Now that our timber beast friends have morphed themselves into money beasts, let’s take a look at why it matters.
Montana Fish, Wildlife and Parks is about to close on a $14 million buy of 41,000 acres of former Plum Creek land in Mineral County, the Fish Creek country around Tarkio. This is yet another phase of the so-called Montana Legacy Project orchestrated by The Nature Conservancy and the Trust for Public Land, using $250 million of federal tax earmarks (that you’ll make up) from Sen. Max Baucus. I’ve written about MLP before, it’s in the Beacon archives.
According to the Missoulian’s Rob Chaney, Montana sportspeople and park users will contribute $3 million, along with $11 million in “federal wildlife conservation money.” Whether those funds are Pitman-Robertson sportsman money, or Land and Water Fund oil-royalty funds, isn’t clear.
FWP plans a 6,000-acre-plus park with access to popular Alberton Gorge, and the rest will stay open to hunting and fishing.
Given that $11 million is “free money” from the feds (yah sure) and the price seems like quite a discount from what Plum Creek was paid ($150 million/130,000 acres/$1,153 an acre), is $341 per acre a good deal?
Well, let’s pretend we’re private buyers after a working forest where we’ll grow trees to pay it off. But Chaney reports the Fish Creek ground has “been heavily logged and much of it burned” in the 39,856 acre Fish Creek fire – just one of many epics (Wedge, Robert, Doris) that year. Other fires that burnt around Fish Creek included the I-90 (2005) and Black Cat (2007). After the fires, Plum Creek salvaged everything it hadn’t already logged and sent it to a mill. So there’s darn little, if any, harvestable wood right now.
Let’s say these lands are capable of producing 10,000 board feet of wood in 60 years (if fire and bugs don’t mess things up). But because we will have to wait for our wood, we need to apply a “discount rate” to figure what the money we collect in 2070 is worth today.
Montana’s Department of Natural Resources reports its forestry program realized stumpage of $236 per thousand feet of harvest in 2007, against management costs of $127 per thousand. So, if we chop all the trees in 2070 (we won’t), our per-acre income in 2070 will be $1,390. Discounted to today’s dollar, the income from each acre we buy for $341 – is worth $42.14 at most. Not such a great deal, huh?
Well, let’s say we want to prevent residential development, such as Plum Creek promotes. When MLP was being “sold” to the public, the left-wing Headwaters Economics (formerly Sonoran Institute) was hired to paste together a cost-of-services study for Fish Creek. It claimed forest land needs only 31 cents of service for each dollar of property tax, while forest ranchettes suck down $1.94 for each $1 in taxes. Mineral County’s “savings” from avoiding “dispersed development” would be $1 million up front and $165,000 a year.
Does spending $14 million up front to “save” a million up front make sense? What if we apply an “opportunity cost” to that money, which could be invested elsewhere at, say, 6 percent? On $14 million, that’s $840,000 in interest alone – supposedly to “save” $165,000 a year? Utter genius, by gosh!
Most brilliant of all, Headwaters based these “savings” on its conclusion that full buildout entailed 230 homes “at an average density of one unit per 15 acres” – that is, only 3,450 acres. The other 37,550 acres of this ground, due to slopes or stream setbacks, was never at any risk of development, ever.
When the land trusts gifted Plum Creek with over a grand per acre for this land, I thought they were nuts. Now the trusts are flipping it to FWP at a discount, but the price is still several times what this property is worth by any rational measure. For FWP (or any entity with fiduciary responsibilities) to spend public funds so recklessly is not just nuts, but criminally so.