Among the controversies surrounding removal of the Little Hope dam in Dayton is how it will impact local property values.
Most of the 50 riparian property owners on what was once a mill pond believe their property values will plummet.
They point to the long stretches of muck where once they had docks and a shoreline. They say invasive species have taken over and they no longer have access to the water.
Nine Little Hope property owners have sued Waupaca County, seeking a total of $406,000 in compensation for the lost property values they believe the dam’s removal will cause.
At the Wisconsin Department of Natural Resources hearing on June 3-4, witnesses testified to the economic impact of the dam’s removal.
County’s report
Prior to the county’s Park and Recreation Committee voting to remove the dam, members received a report regarding the costs and impacts of either removing or replacing the dam.
The county’s report included an appendix on how the dam’s removal could affect property values.
It concluded that “residential property located near a free-flowing stream is more valuable than identical property located on an impoundment. In the short term (less than two years), dam removal does little to harm property values. In the long term (greater than two years), dam removal served to increase property values, as the river and riparian area returned to its natural state.”
Roger Holman, the county’s parks and rec director, testified at the DNR hearing that the appendix was prepared by students in the UW-Extension’s Leadership Waupaca County program.
Economic study
The county’s economic impact analysis primarily relied on a study that appeared in the April 2008 Contemporary Economic Policy, a peer-reviewed journal.
Helen Sarakinos, a co-author of the study and a policy director for the River Alliance of Wisconsin, also testified during the DNR hearing.
She said the study tried to eliminate all other variables – such as parcel size, number and size of rooms – and focus on the relationship of property values to frontage on a river or an impoundment.
The study, “Does Small Dam Removal Affect Local Property Values,” reviewed the real estate sales of 116 frontage parcels and 657 nonfrontage parcels at 14 sites in south-central Wisconsin between 1993 and 2001.
Six of the sites had dams removed, four of the sites had intact dams, and four sites had free-flowing rivers.
Ponds at all the sites involving dams had been classified as small, ranging in size from eight to 194 acres.
“The most valuable properties were on free-flowing streams,” Sarakinos said.
She said the study concluded that no significant change in frontage property values could be identified after a dam’s removal, if the property retained its frontage on the river.
The attorneys representing those opposed to the dam’s removal questioned the validity of the study.
Attorney Paul Rosenfeldt, who represents the property owners suing the county, read an excerpt from the study: “The most obvious weakness of the data is its lack of frontage observations at removed sites.”
Out of the 773 real estate sales that the study reviewed, only six were located at sites where dams had been removed.
“You don’t have enough data for the variable of actual dam removal,” said Ryan Braithwaite, the attorney representing the lake district.
Sarakinos reiterated that the study’s findings indicate that frontage property values are higher along free-flowing rivers than along small impoundments.
If a property on a former impoundment retains its water frontage and the frontage is restored to a natural state, then there are no significant changes in the property’s value.
Mud flats, restoration
Sarakinos also testified that the shoreline along a former impoundment after a dam removal goes through phases.
When the pond is drained, it leaves behind decades of silt that accumulated behind a dam instead of flowing downstream.
“There’s always a stinking mud flats phase,” Sarakinos said. “There’s 150 years of eco-system alteration that has to find a new equilibrium.”
She said it usually takes about five years for nature to restore the river banks, the mud flats to solidify and vegetation to reassert itself. The process can be hastened through restoration projects.
Her testimony included before-and-after photos of several Wisconsin rivers where dams had been removed. On the Milwaukee River, at the site of the Woolen Mills dam, the shoreline evolved over 11 years from dark muck leading a shallow pool of water to a tree-lined bank along a clearly defined river channel.
“It’s really difficult to look at that right now and imagine anything other than devastation,” Sarakinos said, regarding Little Hope.
Holman was questioned regarding the county’s efforts to help restore the shoreline.
Purple loosestrife, an invasive species that crowds out native species, has emerged on the mud flats.
Holman said the county is currently working with Golden Sands Resource Conservation and Development Council to raise beetles to control the purple loosestrife in Little Hope. The beetle program is currently being used on the Chain O’ Lakes.
“I wanted to do it this year, but without willing property owners, I can’t do a thing,” Holman said.
Holman said it would not make sense for the county to invest in eradicating invasive plants that would be recovered by the mill pond if the property owners succeed in replacing the dam.
Little Hope property lines
The report looked at how the dam’s removal could affect property lines.
After the water recedes back to the original river channel, the newly exposed land, or relicted area, may or may not belong to the adjacent property owners.
If the legal description sets the property line at the center or edge of the river, then the relicted area belongs to the current property owner.
If the legal description sets the property line at the edge of the mill pond or flowage, then the relicted area belongs to the heirs of the original owner. If the heirs cannot be found, then the relicted area goes to the state.
“The majority of property owners, based on their deeds, would own to the center of the stream,” Holman testified, adding there are “some trouble areas.”
Holman said about 10 properties had issues due to a court order changing their property descriptions to “the original flowage.”
According to a parcel map of Little Hope, based on county deed descriptions, about 10 properties would lose their water frontage because their boundaries are described as the edge of the mill pond or flowage.
“Where the property owners lose the actual frontage along the water body, a typical outcome is that the state will quit claim this property to the adjoining property owner,” according to the county’s report.