Scott Chatfield, a municipal and land use lawyer based in Central New York, gave a report on the status of Lysander’s Transfer of Development Rights program during the July 30 Lysander town board meeting. Chatfield was appointed as special counsel to handle TDR contracts and other materials earlier this summer by the Lysander Town Board.
After reviewing materials relating to the program, which has been in the works for a decade, Chatfield found that former Supervisor Barry Bullis signed one contract without the consent of the Lysander Town Board.
The contract was a purchase offer sent to Ag & Markets, which included a purchase contract between the town and the Abbotts in the amount of $782,000. This “fully executed purchase agreement,” as stated in the cover letter accompanying the contract, was to act as a catalyst in getting the TDR program off the ground. Ag & Markets would give the town a grant, which the town would use to pay Abbott Farms in exchange for keeping their farmland forever green. However, the town board never authorized the contract.
According to Chatfield, the contract is illegal and void based on the lack of town board authorization. The Attorney General is currently reviewing the fraudulent document and will determine if there is any criminal liability.
Chatfield also noted that when first proposed, development of the TDR program was anticipated to cost $9,000. To date, the town has spent $248,256 on the program, most of which was paid to Barton & Loguidice, the former engineering firm of Lysander. Chatfield said the town is unlikely to be able to recover the spent money.
Overall, Chatfield said TDR, which has been written into town law, is fundamentally sound. He said rather than creating a revolving fund overseen by the town, officials should allow the program to function through the open market system. There has never been a successfully used revolving fund in the state, he said, whereas the open market system has worked.
What are TDR, revolving fund, open market?
TDR deals with the transfer of an intangible concept, the development right. The development potential is what can increase the value of a property – for example, a farmer sells his property for $1,000 per acre to be farmed land or for $3,000 per acre to be the site of a future subdivision. These are two different prices and uses for the same property. If a farmer is looking at retirement, it is easy to see why he/she might want to sell property to a developer rather than another farmer. However, it is imperative to preserve viable farmlands, namely the one the farmer wants to sell. Not only does the land provide food to the surrounding region, it also provides a serene vista to the residents living within its proximity. The problem is neither government nor residents can prevent the farmer from developing the land within zoning regulations.
After developing the basis of the TDR program, the former administration struggled with two different ways of implementing TDR – through a revolving bank fund in which the town purchases development rights from the landowner, documents them and stores them until an auction is held, at which point the rights are sold to the highest bidder; or through the open market system, which allows a buyer in a receiving zone to purchase development rights from a seller in a sending zone at fair market value (in essence, what both parties are willing to settle upon), but the town is still involved regarding documenting rights, approving the transfer and placing an easement on said property.
There was a thought that the revolving fund would act as a catalyst for the program by bringing a willing seller and buyer together and providing a mechanism for just compensation without the need to raise local taxes. This was also dependent on the Agricultural & Markets grant, which expired on Nov. 30, 2011. On the other hand, the open market system relies on free enterprise and the laws of supply and demand. It also keeps government small and out of peoples’ private business.
