By MICHAEL JAMISON
of the Missoulian
KALISPELL - Bob O'Neal looked worried, arms folded over his chest, standing knee-deep in the middle of a piece of Flathead Valley farmland thick with grasshoppers.
It was land just like the land he's spent his life farming, land that in recent years has been growing a cash crop of subdivisions.
"We've somehow got to save it," O'Neil said of that land, "or we're going to shoot ourselves - not in the foot, but right in the head."
Up in the Flathead and up the Bitterroot and up in valley after Montana valley, cash-strapped farmers have been selling off their wheat fields to a seemingly endless stream of developers.
Between 1992 and 1997, census data show the Flathead lost farmland at a rate of 1.4 acres per hour, an overall drop in agricultural land of 22 percent. The individual farms decreased in average size by 29 percent.
Meanwhile, the market value of crops sold from those farms slipped, on average, by 9 percent.
If you're a farmer like O'Neil, it's a balance sheet that doesn't balance.
"We sold it to the developer for obvious reasons," said Flathead farmer Brent Johnson. "Just to clear up the debt."
A good field of wheat brought him 100 bushels per acre, Johnson said, and a good market put $5 in his pocket for every bushel. But things weren't always good. Sometimes, he got just 80 bushels per acre, and sometimes a bushel was worth only $3.
"Eventually," Johnson said, "we just started to go backward."
He, like most small farmers, found a second income - he's in the tractor repair business - but still, it went backward.
And so he whacked off a chunk of dirt, sold it to a developer and kept farming the rest.
He would've sold more, but his wife advised against it.
"She said if I got a million dollars, I'd just farm until it's all gone, anyway," he said. He laughed when he said it, but he didn't smile.
Meanwhile, big landowners like Plum Creek Timber Co. also have been selling off land.
The company's real estate manager, Jerry Sorenson, said agricultural and timber lands go for between $300 to $500 per acre. Carve it up into residential lands, however, and the price jumps 20 times to $10,000 per acre.
"There is a tremendous demand for rural real estate within any proximity of town and the airport," Sorenson said. Since 1996, he said, his company has cashed in on 37,000 acres.
And government has joined the rush as well.
The state Department of Natural Resources and Conservation relies on its land base to make money for Montana's schools. After years of logging and grazing those lands - while at the same time keeping them open for multiple uses such as hunting and fishing - the DNRC is increasingly looking at single-use commercial and residential leases.
On the north side of Kalispell, a square mile of DNRC land that is currently farmed brings in about $45 per acre. A new shopping center planned for those same fields will pay $3 per square foot, or $120,000 per acre.
The agency is looking at similar options on state lands around Whitefish because, in the words of DNRC's David Greer, "there's a lot of money up there."
"But before you join the gold rush," warns Sonny LaSalle, "you better realize, when the house is built, that's about it."
No more hunting there, no more biking or horseback riding or swimming in that favorite shady pool. As farmers and companies and government sell off what was open space, LaSalle said, communities lose values they need to compete in the modern economy.
"People need to recognize that ag land has a value that's much greater than the production of crops," LaSalle said. "It contributes significantly to the scenic beauty so many people are looking for. People value open space and are willing to pay for it. Just look at all the people who don't golf but live right on the course. What they're paying for is a guaranteed, open, green vista."
LaSalle is a former member of the Ravalli County Planning Board, and says there exists a "direct and obvious" relationship between the health of a community's economy and its scenic open spaces.
Perhaps that is why Bob O'Neil was standing in that grasshopper patch talking not to farmers but to the Kalispell Chamber of Commerce. Local business leaders spent most of a sunny July day last week touring the Flathead's farmlands, talking about the connections between amenities like open space and the dollars and cents of economics.
Most of the time, the problems that come with carving up farmland are articulated by the "smart-growth" folk and the wildlife advocates. They worry about losing habitat, about polluting waterways, about turning 100 acres of wheat into 20 five-acre patches of knapweed.
They worry about connecting far-flung ranchettes with the rest of the community, about bike paths and "liveable communities."
But now, it seems, business is worried, too.
Business is worried about sustaining land values, about the costs of servicing those new developments, and about preserving the landscape that is driving the economies of places like Kalispell and Hamilton.
Business is worried about the fact that for every dollar a residential parcel pays in taxes, it requires somewhere in the neighborhood of $1.50 in government services, while farms require only about a quarter in services for every dollar spent in taxes.
