Land Acquisition and the CWSRF

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					Land Acquisition
   and the CWSRF

              Presented By
     Thomas J. Kelly, President
    NYS Environmental Facilities
           Corporation

           November 2003

                                   1
Governor George E. Pataki
Announces Goal
   “Over the past seven years New York State has led
    the nation in protecting crucial land and water
    resources for future generations. By expanding
    opportunities to complete these important projects,
    we will build on that progress and meet our goal of
    preserving one million acres of open space
    over the next decade.” January 18, 2002

   The CWSRF will be an important part of meeting the
    Governor’s goal.

                                                     2
NY’s CWSRF Breaking Ground
with Land Acquisition
   Few other states have financed land
    acquisition through CWSRF.

   EPA fact sheets promote using land
    acquisition to protect water quality. We
    are setting precedents about how to put
    that into action.

                                          3
Land Acquisition and the CWSRF

   Part 1: Land Acquisition Overview

   Part 2: Application Process




                                        4
Part 1:
    Land Acquisition Overview




                                5
Land Acquisition Overview
   What is Land Acquisition?
   How can we finance it under the
    CWSRF?
   Where in NY is land acquisition
    important and why?
   Who can acquire land under the
    CWSRF?

                                      6
What is Land Acquisition?
   You can buy land and all the rights to it.
    Outright or fee simple purchase.
   You can buy some of the rights to the land.
    Purchase of Conservation Easements
       Must be in accordance with Article 49 of the ECL.
       Sometimes the term Purchase of Development
        Rights (PDR’s) is used by communities, but it has
        various meanings and some PDR’s cannot be
        financed.


                                                       7
Article 49 Conservation
Easements
   Engineering and legal staff will review
    conservation easement to verify water
    quality protection goals.
   Subject to EFC approval for CWSRF
    financing but EFC will not negotiate the
    conservation easement.



                                          8
Authority to Finance
Land Acquisition
   Clean Water Act
       Section 212 – land acquisition allowed only
        where the land is an integral part of the
        treatment process – rare, will follow 212.
       Section 319 – land acquisition to prevent
        water quality impacts from nonpoint
        sources.
       Section 320 – land acquisition for projects
        implementing an approved estuary plan.

                                                 9
319 Land Acquisition Projects
   Must protect water quality and/or
    prevent water pollution.

   Parcels must be included in a “land
    acquisition plan” that conforms with the
    NYS NPS (319) Plan and describes the
    water quality purpose for each parcel.

                                         10
    First Non-Profit Land Acquisition
    Loan

   Open Space Institute receives CWSRF short-
    term loan for $6 million

   Preserves 10,000 acres in the High Peaks
    region of the Adirondack Mountains,
    including the headwaters of the Hudson
    River

   Protects the upper Hudson River watershed

                                                 11
10,000 Acres
In the Adirondack Park




                         12
320 Land Acquisition Projects
   Must implement a recommended activity in
    an approved national estuary plan:
       Long Island Sound Study
       Peconic Estuary Plan
       New York-New Jersey Harbor Estuary Program
   Parcels must be included in a “land
    acquisition plan” that links each parcel to the
    recommended activity.


                                                     13
Long Island
Sound
Estuary




              14
Peconic
Estuary




          15
New York New
Jersey Harbor
Estuary




                16
City of Rye Land Acquisition
   $3.1 million short-term, zero interest CWSRF
    loan

   To acquire land for the conservation and
    management of the Long Island Sound
    Estuary

   Finances the purchase of three properties in
    the Long Island Sound watershed

                                               17
Where and Why Land Acquisition
Is Important
   Where
       Everywhere in the state for 319 Projects
       NYC Watershed.
       Nassau and Suffolk Counties, Westchester
        and Rockland Counties for 320 Estuary
        Projects.
   Why
       To protect groundwater and surface water
        from nonpoint sources of pollution.
                                              18
Who Can Apply?
   Municipalities
       For any CWSRF project.
   Not-for-Profits qualified under Article 49
    of the ECL.
       For 319 and 320 land acquisition projects
        only.



                                                19
Part 2:
    Application Process



                          20
Project Listing
   Applicant submits Land Acquisition
    Project Listing Form, Land Acquisition
    Plan, and Parcel List.
   Engineer determines eligibility.
   Engineer scores project and submits
    project information for listing on IUP.


                                              21
Determining Eligibility
   Eligibility Determination performed by
    Engineer in consultation with Technical
    Support Services
   Based on “Land Acquisition Plan”
   Parcel Listing Information
   Land Uses to be Restricted


                                         22
 Eligible Land Acquisition Projects


Types of Projects




                                  23
For each parcel, the Land
Acquisition Plan identifies:
   the water quality benefit (for 319
    projects).
   the recommended activity of the
    national estuary plan which is
    supported (for 320 projects).
The land acquisition plan describes the water
quality issues, water protection needs, parcels or
areas to be acquired and why, restrictions on
use, and other information.

