by Joe Rankin | March 8th 2013 

The Downeast Lakes Land Trust manages some of its Farm Cove Community Forest land for timber, while some is designated as an eco-reserve. Here, an early successional habitat plot is created.
Photo courtesy of the Downeast Lakes Land Trust.

How conservation groups got into managing forestland, and the lessons they've learned.

The Maine Chapter of the Nature Conservancy never planned to get into the forestry business. All it wanted to do was protect the upper St. John River.

Born in the northwestern part of the state, the St. John is one of Maine’s iconic rivers and the longest free flowing river in the eastern U.S. In its upper reaches, near the Quebec border, it runs through low hills clothed in maple, birch, and beech; the valleys are draped in spruce. It’s a place of haunting beauty, where the ghostly Canada lynx stalks snowshoe hares and American martens sniff out voles among the spruce. Moose are everywhere. More than a dozen rare plants live here, including the Furbish’s lousewort, livid sedge, Mistassini primrose, and English sundew. There are rare peatlands, 300-year-old spruce forests, and rare spruce bogs.

So, when International Paper Co. announced its intention to sell some 185,000 acres of Upper St. John Valley forestland in 1998, the Conservancy teamed up with an anonymous timberland investor to bid $35.1 million for the property, with the conservancy pledging about $3 million of that sum. The Conservancy would get several thousand acres along the river and its tributaries and other lands to establish a forest reserve. The investor would get everything else.

The bid came in third. The investor took his money elsewhere. Everyone thought that was that. But a few weeks later, the chapter got a call: the higher bids had fallen through and the owner was willing to accept the Conservancy’s original bid, if the deal could close in six weeks.

“That led us to make a very bold decision to buy the whole thing,” said William Patterson, who oversees management of 225,000 acres for the Maine Chapter. The Nature Conservancy borrowed the entire amount, then mounted a fundraising drive to pay it back. In the meantime, they needed money to pay interest, and there were timber contracts with another year and a half to run. “If the first deal had come together, we probably never would have been practicing forestry,” said Patterson. “It’s almost as though we fell into it.”

The deal closed in December 1998: the largest TNC purchase in the U.S. up to that time. And it put The Nature Conservancy in an unusual position: here was an organization dedicated to preserving forests, who suddenly found themselves in the business of harvesting wood.

“We just didn’t need to take that much land out of production, from a scientific perspective,” said Patterson. Protecting the river corridors and creating a network of forest reserves would accomplish the same thing, but at much less cost. Phasing out timber harvesting “would have been a hardship on local workers, mills, and communities,” he said. “It’s just not affordable, either.”

The New Land Rush

Land ownership in the Northern Forest is in a state of flux. After generations in which ownership hardly changed at all, in the late 1980s a seismic shift began, the aftershocks of which are still being felt. Between 1980 and 2010, more than 23 million acres of forestland were sold, from New York to Maine – some of it more than once, according to forest economist Lloyd Irland.

It was precipitated by a perfect storm of financial factors, said Irland, including the fact that Wall Street investors abandoned the idea that a paper company needed to own timberland to ensure a fiber supply. Energy costs were going up; paper use was falling. In the name of bigger is better, paper companies began gobbling up competitors. Many companies disappeared entirely. Others lived on only as brand names. The “winners,” Irland puts verbal quotes around the word, were left with aging mills and mountains of debt. And their gaze turned to their timberlands.

“[Selling the land] was one place a company could raise a bundle of cash quickly, because no one wanted to buy the mills,” Irland said. Enter the Timberland Investment Management Organizations, the Real Estate Investment Trusts, pension funds, and institutional investors. Irland said that for decades you couldn’t get investors to even look at putting their money in timberland, but this was the roaring 1990s and people had money to invest, much of it from burgeoning retirement funds, and they were looking to diversify portfolios as a hedge against the volatility of stocks. When the John Hancock Life Insurance Co. and Harvard and Yale universities invested in timberland, people took notice. Of course, many of these new investors weren’t looking to make money from the trees, but were looking instead to split up parcels and resell, or hold for a 10- to 15-year period, then turn it over, capitalizing on expected appreciation.

