New Agreement Negotiated for Saugatuck Dunes Property

Lake Michigan dunes and shoreline at Saugatuck © TNC

The Saugatuck Dunes © TNC

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SAUGATUCK, Mich. — Leaders from City of Saugatuck, Land Conservancy of West Michigan and The Nature Conservancy announced today that an agreement has been negotiated to acquire the 171-acre south portion of the McClendon property (formerly the Denison property) adjacent to Saugatuck’s Oval Beach City Park.

“This is a huge step forward in the marathon effort to protect this property in perpetuity for the people of Michigan,” said Helen Taylor, The Nature Conservancy’s State Director for Michigan.

“Those of us who live in this area know how special this land is to the local community, and how treasured it will be by everyone who lives in and visits Michigan,” State Senator Patty Birkholz said. “I’m so proud of the work everyone has done to get us here – we’ve never given up, and now I’m very optimistic that we’ll have a happy ending to this story.”

A contract was signed last December to buy the property, owned by Aubrey McClendon, for $25 million. Subsequent negotiations resulted in the new agreement to buy the property for $20 million. The total cost of the project will likely be up to $23.1 million when associated costs are considered.

Tony Vettori, City of Saugatuck Council member, said: “Our records show that the City has pursued the protection of this property since 1952. The road ahead looks clearer than ever before – the finish line is in sight.”

Vettori said the next step in the project will be securing a grant from the Michigan Natural Resources Trust Fund. In February, the Michigan Natural Resources Trust Fund Board passed a resolution supporting the project for funding in December in the amount “...of not less than $11.6 million, but in any event not to exceed $15 million.”

“This agreement has been made possible by so many, and The Nature Conservancy is honored to have facilitated the process and coordination of the many parties involved,” Taylor said. “Business leaders like David Frey, Dick Haworth, and Jim Brooks offered their wise counsel in our negotiations—in great part because this parcel was named by the West Michigan Strategic Alliance as one of the most critical natural assets in our region that needs permanent protection,” Taylor said. “Extraordinary leadership gifts have been pledged by those who recognize the importance of protecting this shoreline for future generations. We need to express special appreciation to David Frey and the Frey Foundation, the Brooks Family of Holland, Fred and Lena Meijer, and the J.A. Woollam Foundation, among many others.”

The Land Conservancy of West Michigan signed the agreement to purchase the McClendon property. Assuming the Michigan Natural Resources Trust Fund supports the project by providing a grant to the City of Saugatuck, the Land Conservancy will complete the transaction in December, launch a public campaign to raise the remaining funds needed, and hold the property until it can be transferred to the City, while leasing it to the City in the interim.”

Land Conservancy of West Michigan Executive Director Peter Homeyer sees today’s announcement as a major step forward for finding compatible solutions for people and nature.

“The Land Conservancy first began working with the City of Saugatuck to acquire the property in 1994. For more than a decade we have been dedicated to the preservation of this property not only for its ecological values, but also its historical and cultural importance,” Homeyer said. Homeyer pointed out that the Saugatuck area attracts about 2 million visitors each year to the small town with a year-round population of 1,065.

He noted that while additional gifts will be needed to complete the project, they are not encouraged at this time. “As soon as the Trust Fund Board officially approves the grant in December, we will launch a community campaign to raise the remaining $4.5 million needed for the project,” he said. “We hope a significant portion of this remaining funding comes from additional private and public sources, including the National Oceanic and Atmospheric Administration’s Coastal and Estuarine Land Conservation Program.”

To learn more about the project or how you can help now, visit www.naturenearby.org.

The property is part of the world’s largest freshwater dune system, provides habitat for rare and declining species, and is one of the finest examples of Michigan’s characteristic Great Lakes shoreline. More information about freshwater dunes can be found here.

Purchase and Sale Agreement Details:

Project Costs:
- Purchase Price $20 million
- Project related costs (transactional, interest, management): $3.1 million
Seller: Aubrey McClendon (Singapore Dunes, LLC)
Purchaser: Land Conservancy of West Michigan, on behalf of the City of Saugatuck
Purchase and sale agreement contingent upon Michigan Natural Resources Trust Fund Board approval of $12.6 million grant award at December 2009 meeting.
Closing required in December 2009

Sources of Funding and Financing:

A total of $6 million in private donations have been pledged, thanks to the generosity of The Frey Foundation, Fred and Lena Meijer, Jim Brooks and the Brooks Family of Holland, the J.A. Woollam Foundation, and anonymous donors.
Private gifts received to date have helped cover the costs of appraisals, legal assistance, and administrative costs associated with the project.
The City of Saugatuck hopes to be successful in securing a $12.6 million grant from the Michigan Natural Resources Trust Fund. The Trust Fund vote will take place at its December 2009 meeting. At the Trust Fund’s February 4, 2009 meeting, the Trust Fund board passed a resolution stating “We [the Board] support the purchase of the property at a Trust Fund contribution amount to be determined and that has been determined by the MNRTF staff in previous years of not less than $11.6 million, but in any event not exceed $15 million. It may be necessary to make this contribution over more than one year.”
Interim financing is being made available by an array of private sources and foundations, including The Frey Foundation, The Meijer Foundation, J.A. Woollam Foundation, the Conservation Fund and James W. Brooks and the Brooks Family of Holland.
If the Trust Fund grant is approved, the closing will take place in December this year. The closing will be made possible by the $6 million in private donations pledged to date, and the interim financing made available by private individuals and foundations. Along with the Trust Fund grant, a remaining amount of $4.5 million will need to be raised to repay the interim financing and cover all the costs to complete the project. Additional applications are being submitted to public and private sources by The Nature Conservancy and the Land Conservancy of West Michigan to cover these costs.
Following the hoped-for closing and purchase of the property in December, the Land Conservancy of West Michigan will lead a regional campaign to raise the remaining funds required. Gifts are not encouraged at this time, however, after December, it is hoped that the entire local and regional community of West Michigan will come together to provide the remaining resources needed.

