Green Changes Hands
Sprawling Sun Ranch Sold To Mining Exec
The Madison Valley ranch, a haven of conservation and sustainability, gets a new owner.By Amy Linn, 2-02-10
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The spectacular 18,500-acre Sun Ranch in Madison Valley, a showcase for eco-friendly real estate development, has been bought by the CEO of a multinational mining company, the Bozeman Chronicle reports.
The Montana ranch, a blend of conservation, development and sustainability, was put on the market last spring by owner Roger Lang for $55 million. The list price as of last Friday had dropped to $42 million.
In an interview last April, Lang told New West he decided to sell the property to free up capital for his ongoing ranch conservation efforts in Montana and elsewhere in the West.
“Ninety-eight percent of Sun Ranch is protected by conservation easements,” said Lang, who made his fortune in the tech business before turning his attention to conservation. “The business plan was to sell eight to 10 home sites. But we decided that rather than battle the recession and make the business plan work, we’d take some capital off the table and put it to work buying other ranches.
“These next 3-4 years are critical from a conservation perspective,” Lang added, noting that the economic downturn was making property cheaper and slowing the pace of development.
According to Bozeman Chronicle reporter Daniel Person, Lang’s property was purchased on Friday by Sun Ranch Partners, managed by Richard C. Adkerson, the CEO of Freeport-McMoRan Copper & Gold, one of the world’s leading producers of gold and low-cost copper. Adkerson, 62, is rated by Forbes magazine as one of the nation’s highest paid executives, making $38.6 million in compensation last year.
Adkerson’s newly-purchased property near Yellowstone National Park is described by the real estate listing as “an awe-inspiring masterpiece of nature representing one of the last remaining balanced ecosystems in North America.” Elk, moose, grizzly and black bear, mule and whitetail deer, mountain goats, big horn sheep, wolverines, mountain lions, and pronghorn antelope roam the landscape. The Madison River feeds three creeks on the ranch, the former home of actor Steven Seagal.
Lang, who bought the property from Seagal in 1998, protected the majority of it with conservation easements that stay in place no matter who owns it. Lang told New West he would not have sold Sun Ranch now if the easements had not been in place.
Last year Lang purchased the 7,000-acre Schroeder Ranch south of Missoula, near the site of the proposed Bitterroot Resort. That tract is now being restored and a development plan created which also calls for conservation easements and sale of a limited number of home sites.
Even in the recession, well-heeled home buyers are looking for quality-of-life landscapes: places where they can see wildlife, go fishing and skiing, and play outdoors, as Lang told a New West conference last year. “Wealthy, high-end home-buyers subsidize wildlife conservation.”
An irony that can’t escape mention: gold and copper mining can be some of the most environmentally unfriendly endeavors in the world. Adkerson’s company is not complaint-free. In 2006, BusinessWeek noted that an influential environmental group in Indonesia accused one of Freeport’s local operating companies of improperly dumping more than 1 billion tons of residue in local waterways, among other charges. Adkerson denied the claim and told BusinessWeek that Freeport’s practices were responsible and lawful.
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Comments
So, he took a bath. So have a lot of others.
He also took a lot of money from others who got nothing in return. Or at least that was his plan, to score millions in federal funds and writeoffs for something he wanted to do anyway.
I don't "hate the wealthy" but the fact remains that Lang's scheme was based on money from the not-so-wealthy. He gets the credits and cash, and everyone else has to ante up.
Scam. Glad it's over for now.
Since you were so civil, I'll try to answer.
To begin with, conservation easements have support because they are for a "good cause" and furthermore, because so few people have any understanding of economics, or any comprehension of the concept of political economics, gaining a concentrated benefit while the costs are dispersed. You know, the zillion dollar check for the local highway for which everyone in America pays two bits. The threshold for individual response to being robbed two bits at a time versus the huzzahs and hosannas for Senator Foghorne. This phenomenon is why the federal deficit is so monstrous and growing.
You might be interested to know that CE's originated in the 1970s because the land trusts, mainly TNC, realized they would never be able to buy everything they wanted to "save" by relying on the actual willingness to pay of their dedicated members.
I have no objection whatsoever to TNC buying up everything it can, paying taxes on it and managing it for their goals. If they can't afford to do what they want, why in heck is it OUR job to pay for their stuff, to support things most important to THEM when I would rather spend my own money on causes important to me, or "social goods" I happen to find more pressing?
Here's the deal. Sun Ranch had an appraisal of 29 mil. Then the Montana Congs earmarked 4.4 million from LWCF to buy an easement on 10,000 acres, plus another million or so from Wally Mart. The rest of the value is "donated" which entitles the donee to write against their asset base for 15 years. That's a pretty big tax credit for someone like Mr. Lang.
There's also the subsequent donation of 3.9 million, the same month of the earmark transaction, to the Sun Ranch Fund, a "nonprofit." So all that money also goes to credit against Lang's asset base and tax liabilities. You and I and our grandkids and everyone else in America are subsidizing Lang's hobby.
