Howard County has finally started spending its millions intended for farmland preservation - two years after the money was made available and five years since the last agricultural parcel was saved in the county.

The county settled with the owners of Waterford Farm yesterday in a preservation deal that takes in 400.5 acres of the 634-acre estate, one of the largest farms preserved in the county. Officials agreed to pay $6,180 an acre. With interest, which is tax free, the total will be $6.3 million.

Payments - which extinguish subdivision rights but allow owners to keep the land - will be made in installments for up to 30 years.

The deal brought a long-awaited sigh of relief from county officials, who negotiated with the owners for nearly as long as the money was available. The county's local preservation program has paid for 13,201 acres since 1984, but no one is waiting to add land to the total.

"I hope it'll send a message that, hey, this is a good deal that the county is offering," said County Executive James N. Robey, minutes after signing the Waterford settlement. "We've preserved 400 acres - that is a lot of land, pristine land."

The farm, near Route 97 at Jennings Chapel and Daisy roads in Brookeville, is owned by five members of the Dunn family. Separate checks will be cut for each, Everett said.

Bought by the family in 1935 and managed by farmers, Waterford is now best-known for its agriculture tours, pumpkins and corn maze. Pierce B. Dunn, a businessman who lives in Lutherville and worked on the farm as a youth, said he is happy those traditions can continue.

Preserving "is a tough decision," he said. "I can't say that it's right for everybody. It was right for us."

The family, feeling an economic obligation to descendants, compromised between conservation and development, he said.

The Dunns are reserving their right to build 14 houses - seven for family members, seven for farm employees - on the land the county is preserving, as regulations allow.

They also are developing the remaining 234 acres. About 45 houses are planned on about 1-acre lots, clustered around three cul-de-sacs on a small portion of that land.

Jeff Everett, the county's land preservation administrator, realizes this is not a purist's preservation dream. But he thinks most purist preservation opportunities in Howard County are gone. He is happy that most of Waterford will be saved for farming instead of being covered with mansions.

Zoning in the area permits one house for every 4.25 acres. More lots are allowed if developers "import" density by buying the building rights of land somewhere else.

"What if they imported density on the whole thing?" asked Everett. "That would be 300 houses."

Because the Dunns are clustering the development lots close together, an extra 120 acres will be saved for farming, Everett said. The county pays nothing to preserve that land.

The county promised $15 million for farmland preservation in spring 2000, but Waterford's owners have been the only ones to enter into negotiations. Five other property owners applied last year but have not accepted or declined the county's offers.

Because the $15 million does not include interest payments, $12.5 million remains - enough to preserve about 2,500 acres, Everett said.