Transferring the Transfer Fee Model by Story Clark
Jim Light was so taken by the transfer fee model that in 1990 he suggested it to a landowner in Jackson Hole. That landowner, my husband, Bill Resor, with his father, had acquired a strip of land between his family’s ranch and the ski area at Teton Village in order to buffer the ranch from ski area development.
To pay for the buffer, he developed some of the land closest to the ski area into the Granite Ridge Development, clustering homesites along the ski runs and leaving open space along the ranch. As part of the project, the ranch dedicated more open space along the border with Grand Teton National Park. The plan followed Teton County’s planned unit development (PUD) regulations, which require that open space in a PUD be dedicated either to the county’s Scenic Preserve Trust, which the Board of County Commissioners administers, or to a land trust.
However, Bill was concerned about the county’s commitment to conservation over the long term and the political nature of its oversight board (the county commissioners), so he asked the Jackson Hole Land Trust if it would accept and steward the easement instead. The land trust recognized the greater liability of the stewardship responsibilities for open space adjacent to a thirty-seven-lot subdivision. It was also concerned that its usual stewardship request of $15,000 was insufficient to cover future stewardship costs for open space associated with lots with multiple ownership.
At Jim Light’s suggestion, Bill offered a transfer fee in lieu of an up-front payment. He proposed an ascending percentage of the gross sale price of each of the thirty-seven lots, starting with one seventh of 1 percent and leveling off after seven years at 1 percent. The fee would be instituted for twenty years with optional twenty-year renewals, due to the limitations of Wyoming state law on perpetual contracts. Because this was uncharted territory for the land trust, the staff ran multiple scenarios of lot sales and resales to ensure that the fees over time would be in excess of the land trust’s preliminary stewardship requirements. With some trepidation, it accepted the transfer fee arrangement.
After the first ten years and sixty-one sales and resales, the Granite Ridge transfer fee generated $582,380 for the Jackson Hole Land Trust. In 2005, the revenue to the land trust passed the $1 million mark. Its phenomenal success is due to a combination of happy circumstances: numerous high-end lots in the program, a strong real estate market, and a fee based on a reasonable percentage of the gross sale price. Even in a weaker market, the program would have been a strong income generator because of the high inherent value of the lots. The steady construction of new homes further increased that value and thus the revenue (based on gross lot value) during this period.
Return to Part 1 of Funding the Shared Natural Wealth: A Seed Springs to Light
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Additional Resources
A Field Guide to Conservation Finance
Buy A Field Guide to Conservation Finance, by Story Clark
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