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    Document / Saving Land

    Leasing your way to financial stability

    Posted March 23
    Source
    Saving Land magazine, Spring 2026, Land Trust Alliance
    Author
    Ole Amundsen
    About This Saving Land

    A lease can help create stable revenue for land trusts and a host of community and environmental benefits, especially in this time of shifting funding opportunities.

    Ole Amundsen is principal of ARC LLC, where he advises land trusts and communities on strategies to leverage their natural assets as part of their economic sustainability.

    Disclaimer

    These resources are provided "as is" for informational purposes only, without warranty of any kind. They do not constitute legal or professional advice and do not create an attorney-client relationship. They may not reflect current legal developments and should be adapted for your organization with qualified professional help. The Alliance is not liable for any damages arising from use of or reliance on these resources. Views in individual posts and third-party links/logos are not Alliance endorsements. The Alliance is committed to equal opportunity and does not condone unlawful discrimination.

    For accreditation-related materials, please also consult the Land Trust Accreditation Commission website.

    Enter the humble lease, an old-fashioned tool that, when wielded by a thoughtful conservationist, can result in stable revenue for the land trust and a host of community and environmental benefits. The key to success is to understand how a lease can be a dynamic instrument and an instrument of partnership between the land trust and the tenant.

    Leases on land — and water

    In 1985, a farmer walked into Peconic Land Trust’s office in Long Island, New York, and asked if the organization had any land available to lease. He was already operating a community-supported agriculture program with 12 members but needed to move his operation.

    John Halsey, the land trust’s president, considered the request. Since the farmer had the experience and skills both as a land steward and a businessman — he was earning a living from his current CSA — Halsey decided to lease the land to the prospective farmer and hire him as a farmland steward who could help the land trust with future projects. It has turned out to be a highly successful venture for the land trust. Today, Quail Hill Farm CSA has 280 members and generates around $342,200 in annual revenue.

    As Peconic Land Trust grew its expertise in real estate and conservation planning, developers and landowners would approach the organization with complex deals. One such deal involved an attorney representing a local landowner of a 22-acre coastal property that included a dormant oyster hatchery upon which a 40-unit condominium and marina had been proposed.

    Instead, the land trust helped the landowner create four lots on 8 acres, and a 14-acre parcel that included the hatchery was donated to the land trust. To help with the management of the shellfish operation, the land trust entered into a cooperative agreement with Cornell University’s Cooperative Extension Marine Program, which had a complementary facility about a mile away. The property is now called Shellfisher Preserve and is home to a fully operational mariculture facility that produces seeds for oysters, clams and scallops — one of just three hatcheries still in operation on Long Island. Peconic Land Trust has four leases at the preserve, with three of the leases for small growers, providing the opportunity to harvest shellfish and bring them to shore more easily for sorting and selling. The facility also has a barn built over the water that allows these small growers to overwinter some of their oysters. The fourth lease is with a more experienced oyster grower who manages the hatchery onsite.

    The hatchery equipment and infrastructure are expensive to establish, so this lessee has the advantage of renting a one-of-a-kind facility and has been able to make improvements to the existing system, thus expanding productivity and efficiency.

    Through this project, the land trust is helping promote small marine businesses, provide seafood for the local market, and grow and distribute shellfish regionally through seed programs that improve the water quality of Long Island.

    Leasing farmland offers a modest yet steady income and, like many things, what you get out of it is determined by what you put in. The land trust needs to research the going rate of commercial agricultural leases and charge a fair market rate to prevent private inurement (where an economic benefit like a below market rate lease results in enriching a business or an individual).

    On Long Island, Halsey estimates that unimproved agricultural land can be leased for about $150 per acre. If the landowner invests in a deer fence to protect crop land, the price jumps to $400 per acre, and if you then add a water source, like a well, the price is $700 per acre. The revenue from the land trust’s leases is deposited into an overall stewardship and operations account.

