Sale, easements considered for Dry Gulch Reservoir land

Should proponents succeed in developing conservation easements on land targeted for at least partial inundation, there will be no residential or commercial development adjacent to the proposed Dry Gulch Reservoir.

Effective May 12, a long-standing ranching family and two area water districts entered into an agreement with a local land trust to explore the feasibility of conservation easements on some or all of approximately 140 acres located nearly two miles northeast of Pagosa Springs. As Dry Gulch is now planned, a portion of the acreage will eventually lie beneath the waterline, while the remainder will become lakefront property.

The land in question is part of several hundred acres currently owned by the Laverty family, including Kitzel Farrah, Kurt Laverty and Steve Laverty. Entities hoping to acquire that portion of the Laverty property include the San Juan Water Conservancy District (SJWCD) and the Pagosa Area Water and Sanitation District (PAWSD), herein referred to as “the districts.”

Though the Lavertys have been reluctant to sell property to accommodate the reservoir, they are apparently willing to part with that which will ultimately be flooded, while preferably maintaining ownership of the rest. They are also reportedly inclined to donate certain property rights to the public (in the form of conservation easements), in order to preserve and protect the shoreline, view shed and water quality.

Of course, filling Dry Gulch may be possible without the Lavertys having to sell any land at all. According to Southwest Land Alliance (SLA) Executive Director Michael Whiting, many reservoirs exist over land permanently protected by more restrictive easements. Depending on the answers to a number of relative questions, the Lavertys might end up selling the districts all or a portion of the land, or simply holding on to it, while implementing multiple easements.

To answer questions and eliminate all doubt, the Lavertys, SLA and the districts agreed to investigate whether some combination of conservation easements and/or fee title acquisition would satisfy the districts needs, while also benefiting the Lavertys and the community overall.

Based on the yearlong agreement signed last week, SLA will promptly conduct the following “transactional work”:

• Submit an application for an open space (or other appropriate) grant to Great Outdoors Colorado (GOCO) in the grant round most timely to the conservation easement donation.

• Complete a full Baseline Documentation Report as required for the conservation easement donation.

• Take other reasonable and customary steps to further the conservation easement donation.

• SLA shall make its executive director reasonably available to provide updates regarding the potential conservation easement on the Laverty property to the SJWCD and PAWSD boards of directors, officers and management staff.

The agreement further stipulates that each entity shall bear its own legal costs and fees; the districts will pay SLA a nonrefundable $25,000 transaction fee; and the Lavertys will pay for an appraisal and all costs and fees subsequent to the districts’ transaction fee.

Aside from the normal legal jargon typically included in such agreements, a provision in the contract states that any party may cancel the agreement in writing, within 30 days of the desired termination date. Should the Lavertys or districts terminate the agreement, SLA will retain the full transaction fee, but if SLA terminates it, any unused portion of the transaction fee must be refunded to the districts.

Further, the Lavertys and districts agree to provide all documents and information necessary for SLA to complete the transactional work in a timely manner, while acknowledging that restrictions governing use of the land subject to the conservation easement(s) have not yet been determined. Therefore, establishing the feasibility of such easements to meet the districts needs will certainly come at a later date.

Additional terms emphasize that conservation easement transactions aren’t always successful, and SLA has no control over whether GOCO will approve a grant application or not. Nevertheless, SLA believes GOCO will look favorably upon any such agreement that specifies full public shoreline access through an assured trail corridor.

Once SLA’s work is complete, the districts may seek purchase of the entire 140 acres, or just the land to be inundated. Should they purchase just the inundated portion, the Lavertys would likely donate development rights (to the public) on the remaining acreage.

According to PAWSD officials, either arrangement would be reasonably consistent with any restrictions included in the terms of a 2008 Colorado Water Conservation Board (CWCB) loan granted the districts for land acquisition. The former would provide the Lavertys with significant compensation, while the latter would preserve their ownership of a portion of the land, and provide real tax benefits for the donation.

Of course, depending on circumstances including the CWCB loan terms, the districts may not have to purchase any of the 140 acres, relying instead on the Lavertys to donate easements on the entire parcel. Should that be practical, any GOCO money would offset some easement costs, while the districts would assume responsibility for the balance.

If all goes according to plan, SLA will complete necessary easements by the end of this year. Almost certainly, the final version will provide the Lavertys with compensation and/or valuable tax incentives, while the districts will obtain additional land necessary for the reservoir.

The community, on the other hand, will ultimately enjoy a secure water supply well into the future, while gaining an elaborate recreational facility close to town. In fact, current discussions include adding such amenities as a public lake trail, picnic and camping areas, non-motorized boat launches and a disabled- and elderly-accessible fishing dock.

Whatever the final reservoir configuration, Whiting believes conservation easements will benefit all, by protecting environmental values in perpetuity.