To the Highest Bidder

by Jane Braxton Little & r & & r & & lt;span class= "dropcap " & J & lt;/span & ay McLaughlin ambles into the Shade Tree Inn, beams a smile to the waitress, and folds his 6-foot-9-inch frame into a chair. Inches above his head hangs a hornet's nest the size of a Pilates ball, scavenged from the nearby woods. Replicas of local cattle brands decorate the restaurant walls in incongruous combination with brightly painted kachina dolls.


At the next table, three men in plaid shirts, chaps and spurs gulp down mushroom burgers. McLaughlin, 33, chats with a retired log-skidder operator in an orange Kubota tractor cap and a beefy man wearing suspenders that say "woods logger."


Outside, mud-spattered pickup trucks are parked at odd angles in the gravel in front of the Shade Tree, the only restaurant open in Glenwood's one-block business district. Glenwood, population 500, is a Western working town. Nestled in a broad valley 30 miles north of the Columbia River, between The Dalles, Ore., and Yakima, the community is a mix of loggers, ranchers and Yakama Indians, whose sovereign lands extend east across the Klickitat River to the Yakima Valley. Kids growing up here learn how to fell trees and call coyotes, where to hunt in autumn and how to fix tractors. Towering above it all is Mount Adams, snow-capped and shrouded in gossamer clouds.


McLaughlin, a Yale-educated forester, fears this bucolic tapestry is on the verge of unraveling. The private forests that dominate the hillsides are up for grabs -- along with virtually every other timber industry-owned stand in America.


While environmentalists have been occupied with controversies over the management of public forests throughout the West, America's industrial forest owners have been quietly selling out. More than half of the nation's 68 million acres of private industrial timberland has changed hands since 1995. Most of the sales were in the last five years, when ownership shifted on a total area of land larger than the state of Pennsylvania. In the West, where private forests cover 30 percent of the land, timber companies are selling off their holdings in blocks bigger than most national parks.


The pace of buying, selling and reselling timberlands is unprecedented, astonishing even to investors who keep a close eye on the market.


"Never has this much land been for sale in the United States of America. It's phenomenal," says Peter Stein, a manager with Lyme Timber Company.


Every sale carves off a chunk of the nation's working forests. Most of the pieces are destined for development: shopping malls, parking lots, trophy-home ranchettes and exclusive resorts. Scientists estimate that industrial and non-industrial woods alike are disappearing at the astonishing rate of 1 million acres a year. A U.S. Forest Service report predicts that over the next 30 years, housing and other development will spread across private forests totaling the size of the state of Washington.


And far more is at stake than trees. Forest fragmentation will put 340 animal species at risk of extinction -- 20 percent of the total number of species that depend on forests for their survival, according to a 2005 National Science Commission study. It will affect the 180 million people who depend upon private forest watersheds for their drinking water. Even the climate is in jeopardy: With every acre lost, the carbon stored in trees declines and more is released into the atmosphere, where it contributes to global warming.


Dire as it is, this wholesale transfer of timberlands offers enormous opportunities. Suddenly, entire landscapes are on the market. Rural communities are seeing a chance to buy up and manage the land their economies depend on. Many of these communities are teaming up with conservationists, who see a chance to protect unique ecosystems and endangered species.


McLaughlin wants Glenwood to be among those communities. He is working with a group of locals on a grand plan to acquire as much as 80,000 acres of timberland. The land would be managed as a working forest, where logging would continue to contribute to the local economy, where locals could continue to hunt, fish and cut firewood, and where the valley's wildlife could thrive.


To do this, however, McLaughlin and his allies will have to navigate a steep, winding road, and gain the support of not only their community but a host of powerful and well-connected outside players. They will also have to compete in a real estate economy where timberlands have become lines on investment portfolios, rather than landscapes to be cared for and sustained.





A New Breed of Forest Owner & r & So far, the more than 80,000 acres of private industrial timberland surrounding Glenwood have remained relatively intact -- but they are part of the red-hot real estate market nonetheless. In the past five years, the land has had four owners, a swift succession that runs from Champion International to International Paper to Rainier Timber Company to Hancock Timber Resource Group, a Boston-based subsidiary of a mammoth insurance company.


