1 STATE OF VERMONT

SUPERIOR COURT ENVIRONMENTAL DIVISION
} In re Village Associates Act 250 Land Use Permit } Docket No. 6-1-08 Vtec (Appeal of Village Associates, LLC) } }

Decision and Order Appellant-Applicant Village Associates, LLC 1 (Applicant) appealed from a
decision of the District 4 Environmental Commission , granting Applicant’s Act 250 permit for an affordable housing development but re quiring an off-site mitigation fee under 10 V.S.A. §§ 6086(a)(9)(B)(iv) and 6093. Applicant is represented by Heather R. Hammond, Esq.; and the Agency of Agricult ure, Food and Markets is represented by Assistant Attorney General Diane E. Zamos, Esq. The Land Use
Panel of the Natural Resources Board has informatio nal status through John H. Hasen, Esq., but did not participate in the merits o f this appeal or in the briefing on remand. The Agency of Natural Resources also has i nformational status, but did not enter an appearance or otherwise participate. The only issue was whether or not the project invo lved primary agricultural soils, and therefore whether the mitigation fee woul d be required to be paid; no party contested the grant of the permit. An eviden tiary hearing was held in this matter before Merideth Wright, Environmental Judge. A site visit was taken by Judge Wright alone, by agreement of the parties, incl uding, at the request of the parties, driving to or past a number of area agricul tural operations mentioned in
evidence. This Court issued a Decision and Order o n April 30, 2009, ruling that the

1 As of the time of trial, the project property was b eing transferred to Housing Vermont, Inc., which will own and operate the project

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project property contains 10.85 acres of primary ag ricultural soils as defined by 10 V.S.A. § 6001(15), and therefore requiring Applicant to pay an off-site mitigation fee in an amount previously agreed upon by the parties. On appeal, the Vermont Supreme Court reversed that decision, holding that this Court erred in not considering the cost of cle aring trees to prepare the property for agricultural use in determining whether the pre sence of trees on the property is a limitation to agricultural use that cannot be easil y overcome. The Supreme Court
remanded for this Court to consider that cost in de termining whether the 10.85 acres of soils at issue in the appeal constitute primary agricultural soils requiring the payment of an off-site mitigation fee. In re Villa ge Associates Act 250 Land Use
Permit , 2010 VT 42A. The Supreme Court analyzed the 2006 amendment to 1 0 V.S.A. § 6001(15) and concluded that although [t]he amended statute contemplates instances where the presence of trees and the cost of removing them will create a l imitation for cultivation 2 that is simply impossible to overcome[,] there is n othing in the statute mandating this outcome whenever foreste d land is involved. Indeed, there may also be instances where it is entirely feasible and economically practicable to remove tre es to ready land for agricultural use—the fact that trees themselves hav e economic value suggests that this may often be the case. For inst ance, testimony from Agency officials indicated that there may be ways t o overcome the cost of tree removal, including removing the trees over a n extended period of time or allowing the farmer to remove the trees himself. These

2 See also the analysis of the consideration of ec onomics in the “Farmland Classification Systems for Vermont Soils” published by the U.S. Department of Agriculture’s Natural Resources Conservation Servic e (USDA-NRCS), in evidence in the present case as State’s Exhibit B, and the analo gous language used in Act 250 regarding primary agricultural soils, discussed in I n re Brosseau/Wedgewood Act 250 PRD Application , No. 260-11-08 Vtec, slip op. at 6–11, n. 15 (Vt. Sup er. Ct. Envtl. Div. Dec. 8, 2010) (Wright, J.).3 questions will be for the Environmental Court to co nsider on remand. Village Associates , 2010 VT 42A, ¶ 22. The Supreme Court went on to ex plain that the test does not involve a comparison with the cos t to ready the land for development, but “[i]nstead, consideration of the cos t of removing a limitation will involve only a consideration of whether the cost of removal is so high that conversion of the land into agricultural use is not economically feasible.” Id ., at ¶ 23. Following the remand, the parties were given the op portunity to present supplemental evidence, as well as to submit supplem ental written memoranda and requests for findings. The parties declined the op portunity for a supplemental hearing to submit additional evidence regarding the cost of clearing the property of trees in preparation for agricultural use. The par ties submitted supplemental requests for findings and brief supplemental memora nda of law. Upon consideration of the evidence as illustrated by the site visit, and of the written memoranda and requests for findings filed by the pa rties, the Court finds and concludes as follows, in addition to the findings a nd conclusions of the 2009 Decision and Order not implicated in the remand. F indings and conclusions from that decision are restated here only as necessary. Applicant proposed a multi-unit affordable housing development, known as Brookside Village, which was granted an Act 250 perm it and is the subject of the present appeal. The parties do not contest the gra nt of the permit. The parties agree that 10.85 acres of soils with an agricultural valu e of 6, and therefore classified as of “statewide” importance under the USDA-NRCS soils cl assification system, will be affected by the project. These soils are located on the project property on a plateau above the floodplain of the Winooski River and cont ain a healthy eastern woodland, including some stands of mature trees as well as re generating eastern woodland of predominantly hardwood species. Applicant does no t dispute the quality of the4

soils on the project property, their physical and ch emical characteristics, or their soil map classifications. The parties also do not contest that payment of an off-site mitigation fee is appropriate if the soils at issue do qualify as pri mary agricultural soils. The parties have entered into a mitigation agreement in complia nce with subsections (i) through (iv) of 10 V.S.A. § 6086(a)(9)(B) and with 10 V.S.A . § 6093, to take effect if the 10.85-acre area is determined to constitute primary agricultural soils under 10 V.S.A. § 6001(15). The cost of clearing the trees from the property fo r the purpose of building the housing development is approximately $150,000. 3 This cost includes approximately $20,000 allocated to professional logg ers for tree cutting and removal of the cut trees; approximately $50,000 for erosion control during site preparation; approximately $40,000 in “machine time” for the leas ing, labor, and fuel costs for the machines necessary to do the site preparation work, including removal of the stumps and roots; and approximately $40,000 for truc king stumps and roots away from the site, including the dumping fees for those stumps and roots. However, not all of the components of this cost would be require d if the land were to be cleared for agriculture.