At the same time the public bought this, the lot buyers and Lodge customers, 300 a night double occ, retain exclusive access to the ranch. You don't get to admire up close, only afar.
Don't forget, if Lang could have sold all his lots, at 5 to 8 mil a pop, to clients looking for "stress free ranch ownership" the whole game is paid for. The CE cash is just a spiff, a whacking BIG spiff, that further locks in his potential clients so they will never subdivide.
It's an amazingly clever package, stunning in its audacity.
Now, are you ready for the irony? D'ya think he could offer those uber trophy lots at that price while still leaving a subdivision option open? Heck no, it would happen anyway in the association covenants, or he would have NO buyers. Period. But, if you can hook in a few million of other people's money to flip toward perpetuating the model, for something you would do anyway, why not?
I'm sorry, but that's just shameless, a return of nothing for millions that could be applied elsewhere, and I think it is wrong to subsidize such schemes.
I challenge you to name one benefit deriving to the public in return for those LWCF millions and all those tax credits.
I challenge you to name one positive part of the outcome that would be any different without the money.
But of course, you remain nameless, right?
2)An economy remains intact. The Madison Valley isn't as prone to the boom and bust real estate cycle when there is only limited land to develop.
3)A culture remains intact. Ranching can continue, and locals in the valley aren't pushed out by ever increasing costs of living and lack of decent jobs.
One positive part of the outcome that would be any different without the money? In my opinion, all three of the above. Without the money the land may very well have been left open for development, and all would be very, very different.
Economy? The boom came, and Lang busted, for crying out loud.
Culture? The culture USED to be ranching and cows run by real people who made their actual living from growing cows on ground they bought at a price low enough that growing cows paid the mortgage and taxes and overhead.
The cows on the Sun are not paying the freight. They're just a backdrop. The CULTURE is already deader than a doornail.
Of course, if the USFS or other agency had acquired the land, I imagine you'd whining about "federal land grabs" and "incompetent bureaucratic management."
So, the public put up some money to keep the ranch from being developed. The Langs had already donated an easement (TNC) on a sizeable portion of the ranch (along with a virtual giveaway of water rights to Trout Unlimited, boosting flows in the Madison River). They've been amazingly generous to the local community and the natural world. But that doesn't count for much with people like you, I'm sure.
Leaving aside other acts of generosity, I guess your problem with the second easement on the Ranch is that you don't agree that the public got anything of value out of it. I disagree.
If the Langs had decided to do even a modest amount of lower-end residential development during the housing boom, conservatively, they could have made upwards of $20 million (50 lots at 400K per wouldn't have been out of the question, if you've spent any time in the Madison Valley and know what the Sun Ranch has to offer for scenery, seclusion, wildlife, and recreation). Fifty residences there would have been a disaster for wildlife, and wouldn't have been a great thing for water, local infrastructure, agriculture, and emergency services, either.
So, for a fraction of what developing the ranch could have generated, the public avoids those negative outcomes. If the public wants land preservation and biodiversity conservation AND to have picnics and gopher shoots there too, then the public needs to pay for fee simple acquisition.
Again, I think we just disagree as to whether the public got anything of value from putting up money for that easement. I am sure that we could find many public expenditures that I feel are worthless and you think are worthwhile.
The thing we call the Sun Ranch has never been an owner-operated ranch. It is now on its fifth wealthy owner. It was put together out of failed homesteads, which failed because the upper Madison Valley is a dang hard place to live off the land at anything more than a subsistence level. The upper Madison is a pretty place with about six inches of topsoil over a several hundred feet of cobblestones. You can't winter cows there. If you're mad that it's more valued for scenery than for its ability to grow beef, then the intermountain West is going to keep you grumpy for a long, long time.
I won't even dignify your "real people" b.s. Seems pretty arrogant for you (or anyone) to be making pronouncements about who's "real," who counts.
Culture? You've got a lot of learning to do. Where are you from anyway? Ranching has always been a rich endeavor in this state. The Madison especially. A hundred years ago one practically had to be a millionaire to piece together enough 160 acre busted homesteads to get a viable operation going in the valley. A working ranch is a working ranch, no matter who the owner is. Ask any cowboy, and then tell them that their culture is dead as a doornail.
Never mind the 18 part Washington Post series on all the sweetheart deals made on trophy properties with comparatively little conservation or preservation value, and the RE agencies are perfectly willing to use that as a pitch point. Fay Ranches has the tax dodges right there on their site, matter of fact.
So there's a price prop there provided by the public for the trophy buyer, which helps put the land price into uttter orbit, therefore turning the ranch culture into a hobby sideshow rather than a self-supporting proposition. And DON'T go into the grazing lease issue...I'm referring to ranches and ranch buddies of mine who scruff and scrabble on deeded ground, and it's a tough go, but it IS a go.
These are all pretty smart people, many with college degrees, who are fully cognizant of the macro and micro economics that drive their operations. They are, like Nameless implies, the survivors, who picked up the busted homesteads and kept their eyes on the prize. It didn't happen overnight, with bucketsful of money made elsewhere like in the case of Seagal and his "successors."