Wheat doesn't need a cop, hay doesn't need a firefighter, and neither needs an education.
Some contend impact fees are a way to balance those books, requiring developers to pay the price of development upfront. Developers, however, say that would only drive housing prices higher.
Economist Tony Prato, who is embarking on a three-year study on Flathead Valley land-use trends, argues that allowing development that costs local government more than it brings in "is simply a way to subsidize developers, and developers aren't going broke here."
Sure, housing costs would rise with impact fees, Prato says, "but who would you rather subsidize, the developers or the low-income families who need affordable housing?"
After all, he said, developers will always maximize profits, regardless of what's considered affordable.
"It is absolutely about business and economics," said Larry Swanson, an economist who heads the Regional Economy Program at the Missoula-based O'Connor Center for the Rocky Mountain West. "What makes the economies of these places is the fact that they're attractive, and what makes these places attractive for development is that they're undeveloped."
On the face of it, his statement seems a bit of a paradox.
You want the development, because it's good for business. But that same development is bad for business.
"Actually," Swanson said, "it is possible to have your cake and eat it, too, to a degree."
The trick, he said, is to develop and design smart.
For years, Swanson said, the plan for limiting sprawling development was to put everyone on a 10- or 20-acre chunk of dirt. Time and again, however, that approach has resulted in a haphazard appearance with a house poking up every which way you look.
The new approach, he said, is to cluster development - to build nice neighborhoods on sizeable lots with common streets and infrastructure, with trees and sidewalks and nice homes. Give the developer a few extra spots in the density codes, Swanson said, to entice cluster development, and then leave the rest of the space open around the cluster.
A 100-acre subdivision that would have had a house on every 10-acre lot becomes instead 15 houses on 15 acres, with 85 acres of farm land or open space surrounding the neighborhood. The cluster homes are worth more to the developer, and the farmer keeps farming.
There are other tools, as well, Swanson said, such as the now-common conservation easements, which pay people to leave land undeveloped. Others try purchasing or trading density and development rights, paying the farmer not to build, while building in town instead.
Gallatin and Missoula counties have passed public bonds to simply buy the open space and farmland. Grand Junction, Colo., has passed a bond to buy land in the spaces between small surrounding towns, so they don't bleed together and lose their individual identities.
Other options include getting creative and building quality housing - such as townhouses and condos for aging baby boomers - right there in town.
"But whatever you do," LaSalle said, "there has to be a fair exchange. You can't expect the farmer to give up land for nothing, and you can't just condemn a guy to his farm. There has to be a fair trade."
The fairest trades leave options open for the future, he said. Cluster development, for instance, leaves open the possibility of filling in the open spaces between the clusters if the need should someday arise.
At a more regulatory level, neighborhoods can write up covenants, and communities can control the conversion of ag land to residential land through zoning.
"But the problem with convenants," said Flathead County planner Forest Sanderson, "is they're only as strong as your will to sue your neighbor. Zoning is much stronger, because the county attorney enforces the rules."
There aren't many rules here in Johnson's former wheat field. Instead, there are about 130 house sites, each perched on a half-acre or so. Surrounding the cluster of development Johnson continues to reap more traditional crops.
The developer who put the deal together, Frank Strickland, figures this is a good neighborhood - clustered, close to town, on a paved road, surrounded by open space.
"But there are a lot of other projects out there that will stress the infrastructure and be bad for the community in the long run," Strickland said.
He figures the people are coming, and it's better to build a nice neighborhood than to have them all looking to stake out their own 20-acre plot.
The growth used to fluctuate up and down, Strickland said, "but now it's just up. I think the baby boomers have hit."
And hit with a bang.
Think about it; when was the last time you heard of residential land being converted to ag land?
"It's a big, big deal," Swanson said of the rapid conversion from ag to residential. "It's a very fast pace, astounding, really, and it dramatically reflects the pace of change that's going on in the entire economy. It's changing the entire face of our communities in a way we can all see and appreciate. Through that change we need to keep in mind that the look of our towns is our critical, competitive advantage."
But no matter how fast the change, no matter how much the demand soars for a little patch of paradise, farmer Bob O'Neil knows that certain fundamental truths remain unchanged.
Aesthetics and economics do have much in common, he said, and farmers will always farm.
"After all," O'Neil said, "food is not going to go out of fashion."
Reporter Michael Jamison can be reached at 1-800-366-7186 or at mjamison@missoulian.com