Board limits Castleton Lyons offer to $2 million; funds not available until next year

The board that oversees a Fayette County farmland preservation program voted Wednesday to start negotiations for the development rights for a 1,000-acre farm on Ironworks Pike owned by an Irish citizen who does not pay federal income taxes.

The resolution passed by the Rural Land Management Board limited the amount of money offered to Castleton Lyons to $2 million — the amount of local money the city typically allocates each year to the purchase of development program.

That $2 million, the motion said, was “subject to funding from the LFUCG fiscal year 2018 budget and other mutually agreed upon contingencies.”

That means the funding would not be available until the next budget year, or after July 1.

The board also voted on resolutions to move forward with offers on five other farms that have qualified for federal matching funding. Money to pay for the local match for those development rights will come from the current and prior years’ budgets.

The board has been wrestling for months with whether to pursue buying development rights for Castleton Lyons, a horse farm. At issue is whether only local funds should be used to pay for those rights.

Shane Ryan, the owner of Castleton Lyons, does not qualify for federal matching funds that typically picks up the tab for half of those easements in Fayette County's purchase of development rights program. Ryan is Irish and does not file federal income taxes. Federal conservation guidelines say that only United States citizens and those who make under $900,000 can receive federal funding.

There is no citizenship requirements or income limit with the local program.

Several city officials, including Lexington Mayor Jim Gray, have raised concerns about depleting the entire budget of the program on one farm that does not qualify for federal funding.

At an August board meeting, the board voted 7-2 to seek an appraisal of the farm. Although the amount of the appraisal was not released Wednesday, based on appraisals of other PDR farms in the area, it’s likely that the appraisal will top more than $4 million.

That would deplete two years of local funding for the program.

Lawyers and representatives with Castleton Lyons have argued there is no requirement that farms in the program receive federal matching funds.

Billy Van Pelt, who represents Castleton Lyons, told the board before the executive session that Castleton Lyons met all of the requirements of the local ordinance. Van Pelt provided the board with a draft resolution that would give funding to Castleton Lyons. The resolution was also given to the Urban County Council, Van Pelt said. Castleton Lyons pays payroll, property and other taxes and contributes to the economy.

The council ultimately decides how much money to give the program each year.

Since its creation in 2000, the Fayette County PDR program has allocated $77 million — $37 million in local money, $24 million in federal money and $16 million in state money — to buy conservation easements for 29,165 acres, protecting it from future development.

This story was originally published November 2, 2016 at 8:59 PM with the headline "Board limits Castleton Lyons offer to $2 million; funds not available until next year."