About 200 acres of land surrounding its Ozark Southern Stone property in Elk Ranch have been put into a permanent conservation easement donated to the Atlantic Coast Conservancy (ACC). Matt Mills, owner of Legacy Mining Company LLC based in Dexter, Mo., which owns and manages the quarry in Elk Ranch, said they worked with Dr. Robert Keller of the Atlantic Coastal Conservancy to preserve the acreage around the quarry to ensure there would not be development in the future.
“Please take a look at our website and you will see that we spend a lot of time on renewable energy, affordable housing and historic preservation,” Mills, who is also a principal with the equity investment firm Sixty West that is offering sales to investors interested in tax benefits from investing in Opportunity Zones, wrote. “We do have a couple of mining operations, but we’ve personally conserved over 2,000 acres of land in Missouri, Arkansas and Louisiana. This represents more than 20 times the amount of acres we have mined.”
Legacy Mining Company is the management company for both Ozark Southern Stone and about 600 acres of land off Rockhouse Road near Keels Creek and Winona where exploratory drilling activities are being conducted to determine if the property has adequate reserves for a rock quarry. The property has been divided into three LLCs: Keels Creek Property LLC, Shady Grove Property LLC and Trigger Gap Property LLC.
Residents questioned why Atlantic Coastal Conservancy was used for the land adjoining the Ozark Southern Stone property instead of local certified land trusts. Keller was quoted in an article co-published by ProPublica and Fortune magazine in December 2017 titled: “The Billion-Dollar Loophole, the most generous charitable deduction in the federal tax code is being manipulated to make big profits – and there’s no sign that Congress has any intention of fixing the problem.”
Printed in the article, “The idea seems like the perfect marriage of environmentalism and capitalism: Landowners give up their right to develop a piece of property, and in exchange they receive a special tax deduction. Nature is preserved and everybody benefits. … A growing number of recent easement donations, however, are driven by a more commercial reward – an outsized tax deduction for wealthy investors. Known as “syndications” (or “syndicated partnerships,” since they’re typically offered in that structure), they’re deals orchestrated by middlemen with the goal of big payoffs for all participants, many of whom have never visited the land in question.”
The article said Donald Trump has generated more than $100 million in tax write-offs from five conservation easements. But the article said Trump’s deductions are relatively tame compared to the aggressive strategies employed by others in recent years.
“People have accomplished that by exploiting a giant loophole: The size of the tax deduction is based on a claim about how much the land’s value is diminished by the promise not to develop it,” Elkin’s story said. “By law, that estimate is delivered by an appraiser hired by the taxpayer. The appraiser is free to assert that the donated land is actually worth many times what investors paid for it, often just months earlier. That, in turn, inflates the deduction. The process is abetted by law firms, brokers and accountants who pocket millions in fees.”
…“Most prominent among the renegade land-trust leaders: Robert Keller, a brash conservation biologist in Georgia who has built an empire through syndicated easements.”
Contacted by telephone Monday, Keller, who has a Ph.D. in conservation biology from Wake Forest University, told the Eureka Springs Independent that the ProPublica/Fortune article was not well balanced and that he objected to being called “brash.” He said the appraisals for property donated to the Atlantic Coast Conservancy are fair when taking into account the subsurface values. In the case of the land surrounding Ozark Southern Stone, this would include subsurface assets such as limestone or other assets.
“To ultimately stop mining is great for conservation,” Keller said. “This is a wonderful tool for conservation biology. By accepting this conservation easement, I’ve stopped the mining.”
Keller objected to this type of conservation being called syndicated easements, which he said is a pejorative term. He said it is more correct to call them investor-based easements.
“It is not cheating,” he said. “It is not unfair. It is an honorable thing to do.”
In December, five Notice of Intent to Quarry were issued by the Arkansas Department of Environmental Quality for about 200 acres surrounding the Ozark Southern Stone property that is now owned by five LLCs: Variegated Properties LLC, Dense Stone Quarry LLC, Emerald Land Holding Quarry LLC, Ozark Land Holdings Quarry LLC and Caz Property Quarry LLC, according to Carroll County property tax records.
Asked why the owners would apply for those permits if they were not planning to expand the quarry, Keller said to proceed with either mining or a conservation easement, the value of subsurface assets needs to be established.
“You have to establish the highest and best use of the land in order to obtain an appraisal,” Keller said. “You have to take into consideration that you give up all rights when you go into a conservation easement. You are not just giving up surface rights, but rights to any subsurface assets.”
Keller said he is proud of the many acres of land that he has helped preserve.
“I’m conserving as much as I can,” he said. “And what a neat place Eureka Springs is. What a great place to conserve land forever.”
Keller also took issue with the ProPublica/Fortune article’s depiction of appraisers giving unrealistically high appraisals. Keller said as a conservation organization, they are not involved in the appraisals, but instead leave that to the experts.
“Appraisers are honorable people,” Keller said. “An appraiser can go to jail for a false appraisal. And often people don’t consider subsurface value when considering the total appraised value of a property.”
Keller said the Atlantic Coast Conservancy has conserved more than 125,000 acres across 13 states.
“With too much CO2 (carbon dioxide) in our environment, we have to do something to mitigate that,” he said. “Conserving land and letting trees grow is a good way to attenuate the effects of too much CO2 in the environment. If the appraised value is fair – and these people go to great lengths to make sure it is fair – would you rather have a mine there or have it properly conserved?”