Forest ownership may change
Source: MiningGazette.com, by Dan Schneider
December 13, 2007
Restricted public access is a possible offshoot of changing forestland ownership, according to the report released Wednesday by environmental groups.
HOUGHTON — One consequence of investment-oriented ownership of forestland in the Upper Peninsula — particularly lakeshore land — could be more sales to smaller, private landowners.
That possibility is explored in detail on several pages of a report scientists and environmental groups released Wednesday.
“Large-tract Forestland Ownership Change: Land Use, Conservation and Prosperity in Michigan’s Upper Peninsula” explores the potential effects of land ownership changes in the U.P.
GMO Renewable Resources LLC, a Boston-based timber investment management organization, bought 440,000 acres of land in the U.P. from International Paper in 2006.
GMO’s holdings now comprise the majority of the land in Keweenaw County.
A year earlier, Seattle-based real estate trust Plum Creek Timber Company, Inc. bought 650,000 acres in the U.P. from Escanaba Timber LLC.
“Plum Creek actually with that acquisition in 2005 became the largest private landowner in the entire state of Michigan,” said Brad Garmon of the Michigan Environmental Council, one of the authors of the report.
Michigan Technological University Assistant Professor of Biometrics Robert Froese, one of the authors of the study, said landowners like Plum Creek, a real estate investment trust, and GMO, timber investment management organization, have different goals in forestland ownership than their predecessors.
Whereas previous owners were mostly interested in harvesting timber to supply their mills, “the new owners are somewhat more flexible and somewhat more inclined to pursue a broader range of options for extracting value from their land,” Froese said.
He said the majority of the money generated by investment forestland comes from appreciation value at exit.
This way new owners have less incentive to actively manage the land for timber harvest compared with predecessors that had mills to supply.
Froese said in other states, investment-oriented ownership has increased the rate at which forestland is sold to smaller landholders.
He said there is also evidence of this happening locally since 1994.
“In Keweenaw County, the mean size (of land parcels) decreased from about 10,000 acres to about about 5,000 acres,” he said. “That’s indicative of corporate ownership becoming more fragmented.”
He said consequences of fragmented ownership can include less efficient timber management and reduced wildlife habitat.
He said smaller-scale landowners are also less inclined to allow public access to their property.
Eric Stier is the local land manager for Sustainable Forestry Technologies, the consulting firm managing the land for GMO. He said while GMO does have land for sale in the Keweenaw, it is not exactly marketing them aggressively.
“We don’t really do an active marketing program,” he said.
Currently, most eventual buyers find out about available property by stopping into the Sustainable Forest Technologies office in Calumet and picking up a brochure.
“We’ve been able to get enough response in the past that way and I don’t know if that would change,” Stier said.
He also pointed out the land’s former owners periodically sold off parcels, as well and said there are limits on how much parcelization can take place.
“You can’t just go and dissect this land into a million different properties, the market’s not there for that,” he said.
The report makes 22 recommendations for preserving forestland and a forest-based economy in the U.P.
These include maintaining tax incentives for allowing public use of forestlands, supporting private forest conservation programs, educating local zoning administrators and strengthening rural economies.
More information and a downloadable copy of the report are available at www.forestlands.mtu.edu.
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