Hoch Orchard

32553 Forster Road, La Crescent Minnesota

 

BACKGROUND

 

American Farmland Trust (AFT) and Renewing the Countryside (RTC) are seeking a farm buyer for a 60.77-acre Orchard near La Crescent, Minnesota. The Orchard will be sold subject to an agricultural conservation easement, which will limit future subdivisions and restrict the use of the property to agricultural uses. The effect of this easement will be to reduce the Orchard’s sale price and make the property more affordable for a farmer to purchase. The easement is summarized below. 

This Request for Proposal (RFP) includes a description of the property and current infrastructure, an overview of the process and timeline, and an application. Offers to purchase the property will be accepted beginning March 1, 2024, and reviewed on a rolling basis. Applications will be accepted through April 15, 2024.

 

ABOUT AFT AND RTC

 

AFT is a national nonprofit with the mission to save the land that sustains us by protecting farmland, promoting sound farming practices and keeping farmers on the land. AFT has recently started a Buy, Protect, Sell-plus program to increase the protection of farmland and facilitate the transfer of affordable farmland to the next generation and emerging farmers. Under this program AFT purchases agricultural land, permanently protects that land with an agricultural conservation easement, transitions the land to the next generation of farmers, and encourages and supports the adoption of regenerative farming practices by those farmers. 

For the past three years, AFT has been working closely with Renewing the Countryside (RTC), a nonprofit that champions and supports innovative initiatives that build more sustainable and vibrant communities and food systems. RTC coordinates the Midwest Farmland Access Hub—a collective of over twenty organizations working together to help beginning farmers secure improved access to land in Minnesota, Wisconsin, and Iowa. Through this work, AFT and RTC aim to increase opportunities for land access and tenure for emerging generations of farmers.

 

PROPERTY DESCRIPTION

 

Hoch Orchard is a diversified farm situated on a ridge over the Mississippi River Valley in the Driftless Region currently owned by Harry and Jackie Hoch. The property is located near the city of La Crescent, MN, overlooking rolling hills to the west. The Mississippi River is five miles to the east. Although the Orchard feels remote and tranquil, it is just a 30-minute drive to Winona, MN, 50 minutes to Viroqua, WI, and 2.5 hours from both the Twin Cities and Madison, WI.

The Orchard includes 10,000 fruit trees on 35 acres, with over 50 varieties of apples as well as cherries, apricots, plums, strawberries, raspberries and a mixture of vegetables and livestock. The Hochs have a long history of utilizing their apple stock for a diverse set of enterprises, including processing the fruit into jams and sauces and juice and cider. The Hochs have also fermented juice into vinegar onsite or sold the juice in bulk to local distilleries and breweries for apple brandy and hard cider. In addition to fruit production, the Hochs have rotationally grazed pigs, sheep, and chickens between the rows of trees. 

 

Land

• 10,000 trees planted along contour lines on 35 acres

• 2-acre vineyard

• ½-acre pollinator plot

• Spruce and popular windbreaks

• 15-acre woodlot

• 15-acre hayfield

 

Infrastructure

• 16x18 ft., 4-bedroom mobile home with 10x20 addition

• 14.70 ft., 2-bedroom mobile home with new windows

• Packing facility and commercial kitchen (built 2007) 2 walk-in coolers, and box/bottle storage room; continuous belt press, bulk tank and bottler, packing line sold separately

• Barn used for machine storage and workshop

• Storage shed for farm implements and equipment

• 3 high tunnels

• 2 livestock sheds

• Mobile chicken tractors fitted for rotation through orchard lanes

 

Note that there is a small farmhouse located on the property that is not included in the sale. The Hochs will retain a life estate on this house along with 10,000 square feet (approximately ¼ of an acre) surrounding the house. The Hochs intend to live in this house for part of the year. When the Hochs relinquish the life estate, the house and lot will revert to the owner of the property.

