Powderhorn Ranch: The Land Report 2014 Deal of the Year

On August 21, 2014, a coalition of conservation partners announced the purchase of Powderhorn Ranch, 17,351 acres on Matagorda Bay in Calhoun County. At $37.7 million, it was the largest amount ever raised for a conservation land purchase in Texas. King Land & Water was the sole broker on the sale, and The Land Report named it the 2014 Deal of the Year.

For over a century Powderhorn was run as a cattle ranch, but its greatest value lies in its coastal prairie and wetlands, with more than 11 miles of tidal bayfront near the Aransas National Wildlife Refuge. It is a haven for fish, game, upland birds, and waterfowl, including the endangered whooping crane.

“The Powderhorn is a treasure,” Carter Smith, executive director of the Texas Parks and Wildlife Department, told The Land Report. “It’s one of the last of the best of the best, and about as special a place as you’re going to find on the Texas coast.”

More than a decade in the making

James King first learned of the opportunity in 2001, while he was with The Nature Conservancy in Texas. When he left the Conservancy in 2008 to build King Land & Water, he carried the Powderhorn project with him. Over the next six years, King Land & Water represented the seller and worked to bring together a set of partners with both the will to buy and manage the ranch and the funding to do it.

“In the conservation business there needs to be an alignment of will to buy and manage with funding,” James told The Land Report. “I worked till 2014 to build a set of partners that created that alignment. So many meetings, so many conversations, and so many partners finally made it happen.”

The partners

The Conservation Fund and The Nature Conservancy bought the ranch from Cumberland & Western Resources, working with the Texas Parks and Wildlife Department, the Texas Parks and Wildlife Foundation, and the National Fish and Wildlife Foundation. Most of the funding, $34.5 million, came from the National Fish and Wildlife Foundation’s Gulf Environmental Benefit Fund, created with dollars paid by BP and Transocean after the Deepwater Horizon oil spill. It was the biggest land acquisition in the nation at that time to use spill restoration dollars. The Conservation Fund and The Nature Conservancy of Texas each provided $10 million in interim funding so the ranch could be bought in 2014, and The Nature Conservancy holds a permanent conservation easement on the property.

A seller committed to conservation

Cumberland & Western Resources’ investors sold Powderhorn below its market value to ensure its permanent safekeeping. “We are most grateful to the owners for affording us both the time to put this project together, as well as a discount on the purchase price in order to facilitate this transaction,” said Dan Allen Hughes, Jr., then chairman of the Texas Parks and Wildlife Commission.

James saw the same commitment throughout, and credited the landowner, along with his attorney Greg Betterton and ranch manager James Brown: “I must say in my 30 years in the conservation real estate business, I have never seen a landowner more patient and generous as Brad Kelley.”

At the time of the sale, the plan was for the Texas Parks and Wildlife Foundation to take title and turn Powderhorn over to the Texas Parks and Wildlife Department, to become a state park and a wildlife management area.