FOR IMMEDIATE RELEASE

Key property near Mt. Rainer protected in first complete investment fund transaction

CLC fund completes first investment cycle

The Cascade Land Conservancy has completed its first “round trip” transaction using the Conservation Investment Fund, a privately placed fund designed to provide investors with a modest return while enabling the Conservancy to conserve land.

The fund, launched in 2004, totals nearly $4 million from about a dozen investors. The fund is designed to allow the Conservancy to act quickly to purchase or control land to be conserved while a more permanent solution is worked out.  Property can be held for a maximum of two years.

Last year, $1.9 million from the fund was used to purchase and hold the 203-acre Marsh farm in the Carbon River Valley in Pierce County near Mount Rainier National Park. The land was considered key to the preservation efforts underway in the valley in support of a major expansion of the park.

Earlier this month, Pierce County Conservation Futures, a county bond fund for land conservation, purchased the Marsh farm from the Conservancy for $2.1 million, completing the fund’s investment cycle.  The money from the Marsh sale will be rolled back  into the fund for future acquisitions.

The land eventually will be sold or exchanged into public ownership by the federal government for inclusion in the national park.

“Pierce County Conservation Futures really stepped up to the plate on this property,” said Ryan Dicks, Vice President of Conservation for the Cascade Land Conservancy.  “They have ensured that a new Carbon River entrance to Mount Rainier Park will become a reality.”

The fund is one of the few in the country using this kind of financing to achieve conservation.

Russell Shay, Director of Public Policy for the Land Trust Alliance, the Washington, D.C.-based organization that represents land trusts said that such funds  have been “discussed by a lot of people, but very few have been able to make it work,”

Here’s the background on the transaction:

The CLC bought the property in late 2004.  Under the terms of the sales agreement, a down payment was made by the CLC, and the sale was slated to close by September 30, 2005. The CLC paid $1.9 million for the property, taking the risk of holding it until federal or local funding was secured.

Enter the Conservation Investment Fund, LLC, or “CIF.”

The Conservation Investment Fund was formed in early 2004 by the Conservancy to respond rapidly to conservation acquisitions identified by the CLC.  While the CLC has a strong balance sheet and assets, it does not have the financial resources to respond to several acquisition opportunities at the same time.  The fund, however, can move quickly when necessary.  It is one of the first of its kind, linking traditional investment goals with conservation.

CIF also provides community-minded investors the opportunity to purchase interests in the fund and see their funds work to conserve precious land in the King, Kittitas, Pierce and Snohomish County areas served by the Conservancy.

Last September, when it came time to close the transaction, the investment fund was used for the payment to the Marsh family.

“This was the first of many transactions,” said Gene Duvernoy, president of the Cascade Land Conservancy.  “Often we must acquire property immediately to remove the risk of development. The investment fund provided us with the inexpensive capital we needed to move quickly.”

Duvernoy also said the CIF is one of the tools envisioned as part of The Cascade Agenda, a visionary 100-year program to conserve more than 1.25 million acres of critical lands in the four-county area served by the CLC.  The fund is one of the sophisticated financing tools that will help make The Cascade Agenda a reality.

“The Cascade Agenda is not so much about funding as it is about financing,” Duvernoy said.   “The Conservation Investment Fund plays a very powerful role in promoting the goals of The Cascade Agenda.”

Near the town of Carbonado, Pierce County, the 200-acre Marsh family property is bordered by the Carbon River and the northwest boundary of the park.  It will be the site for the new northwest entrance to the park, replacing an existing road frequently washed out by floodwaters from the Carbon River.  Along with providing park visitors improved access, the new entrance will reduce the cost of road repairs for taxpayers.  A new campsite is also expected to be built near the entrance.

The Marsh family, which owns the property, said it “was pleased to know that their much loved property will be preserved in its natural state as part of the Mount Rainier National Park.  Our parents’ vision of having their property incorporated into the national park is now being realized.  This special place will be preserved for generations to enjoy as we have for the last 45 years.”

The CIF has attracted about a dozen investors so far, providing a total of nearly $4 million for conservation projects.  The fund also has an investment in Kittitas County.

The complete investment cycle for the Marsh property puts $2.1 million back into the fund for other pending projects.

The fund can bypass traditional financing sources that may often be more expensive or time-consuming to obtain.

Traditional commercial bank loans can take 30-90 days to assemble, require extensive paperwork, loan fees and costly interest, set at a high rate. The loan also often will only allow an 80% loan-to-value ratio.  This problem will worsen as land values in the region continue to escalate.

The Conservation Investment Fund’s ability to provide temporary conservation financing solves the timing and cost impediments of traditional commercial financing and furthers CLC’s goals by securing multiple rapid response conservation properties that would otherwise be converted and lost to conservation or would require purchase at a higher cost from an intermediate buyer.

CIF is a limited liability corporation with the CLC acting as managing member of the fund.  Under the CIF’s governing documents, the fund can hold property for no longer than two years. An exit strategy must be in place.

The Cascade Land Conservancy has successfully conserved over 120,000 acres in the last decade.  From this solid foundation the CLC has launched a concerted effort to conserve our region’s most critical landscapes.  Currently, the organization is negotiating to conserve over 200,000 acres of properties vital to our region’s ecosystems, communities and economy.  Not surprisingly, many of these lands also are among the most threatened for conversion to developed property in our region.

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