On August 16th, I was among the attendees at a presentation by “Rit” Schartner at the former Bald Hill Nursuries headquarters at which Mr. Schartner passed out a three-page timeline fact sheet describing the financial dilemma he and his family find themselves in.
Their problems began with the August 2005 purchase for $7.4 million of the 140-acre Bald Hill Nursery property on the corner of Routes 2 and 102. One hundred twenty acres of the site lie in Exeter.
The lender, Farm Credit Administration (FCA), required additional collateral in the form of a mortgage on all the Schartner Farms properties on South County Trail (Route 2) including their well-known, locally popular farm stand, pumpkin patch and strawberry and blueberry fields. FCA is a government secured entity similar to Fannie Mae except that it makes loans directly to assist farmers.
In December 2008 an agreement was entered into with the State of Rhode Island, the towns of North Kingstown and Exeter and Southland Communications, Inc., a private contributor, that created an “Agricultural Conservation Model” developed by the Schartners in 2001. This included the sale of the development rights to the 120 acres in Exeter for $5.250 million.
The state Agricultural Land Preservation Commission put $1 million from a bond issue into the deal; North Kingstown ponied up $750,000; Exeter $500,000; and Southland the remaining $3 million.
Southland Communications is a Providence-based investment firm. Their contribution was contingent upon a favorable opinion that it was “fully deductible for tax purposes”.
These development rights did not include the commercially-desirable 20 acres on the corner of Ten Rod Road and South County Trail although the state, the towns and Southland were given the right of first refusal to purchase the development rights on this parcel should Schartner receive an arms-length offer from a third party buyer.
Schartner agreed to wait two years before selling the corner acreage to give the towns a chance to enact a Transferable Development Rights ordinance. In concept, what TDRs do is preserve an area that is deemed worthy of protection while allowing the owner of that property to sell them to a developer in another part of town to enhance, say, a commercial property.
For example, a developer wants to build a 10-unit subdivision in a zone that will only allow eight. The municipality, state or government agency acting as the intermediary in the transaction informs him that farmer MacDonald holds TDRs that will allow him to build an additional two units on the site. The developer then buys the TDRs from old MacDonald at a negotiated price.
One can argue that this is a form of social engineering that obviates local zoning and building codes and a municipality’s master plan.
Mr. Schartner alleges that North Kingstown “made fundamental mistakes in drafting the ordinance for the Post Road corridor” thereby making his TDRs worthless. He says the market for TDRs was over before it began, notwithstanding that the state and other towns want to see them work.
North Kingstown town manager Mike Embury disputes this allegation, noting that he put two developers in contact with Rit Schartner who came away saying the farmer had an unrealistic price in mind for his TDRs.
I share this with you on background for now the story becomes more complicated.
There is an abandoned picnic grove on Route 102 that lies on the state right of way but which fronts Schartner’s property and through which they need access to the Bald Hill Nursery parcel. In 2006, they deposited $750 with the state properties commission for a conservation easement on the grove.
The 2008 contract provides that the grove “shall remain in current public ownership and use, and will not be compromised or altered”. The buyers of the development rights agreed that they would not object to a conservation agreement satisfactory to them and approved by the state.
In March 2006, the state granted Schartner permission to put a driveway through the grove on the Exeter frontage which he did. In February 2009, North Kingstown approved a Physical Alteration Permit (“PAP”) to put in a driveway which he did. But in October 2010, Exeter sued the Schartners, probably on the basis of the provision in the December 2008 contract. Schartner has countersued.
In late 2010, the $750 good faith deposit was returned to Schartner when then-governor Carcieri ordered DOT to turn control of the abandoned grove over to DEM. The Agricultural Land Preservation Commission is an agency of DEM which still holds an option to purchase the development rights to the 20-acre parcel.
Last December, Exeter passed a TDR ordinance that applies only to the half of the 20 acre parcel that lies in that town and transferred its TDRs to North Kingstown to be used in the Post Road Corridor. Schartner complained to the NK town council that he cannot sell even the TDRs he holds to any developer in the corridor. The council voted to accept Exeter’s TDRs.
I grew up in the tobacco valley of Connecticut and went to work on a farm when I was 14. I understand the farmer’s attachment to the land and desire to pass it down to his children. By the way, the average age of a farmer in this country is 55.
Farming is hard work and at the mercy of the weather, which is beyond your control. It is also one of the most dangerous occupations because of the machinery used and chemicals and insecticides required to farm productively.
All too often, the farmer’s kids don’t want to work the long hours in all kinds of weather and will jump at a developer’s offer accompanied by a check with six zeros on the end. Once the land is lost to farming, it is gone forever.
Rit Schartner developed an agricultural conservation model by which he thought he could pass on his land to succeeding generations that has the flexibility to allow them to adapt to changing market conditions while keeping the essence of the farm intact.
Unfortunately, he ran into an entrenched bureaucracy that has placed all its chips on the competing open space concept. It takes a lot of time for political maneuvering and a pile of money for lawyers, engineers and, oh yes, campaign contributions to break down such a barrier.
Rit Schartner as a working farmer who has overextended himself financially has neither.
What I do know is “for sale” signs for half-acre lots have gone up on 200 acres of prime farmland. When those houses are built can you spell bond issue for a new school in Slocum?
Good luck in New Hampshire, Rit.
Richard August is a North Kingstown resident and a regular contributor to the Standard Times. His opinions are his own. He can be reached at email@example.com .