Friday, June 8, 2007

Hole in One

Whatever costs the taxpayers have borne to respond to the mess of the Balsam Mountain Preserve golf course dam break...are a pittance compared to the corporate welfare that allowed the developers to take a $20 million dollar tax write-off on the $10 million dollar purchase of the land. Yes, you read that correctly.

Conservation Easements: Developers Find Payoff in Preservation, a Washington Post article of December 21, 2003 contained this interesting tidbit:

In the Great Smoky Mountains near Asheville, N.C., investors two years ago bought 4,400 acres, placed an easement on 3,000 acres and then began developing 350 home sites and an 18-hole golf course on the remaining property.

A master plan for the development, called the Balsam Mountain Preserve, shows that the easement area is broken up by the fairways and home sites, which spot the land like mushrooms on a pizza.

(See BMP site map.)

Investors paid about $10 million for the land and shared in a tax write-off "in the $20 million range," said James A. Anthony, a partner in the South Carolina development firm of Chaffin/Light Associates.

The deduction was based, in part, on an appraiser's assessment of how much the land would have been worth had they filled the acreage with 1,400 homes, Anthony said.

Far from a liability, the easement has become a marketing tool. Sales literature describes the subdivision as "a community within a park" and the undeveloped portions as maintained "for the quiet enjoyment of members."

Anthony said: "It does add value to the remaining land. Kind of like a limited-edition print -- the fewer you have, the more the value." Appraisers factored any appreciation into their calculations of the tax benefit due the investors, Anthony said.

The firm is considering placing an easement directly on the golf course once it is completed, he added.

For more on BMP financing:

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