Purchase/Leaseback Program
November 10, 2000

In early 1998, Gene and Linda Williams approached the Department of Game, Fish and Parks with a proposal to sell their family ranch to the Department and then lease the ranch back from the Department, thereby maintaining their beef cattle operation and lifestyle. Inherent in this proposal was the continuing cattle operation, the option by the seller to repurchase the property at the end of the stipulated 20-year lease and public access to the property for hunting, fishing and other outdoor recreation activities. Because the Department was not able to dictate future agency policy on the sale of property, it was decided the South Dakota Parks and Wildlife Foundation would make the actual purchase using private monies, maintain title to the property and also maintain the lease agreement with the Williams’. The Williams Ranch Purchase/Leaseback Program was initiated in December 1998, at the urging of the Williams’, to demonstrate the effectiveness of their unique proposal.

The actual purchase/lease, as stipulated in the agreement signed by the Williams’ and the Foundation, encompasses 1400 acres of the 1718 acre Williams ranch in Jackson County. Specifically, the ranch is located north and directly adjacent to Badlands National Park, two miles west and three miles south of Cactus Flats. The ranch is comprised of rolling hills and some badlands type terrain. It is presently managed as a cow/calf operation with a carrying capacity, including USFS leases, of approximately 2,400 AUM’s.

The purchase price of the property was $279,960. The lease agreement specifies a lease payment to the Foundation of $15,000 per year for 20 years. The balloon payment, should Williams elect to repurchase the property, was set at $150,000. These figures result in a net income for the Foundation of about $170,000 over 20 years. $300,000 in lease payments plus a balloon payment of $150,000 ($450,000) minus an initial land cost of approximately $280,000 equals $170,000.

Initial discussions on the proposal produced the following potential benefits:

• The property would stay on the tax rolls for Jackson County
• The family ranching operation would stay the same thus maintaining the local economy, traditional lifestyle, school population and community population
• Lessee develops conservation and wildlife management plans to improve the health of the land and wildlife
• The public has year-around access to the property for hunting, fishing and other recreation activities
• Potential to shift monies from federal land acquisition programs to conservation activities
• Provides cash from equity in land for operation enhancement
• Opportunity for open-air, outdoor learning center development
• Provides additional guaranteed loan dollars for other producers
• Reduce producer liability
• Provides long-term income for Foundation

Since the agreement with the Williams’ was signed in December 1998, there have been several critical events including:

The final purchase payment of $79,960, made in January 2000 and the first lease payment of $15,000, made in the same month. Taxes have been paid to the County during this period.

The Williams’ worked with the Natural Resources Conservation Service on the construction of a bicycle trail and interpretive signs on the south side of the property. Cost share for the activity came from NRCS. The activity continues and is expected to be completed spring 2001.

The road to the fishing dam has been reworked and resurfaced. Access is now available year-around with only limited weather restrictions (blizzard).

The 1999 and 2000 annual hunting seasons for upland and big game were accomplished with no disruption to the farming/ranching operation and minimal increase in the workload for the Foundation and the Department. The ranch was open to walk-ins for the upland season and the deer seasons were scheduled using a call-in system for all successful Jackson County applicants. Very positive comments were received from both successful and unsuccessful hunters after the first deer season. Most were just happy to have some place to hunt that wasn’t overrun with other hunters. Comments during the call-in for the 2000 season were also very supportive of the opportunity, even those who called in too late to get a slot.

Discussions on the development of a master management agreement between the Department, the Parks and Wildlife Foundation and the Williams’ continued on a philosophical level. Questions still need to be answered on specific hunting opportunities, type of fishery, fishing restrictions, small game hunting, archery hunting, signage, and promotion.

CONCLUSIONS:

Following almost two years of operation at the William’s Ranch Purchase/Leaseback Project, most if not all of the expectations of the program have been met or are in progress. Area ranchers, hunters, county government and other agencies have been very receptive to the program. The lessee has been an avid proponent of the program and has cooperated in the installation of roads and trails for more efficient public access. If there has been any negative component of the program it is the lack of funding to start other projects. As soon as the Williams deal was finalized, other ranchers in the area were very interested in participating in the program. The interest has cooled since they realize this is only a pilot project designed to test the effectiveness of the program. It is expected their interest can be revived. To date, the program has been very successful and well received.

RECOMMENDATIONS:

Based on the results outlined above and on the feedback from local, state and national contacts, the Purchase/Leaseback Program should be incorporated into the mission of the Parks and Wildlife Foundation as a permanently managed program. It could actually be the centerpiece of the Parks and Wildlife Foundation programs. It is further recommended that the program be expanded to a level acceptable to the Board of Directors, the Department of Game, Fish and Parks and the local farming and ranching community.

The recommended short-term level of expansion would include the purchase/leaseback and management of one new 2,500 acre ranch per year, each year, for the first five years. The program would, by necessity, be evaluated annually and expansion plans revised based on funding and interest in the program.

Cost to initiate the program, based on 2,500 acre ranches at $200 per acre would be $2.5 million dollars. Assuming the fundraising to support this program would be spread over 3 – 5 years, the expansion could begin as soon as sufficient money was available to make a purchase.