Conservation organizations, worried that these new owners would liquidate large blocks of intact forestland, soon got in on this new land rush. The Conservation Fund, The Nature Conservancy, and The Trust for Public Land, among others, all purchased significant acreage in New York, Vermont, and New Hampshire – including 300,000 acres of former Champion Lands that stretched across all three states. (In many cases the organizations later resold the land to public entities or private companies, often retaining conservation easements.)

But the great bulk of the large timberland transaction (“large” being defined here as a parcel over 50,000 acres in size) was taking place in Maine. Between 1980 and 2006, 1.68 million acres were sold in Vermont, New Hampshire, and New York combined. In Maine, 18.6 million acres changed hands during that same timeframe, often more than once. Buyers included The Nature Conservancy, who bought the St. John Forest lands in 1998; the Appalachian Mountain Club, who bought 65,500 acres in the 100 Mile Wilderness east of Maine’s Moosehead Lake in 2003 and 2009; and the Downeast Lakes Land Trust, who bought 33,708 acres just west of the town of Grand Lake Stream.

Different Goals

So, now that conservation groups find themselves managing forestland, what are they doing different? All say they want to continue harvesting timber, in part to contribute to the local economy. But their management goals also include protecting sensitive areas, improving wildlife habitat, and encouraging public recreation, even if it means sacrificing some timber income.

After The Nature Conservancy bought the St. John Forest, it put nearly 56,000 acres – about 30 percent of the land – into forever-wild reserves. According to Patterson, they looked for areas with fairly mature forest, where there were few roads and more than one forest type. The Conservancy’s management plan stipulates that in every timber harvest five to eight percent of the land is to be permanently untouched in a sort of microreserve. The organization also created a 1,000-foot buffer along the main stem of the St. John River, where most of the rare plant communities – and recreational users – are found.

“We operate under a conservation model that suggests that a network of medium-sized forest reserves, scattered across the landscape, will be critical to the health of the forest,” said Patterson. The idea is to create older, ecologically stable forests to provide refuges for birds and mammals, such as the pileated woodpecker and the marten, that only thrive in older woods.

AMC took a similar approach, voluntarily setting aside a lot of operable timberland to be managed in a natural condition. “About 21,000 acres, or a third of our property, is designated forever-wild forest reserve,” said David Publicover, the AMC’s forest ecologist and assistant director for research. “We believe that there is a need for more natural areas in the north woods of Maine to provide a range of values that are not provided by the best of the actively managed timberlands. We did it partly for remote backcountry recreational purposes and partly to restore late successional forest to the area, which is habitat that’s lacking in the region.”

As part of its Farm Cove Community Forest, the Downeast Lakes Land Trust set aside 3,560 acres around Fourth Machias Lake as an ecological reserve. The land butts up against other ecological reserves the state of Maine manages, said Director Mark Berry. The rest of the land is managed for timber, but under a plan that gives wildlife habitat, timber production, and public recreation equal value.

Berry said when the Trust acquired its lands the property had been commercial forest, but wasn’t in horrible shape. That being said, one objective is to increase the amount of standing timber to 20 to 22 cords per acre. (By comparison, in 2011, the average stocking rate across the eight Maine counties with the largest timberland holdings was 16 cords per acre; for the state as a whole, it was 17.2 cords per acre, according to Ken Laustsen, a biometrician at the Maine Forest Service.) It will take a while to do that, he acknowledged.

Other non-profits, too, are trying to increase the amount of standing timber on their woodlands, and the higher stocking levels they aim for are only one thing that differentiates them from investor-owned timber companies and makes them more like the managers of public lands, such as Maine’s Bureau of Parks and Lands. Private timber management is “much different” than that of nongovernmental organizations, said Publicover. Nonprofit management “is similar to public lands management, but notably different than commercial lands,” he said. “No investment owner aims at 20 to 22 cords per acre.”

There are only so many ways to log, and the nonprofits use many of the same silvicultural techniques that the for-profit timber companies do, whether shelterwood cuts, patch cuts, or selection cutting.

