OCTOBER 06, 10:13 EDT
by Frank Fisher
Associated Press Writer
AUGUSTA, Maine (AP) - A huge chunk of Maine forestland is changing hands, as one timber giant announced plans today to sell more than 900,000 acres to another large company. Two small but important parcels are being offered to the state.
In a transaction closely watched by environmentalists, Sappi Fine Paper North America announced an agreement today to sell the acreage, about 5 percent of the state's forest land, to Seattle-based Plum Creek Timber Co. The price was $180 million, Plum Creek said.
Sappi, a subsidiary of South Africa-based Sappi Ltd., also said it is offering two prime properties to the State of Maine, including most of 29 miles along the eastern shore of Moosehead Lake and 15 miles along both sides of the Kennebec River's West Outlet. The parcels total 1,908 acres.
Gov. Angus King had been trying to negotiate with Sappi to buy some of its recreational lands to protect them from development.
Jym St. Pierre, main director of Restore the North Woods, an environmental group in Augusta, said the preservation of the 1,900 acres ``sounds like it's a baby step in the right direction.'' But he said he was disappointed that more acreage wasn't going to the state.
``It's a far cry from the historic opportunity that we had here to protect the public values at stake on a landscape scale,'' St. Pierre said.
As part of the sale, Plum Creek has agreed to a 40-year timber supply contract to sell fiber to Sappi's mill in Skowhegan.
Plum Creek is one of the largest private timberland owners in the country with over 2.4 million acres, according to Sappi. However, some environmentalists have criticized the company for its forest practices, accusing Plum Creek of logging too heavily.
Nearly 90 percent of Maine is covered by forests, making it the most heavily wooded of the 50 states. The 905,000 acres being sold by Sappi are in and around Bingham, Greenville and Jackman in the central part of the state.
Traversed by 2,500 miles of logging roads and home to flourishing herds of deer and moose, the land comprises the most intensively managed forests in the state.
In a statement, Sappi Fine Paper president and chief executive Monte Haymon said Plum Creek ``has the expertise to balance the economics of timberlands management with the protection of wilderness areas and the needs of the public for access to these areas.''
Terms of the sale were not announced. The sale is expected to become effective by the end of the year, subject to regulatory approvals, but is not subject to financing, Sappi said.
Copyright 1998 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Send comments and questions about The WIRE to feedback@thewire.ap.org
By Frank Fisher, Associated Press, from the Boston Globe. 10/06/98 15:52
AUGUSTA, Maine (AP) - A Seattle-based timber company decried by one environmental group as a ``forest liquidator'' but defended by Maine's governor has agreed to buy 905,000 acres of Maine woodlands, about 5 percent of the state's forests.
Plum Creek Timber Co. will pay $180 million for the land, home to flourishing herds of deer and moose, the seller, Sappi Fine Paper North America, announced Tuesday.
Sappi, a subsidiary of South Africa-based Sappi Ltd., also said it is offering easements to two prime properties to the state of Maine, including virtually its entire ownership of 29 miles along the eastern shore of Moosehead Lake and 15 miles along both sides of the Kennebec River's West Outlet. A Sappi news release said the company and the state would begin negotiating for the easements this week, which would protect the land from development and guarantee public access. Since Sappi announced in June it was selling its land to concentrate on manufacturing coated wood-free and specialty papers, Gov. Angus King has been negotiating to buy some of the most desirable properties. The parcels total 1,908 acres.
In addition, King said at a news conference that the state was negotiating with Plum Creek for rights to 14 miles of shoreline on Flagstaff Lake that total about another 700 acres.
``We do know that there will be a price. We do know that it will be significant,'' King said.
Additional property could be acquired in future discussions, he said. The governor said he hoped the state could obtain the easements at below market prices. The Nature Conservancy has agreed to put up the money until the state can pay it back, either through a bond issue or a direct appropriation, King said.
Plum Creek, which owns timberlands in Montana, Idaho, Washington, Louisiana and Arkansas, had been rumored to be the likely buyer for a week. Environmentalists wasted no time before condemning the company for heavy logging and developing land in the Northwest.