    Honoring donor intent

    As you move west across the country, the size and scale of farming generally increases. The accredited Iowa Natural Heritage Foundation has found solid footing in leasing around 50 properties. There are many different leases and wide variability in revenue depending on the quality of the land and management goals of the land trust. For example, in Iowa, crop leases can generate between $200 to $300 per acre per year, whereas pasture or custom grazing can be $30 to $80 per acre per year. “Iowa farmland always rents,” says Joe McGovern, president of Iowa Natural Heritage Foundation. Each year, the land trust processes many land transactions.

    However, only a few of the deals result in the land trust owning the property for the long term. In accepting a donation of farmland for the long term, donor intent is important. “When someone says, ‘I just want my farm to stay a farm and be managed the way my granddad did for the long-term health of the land ― can you help us do that?’ the answer is usually ‘yes!’” explains McGovern.

    Iowa Natural Heritage Foundation assesses a potential donation of land for its conservation value, its value as working farmland in a lease arrangement and the intentions of the donors. In its planning process, the land trust will take marginal land on the property out of agriculture and restore that land for its ecological function, leaving the focus for farming on the high-quality soils. The acreage in farming on a property might go down but profitability per acre goes up since the enterprise is focused on the best land for farming and not trying to make marginal land farmland. The land trust then looks for a tenant who has a passion for farming and who gets the big picture of the value of conservation.

    “We don’t try to squeeze every nickel in the lease from the tenant and the donors’ wishes ― we aim to strike a balance,” says McGovern.

    Carl and Margie Boylan had a deep sense of stewardship as farmers, practicing no-till farming and managing 60-foot grass perimeters around all their fields to promote water retention and improve soil health. It still came as a surprise when the couple gave their 1,243-acre farm to Iowa Natural Heritage Foundation in 2021, as they had only donated to the land trust once in a conservation campaign in 1990. Their wishes were clear: The land was not to be sold, and funds made from leasing the land could be reinvested into the farm and the land trust’s statewide efforts.

    After a planning period, the land trust began a series of restoration efforts in partnership with the tenants. In managing the grasslands, the land trust started a rotational grazing regime on four paddocks converted to warm season pasture interseeded with flowering plants, using cattle to enhance low-diversity grassland habitat. Iowa Natural Heritage Foundation also gets income from leased cropland and by renting the house and buildings. The income has allowed the land trust to do more native habitat restoration on the land, while keeping most of the land as a working farm, in line with the wishes of the Boylans.

    An interesting aspect of leases is that they allow a land trust to capture several revenue streams from different tenants on a single property ― maximizing the public benefits and income.

    The accredited Galveston Bay Foundation in Texas has a triple play with three leases ― for carbon sequestration, cattle grazing and duck hunting ― on its 5,200-acre Chocolate Bay Preserve. The land trust acquired the property in 2021 with funding from the Deepwater Horizon oil spill recovery fund and U.S. Fish and Wildlife Service. The property was prioritized for its vast wetland habitats and high-value coastal grasslands, since it had never been plowed and leveled for row crop farming, but it did have about 2,000 acres of overgrazed and poorly managed native grasslands. Restoration of the native plant community became an immediate priority for the land trust.

    The qualities of an intact native grassland and a defined restoration plan attracted the attention of Grassroots Carbon, which entered into a five-year carbon sequestration lease that generates, on average, about $80,000 per year. When the carbon project started, the land trust classified the revenue as unrestricted. However, with several years of experience on the project, future revenue will be restricted for land stewardship on the preserve.

    The upland components of the preserve are utilized for cattle grazing. The land trust structured a lease for $45,000 per year with a neighboring ranch. As part of a long-term management strategy, the land trust invested in new fencing that provides four grazing pastures between 400 to 600 acres for rotation. This allows significant rest to promote the recovery of the native plant community. To reduce the impacts of grazing pressure on the land, solar water troughs were installed away from the natural watering areas to spread the cattle out more evenly across the grassland. The grazing lease and carbon lease are, in fact, connected since if the pasture is overgrazed, it will impact the amount of funding provided by the carbon lease. So both leases are, in effect, mutually supportive.