Future Use of Property:

The City of Saugatuck will enter into a lease with the Land Conservancy of West Michigan to use and manage the property as a Natural Area extension of Oval Beach City Park shortly after the acquisition of the property by the Land Conservancy of West Michigan. Management of the property will maintain, and where necessary, restore the diverse natural features found at the property.
The Land Conservancy of West Michigan, the City of Saugatuck and The Nature Conservancy are working together to finalize a land management plan that will protect the property’s unique resources and provide for compatible non-motorized recreation. An endowment will be sought to help underwrite the appropriate management of the property.
The property will be open to pedestrian access through a system of designated trails with educational signage, including sets of wooden stairways and platforms at key locations to protect the dunes while allowing visitors to enjoy the views from high points on the property.
Visitors will be able to fish from the south pier on the Kalamazoo River mouth, and in the future from one or two platforms to be developed on the Ox-Bow Lagoon.
Sunbathing will be permitted along the Lake Michigan beach of the property. While swimming at one’s own risk in Lake Michigan will be permitted, users will be encouraged to swim at Oval Beach where the Beach Patrol Program will be present.

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Leadership Gift Commitments That Are Making this Agreement Possible:

The Frey Foundation
Fred and Lena Meijer
James W. Brooks and the Brooks Family of Holland
J.A. Woollam Foundation
Anonymous

West Michigan Community Leaders whose advice, input, and expertise have helped the negotiating team immensely, and made this agreement possible:

Patty Birkholz, Michigan State Senator
David Frey
Dick Haworth
James W. Brooks
Phil Miller

Negotiating Team:

Jack Marquis, Warner, Norcross & Judd, of counsel to The Nature Conservancy
Keith Walker, McShane & Bowie; and Tim Lundgren, Varnum, Riddering, Schmidt & Howlett, of counsel to the Land Conservancy of West Michigan
Gail Lewellan and Leslie Gillette, legal counsel, The Nature Conservancy
Helen Taylor, State Director for The Nature Conservancy, Michigan
Peter Homeyer, Executive Director for the Land Conservancy of West Michigan
Rich Tuzinsky, Director of Land Protection, The Nature Conservancy
April Scholtz, Director of Land Protection, Land Conservancy of West Michigan

Exploratory Group Members – summer/fall 2008, whose work provided the foundation that led to the negotiation of an agreement:

Helen Taylor, State Director for The Nature Conservancy, Michigan
Stephen Neumer, of counsel to Aubrey McClendon (Singapore Dunes, LLC)
Tony Vettori, Saugatuck City Council member
Jack Marquis, Warner Norcross, of counsel to The Nature Conservancy
Rich Tuzinsky, Director of Land Protection, The Nature Conservancy
Phil Miller, Saugatuck resident, Chair of Saugatuck Save Our Shoreline
Chris Roerig, Saugatuck Township
William W. Wester, Sr., Saugatuck Township

Background on the partnering organizations who made this project possible:

City of Saugatuck

The City of Saugatuck was incorporated as a village in 1868 and officially became a city in 1984. Saugatuck, meaning "mouth of the river," derives its name from the area’s Native American heritage and proximity to the Kalamazoo waters. Saugatuck's Oval Beach has been rated by Conde Naste's Traveler Magazine as one of the 25 best shorelines in the world, and MTV has ranked Oval Beach as one of the top five beaches in the country. Local residents have been seeking public access and protection of the Denison property since 1952. Learn more about Saugatuck at http://www.saugatuck.com

Land Conservancy of West Michigan

The Land Conservancy of West Michigan is a local, nonprofit organization that preserves natural land and open space in eight West Michigan counties. It is the only organization devoted solely to preserving natural and scenic lands that are an important part of West Michigan’s community character. With more than 30 years of experience keeping nature nearby, the Land Conservancy has protected more than 5,000 acres with nature preserves, conservation easements, and project assistance to local governments. For more information, visit http://www.naturenearby.org

The Nature Conservancy:

The Nature Conservancy is the leading conservation organization working to protect the most ecologically important lands and waters around the world for nature and people. To date, the Conservancy and its 1 million members have been responsible for the protection of more than 120 million acres worldwide, including 360,000 acres in Michigan. The Nature Conservancy is working to make the Great Lakes the best managed freshwater ecosystem in the world. For more information, visit http://nature.org/michigan.