ALCS 2024 Retrospective
December 31, 2024
Up until about ten years ago, we used to put a real estate retrospective up here at the end of each year. We have not done so in a long time for a variety of reasons, but this year we are doing it, for one simple reason: Everything around our business model has changed.
Change Number One: Large parcels of raw land have been in high demand since 2020. With 2020’s COVID19 came big demographic changes in America. One of the most visible changes was the mass movement of urban and suburban voters out into rural areas. Ostensibly to achieve some separation and distance from large groups of disease-sharing people and failing urban centers, this geographic move resulted in a much larger buyer’s market for large parcels of land. Almost all of our work involves large parcels of land, and often ALCS found itself in a lot more competition for basic properties than our business model can justify. Only intensive use and subdivision can justify the prices that have been paid for large parcels of raw land in Upstate New York and across Pennsylvania, and ALCS is not really interested in subdivision and development.
Change Number Two: Public demand for more public land in rural America is greatly diminished in places where it is easiest to do. Due to heavy-handed management of public lands by public employees across America, a well of resentment and frustration has been rising among rural citizens who live in, around, or adjacent to public lands. Rural areas have the greatest amount of large parcels available, and yet finding support there for our form of market-driven land conservation projects has really fallen off, at least in the areas ALCS works in. We hear most of this is unhappiness with the way that public forest and parks staff interact with private landowners, at the federal, state, and local levels. There appears to be a disconnect between the land management goals and values of the public employees who are hired to care for those public lands, on the one hand, and with the nearby public citizenry, on the other hand. Because ALCS works in relatively lower-cost rural areas, where land is more available for prices ALCS can afford, we find ourselves at odds with the very people we need to make our projects successful.
Change Number Three: Public support for public land is diminishing in places where public land is most pronounced. As above, those rural areas that have the most public land are becoming the same places where additional public land is least wanted and the existing public land is under renewed scrutiny. This seems to be due to a difference of opinion about how existing public lands should be managed. One of the greatest sources of frustration that we hear from people is that traditional intensive public land uses, like oil and gas drilling and sustainable forestry, have been decreased, in favor of solar and wind projects of dubious value and utility, and with much greater surface impacts that public land managers have always said they opposed.
Change Number Four: Although we have not done any substantive consulting in many years, the idea of “greening your company” has been greatly shaped by the climate change movement since we started helping companies reduce their waste stream in 2004 and to better describe their environmental quality commitments. Today, “climate change” has sucked all of the oxygen out of environmental quality and conservation efforts. Despite not being synonymous with the environment, “climate change” has become the primary goal of environmental quality initiatives. Much more prosaic, humbler, more attainable efforts may have more value and use, but they are almost passé at this point. Because ALCS does not participate in or promote policies or efforts associated with “climate change”, this part of our business is moribund.
Change Number Five: It is increasingly harder to find public partners for our land conservation efforts. ALCS is a small business, and we must “churn” our projects to make money to stay afloat. Unlike land trusts that accept large public grants for their projects, and who have large membership bases that keep them in operation, all of ALCS’ projects are driven by private investment. Our return on investment must be penciled out in the positive, in the worst case scenario, before we ever take a shot at a project. So our ability to hold onto land for long periods of time in the interest of land conservation (environmental credit banking, conservation easements, and conversion to public land) is limited. One example: ALCS purchased 100 acres in a southeastern PA county last year, primarily for its timber. We made written and verbal overtures to the township, offering to generously bargain sale the property so it could become a public park, which neighbors overwhelmingly supported. We also offered use of the property’s abundant springs, or outright ownership, to the adjoining public water authority. Both entities – township and water authority – either ignored our overtures or reacted angrily. We have some other examples, one of which is going to become public soon, the bottom line being that our business model depends upon two-way mutual partnerships with public or private entities. With real and imaginary reasons holding back public agencies and governments from participating, and with our relatively short horizon, our ongoing land projects must take on new purposes.
In sum, 2024 was a year of learning, as our business model comes up for re-evaluation in light of the changing markets around us. We are hopeful that 2025 will have a better overall economy, and hold better timber prices, as the cost of diesel fuel and logging machinery and tools have doubled since 2020, while timber prices have remained static or decreased.
