Private Funding Opportunities

October 5, 2017County Executive’s Land Conservation Advisory Group

2

Private Funding

1) Transfer of Development Rights

2) Mitigation Credits

3) Ecosystem Service Markets

4) Other Financing Mechanisms

5) Private Philanthropy

6) Impact Investing

$120 M

$53 M

$0

$33 M

$ ???

3

Private Funding - Philanthropy

The Question We Tested:

“Would a coalition of leading private sector

organizations partner with King County, its cities,

and our non-profit partners to invest $50 million

towards this Initiative over the next 10 years?”

44

5

“Quality of life, driven by ourbeautiful surroundings andopportunities for outdoorrecreation, is ranked by localbusinesses as the top benefit of being located in our region.”

- Puget Sound Business Barometer, Seattle Chamber of Commerce

6

Quality of Life

Economic Growth

Job Opportunities

Access to Nature

PublicHealth

7

63,000 Acres – 5 ways to invest

14,300 Acres

13,500Acres

Total: 27,800 Acres

26,300 Acres

150,000Acres

Total:176,300 Acres

20,200 Acres

26,000 Ac.

Total:48,200 Acres

Total: 2,200 Acres

8

Private Funding - Philanthropy

Finding #1

2016 National Giving

Individuals

Foundations

Bequest

Corporations

72%

15%

8%5%

$390 Billion

Have realistic expectations about corporate contributions

9

Private Funding - Philanthropy

Finding #2

Private giving for land acquisition is tough and will be limited, especially from traditional environmental foundations

10

Private Funding - Philanthropy

Finding #3

0

1

2

3

4

5

Private Annual Conservation Giving

“LCI Additionality”

Annual Base Giving

Additional Givinginduced by LCI

Limited additionalityfrom existing

conservation donors

$

11

Private Funding - Philanthropy

Partnerships with healthcare providers hold promise

Finding #4

More & Better Access to

Urban Parks, Greenspace,

Trails

12

Private Funding - Philanthropy

Finding #5 “Alignment”

The matching power of the public dollar can help “align” our non-profit partners with the goals of the Initiative

13

Private Funding - PhilanthropyDonor Type 10 year Total 30 year Total *

Corporations

IndividualsBase donorsNew donors

Foundations

Healthcare Providers

TOTAL

$5.5 M

$8 M

$8.5 M **

$6.5 M ***

$28 - $34 M

* 3% inflation years 10-30; Assumes giving decreases 5%/yr years 10-20 and 10%/yr years 20-30** Assumes the Initiative is able to attract 0.5% of GHCF’s annual giving ($450k/yr)*** Assumes the Initiative is able to attract 1% of Healthcare annual Community Benefit funds ($650K/yr)

$0 - 6 M

$14 M

$20 M

$21 M

$16 M

$71 - 86 M

$0 - 15 M

14

Private Funding (30 yrs)

1) Transfer of Development Rights

2) Mitigation Credits

3) Ecosystem Service Markets

4) Other Financing Mechanisms

5) Private Philanthropy

TOTAL

$120 M

$55 M

$0 M

$71 - $86 M

$33 M

$279 - 294 M

15

“Impact Investors”

• Lower borrowing costs via loan guarantees

• Foundations’ Program Related Investments (PRIs) will have limited applicability

• Opportunities to “accelerate” the rate of land acquisitions

Private Equity Conservation Investors “Buy, Hold, Sell”

16

Future Ecosystem Services Markets

Most promising markets for land conservation in KC:

• Carbon credits• Stormwater

Many other, potentially large, markets … But, too much uncertainty right now to assign $$ est.

17

Carbon Credits

Sources: older forests in fee acq., preservation esmt acq., or private working forest enrollments

Size of opportunity ($$)• Supply from LCI lands• Buyers for credits• Start-up costs,

logistical barriers?

RURAL FOREST CARBON CREDITS

Source: UFCR

18

LCI Supply Analysis: County-wide

hi-res 3D mapping

Forest growth & carbon modeling w/ partners

Field work at pilot sites w/ willing landowners

19

Carbon Credits to Fund the LCIForecast: Low-end High-endValue to the LCI* $25 million $33 million

Probability of Success: 70%

Expected Value: $18 million $21 million

Recommended FundingAssumption: $20 million* Value = direct carbon revenues for fee acq. & preservation esmt acq. + avoided acquisition costs for private working forest easements

20

Stormwater – L.I.D. Flow Control Credits

Concept: • Standards likely raised

within a decade

• Offsite credit purchase from new facilities, programs, or land conservation will allow both development flexibility & stormwaterfunction in watershed

Projected funding:• $13 million (range $6m - $28m)

• Further refinement ongoing

21

Other Financing Mechanisms

• Most “fill-the-gap” mechanisms, need more aggregated and higher cash-flowing assets

Potentially applicable to LCI:• Conservation-in-lieu-of-interest loans • Partial acquisitions / limited development fund• Timberlands aggregation…

But, insufficient scale or certainty at this point

Recommend $0 funding wedge

22

Private Funding (30 yrs)

1) Transfer of Development Rights

2) Mitigation Credits

3) Ecosystem Service Markets

4) Other Financing Mechanisms

5) Private Philanthropy

TOTAL

$120 M

$55 M

$0 M

$71 - $86 M

$33 M

$279 - 294 M

Private Funding Opportunities