CALCULATING
WIND RIGHTS
ASSIGNMENT
• Conservation Easement on 380-Ac. Dairy Farm
• Restricted Rights – Wind Energy Development
& Some Development Rights
• Retained Rights – Development, Recreational,
Agricultural
Property Description
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Building Site:
Tillage:
Pasture:
Wetlands:
Wasteland:
Buildings:
2 Acres
15 Acres
122 Acres
180 Acres
61 Acres
House, 5 Barns, Silos
Highest & Best Use – Before
• 9 Economic Units
– All have existing road frontage
– All have developable sites
– Sizes range from 11 to 85 Acres
• Sizes meet minimum zoning requirements
• Sizes match market study results
• Mix of sizes minimizes marketing time
– 7 include wetlands (25% to 91%)
– 1 includes building site and all buildings
Before Valuation
• Value estimated for each EU
• Gross value of EU’s discounted for
subdivision costs and marketing time to
calculate net “Before Value”
• Before Land Value includes potential for
development, wind energy, agriculture,
recreation and other “typical” ownership
rights in neighborhood
Acquisition
• Extinguish Development Rights on 180 acres of
wetlands
• Extinguish Comm. / Indust. Wind Power Rights
• Retained Rights
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Agricultural
Rural Enterprises
Recreational
Rural Residential Development on non-wetland acres
• Comments on Extinguished & Retained Rights
Development Rights on Wetlands?
What Development Rights Exist on
Wetlands?
Effects of Acquisition
• Market Study revealed low demand for rural
residential lots
• Public utilities of only E & T
– Town may extend water to subject’s frontage
• Comm. / Ind. Wind Development Rights
– What?
– Potential?
– Support for Value?
Does Value for Wind Development
Exist?
• Research found Value for Wind Development
is Speculative
– Average wind speed
– Proximity of established transmission network
– Local ordinances
– Established demand
Evidence of Wind Potential
• Wolfe Island – 197.8-MW wind farm
– St. Lawrence River, Canada (across from Cape Vincent)
– 86 2.3-MW wind turbines
• St. Lawrence Wind Farm (Acciona - proposed)
– 53 1.5-MW wind turbines extending NE from subject
• Cape Vincent Wind Power Project (BP - proposed)
– 84 1.6-MW wind turbines extending E from subject
• Horse Creek Wind Farm (Iberdrola – proposed)
– 62 2.1-MW wind turbines to E/NE
• Galloo Island Wind Farm (approved)
– 84 3-MW wind turbines to SW in Lake Ontario
How to Measure
Wind
Development
Value?
How to Measure Wind Value
• Research in areas of established Wind Farms
found no “Before” and “After” land sales
• Leased sites
– $3,000/site and up
– $55/acre and up
– $3,000 to $4,000 per MW of production
• For local wind farms: $4,500 - $12,000 per site
How Big is a Turbine Site?
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Turbine site area ranges from 1 to 2 acres
What distance is required between sites?
Need to know tower height to tip of blade
Fall zone = tower height x 1.1
3-MW heights = ±600 feet
Fall zone = 660 feet
Circle or square fall zones
How Big is a Turbine Site?
• 660 ft. + 660 ft. = 1,320 feet diameter of circle
or side of square
• 1,320 ft. x 1,320 ft. = 1,742,400;
÷ 43,560 sf = 40 acres
• 660 ft. x 660 ft. x π (3.14159) = 1,368,477 sf;
÷ 43,560 sf = 31.4 acres
• Site lease actually commits an additional 30
to 39 acres
• Allow for non-developable areas
Other Density Requirements
• Developers may require minimum distance
between turbine sites (e.g. 1,250 feet)
• Alignment of towers to minimize impact on
wind patterns
– Upwind wind patterns to be minimized
– Topographic features
Unit Site Rental
• $4,500/site for 40 acres = $113/acre
• $12,000/site for 40 acres = $300/acre
• One source reported $55/acre minimum
Valuation
• Per acre unit rent
• Deductions
– Vacancy/Collection Loss
– Landlord expenses
• Land taxes
• Management
• Extra crop / pasture / access road costs
• Net Income
• Capitalization
• Value per Acre
Wind Energy Value for Subject
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Available Subject Acreage for Wind Turbines
380 Acres Total Subject Area
Less 180 Acres Wetlands
Less Wetlands Buffer of 15 Acres
Less 5 Acres Farmsite
Less 10 Acres Around Out-Parcels
Net Acreage of 170 Acres
Wind Energy Value for Subject
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170 Acres x Net Rent Per Acre
Lease Term = 25 Years + Renewal
Discounted Cash Flow Analysis?
Direct Capitalization?
Questions?