``Maine people should be deeply concerned by today's news that Plum Creek - an aggressive timber and real-estate development company - has purchased nearly 1 million acres in the heart of the north woods,'' said Pete Didisheim of the Natural Resources Council of Maine.
Despite Maine having about 17 million acres of forests, the state ranks near the bottom in the country in the amount of land that is publicly owned, less than 5 percent, Didisheim said.
The Maine chapter of the Sierra Club, calling Plum Creek a ``forest liquidator,'' said the time had arrived to begin buying large areas of the state's north woods to create a ``Maine Woods National Park,'' a term that has long made loggers cringe.
Plum Creek, which will own over 3.3 million acres if the Maine deal goes through, disputed the environmentalists' charges. Spokesman Bill Brown said the company has no real estate subsidiary and is serious about protecting the environment.
``I think since we became a public company in 1989, our record is significantly different than when we were a subsidiary of a large railroad,'' Burlington Northern, Brown said.
Rick Holley, president and chief executive officer of Plum Creek, promised in a statement that his company would ``manage these lands in an environmentally progressive manner.''
As part of the sale, Plum Creek has agreed to a 40-year timber supply contract to sell fiber to Sappi's mill in Skowhegan. Sappi's desire to have a reliable fiber supply precluded the state from buying most if not all the property for sale, King said.
The sale is expected to become effective by the end of the year, subject to regulatory approvals, but is not subject to financing, Sappi said. King tried to calm the anxieties of environmentalists, a potent political force in the state when united. He said he had breakfast with Holley Tuesday, and the company president assured him of Plum Creek's commitment to sustainable forestry and leaving its lands open to the public.
``So, I believe that I, along with all the people of the state of Maine, can breathe a sigh of relief this morning that we are not losing an asset that has been traditionally available to the people, but we are gaining a landowner who is committed to that policy,'' King said.
The governor said it appears Plum Creek had a ``somewhat negative reputation from the late '80s,'' but ``I believe in redemption.'' His staff distributed a letter from Montana Gov. Marc Racicot praising the company. Much of the land owned by Sappi is in Somerset County. Those holdings include dozens of remote ponds, 60 acres of shoreland on Moosehead Lake and miles of riverfront on the Kennebec River.
The state went after the 29 miles of shore on eastern Moosehead Lake because it would join with the 7 miles of waterfront it already owns, creating a 36-mile-long stretch of protected shoreline.
Sappi said the property it is offering the state includes 1,482 acres that run 500 feet deep along Moosehead Lake. The Kennebec River property is a waterway connecting Indian Pond to Moosehead Lake, running 250 feet wide along both sides of the river and totaling 426 acres.
Plum Creek said it expected to retain the ``vast majority'' of the 70 Sappi employees who currently manage the lands. The company also said it has a policy providing for public recreational opportunities on its timberland. Sappi spokeswoman Melanie Otero said the company had initially said it was selling 911,000 acres, but only 905,000 acres are land and the rest is water, which Sappi does not technically own.
Another 2 million acres of Maine forest land could also be up for grabs. South Carolina-based Bowater has said it is considering unsolicited offers to buy its operations in Maine.
PRESS RELEASE - SAPPI SELLS TO PLUM CREEK
Date: 98-10-06 13:17:23 EDT
October 6, 1998
FOR IMMEDIATE RELEASE: CONTACTS:
October 6, 1998 Robert Perschel, NFA Chairman: 617-350-8866 or 617-875-8866
Andrea Colnes, NFA Director: 802-223-5256
SAPPI Lands in Maine Sold to Plum Creek For $180 Million
Almost 1 million acres of Northern Forest go to country's sixth largest timberland owner.
SAPPI offers State conservation easements on two small shore frontage parcels.
MAINE - In a statement released today, South African Pulp and Paper International (SAPPI) announced that it has sold almost its entire Maine land holdings, over 900,000 acres, to Plum Creek Timber Company, L.P. of Seattle, WA for just $180 million (less than $200 per acre). The SAPPI lands include extensive shore frontage on Moosehead Lake, Flagstaff Lake and the Kennebec River as well a many remote ponds, high elevation forest and roadless areas.
