By Jacob Meyer, Co-General Counsel to NEFA
At each step in the development and management process of NEFA sustainable farming projects, there are important and necessary legal actions that enable progression and success on the ground. What follows is a summary of the legal status of NEFA’s current active projects, as of late November, 2014:
Farmland Renewal, LLC: Copake Agricultural Center
With the assistance of legal counsel at the law firm of Lavelle & Finn, LLP, NEFA formed Farmland Renewal, LLC (FR LLC) and funded the acquisition of the 122-acre Town Center Farm in late 2013. In the beginning of 2014, Farmland Renewal, LLC, acquired two farm houses abutting the Town Center Farm, funded by loans from the Kinderhook Bank and Hudson River Ventures, LLC. A loan from Columbia Economic Development Corporation and contracts with five local construction firms enabled the LLC to complete capital improvements to all properties.
Working in consultation with an advisory board of FR LLC investors and with Lavelle & Finn, NEFA developed an Amended and Restated Operating Agreement (Operating Agreement). FR LLC’s adoption of the Operating Agreement in August established rules governing how FR LLC does business, including the members’ financial and managerial rights and duties. By accepting the Operating Agreement, investors converted from convertible debt holders to equity members in FR LLC, with full rights and responsibilities as set forth in the Operating Agreement. Currently, Members holding $590k out of $610k initial convertible debt have formally accepted the Operating Agreement.
With Alice Belt’s farm remaining as the final property initially proposed for inclusion in FR LLC, NEFA has set a closing date of December 17th on that property and secured the necessary funding to close. With Alice’s farmhouse, farmland, greenhouse and shop currently leased to Tiny Hearts Farm, MX Morningstar Farm and Sparrow Arc Farm, acquisition of the property will offer valuable land, views and infrastructure that create a variety of options, for Sparrow Arc Farm, FR LLC, and the town.
Simultaneous with the Alice Belt farm acquisition, FR LLC will complete the sale of two conservation easements, one on the Town Center Farm and the other on the Alice Belt farm, with the easements to be held by Columbia Land Conservancy and the purchase funded by Scenic Hudson. NEFA has arranged for subdivision of a house lot from the rest of the Alice Belt farm; the lot will be excluded from the easement so that it will remain available for future use by a farmer. The sale of these easements will partially fund the purchase of the Alice Belt farm and will allow FR LLC to retire a portion of its current debt.
After the closing on Alice Belt’s farm, FR LLC will continue to raise equity investment towards operating expenses and retirement of additional short-term debt.
Visit the Copake Agricultural Center page on the NEFA website.
Chester Agricultural Center, LLC
With the assistance of Albany law firm Lavelle & Finn, NEFA formed the Chester Agricultural Center, LLC (CAC LLC) on October 7 with the aim of eventually purchasing approximately 270 acres of “black dirt” in Chester, New York. On November 14, the Ralph E. Ogden Foundation (REOF) and NEFA adopted a multi-member operating agreement for the CAC, LLC, with REOF as CAC, LLC’s current majority member. Thanks to funding provided by REOF, CAC, LLC completed its first closing on November 17, acquiring 70 acres of black dirt and buildings from sellers Tom & Marion Zangrillo. The CAC, LLC’s next closing is scheduled for December 18, at which time it hopes to acquire an additional 24 acres and three barns from Mr. Zangrillo.
NEFA has been in negotiation will a group of talented farmers and expects in the next few weeks to execute four to six leases on the parcels acquired on November 17. NEFA has been working with REOF and other local partners to develop and implement a set of unique standards for inclusion in the leases, intended to encourage greater equity in farmer employer-employee relations.
Visit the Chester Agricultural Center page on the NEFA website.
Tisane’s at South Hill Farm
NEFA is in the process of negotiating contracts to purchase 171 acres of farmland and historic houses and barns at South Hill Farm in New Boston, New Hampshire. NEFA is also developing offering materials on the same.
Visit the South Hill Farm page on the NEFA website.
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