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Many Midwest Owners Cash Out Farmland

Conservationists fear a decline in open spaces as developers snap up acreage in Illinois and Iowa. Farmers worry, but can't refuse offers.

April 02, 2006|William Sluis | Chicago Tribune

When Dave Ebert bought 72 acres near New Lenox, Ill., two decades ago, "the home-building industry was dead and farming was in a bad period," he says.

But times have changed. Now, hardly a week passes that he doesn't get letters at the bank, notes in his mailbox or phone calls from builders or realty agents -- all offering to acquire his farm, for many times what he paid.

And Ebert, 56, who until half a dozen years ago farmed 720 acres in Will County, is down to working one-third of that amount, most of it rented.

"Just about all of the land now is owned by developers, but they want it farmed so they can qualify for a lower property tax rate," he said.

Instead of tilling the soil, Ebert said, "my main job is to get out of the way of the bulldozers."

For now, he is holding fast to his land. He rejects the notion that he is the last farmer in New Lenox, saying there are four others.

According to the state's Department of Agriculture, Illinois has lost 3.6 million acres of farmland since 1950, an average of almost 77,000 acres each year.

In addition to pleas from home builders, many farmers are under pressure from their families to sell their land as it escalates in value, Neil Harl, professor of agricultural economics at Iowa State University, said.

"The value gets so high that the farmer finds the rest of his family wants to sell," Harl said. "About all that can be done is to try to steer the investment to farm property elsewhere. Farmers realize that tax laws won't allow you to trade a tractor for a herd of cows, but you can buy another farm."

But moving to a distant area involves risks, Harl said, because farmland may be overvalued relative to the price of crops because of federal farm subsidies.

In some parts of Iowa, farmland has risen in value by 70% over the last three years, Harl said. An acre of farmland in the state that sold for $787 about 20 years ago now goes for $2,900 -- nearly four times as much.

Yet time may be running out on the boom in farm values, Harl says, because there are signs that the residential real estate market is weakening.

Many farmers may believe they can get $200,000 an acre for their land, but actual prices vary widely, said housing consultant G. Tracy Cross.

"If you think about paying $200,000 for a piece of dirt, it figures out to something like $4.59 a square foot. Who ever heard of paying that much?" he said.

The big question for builders is whether they can get rapid approval to start construction, said Cross, of Tracy Cross & Associates in Schaumburg, Ill. So-called entitlements, in which suburbs make agreements for the creation of schools, sewers and other infrastructure, are critical, he said.

"The value of land drops quickly if you aren't allowed to build," he said.

One of the last rural outposts in Chicago's southwest suburbs is Bengtson's Farm, which every year draws thousands of kids and their parents for its autumn pumpkin festival.

David Bengtson, 47, said his father sold the last of the farm's 116 acres in Homer Glen a few years ago and moved to Florida. His family operates the annual pumpkin fest, which includes hayrides, a petting zoo and haunted barn.

With the family farm now entirely developed into housing, they rent land for the festival. They even stopped growing pumpkins three years ago.

"Let's just say running the fest is easier and more profitable than farming," Bengtson said.

"To make money in farming, you've got to have access to thousands of acres of land," he said.

As for neighbors in Homer Glen and Lockport Township, Bengtson said, "There still are a few farmers, but not many."

Ebert says that if he sells his land near New Lenox, he would face immediate tax pressures to "roll over" the money. That would mean quickly buying a farm elsewhere in the Midwest.

"When developers buy land here, it has the effect of raising prices for farmland 100 or more miles away," Ebert said.

In southwest suburban Mokena, Ill., the last farmer was Edwin Yunker, who died five years ago.

The elder Yunker was a near-legendary figure in the community. He would walk a small herd of cattle across LaPorte Road in front of his barn, halting traffic as recently as the mid-1990s.

And his land didn't go to developers. Voters in Mokena were so eager to preserve his 115 acres, which include a large stand of old oak trees, that they approved a park district referendum to buy the land for $3.25 million.

Although there still is a plan to create a "working" farm with animals at his old farmstead, the first project to rise on the grounds is a recreation center, which is nearing completion after a lengthy controversy.

In Palos Park, the Community Center Foundation operates a farm for children to visit.

Elsewhere, such old-fashioned farms are becoming a memory. And as they are consumed by housing, the fight to preserve open space grows more difficult.

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