Boston Redevelopment Authority v. National Park Service (BRA II)

US Court of Appeals, First Circuit, No. 15-2270, September 23, 2016: Upholds NPS disapproval of Long Wharf restaurant use.

On appeal the court upheld the District Court decision in Boston Redevelopment Authority v. National Park Service (BRA I) 125 F.Supp.3d 325 (2015) in favor of the National Park Service (NPS), forbidding the Boston Redevelopment Authority (BRA) from using [...]

Gemperle v. Commissioner

U.S. Tax Court, T.C. Memo. 2016-1, January 4, 2016: No preservation easement tax deduction unless appraisal filed with tax return.

Gemperle, the taxpayer (petitioner), claimed a federal income tax deduction for 2007 and 2008 for the contribution of a historic preservation easement on the façade of a Chicago home. Contrary to the requirements of the Internal Revenue [...]

US v. 1.57 Acres of Land

US District Court, S.D. California, No. 12cv3055-LAB (MDD), September 8, 2015: Non-economic value of conservation easement excluded in valuation of taking.

This decision is about excluding evidence in a trial to determine how much the United States must compensate the County of San Diego for taking a small parcel of land subject to a conservation easement. The [...]

Register v. The Nature Conservancy

US Dist. Court, ED Kentucky, Civil Action No. 5:13-77-DCR, December 9, 2014: Charitable gift restricted by oral contract but claimed restriction violation goes to jury

At issue were whether a contribution to a charity was restricted, what the law required if the gift was restricted, and whether the gift was ultimately used contrary to the restriction.

Register, the donor, contributed appreciated stock to The Nature Conservancy (TNC). The trial record produced evidence about what Register and TNC personnel thought the donation was for at the time of donation and leading up to it.  Register alleged the gift of about $1 million to TNC was intended to be permanently restricted for the purchase and management of a parcel of land known as Griffith Woods. Register alleged he made the gift intending to obligate TNC to use the proceeds from a sale of Griffith Woods for management of that property if Griffith Woods were ever sold. Using the gift and other funds, TNC bought Griffith Woods and then sold it. Part of the land was sold to the University of Kentucky (which Register evidently expected) and TNC sold the rest to the Kentucky Department of Fish and Wildlife Resources (“KDFWR”), without a conservation restriction.

Among the evidence relevant to the court’s decision was that TNC placed Register’s original donation in an account classified by TNC internally as “temporarily restricted” to fund the purchase of Griffith Woods. After Griffith Woods was sold, TNC deposited the funds back into that account and then transferred money out of the account. TNC used some of the proceeds from the sale to pay-off a land debt on another project and the rest were deposited into TNC’s general operating fund. TNC admitted that no portion of Register’s gift is currently being used to benefit Griffith Woods. The court’s opinion recites much additional evidence specific to the knowledge and intent of the parties at various times.

The court first held that as a matter of law Register’s donation was restricted as a “conditional gift” and as such TNC was bound by Register’s intention when it accepted the donation. The court cited an Arizona Supreme Court decision (Dunaway v. First Presbyterian Church of Wickenburg, 442 P.2d 93, 95 (1968)) for the proposition that a charity’s acceptance of a gift creates an implied contract with a promise “agreeing to the purposes for which it is offered.” The court cited a Seventh Circuit decision (Kentucky is in the 6th Circuit) for the proposition that a promise of a gift is a promise subject to contract law.

The court found that although there was no written contract in one integrated document, the evidence supported the conclusion that the parties entered into an oral contract and Register’s donation was “restricted to Griffith Woods” as a matter of law. [Digest readers are urged to read the opinion if they are interested in the specific statements, writings and circumstances that gave rise to the court’s conclusion in this and other aspects of its decision.]

