11/24/2015 State Land Valuation in the ADK Forest Preserve David P. Wolff

11/24/20152David P. Wolff What I’m Going to Tell You Explain the law covering the valuation of state land Why should towns care if the state valuation is not correct Review the current components of the state’s valuation methodology Highlight impact of key assumptions on the valuation All comparisons are LAND-to-LAND only

11/24/20153David P. Wolff New York State lands in the ADK Forest Preserve are to be “valued as if privately owned” Real Property Tax Law §532(a): “The following state lands shall be subject to taxation for all purposes: All wild or forest lands owned by the state within the forest preserve.” Real Property Tax Law §542(1): “State lands subject to taxation shall be valued as if privately owned.” The Law

11/24/20154David P. Wolff There is a wide variance in the Section 532 (A) assessed value per acre of state forest land

11/24/20155David P. Wolff If the state’s valuation of shoreline increased consistent with recent marketplace gains, private owners would carry less of the assessment (and tax) load

11/24/20156David P. Wolff The value of state land is the sum of the values of A) Stumpage, B) Bare Land, and C) Shoreline Sample Parcel of State Land Forest = State Land Value ShorelineStumpage Bare Land ++ Lake

11/24/20157David P. Wolff (A) Stumpage: A function of the type, quantity, & quality of tree, ease of logging, & accessibility

11/24/20158David P. Wolff (A) Stumpage: Modern technology simplifies logging in remote steep terrain Feller BuncherSkidder LoaderHeli-logging

11/24/20159David P. Wolff (B) Bare Land: A function of the sales of vacant private land within a Market Area

11/24/201510David P. Wolff (B) Bare Land: The state’s valuation of bare land within the ADK Park varies dramatically from town to town From $850 to $1265 per acre From $475 to $900 per acre From $250 to $400 per acre From $375 to $570 per acre

11/24/201511David P. Wolff (C) State shoreline value is a function of quality and quantity of waterfront; type of lake; & accessibility

11/24/201512David P. Wolff ( C) Shoreline: The state’s valuation formula gives results that differ from a typical town’s formula Valuation of Parcel Based on Shoreline Feet State formula Assessor’s formula All feet equal

11/24/201513David P. Wolff (C) Shoreline: If applied to private land, the state’s formula undervalues the shoreline by 21% while a typical assessor’s formula undervalues state land by 44% Valuation of Parcel Based on Shoreline Feet State formula Assessor’s formula * When applied to private property on Lake Kiwassa 21% 44%

11/24/201514David P. Wolff (D) Intrinsic Value: The ADK Park is unique in many ways and the components of that uniqueness carry value to all citizens of NYS Intrinsic Value driven by: Unique mix of public and private land Unique collection of wetland types and old growth forests Unique diversity of open space and recreational lands, of wildlife and flora, and of mountains and meadows Shrinking supply of private land but increasing demand Components of Intrinsic Value: Recreational value for the public Development restrictions Creation & maintenance of Infrastructure for recreation by DEC Carbon credits/offsets thru “forever wild” policy Environmental value due to improved watershed quality and biodiversity

11/24/201515David P. Wolff (D) Intrinsic Value: Recent state/private land acquisitions have included a value for conservation easements Conservation easement valuation is evolving State pays “damages” to private land owners for development and recreation rights Constitutional protection of land has value Four recent major public/private deals in ADK Park: –Champion (104,000 acres) –International Paper (257,000 acres) –Domtar (104,000 acres) –Finch Pruyn (160,000) Value of conservation easements estimated to be: –Lyme Timber purchase = 27% –Finch Pruyn estimate up to 40% Impact: If a town’s largest land owner’s assessment increased 27% or more, how much would it benefit the other constituents?

11/24/201516David P. Wolff = State Land Value + Shoreline Intrinsic Value (Conservation Easements) Stumpage Bare Land ++ The value of state land should be the sum of the values of A) Stumpage, B) Bare Land, C) Shoreline with updated assumptions, and D) Intrinsic Value

11/24/201517David P. Wolff FAQ: Transition Assessments are temporary and occur when taxable state land bears a smaller share of local taxes than the share borne in the preceding year -7 Points Transition assessments decline over 5 years In Harrietstown: $34,000,000 loss in state assessed value in 2 years Result: Each private property owner paid on average approximately $250 more in taxes per private parcel

11/24/201518David P. Wolff New York pays 5 types of taxes and payments in lieu of taxes in the ADK Park

11/24/201519David P. Wolff Summary: State land should be valued as if privately owned and it is NOT State methodologies need to be updated –Macro results do not reflect current market reality –Macro results vary between neighboring towns –Methodologies do not reflect current technologies State & private methodologies differ: –In violation of the law –Results differ between neighboring land Intrinsic value of state land not considered in assessments of state land Decline in available private vacant land sales, especially shoreline Result: Significant and increasingly negative impact on towns