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		Nature Conservancy Magazine: Autumn 2006 Nature Conservancy Magazine Sale of the Century Up Close Let a Thousand Flowers Bloom Hunter, Angler, Conservationist The Stamp of Conservation Nature Stories Podcast Nature Landmarks Nature Books Nature Travel Nature Preserves Subscribe Previous Issues

Sale of the Century

Page 2

Spruce and fir forest near Number 5 Bog, Maine © David McLain   Sawyer Pond, just outside of Greenville, Maine © David McLain View slideshows of the forests of: Alabama Maine South Carolina Virginia Wisconsin Forest Conservation From rainforests to pine woods to the boreal forests of the northern latitudes, forests blanket nearly one-third of Earth’s land mass. They harbor in their shady depths an astounding variety and abundance of life. Communities of people everywhere rely on forests for their livelihoods and survival. The Nature Conservancy and our Global Forest Partnership are working to conserve forests in sites across the US, Latin America, Asia Pacific and Africa.

The 21st Century Forest
Despite the conservation records being set, there is a sobering side to these huge deals: The land they protect is only a tiny fraction of the forests that have been put up for sale in recent years as the forest-products industry has divested itself of its extensive U.S. landholdings. The Wisconsin and Southern-states deals protected nearly 280,000 acres, but that represents less than 5 percent of the 6.8 million acres IP put on the block last summer.

“The Nature Conservancy did a great job, but 95 percent got away,” says Kim Elliman, chief executive officer of the Open Space Institute, a land trust that has helped protect more than 90,000 acres in New York and has assisted in the protection of 1.4 million acres elsewhere in the Northeast.
In the past decade, more than half of the nation’s timber-company lands have been sold. In 2004, for example, Boise Cascade sold all of its 2.3 million acres of forestland. The company now operates under the name of its subsidiary, the office supplier OfficeMax.

“What it’s boiled down to is that these properties are worth more to other buyers than they are to us,” says Sharon Haines, IP’s director for sustainable forestry and forest policy. “The value of land in the U.S. has been increasing dramatically over the last eight to 10 years and, as a result, you’ve seen more and more forest-industry companies divest themselves.”

Timberlands that have been managed and harvested for more than a century are now more valuable as real estate. That’s due in part to a shift in the source of paper pulp in the United States: More than one-third is now generated from recycled sources, and new supplies of cheap pulp are rolling in from Brazil and Canada. But another reason is a shift in the paper industry itself.

Until the 1990s, forestry companies owned the woods that supplied the grist for their mills and wood-turning plants. But as prices for wood pulp stagnated, and their real estate holdings grew in value, paper companies realized that it made more sense to sell their forests, invest the proceeds in core operations, and buy the wood and pulp they needed on the open market.

Much of the land has been purchased by timber investment management organizations, or TIMOs, and real estate investment trusts, called REITs. These investment vehicles have become the largest
private timberland holders in the country. Plum Creek, a REIT, is the largest of all.

The big worry for conservationists is that, in many cases, these timberland investors will do just what Plum Creek set out to do in Maine: subdivide their timber holdings and sell them off as real estate developments.

The environmental and ecological implications of the divestitures will be enormous, says George Gay, executive director of the Northern Forest Alliance in Stowe, Vermont. “You look at the Eastern landscape as a whole, and you see this expanding megalopolis of development and sprawl that stretches from Atlanta to Boston, and right on its inland shoulder are the forests of the Appalachian chain,” he says. At stake is everything from the quality of urban water supplies to the survival of many rare plant and animal species. 

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