The State Water Control Board has given preliminary approval to Stafford County's request for a $30 million loan to buy the Crow's Nest peninsula and protect it from development.
But whether it will be enough for the landowner, who has had offers from developers approaching $50 million, and whether the county can afford to take on more debt, remain to be seen.
The loan would come from the Virginia Land Conservation Loan Fund and could be available by year's end.
First, the Board of Supervisors would have to agree to borrow the money at a time when the county is facing a fiscal crunch.
"We are talking. I think it's premature to get too far out ahead on this. The board has not yet made a commitment," said Stafford Supervisor Kandy Hilliard, an ardent advocate of preserving Crow's Nest.
The county is already drawing $5.2 million from reserves to fund this year's budget. Just last year it upped its debt ceiling to be able to fund its $524 million, six-year capital improvements plan.
"The board is committed in its desire to preserve this property, and we need to hash through this financially," Hilliard said. "I'm hoping that with money in hand we could go back to the owner and say, 'This is where we're at.'"
The landowner, K&M Properties of McLean, has said it has gotten offers from developers approaching $50 million. The investment partnership bought the land for $17.8 million in 1989.
K&M's attorney Clark Leming said the company would consider any legitimate offer to purchase the property.
"The issue is how much the county is willing to [pay]. The fact that it is state money or the county making the offer is not an impediment if the price is right," he said.
The loan, even combined with $7.5 million in state and federal money already earmarked toward a purchase of Crow's Nest, would be far less than recent offers by developers, Leming said.
But he added that K&M might be more receptive to this approach.
"The important problem before was that a great deal of the offer was not cash in hand," he said. That was the case last year when negotiations with the state fell through.
Patricia Kurpiel, a member of the Save Crow's Nest preservation group, said the water board's decision is good news.
"This is a major first step. It's definitely a part of the puzzle necessary to protect Crow's Nest," she said.
The county wants to buy the 4,175-acre tract between Accokeek and Potomac creeks so developers will not be able to disturb the area's fragile ecology. Named after The Crow, a black schooner anchored off the property during the 1800s, Crow's Nest is home to rare plants and animals, virgin forest and several historical sites.
The land is zoned for a minimum lot size of one acre, or about 1,400 homes. K&M Properties is working on site plans to either develop Crow's Nest within that zoning or cluster houses on smaller lots, which would require a rezoning.
If the county buys the land, it will instead become a nature preserve and recreation area.
A state loan is the latest wrinkle in the effort to preserve the land.
In May, supervisors voted 5-2 to raise money for the project through a bond referendum, to be held this November. But it was deemed that the conservation loan fund could be a better bet because the interest rate would be 1.5 percentage points lower.
The 20-year state loan would carry an interest rate of 3 percent.
The state water board allocated $70 million in loans for 16 projects ranging from conservation to improvements at sewage treatment plants.
After a public-comment period, the loans go back to the board for final approval in December.
Staff writer Ruth Finch contributed to this report.
To reach RUSTY DENNEN: 540/374-5431 rdennen@freelancestar.com