 

TIMELINE

 

AFT has entered into an agreement to purchase the property from the Hochs by November 2024. During our contract period, AFT wishes to identify a qualified farmer to purchase the property from AFT subject to an agricultural conservation easement held by AFT. Our preference is to sell the property to a qualified farmer-buyer at the same time as AFT acquires ownership of the property.  However, AFT is willing to lease the property to a qualified farmer for a reasonable period of time prior if needed to facilitate the farmer’s eventual purchase of the property. If you are interested in a lease prior to purchase, please note this in the application.

 

PROCESS

 

AFT and RTC are working together to identify a purchaser of the Orchard. RTC and AFT will host a virtual meeting in early February 2024 to answer questions about the farm and the process and to discuss the agricultural conservation easement and how it will impact the property. 

 

An open house for interested buyers will occur in late February and Jackie Hoch will be available to answer questions about the property and the historic uses of the farm. Prior to attending the open house, AFT and RTC request that interested buyers complete an initial application to indicate interest.

 

Following the open house, prospective buyers interested in moving forward should be prepared to complete an application and provide information about their professional and agricultural backgrounds and their plans for the farm. Resources will be provided to help prospective buyers in assembling a business plan.

Applications will be accepted beginning March 1, 2024, and reviewed on a rolling basis. Applicants are encouraged to submit all materials by April 15, 2024, for consideration. More details on the selection process can be found below. Individuals or groups of farmers, farming collectives or cooperatives, or non-profit farming organizations are all invited to apply.

 

Potential buyers are encouraged to reach out to Bonnie Warndahl at bonnie@rtcinfo.org with questions and to indicate their interest in the Orchard so that they may be informed of updates about the sale.

 

MINIMUM PURCHASE PRICE

 

The minimum purchase price that will be considered is $550,000. Note that the purchase price does not include taxes and other associated closing costs.

 

As a 501c3 organization, AFT may not sell the Orchard for below the property’s restricted agricultural value (i.e. the value of the Orchard once it is restricted by agricultural easement). The easement allows AFT to sell the property for less than its fair market value while ensuring that the land remains available for agricultural use. The easement should not interfere with a future farmer’s intention of utilizing the property for farming purposes.

 

AGRICULTURAL CONSERVATION EASEMENT

 

An agricultural conservation easement is a perpetual, binding agreement between a landowner and AFT that places permanent restrictions on the development and use of the property. Generally, agricultural conservation easements are designed to protect agricultural and other natural resources associated with the property including the natural, scenic, or open-space values of the property, assuring its availability for agricultural, forest, recreational, or open-space use, protecting natural resources, and maintaining or enhancing air or water quality. Typically, an agricultural conservation easement has the effect of lowering the fair market value of the property.

 

When AFT sells the Orchard, it will be subject to an agricultural conservation easement (ACE) held by AFT.  We will develop the terms of the ACE in consultation with the future buyer. However, in general terms, the ACE will allow for all types of agricultural uses, new agricultural structures, and additional farm labor houses. The ACE will restrict the ability to subdivide the property and will only permit the construction of one additional single-family residential dwelling.

 

The ACE will include restrictions to ensure that the property is used for and remains available for agricultural use and that any future sales of the property are made to qualified farmers at agricultural value. These restrictions will further reduce the fair market value of the property beyond the reduction normally attributable to a standard agricultural conservation easement. Future buyers will also be encouraged to follow an agricultural practices management plan. AFT and RTC will work with the future buyer(s) to connect with available resources to support the adoption of regenerative agricultural practices on the land.

 

SELECTION PROCESS

 

The competition for farmland is significant and to ensure a fair and transparent process, AFT and RTC will rely on the input and expertise of an independent advisory committee who are not employees of RTC or AFT. This committee is comprised of experts in agricultural production, farm lending, and business planning with an understanding of local markets. The committee will review all applications and provide a recommendation on the top candidates. These candidates will then be invited to have a conversation with AFT and RTC to discuss the transaction and the applicant’s background and interest in purchasing the farm. 