"Some of Maine's highest value woods, waters and mountains are now in the hands of a company that is currently engaged in selling off prime parcels of wild Montana land to the highest bidder," commented Northern Forest Alliance Chairman, Bob Perschel, upon learning of the SAPPI sale.
Well known in western and southeastern states for its aggressive timber harvesting operations, Plum Creek is also a major seller of prime real estate for development . A visit to their website (www.plumcreek.com) shows they specialize in subdividing pristine shorefront acreage to sell as sites for "executive" second homes and "ranchettes." In June of this year, Plum Creek applied to the Securities and Exchange Commission (SEC) to change their corporate structure from a Master Limited Partnership (MLP) to a Real Estate Investment Trust (REIT) thus making the company accessible to a wider range of stockholders including institutional investors such as pension funds.
SAPPI also announced today that it will offer the State of Maine conservation easements on a small amount of prime waterfront acreage on Moosehead Lake and the Kennebec River. The parcels to be included in the easement offer are: a 29 mile long, 500 foot wide, strip of shore frontage on the eastern shore of Moosehead Lake and 15 miles along both sides of the Kennebec River's Western Outlet - this strip would be 250 feet wide on each side of the river. These possible conservation easements fall far short of the 100,000 plus acres the King Administration had originally bid on to purchase from SAPPI for public ownership.
"This sale is a clear indication that we are entering a new era of land ownership in the Northern Forest," said Andrea Colnes, Director of the Northern Forest Alliance. "The arrival of Plum Creek in the northeast signals that real estate development, much more than traditional forest uses, is becoming the future of the Northern Forest. This signals a sea change for the Maine Woods. We are likely to see more and more fragmentation of what was once a vast working forest that provided both timber and recreational opportunities. " continued Colnes.
- MORE -
"We are deeply concerned that many of the most valuable lands in Maine's North Woods remain unprotected. Extraordinary places like Spencer Lake, the Moose River Bow Trip region, high elevation land near the Appalachian Trail and portions of Mt. Crocker, Abraham, Spaulding and Sugarloaf are at high risk for development. Despite his efforts with SAPPI, Governor King was sharply limited in his ability to negotiate because Maine currently has no legislative mechanism nor money on hand to preserve this valuable land for future generations," said Bob Perschel. " Aside from the small easement acreage SAPPI is offering, Maine will now have to negotiate with Plum Creek which is well known in the West for driving a hard bargain in its land sales to conservation interests."
Colnes continued, "With the possible exception of New York, none of the Northern Forest states has the resources to protect their remaining unbroken forest land from a future of fragmentation and development. This is a wake-up call that should galvanize all who care about the Northern Forest. We must take action now and call upon our governors and our congressional representatives to make funding for land conservation in this region a national priority. Congress needs to fulfill the promise of the Land and Water Conservation Fund and restore its authorized annual appropriation of $900 million including money for the state matching grants program."
####
Contacts for information about Plum Creek:
http://www.plumcreek.com
www.landscouncil.org See articles in the September, 1998 issue of their newsletter "Transitions" under the "lands council news" sub menu for information on Plum Creek's corporate entity.
Contact people and organizations in states where Plum Creek operates:
Steve Thompson Mark Solomon The Lands Council The Lands Council Box 4471 517 South Division Street
Whitefish, MT 59937 Spokane Washington 99202 Ph: 406/862-3795 Ph: 509 838-4912 Fax: 406/862-5344 Fax: 509 838-5155 e-mail: sthompson@desktop.org email: msolomon@landscouncil.org web: www.landscouncil.org
John Gatchell
The Montana Wilderness Association John Osborne (Lands Council founder)
(406) 443-7350 home: (509) 328-1087 work (hospital) (509) 328-4521
John McCarthy, conservation director
Idaho Conservation League
(208) 882-1010
jmccarthy@wildidaho.org
Andrea Stander
Media Coordinator
Northern Forest Alliance
43 State St. Montpelier, VT 05602
802-223-5256 (phone)
802-229-4642 (fax)
astander@igc.apc.org
Date: October 6, 1998 Contact: Pete Didisheim, Judy Berk, 622-3101
Development/Timber Company buys 1 million acres of Maine woods, waterfronts Plum Creek buy could put Maine's traditions, places, heritage at risk
Statement of Pete Didisheim, Advocacy Director
"Maine people should be deeply concerned by today's news that Plum Creek - an aggressive timber and real-estate development company - has purchased nearly one million acres in the heart of the north woods. Included among Plum Creek's new properties will be some of Maine's most scenic mountain tops, spectacular undeveloped shorelines, and remote forests. These lands have been enjoyed by generations of Maine people for hunting, fishing, and remote recreation, yet - if Plum Creek manages these lands as they have managed their holdings in other states - then these precious areas could be sold off for development, posted with "no trespassing" signs, and become off-limits to the people of this state forever."