                                                     24
    What “Land Acquisition Plans”
    Can Be Used?
    Important Note: Any appropriate land acquisition
    plan may be used but only parcels that protect water
    quality or prevent water pollution may be financed.
   County or other Local Community Preservation Plan
   Local Groundwater Management Plan
   Local Water Resources Management Plan
   Source Water Protection Plan
   The Long Island Comprehensive Special
    Groundwater Protection Area Plan
   New York City Watershed MOU
                                                    25
Are All Projects or Property in
Land Acquisition Plan Eligible?

   No. Only those with documented water
    quality related needs are eligible.
   Open space for parks not eligible.
   Cultural or historical resources typically
    are not eligible.



                                            26
Environmental Review
   Municipalities – same as for other
    CWSRF projects.
   Not-for-profits – EFC is lead agency.
   SERP Certifications performed by DEC
    Regional staff




                                        27
Land Use Restrictions for
Protection of Water Quality
   Land Acquisition includes outright (fee
    simple) purchase and conservation
    easements in accordance with Article 49 of
    ECL.
   For all land acquired with CWSRF financing,
    restrictions of future land use must be
    imposed to provide for the protection,
    preservation and enjoyment of water
    resources in perpetuity.
   Restriction are site specific and will be
    determined on a case-by-case basis.

                                              28
Restrictions Determined by
Type of Recipient
Municipal Recipient
 Fee simple land purchase is undertaken
  pursuant to a New York State law or
  regulation.
       No additional restrictions other than that provided
        under relevant legislation.
   Fee simple land purchase is not undertaken
    pursuant to a New York State law or
    regulation.
       Restrictions imposed by CWSRF loan documents
        and water quality protection restrictions.

                                                        29
Restrictions Determined by
Type of Recipient
Not for Profit Recipient
 All not-for-profit recipients will be
  subject to restrictions incorporated into
  CWSRF loan documents as well as site
  specific water quality protection
  restrictions.



                                         30
Fee Simple Land Purchase
Intended For Conveyance to NYS
   Recipient may have up to 5 years to secure
    conveyance to municipality or state agency.
   During this 5 year period – EFC will agree not
    to file CWSRF loan documents or water
    quality protection restrictions.
   In event Recipient is unable to secure
    conveyance – EFC will file CWSRF loan
    documents or water quality protection
    restrictions.
                                               31
Activities Allowed and Restricted
Allowable Use
 Passive Recreation – Scope and extent
  of such recreational uses shall be
  limited as necessary to ensure no
  significant damage to the property.
 Hiking, bird watching, fishing, canoeing

  or kayaking.

                                        32
Activities Allowed and Restricted
Active Use
 Recipient must demonstrate active use has been
  generally permitted and will be appropriately
  managed to improve, protect or maintain water
  quality.
Restricted Activities
 Constructed facilities

 Motorized vehicles

 Any activity not provided for in nationally approved
  estuary or land management plan.
 Any activity negatively impacting water quality or
  contrary to purpose for which property is protected.

                                                    33
Disbursement Procedures
Recipient must provide the following with each
   disbursement request
  Certified copy of real estate contract
  Real estate appraisal
  Necessary water quality protection
   restrictions
  Certification for Section 319 or 320 Project
  Disbursement Request with proper check
   request
  Escrow Letter

                                             34
Disbursement Procedures
EFC Approval Process
 Legal review of real estate contract, appraisal
  and supporting documentation, including
  necessary restrictions.
 Program management to review certification

  (319 or 320), real estate contract, appraisal
  and supporting documentation.
     Eligibility determination


                                              35
Disbursement Procedures
EFC Approval Process
 Appraisal staff review of real estate appraisal

 Confirming opinion of independent appraisal, if
necessary.
 Finance to approve sufficiency of disbursement
documentation
        Disbursement Request with proper check request
        Escrow Letter
Final Step – Loan Committee Approval of
Disbursement


                                                          36
Penalties For Recipient
Non -Compliance
In the event land use restrictions are
violated;
 Recipient will be required to return all

CWSRF financing received, plus a
predetermined penalty amount.
 May forfeit ability to participate in

future CWSRF financings.

                                         37
Credit Considerations

  Who is the Borrower?
   • General Purpose Local

     Governments (Counties, Cities,
     Towns and Villages)
   • Local Authorities

   • New York State

   • Not-for-Profit
                                      38
Security Requirements


 Evidence of Indebtedness
   •  Investment Grade Rating
   •  Letter of Credit
   •  Local Debt Service Reserve
   •  Third Party Guarantee


                                   39
        Loan Structuring Issues

Term:
   Short Term Loans (GRID notes) up to 3 years, with annual
    conversion to Long Term for prior-year disbursements.
   Long Term Financing for up to 30 years (30 year PPU).

Project Start and Completion:
    EPA requires SRF loan repayments to begin within one year of
     project completion.
    Project Start is the first disbursement within the annual period.
    Project Completion is the final disbursement within the annual
     period.


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