ATLANTA--(BUSINESS WIRE)--In a legal filing on February 20th, the Atlanta-based real estate company EcoVest has emphatically denied claims by the Department of Justice that its land development projects were inconsistent with U.S. tax laws or Congressional intent to promote the private sector’s participation in land conservation efforts.
“Federal law has long sought to encourage the preservation of natural resources and undeveloped land by providing tax deductions for conservation easements,” EcoVest stated in its answer to the complaint filed by the Justice Department in December, adding that “the evidence will show that the EcoVest Parties went to great lengths to ensure that all of their projects fully complied with the law.”
EcoVest’s chief financial officer, Bob McCullough, held a press call on February 21st to provide details on his company’s response to the Department of Justice’s lawsuit.
As stated in the filing, “EcoVest is a real estate company that balances economic, environmental, and social gains through the preservation of natural resources and promotion of sustainable business practices. Investors in projects managed by EcoVest choose whether to build on their property in accordance with comprehensive development plans, to hold it for appreciation, or to preserve it via a conservation easement, which not only protects such property in perpetuity but also provides the potential for limited development.”
EcoVest’s programs have preserved nearly 20,000 acres of environmentally sensitive land, including forests, meadows, wetlands, streams and coastal plains, which together are equivalent to the size of Manhattan.
EcoVest takes numerous steps to ensure that its projects are fully compliant with the law. First, EcoVest underwrites the development potential of the property, including the commissioning of market studies, engineering and architectural reports, zoning, entitlements, and other necessary third-party reviews. Second, EcoVest undertakes rigorous processes to ensure that all independent appraisals associated with the real estate are valid. These appraisals are made by highly qualified independent appraisers and are then corroborated by additional reviews. Third, EcoVest programs are distributed through FINRA registered independent broker-dealers, which are each required to perform due diligence and verify the validity of the third-party appraisals and other underwriting work product. Fourth, after the due diligence process is completed, these FINRA-registered broker-dealers distribute offerings that give investors a choice to fully develop the real estate in accordance with the underwritten development plan, hold the real estate for appreciation, or establish and then donate an easement on the real estate to a land trust in order to preserve the conservation values associated with the property in perpetuity and provide the potential for limited development. Finally, with respect to all of these steps, EcoVest ensures it is fully compliant with disclosure and reporting requirements of the IRS, the SEC and FINRA.
Federal law seeks to encourage the preservation of natural resources and undeveloped land by providing tax deductions for conservation easements. Since the 1970s, the availability of the conservation easement non-cash charitable deduction has helped conserve millions of acres across the U.S. In 2015, Congress passed a bipartisan bill permanently increasing the tax incentives for conservation easements with the goal of encouraging more landowners to donate their land for conservation. Because of decreased government spending on conservation efforts, the private sector’s conservation efforts in the United States are more important than ever.
From $183 million in 2017, the Department of Interior’s budget for land acquisition has shrunk to $54 million in 2018 and is projected to decline to $8 million in 2019. Simultaneously, the amount of land preserved in perpetuity under conservation easements has grown from 500,000 acres in 1990 to more than 30 million acres today.
About EcoVest
EcoVest is a real estate company that balances economic, environmental, and social gains through the preservation of natural resources and promotion of sustainable business practices. Investors in projects managed by EcoVest choose whether to build on their property in accordance with comprehensive development plans, to hold it for appreciation, or to preserve it via a conservation easement, which not only protects such property in perpetuity but also provides the potential for limited development.