"Plum Creek has a notorious record of buying land at bargain prices, as they did today, then selling prime parcels for a huge profit. This profit-driven out-of-state company now is poised to cash in on the love that Maine people have for the land which Plum Creek just got for $200 per acre. In Montana, Plum Creek lands on pristine lakes -- not unlike places they purchased today in Maine -- are being offered for $10,000 to $30,000 per acre.
"We commend the Governor and his staff for their extensive efforts over the past few months in making a serious proposal to SAPPI for the protection of many of the most important elements of the 911,000 acres that SAPPI had placed on the market. Although it is welcome news that negotiations will continue regarding development restrictions along a portion of the shorelines of Moosehead lake and the West Outlet of the Kennebec, these tracts represent but a small fraction of the lands worthy of protection against vacation home development, marinas, and condominiums."
"Plum Creek's commitment to sell a conservation easement on Flagstaff Lake to the state is significant. However, the prime lands purchased by Plum Creek and still vulnerable to development include more than 30 additional miles of undeveloped shoreline along Moosehead Lake, more than half of the shoreline of Spencer Lake, the Moose River Bow Trip region, Bald Moutain Pond, many miles of shoreline of the Kennebec River, and high-value mountains near the Appalachian Trail including most of Mt. Crocker, and portions of Mt. Abraham, Spaulding and Sugarloaf. These pristine lakes and unique mountains are at high risk of development unless actions are taken by the state to secure their protection - as the Governor sought to do. Regrettably, neither SAPPI nor Plum Creek seriously entertained a broad effort by the state to protect these lands on behalf of the public interest.
"Plum Creek is a major landowner the likes of which we have not seen before in Maine. Unlike Maine's other large landowners, Plum Creek is a major real estate developer in addition to being an aggressive timber harvester. One look at Plum Creek's website shows that the company specializes in subdividing their most attractive properties for vacation homes."
"One lesson we should learn today is how important it is for the Governor, business leaders, state legislators and congressional delegation to move quickly to develop a plan and the necessary funding to implement a long-term conservation strategy for lands such as SAPPI's that have been enjoyed by generations of Mainers but which could become victims to profit-driven real-estate companies such as Plum Creek."
"Maine ranks near the bottom of all states in the country in the amount of publicly owned lands - less than 5%. By comparison, New Hampshire has 15% public land; Vermont has 11%; Massachusetts has 24%.
"The arrival of Plum Creek in Maine, and the prospect of other major forestlands being sold to similar companies in the future, should serve as a wake-up call to the entire state and its elected officials. If we hope to protect some of the most valued lands in Maine from being subdivided and posted off-limits, then we must do as other states are doing and work aggressively to raise the necessary public and private funds for the purchase of land and conservation easements. Monroe County, Pennsylvania has approved a $25 million public land bond; Austin Texas, $65 million; Connecticut, $160 million. It's time for Maine to take action too."
###
Contacts for More Information about Plum Creek
Websites:
Plum Creek's real estate offerings: http://land.plumcreek.com
The Lands Council: http://www.landscouncil.org See the last few articles in the September, 1998 issue of their newsletter Transitions under the "Lands Council News" submenu for information on Plum Creek's corporate entity.
