fbpx

Nature’s Bailout

By Beacon Staff

Our latest election had millions of Americans voting at least partly because of worries over our national debt.

Government runs deficits because too many politicians are willing and happy to rob Peter (and Peter’s grandchildren) to pay Paul. To score Paul’s vote, they approve objectively stupid expenditures (on Peter’s dime) for projects and programs that simply don’t pencil out.

A few examples include the Fannie Mae and Freddie Mac mortgage mess, the related derivatives disaster, plus Obamacare. Further down the food chain, there’s California’s unfunded pension liability. A million here, a billion there, and as Congressman Everett Dirksen allegedly said, “pretty soon you’re talking real money” – as in 13.8 TRILLION smackeroonies and climbing.

Had enough? Sure, but right here in Montana, our esteemed leaders apparently haven’t. A couple of weeks ago, the Montana Land Board approved the issuance of $21 million in bonds to buy the “Montana Legacy Project’s” Potomac parcel near Missoula.

These 32,000 high, steep acres were robbed fair and square from the public by Anaconda and Northern Pacific over a century ago, and logged hard ever since, most recently by Plum Creek. Then, Plum Creek robbed the Nature Conservancy (TNC) fair and square in the Montana Legacy Project deal.

Now, the Land Board has signed Montanans up to be robbed – again. How? Paying off the bonds (at a favorable 3 percent, thanks to the state’s credit rating) will cost $1.5 million a year for 20 years.

Will income from the land pay the bond? Heck no. The Montana Department of Natural Resources and Conservation (DNRC) states the revenue will be $222,000 a year, every dime of which will go to the school trust, not to pay the bond. We’ll be paying $1.5 million a year out of the general fund, leaving us $1.3 million short – and it adds up.

Next, I finally took the time to go over yet another hunk of the Montana Legacy Project, the West Swan Valley Conservation Project, which concerns 9,350 acres of checkerboard 20 miles south of Bigfork on the west side of Highway 83.

The Nature Conservancy, which according to Montana Fish, Wildlife and Parks’ (FWP) Environmental Assessment (EA) “is not in a position to continue to own and manage these lands for the long term,” wants to sell to anyone who is. Ergo, the EA proposes to either buy it outright, buy the development rights, or a combination, using Bonneville Power Administration (BPA) wetlands mitigation funding. That’s not really “free” money, as ratepayers (you) will support that every time you turn on the lights.

If the Land Board approves West Swan on Monday the 15th, will you get your money’s worth? Let’s run the numbers: The “full appraised fee purchase value” for these 9,350 acres is $21.8 million, or $2,331 per acre. This “appraised” value includes both timber and potential development value.

The preferred option is for TNC to sell FWP a “conservation easement” for $14.8 million ($1,583 per acre), allegedly a “bargain sale” from $18.6 million ( $1,989 per acre). In essence, FWP would be buying, and extinguishing, the “development rights” from TNC.

The leftover timber value would be assigned to the property and sold to another buyer, which is most likely to be Montana DNRC. When you subtract $18.6 million from $21.8 million, you’re left with $3.2 million, or $336 per acre.

Here’s the good part: West Swan is apparently “Phase III” of MLP, for which TNC will pay Plum Creek $1,450 per acre when the deal closes this month. In other words, in this tanked real-estate market, Plum Creek will still get a top-of-the-market price.

Even better, TNC gets to instantly cash out, making a quick-flip profit to boot. Better still, TNC will also score the perpetual land restrictions it wants, for “free.”

Best of all, TNC will still own the West Swan land and make even more money when it sells! Wow!

I’ll bet there are lots of Montanans who wish they could get the Land Board to approve a similar deal for their property right about now. But when you’re small enough to fail, you don’t get a bailout. You just get the bill – and it’s still adding up.