The changes in ownership have taken a toll on Glenwood. Throughout much of the 1990s, private-land logging insulated the community from declining timber harvests on the national forests. Although timber jobs fluctuated with the market, locals could count on first crack at whatever was available. But the recent ownership merry-go-round has thrown everything out of kilter. Foresters who once enjoyed steady work must reapply to each new owner. Loggers who have dedicated decades to the local woods face constant uncertainty.


Darrel Spies, owner of a Glenwood logging company, has had enough work to keep 30 employees busy during most of his three decades in Glenwood. Lately, however, he has been forced to sell off skidders and other logging equipment. "It's hard to keep guys working steady with all the ownership changes," he says.


The new owners have brought in outside workers and are selling logs wherever they can get the best price, Spies says. "There's no loyalty anymore. They don't seem to care about the woods or anything else. We're just a number to them."


Past forest owners did their share of damage to local ecosystems, building roads, spoiling streams and clear-cutting patches as big as state law allows. With their corporate counterparts nationwide, they were maintaining a continuous flow of materials to their mills. Throughout a century of frequent controversy, these industrial giants ran integrated operations that grew trees, harvested and processed them.


But the new owners belong to a different breed entirely. Instead of producing sawlogs and pulp over the long haul, their sole aim is to maximize short-term profits for investors. Known as timber investment management organizations (TIMOs), they cut their forests fast and hard. Then, once the trees are gone, they put the land up for sale, seeking maximum prices. In today's soaring real estate market, the most obvious profits are in what is euphemistically known as "highest and best use" -- development.


In 1990, there were two or three TIMOs in the United States. Today, there are 24, managing timberlands valued at $15.7 billion. The new owner of the land around Glenwood, Hancock, is the largest, with more than 3.3 million acres of forests valued at $4.8 billion.


No one in Hancock's Glenwood office is available to answer questions. Brian Carmichael, a company spokesman in Boston, can provide no information about plans for the Glenwood tract. He will only say that as a TIMO, Hancock is responsible for managing its clients' investments. But locals say Hancock's plans are abundantly clear. Up a maze of dirt roads outside of Glenwood, Spies and his crew of six men are running heavy equipment in one of the company's 120-acre logging sites. Spies calls it a "dirty clear-cut." His directions are to fell everything but the occasional "wildlife tree." At this rate, he predicts, logging on Hancock land will be over in three years and Glenwood will be ready to put the timberlands on the market.


"They're going at it really hard," says Spies. "Makes it tough for us to survive over the long haul."


The effects of the ownership changes worry Bob Beverage, who moved to Glenwood 20 years ago after retiring from the Navy. As chairman of the Glenwood community council, he has tried to convince Hancock to retain the foresters and loggers whose families have worked in the woods for three or four generations -- with some success.


Without these timber jobs, "it's lean pickings," says Beverage. "We're lucky to stay ahead of the wolf."


McLaughlin worries less about the fast-paced cutting than about what may follow it. As aggressively as timber companies have harvested their lands, they have always maintained them as working forests. Even clear-cut woods retain the potential to produce sawlogs, host wildlife and provide recreation. Given enough time, most clear-cuts can be restored to their natural biodiversity. Once the land is carved into home sites and ranchettes, however, that potential is gone for good.





A Goal for Glenwood & r & Lean, lanky and quick to laugh, Jay McLaughlin grew up in the Seattle area, where he watched dairy farms disappear under sprawling subdivisions. After graduating from Whitman College in Walla Walla, he and his wife spent two years as Peace Corps volunteers in a remote village 12 hours from Panama City, Panama. They moved to Glenwood in 1998 to teach the community's 120 students.


It was love at first sight, McLaughlin says. There were salmon in the streams and wildlife in the woods. And there was still the hope that the local people could manage the natural resources in a way that would sustain their community for generations to come, he says.


When the McLaughlins left in 2000 for Yale, where Jay earned a master's degree in forestry, no one expected them to come back. But the first job offer Jay got was in Glenwood, working as a forester for the Bureau of Indian Affairs. "It was fate," he says with a broad grin, between bites of the Shade Tree's chili and cornbread.


