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Home News Headlines Saving The Ranch: A landmark conservation agreement helped the Dahlstrom Ranch stay in the family

Saving The Ranch: A landmark conservation agreement helped the Dahlstrom Ranch stay in the family

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The Dahlstrom Ranch is typical of a lot of Hill Country acreage. It's green but rocky with caves and sinkholes that recharge Edwards Aquifer. It abounds with wildlife and Ashe juniper. Located a little west of Buda on Onion Creek in Hays County, the ranch is situated at the eastern edge of the Hill Country in the heart of one of the fastest-growing regions in the state.

The Dahlstrom family has owned the land for five generations, through boom and bust. A few years ago it looked like that line of ownership would be broken. The region's boom threatened to make the ranch go bust. Its appraised value was $30 million, based on its worth on the commercial market, and a subdivision already had the ranch in its sights.

Though it would have been an easy matter to sell the land, the family wanted to preserve it for future generations. Projected estate taxes made that prospect daunting, if not impossible.

From those circumstances came a landmark agreement featuring the Hill County Conservancy, the Natural Resources Conservation Service (NRCS), the city of Austin, Hays County and the family for a conservation easement that is used as a model for other landowners looking to lower estate taxes, preserve the natural beauty of the land and keep it in the family.

Thomas Hall with the law firm Braun and Gresham PLLL, which represented family matriarch Gay Ruby Dahlstrom during the process, referred to it during a recent webinar on conservation easements, calling it a good example of how easements are negotiated and why.

“You have to have something worth protecting,” Hall said. “In the case of the Dahlstrom Ranch, the land provided an aquifer recharge system that the city of Austin and Hays County depended on.”

But there was something else. The property also has a rather large quarry on Onion Creek.

“Most land trusts wouldn't want it,” Hall said.

The Hill Country Conservancy wanted it, however, and with the cooperation of the other parties and the family put together the first private land preservation agreement of its kind. Hall said the firm helped the family negotiate a deal that kept the subdivision out and quarry operations, which provide income for the family, going until 2060. At that time the site is slated to be turned into a water feature of some kind.

Conservation easements are written agreements between a landowner and an easement holder, such as a government entity or a land trust like Hill Country Conservancy. The landowner retains legal title to the property and negotiates its future uses and restrictions.

“The landowner is not powerless in this process,” Hall said. “The land trust and the landowner can make sure the family keeps it to use and for recreational enjoyment. For most property owners, that's the goal. No public use is required. You can permit it to be open to the public, but very few landowners do that. Most are interested in privacy and keeping the public out.”

The Dahlstrom Ranch is different in this regard. Hays County contributed $4.9 million and wanted public access, resulting in public access to 348 of its 2,254 acres.

The final deal called for three conservation easements, including one over the quarry, which was not tax-deductible; one with NRCS, which contributed $4 million, to protect areas of archaeological significance; and the one with Hays County that included public access. Hill Country Conservancy is given the right to enforce the restrictions and provisions. The various easements and donations of the land for easements by the Dahlstrom family reduced the appraised value of the land by 86 percent, Hall said.

“A lot depends on the market and where your land is in relation to metropolitan areas and market factors near you,” he said.

Hall said people who might be interested in a conservation easement include urban owners of rural lands and people who are “land rich and cash poor” along with heritage land owners and developers marketing rural lands for conservation.

Since 2006, the maximum deduction of federal income tax for donating a conservation easement has been 50 percent of adjusted gross income over 16 years but Hall noted that those incentives expired at the first of the year. Unless they are renewed, the incentives will drop to 30 percent over six years.

“As of right now, the enhanced incentives are not the law of the land,” Hall said. “I don't know what will happen, but I do know there is a lot of bipartisan support for the incentives. They could be renewed retroactive to the first of the year, but right now we just don't know.”

There are several land trusts in Texas, some of which operate statewide and some geared to specific regions. One, Texas Agricultural Land Trust, is dedicated solely to preserving agricultural land. To find out more about land trusts in your area, visit the Texas Land Trust Council at

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