Supervisors approve PACE purchases

The next steps in the county of San Diego’s Purchase of Agricultural Conservation Easement (PACE) program were taken Aug. 6 when the San Diego County Board of Supervisors voted 5-0 to set a Sept. 17 hearing date to acquire easements from eight property ownerships, to direct the county’s chief administrative officer to implement a mitigation program as part of the PACE program, and to refer to the 2015-16 budget process $5.5 million for purchases during the next round of the program.

“I see this as another big success for agriculture,” said Supervisor Dianne Jacob.

“It’s going to help us preserve some agricultural land out there,” said Supervisor Dave Roberts.

The easement purchases expected to be approved Sept. 17 include 19.14 acres of a Bonsall parcel owned by Bagher and Ginger Bahardar; the county will pay $190,000 for the agricultural conservation easement along with processing costs. The easements to be purchased also include three in Valley Center (one of which involves two legal parcels), two in Jamul, one in Campo, and one in the Crest-Dehesa area. A Bonsall property owner declined the county’s $75,000 offer for a conservation easement over five acres, and available funding was exhausted before a six-acre Fallbrook easement on the priority list could be appraised.

“The PACE program is a good program. It is an opportunity for some of the farmers who were downzoned during the general plan update to recoup some of their lost property value while preserving agricultural lands,” said Supervisor Bill Horn.

In August 2011, the Board of Supervisors approved an update of the county’s general plan. The update directed county staff to develop a pilot Purchase of Agricultural Conservation Easement program to compensate willing property owners for placing an agricultural easement on their property which would limit future uses and eliminate future development.

The resulting PACE program includes three eligibility requirements: the property must have been actively farmed or ranched for at least two years prior to the application, the general plan update must have reduced the property’s density, and the property must have had the ability to be subdivided prior to the general plan update.

Between 500 and 600 property owners expressed interest in taking part of the program, and 60 property owners submitted applications for the pilot program. The applications were ranked on criteria established by the PACE advisory group. The primary ranking factor was the density reduction due to the general plan update, and other ranking criteria included agricultural viability and the ability to contribute to the assemblage of the Multiple Species Conservation Program.

The pilot program included a $2 million allocation covering $212,000 for independent third-party appraisals and $15,000 for title and escrow expenses as well as funding to purchase the easements. The appraisal which determined the value of the agricultural easements used the California Farmland Conservancy Program traditional approach which estimates the market value of the land if unencumbered and the market value of the land with the conservation easement and then determines the easement value by subtracting the encumbered appraisal value from the value of the unencumbered property.

The 10 properties with the highest ranking were appraised during the pilot program. The property owners ranked second and fifth declined the easement offer while the owners of five properties totaling 10 legal parcels provided “willing seller letters,” including two Fallbrook ownerships with a combined 138.17 acres. The acceptance of those five property owners exhausted the available funding, so offers were not made for the remaining ranked properties and appraisals were not made for the properties not ranked in the top 10.

In July 2013, the Board of Supervisors approved the purchase of the five properties totaling 738 acres for a cumulative purchase price of $1,694,000.

The 2013-14 budget process allocated $620,000 to complete the purchase of the 10 ranked properties; two of the owners declined the easement offers while the owner of a 44-acre parcel in Lakeside accepted the easement purchase agreement. The remaining $560,000 was added to the $94,000 from the original $2 million funding to cover future purchases.

On Dec. 4, the Board of Supervisors directed staff to work on acquiring easements from the 16 properties not funded during the pilot program while referring the acquisition costs of those properties to the 2014-15 budget process. That Board of Supervisors action also directed preparation of a mitigation program as an expanded component of the PACE program and directed to the budget process annual expenditures which would cover placing additional properties into the PACE program.

The mitigation program, which was to be created separately from the budget process, will allow applicants to purchase PACE credits for off-site mitigation to agricultural impacts. The mitigation program may be a source of funding for the PACE acquisitions.

“Including the mitigation component to the program is a huge benefit to both the development and agriculture industries,” Horn said.

“I really like this mitigation component,” Dave Roberts said.

The expected mitigation program will include a cost of $3,827 per acre to purchase mitigation bank credits, including $3,189 per acre for the purchase itself along with processing costs.