Contacts in states where Plum Creek operates:
Steve Thompson, The Lands Council, Whitefish, Montana;
Ph: 406/862-3795; e-mail: sthompson@desktop.org
Mark Solomon, The Lands Council, Spokane Washington
Ph: 509 838-4912; Fax: 509 838-5155; email: msolomon@landscouncil.org
John Gatchell, The Montana Wilderness Association
Ph: (406) 443-7350
John McCarthy, conservation director; Idaho Conservation League Ph: (208) 882-1010; email: jmccarthy@wildidaho.org
John Osborn, Ph - home: (509) 328-1087; work: (hospital) (509) 328-4521 cellphone: (509) 499-2160; email: josborn@landscouncil.org
George Draffan; Public Information Network
Ph: (206) 723-4276; email: pin@igc.org
Additional Contacts in Maine (all Area Code: 207):
Sporting Camps:
Jim Glavine, Beaver Cove Camps, First Selectman, Beaver Cove (near Greenville), 695-3717.
Dale Wheaton, Wheaton's Lodge, Forest City (near Danforth) 843-5732 John Richardson, Nugents Camps, (Allagash area), 944-5991
Rafting Companies:
Jan Murton, North Country Rivers, West Forks, 923-3492
Ed Beauchamp, Professional River Runners of Maine, West Forks, 663-2229
Fishing Guides and Shops:
Danny Legere, Maine Guide Fly Shop, Greenville, 695-2266
Bob Nelson, Nelson's Sport and Hobby, Dover-Foxcroft, 564-8568 Bob Dionne, Aardvark Outfitters, Farmington, 778-3330
Ray Reitze, Professional Maine Guide, Earthways, Canaan, 426-8138 Linda Coskie, Warren Cochrane, Allagash Canoe Trips, Greenville 695-3668
Forest Products Manufacturers:
Jerry Stelmok, Island Falls Canoe, Atkinson, 564-7612
Vincent and Tammera Richel, Highland Art Works, Rangeley, 864-5493 Roland Thurlow, North Woods Canoe, Atkinson, 564-3667
Outfitters/ Other:
Kevin Slater, Mahoosuc Mountain Outfitters, Newry, ME 04261 Buck Oherin, Earth Treks, 800-589-4770
Gary, George and Faith, The Phoenix Center, Blue Hill, 374-2113 Michael Boutin, North Woods Outfitters, Greenville, 695-3288 Roger Courier, Owns a piloting company, 695-2278
Judy Berk
Natural Resources Council of Maine
271 State Street
Augusta, Maine 04330
phone - (207) 622-3101
fax - (207) 622-4343
email jberk@nrcm.org
BW0067 OCT 06,1998 5:31 PACIFIC 08:31 EASTERN
Business Editors
SEATTLE--(BUSINESS WIRE)--Oct. 6, 1998--Plum Creek Timber Company, L.P. (NYSE:PCL) announced today that it has signed a definitive agreement to purchase 905,000 acres of forest lands in central Maine from Sappi Fine Paper North America (S.D. Warren Company), a subsidiary of South African-based Sappi Limited, for $180 million.
The acquisition of these timberlands will bring the total ownership of Plum Creek, which is the sixth largest private timberland owner in the nation, to over 3.3 million acres.
As part of the acquisition, Plum Creek will enter into a long-term agreement to supply fiber from these timberlands to Sappi's paper facility in Skowhegan, Maine. Plum Creek expects to retain the vast majority of the 70 employees who currently manage the lands. "This acquisition fits Plum Creek's strategic objective of expanding and enhancing our overall timberland ownership and making acquisitions that are accretive to our overall cash flow," said Rick R. Holley, President and Chief Executive Officer. "The Sappi timberlands are among the most attractive timber properties in the Northeast and include well-managed, productive hardwoods and softwoods in close proximity to several sawmills, pulpmills and chipmills. These lands diversify our timber holdings in a geographic region with very stable demand for wood fiber."
"Plum Creek is delighted to assume the stewardship of these high-quality timberlands," continued Holley. "Plum Creek employs innovative and environmentally responsible management practices throughout our timberland ownership. We will manage these lands in an environmentally progressive manner."
