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Monday, November 3, 2014

How New Development Can Help Fund Farmland Preservation

It seems like an oxymoron, but there is an opportunity to score funding for a municipality's Farmland Preservation Fund when a greenfield is sold to a developer. At least there is here in Pennsylvania with how our real estate transfer tax is divvied up after a property sale. In PA, the buyer and seller each pay a 1% transfer tax. Of that 2%, the municipality gets one half and the local school district gets the other half. For larger municipalities or places with large commercial or industrial properties that change hands from time to time, the local cut of the real estate transfer tax can be a nice supplemental revenue stream.

Back Story
I've blogged previously about a seemingly shady land deal that happened in 2010 here in Lower Macungie Township, so if you've already read about this back story please feel free to skip to the next section.  Lower Macungie is 22.6 square miles and is home to nearly 31,000 people. Over the past 20 years, we've experienced a lot of farmland being lost to developments - mostly residential, but some commercial and light industrial too. In 2010, the township's Board of Commissioners entered into a closed-door re-zoning agreement with the owner of the largest contiguous tract of agricultural land in our township, about 700 acres, nearly all of which was zoned for agricultural preservation. That land is now zoned as light industrial, highway commercial, and residential.

What did the township get out of that deal?  The guarantee that the land owner, one of the largest land owners and speculators in the two-county Lehigh Valley, would withdraw his proposal to build a quarry on that land. But that quarry proposal was just a bluff. If he had built a quarry, which was allowed under the agricultural zoning, it could only have been a fraction of the size he originally proposed, because: (1) there is a major petroleum pipeline easement running directly through the tract; and (2) I doubt that he could not have gotten approval from the PA Department of Environmental Protection (PADEP) to dewater the quarry to a workable depth without completely dewatering the adjacent Little Lehigh Creek, designated by PADEP as a High Quality Cold Water Fishery.  But the board of five commissioners at that time included three Realtors. The Realtors would be getting more inventory into the local real estate market if the land was developed, so it certainly worked out for them. Let's not even start talking about how the local farm roads cannot currently handle the truck traffic from the nearby warehouses that have already been built in the area.  

A Warehouse Grows on a Farm Field
Part of 700 acres of land in Lower Macungie Township that used to
be zoned for agricultural preservation but is about to be developed
into several large warehouses. (photo credit: www.mcall.com)
Three light-industrial parcels that were subdivided from 700 acres of formerly preserved agricultural land have been sold to a developer and are going through the approvals for construction of large warehouses. These will be the first of several light industrial parcels and commercial parcels sold and developed. Eventually there will be 400 new homes as well. All of these new greenfield projects are thanks to our previous Board of Commissioners that facilitated the sweetheart rezoning deal for our local land baron, who has an industrial-scale turkey farm that he tends to when he is not planning his next greenfield development project. Over the last several decades this nominal turkey farmer, and his late father before him, made a habit of buying thousands of acres of local farmland, farming the land for a while, and then selling the land off to developers when the time seems right. At least half of the 700 acres involved in the 2010 rezoning deal had already been zoned for agricultural preservation when the land baron originally bought the land. And he has the clout to get Realtors who moonlight as local politicians to bow before him, kiss his ring, and rezone land - without even requiring him to pay to upgrade the local roads that would service the land he wants to develop. But this is all in the past now. So how do we make lemonade out of this lemon of a rezoning deal?

Plans for new warehouses on land formerly zoned for agricultural preservation
in Lower Macungie Township. (photo credit: WFMZ.com)
By the time the 700 acres of formerly preserved farmland is fully developed, the township's total share of the real estate transfer tax revenue could be as much as $600,000. So far we've already seen $120,000 come into the township coffers from this revenue stream.  Since the residents of Lower Macungie were shafted on this rezoning deal that will convert 700 acres of farmland to sprawling warehouses, strip commercial boxes, and 400 homes with kids to burden the local schools, shouldn't the proceeds from the real estate taxes be used to offset that loss of open space? All real estate tax revenue from these former 700 acres of preserved farmland should be designated for a farmland preservation lockbox and used to help to purchase development rights from other local farms.

Unfortunately, $600,000 will be a drop in the bucket to purchase enough development rights to make a difference, but it is critical that we begin with the real estate tax revenue from this poster child for poor land use decisions and use it as seed money for a deliberate and defined effort to slow down the pace of greenfield development within our community. If we can start with earmarking this real estate transfer tax, we can then have a more serious discussion about a referendum to ask voters to authorize an earned income tax to more fully fund farmland preservation in our community.  Save it or pave it.

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