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Maximizing Your Land Acquisition Dollars with the NJEIFP

learning tool
by

michelle rollman

on 25 February 2015

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Transcript of Maximizing Your Land Acquisition Dollars with the NJEIFP

CMV
PAR Memo
Purchase Contract / Assignment Agreement
CBR Form
Issuance of Environmental Decision Document by EIFP
We buy properties in fee, not easements on those properties.

We buy an undivided interest in each parcel.
Water Quality Act of 1987 amended Federal Clean Water Act requiring states to establish a Clean Water State Revolving Fund (CWSRF)
CWSRF provides financial assistance for construction & implementation of projects that help protect, maintain and improve water quality
Every year the EPA awards CWSRF capitalization grants to the states
BACKGROUND
Maximizing your Land Acquisition Dollars with the New Jersey Environmental Infrastructure Financing Program
New Jersey Environmental Infrastructure Financing Program
In 1988 NJ's CWSRF program was established as the Environmental Infrastructure Financing Program (EIFP) and consists of two entities:
NJDEP
New Jersey Environmental Infrastructure Trust (Trust)
DEP handles the project review details
The Trust deals with financing details
The DEP (Fund) Portion of the loan comes from:
The Trust portion of the loan comes from the sale of Bonds
Where the Loan $ Comes from
EIFP Loans are a blend of two different loans
These loans come at market-rate
These loans are interest free
SFY 2014 loans are offered at

75% Fund
and 25% Trust
Resulting in a low interest rate
EXAMPLE
Total overall program sources: $192.6 M
Priority List
PS
IUP
The Priority System (PS) describes the ranking methodology for the water pollution control projects that are eligible for financial assistance through the EIFP
More information is available at:

http://www.nj.gov/dep/dwg/cwpl.htm
The Intended Use Plan (IUP) provides information on EIFP funds available including all federal funds allotted to the State under the CWA and available to the CWSRF
A Priority System, Intended Use Plan, and Project Priority List is developed every year
Eligible Water Quality Projects
Projects May Include:

Construction
Upgrades and improvements to sewerage treatment plants
Construction, repairs and replacements to sewerage collection systems and pumping stations
Installation of preventive or control measures for combined sewers (sewers that contain both sewerage and stormwater)
Construction or modifications to stormwater conveyance and treatment systems
Construction of green infrastructure
Installation of some non-point pollution controls.
Open Space Land Acquisition projects fall into the non-point pollution category of projects
Eligible Applicants
Municipal and County governing bodies
Municipal, County and Regional Water, Sewer and Utility Authorities
County Improvement Authorities
Certain State Authorities
Non-profit entities are not eligible to obtain an EIFP loan, but can partner with an eligible applicant
SFY2014 EIFP Schedule
October 1, 2012
May 2014
March 4, 2013
Commitment Letter and Planning Document Submission
Letter of Intent submitted on-line at: www.njeit.org/applicant. Call Trust at 609-219-8600 to request a user account
Design Documents and Loan Application Submission
Loan Application also submitted on-line. Design Documents for land acquisition projects are considered to be the submission of appraisals and Preliminary Assessment Report to Green Acres.
Loan Award
Bridge (or interim) loans are available for projects that need funds prior to loan award date
Additional 2014 Program Schedule Dates of Items Handled by the Trust
December 2013
May 2014
January 2014
more info at http://www.njeit.org
March 2014
April 2014
Submit Financial Addendum Forms to Trust
Last date for Local Finance Board Approval
Commence Escrow Closing
Bond Sale
SFY2014 NJEIFP Loan Closing
Planning Document Content
(follow the planning checklist provided as a handout)
Other Submissions for Open Space Land Acquisition Projects
Recorded document that is the DEP’s easement on the funded property
What can and cannot take place on the property will be listed in the document
Specialized clauses can be added for unique situations/conditions
Survey of entire acquisition and of the EIFP-funded portion will be included, as well as specialized maps showing areas to be mowed and existing trails, if applicable
EIFP Deed of Conservation Restriction
Unallowable Options:
Agriculture
Fertilizer, pesticide, algaecide application
Active recreation/major picnic areas/ intermittent recreation
Existing or new roads / parking lots for public use
Existing structures
Powered boats
Allowable Options:
No uses
Limited passive uses
Existing roads maintained as is for limited access
Mowing of grassland up to 3 times per year
Hunting
Some water based uses
Allowable and Unallowable Uses/Features
The Trust portion is calculated at 25% of the available DEP funds for SFY2014
Total Fund $144.5 M
This is when $ becomes available to loan applicant for long term financing
Ewok Meadows: Endor Township, Block XX, Lot XX, approximately 50 acres. This property is located in the Wickecheoke Creek watershed and is crossed by the Plum Brook, a C-1 stream and tributary of the Wickecheoke Creek. The Wickecheoke Creek feeds the D&R Canal, a drinking water source for central New Jersey. Approximately half of the property is forested with some areas of steep slopes and wetlands in the north and western areas of the parcel. The remaining half contains active hay fields, and the soils within the agricultural area are prime agricultural soils. New Jersey Conservation Foundation (NJCF) is taking the lead and would manage the property as part of their Wickecheoke Creek Greenway project, utilizing the site for passive recreational purposes and continuation of agriculture in existing agricultural areas. The property connects directly to other NJCF-owned properties (XX and XX). Sensitive water resource area coverage is 99%, including critical habitat, areas of high groundwater recharge, riparian areas, and densely forested areas. Staff analysis of development threat based on local zoning is moderate-high (16 unit potential). This is a desirable area for new construction; about two-thirds of the site is flat and currently farmed (hay fields). At 20% participation, NJWSA’s contribution would be approximately $200,000 of an estimated $1,000,000 acquisition price. Partners include NJCF, Hunterdon County and Endor Township.
(additional submissions also required by Trust)
Planning Document Content
(follow the planning checklist provided as a handout)
Area map indicating location of property
Map of parcel with detailed data
Applicant background/general information
Substantiate a water quality benefit
Characterize the property
Past, present & future uses of property
Contamination
Other funding sources & partners
Acquisition schedule
Public participation
Property management after acquisition
Certification that property not COAH designated
8. Utilities: Are public water and/or sewer available? _____________________________________________
9. For properties in the Highlands, is it in the Preservation Area_____ or Planning Area ____?
10. For properties in the Pinelands, is it in the Preservation Area? Yes ____ No ____
11. If there are any structures on-site, please describe the condition, current use, and proposed future use after acquisition. ______________________________________________________________________________
_______________________________________________________________________________________
Note: Please be reminded that all structures must be evaluated for historic preservation purposes in accordance with the Green Acres rules. N.J.A.C. 7:36-4.4 (for local governments) and N.J.A.C. 7:36-15.4 (for nonprofits). In addition, the proposed use(s) of existing structures that will remain after acquisition must be approved in advance by Green Acres to ensure the eligibility of the proposed use(s).
12. Will this be a fee acquisition _____ or an easement ______? If an easement, please describe type of easement as well as deed restrictions to be placed on the land. _________________________________________________
_______________________________________________________________________________________

Please also provide a copy of the proposed easement language. If less than full public access will be provided, you must show public access area(s) on the Project Reference Map. Any limitation to public access must be approved by Green Acres, as this may affect funding eligibility.
13. Is this an entire taking _____ or partial taking______? If a partial taking, please describe the taking and remainder areas in detail and show clearly on the Project Reference Map. ________________________________
_______________________________________________________________________________________

14. Do you have a copy of an existing survey of the property? _____ If yes, please provide a copy.

15. Does the current owner have a contract of sale or option agreement for this property, with you or anyone? ____ If yes, please provide a copy of the contract/agreement.
16. Are there any subdivision/development approvals for the property? ______If yes, please describe and provide a copy of approved plans._______________________________________________________________________
________________________________________________________________________________________

17. Is this a multi-party acquisition? ____ If yes, please list partners and describe the proposed ownership/management interest for each party. (Attach additional sheet(s), if necessary.)___________________
________________________________________________________________________________________
________________________________________________________________________________________
18. Has the project site been identified by a municipality or otherwise designated for use in meeting municipal fair share low and moderate income housing obligations under the Fair Housing Act of 1985 (N.J.S.A. 52:27D-301)? _____ Yes _______No
GREEN ACRES
LOCAL GOVERNMENT UNIT AND NONPROFIT GUIDE
Pre-Appraisal Requirements
In order to establish an accurate value for a parcel of land, it is important to have all pertinent information before it is appraised. The following questions will allow Green Acres and the appraisers to be hired by the local government or nonprofit to have a better understanding of the project. It will streamline the appraisal process, as well as the appraisal review. This fact sheet must be submitted with the Project Reference Map and approved by Green Acres before you hire appraisers. Green Acres will not schedule a pre-bid appraisal meeting or authorize appraisals to begin until this completed fact sheet and the Project Reference Map have been submitted and approved. If the appraisal scenario changes from what is described below, corrected information must be submitted immediately to Green Acres.