But Publicover points out that there are variations on each of those practices. Nonprofits and public land managers are “more likely to use longer rotations, maintain higher post-thinning stocking, and retain more mature trees. We make a tradeoff of economic maximization for noneconomic benefits.”

In a standard shelterwood cut, for instance, a stand is logged, but older trees are left to provide partial shade for seedlings and saplings in the understory. Later, when the saplings are well established, the rest of the overstory is removed, leaving a stand of trees that are roughly the same age. Publicover points out that this perpetuates a cycle of even-aged forest. AMC prefers what he calls “deferred shelterwood,” forgoing the final overstory harvest and leaving the oldest trees, which ensures a multi-age stand and a forest that is more structurally complex.

The Conservancy has done a fair number of shelterwood cuts and multistage removals on the St. John lands, said Patterson. In late 2012, working with University of Maine scientists, the organization even began experimenting with clearcutting on a small scale – less than 100 acres – in an area where spruce seedlings were well established.

“Clearcutting can be a controversial management tool and has been badly applied in some instances,” said Patterson. “But it is a legitimate forest management technique when done to achieve specific objectives.” In this case, it’s to create habitat for lynx, which prefer young spruce groves as the place to hunt their favored prey, the snowshoe hare, and to provide a little age diversity, since most of the spruce in the area is 20 to 30 years old.

“The difference is not huge,” said Patterson of forestry in the St. John Forest. “We cut a respectable amount of wood each year, a 13-year average of about 20,000 cords per year from 125,000 acres of land. Many of the forestry techniques we use are not unique to TNC. It is perhaps the combination of the protections we have in place and our landscape-level approach to forest management that is unusual. Like any landowner, we avoid harvest prescriptions that are not workable for contractors or that result in a net loss to the Conservancy.”

A New Perspective

One of the things the nonprofits agree on is that getting into the business of managing land for timber has given them a whole new perspective. In many ways, it’s been a hard lesson.

“One thing I’ve learned is how much we are constrained by the nature of the land, the nature of the stands we’ve inherited,” said Publicover. “I know there’s a lot of talk about uneven-aged management in the northern hardwoods region. I think that works when you have a lot of sugar maple and yellow birch. It doesn’t work so well when you have stands of beech dying of beech bark disease.”

Leaving enough larger trees on those stands to qualify as an uneven-aged stand would mean leaving diseased beeches that won’t survive until the next cut, he said. And the economics wouldn’t even cover the cost of having the trees marked. Publicover said there were other ways to meet the AMC’s goals, including shelterwood cuts or overstory removals in areas where the understory was well-established.

Publicover has been part of the Northern Forest debate for years. He was deeply involved in the Northern Forest Lands Council process. He contributed to the first edition of Good Forestry in the Granite State, and was a member of the team that developed the first regional standards for Forest Stewardship Council certification in the Northeast.

“I tell people I spent the first 10 years of my career at AMC telling other people how we should be doing things. Now that we own land, I get to find out how much of what I was saying actually made sense,” he joked.

The AMC knew from the outset that it was going to be managing its property for timber, said Publicover. First, because forest products are a big part of the local economy, and second, to cover expenses. “We’ve found that owning land is expensive. There’s property taxes, road maintenance. We went into it and didn’t really know how expensive it is to maintain roads, especially given the high level of public recreation we are promoting,” he said.

In Vermont, the Atlas Timberlands Partnership’s annual costs run $100,000 to $150,000, including $60,000 in taxes, said Carl Powden, Northern Greens regional director for Vermont Land Trust. Generations of high-grading, however, left them with a forest that will produce mostly pulp for quite a while. In terms of cash flow, “it’s been lean.”

“It’s going to take a long time to turn things around. And in the meanwhile, no one is going to get rich,” said Powden, who acknowledged that going into the working forest project, “I thought it would be challenging, but I didn’t realize how challenging.”

Is it a worthwhile pursuit? “Absolutely. It’s worthwhile to keep the land in forest and produce timber products and the jobs associated with that. But I think at least equal to that…is the learning that’s come from that. The firsthand knowledge that we’ve gained from Atlas is something that goes with me every time I go to talk to a forestland owner who’s thinking about putting a conservation easement on his or her property.”

