Ouray County Faces the Future | Can Ranching Survive Development Pressures?
by Christopher Pike
Nov 06, 2006 | 506 views | 0 0 comments | 9 9 recommendations | email to a friend | print
The year 2006 will long be remembered as a year of political divisiveness and soul-searching over which vision should prevail in a Ouray County that is on the verge, if not already embarked upon, an unprecedented residential building boom.

With higher land costs, the commercial viability of existing ranching operations unknown and the vagaries of the ranching business in general, the future of the industry remains in question. The development industry, already the principle driver for the county's economy, continues to give the impression to an increasing number of citizens, developers, realtors and policy makers that the future is in housing, and not ranching.

The vision, a blend of greed driven wishful thinking and hard reality, will nonetheless be shaped by competing intrinsic values: short-term financial gain derived from rising land prices fueled by continued demand for a limited amount of inventory versus ranching as a calling, a love of the lifestyle that is short on pecuniary profits derived from the land, but rich in a way of life that is intrinsically gratifying but highly demanding.

All agree that the ranching life has never been an easy business, and with higher land prices and the current climate of politics, it's gotten more difficult. "I've watched my budget," commented Denise Adams, who manages 1,000 acres sandwiched in between the Lauren and Wolf ranches.

"There's a lot of hardship. It's work eight days a week, even when the weather turns, you have to stay with it. The drought of 2002 took me away. I sold a lot of cows."

Adams manages her father Gene's 1,000-acre ranch, which adjoins Double RL to the west and Wolf Ranch to the east. She is the next generation, and possesses a value system that may be dwindling. "It's not for everybody. Love of the life, love of the animals and love of the land," said Adams.

"I'm right in the middle of multimillionaires, but the beautiful part of it is that they are not developers," her father, Gene Adams, said in 1998 to author Kathleen Norris Cook, for her book, Spirit of the San Juans.

According to a recent county-initiated build-out study, approximately 15,551 acres remain in irrigated agricultural land countywide and another 137,796 acres remain for grazing areas and open space. There are 15,122 acres of potential riparian area.

"It's not as simple as big ranches versus little ranches," said one rancher, a prominent citizen who requested anonymity. "Some holdings here are only a small percentage of total holdings outside the county or throughout the world. Others have their livelihood dependent entirely on a few hundred acres. Big ranches like Double RL are not economically dependent on acreage here, and remain either long-term investments or tax shelters or both."

In addition to Double RL, Wolf Cattle Inc., Telluray and Sleeping Indian ranches are owned by independently wealthy individuals, at least one of them a billionaire.

"Ranching in Ouray County is basically doomed because of the beauty," said rancher Barbara Weber. "As far as trying to preserve ranching, it is a double edged sword.

"It's nice for them to irrigate for people to see, but I get really tired of politicians who say they really want to preserve the beauty and keep property rights intact."

Weber argues that because of the high land values, a rancher cannot make a living on the land any more, especially not when they are strapped with a mortgage – even when there is another generation waiting to take over, ranching is still cost prohibitive.

"Ranching has to be a love of lifestyle," pronounced Weber. Ranchers "have money because of their land, not because of cattle prices. They have to have enough money to pay for the land. A real rancher can't do it."

Her own son, Richie, currently co-manager of the family ranch, "couldn't buy this ranch," she said. "The cows couldn't pay for it. The prices have been driven up so high – we can't sell the ranch to him because he can't afford it, and because of government laws. A sale for a lower price than market value would trigger an audit by the IRS for gift tax purposes, which would be imposed if sold below market value. You can't pass down the ranch anymore.

"And how many are willing to work in ranching without health insurance and two weeks of vacation?" she added. "You have to love the life."

Weber acknowledged there might be some way to preserve a ranch, however, with a creative use of bonus density such as that being considered by the county land use officials at present. "The valley is probably the least oppressed," she said, "with such owners as the Ingos, Ayres, Hudsons, Potters and Fergusons. We could use the clustering tool for ranches. We could preserve the pretty land."