The court then turned to the “parameters and duration” of the conditions, if any, of the contract. One letter from Register to the Director of the Kentucky TNC chapter at the time included, “I’d like to make now a gift …  I would prefer that the … proceeds go toward the establishment and management of a nature preserve in the Bluegrass region, e.g. Griffith Woods. If the Griffith Woods project falls through, I trust that KNC will put to use the funds in a manner that will further help protect areas in Kentucky with unique and diverse plants and animals.” The actual transmittal letters from Register’s investment clearinghouse to TNC memorializing the transfer of stock stated “[t]his represents a gift from [Register] to the Nature Conservancy-Kentucky Chapter, Griffith Woods project” or “[t]his represents a gift from [Register] to the Kentucky Chapter Griffith Woods project.”

TNC’s arguments focused on Register’s letter’s use of “precatory language” (“prefer” and “e.g.”) and the general nature of how he wanted the gift used if the Griffith Woods “project falls through.”   The court, however, concluded that Register’s intent for the funds to be used for Griffith Woods was meant by him as a limiting restriction and created an enforceable obligation because the next sentence points out what is to happen if the Griffith Woods preference is not fulfilled. The court also found the evidence lead to the conclusion that, “At the time the donation was made, no one appeared to believe that the funds were not restricted to Griffith Woods.” Continue reading Register v. The Nature Conservancy

Scheidelman v. Commissioner (Scheidelman IV)

US Court of Appeals, 2nd Circuit, No. 13-2650, June 18, 2014: evidence supports Tax Court; easement had no value for charitable contribution purposes.

The IRS denied Scheidelman a charitable deduction for a façade easement on a property in a New York City historic district. The Tax Court sided with the IRS in Scheidelman v. Commissioner, T.C. Memo. [...]

San Antonio Board of Adjustment v. Reilly

Texas Court of Appeals, 4th Dist., No. 04-13-00221-CV, March 19, 2014: No abuse of discretion if board relies on non-expert opinion of neighbors in demolition decision.

Reilly sought a permit from the City historic preservation officer to demolish a house in a historic district in San Antonio. When the permit was denied, Reilly appealed to the Board [...]

Stockport Mountain Corporation LLC v. Norcross Wildlife Foundation, Inc.

US District Court, M.D. Pennsylvania, No. 3:11cv514, August 27, 2013: Conservation easement’s prohibition of industrial or commercial activity unambiguously bans fracking.

At issue was whether the wording of a conservation easement was ambiguous regarding prohibition of surface activity by plaintiff Stockport Mountain (Stockport) for natural gas hydraulic fracturing (fracking). Defendant Norcross Wildlife Foundation, Inc. (Norcross) brought a [...]

Pesky v. US (Pesky III)

Dist. Court, D. Idaho, No. CIV. 1:10-186 WBS, July 8, 2013: Conservation easement deduction fraud penalty dismissed, other issues go to trial.

This decision is on motions for summary judgment (to decide the issues in question without proceeding to a trial about them) in the dispute between the IRS and the Peskys about whether, in light of [...]

New Jersey Department of Environmental Protection v. Huber

Supreme Court of New Jersey,No. A-116 September Term 2010 065540, April 4, 2013: Inspection under wetlands permit on conservation easement constitutionally permitted.

The Hubers’ residence includes land subject to a wetlands permit under New Jersey’s Freshwater Wetlands Protection Act (FWPA; N.J.S.A. 13:9B-1 to -30) and a deed restriction/conservation easement to their Township. After a neighbor complained about [...]

Pesky v. US (Pesky II)

U.S. Dist. Court, D. Idaho, No. Civ. 1:10-186 WBS, January 7, 2013: Refuses to dismiss IRS claim for 75% penalty for conservation easement tax fraud.

The Peskys were denied a charitable deduction from income tax for the grant of a conservation easement to The Nature Conservancy (TNC) on land owned by the Peskys, and the IRS imposed [...]

Flaum v. The Colonial Williamsburg Foundation

District Court, E.D. Virginia, No. 4:12cv111, November 21, 2012: Complaint of plaintiff in ADA historic property claim need not show remedy is readily achievable.