Patterson had a similar observation: “If we didn’t have this experience ourselves, we might go out and sit across the table from a large landowner who we’re negotiating an easement with and say, ‘Can’t you do all these items for conservation?’ and think that there’s no cost to the landowner. We’ve learned a lot. Some things we’re able to quantify for ourselves. Others are more just a conceptual understanding.”

All the conservation groups acknowledge that they have an advantage over private commercial forestland owners: donors ponied up money to buy the property so they aren’t stuck with paying long-term interest on debt. In the case of the Atlas Timberlands, the Freeman Foundation donated $5 million of the $5.5 million purchase price and the John Merck Foundation another $250,000. The Nature Conservancy’s St. John Forever capital campaign raised its entire $35.1 million from donors, including one donation of over $3 million. AMC and Downeast Lakes Land Trust similarly depended on donors to make their projects happen.

Setting a trend?

One shouldn’t get the idea that conservation groups are going to continue buying up working forest all across the North Woods. Irland, the Maine-based forest economist who’s closely followed ownership changes in the Northern Forest for decades, said these purchases came about as a result of a particular set of circumstances, among them the low price of forestland. Since then, timberland values have risen and stumpage prices have fallen.

“They don’t have the money, and they have pretty much got their hands full taking care of what they’ve got. It’s not their core business. And the threat’s not there right now. One reason for moving into a lot of these things was the perception of threat, of sprawl and subdivision. That was not an irrational argument at the time it was made. It’s a harder argument to make right now,” said Irland.

Plus, he said, not many conservation organizations want “100 percent of the forest management job. They want just what they need. What they’re concerned about now is fragmentation and conversion. If they can get that taken care of and get these landscapes protected against land subdividers, for many of them, that’s their best objective.”

Going forward, Irland believes, and others concur, that conservation easements, not outright purchase, will be the tool of choice for protecting large swaths of forestland.

“Conservation easements are a more economical way to promote sustainable forest management and they’re adequate to prevent land conversion in most places,” said Patterson. “However, for a network of forest reserves, it is necessary to purchase the land outright, including the valuable timber rights needed to establish a reserve.”

The Downeast Lakes Land Trust is one of the few nonprofits still looking to buy. The Trust is focused on raising $24 million to acquire 22,000 acres between its Farm Cove Community Forest to the west and Passamaquoddy tribal lands to the east. The targeted land surrounds the village of Grand Lake Stream. The Trust’s Mark Berry considers it to be a “major gap in the conservation landscape down east.”

Future influence?

One question, of course, is whether the new nonprofit owners will have a long-term influence on the way forestry is practiced in the North Woods. Some think the answer is yes, that this more holistic model will give commercial landowners something to reach for. But AMC’s Dave Publicover doesn’t suggest that what AMC does should be a model for commercial landowners.

“The goals and constraints are different,” said Publicover. A commercial forestland owner is trying to do right by the land while generating an adequate return on the parcel’s timber, a preservation-minded owner is trying to establish a wilderness area untouched by human hands, a conservation organization like the AMC is trying to do both things – to promote a model for land conservation that bridges the gap between preserve and commercial working forest.

“We’re trying to do something that’s more diverse and more complex,” said Publicover, though he’s quick to add that it’s been done before, most notably in the White Mountain National Forest.

“A hundred years ago, the forest was a landscape devastated by extensive liquidation harvesting and massive forest fires. Today, it’s considered one of the most beautiful landscapes in the Northeast and the largest expanse of relatively mature forest,” Publicover said.

In his mind’s eye, Publicover can see the Appalachian Mountain Club’s holdings two or three centuries hence: its ecoreserves looking like old growth, their legacy of repeated heavy harvesting virtually erased. The managed timberlands are well stocked with trees of different ages, many high-quality sawlogs, and quite a few venerable giants. Some big trunks lie rotting on the ground. From ferns to fungi, salamanders to deer, the forest has a healthy complement of other life.