement generally does not allow public access, but can if desired by the landowner. 

Why Should Corporations Donate A Conservation Easement? 

In addition to reinforcing the corporation's commitment to the stewardship of the land it controls, donating a conservation easement further protects the natural resource values of the property and can provide financial advantages to the donor. The area under easement can be on unused land, such as a wetland or an area which serves as a buffer zone for manufacturing or office facilities. The donation ensures that the conservation values of the property are protected, without changing ownership.

What Are The Financial Advantages? 

• If the donation meets federal tax code requirements, the easement's value can be treated as a charitable gift and used to reduce income taxes to the extent the individual corporation's tax situation allows.     
• The Internal Revenue Service and state departments of revenue allow deductibility for protecting a viewshed, e.g. preserving the open space which serves as a buffer for the company.     
• Easement values vary greatly, and are based on a number of factors including tract size, the breadth of the easement's restrictions, current zoning, area development pressures, the adjacent property's ownership and use, and a particular site's suitability for development. The highest easement values result from very restrictive easements on tracts of open space desirable for development.     
• According to the federal tax code, to qualify as a charitable donation, the easement must provide public benefit by permanently protecting important conservation resources. However, in most cases, the easement does not need to cover all of the property, preclude all use for development, or allow public access to qualify.     
• Additionally, corporations may see lower property taxes because conservation easements may lower the fair market value of the property.

How Do Corporations Proceed?  

The first step is to determine suitable property that could be protected by a conservation easement. The Wildlife Habitat Council's biologists can help corporations decide which parcels provide the most benefit to wildlife.

Land trusts are private, nonprofit conservation organizations that generally can hold conservation easements. Land trusts will help the corporation design a conservation plan that protects the land and fits the financial needs of the corporation. The land trust also has access to attorneys, appraisers, and other specialists familiar with conservation easements. Please contact, the Land Trust Alliance for a land trust in your area.

A timber company protects forestland. When the Greater Johnstown Water Authority decided to sell 2,000 acres of its holdings, the Western Pennsylvania Conservancy (WPC) teamed up with the Lyme Timber Company to protect the property from development while still providing for sustainable timber harvesting. The county sold the property to Lyme Timber with the stipulation that the company donate a conservation easement to WPC.

A natural gas company protects its shoreline. As part of the process for siting a natural gas shipping terminal, Cove Point LNG, a liquefied natural gas facility, agreed to donate an easement protecting 600 acres to the Maryland Environmental Trust and The Nature Conservancy. The property provides habitat for several rare species while also serving as an important physical buffer for the Cove Point LNG facility.

Other Possible Opportunities 

Here are just a few examples, among many possibilities, of what may be considered for conservation easements:

• Wetlands that serve as buffers along rivers, or are located in flyways critical to waterfowl during the migratory seasons;  
• Timberlands, prairies, meadows, and agricultural lands;  
• Quarries and gravel pits;  
• Lands protecting habitat to threatened or endangered species; and  
• Lands that preserve viewsheds.

For more information, please contact:

Wildlife Habitat Council
Minnesota Land Trust
Maryland Environmental Trust

This site is designed to provide accurate, authoritative information in regard to the subject matter covered. It is with the understanding that the publishers are not engaged in rendering legal or financial services. If legal advice or expert assistance is required, the services of experienced professional advisors should be sought.

Back to top

Click here to download
Adobe Acrobat Reader