Potlatch to sell up to 120,000 acres (MN)

Duluth News Tribune
January 18, 2007
By John Myers

Potlatch Corp. this year will begin selling up to 120,000 acres of forest land in Minnesota to capture the property’s skyrocketing value for recreation and development.

Company officials confirmed this week that the northern Minnesota land is part of the company’s plan to sell about 20 percent of its 1.5 million acres in the U.S.

The sales include 120,000 acres of Potlatch’s 310,000 acres in Minnesota, 120,000 acres in Idaho and 60,000 acres in Arkansas.

Potlatch officials say the targeted lands are higher-valued properties worth more for recreation and development than for logging. The company says it will use tax incentives and proceeds from land sales to buy lower-valued forest land for traditional forestry.

“At the end of the day, we want to own more forest land than we did before we started,’’ said Mark Benson, vice president of public affairs for the Spokane, Wash.,-based company. He noted the company last month acquired 76,000 acres of timberland in northeastern Wisconsin.

The company has not identified which of their Minnesota parcels will be sold. Benson said the lands targeted for sale are too valuable in today’s real estate market to keep on the company’s ledger for timber harvest twice every century.

But the sale of more Minnesota forest lands has conservation groups and state resource officials worried. State, federal and private groups have been working for more than two years to stem the tide of forest land being sold and broken up for cabins and retirement homes in Minnesota.

Land owned by Potlatch and other large forest products companies has been a critical element for recreation, timber harvests and northern ecosystems. But as land values increase, companies face pressure from Wall Street to capture its value for shareholders.

The trend has closed thousands of acres of land previously open to the public for hunting and other recreation. And the forest land rush has taken thousands of acres out of timber management for the state’s forest products industry, often due to parcel sizes that are impractical to manage or where owners chose to let trees grow old.

Those land sales and ensuing development also interrupt large tracts of contiguous forest considered important for many forest animals such as boreal owls, songbirds, moose, wolves and lynx.

The state, federal government and conservation groups are spending millions of dollars to buy conservation easements on private forest land to keep it from being developed. And while Benson said the Potlatch land will be available for the state or conservation groups to purchase on the open market, it’s not clear where the money would come from.

“This caught us a little by surprise. We’ve let them know, and the [Minnesota Department of Natural Resources] has let them know, that we want to talk,’’ said Tom Landwehr, assistant state director of the Nature Conservancy. “We’d like to sit down on a large-scale basis and see if a big deal can be done. We think that makes more sense for Potlatch than selling it off tract by tract.’’

“Of course, the big question is, who’s going to pay for it even if we can make a deal?’’ Landwehr said.

Conservation and state interests say they would focus their efforts on Potlatch lands adjacent to or surrounded by public lands to help keep the blocks undeveloped.

Minnesota lawmakers last year approved $7.5 million to buy conservation easements on forest land. The easements keep the property in private hands and open to the public but prevent the land from being parceled up and developed. The DNR has asked for another $2 million this year in state lottery trust fund money for the Forest Legacy program. Congress also has approved money for the easements.

But any effort by the state to buy forest lands may have to wait until the 2008 state bonding bill, if there’s any political will.

“We’ve been selling the idea of easements and now we’d be talking about purchases, so we may have to change course a little here,’’ Landwehr said. “But this may be Minnesota’s last chance’’ to keep this land open to the public and to wildlife.

About 6,000 acres of forest and open space is lost to development each day across the U.S., the Wisconsin DNR estimates. That’s about four acres per minute.

Benson said Potlatch is proceeding with the sales slowly and that only about 25,000 of the 300,000 acres to be sold nationally will be put on the market in 2007.

“This isn’t a rushed liquidation of land. This is a long-term strategy,’’ he said. Potlatch, once a major player in the wood products industry, has sold most of its mills and is now a real estate holding company that seeks return on land values. In recent years the company has sold land to conservation groups for preservation and has participated in selling conservation easements for land that it continues to own but will never develop.

It’s not the first effort by Potlatch to make money off its Minnesota holdings. Potlatch in recent years has begun leasing thousands of acres to hunting groups that had been open to free access.

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.

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