Carbon & Conservation Investors 1, LLC
(Minimum Investment $25,000)
Risks & Benefits
Potential benefits of voting for conservation over development include:
- Environmental benefits by ensuring that the subject land will remain undevelopable preserving the current conservation values and ecosystem on the property.
- Conservation of the property can provide the opportunity to create quantifiable stores of assets that are recognized as being of great monetary value in the global fight to mitigate climate change and global warming through the enhancement of carbon sequestration, water retention, biodiversity, and soil enrichment.
- Protection of the ecosystem would be of significant importance to various government agencies and native American tribes that have active programs adjacent to this property.
- In lieu of the potential profits associated with the development of the project, investors would receive a charitable deduction immediately of approximately $16,780,000 which is roughly 4 times the cost of acquisition of $4,195,000. Based on the Cushman & Wakefield study the profits if the project was developed would be $27,129,540 over a 5-year period.
- A vote to conserve the property will NOT require the additional capital contributions or debt from investors that may be necessary to pursue the development plan.
Potential risks of voting for conservation over development include:
- The IRS considers this investment a “Listed Transaction” which requires the filing of a transaction report with the IRS notifying them the partnership elected the “GREEN” option and will receive the charitable deduction.
- High probability the IRS will elect to audit the Partnership and challenge the deduction which will be vehemently defended to the letter of the law. The potential however exists that if the IRS challenges are successful in Federal Courts, investors could face back taxes PLUS penalties and interest.
- Legislative changes could retroactively diminish or eliminate the charitable deductions investors receive by a vote for the “GREEN” option.
Deal Structure & Terms
The investment will be structured as an LLC that will acquire a 98% interest in COP LLC which currently owns 100% of the property. The LLC will be structured as a Partnership so that all forms of gains and/or losses from COP LLC, which include charitable deductions would pass-through to the investors of the LLC.
To provide investors with a significant risk adjusted return through the acquisition of a piece of undeveloped land.
Minimum Investment – $25,000
- A one-time 1% contingency Fee
- No Annual Management Fee
- No Performance Fee
- Partnership for US tax purposes
- K-1 for US taxpayers
The investment in the LLC is considered Illiquid. If the “GREEN” option is elected by investors, they will receive an annual K1for the life of their ownership in the property. If the development option is elected, and if the developed property is later sold, Investors would cease to receive K1’s from the Partnership.