Editor’s note: Don’t miss NHPR’s Rick Ganley interview with Paula Tracy Tuesday for this story.
By PAULA TRACY, InDepthNH.org
CLARKSVILLE – There is a mystery in the North Country involving the land Eversource purchased for the ill-fated Northern Pass hydro power project and who has now become the land’s new owners.
The mystery involves money. And questions such as why did the state not collect real estate transfer taxes on the land given away by Northern Pass’ developer Eversource?
Only three prior owners had their land returned by Eversource.
An organization known only as Dead Water LLC now owns 4,250 acres in the state in 15 different communities, the bulk of the 5,300 acres acquired by Eversource over eight years. Dead Water LLC paid nothing for the 4,250 acres.
Eversource, the state’s largest utility, spent more than $318 million on its proposal to flow 1,096 megawatts of Hydro Quebec power to Massachusetts to help meet its carbon reduction law.
The utility’s ratepayers didn’t pay for Northern Pass as it was an enterprise project outside of rate setting with the company wholly at risk because it was outside of its regulated business.
The above and below ground transmission line would have run 192 miles though New Hampshire from the Canadian border to Deerfield. And Eversource needed to buy land in the North Country to connect a section from Pittsburg to Groveton.
On June 4, the Delaware-based company, Dead Water LLC, was formed but neither the seller Eversource nor the land’s manager Wagner Forest Management of Lyme would discuss the owner’s name. State law allows for such privacy.
The other winners of the zero cash land deal for about 15 properties are the owners of Bear Rock Adventures in Pittsburg, an OHRV recreation company.
They say they are interested in developing overnight accommodations on or near the trails on these new tracts. The company formed R & B Rentals LLC to accept the land.
But many of the people who sold their land to Eversource for Northern Pass had no opportunity to recoup their properties.
Hay farmer Roger Sylvestre of Clarksville said he sold about 320 acres of his woods on Clarksville Pond Road to the Northern Pass project in 2012 for $5 million with what he described as a verbal agreement that if they did not use the land for the transmission line, it would be offered back for his farm and kids.
He said that never happened.
After a June 25 news release in which Eversource announced it was divesting and handing some of the properties back, Sylvestre wondered if he missed a call or a letter from Eversource.
He said his tract, assessed at about $240,000, was given away to a mystery owner.
William Hinkle, Eversource media relations manager, confirmed that only three tracts were returned to their original owners and those were to people with existing leases.
Wagner officials said a fourth track was returned to the original owner and said they might be willing to return more tracts, depending on the location.
Eversource’s news release stated, “The agreements with R & B Rentals LLC (Bear Rock Adventures) and Dead Water LLC (managed by Wagner Forest Management) represent the majority of the total acreage of these transactions.”
Asked who the owners of Dead Water LLC are, Hinkle wrote, “We do not have any additional details to provide beyond those available in public record, such as the deed transfers.
“As referenced in the news release, Dead Water LLC is managed by Wagner Forest Management, and we cannot speak for them regarding their intentions. There are no restrictions to the transferees as part of the agreements,” Hinkle wrote.
Sylvestre said, “I would like to know who these people are.”
E.H. Roy of Stewartstown, said Eversource gave “sweetheart giveaways” to their friends, while he said his neighbors told stories of being threatened by Eversource with eminent domain if they did not sell when Eversource wanted to buy it originally.
And now, the future of those connected tracts, the ownership objectives and potential for use as another power line remain in question.
However, some observers like Jack Savage, president of the Society for the Protection of New Hampshire Forests, doubt a new iteration of Northern Pass will happen with several other permitted projects either under construction or about to be.
The Forest Society, which opposed the project, contended Northern Pass above ground would irreparably harm the state’s environment, tourism and way of life.
“It seems unlikely to me the Northern Pass concept would come back now that they’ve conveyed these lands to separate landowners without retaining a deeded powerline right-of-way,” Savage wrote in an email.
HEADLINES AND PRESS RELEASES
News stories about the transactions, based on the Eversource press release, had headlines like the one in the NH Business Review in June that indicated “5,300 acres for the ill-fated transmission plan ceded back to previous owners.”
That got some of the previous owners talking, when in fact, they found out from each other that was not the case.
When Eversource decided to abandon the $1.6 billion project, after the state’s Site Evaluation Committee rejected its application and the decision was upheld by the state Supreme Court, the utility wrote off $240 million in land purchases in 2019, and retained the parcels and paid taxes until this June.
Corrine Rober of Colebrook, president of Bear Rock Adventures, received the land for free that Northern Pass acquired for about $6.3 million. The land transferred with no real estate transfer tax and is listed as owned by R & B Rentals, with Rober’s Colebrook address.
Sylvestre and others were stunned when they read headlines that the land was returned to owners and two other entities.
