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University of California
RREA

Agricultural Easements

STEVE KISTLER: AGRICULTURAL EASEMENTS

Jamestown, CA – One of the things that Steve Kistler remembers about working on his family’s two cattle ranches when he was growing up is what a struggle it was for his father to stay in business. So, after he graduated from California Polytechnic Institute in 1984, he moved onto one of the ranches and spent the next 10 years improving the ranch’s finances.

His grandfather had bought the ranches in 1955 and left them to his two sons. Kistler’s father didn’t live on the ranch ­ he hired a manager to run it. Kistler and his three brothers spent their summers working on the ranches, one a 3,000-acre spread near Jamestown, the other, now 650 acres, near Oakdale.

Kistler became the first member of his family to manage the ranches, and “I did everything on the ranch for 10 years,” he says. “After five years I was able to show profits and considerably lessen our debt.”

Kistler derives his main income from a beef cattle operation. He has 360 cows and 160 yearlings. He breeds the cows, who bear calves. He weans the calves when they’re between eight and ten months old, and eventually sells them or ships them to a feedlot, where they’re fattened and sold.

In addition to the beef cattle operation, Steve and his wife, Jeannie, run a summer camp, five one-week sessions for kids from nine to 15 years old. The kids ride horses, learn how to rope a mechanical cow, and go swimming and waterboarding in Lake Tulloch, a private lake that borders the ranch.

Kistler also does tours for school groups and rents out three large ponds on the ranch to anglers for catch-and-release fly-fishing. Wildlife is abundant on the ranch -- deer, turkeys, wild pigs, blue herons, egrets, and osprey.

All was going well on the ranches until Kistler’s uncle decided he wanted to sell his share of the property. They couldn’t reach an agreement, and he sued the family. The only way to pay him off was to sell some of the ranch near Oakdale, and Kistler went into debt again to pay attorney fees. He says the experience reversed his financial momentum.

That experience, and the fast-paced development in Tuolumne County, spurred Kistler into finding a way to hold onto his ranch and prevent his land from being turned into housing tracts. He attended a public forum in February 2003 put on by University of California Cooperative Extension and funded by the federal Renewable Resources Extension Act (RREA), which is administered by UC’s Division of Agriculture and Natural Resources.

At the forum, speakers talked about ways of preserving open space in agricultural lands, “to keep it from being chunked into ranchettes,” says Kistler. “That’s where I first found out about agricultural easements.”

California is losing its open space at a fast clip. Every year, 20,000 acres of agricultural land morphs into housing developments. In the 1980s and 90s, Tuolumne County, where Kistler lives, grew at a rate that hadn’t been seen since the Gold Rush in the mid 1800s. The growth rate eased to 4.5 percent between 2000 and 2004, bringing the county to its current population of about 57,000. While the area isn’t providing many jobs, it’s attracting a large number of retired people, the source of its population increase.

Instead of gold, people come to the hills for peace and quiet. They’re chopping up land into large lots, ranging from one to 40 acres. Along the way, they take valuable rangeland out of production and destroy wildlife habitat, says Jay Norton, the UCCE farm advisor who organized the forum. The lots are too small to farm and too large to maintain well. Many fields grow thick with weeds and brush that are a fire hazard. The supporting infrastructure of roads, water and septic systems also contributes to environmental damage.

The forum, so popular it was followed by another six months later, featured presentations about the impact of development on agriculture, fire and infrastructure. Representatives from the California Department of Conservation, the California Rangeland Trust, residential cluster development planners, conservation easement associations and the Sierra Business Council also provided information. It was the approach of the California Rangeland Trust that most appealed to Kistler.

The California Rangeland Trust was founded by the California Cattlemen’s Association in 1998. It works with several other land trust organizations -- including the Trust for Public Land, the Nature Conservancy, the California Department of Fish and Game and the American Land Conservancy ­ to protect prime rangeland and its associated wildlife and watersheds. Unlike organizations such as the Nature Conservancy, the mission of the California Rangeland Trust is to keep land in production, as well as maintaining clean air, water and wildlife habitat.

“We now hold a little over 200,000 acres in easement,” says Devere Dressler, a director for the California Rangeland Trust. Dressler, a fifth-generation rancher, operates the 150-year-old Dressler Ranch, which straddles the Nevada-California border. The easements include ranches in Monterey, Fresno, Alameda, Merced, Mariposa, Plumas, Sierra, Colusa, Calaveras, Mendocino and Kern counties.

The trust is one of several that have sprung up across several states where cattle-ranching is common, including Colorado, Wyoming, Montana, Arizona, Kansas, Nevada and Oregon. The trust obtained money from Proposition 40, which provided money for land conservation; Proposition 50, which set aside money to protect wetlands and watersheds; state grassland reserve funds; California Department of Transportation, California Fish and Game, and private donations.

“Our major problem now is that we’ve run out of money to purchase these easements,” says Dressler. About 500,000 acres are in applications. One of those applications is Kistler’s.

“With Steve’s application, we plan to secure money through mitigation,” says Dressler. Mitigation funds come from a developer who, in exchange for building in an environmentally sensitive area, agrees to donate money that will go toward the purchase an agricultural or conservation easement.

Agricultural easements work like this: A rancher applies to the trust, which reviews the project. If it’s accepted, the ranch is appraised to determine the conservation value, in other words, the value of the development rights, which ranges from 30 to 80 percent of the actual value of the property.

“Each place is different, according to the development pressures,” says Dressler. On a 1,000-acre ranch, an owner could receive $1,500 an acre. Putting the land into a trust doesn’t mean the owner can’t sell the ranch. It just means that an owner could sell the ranch, as long as the buyer wants to keep ranching. The land can never be developed for housing.

Maintaining a working ranch makes more sense than removing the cattle and doing nothing on the land, says Kistler. “You don’t want this place to be cow-free,” he explains. “It would be a foolish thing to do. The place needs to be grazed, or it will be overrun by weeds. Having a field full of weeds is not beneficial to wildlife, and it’s a fire hazard.”

Kistler plans on using one-third of the easement money to make improvements on the ranch. The remainder will go into a fund that draws interest, so that he can give his cousins and brothers some income from the property. “For the first time, they’ll be getting some value from the ranch for their ownership,” says Kistler. “It’ll pacify future squabbles like I went through.”

Having money in the bank also provides a cushion for the lean years. “When times are tough in the cattle business,” says Kistler, “that’s when guys say, ‘Well what the heck am I gonna do?’ The cows aren’t worth anything, and you got people knocking at your door to sell the land to build ranchettes and stuff, well that’s what ends up happening. But if you can sell your property rights and use that money to get you through leaner times, that’s a great opportunity.”

-- by Jane Ellen Stevens
May 2005

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