Down on the solar farm
The American farmer is still the lifeblood of our ability to produce food, not only for ourselves but also for the world, but the decline in the amount of Wisconsin land that’s actually being farmed might strike some as alarming. While this trend is having an impact, some of those impacts are beneficial in terms of land values, enabling the rise of solar energy farms, and fostering the use of cluster zoning to create the best of both development worlds.
That, in turn, is impacting commercial development, according to a panel of local construction industry executives and local attorney Peter Tirella of the Boardman & Clark law firm. According to Tirella, while we still have a massive amount of farmland, the slight decrease over the past year — roughly 100,000 acres out of around 14.2 million acres — is correlated with the number of farms that have decreased. The state is down roughly 300 farms since the start of 2021, which begs the question: whether they are being sold or closed, what becomes of those farm properties?
“In the past, we’ve seen some farmers consolidate their farms, going to either larger farms or those with equal size,” Tirella notes. “Especially interesting in the Madison and Milwaukee areas, you’re seeing these farms near urban centers where there are residential buyers who are interested in escaping the city and buying these large pieces of land to have a little bit of quiet. So, that is something you need to consider with your production of agricultural products for your beef, milk, and cheese. If you are near an urban center, there might be a decrease in the available farmland that is actually being productively farmed.”
Why are these farmers selling their land? It’s been a rough pandemic period, but does that explain everything? At the beginning of the pandemic, commodity prices had been all over the barnyard for several years, so the commodity shock might have had some farmers selling due to the volatility, even if they had a good, long run at farming. More recently, there has been some degree of stabilization, so Tirella believes that farmers might want to exit because commodity prices are rising again and there is a profit opportunity. “Smaller farmers might say, ‘I was shocked by the beginning of the pandemic, but prices are rising, and I’m not interested in pursuing this any further, so I can sell my farm at a profit to somebody else,’” he reasons.
Among the potential buyers are the operators of solar farms — large solar farms. One local example is the Koshkonong Solar Energy Center, which will be built on about 4,600 acres west of Cambridge, Wisconsin. Despite some opposition, Madison Gas and Electric, in partnership with We Energies and Wisconsin Public Service, has gained approval from the Public Service Commission of Wisconsin for the center, a 300-megawatt solar project with 165 megawatts of battery storage to maintain electric reliability. The $649 million project, part of MGE’s plan to reach net-zero carbon electricity by 2050, would include up to 730,000 solar panels and is estimated to generate enough clean energy to power about 90,000 households.
“This is going to be one of the biggest solar farms, if not the biggest, in the state,” Tirella notes.
According to Tirella, the project is large enough to affect energy prices and allow for additional construction on the property, so there is a profit opportunity. “A lot of it is private ownership, so they will sub-lend or lease-lend to these solar companies, who will develop on the land,” he explains. “There is also a misconception that if you put in a solar farm in these areas, you’re getting rid of every economic opportunity that’s not a solar farm, and in some cases that might be true, but with modern technology, that’s really not the case these days.”
Clusters of development
Another farmland trend is cluster zoning, which is designed to preserve rural land while still allowing some development. As noted by Holly Brenner, senior vice president for C.D. Smith Construction, building is essentially done in clusters. When you think about developing a 100-acre field, Brenner notes that you can cluster the development — the buildings — on 10 or 20 acres, and you still have 80 acres worth of protected paths or areas to conserve and maintain. If done property, creating these tighter communities can make for very smart, attractive developments.
“It’s a density-driven approach, and that density can lead to more cost-effective and sustainable development because things are closer,” Brenner explains. “If they are spread out, then you have to run infrastructure over a larger space. Well, if they are together, they are dense and there is more savings and efficiency there.”
Jeff Grundahl, co-owner of JG Development, characterized cluster zoning as an interesting result of zoning pressure and people moving in and around the cities, whether it be for personal use or business use. Grundahl says cluster zoning has allowed for some interesting things to happen in Dane County, and there will be continuing pressure to reduce the required acreage to cluster-zone land, whether it be for residential use or particularly for any business use.
“The average price for agricultural land sold in Wisconsin in 2021 was about $4,757 an acre,” Grundahl states. “That’s actually an 11% increase over 2020 just for an acre of ground. The stimulus payments paid out due to COVID-19 and the decrease in commodity and input costs may explain some of that, and there was about the same number of acres sold in the state from 2020 to 2021. It’s an interesting dynamic because there were 14% fewer sales in 2021 than there were in 2020, so it indicates the parcel size for each was greater than it was in 2020.
“There are a lot of groups out there such as the Southeastern Wisconsin Regional Planning Commission that control a lot of this stuff,” he adds. “The southern counties have a pretty good model for zoning ordinances, and it’s something other entities and communities should look at because it has some good, common sense for the future.”
Tirella says cluster zoning is a great opportunity to encourage local development and also preserve natural resources for future generations, a novel way of looking at development that is a uniformly positive thing, even if it might lead to increased planning and engineering costs. “You can counteract that with decreased development costs,” Tirella notes. “It’s a good thing we’ve got going for us.”
Away from the core
From the vantage point of Tim Cleary, executive vice president for Ideal Builders, the declining amount of Wisconsin land that is being used for farming is also a tip of the cap to Wisconsin farmers. He notes the yields that farmers can extract per acre is higher than it’s ever been, and the use of technology has allowed them to be hyper-efficient in how they farm.
Cleary, who grew up in Middleton when it was more rural in nature, recalls that when West Towne Mall was built, a lot of people thought that it was out in the middle of nowhere. “When I think about declining farmland, you don’t have to go too far back in Madison to talk to people that will reference the fact that they live on what used to be farmland,” Cleary says. “That trend will continue now that we see people who are either having to go vertical in downtown Madison, or if their business is such that they need space, they have to push out farther and farther away from the core of the city to find land on which to build their project.”
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