Land Acquisition and the CWSRF

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Land Acquisition and the CWSRF

• Presented By
• Thomas J. Kelly, President
• NYS Environmental Facilities Corporation
• November 2003

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Governor George E. PatakiAnnounces Goal

• Over the past seven years New York State has led
  the nation in protecting crucial land and water
  resources for future generations. By expanding
  opportunities to complete these important
  projects, we will build on that progress and meet
  our goal of preserving one million acres of open
  space over the next decade. January 18, 2002
• The CWSRF will be an important part of meeting
  the Governors goal.

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NYs CWSRF Breaking Ground with Land Acquisition

• Few other states have financed land acquisition
  through CWSRF.
• EPA fact sheets promote using land acquisition to
  protect water quality. We are setting precedents
  about how to put that into action.

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Land Acquisition and the CWSRF

• Part 1 Land Acquisition Overview
• Part 2 Application Process

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Part 1 Land Acquisition Overview
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Land Acquisition Overview

• What is Land Acquisition?
• How can we finance it under the CWSRF?
• Where in NY is land acquisition important and
  why?
• Who can acquire land under the CWSRF?

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What is Land Acquisition?

• You can buy land and all the rights to it.
  Outright or fee simple purchase.
• You can buy some of the rights to the land.
  Purchase of Conservation Easements
• Must be in accordance with Article 49 of the ECL.
• Sometimes the term Purchase of Development Rights
  (PDRs) is used by communities, but it has
  various meanings and some PDRs cannot be
  financed.

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Article 49 Conservation Easements

• Engineering and legal staff will review
  conservation easement to verify water quality
  protection goals.
• Subject to EFC approval for CWSRF financing but
  EFC will not negotiate the conservation easement.

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Authority to Finance Land Acquisition

• Clean Water Act
• Section 212 land acquisition allowed only where
  the land is an integral part of the treatment
  process rare, will follow 212.
• Section 319 land acquisition to prevent water
  quality impacts from nonpoint sources.
• Section 320 land acquisition for projects
  implementing an approved estuary plan.

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319 Land Acquisition Projects

• Must protect water quality and/or prevent water
  pollution.
• Parcels must be included in a land acquisition
  plan that conforms with the NYS NPS (319) Plan
  and describes the water quality purpose for each
  parcel.

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First Non-Profit Land Acquisition Loan

• Open Space Institute receives CWSRF short-term
  loan for 6 million
• Preserves 10,000 acres in the High Peaks region
  of the Adirondack Mountains, including the
  headwaters of the Hudson River
• Protects the upper Hudson River watershed

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10,000 Acres In the Adirondack Park
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320 Land Acquisition Projects

• Must implement a recommended activity in an
  approved national estuary plan
• Long Island Sound Study
• Peconic Estuary Plan
• New York-New Jersey Harbor Estuary Program
• Parcels must be included in a land acquisition
  plan that links each parcel to the recommended
  activity.

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Long Island Sound Estuary
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Peconic Estuary
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New York New Jersey Harbor Estuary
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City of Rye Land Acquisition

• 3.1 million short-term, zero interest CWSRF loan
  
• To acquire land for the conservation and
  management of the Long Island Sound Estuary
• Finances the purchase of three properties in the
  Long Island Sound watershed

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Where and Why Land Acquisition Is Important

• Where
• Everywhere in the state for 319 Projects
• NYC Watershed.
• Nassau and Suffolk Counties, Westchester and
  Rockland Counties for 320 Estuary Projects.
• Why
• To protect groundwater and surface water from
  nonpoint sources of pollution.

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Who Can Apply?

• Municipalities
• For any CWSRF project.
• Not-for-Profits qualified under Article 49 of the
  ECL.
• For 319 and 320 land acquisition projects only.

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Part 2 Application Process
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Project Listing

• Applicant submits Land Acquisition Project
  Listing Form, Land Acquisition Plan, and Parcel
  List.
• Engineer determines eligibility.
• Engineer scores project and submits project
  information for listing on IUP.

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Determining Eligibility

• Eligibility Determination performed by Engineer
  in consultation with Technical Support Services
• Based on Land Acquisition Plan
• Parcel Listing Information
• Land Uses to be Restricted

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Eligible Land Acquisition Projects
Types of Projects
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For each parcel, the Land Acquisition Plan
identifies

• the water quality benefit (for 319 projects).
• the recommended activity of the national estuary
  plan which is supported (for 320 projects).

The land acquisition plan describes the water
quality issues, water protection needs, parcels
or areas to be acquired and why, restrictions on
use, and other information.
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What Land Acquisition Plans Can Be Used?