3 This cost is the cost of clearing about ten acre s of trees for the entire proposed development. However, no evidence was presented tha t all of the ten acres of clearing would be taking place on the 10.85 acres o f soils classified as “statewide” at issue in this appeal. That is, 1.21 acres of soils that do not qualify as farmland of “prime,” “statewide,” or “local” importance under the USDA-NRCS classification system are also affected by the project. If any of that area of unrelated soils needs to be cleared for the project development, the develop ment cost figures should be discounted by that amount, as the only issue in the present case on remand is the cost of clearing the agricultural soils for farming . If the estimated cost of clearing the land for the proposed development is allocated enti rely to the 10.85 acres at issue, the cost of conversion of the land for development is, as stated in Applicant’s memorandum, approximately $13,825 per acre.5 The cost of clearing the trees from the property in preparation for agricultural use would be far less than that required for develo pment. The $50,000 cost of erosion control during the site preparation and dev elopment process would not be incurred by a farmer. With regard to erosion contr ol for development, Applicants were required to prepare and follow an erosion cont rol plan, required for construction projects, because the ground surface is disturbed during site preparation and construction. One requirement of the plan, for example, is for the developer to stabilize the soil at the work entranc e to the site by putting down erosion control matting. By comparison, an erosion control plan is not required for simply logging the land. Loggers must instead comp ly with certain management practices standard in the industry and therefore in cluded in the professional logger’s estimate of $20,000 for logging and removing the cut logs and tree debris. There is good access from the project property for the removal of timber to a
flat area at West Street. There is no technical or physical impediment to the removal of trees from the 10.85-acre portion of the project property at issue in this appeal.
The mature trees have value if harvested for timber , although the dollar value of
that timber was not established in evidence. The r egenerating forest and the
branches and debris from the mature trees would hav e value if harvested for wood chips to supply the nearby McNeil electric generati ng plant, although the dollar value of the wood chips was not established in evid ence. 4 For agriculture, although the stumps and roots have to be removed from the soil in order to farm, they do not have to be taken off site, but can be left in stump dumps on the site but away from or at the edges of the agricultural fields. Thus,

4 The estimate of $20,000 for logging during constru ction is net of expected revenue to the logger from sale of the trees for lumber or wood chips. The fact that revenue from sale of the trees is included in the $20,000 of the cost allocated to logging does not change the result in this case, as further discu ssed below.6

even if the removal of stumps and roots from the gr ound, in preparation of the land for agriculture, would have incurred the entire $40 ,000 of machine costs as would have been incurred for development, none of the othe r $40,000 of trucking costs and dumping fees (to take the stumps and roots away fro m the property) would have to be incurred to prepare the property for agriculture

. Thus, even using the cost components as estimated b y Applicant, the cost of tree removal to convert the land to agriculture is likely to be approximately a total of $60,000, calculated from the $20,000 allocated to logg ing the property plus the $40,000 of machine costs for removing the stumps and roots and placing them elsewhere on the property away from the agricultura l fields, or a total of approximately $5,530 per acre for the 10.85-acre are a. In addition, a farmer can further overcome the cost of tree removal for conversion to agriculture by removing the trees ove r an extended period of time, by using the revenues from farming on the earlier-clea red acreage to offset the cost of later clearing, and by doing some or all of the work using the farmer’s own labor and equipment rather than by incurring the cost of outside logging or stumpremoval contractors. If the work is done by the farmer, the revenue to the farmer from the sale of trees for lumber or wood chips wou ld further overcome the cost of
tree removal. Balanced against the cost of preparing the land fo r agriculture, a small, diversified specialty vegetable and soft fruit farm ing operation could succeed on the 10.85-acre portion of the project property if that portion of the property were cleared of trees. The cleared property would be capable of earning a gross income of approximately $22,500 per acre if used for a Communi ty Supported Agriculture (CSA) operation. 5

5 Although the Court also found in the initial dec ision that the 10.85-acre portion of7

This gross income of $22,500 per acre would therefo re be able to offset even the $13,825-per-acre one-time cost of tree removal f or development, if amortized over just a few years. It would certainly be able to offset the $5,530 per acre onetime cost of tree removal for agriculture, particula rly if amortized over a few years. The costs may be further reduced if the trees are r emoved over an extended period of time, if the work is done by the farmer, and if th e cost is offset by sale of the trees for lumber or wood chips. In any of these scenario s, the cost of clearing the 10.85 acre area at issue in the present case for agricult ural use is not “so high that conversion of the land into agricultural use is not economically feasible.” Village
Associates , 2010 VT 42A, ¶ 23.

Accordingly, based on the foregoing, it is hereby OR DERED and ADJUDGED that the project will result in the reduction of th e agricultural potential of 10.85 acres of primary agricultural soils, and therefore that t he previously agreed amount of off-site mitigation fee is required to be paid.

Done at Berlin, Vermont, this 6th day of January, 2011

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_______________________________________________ Merideth Wright Environmental Judge

the property could contribute to nearby agricultura l operations if cleared of trees and planted in hay or used for pasture, for the purp oses of considering whether the cost of conversion for agriculture is economically feasible, it is appropriate to consider the more intensive and more value-added CS A use in that calculation.