April 29, 2013

Also see 13-1183 (Extend Conservation Easement Tax Credit Cap)

The following document is offered as an account of the course of events encountered by landowners while attempting to sell tax credits generated from the act of placing conservation easements on their real property. For the most part it will be in the first party and at times in the second party format.

My wife Joyce and I placed a conservation easement on 480 acres of our farm in the fall of 2003 with the Palmer Land Trust based in Colorado Springs Colorado. A representative of the land trust visited us at our home in early July explaining the benefits of conservation easements and left a list of professionals to assist us in the process which was quite involved. The list contained only one appraiser, one geologist, several attorneys, a surveyor two botanists to do a baseline of the ecosystem and several tax credit brokers to sell our tax credits, a detailed list of the actions we needed to complete by certain dates in order to take advantage of the sale of the tax credits which was the most persuasive element of the sales pitch.

We contacted all of the professionals necessary to accomplish the task and it was done by the deadlines except for the baseline assessment and the land trust was comfortable with that being done some time in the early part of 2004. Every thing went according to plans until we submitted the documentation to the tax credit broker a Mr. Carl Spina who was at the top of the list of credit brokers. We sent him our package and a contract he had provided with our signature affixed to be signed by him and mailed back to us, however he called us in a few days stating that our appraisal done by John Stroh was inadequate and would require another appraisal. When questioned as to why, his reply was the work was so poor it couldn’t be salvaged. As I didn’t agree with his analysis and attitude his blatant disregard of the facts I decided to call Representative Lola Spradley who was the author of the bill that created the tax credit part of the program to find out if a credit broker had the authority to make such a determination as Mr. Spina had. She then directed me to an attorney Mr. Larry Kuter the legal mind for the Colorado Collation of Land Trusts (CCLT) Mr. Kuter informed me that the brokers were the clearing house and that he couldn’t do any thing for me. I then ask him who or what State agency or department had the last word his reply was that there was none and that was by design the land trusts didn’t want some bureaucrats looking over their shoulders. I then informed him the matter was not closed and that I would go to the press with my concerns his reply was don’t do that they the CCLT did not want any negative press and he would see what he could do. I had several more conservations with Mr. Kuter and in the mean time had found out that his Son was one of the lead attorneys for a group of investors trying to buy irrigation water rights in the Arkansas Valley when confronted with the fact that the Kuter boy was trying to buy water rights Larry Kuter the father became very agitated and denied any connection. Mr. Stroh had appraised water rights around the Rocky Ford community and that Great Out Doors Colorado who was furnishing funds to place conservation easements on irrigated farm land, was being pressured to not accept the valuation Stroh had arrived at. Among those objecting was a prominent water attorney Peter D. Nichols who asserts he has examined 20 or so of the Stroh appraisals and finds them all lacking. It seems there are an awful lot of non appraisers with conflicts of interest passing judgment on a professional appraisers work and that there is no unbiased authority to intervene.

The Stroh’s work has been attacked by fellow appraisers who have been hired as review appraisers for the tax credit community these individuals are on the payroll of biased men with questionable agendas, and the standards they have incorporated in the condemnation of Stroh’s work did not even exist at the time of the 2003 appraisals the Guide as they refer to it in there reviews was commissioned by the CCLT in the year of 2004 or 5 and was for the most part the product of a Mark Weston an appraiser who has been in the employment of a Mr. Mike Strugrt who asserted in a conversation with Mr. Stroh that he would put the Stroh’s out of business an excerpt from a to whom letter written October 20th 2008.

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The appraiser was Mark Weston!

On April 1 2004 Mark Weston appraiser assumed the role of IRS agent while meeting with a group of irrigated farmers in the office of the Lower Arkansas Valley Water Conservancy District when explaining why the Stroh appraisals were valuing the water to high, Weston made the comment that if the in question appraisals were to be examined by an IRS auditor with the green eye shades and celluloid cuffs they would be thrown out. As of this date the IRS has not rejected nor even questioned the value of the Stroh appraisals, Weston far exceeded his authority in this case.

The CCLT successfully promoted a series of what were referred to as conservation easement Task Force meetings hosted by representative Madden and Senator Isgar. The first meeting occurred shortly after Director Erin Toll assumed her role as director of the division of real estate. In the course of the presentation of various players in the conservation easement enterprise Mark Weston challenged Ms. Toll to do something about the fraudulent appraisers by making the statement that it was a shame that the Division of Real Estate wasn’t dealing with the incompetent appraisers in southeast Colorado. Her reaction was to jump to her feet in front of the entire assembly and state that her department would not let any of them to get by, she would prosecute any and all violators, which she did. The problem with what she did was to use the afore mentioned guide prepared by Mr. Weston which was not in effect at the time of the Stroh, Milenski O’Gorman, or Stewart appraisals and is not applicable retroactive to any of the in question appraisals. The conflict of interest present in all of the decisions made is unbelievable. Mr. Carl Spina made the comment during the fourth task force meeting when the Governors Oversight Commission was being proposed that such a body was totally unneeded as he as well as the credit brokers were the Gate keepers for the program and were fully qualified to examine a conservation easement and accept or reject it in twenty minutes. I will leave the reader with the responsibility of determining what the conservation easement program is.
HB-1300 is providing as it was intended a platform other than the Colorado Department of Revenue administrative hearing process which was overwhelmed with the whole process. The District Court process is turning out to be expensive and may never result in getting into court.

This brief and I hope to the point account will clarify the issue. It will be interesting to find out how hard the players will defend their actions.

J.D. Wright