Innovative fund protects natural assets in the Great Lakes basin

The Crystal River in Glen Arbor, Michigan, is known for translucent water and a switchback course that snakes through miles of forest en route to Lake Michigan. A glorious stretch of the river would likely be the centerpiece of a golf course today, were it not for a loan fund designed to save natural habitat in the Great Lakes basin.

The Conservation Fund, a national land preservation organization, created the Great Lakes Revolving Fund in 2001 with a $4 million grant from the Charles Stewart Mott Foundation. The fund provides short-term financing to help land trusts and government agencies acquire natural habitat and freshwater resources of “high ecological significance.”

Among the earliest projects were two loans, totaling $2.3 million, to help the Leelanau Conservancy purchase 90 acres of land along the Crystal River. The deal, which totaled $5.5 million, resolved a highly contentious legal battle over the proposed golf course and ensured that the stretch of river at issue would retain its natural character in perpetuity. The land was then added to the Sleeping Bear Dunes National Lakeshore.

“Without the support of The Conservation Fund and the Great Lakes Revolving Fund, I doubt we would have been able to preserve this beautiful stretch of river,” said Tom Nelson, executive director of the Leelanau Conservancy. “The Conservation Fund changes the optics for land conservancies, from ‘Can we do this?’ to ‘There’s the finish line and this is how we’re going to get there.’ That is an amazing thing.”
Great Lakes Revolving Fund Projects
Mott has provided a total of $7.7 million in grants to the Great Lakes Revolving Fund. It has been used to finance all or part of 49 land acquisitions in Great Lakes states and the Canadian Province of Ontario. Those projects collectively preserved 125,000 acres of property valued at $150 million. Highlights include:

  • Several large waterfront parcels that became new state parks, or expanded existing parks, along Lake Erie, Lake Michigan and Lake Superior;
  • 2,500 acres of coastal boreal forest on the north shore of Lake Superior, including 13 miles of undeveloped shoreline (see related article);
  • a 590-acre island in Lake Erie that features 2.5 miles of undeveloped shoreline;
  • the largest land acquisition project in Wisconsin history, 72,423 acres of forest along the Brule and St. Croix rivers;
  • more than 100,000 acres of working forests in Wisconsin, Michigan and New York, where sustainable forestry practices were implemented to protect ecosystems while maintaining logging-related jobs; and
  • 369 acres of wetlands and open spaces that the Milwaukee Metropolitan Sewerage District uses to trap and filter polluted storm water that otherwise would flow into Lake Michigan.

Sam Passmore, director of Mott’s Environment Program, said the Great Lakes Revolving Fund has exceeded expectations. He said it has financed more projects, in more areas, than anyone anticipated. The Conservation Fund also leveraged Mott’s $7.7 million in grants into $58 million in land acquisitions.

“The geographic spread and diversity of the projects, the number of acres protected, and the amount of money leveraged for additional land preservation is breathtaking,” Passmore said.

Three factors prompted the creation of the Great Lakes Revolving Fund, said Peg Kohring, Midwest regional director for The Conservation Fund. In 2001, banks wouldn’t loan money to land trusts, land trusts couldn’t raise money fast enough to compete on the open market with developers and land speculators, and the Mott Foundation wanted to support large-scale land conservation projects.

Kohring said she worked with Lois DeBacker, a former director of Mott’s Environment Program, to develop the concept of a loan fund that would level the financial playing field for land trusts.

“I never imagined the fund would play a role in so many large land deals,” Kohring said. “Many of these deals got us to the landscape scale of preservation, which is optimum from an ecosystem perspective.”

Case in point: In 2003, the Western Pennsylvania Conservancy borrowed $2.4 million from the Great Lakes Revolving Fund to purchase the last mile of undeveloped shoreline along Pennsylvania’s portion of Lake Erie. The 549-acre parcel became Erie Bluffs State Park.

“The loan allowed us to move quickly to acquire the property while at the same time negotiating with the state to ensure it would be preserved as a state park,” said Cynthia Carrow, vice president of government relations at the Western Pennsylvania Conservancy. “Because the land is on a bluff overlooking the lake and has a mile of shoreline, we felt it was highly susceptible to development.”

The success of the Great Lakes Revolving Fund prompted The Conservation Fund to expand its land acquisition efforts across the United States and Canada.

“The GLRF has been an amazing engine of conservation,” said Tom Duffus, vice president of The Conservation Fund’s Midwest Region. “Having a passion for land-based conservation and the science of understanding ecosystems is all well and good, but without financial tools at your disposal you’re going to fail.”

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