Land gamble became state's

Preservation deal eyed skeptically

Sun Follow-Up

October 07, 2007|By Rona Kobell | Rona Kobell,Sun reporter

GRASONVILLE -- The lands that once belonged to Arthur Kudner Jr. spread across Queen Anne's County like a lush carpet. From the main road, the forest appears to have no end, and acres of soybean fields hug the shimmering blue of Prospect Bay.

Even on the rural Eastern Shore, this much land - more than 1,500 acres - is hard to find, and harder still to keep pristine. So when the estate went up for sale, nearly every land trust in the state took notice. But none could afford to buy it.

Then David Sutherland made a $20 million gamble.

The charming, high-energy Louisiana native had spent two decades in the nonprofit land preservation movement, protecting thousands of acres on the Eastern Shore and across the country. But this time, he was venturing out as an entrepreneur. He agreed to buy the farm for $20 million, using a loan from the estate.

His goal, he said, was to develop some of the property - but to preserve much of the rest. And to do that without losing money, he needed someone to pay him to keep the land as open space.

Sutherland's push to secure state funding for the Kudner farm prompted an outcry when it became public over the summer, particularly because of the high price he demanded for a relatively small piece of the farm. But a closer look at the deal reveals problems beyond the price.

It shows how a well-connected deal-maker seized upon a fleeting state interest in building sports complexes to persuade the government to buy his property. He persuaded county commissioners that they could put such a complex on a couple of hundred acres of land that mostly cannot be developed. And when that plan fell apart, state officials went ahead and bought the parcel anyhow.

The deal also illustrates a weakness in Maryland's Open Space program that even state officials have acknowledged: The program has mostly reacted to offers that come its way rather than seeking out the most important properties to protect.

"You want to be nimble and react to offers, but you need to have a strategic plan, too, so you can buy the most valuable properties before they're gone," said George Maurer, a veteran land-use planner for nonprofits and local governments.

In July, the state and Queen Anne's County paid Sutherland $5 million for a 271-acre piece of the farm, a price higher than either of two state appraisals. Maryland may pay him millions more to protect another 575 acres. If the state doesn't come through, Sutherland says, he'll be forced to sell the property on the open market.

All that has prompted criticism in Annapolis: Why would the Department of Natural Resources let a profit-seeker buy property that the agency knew it wanted as open space?

And Sutherland's efforts have infuriated some on the Eastern Shore, who believe he used connections made while working for a nonprofit to try to enrich himself.

"From the start, this did not smell good," said former Queen Anne's County Commissioner Michael Koval. "We knew Sutherland as being part of the Conservation Fund. What the hell is he speculating on real estate for?"

Sutherland, 44, says he only wanted to save a beautiful farm from a future of subdivisions.

"There was at the time no traditional conservation organization that could handle it, so I took it on," he said. "We took a deep breath, and we said, `Hey, we want to make this project work.' "

The man

Sutherland's gamble in buying the Kudner farm in 2006 was built on more than hope: His past work meant he was well-known to the people who run state land programs.

Sutherland spent almost two decades with the Conservation Fund, where he helped to protect nearly 4 million acres throughout the country - about 200,000 of them in Maryland. He joined the Virginia-based nonprofit in 1988, a brash 25-year-old burned out from a brief career in the foreclosure business.

The Conservation Fund's purpose was to bridge the gap between what governments wanted to do to preserve open space and what they could afford. Sometimes, the fund helped Maryland's Department of Natural Resources find willing sellers of land that the state could buy with Open Space dollars. Other times, the fund bought properties and held them until the state or a county could take title.

Sutherland, a master at putting together deals, quickly became the go-to guy for Maryland's Open Space staff. John R. Griffin, who was state natural resources secretary from 1995 to 1999, said Sutherland helped bring in millions of dollars to close land deals the state could not have done otherwise.

In 1998, Sutherland persuaded the Richard King Mellon Foundation to kick in $3.2 million so Maryland could buy Chapman's Landing, a 2,225-acre tract in Charles County that was being prepared for subdivisions. The next year, he got the foundation to shell out $16.5 million for 29,000 acres of forest on the Eastern Shore and Southern Maryland.

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