“I should have held out for $10 million,” Sylvestre said. “I told them if you are not going to use it, we’d like it back,” Sylvestre remembered.
He said his neighbor, who waited on selling his 42 acres for years, got $4 million for it. His neighbor also found his land transferred for free to Dead Water LLC.
The whole eight-year fight, which began around 2010 when Eversource announced the plan for the massive transmission line, had emotional costs as well as financial ones.
Disagreements over the project linger as some neighbors are still not talking to each other over whether to sell or hold on, or speak in opposition to or support of the project.
Sylvestre said some of his neighbors were not happy with his decision to sell.
“They got their noses out of joint” and some of the most vocal eventually caved to the utility as the prices being offered were too good to pass up, he said.
Sylvestre said if he had to do it again, he would sell, but when the money was divided among his children, after the taxes and lawyers were paid, “was not as much as people would think.”
NO REAL ESTATE TRANSFER TAXES PAID
Hinkle said disposing of the properties at no cost was related to the utility’s write-off of about $240 million in land sales in 2019 following the Supreme Court’s unanimous ruling upholding the SEC’s decision against Northern Pass.
The deeds in Coos County Registrar of Deeds office cite an exemption to the state’s real estate transfer tax, which is usually assessed equally on the buyer and seller at $7.50 per $1,000 of sale price or value.
Hinkle said the exception under the law is that no taxes need to be paid if the transactions do not involve money or future expectations.
The lack of tax payments raised eyebrows resulting in several calls to the state to determine if it was legal.
State Department of Revenue Administration Commissioner Lindsey Stepp said she could neither confirm nor deny whether the transactions are being audited.
“We do audit the Real Estate Transfer Tax. Although I cannot discuss information concerning a specific taxpayer,” Stepp said, though she did say she was aware of the issue before InDepthNH.org asked questions.
“So, for example, if a buyer paid $1 for a property, the RETT would be applied against that. However, both the statute and rules authorize DRA to look beyond the cash paid” to “‘consideration’ of any value exchanged,” she said.
Additionally, the statute (RSA 78-B:9) explicitly empowers DRA to determine that the actual price or consideration is, in fact, the fair market value of the real estate, unless the taxpayer can provide specific proof to the contrary, she said.
In the absence of this information, one could look to the assessed value…Of course, a variety of factors could result in the fair market value going up or down in the subsequent two years, and the older the prior transaction, the less useful it becomes, Stepp said.
The appraised land and buildings value transferred by Eversource in Pittsburg, Stewartstown, Clarksville and Colebrook alone total $2,732,735.
DEAD WATER AND ITS PLANS
With concerns in the North Country about the continued use of unrelated large tracts of land for carbon offsets instead of logging, many are concerned about the large holding given to Dead Water.
Dan Hudnut is president of Wagner Forest Management Ltd.
Hudnut’s company also manages land for Bayroot LLC, an investment of Yale University which provided Eversource a 25-mile right-of-way for the Northern Pass transmission line, which was controversial on the Yale campus at the time.
North Country residents like Roy theorize the “sweetheart deals” went to friends of Northern Pass and Wagner would be considered a friend during the Northern Pass efforts.
Hudnut said about 4,000 acres of the 4,200 Dead Water acquired are in Pittsburg, Clarksville, Stewartstown, Colebrook, Dixville and Columbia, while the rest is scattered across eight towns farther south.
Half of that acreage is an old campground property in Franklin, and another 80 acres being a private woodlot in Pembroke, he said.
Wagner owns no land, Hudnut said, but manages more than 2 million acres in Canada and the Northeast for various clients, with a North Country office in Errol.
When asked who owns Dead Water LLC, Hudnut said, “We don’t discuss our clients.”
He said the primary objective for the land will be “forest management, with sustainable harvesting.”
When asked if the properties were contiguous he said, “the northern lots are generally in irregular, elongated blocks along the planned (utility) corridor.”
When Hudnut was asked if Dead Water was willing to sell property back to the previous owners, he said “It depends on the property. One in Stewartstown has already been sold to a previous owner.”
BEAR ROCK PLANS
Corrine Rober said she plans to keep the tracts to benefit Bear Rock’s OHRV rental business including developing future overnight accommodations for riders. There are about nine structures on the properties she acquired.
R & B Rentals LLC, which Bear Rock owners created for the donation of the land, transferred at least two tracts recently that it received free from Northern Pass.
One six-acre parcel atop Mudget Mountain Road with an extensive view and house sold for $40,000 according to the tax stamp and another six-acre tract of land with a similar view but no house, sold for much less.
Rober told the Stewartstown Planning Board in July the tracts were being sold to brothers who planned to use the property and existing structure as a camp. Rober sought a lot line adjustment.