    The same neighboring ranch also operates as a high-end hunting club and has leased the coastal wetlands for duck hunting, generating an additional $15,000 per year. The hunting lease was negotiated at a greatly reduced rate compared to market value due to terms of the lease that limit the number of allowed hunting days to help keep the bird population robust.

    “When considering a new tenant, you need someone you can really trust, who shares your vision and conservation ethic, and can be flexible adjusting land management techniques to environmental conditions,” says Matt Singer, director of conservation at Galveston Bay Foundation. “Our tenants are our eyes and ears on the land as we often don’t visit our preserves every day or every month.”

    When it comes to carbon leases, land trusts need to do extensive due diligence in advance to make sure they are prepared and capable of managing the lease agreement.

    “Carbon leases are complex, sophisticated deals that a land trust shouldn’t enter into lightly,” notes Ailla Wasstrom-Evans, conservation defense fund and education manager at the Land Trust Alliance. She advises land trusts to review the practical pointer Legal Considerations for Carbon Offset Projects, Part V: Navigating Carbon Offset Project Related Agreements.

    Lease tips and considerations

    Leases need to be carefully drafted, with conservation protections and best management practices in place. Proactive risk mitigation is critical — the Alliance recommends land trusts hire legal counsel for proper due diligence. Some questions to consider:

    • Will the leased use impact any beneficial property tax treatment the land trust receives for that parcel of fee lands?

    • Does the income generated constitute an unrelated business income that is taxable?

    • Does the lease agreement allow the land trust access to do annual property monitoring?

    • Does the lease specify whether improvements are allowed — such as drainage systems, fencing or other structures — or if there are restoration requirements?

    • How will the land trust use the revenue from the lease — will the lease income be invested back into the property or distributed more widely in the organization?

    • If the tenant is in breach of the lease and eviction is required, does the land trust have legal counsel knowledgeable in landlord tenant disputes? (Remember that Terrafirma insurance coverage will likely not apply, as there is an exclusion for business disputes.)

    Along the Canadian border of New York, the Thousand Islands Land Trust manages over 500 acres at Zenda Farms Preserve in Clayton, New York, where innovative land leases support both conservation and community.

    At Zenda, grassland bird habitat takes priority. To protect grassland birds during the nesting season, haying is delayed until after Aug. 15, when the birds have fledged. While hay harvested after Aug. 1 loses some nutritional value, the land trust’s tenants have found a creative solution: turning the hay into high-quality compost that’s sold to mushroom producers in Pennsylvania. This practice not only safeguards wildlife but also turns a potential loss into a savvy environmental and economical solution.

    TILT’s executive director, Jake Tibbles, sees this as essential. “As conservationists, we are not big risk-takers,” reflects Tibbles. “But without taking risks, there’s very limited reward. Not all of our ventures have worked out, but you have to be willing to try new things.”

    That spirit of innovation has led to other successful partnerships across Zenda Farms Preserve. One such collaboration is with Yessi’s Bees & Honey LLC, one of the largest bee operations on the East Coast. Through a barter-style agreement, TILT provides land in exchange for honey that is then bottled and sold as Zenda Farms Honey. That same model applies to TILT’s maple syrup leases, where sugarbushes are tapped to produce Zenda Farms Maple Syrup.

    These ventures are more than strategic agreements — they’re purposeful collaborations that bring conservation to life. Annual profit sales of honey can average from $9,000 to $11,000, while maple syrup sales bring in $5,000 to $6,000. Beyond financial return, these products carry the spirit of TILT’s work into homes around the community.

    As Tibbles describes, “Having products derived from our lands is like having our mission statement in a bottle sitting on kitchen tables across New York state.”

    Finding your entrepreneurial spirit

    In sum, leasing land can provide a reliable and stable income. With some additional entrepreneurial spirit, a lease can raise the profile of the organization in a meaningful fashion. One way to start exploring if leasing land makes sense for your organization is to include a revenue plan as part of your strategic plan. Exploring a range of approaches to raising revenue as you are thinking about the goals for conservation and stewardship is a natural fit. As mentioned before, you need to do your homework on the leasing values in your region, so doing this research as part of a strategic plan is very efficient.