What would you do with $50 million? We’re about to find out how the island’s five elected Land Bank commissioners intend to spend an unprecedented war chest accumulated last year to further its mission in the areas of open space conservation, recreation, and agriculture.
Thanks to the record-breaking year in island real estate, the Nantucket Land Bank took in more than $50 million in revenue from the island’s 2 percent transfer fee on real estate transactions. It’s an astounding sum of money that equals more than half of the town’s entire general fund operating budget.
With its coffers overflowing, the Land Bank will have extraordinary opportunities to pursue property acquisitions that may have previously been out of reach. But it has also thrust the Land Bank – and how it spends its money – back into the spotlight after last year’s contentious debate over reallocating a portion of Land Bank revenue for affordable housing projects.
“It’s unreal,” Land Bank chair Neil Paterson said of the $50 million in revenue. “I could never have imagined it, but you have to bear in mind it’s all relative to the price of real estate. I, and the board and the staff, take the responsibility incredibly seriously. To be responsible for spending that amount of money, I take it very seriously.”
Paterson and Land Bank executive director Jesse Bell said that more than half of the $50 million is already committed to pending property acquisitions that are under contract and will be revealed soon.
“A big focus for us has been waterfront property and, definitely, the Land Bank program is functioning just as it was intended to,” Bell said. “It allows us to still be in the game acquisition-wise when the market is at its peak and when there’s intense development happening. We’re very active in the real estate market right now.”
Despite the well-known restrictions on how Land Bank funds can be used – conservation, recreation, and agriculture – community members who have heard about its massive haul in 2021 have proposed all manner of potential ways to spend it, most of which don’t fall into the specific areas outlined in the Land Bank’s enabling legislation.
“People come into this office all the time (with ideas),” said Bell, who acknowledged last year’s debate at Town Meeting over using Land Bank funds for affordable housing, which was ultimately defeated by a wide margin. “We are making a real effort to collaborate with the affordable housing advocates. I’m in regular communication with (municipal housing director) Tucker (Holland) and (real estate specialist) Ken (Beaugrand). We want to help and we’re open-minded about collaborating on joint acquisitions that serve both our missions.”
Land Bank commissioner Allen Reinhard said the real surprise shouldn’t be the the $50 million the Land Bank took in last year, but rather the $2.3 billion in island real estate sales and the building boom that has come along with them.
“When the Land Bank was created back in 1983 it was intended to keep up with the market and that’s exactly what has happened,” Reinhard said. “As the prices have gone out of sight, which they certainly have the last few years, we’re still in the market because of that 2 percent transfer fee. The system is working exactly the way it was intended to work. It’s great that the Land Bank has the resources we’ve had because there were properties we took a look at awhile ago and said that’s too much. Now all the sudden, it might not be too much.”
Paterson and Reinhard both commented regarding their view of the Land Bank as a much-needed check against the booming development happening across the island. Given the current environment, they said, the Land Bank and the island’s other conservation organizations are more important than ever.
“Is it perfect? No. But we’re at a crossroads on this island,” Paterson said. “Without the Land Bank and the Conservation Foundation, what would this place look like? It would look like Bermuda. The amount of growth happening on this island is phenomenal. Every house on all these big projects have pools, tennis courts, everything. Is the Land Bank a victim of its own success? It’s a benefit of (former town planning director) Bill Klein’s infinite wisdom to save this island from itself.”