Plum Creek has an open lands policy that provides the public recreational opportunities on its timberland. The company is also committed to continue discussion with the State of Maine regarding conservation easements on portions of Moosehead Lake and the Kennebec River.
Completion of the transaction is subject to certain customary conditions, but is not subject to financing. The transaction is expected to close by the end of the year.
Plum Creek is one of the largest private timberland owners in the nation with timberlands and mills located in the Pacific Northwest and Southeast United States.
More information on Plum Creek Timber Co. may be accessed at: http://www.businesswire.com/cnn/pcl.htm or by fax at 888/329-4694.
--30--AMP/se*
SEATTLE (Reuters) - Plum Creek Timber Co. LP said Tuesday it has agreed to buy 905,000 acres of forest lands in central Maine from South Africa's Sappi Ltd. for $180 million.
The acquisition will bring the total ownership of Plum Creek, which is the nation's sixth-largest private timberland owner, to more than 3.3 million acres, Plum Creek said.
The company said it will enter into a long-term agreement to supply fiber from the newly acquire timberlands to Sappi's paper facility in Skowhegan, Me.
Plum Creek said it expects to retain most of the 70 employees who currently manage the land.
The deal is expected to be completed by the end of the year. Plum Creek's stock was off 19 cents at $27.94 in early trading on the New York Stock Exchange.
REUTERS
Reut10:39 10-06-98
NEWS RELEASE -- For Immediate Release
October 6, 1998
Contact: George Draffan (206) 723-4276
Mark Solomon (509) 838-4912
James A. St. Pierre (207) 626-5635
Plum Creek Timber Buys 905,000 acres in Maine
In a move denounced by conservationists across the nation, Plum Creek Timber Company announced its purchase today of 905,000 acres of Maine timberland from South African Pulp and Paper (Sappi) for $180 million dollars. Plum Creek, once referred to by a western Congressman as "the Darth Vader of the timber industry", is reviled by forest conservationists for its huge square mile clearcuts that have literally "checkerboarded" the forests of Washington, Idaho and Montana.
"The communities and forests of our nation are being exploited as colonial possessions by Plum Creek and other huge timber corporations," said John Osborn of The Lands Council in Spokane, Washington. "From Maine to the Great Lakes to the Pacific Northwest and back again they take our forests, they take our worker's jobs, they take their promises and cut and run," Osborn continued.
"It's going to be shock therapy for the state of Maine," said James A. St. Pierre, Maine director of RESTORE: The North Woods in Augusta, Maine.
Plum Creek is the latest heir to the legacy of a 134 year old act of Congress, the Northern Pacific land grant. As incentive to build a railroad from the Great Lakes to Puget Sound, Congress granted the railroad over 40 million acres of public land that Congress intended be sold to homesteaders along its path. Instead, the Northern Pacific sold huge portions of its grant lands to timber and mining interests. A century later, in 1989, the railroad spun off its remaining timber holdings to a new corporation, Plum Creek Timber. As a natural resource limited partnership, Plum Creek pays no federal corporate income taxes.
"Plum Creek's operations have been based on illegal and damaging public subsidies from the very beginning. Having stripped its original lands of their forests and value, it is taking its ill-gotten gains to buy up land in other parts of the country," said George Draffan of the Public Information Network, Seattle, Washington.
The Maine acquisition follows Plum Creek's sale of 107,000 acres of cut-over forest in Washington and Idaho, 164,00 acres in Montana and its subsequent purchase of more than half a million acres in Louisiana and Arkansas. In Montana, Plum Creek is carving up 150,000 acres of its forest land for residential development. In Washington, Plum Creek is threatening to cut thousands of acres of ancient forest unless the public exchanges more of its land to the corporation. In Maine, Plum Creek is negotiating with the state to preclude Plum Creek_s development of its new properties along Moosehead Lake and the Kennebec River.
"Plum Creek appears to be practicing corporate extortion in Montana and Washington-- and now Maine", said Mark Solomon of The Lands Council. "They are threatening our forests' future with chain saws and subdivision development after demonstrating their ability to kill our forests for corporate profits," Solomon continued.