The historic preservation issue in this case is whether, at time of filing a claim in court under the Americans with Disabilities Act (“ADA”) for removal of architectural barriers at a historically significant [...]

Sierra Club v. Salazar

US Dist. Court, Dist. of Columbia, No. 10-1513(RBW), October 2, 2012: Advocacy nonprofits denied standing to challenge delisting of district from National Register.

The Sierra Club, Ohio Valley Environmental Coalition, Friends of Blair Mountain, Inc., West Virginia Labor History Association, National Trust for Historic Preservation in the United States, and West Virginia Highlands Conservancy (“Plaintiffs”) sought to [...]

T-MOBILE NORTHEAST LLC v. THE TOWN OF ISLIP

US Dist. Court, ED New York, No. 10-CV-692, September 21, 2012: NY Town denial of cell tower siting permit on aesthetic grounds upheld.

The Defendant Town of Islip, through its Planning Board (“the Board”) denied a request by plaintiff T-Mobile Northeast LLC (“T-Mobile”) for a special use permit to construct a 120-foot monopole cell tower within a [...]

Davis v. Ciborowski Family Trust

U.S. Dist. Court, D. New Hampshire, Civil No. 11-cv-436-PB, August 31, 2012: Efforts by owner to look into conflict between ADA compliance and property’s historic significance are relevant to owner’s invocation of ADA’s historic significance exception.

This case concerns the allowable scope of discovery by the plaintiffs in a claim under Title III of the Americans with [...]

TROUT RANCH, LLC v. COMMISSIONER (Trout Ranch II)

United States Court of Appeals, Tenth Circuit, No. 11-9006, August 16, 2012: Upholds Tax Court’s value of conservation easement & use of evidence.

In the Tax Court case (Trout Ranch I, T.C. Memo. 2010-283; No. 14374-08, December 27, 2010. http://preservationlawdigest.com/2010/12/30/trout-ranch-llc-v-commissioner/), the taxpayer argued that only the comparable sales appraisal method could be used because data on sales [...]

Kinnison v. City of San Antonio

US Court of Appeals, 5th Circuit, No. 11-50333, May 31, 2012: Time gap between historic building demolition order and demolition raises question of fact requiring trial, not summary judgment, on 4th amendment claim of unreasonable seizures and 14th Amendment procedural due process claim.

In 2008 the City of San Antonio demolished a building of some historic value. [...]

Dunlap v. Commissioner of Internal Revenue

U.S. Tax Court, T.C. Memo, 2012-126, May 1, 2012: Tax Court finds taxpayers’ appraisals not credible to rebut IRS appraisal, resulting in zero value for tax deduction purposes to historic preservation easement to NAT. Deductions were allowed for “required” cash contributions and accuracy-related penalties were disallowed.

The unit owners of a condominium building (Cobblestone) in a New [...]

BUTLER v. COMMISSIONER OF INTERNAL REVENUE

United States Tax Court, T.C. Memo. 2012-72, March 19, 2012: Where taxpayer presented credible evidence that reserved rights were not inconsistent with conservation purposes and IRS presented none to contrary, taxpayer satisfies burden of proof despite sparse record; state law determines whether unrecorded baseline documents may be incorporated by reference in conservation easement; appraisal revised by [...]

Rolfs v. Commissioner of Internal Revenue II

US Court of Appeals, 7th Circuit, No. 11-2078, February 8, 2012: Upholds the Tax Court decision that value of house donated to fire department on condition it be destroyed did not exceed the fair market value of the benefit the taxpayer received in return by house’s destruction.

The opinion upholds the decision of the Tax Court in [...]

PESKY v. US (Pesky I)

Dist. Court, D. Idaho, CIV. 1:10-186 WBS, August 29, 2011: Orders production of landowner’s attorneys’ documents related to appraisal of conservation easement value, in suit by landowner against US.

The Peskys donated a conservation easement to The Nature Conservancy in 2002. The IRS refused their claim for a qualified conservation contribution tax deduction and assessed a deficiency. [...]