1. Please describe the physical characteristics of the property, including legal access to it and any special features:_____________________________________________________________________________________________________________________________________________________________________________

2. Present use of the property: _________________________________________________________________
__________________________________________________________________________________________

3. Are there any existing easements or rights-of-way on the property? If so, please describe.
__________________________________________________________________________________________

4. Are there any leases or rentals on or of the property? _____ If yes, please describe terms of the agreement(s). __________________________________________________________________________________________
__________________________________________________________________________________________

5. Are there any wetlands, streams, ponds or Category One streams on the site? If it includes wetlands, do you have a Letter of Interpretation for the property? _________________________________________________________ __________________________________________________________________________________________
Note: Stream classifications are listed in the Surface Water Quality Standards (SWQS) at N.J.A.C. 7:9B-1.15 (found at www.state.nj.us/dep/rules/). The Department’s interactive mapping tool (accessible through www.nj.gov/dep/gis/) is also helpful in identifying stream classifications. Directions on how to use the interactive mapping tool can be found at www.nj.gov/dep/wms/bwqsa/.
6. What is the zoning for the property? ____________________ Has it been rezoned since January 1, 2004? If yes, what was the previous zoning? _______________________________________________________________

7. Has the property been sold or otherwise changed ownership since January 1, 2004? Yes ____ No _____
It is okay to transfer the land after closing.

If you “flip” it to one of your partners right away, we consider it to be the completion of the project, as planned, documented, and approved by us in advance.

If you transfer it later, or if you transfer it to an outside party (not part of the transaction), you must follow the procedural requirements of N.J.A.C. 7:36-25.5 (Administrative Transfer of Land) which includes public notifications and a hearing.
The Flippin’ Land
Project Reference Map

and

Pre-Appraisal Questionnaire
Green Acres Program
Green Acres and the Environmental Infrastructure Program
Perfect Together

As sister agencies within the Department, the EIFP consulted with Green Acres to share resources and expertise.
Green Acres provides the technical assistance and approvals of the acquisition components while EIFP handles the loan funding.
landowner
partners
deed
title search
survey
contract agreement
management agreement
assignment agreement
appraisal
P.A.R.
Don't just do something.
Sit there!
Land Transaction Puzzle:
Visualize the outcome - big picture - if you have this vision/blue print, you will know how to design each component of the land transaction

Consider who will use the land now and in the future.

What are the environmental resources to be protected or enhanced?

What are the environmental constraints?

How will public access be provided?
WHAT IS THE PURPOSE OF THIS LAND ACQUISITION?

Consider the purpose of the acquisition.

What organization or entity would best serve the purpose of the land purchase?

Be mindful of the preliminary assessment, buildings, wells, or other “improvements”.

Will you need a Management Agreement?
WHO WILL MANAGE THE LAND?

Consider the appraisal; what is to be valued

What will be your funding source(s)?
HOW WILL YOU PAY FOR THE LAND AND SOFT COSTS?
WHAT STRINGS ARE ATTACHED TO THE FUNDING SOURCES?

Are there land use restriction or requirements that don’t fit with the purpose of your acquisition?

Are there areas of land that are not eligible for your funding source?


Will you need an Assignment Agreement?
WHO WILL NEGOTIATE AND ENTER INTO THE CONTRACT WITH THE LANDOWNER?
WHO WILL BE THE GRANTOR(S) AND THE GRANTEE(S) ON THE DEED?
Consider Schedule B of your title search.

Know what interest percentages should go to the grantees, per the Assignment Agreement.
Consider Schedules A and B of your title search

Know what interest percentages should go to the grantees.

How is the Land described?

Will the parties take divided or undivided interest?

Is there deed language required by your funder(s)?
WHAT WILL THE DEED SAY


1. In order to receive funding, you must have a legal interest in the transaction throughout the project right through title closing.

a) Partners are buyers together on the Purchase Contact or
b) Partners enter into an assignment agreement

2. To be eligible for payment, the interest at closing must reflect the Green Acres funding plus the match.
GREEN ACRES GOLDEN RULES OF COOPERATIVE PROJECTS
GA x 2
CMV = % of Interest Required at Closing
New Jersey Water Supply Authority,
EIFP Applicant, subject to Green Acres review
1999: Source Water Protection Program

2001: Land acquisition with the Spruce Run Initiative
2004: First property closing

To date: 2,868 Acres preserved (NJWSA as an owner)

To date: 3,859 Total acres preserved (with partners)
$17,861,205 financed
$21,006,493 final cost
1.335% effective interest rate
Owning an undivided interest gives several advantages:

The property is harder to sell or “divert”, even if a partner no longer exists
Protects the intent of the preservation effort;
it’s all about water for us
We buy in partnership with other entities. This gives several advantages:

Everyone’s $$ goes further; more land is preserved
We can “match” a partner’s Green Acres funds for soft costs (NOT for land cost)
Our partners manage the land on a day to day basis. They do the trails, kiosks, signs, etc, with our $$ support.
Examples of great partnerships:
Crystal Springs in Lebanon Township, Hunterdon County & Washington Township, Morris County: NJWSA, Hunterdon Land Trust, Washington Township Land Trust, Lebanon Township, Hunterdon County, Green Acres
Pleasant Valley Mills in Mendham Township, Morris County: NJWSA, Schiff, Mendham Township, Morris County Municipal Utilities Authority, Morris County, Green Acres
South Branch Preserve (North Area) in Mount Olive Township, Morris County: NJWSA, The Land Conservancy of New Jersey, Raritan Headwaters Association, Trout Unlimited, Morris County Municipal Utilities Authority, Mount Olive Township, Morris County, Green Acres
“Thompson” Property – County Route 519 in Delaware Township, Hunterdon County
178 acres
Owned by a local developer; for sale; highly suitable for development
Strategic acquisition for Delaware Township and NJCF
Vicki Jenkins (609) 292-3114 victoria.jenkins@dep.state.nj.us
Pam Thier (609) 984-0596 pam.thier@dep.state.nj.us
EIFP Restriction Area
Green Acres Restriction Area
All Deed Restriction Areas
Hunterdon County Restriction Area
Existing Structure (Not in EIFP Area)
95% Sensitive Water Resource coverage
EIFP Buffers on New Trail Construction
Existing Agriculture Area (Within EIFP Area; No further Ag Permitted)
Julie Hajdusek (908) 685-0315 x226 julie@raritanbasin.org
Examples of Great Partnerships:
Examples of Great Partnerships:
the Federal capitalization grant, unused funds from prior years, and from repayments of prior year loans
For $ To Close
For Reimbursement
Approved Survey
Title Commitment
Draft Deed
Executed DCR
90 Day Letter
Imminent Purchase Letter
Payment Requisition
Approved Survey
Title Policy
Recorded Deed
Executed DCR
90 Day Letter
Payment Requisition
must be approved by Green Acres
Summer/Fall 2013
CMV
PAR Memo
Purchase Contract / Assignment Agreement
CBR Form
Issuance of Environmental Decision Document by EIFP
Other Submissions / Approvals for Open Space Land Acquisition Projects
(additional submissions also required by Trust)
May 2014 and Beyond
including special EIFP-specific language
40 projects completed within 9 loans
Meet Early
Meet Often
The EIFP loan can be used as match money to Green Acres grant dollars.
(no later than escrow closing)
(requires completion of all planning list items by loan applicant)
Summer/Fall 2013
Other Submissions / Approvals for Open Space Land Acquisition Projects
(additional submissions also required by Trust)
(no later than escrow closing)
(requires completion of all planning list items by loan applicant)
Other Submissions for Open Space Land Acquisition Projects
(additional submissions also required by Trust)
For $ To Close
For Reimbursement
Approved Survey
Title Commitment
Draft Deed
Executed DCR
90 Day Letter
Imminent Purchase Letter
Payment Requisition
Approved Survey
Title Policy
Recorded Deed
Executed DCR
90 Day Letter
Payment Requisition
must be approved by Green Acres
May 2014 and Beyond
including special EIFP-specific language
Ownership Scenarios
3 Green Acres Applicants
100 Acres
A = 50% interest
B = 25% interest
C = 25% interest
50% for A = $25.00
25% for B = $12.50
25% for C = $12.50
CMV $100
or
100% interest = $50.00
A
50 Acres
B
25 Acres
C
25 Acres
Take into consideration:
EIFP easement
County restriction
Conservation Restriction
Survey
Management
Del Twp - $1,000,000
Hunt Co - $ 500,000
Partners:
Del Twp OSTF - $ 500,000
NJCF - $ 500,000
Hunt Co OSTF - $ 250,000
Donation Credit - $ 250,000
=
Total, $4,000,000
EIFP Restriction Area
Ultimate Ownership Post Closing
Cash at Closing
Interests Assigned on Deed at Closing
50%
25%
25%
$1,000,000 GA Grant
$ 500,000 TWP OSTF
$1,000,000 EIFP
$ 450,000 OSTF
$ 50,000 Private
$ 500,000 GA Grant
$ 250,000 OSTF
$ 3,750,000
M
M
M
M
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