Last week the Maine Forest Service released an analysis of the state's timber supply showing that Maine's largest landowners are cutting 14 percent more wood annually than their forests are growing.
"The forests of Maine face huge theats from overcutting and development pressures. Clearly we need to do two things--permanently protect more land from logging and mandate sustainable forestry on our other timberlands", said St. Pierre of RESTORE. "The sale of nearly a million acres of forest to Plum Creek could turn out to be the wake up call Maine has needed for a long time," St. Pierre continued.
The Railroads and Clearcuts Campaign is a national coaltion of environmental, labor and corporate accountability advocates dedicated to the revestment of lands wrongfully removed from the public domain as a consequence of the federal 1864 Northern Pacific land grant. The Campaign is coordinated by The Lands Council, a non-profit forest conservation group based in Spokane, Washington.
-30-
Background (10/6/98)
Plum Creek Timber buys 905,000 acres in Maine
Plum Creek Timber Company has announced its purchase of 905,000 acres of Maine timberland from South African Pulp and Paper (Sappi). Given Plum Creek's history and its methods of operation, these expansions bear closer examination.
Plum Creek Timber: built from the public domain
During the 19th century, railroad corporations were given enormous _land grants_ as financial incentive to build the nation_s transcontinental transportation network. Congress intended the railroads would sell these lands to settlers. Instead, much of the land turned over to the railroads was kept by the railroad or sold to timber and mining corporations, including Anaconda Copper, Boise Cascade, Potlatch, and Weyerhaeuser.
In 1988, the timber, coal, oil, and other natural resources still held by Burlington Northern Railroad, the corporate descendant of the original Northern Pacific Railroad land grant recipient, were spun off into a new corporation: Burlington Resources (BR). In 1989, BR spun off its timberlands in the Northwest to yet another corporation: Plum Creek Timber. Plum Creek was born with more than a million acres of valuable (and irreplaceable) ancient forest in Montana, Idaho, and Washington states - forests which some maintain still rightfully belong to the American people.
Cut and run - and develop
Plum Creek immediately set out to liquidate its timber assets, exporting much of it to Asia as logs and chips to Asia. Criticism of the company led former Plum Creek Timber spokesman Bill Parsons to tell a Montana legislator. "We have never said we were on a sustained-yield program, and we have never been on a sustained-yield program. Let's get to the heart of it. Sure, it's
extensively logged, but what is wrong with that?"
Idaho Governor Cecil Andrus angrily charged that Plum Creek's "only concern appears to be cashing out their equity at everyone else's expense."
Double liquidation: remove valuable timber, then develop the land Having liquidated much of its timber in the Northwest for log and wood chip exports to Asia, Plum Creek began selling off prime valley-bottom wildlife habitat and riparian areas for real estate development.
Plum Creek identified 10 percent of its Montana lands, 150,000 acres, to be used for its "highest and best use" - real estate development. Plum Creek is now selling various parcels of land (many of them rare lakeshore properties) and is working to develop the rest of the 150,000 acres -- land which wildlife agencies maintain are critical for wildlife conservation purposes. In one deal now being negotiated, the State of Montana would pay Plum Creek millions of dollars to purchase development easements on some of the most critical wildlife lands -- not the land itself which is beyond the financial ability of the state to purchase. The company would retain the right to keep cutting timber off the lands.
Restructuring to expand: on to the South and Northeast
Plum Creek is now reinvesting its profits from this double liquidation by buying hundreds of thousands of acres in the Southeast - and now in New England. As Jude White of International Paper told forester and author Gordon Robinson: "Hell, Robbie. We're on sustained yield. When we clean up the timber in the West, we'll return to New England, where the industry began."
Plum Creek has also announced that by the end of the year it expects to restructure from a limited partnership (LP) corporation to a real estate investment trust (REIT). As an REIT, the debt-heavy Plum Creek will be more attractive to mutual funds and other institutional investors who do not invest in LPs, thus attracting more cash for its expansion activities.
For more information contact The Lands Council: 509.838.4912 or visit our website at