 

In evaluating proposals, the advisory committee will consider and make its recommendation based on the following criteria:

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• Willingness of farmer to pay agricultural market value of the property subject to the ACE and the farmer’s ability to secure financing at closing (formal financing approval is not necessary to submit a proposal)

• The degree to which an applicant’s proposal is 

  • (1) well-suited to the size, soils, and configuration of the farm; 

  • (2) well-suited to local markets and local demand; 

  • (3) likely to encourage the long-term productive agricultural use of the land; and 

  • (4) economically practicable. 

• Although not required, preference will be given to applicants with orchard experience who plan to utilize and enhance the existing agricultural infrastructure on the property.

• Level of farming experience and training related to the applicant’s proposed farm operation.

• Preference will be given to proposals where food or fiber for human use and consumption is produced.

 

ADDITIONAL MATERIALS AVAILABLE BY REQUEST

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• Appraisal

• Draft Agricultural Conservation Easement with Affirmative Farming and Affordable Farmland Covenants

• List of farm equipment for sale (note that farm equipment will be sold separately)

• Resources for completing a business plan

• Building inspection

 

APPLICATION:

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The application will follow a three-step process. The first step is to complete the Hoch Orchard Application Phase I (questions outlined below).  Applicants who complete the questions under Phase I will be invited to an open house at the Orchard at the end of February. Attendees will be able to tour the farm and ask Jackie Hoch questions about the property. Following the open house, applicants who are interested in purchasing the property must complete a more detailed application under Phase II. An independent advisory committee will evaluate applications and top candidates will be invited to participate in an interview.

Both individuals and groups of farmers with multiple proposed enterprises are encouraged to apply. If applying as part of a group or cooperative, please ensure that all members of the cooperative participate in the application and include details on each member’s experience and proposed plans.

If preferred, please note that we can accommodate an interview in lieu of a written application. Should that be your preference, please contact Bonnie Warndahl (scroll to the bottom for contact info). 

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Phase I

1. Name, contact information

2. Why do you want to purchase Hoch Orchard?

3. Provide a summary of your farming background, including relevant training, apprenticeship or work experience, and/or connections to the local community. 

   1. Do you have any experience owning and/or operating a farm? 

   2. What types of operations have you worked on and for how long? 

 

Be sure to include information about where you have farmed including any experience farming within the southeastern

 

Minnesota/southwestern Wisconsin region and/or orchard-related experience.

1. Given what you know about the farm, what are your potential goals for the property? Include your short- and long-term goals for the operation including any changes or improvements that you would hope to make. Also note your preferred timeline for implementing those plans.

 

Phase II

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1. After visiting the farm, note any adjustments to your answers to the questions in Phase I.

2. Provide a three-year income and expense projection for your proposed operation.

3. Do you have any non-farm uses planned (e.g. education programming, agritourism)?

4. How will you finance the purchase of the property? If you are selected as the buyer, you will need to provide evidence of your ability to secure financing to purchase the property.

5. What is your timeline for beginning production on the land? Do you intend to purchase the land from AFT immediately or do you plan to rent the farm for any length of time? If you are interested in renting before purchasing, how long would you anticipate renting from AFT? Note that AFT would charge a market rental rate but could simultaneously accept installment payments credited toward the eventual purchase of the property. 

6. Describe your experience implementing sustainable agricultural practices. Though not required, letters from NRCS describing conservation practice adoption are welcome.

7. Do you have any conditions that you’d need to include in an offer to purchase the land from AFT (e.g. do you need to sell a current property or obtain financing to purchase the farm)? 

8. Do you have any familiarity with agricultural conservation easements? Are you comfortable owning a farm that is protected by an agricultural conservation easement?

9. Any other information that you think is important for consideration. This could include an analysis of markets to sell your products, reference letters, or press regarding past agricultural operations.

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To request additional information or if you have further questions or need assistance with the application, please contact Bonnie Warndahl at bonnie@rtcinfo.org or Alison Volk at avolk@farmland.org.