Fringe benefit

Executive Summary
Issue. Transfer of development rights in Collier County's rural fringe. Industry. Development Key. Planners in Collier County are trying to fix a land-development credit system that most agree is broken.

Collier County's complicated land-development credit system in the rural fringe may be broken, but one man profited handsomely when he figured it out early.

Wayne Maahs, a retired state game warden, bought 40 acres off Sabal Palm Road for $84,000 in March 2001. The Picayune Strand State Forest surrounds his property and sightings of bears, panthers and turkeys are common.

But in a stroke of good fortune a year later, Collier County designated his land as environmentally sensitive and worthy of protection. In exchange for leaving his land largely undeveloped, Maahs earned the right to sell his development rights to anyone who might want to use those credits on land designated for future development.

The result was a windfall: Maahs sold his development rights to developer Bonita Bay Group for $630,000 in 2005 while still retaining ownership of his land and the ability to build a home at any time in the future. “It was a no-brainer for me,” says Maahs.

Maahs' experience runs counter to many landowners in the area who felt cheated by the transfer-of-development-rights program instituted more than a dozen years ago in a 77,000-acre area east of Interstate 75 in Collier County. Some have argued that the program was a thinly veiled government taking of land without compensation.

But Maahs says he realized the value of the development credits when the program's rules were established in 2002 and amended in 2004. “I went to every meeting because it was very confusing,” he says.

Wayne Maahs brings friends and family out to enjoy his rural land, where he has a rustic cabin and some livestock.

Maahs followed the county's instructions, severing the development rights from his property by filling out paperwork with Collier County for that purpose. Then, in 2005, he wrote to developers whose names were maintained on a county website as prospective buyers. “I didn't hear anything from them,” Maahs says.

Meanwhile, land speculators offered him as much as $800,000 for his land during the boom because it's located just five miles from busy Collier Boulevard. Maahs jokes he can buy a pizza at the corner of Rattlesnake Hammock Road and Collier Boulevard and still have it piping hot when he reaches his property. “It was hard to turn them down,” Maahs acknowledges.

Maahs' friends and neighbors thought he was making a mistake by severing his development rights, giving up any potential future appreciation should development reach his property one day. “They thought they could make a lot more money by holding out,” he says.

But Maahs had no intention of selling. He built a rustic cabin on the property where he invites family and friends to enjoy nature, surrounded by state forest that he reckons will never see development in his lifetime. During the rainy season, Maahs reaches his cabin by swamp buggy, custom built to roll through half a mile of swampy land through the forest and giving visitors an otherworldly feel. “I have nobody around me,” he smiles.

Maahs didn't give up trying to sell his development rights when no one responded to his letters. He phoned each developer to whom he had written, and his persistence paid off when Bonita Bay Group purchased 21 development credits from him for $30,000 each for a total of $630,000 in 2005.

Maahs still has enough development credits on his land that he can retain his property as he intended. And he can still build a house on it if he wanted to at some time in the future.
Even better, the windfall allowed Maahs to retire five years early at age 55. He also used the money to buy a condo off Radio Road, a boat and some all-terrain vehicles. “It was free money,” he says.

Land grab
Collier County is trying to fix a program that some landowners now believe was a government conservation land grab in disguise.

In a bold experiment launched a dozen years ago, Collier County designated certain parts of the rural fringe totaling 77,000 acres east of Interstate 75 as environmentally sensitive and worthy of protection. The county did this in response to the state's mandate to protect more of its rural lands in 1999.

In exchange for voluntarily stripping their development rights, the county allowed certain landowners in environmentally sensitive areas to sell those rights to landowners or developers in areas deemed appropriate for development.

But the complexity of such a transfer-of-development-rights program combined with a recession and tight restrictions on development turned out to be an economic failure for all but a few landowners (see related story.) County officials have been holding a series of sometimes-tense public meetings where armed security guards have been conspicuously present and everyone is required to sign in.

“Your investment was held hostage by a system that was dysfunctional,” says Tim Nance, the former director of operations for tomato grower Gargiulo and a Collier County commissioner who owns a home in the fringe area.

Nance began urging a review of the program as early as 2012. “It's a very thinly veiled eminent domain situation,” Nance says. “The numbers don't add up in this deal.”

But scrapping the program isn't an option, and so far the program has withstood eminent-domain court challenges. “Nobody wants to go there,” Nance says.

A group of large landowners made recommendations recently that would improve the program. Among the suggestions: Create a bank that would function as a brokerage of credits, buying them from willing sellers and selling them to buyers. “The bank is a great idea,” Nance says.

In addition, developers say the economics of the program don't work because they're not permitted enough density on their projects to make the purchase of development credits financially feasible. “One of my clients years ago looked at developing a rural village and it just wouldn't work,” says Bruce Anderson, an attorney with Cheffy Passidomo in Naples who participated in the landowners study.

Environmentalists see an opportunity in tweaking the program, too. Landowners in environmentally sensitive areas are permitted to claim an extra credit if they give their land to the government, but in some areas of the fringe no government agency is willing to accept it. Some environmentalists believe taxpayers should spend more money acquiring and maintaining these lands.

If developers can be permitted to build more on land earmarked for construction, county officials also will have to fix the thorny problem of the limited supply of credits. In fact, the demand for credits might outstrip the supply by nearly as much as three-to-one, the county says.

Because there are fewer credits than developers might need, the value of those credits on the open market could surge to the point at which developers couldn't afford to buy them. One suggestion is to increase the number of credits for landowners in environmentally sensitive areas, though it might dilute the value of existing credits.

Whatever the outcome of the recommendations, the stakes are high because land-management programs in adjacent areas of Collier County will feel the impact of the decisions taken for the rural fringe. Areas such as Golden Gate are next in the county's land-plan reviews. For his part, Anderson has attended all the meetings. “If you're not at the table, you're on the menu,” he chuckles.