• Important Note Any appropriate land acquisition
  plan may be used but only parcels that protect
  water quality or prevent water pollution may be
  financed.
• County or other Local Community Preservation Plan
• Local Groundwater Management Plan
• Local Water Resources Management Plan
• Source Water Protection Plan
• The Long Island Comprehensive Special Groundwater
  Protection Area Plan
• New York City Watershed MOU

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Are All Projects or Property in Land Acquisition
Plan Eligible?

• No. Only those with documented water quality
  related needs are eligible.
• Open space for parks not eligible.
• Cultural or historical resources typically are
  not eligible.

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Environmental Review

• Municipalities same as for other CWSRF
  projects.
• Not-for-profits EFC is lead agency.
• SERP Certifications performed by DEC Regional
  staff

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Land Use Restrictions for Protection of Water
Quality

• Land Acquisition includes outright (fee simple)
  purchase and conservation easements in accordance
  with Article 49 of ECL.
• For all land acquired with CWSRF financing,
  restrictions of future land use must be imposed
  to provide for the protection, preservation and
  enjoyment of water resources in perpetuity.
• Restriction are site specific and will be
  determined on a case-by-case basis.

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Restrictions Determined by Type of Recipient

• Municipal Recipient
• Fee simple land purchase is undertaken pursuant
  to a New York State law or regulation.
• No additional restrictions other than that
  provided under relevant legislation.
• Fee simple land purchase is not undertaken
  pursuant to a New York State law or regulation.
• Restrictions imposed by CWSRF loan documents and
  water quality protection restrictions.

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Restrictions Determined by Type of Recipient

• Not for Profit Recipient
• All not-for-profit recipients will be subject to
  restrictions incorporated into CWSRF loan
  documents as well as site specific water quality
  protection restrictions.

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Fee Simple Land Purchase Intended For Conveyance
to NYS

• Recipient may have up to 5 years to secure
  conveyance to municipality or state agency.
• During this 5 year period EFC will agree not to
  file CWSRF loan documents or water quality
  protection restrictions.
• In event Recipient is unable to secure conveyance
  EFC will file CWSRF loan documents or water
  quality protection restrictions.

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Activities Allowed and Restricted

• Allowable Use
• Passive Recreation Scope and extent of such
  recreational uses shall be limited as necessary
  to ensure no significant damage to the property.
• Hiking, bird watching, fishing, canoeing or
  kayaking.

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Activities Allowed and Restricted

• Active Use
• Recipient must demonstrate active use has been
  generally permitted and will be appropriately
  managed to improve, protect or maintain water
  quality.
• Restricted Activities
• Constructed facilities
• Motorized vehicles
• Any activity not provided for in nationally
  approved estuary or land management plan.
• Any activity negatively impacting water quality
  or contrary to purpose for which property is
  protected.

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Disbursement Procedures

• Recipient must provide the following with each
  disbursement request
• Certified copy of real estate contract
• Real estate appraisal
• Necessary water quality protection restrictions
• Certification for Section 319 or 320 Project
• Disbursement Request with proper check request
• Escrow Letter

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Disbursement Procedures

• EFC Approval Process
• Legal review of real estate contract, appraisal
  and supporting documentation, including necessary
  restrictions.
• Program management to review certification (319
  or 320), real estate contract, appraisal and
  supporting documentation.
• Eligibility determination

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Disbursement Procedures

• EFC Approval Process
• Appraisal staff review of real estate appraisal
• Confirming opinion of independent appraisal, if
  
  necessary.
• Finance to approve sufficiency of disbursement
  documentation
• Disbursement Request with proper check request
• Escrow Letter
• Final Step Loan Committee Approval of
  Disbursement

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Penalties For Recipient Non -Compliance

• In the event land use restrictions are violated
• Recipient will be required to return all CWSRF
  financing received, plus a predetermined penalty
  amount.
• May forfeit ability to participate in future
  CWSRF financings.

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Credit Considerations

• Who is the Borrower?
• General Purpose Local Governments (Counties,
  Cities, Towns and Villages)
• Local Authorities
• New York State
• Not-for-Profit

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Security Requirements

• Evidence of Indebtedness
• Investment Grade Rating
• Letter of Credit
• Local Debt Service Reserve
• Third Party Guarantee

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Loan Structuring Issues

• Term
• Short Term Loans (GRID notes) up to 3 years, with
  annual conversion to Long Term for prior-year
  disbursements.
• Long Term Financing for up to 30 years (30 year
  PPU).
• Project Start and Completion
• EPA requires SRF loan repayments to begin within
  one year of project completion.
• Project Start is the first disbursement within
  the annual period.
• Project Completion is the final disbursement
  within the annual period.