Spilling Bill’s beans: A tech billionaire has bought $113 million in Nebraska farmland

— Destiny Herbers Flatwater Free Press

LINCOLN — Federal records list the farms spread throughout Nebraska as foreign owned, though there’s no country attached and no hint they might be related.

In Nebraska’s business records, Willowdale Farms, Merrick County Farms, Dove Haven Ranch and others have one similarity: Each farm’s office address leads to a single-story brick building in the St. Louis suburbs. It’s an office park housing a dentist, lawyers and, until recently, a farmland investment startup called AgCoA.

For years, AgCoA was owned by the Canada Pension Plan Investment Board, a government group managing retirement funds for 21 million Canadians.

But in 2017, the Canadian board decided to unload a half-billion dollar chunk of its American farmland – including all 22,830 acres of its Nebraska land.

The buyer of those unassuming-sounding Nebraska farms wasn’t publicly listed. Until now, the deal’s financial details and the gargantuan loan he’s taken out against the land have remained hidden.

The buyer’s name: Bill Gates. The billionaire Microsoft co-founder has, in the past six years, spent more than $113 million buying Nebraska farmland.

The Flatwater Free Press analyzed five years of land sales data, between 2018 and 2022, gathered by a University of Nebraska-Lincoln College of Journalism and Mass Communications data journalism class.

If that data would have included 2017 – when Mt. Edna Farms, the Gates-owned company, bought Nebraska land from the Canadians – then Gates would have been the top buyer of Nebraska ag land by money spent. Since 2017, he’s spent more than double the second-place buyer.

Gates’ farmland is held by more than 20 shell companies spread across the country. Some lead back to a P.O. Box in Kirkland, Washington, where Cascade Asset Management, Gates’ investment manager, is headquartered.

Others are linked to Lenexa, Kansas, and Monterey, Louisiana, population 371, where reporters have previously traced Gates’ operations.

These limited liability companies, buried under layers of business names, overlapping employees and addresses in at least three states, form a tangled, opaque network.

Because it’s hidden, Nebraskans living and farming near Gates land are often unaware that one of the world’s richest men owns the soybean field down the road.

Gates now owns around 20,000 acres of farmland across 19 counties in Nebraska after selling some land in recent years. He owns the largest chunk, about 8,500 acres, in Holt County.

“I think if you ask on the street, who owns Mt. Edna Farms, nobody’d even know what it was,” said Bill Tielke, chair of the Holt county board.

Mt. Edna has a farm manager in Holt County, Tielke said, and locals work for the farm and rent the ground. Tielke only knows of the Gates ownership because he’s worked as a crop adjuster on the land.

“I don’t remember it throwing up any bells or whistles or anybody even saying anything about it,” Tielke said.

The Nebraska Farm Bureau, through spokesperson Cassie Hoebelheinrich, declined to comment on Gates’ farmland ownership.

“This is an issue we really don’t follow and isn’t a priority for us,” Hoebelheinrich said.

Gates’ land ownership has been the source of much rumor, and some concern, in Nebraska, partly because of his connections to the Bill and Melinda Gates Foundation, which works on global public health, sustainability and climate change.

If Gates’ land was given to a nonprofit – potentially making it exempt from property taxes – it would “decimate” the counties involved, said State Sen. Tom Brewer, a Republican whose district covers 11 counties in central and northern Nebraska.

“It would force action from the Legislature to protect the counties,” Brewer said.

But the farmland isn’t part of the Gates Foundation portfolio, said Gates’ investment manager. It’s, rather, strictly a financial investment.

“The investments that Cascade makes in Nebraska farmland are not connected with the agricultural or climate initiatives of the Bill & Melinda Gates Foundation,” a Cascade spokesperson said, declining to answer further questions about Gates’ Nebraska farmland purchases.

Gates himself recently publicly reinforced this idea that his farmland is an investment – albeit one aiding the Gates Foundation’s bottom line.

“The decision to buy this land was made by people who help manage my money so that we get a good return, so that the Foundation can buy more vaccines,” Gates said on a November episode of Trevor Noah’s podcast. “And they saw that if we could invest in land and (improve) the productivity of that land, that it would have a good return.”

Gates doesn’t simply receive rent checks from his Nebraska farmland. He’s also using it to borrow staggering sums of money.

In 2021, Mr. Edna Farms filed paperwork with Dawson County, clearing the path to use some Gates’ land as collateral.

Gates’ LLC then took out two loans against his Nebraska farmland.

The obvious question: Why is Gates, named Forbes’ richest man 18 times, using Nebraska farmland to take out a $700 million loan?

Using IRS data, the news outlet ProPublica estimated Gates’ total annual income at $2.85 billion, with a federal income tax rate of 18.4%. That income primarily came from sales of Microsoft stock, which is taxable.

But extremely high net-worth individuals like Gates often use a strategy of borrowing against their assets – like land – if they want spendable money. Selling those assets would generate taxable income, said Adam Thimmesch, University of Nebraska College of Law professor specializing in business and tax law.

“If you can hold those assets until you die, all of that taxable gain goes away, so the ideal tax planning technique, if you’re wealthy enough to be able to do it, is to invest in those appreciating assets,” Thimmesch said.

If certain conditions are met, tax law then allows someone to inherit the land and avoid paying taxes on the appreciated value if they sell it, Thimmesch said.

In the meantime, ultra-rich Americans can borrow against their assets to fund their lifestyles or make other investments. Banks are happy to lend money for farmland, he said, because its value is secure.

“So you can eliminate that entire layer of tax, while still kind of enjoying the benefits of being wealthy while you’re alive,” he said.

Gates’ land ownership in Nebraska includes the valuable water beneath that land.

He has access through 191 existing wells, which up the land’s value for farmers and investors alike by providing crop irrigation.