Conservation Glossary:

Bargain sale: When a landowner sells a property to a government entity or a nonprofit organization for less than fair market value, the transaction is called a bargain sale. The difference between the sale price and the fair market value is considered a charitable donation. As a result, the owner can receive an income tax deduction or a reduction in estate taxes. A bargain sale is a useful tool when the property owner faces a large tax liability for selling the property due to a long-term capital gain or a large estate.
Conservation easement: A conservation easement is a way for a landowner to permanently protect the environmental value of his or her land while continuing to own it. It is a legal agreement between a landowner and a government agency or nonprofit organization that permanently limits development of the land. Even if an owner sells the land or passes it to his or her heirs, the conservation easement remains in effect. By donating a conservation easement, a landowner may qualify for a variety of tax incentives. These include reduced property and estate taxes, as well as having the easement classified as a charitable gift for income tax purposes.
Land donation: Some landowners, who would like to see their property become a park or other open space amenity, simply donate the land to a local government, such as a park district. Sometimes they donate part of their land and keep the rest. When owners donate land they receive a tax deduction for the value of the donation. The donation also reduces or eliminates the owners' real estate taxes, depending on whether they donate all or part of their property. And since they no longer own the donated land, it is exempt from estate taxes.
Life estate: A life estate enables a landowner to sell his or her property to an agency such as a forest preserve district yet to be able to continue to live on it. Upon the owner's death, the full title of the property transfers to the forest preserve district. A life estate is useful when a district has acquired all but one or two parcels of land, and the remaining targeted property is where an elderly person lives. She does not want to move, but she is interested in having the land become a park in the future. If the parcel will complete the park but is not essential to its current development, the district could buy the land from her subject to a life estate.
Open Lands Trust grant: Open Lands Trust (OLT) grants are a State of Illinois program administered by the Illinois Department of Natural Resources (IDNR). They are designed to help local governments and state agencies acquire land for conservation and natural resource-related recreation from willing sellers. OLT grants fund up to 50 percent of a project's total cost, or 90 percent for agencies qualifying as economically disadvantaged. The maximum award for any single project is $2 million annually. Funding is competitively awarded based on written applications submitted by an annual deadline that varies from year to year. Grant recipients receive reimbursement after they complete their projects and must convey conservation easements to IDNR for all property acquired with OLT assistance. Through the year 2004, OLT will make $40 million available for acquisitions annually.
For more information, visit http://dnr.state.il.us/ocd/gaoutnew.htm on the World Wide Web.
Open Space Lands Acquisition and Development (OSLAD) grant: The OSLAD program, administered by the Illinois Department of Natural Resources, aims to help local governments acquire and/or develop land for outdoor recreation and open space preservation. OSLAD grants fund up to 50 percent of a project's total cost, with maximum awards of $750,000 for acquisition and $400,000 for development projects. Funding is competitively awarded and based on written applications that are submitted by the annual deadline of July 1st. Grant recipients receive reimbursement after their projects are completed.
For more information, visit http://dnr.state.il.us/ocd/gaoutnew.htm on the World Wide Web.
Option agreement: An option agreement on a contract to purchase land enables the buyer, such as a park district, to pay for the right to buy the land at a later date at a specified price. It is useful if an owner is interested in selling but is not ready to sell, and the district is interested in the land but is not ready to buy it. A variation is to prepare the purchase contract for a specified price with an option agreement that gives the park district the right of first refusal when the owner is ready to sell. The owner has the right to market the property. If he or she receives a legitimate offer that is higher than the park district's price, the district has the option to buy the property at the higher price or cancel the deal.