Subsequent efforts to obtain more information from Rober on this transaction were unsuccessful.
The two lots appear to be extra and not necessary for a potential trail of connected tracts which could possibly be developed, making the overnight accommodations more valuable if renters can take their OHRVs off trailer and access a trail from the property.
Some of the lots are near Coleman State Park with expansive views.
In an email, Rober said, “Bear Rock has had a long-standing relationship with Eversource, and has worked collectively to find ways to promote recreational-based activities in the North Country. We plan to utilize the land transfer to continue to grow and expand access to recreational and tourism-based activities in the community, which Bear Rock has proudly been promoting in the region since 2013.”
She said Bear Rock is not in any way affiliated with Dead Water LLC, and she was not aware if Eversource offered any of the land to previous owners before giving it to her company.
Rober’s company has been recognized for growing the OHRV business in the state and she received a visit at the business in August from Gov. Chris Sununu.
BROWN THEORIZES BEAR ROCK’S CONNECTION TO EVERSOURCE
Harry Brown of Stewartstown said he was president of the Ride the Wilds and a member of the North Country OHRV Coalition. In 2015, the group sought to develop the now 1,000-mile plus interconnected series of OHRV trails managed by 11 non-profit clubs.
Brown said Rober worked as a member in the Ride the Wilds marketing arm with Eversource on his idea to reach out to Northern Pass executives to see if they would be willing to give that land —which they no longer needed because they were pursuing another path — to the club and allow for a log cabin on one of them to become the group’s headquarters.
The plan was to procure the land, plus as much as $500,000 in cash from Northern Pass, and once the project was operational, it would receive $5 million as an endowment to manage and operate the trail network.
“We were using them as a cash cow,” Brown said.
Brown said the organization was neutral on the highly controversial project but wanted to leverage the situation.
But once the group’s intentions to work with Northern Pass were leaked to the press, the coalition fell apart. Now that land and building are in the hands of Bear Rock, he noted.
In the June news release, Eversource’s William Quinlan praised the transfer of the land to Bear Rock and Wagner through Dead Water as a way to reward the local business’s “long-standing support for the state’s strong interest in recreation and environmental stewardship.”
In a letter to the editor of a local newspaper Brown said, “This is hogwash! If Eversource was truly interested in maintaining the State’s strong interest…they would not have transferred those properties to for-profit corporations.
“Once an individual or corporation buys property, they can do what they want with it now and in the future. Both might be well intentioned, but that doesn’t guarantee its use in perpetuity. If Eversource was to accomplish what Mr. Quinlan was quoted as saying, then they would have donated it to the state of New Hampshire, and expanded Coleman State Park. And it always seems to be smoke and mirrors with Eversource,” Brown said.
North Country District 1 Executive Councilor Joe Kenney, R-Wakefield, said, “It has always been my belief that the disposal of the Eversource land from the Northern Pass experience should have been made in concert with local communities, state park system, well-known conservation groups and previous owners.
“One would think that land that is given away should pay a transfer real estate tax, particularly if it went to a private entity, unless it is the responsibility of the private entity to pick up the tab upon agreement,” Kenney said.
Kenney agreed with Brown the utility was less than forthright in its transactions at the beginning of the efforts for Northern Pass and that may have been part of the project’s downfall.
Hinkle, when asked if Eversource consulted the state before the land was transferred to the new owners, said, “Northern Pass Transmission and Renewable Properties Inc., are not part of Eversource’s regulated utility business. As such, there is no requirement to consult with the state.”
Nonetheless, the Department of Natural and Cultural Resources and New Hampshire Fish and Game were aware of these transactions before they were finalized, Hinkle said.
Sarah Stewart, commissioner for DNCR, which could have potentially expanded Coleman State Park said Eversource officials gave her office “a heads up” but never offered the land to the state.
REAL ESTATE VALUES IN THE NORTH COUNTRY
Realtor Wayne Frizzell, of Raymond E. Davis in Colebrook, said land value has increased tremendously since it was purchased for Northern Pass, particularly since the pandemic.
The land selling now “is not going to locals, which is something different,” Frizzell said. “The young ones can’t afford it now.”
People buying now are mostly interested in a second home with future plans for retirement or for an income property, he said.
Noting the land Rober sold to the Connecticut brothers, Frizzell and Lancaster Realtor Peter Powell agreed the selling prices as evidenced by the tax stamps are far lower than market value.
For example, Frizzell said he has a listing in Colebrook for nine acres of land with no buildings, at $167,200.
LOOKING BACK
After years of Northern Pass upheaval from the day in 2010 when the project was announced with much fanfare, there are similarities to the way it began and ended with the public left to figure out the plan with few details available, Executive Councilor Kenney said.
And Brown said as it has been throughout the ill-fated Northern Pass project, there are more questions than answers.