Acquisition of Conservation Easements (ACE) Waiver of Income Determination Method
Request approval to waive a requirement in the ACE ordinance that makes income determination subject to aggregate AGI instead of weighted AGI
Tucker, Foley, Kamptner, Cilimberg, Benish, Goodall
ACTION: X INFORMATION:
“A” - Income Grid for determining purchase price
“B” - Income determination for Henley Forest, Inc.
As per section A.1-110(I) of the ACE ordinance, the Board of Supervisors may waive or extend any requirement or deadline if, for good cause, it is shown that circumstances exist which warrant such action.
Goal: 2.1 – “Protect and/or preserve the County’s rural character”. Goal: 2.2 – “Protect and/or preserve the County’s natural resources”.
Per the Executive Summary of
The Henley Forest, Inc. property is held by fifteen
(15) different shareholders, all of whom are part of the extended
Though the aggregate income approach may be
appropriate in other cases of multi-person ownership, it is the opinion of
staff and the ACE Committee that this approach unfairly penalizes the
A more equitable solution would be to use a “weighted average” approach whereby payment is based on a shareholder’s proportionate share or contribution of income (see Attachment “B”). The purchase price of the easement would be determined by multiplying the appraised value of the easement ($242,000) by an individual shareholders proportionate share of the corporation. The resulting value would then be adjusted according to the income grid. The individual payments for each of the fifteen (15) shareholders would then be added up to produce the total ACE payment. This approach would follow the accounting standard for “S” corporations and minimize the disproportionate influence of two (2) high income shareholders to a level that more appropriately reflects the relative contributions (in income) of each of the shareholders. Using the weighted average approach, the net ACE payment would be $237,644 or 98.2% of the total appraised value. Those with incomes below the minimum threshold would be entitled to the full appraised value while those with incomes above it would be appropriately discounted.
the Henley Forest, Inc. property has significant conservation value. In addition to qualifying for tourism funds
(because it has 76 acres and 2,250 feet of ridgeline within the mountain “ridge
area boundary”), the property has 11,494 feet of common boundary with the Byrom property (put under an ACE easement in August, 2003)
and 5,400 feet of common boundary with the Shenandoah National Park. Placed side by side, easements on both Henley
and Byrom would create a 1,083 acre contiguous block
of protected property that runs from
Therefore, ACE staff recommends that the Board of Supervisors waive the aggregate income method for determining income for the Henley Forest, Inc. property and allow the determination of AGI and purchase price to be based on the weighted average of the shareholders of the corporation as described above and shown on Attachment ”B”.
Approve staff’s recommendation that the purchase price for the Henley Forest, Inc. ACE easement be $237,644 by applying the weighted income approach, rather than the aggregate income approach set forth in the ACE ordinance.