By the time the McLaughlins returned, however, many other residents had departed in search of the economic stability Glenwood no longer offered. Along with rusting equipment and buildings ready to collapse, they left behind a rash of struggling businesses. The school had dwindled to 80 students. Around the valley, locals were muttering about Glenwood's last gasps.


"When you lose one person, you also lose a school board trustee or a basketball coach. Everyone does so much here," says McLaughlin, who was elected to the community council in 2002.


Unwilling to watch the community fall apart, McLaughlin gathered a group of local leaders and formed the Mount Adams Resource Stewards (MARS). They began discussing everything from how they could save local jobs to where the global economy might lead Glenwood. Then they adopted a set of goals designed to promote the community's long-term health through careful stewardship of local natural resources.


MARS' mission is about more than jobs. Sound forest management would maintain healthy natural systems and restore damaged areas, McLaughlin says. Glenwood enjoys the unique biodiversity of a transition zone, where the wet ecosystems west of the Cascades mingle with the drier east-side species. Greater sandhill cranes flock to the valley's wetlands, the only known nesting site in the state. A healthy population of Oregon spotted frogs, a state endangered species, is one of just four in Washington. Cougars and mountain goats wander in the mountains, and the valley is host to Western toads and 165 species of birds.


"There aren't a lot of places like this one left. It's worth trying to protect," says McLaughlin.


To do that, MARS wants to buy private forestlands for community management. Owning the Hancock land -- even a small chunk of it -- would help maintain the jobs and forest access locals have enjoyed for nearly a century. And instead of someone in Boston or Seattle making decisions about what happens to the land and the town, Glenwood residents would be in charge.


"Owning land will empower this community. We will be making decisions about what we want," McLaughlin says.


So far, MARS has taken only small steps toward buying any land, says Jacquie Perry, co-owner of an inn and recreation center, and a member of the MARS board. In the last year, the group has won several grants for around $100,000 to fund economic development that includes processing small-diameter logs.


"That's small potatoes, but at least it's a place to start while we build credibility," Perry says.





Hope and Heartbreak & r & The MARS proposal may seem like pie in the sky, but other communities have achieved similar goals. In Montana's Blackfoot Valley, just west of the Rocky Mountain crest, a broad-based citizens' coalition is protecting the landscape surrounding the Blackfoot River, made famous by Norman Maclean's novel, A River Runs Through It. The nonprofit Blackfoot Challenge began more than 25 years ago with a bootstrap effort to safeguard alfalfa and cattle operations from strip malls and trophy homes. Today, this alliance has protected 90,000 acres of land from development, using conservation easements, and restored 47 miles of stream, 2,600 acres of wetlands and 2,300 acres of native grasslands.


In 2003, Plum Creek Timber Company announced plans to sell 88,000 acres of cutover forestland above the Blackfoot Valley. With the help of the Nature Conservancy and other partners, the Blackfoot Challenge is now facilitating the purchase of that land -- at a price, so far, of $32 million. Some of the land will be sold to local ranchers, with conservation easements restricting development. Some will be sold to public agencies to preserve wildlife habitat and recreational access. A 5,600-acre hillside of bunchgrass prairie will be protected as a "community conservation area," owned and managed by Blackfoot residents. They plan to restore its native grasses while using it for recreation and sustainable grazing.


Eventually, the group wants to protect everything within the ridges that ring the Blackfoot Valley -- the entire 1.5 million-acre watershed.


"This is all about what communities can do -- for themselves and the land," says Jim Stone, Blackfoot Challenge board chairman.


Whether the Challenge will be able to protect the Blackfoot's still spacious landscape into the future is an open question. Some ranchers are challenging local zoning regulations that prohibit most land divisions under 160 acres. Almost everyone is worried about skyrocketing property values. The very successes that local ranchers have earned in preserving their land and lifestyle may contribute to pricing out the next generation -- exiling Blackfoot children from their own valley.


And for every community that has successfully protected its working landscape, dozens more are still struggling. Not all of them succeed.


