Letter: More on TDRs
I wanted to weigh in on the “controversy” over the value of transferable development rights recently granted to David Brown and Jody Anthes by the Pitkin County commissioners. The commissioners awarded them two transferable development rights to preserve a rare archaeological site recently discovered on a piece of property the pair owns in Emma. By the way, both the couple and the commissioners should be congratulated for this first-of-its-kind arrangement.
To the point, both local papers speculated the transferable development rights were worth $175,000 each or $350,000 for the pair. As a local real estate broker for Aspen Snowmass Sotheby’s who specializes in transferable development rights, I can confirm those figures as in line with the current market. However, I also wanted to point out that transferable development rights are similar to other real estate as they, too, are subject to real estate commissions should the owners decide to market and sell through a local broker.
If they chose to sell on their own, sellers of transferable development rights still will need to hire a local attorney to negotiate and write up a contract. In either case, those with perfected transferable development rights in hand or those who wish to convert active mining claims or rural and remote development rights to transferable development rights will always require the services of a local land-use planner. Lastly, sales of transferable development rights (just like real property) are subject to capital gains taxes.
The bottom line is, using Brown and Anthes as an example, that every transferable-development-right transaction is subject to commissions, legal fees, consulting fees, taxes and even closing costs. Therefore, should Brown and Anthes find a buyer for their two transferable development rights at $350,000 for the pair, they likely will net around $325,000 at the closing table.
That might still represent a bit of a windfall for the couple but one well deserved, in my opinion, for working to preserve the site rather than running a bulldozer over it.
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