Peter Decker, a former Ouray County planning commissioner, Vietnam war correspondent and merchant seaman, is a rancher in Ouray County (Double D Ranch), although he has scaled back considerably. Decker has written two books on the history of the region, including Old Fences, New Neighbors, published in 1998.

"It's a tough question, can ranching survive," he allowed. "Here in Ouray County and San Miguel County, it is really competing with second homes and recreational use."

Decker and his wife Dee Dee sold some of their Ouray County holdings in 1993, when prices began to rise, and acquired cheaper acreage in Nebraska. At present, they have dedicated 300 of the remaining 740 acres of their holdings to a conservation easement.

Severely limited ranching opportunities are still economically accessible for smaller tract cattle ranchers who are willing to endure the toil, Decker said. But "to think you can make money in the cattle business, you can forget it," he said. "You're not going to pay for the land. New people do want into the industry by inheritance and they can make it if [they] don't have a big mortgage. I think it's still viable."

Decker said that land values have increased 300-400 percent in the last 20 years. "In the process, that has a negative effect, if ranching requires large acreage," he observed. The bigger question is this: Are ranches still viable? "Why haven't there been claims for bankruptcy if it's not viable?"

Ginny Harrington, director of the Northern San Juan Initiative, urged a long-term outlook. Her organization is engaged in the promotion of ranching through education about estate planning, conservation easements and business practices, including "niche markets" for ranch business alternatives in Ouray County. "There's a disconnect between values of agriculture and what it contributes versus what development costs the community," she said.

Harrington cited the statewide average figure of $1.65 in infrastructure costs to support dispersed rural communities for every $1 of revenue received by counties. Agriculture, on the other hand, costs 35 cents and contributes $1 in revenues statewide. "Our ranchers are responsible for being good stewards," she said, and "if development squeezes them out, the sense of community diminishes." Harrington goes on to observe that, should development threaten ranchlands, tourism will decline substantially. "The sense of place is what tourists want to see," she said. "I don't see as many officials and business people saying they'll support our local ranchers."

Or, as her husband, Tom, former manager of the Double RL, said in February of this year to the Ouray County Commissioners: "Cattlemen are a small group; most of those people are active and depend on it for their livelihood."

Others foresee an erosion of the basis for maintaining ranching. "The issue is landowners and will they think they are making enough money," said Sara Coulter, co-founder of the San Juan Corridors Coalition, an organization chartered to preserve wildlife and vital riparian areas. "Ranching sure is important for preserving habitat. We have taken it for granted."

Coulter said the purchase and/or transfer of development rights offers another opportunity for ranching land preservation. "I think [Purchase Development Rights and Transfer Development Rights] are options to be investigated," she said. "You need full-blown PDRs as well as TDRs. You can reduce but you can't eliminate development in key areas such as the valleys."

But Decker countered that TDRs involve "horrendous" bookkeeping and are "very complicated."

Perhaps there is a middle ground, in which the higher administrative costs of TDRs will be worth the price to institute a bona fide TDR banking system.

Meanwhile, some area ranches are surviving through diversification. Denise Fisher, owner of the 52-acre Angel Ridge Ranch, LLC, maintains horses and cows, as well as provides trail rides, dog sitting, weddings, reunions and retreats. "It keeps me busy 24/7," she said. "Everybody kind of networks together." Fisher is presently looking for a partner to purchase a 50 percent interest in the ranch, to "take some pressure off."

"It's hard to wear ten hats at once," she said.

Aleta Jupille, who owns a small parcel with her husband Howard on Log Hill Mesa, now raises organic beef, fowl, pork and sheep, all grass-fed so as to ensure a high-quality, low in saturated fat product. They employ strip grazing "to build up the land," said Jupille, who has gone to work at a Montrose deli, as well, to support the newly reconfigured ranching operation, which is growing.

It is future legislation, however, that favors development in ranching areas, along with pure economics, that hold the proverbial key.

Dee Dee Decker maintains that if one of the ranches on the valley floor goes, it would devalue the other ranches. "I think there are some greedy realtors in one area and some who are not," she said. "The greedy ones will certainly do what they can."
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