Take Roslyn, Wash., a picturesque town just east of the Cascades that was immortalized as the set for TV's Northern Exposure. In 1988, a rumor began to circulate that Plum Creek planned to clear-cut the 150,000-acre forest that dominated both the local economy and the view from town. Concerned citizens formed a nonprofit, which they called RIDGE after the mountain crest that unites the community. They developed a plan to maintain the timberlands surrounding Roslyn as a working forest that would create "a living envelope," providing jobs as well as protecting and enhancing wildlife habitat.


But Plum Creek had other ideas about the "highest and best use" of its Roslyn lands. It began cutting heavily across the ridge, just out of sight of major tourist routes. That launched a battle that raged through the 1990s, pitting RIDGE against "the Darth Vader of corporate America," says Peg Bryant, an occupational therapist who helped found the organization. RIDGE sponsored town meetings, attended county planning sessions, and served as a citizens' advisory committee to the city. The group's goal was to create an 8,000-acre corridor stretching from ridge to ridge above the Cle Elum River.


Eventually, the issue landed before a state panel responsible for growth management decisions. RIDGE suffered a crushing defeat when the board allowed development on Plum Creek's timberlands, paving the way for the sale of 7,000 acres for a high-end resort with three golf courses and up to 3,775 residences. Wielding a lawsuit, RIDGE managed to delay the construction for four years, but ultimately settled out of court for $500,000, which it put toward purchasing 323 acres of forest above Roslyn.


Cordy Cooke, an urgent-care nurse and RIDGE activist, points out that the settlement also guarantees free public access to the Cle Elum River, hiking trails, labor standards for resort employees, traffic improvements, wildlife protections and limits to both the size and number of entrances to the resort and the number of residences. "We forced a multinational development corporation to make a serious effort at mitigation," says Cooke.


But 323 acres of woodsy landscape is a far cry from an 8,000-acre working forest. And the process was deeply divisive: RIDGE members were ostracized, and taunted at public meetings. The personal toll was too much for Hank Fraser, a fisheries biologist who dropped out when it became clear that the resort would be built.


"I figured the argument would be over how many flowers we could plant. We had lost sight of the big picture," Fraser says. "It was a heartbreaker."





The Challenge for Communities & r & The inevitable failures have not dissuaded many Western communities from fighting for control of private timberlands. In Montana's Swan Valley, Plum Creek's announced sale of 10,000 acres for real estate development has generated a campaign to buy land for community management that protects the timber-based economy and public access. Near Bend, Ore., the Deschutes Basin Land Trust is trying to purchase nearly 33,000 acres of working forest. If they are successful, these groups will join 3,000 communities nationwide that own a total of 4.5 million acres of forestland.


But they are entering a tough, aggressive market. To be competitive, they need new attitudes, new allies and new financial tools, says Tom Tuchmann, president of U.S. Forest Capital in Portland. "This is the world of Wall Street. It's way beyond bake sales."


Federal funding for conservation purchases has seen a serious decline in recent years. Last year, existing programs provided a mere $314 million to buy parks, forest, wildlife refuges and shorelines. But on the state and local levels, voters have approved major conservation funding initiatives in recent years. In 2004, voter-approved ballot initiatives made $4.1 billion available to create parks and preserve farmlands and forests.


Conservation groups, too, have stepped up, becoming one of the top four land buyers in the country in the last two years. Sometimes, they purchase the tracts outright. In other cases, they help cities and community groups buy land, holding it until it can be transferred to local ownership. Most of these acquisitions include conservation easements, which limit development but often allow timber harvesting and other management activities.


Tuchmann is one of a growing group of environmental entrepreneurs and investment bankers who are working to increase the options for forest communities. He designed a program, approved last year by the Oregon Legislature, that authorizes counties and cities to establish local "forest authorities," which can issue taxable or tax-exempt revenue bonds. Community organizations can apply to these authorities for funding to purchase land that will provide environmental, social and economic benefits to the public.


In December, the Deschutes County Commissioners created Oregon's first community forest authority, allowing the Deschutes Basin Land Trust to borrow municipal debt funds to acquire the 33,000-acre Skyline Forest. The bonds will be repaid with revenue from timber harvests.


