This article was originally published on GreenBiz.
“Starting in the 1990s energy companies began unloading raw, undeveloped land they owned but no longer needed — a consequence of energy conservation efforts that reduced the need to build new power plants. Most companies either donated the unneeded land for preservation or recreation purposes — a seemingly smart public relations move — or sold the property at conventional land prices.
The shrewd companies, however, gave thought to the land’s ecological value, meaning its ability to harbor rare species, preserve valuable wetlands, improve soil quality and more.
Consider Allegheny Power Company, the Pennsylvania-based electric utility. In 2002, an IRS-approved appraisal of developable eco-assets basically doubled the market value of its Canaan Valley property in West Virginia — from $17 million to $33 million. The company sold 12,000 acres to the non-profit Fish & Wildlife Foundation at the traditional land price ($17 million), then claimed a tax deduction on the “gift” represented by the incremental $16 million eco-asset value identified by an appraiser.
In addition to earning $17 million from the sale, Allegheny offset its next-year tax liability by $5.1 million. The company realized a total value of $22 million on a property that had essentially no cost basis, having been purchased in the early 1900s…”
Read on at: GreenBiz.