And Jim, yer wrong. Montana is never going to look like Reserve, except on Reserve. Get away from the Hollywood amenity drainages
and Montana still looks, smells, feels and ACTS like Montana. Try taking a left up the Shields either go straight, or make at least one right turn, then let yourself wander.
Lang's deal is a ripoff of the many for the few -- so I guess this is a case of the beneficiaries defending the gravy they like. Par for the course.
I'll say it again: the Sun Ranch has always been owned by wealthy out-of-staters. It has a lot of stuff that type of buyer wants: seclusion, wildlife, stunning views. It doesn't have what a by-the-bootstraps cattleman wants: productivity. Most of the Sun Ranch is above 6,000' above sea level, with some of it above 9,000'.
In the case of the Sun Ranch (which is what we're talking about here, not dodgy easements somewhere profiled in the Washington Post series you reference), rich people put the ranch together long before the 1976 Tax Reform Act created a tax break for donating an easement. Other rich people bought it and sold it without ever availing themselves of easements -- so it seems that easements aren't really driving the selling price of the Sun Ranch. Even if a "real rancher" (owner-operator trying to pay off the land with beef) would want to own such marginal range.
Mr. Skinner, I'm glad you have some ranching buddies. If you really want to be of use to them, maybe you should focus less on making them out to be victims (of wolves, of brucellosis, of Roger Lang), and more on creative ways to be profitable and competitive in today's ag market. Get them all a subscription to Stockman Grass Farmer; sponsor Jim Gerrish to come up from Idaho for a grazing seminar.
Seeing oneself as a victim is disempowering and keeps people from taking responsibility for their destiny. If ranchers want to blame Ted Turner, Roger Lang, Buffalo Field Campaign, and Defenders of Wildlife for their predicaments, I doubt they'll find many points of leverage or ways to adapt.
I think National Cattleman's Beef Association (which doesn't support Country of Origin Labeling and is all for flooding our supermarkets with imported beef) benefits from keeping ranchers distracted with bogeymen, while NCBA, midwest feeders, and packers (monopolists who use the power of the USDA to squash competition and prevent adequate food safety inspections) profit handsomely from the status quo. Your friends and my friends who try to make a living off a cowherd are at the mercy of these oligarchs.
The groups you name are simply vultures feeding on the corpus. Were they not in the pool of hazards, then perhaps the focus could shift to the concentration issue, right?
As for Sun Ranch...why was it necessary to "conserve" it with public funds if, as you say, it was assembled by the richies WAY before the Tax Reform Act and those goodies -- AND the Nature Conservancy?
This is about people on the public gouge, all in the name of "conservation." A scam.
Ryan, sure you are subsidized. Actually, you are getting a transfer payment and it is the processors making the money...and I suppose paying whatever taxes they can't dodge.
The food security issue is real, however. And Congress is too collectively stupid in its present makeup to reform the system so that producers could be directly paid what their production is worth.
High Wide? J.K. Howard...pretty much a populist historian. He laid the path for K.R. Toole, (Land) Ken's dad and we all know Ken's politics.
I find it somewhat ironic that you would bring up anticorporate tomes as an exemplar. Corporations on the gouge are nothing new, a fact of life. Yet you choose to ignore the reality that Lang's existence here is as a corporate entity, as is the involvement of the land trusts. Just like good old ACM, NP, BN, et cetera, Lang is on the gouge for his own advancement -- or was.
And how about the corporate rape now being conducted under the holy name of "conservation" in the form of the Montana Legacy Project? Oh, but that's sacred? C'mon, answer me that.
Bottom line is, the wealthy can do anything they want, but it would be nice if they did all those "good things" as good "philanthropists" should -- on their own dang millions.
Distressed sale! Not only the write downs from the CE, but straight losses against a declining asset base. Impressive. If true, of course.
The conventional wisdumb at the beginning of 2009 was that the protfolioed yupscale amenity market was insulated. Since then, Tamarack, Moonlight, Yell Klub, Sun....
Those folks will be fine, at least still finer than 99 percent, but they're not trading in the Bentley for new or glomming onto new baubles.
By the way, Ryan, I'm waiting for my answer.
Just to clarify one thing: (and yes, I am friends with Roger Lang, which is how I come to know and care about some of the details here) the Sun Ranch Institute and the Sun Ranch Fund are two different things.
Roger Lang gave Trust for Public Lands $3.9 million to protect open space in the Madison Valley; TPL is calling this money "Sun Ranch Fund."
http://www.tpl.org/tier3_cd.cfm?content_item_id=3280&folder_id=174
Sun Ranch Institute is a non-profit that Roger started; read all about it at
http://www.sunranchinstitute.org/
Two different, wholly separate entities.
And thanks, Drover, for your "disclosure" of interest. So TPL got the money and it's in a "fund?" Ah. Didja all know that TPL also has a 501c4 arm that exists to lobby for public "conservation" money and bond issues? Tells donors that every dollar brings in a grand of public gouge money? They don't say that in those words, but there it is.