The upside of the real estate downturn

March 10, 2008 9:41:22 PM PDT
The downturn in the real estate market means land trusts that buy and preserve open space are able to buy more land now than when the market is hot. One such trust that preserves open space across the country is based in San Francisco.

Four thousand acres of ranch land in Contra Costa County, ranch land in Truckee and hundreds of thousands of acres of land in California have been preserved as open space through the Trust for Public Land, or TPL.

The San Francisco-based trust is one of 125 land trusts in California alone. They're all benefiting right now from the drop in the real estate market. Since they rely entirely on donations, they can't be as competitive when the market is hot.

"We take land conservation seriously and we know the best way to protect it is to buy it, own it and preserve it forever," says Reed Holderman, TPL's western regional director.

Holderman says the market downturn allows them to snap up properties otherwise out of reach like 365 acres along the Nashua River in New England, 27 acres in Portland, Oregon. There, TPL paid a mere $4 million for what could have yielded around $20 million for developers who wanted to build homes. But with the housing market plummeting, the developers saw a safe out with an offer from the trust.

"It's all cash now, and when people have loans outstanding and want to move on and know that this isn't where the market's going, then we tend to get these better deals," says Holderman.

TPL has 40 offices nationwide, but it was born in San Francisco. The Gerbode Valley was the first piece of what became the Golden Gate National Recreation Area.

But in the late sixties, a community of 30,000 people was planned for that valley. Straight up from the Rodeo Lagoon, it would have had beautiful ocean views and be an easy shot to San Francisco over the Golden Gate Bridge. It was to be called Marincello.

However, a group of young area lawyers successfully blocked the gulf oil-backed plan by taking a zoning technicality to the State Supreme Court. Marty Rosen was one of those lawyers.

"It was going to be a new town of 30,000 in what is now the Gerbode Valley, with 50 16-story high-rises and a state of the art mall a mile long," says TPL founder Marty Rosen.

The young lawyer's success led to the creation of TPL in 1972, whose mission now is to preserve land for people, not so much for endangered species or ecology alone, but people. That includes parks, playgrounds, community gardens and historic sites all across the country in urban and rural areas.

"We're dismissed as a left coast phenomenon by some people, you know, fuzzy-headed, latte-driven infidels. But on the other hand, we're not only western, those are our roots, but we hope that our blossoms are spreading all over the country, and in some sense, all over the world," says Rosen.

TPL says the market downturn is opening up some deals in California, but for now, those deals are still confidential.