San Francisco-based Pacific Forest Trust would pay an Ohio pension fund up to $10 million to reduce logging and to put about 30 percent of its 33,000-acre Pondosa Forest near McCloud permanently off-limits to development. The area includes the critical headwaters of much of California's drinking and irrigation water.

Date:   9/28/2005 7:00:34 PM ( 19 y ago)

Win-win deal could save thousands of acres of California forest

By JIM WASSERMAN
Sacramento Bee
27-SEP-05

MCCLOUD, Calif. -- The mile-high creeks start small enough to jump across, draining white fir and cedar forests beneath 14,179-foot Mount Shasta. Moving south, they join streams that flow into the Sacramento and Fall rivers that finally pause in the massive reservoir behind Shasta Dam.

This is a rugged land with scenery to die for, and, indeed, timber companies and environmentalists have fought bitterly over these types of forests for years.

But a pending $10 million deal between the traditional adversaries showcases a fresh way of looking at a forest's value _ one that could save thousands of acres in California's private forests from development.

San Francisco-based Pacific Forest Trust would pay an Ohio pension fund up to $10 million to reduce logging and to put about 30 percent of its 33,000-acre Pondosa Forest near McCloud permanently off-limits to development. The area includes the critical headwaters of much of California's drinking and irrigation water.

In turn, the State Teachers Retirement System of Ohio could continue logging a forest in Shasta and Siskiyou counties that produces 14 million to 16 million board feet of timber annually.

Conservation easements, used to preserve thousands of acres of California farmland and stretches of coastline, pay property owners not to sell to developers and to agree to permanent property restrictions.

The state loses 30,000 acres of private forests and woodlands annually to ranchettes and other development, the California Department of Forestry estimates.

In a deal that could signal emerging middle ground in the timber wars, the McCloud forest easement would be the largest acquired in California from a commercial owner in an actively managed forest, said Pacific Forest Trust managing director Constance Best.

"Timberland is not being viewed as a production asset so much anymore," said Scott Sacco, vice president of Forest Systems, a Massachusetts company that manages the forest for the pension fund. "It's being viewed as a financial asset."

Mineral rights, hunting and recreation leases, sensitive landscapes and carbon storage in trees to moderate global warming can all make money, says a new breed of forest managers. Throw in appreciating land values, they say, and returns on investment could reach 12 percent a year, especially attractive to more patient institutional investors.

"What I like to hear as a professional forester is that the notion of conservation values and timber management are not mutually exclusive," said Paul Violett, forester with Yuba County-based Soper-Wheeler Co.

He said his company, which owns nearly 100,000 acres of forest in Northern California, was approached about an easement this year, but the acreage proved to be too small for the conservation group.

If signed and funded, the McCloud deal would be the Ohio pension fund's second big forest conservation deal. In 2001 it received $13.6 million for a similar easement on 32,000 forested acres in Florida.

In California, the $59 billion pension fund has agreed to curb logging by 20 percent in some instances to make its forests bigger, thicker and older. It's also agreed to clear-cutting restrictions and to jointly manage the nearly 9,150 acres under easement with Pacific Forest Trust.

"It does make good sense," said Laura Ecklar, spokeswoman for the pension fund that owns a $470 million forest portfolio in seven states. "It's good stewardship, and we're amenable to it."

Cash value for the easement will be determined after an appraisal and is subject to a final agreement between the forest trust and the pension fund. Sacco of Forest Systems said his firm has analyzed the land's estimated timber value for coming decades, looked at comparison sales, analyzed future development values and conservation values, and kept in mind the pension fund's fiduciary duty to its members.

The forest trust, which says it has more than 35,000 acres of smaller forest parcels under easement in Northern California, Oregon and Washington, has received $500,000 toward the proposed McCloud easement from the San Francisco-based Richard and Rhonda Goldman Fund.

But most of the funding may come from Proposition 40, the $870 million bond measure California voters passed in 2002 to preserve coastal land, build urban parks and protect water quality. Proposition 40 has provided nearly $60 million for conservation easements, including $7.9 million to prevent development of parts of the Hearst ranch on the Central Coast. But the Mount Shasta-area easement would be its first and largest in a major commercial forest.

"It looks positive right now. It's a new approach to conserve forest lands and a different way to get conservation values," said Al Wright, executive director of the state's Wildlife Conservation Board, which allocates the bond money. "The future cost to the state is practically nothing."

Wright said he expects a decision on the forest trust's funding application within months.

In making an argument for state money, Best looked out recently across the blue-green forested landscape near McCloud and asked, "What is the alternative future for land like this?"

The answers already dot the woods around snow-shrouded Mount Shasta. "The alternative future is ranchettes," she said.

"Baby boomers are getting to retirement time, and they want to get away from the crowds," confirmed Roger Spitsen, a real estate agent in McCloud, population 1,500. "They have plenty of money to come up here and get more land than they had before, and they really enjoy that."

State conservation and environmental groups are beginning to agree that California's timber-cutting rules, designed to protect pristine landscapes, can become a contributing factor to real estate development that brings pollution threats from septic tanks, oil runoff and lawn chemicals.

Private forest owners are tiring of these regulations and of log prices that have dropped 38 percent in the last decade. Despite the state's wealth of forests, it imports more than 80 percent of its wood products, reports the California Forest Products Commission, a forest trade group.

"There's broad agreement that conversions are a problem," said Paul Mason, the Sierra Club's Sacramento-based forest representative. "They're happening in forest land even faster than on ag land. Making sure we can grab some large chunks of forest that can be managed is going to be an important part of an overall forest protection scheme."

Pacific Forest Trust representatives say using California taxpayer money to fund an easement with a private Ohio business venture can be the best way to deal with reality. They hope to save thousands of more wooded acres by buying easements.

"You end up with society making choices," said Best. "You can let the marketplace decide, or you can say, 'Maybe we need to act in the market, too.' "


(Distributed by Scripps-McClatchy Western Service, http://www.shns.com.)


 

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