Summer 2009 pg2

Proposed General Plan Update will promote the export of

Dollars out of the County – By Bill Bertain

The Board of Supervisors got it right in 1976 when they recognized the right and necessity of rural property owners to have residences on TPZ lands. Embodied in their decision was the recognition that local property owners who profit from selling timber, circulate those timber dollars locally to a greater extent than do out of area corporate timber owners.

Many of the changes being considered in the General Plan Update will encourage increased TPZ ownership by outside corporate entities. These changes will also have a chilling effect upon small TPZ landowners and will be a disincentive to continued TPZ ownership for most owners. These most significant of these changes are:

1.     Residences being allowed on TPZ lands via a Conditional Use Permit will entail

       a.     Demonstrating, to a bureaucrat, that the house is needed to further the primary use of the property (i.e. the growing of trees)

       b.     A Conditional Use Permit is a discretionary decision and therefore could open up the possibility that an EIR could be required under CEQA for the permit should someone object to your permit

       c.     No assurance that one could replace a structure that burned down (since the rebuild would be subject to a new permit and the need to show "necessity")

2.     Involuntary merging of contiguous legal parcels, owned by the same owner, through implementation of the existing, but dormant, County "Merger Ordinance"
3.     Increasing minimum parcel size to 600 acres
4.     Providing for zero housing units on resource lands in the State mandated Housing Element

These are major changes to the historic land use of rural properties and will force a single use of these parcels. This single use will be reflected in the value of these TPZ parcels and values will likely fall by more than 50%. Most small, private landowners cannot afford the long term holding cost associated with an investment that is strictly timber related. The land ownership patterns will change and these TPZ lands will gravitate to the timber corporations or the wealthy.

When one considers the "timber industry’s" average operating costs, two thirds of these monies are spent in acquiring the raw material (logs). One could conservatively infer that two thirds of the industry’s profits are generated from the value of the tree. This profit is called "stumpage" and accrues to the timberland owner and directly results from the productivity of our resource lands.

Where do profits end up? They end up at "headquarters", be that an out of area corporate location or the household of a local TPZ landowner. Local timber owners (i.e. local TPZ owners) will circulate their timber profit dollars locally to a much greater extent than will an out of area timber owner. This self-evident truth is just a different manifestation of the "shop local/keep your dollars local" tenet that most local businesses live or die by.

The State Legislature recognized the significance of the small private timberland owner and their conservative stewardship values by allowing these owners:

  1.     A specially designed 10 year harvest plan called a Non Industrial Timber Management Plan and
  2.     Special yield tax reductions for small volume timber harvests.

Both of these actions were undertaken to encourage continued ownership of timberland properties. Now here comes the Humboldt County General Plan Update with changes that will not only thwart the State Legislature’s desires, but also provide concrete disincentives to this type of ownership.

In summary, reality and historic events (i.e. Maxaam) demonstrate that large ownerships are NET EXPORTERS of dollars out of Humboldt County, dollars that are derived from the County’s resource lands. IS THIS REALLY WHAT THE BOARD OF SUPERVISORS WANTS TO ACCOMPLISH WITH THE GENERAL PLAN UPDATE? The Board should take a good hard look at the unintended consequences of these General Plan changes, learn from history and recognize that local ownership of timberland is a benefit to the County and will only endure if residences and multiple-use concepts are maintained on our rural lands.

 


 

General Plan Update: Merger Ordinance

By Debbie Provolt

As part of the General Plan Update the Planning Commission and Board of Supervisors will consider the future of the Humboldt County Merger Ordinance. The County adopted a Merger Ordinance over 20 years ago, but it has never been implemented. To implement, they must first identify all of the legal parcels in the County which should be considered for merger, and send out legal notices to the owners of the land. The owners must be given an opportunity for a hearing before any merger takes place. If the decision is made at the hearing to merge the parcels, a Notice of Merger must be recorded in the County Recorder’s office. Until this process is completed, the Merger Ordinance has no effect on the ownership of land, and owners retain the legal right to sell existing legal parcels.

In the draft of the plan update that came out last year, County staff-recommended Alternative B called for a complete repeal of the merger ordinance. The draft of Alternative B that came out this April repeals only the merger of substandard (less than 160 acres) TPZ parcels, not under Williamson Act. Both last year’s version and the new version of Alternative A call for the complete implementation of the Merger Ordinance with a comprehensive noticing effort.

These General Plan updates require careful study, especially since the Summary of Key Issues and Review of Alternatives which came out this month is very false and misleading. It states that Alternative B &quot:Repeals existing Merger Ordinance" (when it actually repeals only a portion of the Merger Ordinance) and that Alternative A "Does not repeal Merger Ordinance" While it is true that Alternative A does not repeal the ordinance, it is extremely misleading to omit saying what it actually does – it fully implements the Merger Ordinance. Even thought Alternative C is identical to Alternative B, no mention of the merger ordinance appears in the summary of Alternative C.

Implementation of the Merger Ordinance would be extremely harmful to all affected landowners. First, the value of their land would be dramatically reduced. The decision to merge or consolidate holdings should remain in the hands of property owners and occur only on a voluntary basis. Several landowners in Humboldt County who want to guarantee that their holdings remain under single ownership in perpetuity have entered into voluntary Conservation Easements. Under these easements, the most common rights that are given up are the right to sell existing legal parcels, as well as the right to ever subdivide in the future. The easement agreement effectively merges the parcels forever. Other protective guarantees are generally made as well, but the owner retains the right to own and operate their land much as they have in the past. The landowner receives payment for the loss of value resulting from the merger provisions of the easement, or is able to take tax deductions for the value they have given up, or a combination of the two. The amount of the payment or deduction is the difference in market value of the land in its original state as multiple legal parcels, and the market value of the ranch as a single parcel.

Charlie Tripodi, the "Landman" is an expert on the market value of timberland, and the relative prices for land sold as 40 and 160-acre parcels to land sold in much larger tracts. He provided the following recent sale prices for lands in the same vicinity, and of equal quality: 40 acre parcels are selling for between 3,000 and 3,750 per acre, while 160 acre parcels sell for 2,000 to 2,650 per acre. A 2,000 acre ranch sold as one unit for 1420 per acre. If the County decides to implement the merger ordinance, people who currently own multiple adjacent parcels would see their value slashed from the cumulative value of a mixture of 40 to 160 acre parcels cited above to a single unit value of about 1450 per acre.

Second, the owner of multiple parcels merged by the County would lose a lot of property rights. An owner in a financial crisis would no longer have the legal right to sell one or two parcels to enable him to keep the majority of the land intact and profitable. He would lose the right to give his children each a part of the land, either by Deed during his lifetime, or by his will. He would lose the present legal entitlement to have a home on parcels given to his children, or sold to others. Most people are unable to afford to purchase thousands of acres at one time. We have always had the right to buy existing legal parcels, and buy and sell them as we wish. A merger of all parcels which would result in larger parcel sizes would make it extremely difficult for an owner to sell his land, even as one unit, because the pool of potential buyers would become extremely limited. Those who own only one parcel, or whose parcels do not touch each other would be enriched by implementation of the merger ordinance. While they would benefit, those with multiple contiguous parcels would lose.

 

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