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AOG Education Event Recap – Conservation Easements

by AOG Wealth Management

Recently, accredited clients of AOG were given the opportunity to hear the latest information relating to conservation easements. Jack Hollander, vice president of capital formation at Ecovest was the guest speaker for the dinner event hosted at McCormick and Schmick’s in the Reston Town Center. Joining him for the event was Vern Burling, Vice president of Sales at Triloma Securities, the managing broker/dealer for Ecovest. Jack delivered a very insightful presentation about conservation easements in which he explained the ever-growing need of private capital to fill the void left by shrinking government budgets dedicated to conservation. For those unfamiliar with the concept, a conservation easement allows for a permanent (or into perpetuity) restriction to be placed on the developmental uses of land in order to protect its conservation values.

Ecovest’s mission statement describes how their programs strive to find the perfect balance between conservation and development of land; “We believe that development opportunities should not be judged on economic viability alone, but that the responsible use and preservation of natural resources should be equally considered.” Jack communicated the same message as he described how Ecovest has successfully brought 51 programs to market allowing investors to vote if the land owned by such partnerships should be fully developed (highest or best use scenario) or whether the conservation option would be instated – allowing for a charitable deduction to taxes. Historically, all programs have voted for the conservation easement route to be followed. Jack’s presentation covered not only the advantages but also highlighted the risks. He described in detail the risk mitigation strategies followed by Ecovest as it relates to an IRS audit. The high quality of underwriting standards used; the assurance of various independent appraisers for valuations; and the extent to which IRS requirements for conservation easements are not only met, but exceeded, were some of the points used to highlight why Ecovest has been so successful with their programs.

Overall, AOG clients attending the event enjoyed the interactive nature of the presentation which allowed for detailed questions to be answered. Jack’s clear and well-structured message brought great assurance of the high quality of the work done by Ecovest and steps taken to ensure that all legislative requirements are met. Given Ecovest’s notable distinction in this field it comes as no surprise that AOG has partnered with Ecovest for the last three years and looks forward to continuing this partnership over the coming years.

Conservation easements, the appraisal methodologies and applicable tax laws are highly scrutinized by the IRS and are subject to complex rules and requirements. Further, Real Estate development is subject to significant market risk and there is no guarantee that the projections presented in the development projections will be achieved if the Company pursued development of the property pursuant to the development plan. Further the units being offered hereby involve a high degree of risk including risks associated with the ownership and/or development of real estate, conflicts of interests and management risks and investment and operating risks as well as tax and financial risk associated with the transaction and general economy.

Category: Blog, Company Updates, Info Articles, Wealth Management