Don’t rush critical land decisions

A specialist with Farmers National Company says landowners should not rush a decision if approached by a company to use farmland for a project.

Chace Daley, the senior vice president of energy management, says there’s a growing interest in renewable energy with the tax breaks included in the Inflation Reduction Act and landowners should take time to find out as much as possible about the project.

“These projects, some of which, are structured in a way that’s suboptimal for landowners, meaning there’s not a lot of upfront cash for landowners and if you sign up for these transactions, there may be a lot of optionality and contingency.”

He says having an advocate to help navigate the process is also helpful and some projects will pay for a lawyer or advisor to weigh the pros and cons.

“Find a partner who will be more creative with you in the long-term,” he says. “Some of these projects won’t happen. There may be a permitting issue. It’s a lot of work upfront with an uncertain project.”

Daley says landowners should consider the optimal use for farmland and know their rights as decisions are made.

“The first thing you need to know is whether you can say no,” says Daley. “Some projects will have eminent domain and others won’t. That’s an item you need to think through and if they do have eminent domain, that means there’s some police power they can use to get projects across the finish line.”

He says eminent domain can be a game changer in negotiations, but advisors that work with landowners can possibly negotiate terms. Daley says if eminent domain is not part of the project, landowners can pass on opportunities that aren’t right for their farming operation.

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