Win/win solutions to environmental issues

Developers and environmental conservation groups have the reputations of being the cobra and mongoose of the real estate world. The two sides are constantly at odds over what is the best future course for a piece of property. But confrontation doesn't have to be their only form of contact.

In fact the two sides can work together, and, in general, both achieve their goals. How this can be accomplished is the subject of a panel discussion scheduled for NAIOP's RealMart '95, to be held Oct. 16-19 at the Mirage Hotel in Las Vegas. The convention, co-sponsored by NATIONAL REAL ESTATE INVESTOR, is the annual gathering of the members of the National Association of Industrial and Office Parks (NAIOP).

"The main message we want to get across to the corporate community is that we can work with them," says Kate Herrod, deputy director of development for The Nature Conservancy, an Arlington, Va.-based environmental organization, and a member of the panel, along with Henry "Greg" Gregory, president and CEO of Industrial Developments International, Atlanta, and William Sullivan, manager, with DuPont Corporate Real Estate, E.I. DuPont DeNemours & Co., Wilmington, Del.

"We want to show the audience that developing in an environmentally-sensitive way can be good business," says Gregory. "Our customers, for the most part, are interested in environmentally sound practices, and if we develop our product in an environmentally-sensitive way the customers will appreciate it and be more attracted to the project."

But the advantages go far beyond public relations. Working with environmental groups can result in tax breaks, increased capital flow and a refocusing of employee efforts on profitable goals rather than managing excess real estate. "They can use their employee time to make money rather than wrestling with property management," says Herrod.

The Nature Conservancy (TNC) attempts to work with and within the business world, and more specifically the real estate world, to protect locales of environmental significance.

Herrod says TNC realized that, along with ecological significance, land is also the livelihood for people. "You have to play to people's self-interest," she says. "We will not litigate, we will not take anybody to court, we do not put sugar in anybody's gas tank and we are not going to lay down in front of tractors," she says.

What TNC does is make land owners aware of the critical nature of a particular site and how they can best manage it. "If they are interested in giving a conservation easement to us and getting a tax deduction or signing some sort of management agreement where we help them manage their property, we can work with them on these things," says Herrod.

She also handles the Conservancy's Trade Lands Program, where corporations can make tax-deductible gifts of land to the group. The land is managed and protected by the Conservancy if it has ecological significance, such as being a wetland or the habitat of endangered species, or, if not, it is sold to raise money to purchase other, more conservationally important tracts of land.

These purchases include land for the U.S. Forest Service, which, due to budget constraints, does not always have the money available to purchase land when it becomes available. Herrod says, in these instances, TNC buys the land and holds it until the Forest Service receives its funding and then sells it back to the government agency at no profit.

TNC currently owns or has under lease 1.5 million acres of land.

The Trade Lands Program has inspired similar programs within corporations. Two years ago DuPont began its Land Legacy Program, through which the company donates tracts of land it no longer has plans for to municipalities and conservation groups. Sullivan says the land is used as parks or wildlife sanctuaries.

DuPont has donated more than 2,000 acres under the program so far, and through its numerous chemical plant sites and oil exploration leases garnered by its Conoco Oil division, Sullivan says the company has a large amount of excess land that will be studied to identify future donation opportunities.

In addition to tracts already donated in New Jersey and Delaware, DuPont is currently considering sites in Texas.

"The Land Legacy Program is a way to put some of the land back to good uses, rather than just sitting on it or selling it," explains Sullivan. "It is a way to give back to the community."

Industrial Developments International (IDI) develops and manages industrial parks, which it sells to institutions. The company develops about 6 million sq. ft. a year and owns about 1,400 acres of undeveloped land in 13 cities.

Gregory, who serves on TNC's National Real Estate Advisory Board, says industrial development and conservation are difficult, but not impossible to mesh.

"We deal with large areas that need to be flat, because trucks cannot pull above a certain grade, and thus don't allow much creativity when it comes to grading," explains Gregory, who adds that often everything -- including all of the trees -- has to be cleared from sites.

To compensate for the total clearing of some areas, IDI, when putting together the masterplan for its developments, identifies certain areas that can be left in their natural state. "We begin the project with some idea of where these areas will be," says Gregory. "And we want them to maintain their conservation value, but also be very visible so they add some aesthetic value to the project."

Anther thing IDI does is save as many trees as possible. "We look at it as part of our landscaping program. If we can save trees it is far better than having to come in and plant trees later, although we do that as well," he says.

"We work with our landscape architect on saving these natural areas within our projects, and we find that they contribute to the interest in our developments," he says.

The panel's goal is to point out the business advantages, both monetary and otherwise, derived from working with conservation groups, so that such cooperation, in the future can be a win/win solution for all of us.

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