Elsewhere, local, regional and national land trusts are forming joint ventures with private investors in order to assemble the capital to bid on huge land transactions. Among them are TIMOs such as Lyme Timber Company, based in New Hampshire, which has put up millions of dollars in private capital to make it possible for communities and land trusts to acquire working forests. Hancock has also been involved in several partnerships that have protected timberlands from development. Without the private capital, most groups would not be able to take the financial risks, says Bill Ginn, director of the Nature Conservancy's global forest initiative.


These partnerships raise complex questions for many environmentalists. Some oppose any land acquisitions that require logging to support the sale. They consider community-owned forests a timber industry scheme that will degrade environmental protections on valuable landscapes.


Tuchmann acknowledges that large land purchases can create pressure to harvest timber to pay back the debt. But over time, he says, it is better to have the land remain in working forests than be converted to development.


Communities are protecting timberlands that are part of their own economic futures, says Ginn. "In the long run, sustainable use must become the foundation of all communities and not a conservation-inspired luxury."


Small Town, Big Dreams


In Glenwood, Jay McLaughlin rifles through the MARS office in search of maps. The office -- down the road from the Shade Tree in a back room of the Grange Hall -- houses a cluttered collection of government documents, treatises on forest management and strategies for land conservation. A photocopier is jammed into one corner and a computer dominates the only desk.


McLaughlin grabs a set of topographic maps and strides out through the Friday-night bingo room. Outside the Grange Hall, he carefully puts the office key on a small marquee beside the front door -- Glenwood's version of leaving the latchstring out. He hops in his dusty red '98 Ford pickup and heads to the woods to visit some of the forest parcels MARS is considering for acquisition.


The group is looking for a few hundred acres to start with -- a spot with special significance for locals, where MARS can demonstrate what the community can do for the forest and what the forest can do for the community. The place could be a gateway to Glenwood, showcasing sustainable forest management. It could be a site treasured for its historic or aesthetic value, or a place accessible for skiing, snowmobiling, hiking and horseback riding.


McLaughlin drives along a two-lane road past timber stand after timber stand marked for aggressive cutting. All belong to Hancock.


The pace of Hancock's logging infuses McLaughlin with fresh urgency. He has contacted the Vancouver-based Columbia Land Trust to help find and fund a suitable site, but acknowledges that coming up with the money will be a major hurdle.


Back at the Shade Tree, the MARS community-forest project meets with some healthy skepticism among the coffee crowd. Beverage, the community council chairman, says local forest ownership would be ideal, but that buying up thousands of acres seems unlikely in an area where annual income averages between $20,000 and $30,000. "I doubt there's that much money to accomplish something like that," he says.


"Very noble... but a long, long reach," says Jerry Lorenz, co-owner of the restaurant and the Shade Tree Motel.


As a former forester, Lorenz is not persuaded by arguments touting the benefits of a community-owned forest. Since he moved to Glenwood in 1967, Lorenz has watched Champion close its woods operations, shut down its sawmill, and then sell the forest to International Paper. The town has been dying ever since, he says.


Last year's high school graduating class had 14 students. The Class of 2006 has eight.


Glenwood's only hope is people who want to get out of the city enough to buy the small tracts of timberland converted for development, Lorenz says. "I'll support anything that will keep our town vital, but we need something right now, not when Jay's son is my age."


McLaughlin is looking further ahead. He has seen the excitement of Glenwood students when they understand the link between forest health and salmon. He admires the pride loggers like Spies take in their work. He has felt the inspiration that comes when a community works together for a common goal. McLaughlin is convinced the community will survive, even thrive, if it can retain its working forest.


On the drive back into town, a full moon rises over the valley as the setting sun streaks the snowcap of Mount Adams with orange and rose.


"I'm a dreamer," McLaughlin says. "Special places don't stay special by accident. We're going to put together a future for a valley we'd be happy to live in."





This article first appeared in & lt;a href="http://www.hcn.org" & High Country News & lt;/a & , an awarding-winning newsmagazine that covers the West's communities and natural resource issues. Jane Braxton Little writes from Plumas County, Calif.





For More of our forestry coverage see our & lt;a href=" & & http://www.inlander.com/localnews/localnews.php" & news section & lt;/a & .