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Elliott Forest sale moves forward over Brown's objection

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Two of three State Land Board members vote to go ahead with the sale, albeit with changes.

OREGON DEPARTMENT OF FORESTRY - The State Land Board voted Tuesday to continue with the sale of an 80,000-acre swath of the Elliott State Forest.SALEM — At odds with the governor, the Oregon treasurer and secretary of state voted Tuesday to go ahead with a plan to sell a hotly debated swath of coastal forest to a partnership between a timber company and a Native American tribe — albeit with some changes.

At issue is the sale of an approximately 80,000-acre parcel of the Elliott State Forest in Coos and Douglas counties. Environmental groups have fought for keeping the land in public hands.

The State Land Board — the governor, treasurer and secretary of state — oversees certain state-owned lands. Treasurer Tobias Read and Secretary of State Dennis Richardson endorsed moving forward with the sale over Gov. Kate Brown's objection.

Read proposed an amended version of the original sale protocol that he says includes "enhanced recreation and conservation measures."

Brown, over Richardson's objections, directed the state lands department to come up with a proposal for public ownership of the forest. The department reports to Brown.

The sale of the Elliott is a complex issue, in part because the land in question is essentially a trust — the state must collect money from harvesting timber or other activities for the state's Common School Fund and the land board is the fiduciary of that fund.

In 2015, the land board — then comprised of Brown, then-Treasurer Ted Wheeler and then-Secretary of State Jeanne Atkins, all Democrats — voted to go ahead with a multi-step sale protocol that included an assessment of the land's value and a set of criteria for the sale.

Over a year later, only one group, a timber company out of Roseburg called Lone Rock Resources — in partnership with the Cow Creek Band of Umpqua Tribe of Indians — submitted a proposal for acquiring the forest. The Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians would, under that proposal, hold a conservation easement.

In light of the tribes' involvement, the sale of the Elliott also now raises questions about the government's duty to "right some historic wrongs," in the words of Treasurer Read. Native Americans were systematically removed from their ancestral lands as the United States and Oregon took shape — a truth especially poignant on the state's 158th birthday Tuesday.

Brown said the requirements for the sale were too stringent.

The state set the price at $220.8 million, and required bidders to have detailed plans for employment on the forest and maintaining certain features, such as old forest stands and riparian areas. Several public agencies had expressed interest in the property, but none ended up submitting an acquisition proposal.

Brown wants not only to keep the land public, but decouple some or all the land from the Common School Fund.

Brown wants to use $100 million of the state's bonding capacity to purchase especially sensitive habitat areas in the forest, such as steep slopes. She also wants to negotiate a new habitat conservation plan with federal agencies on the rest of the land, while also providing an opportunity for tribes to exercise ownership.

Prior to the vote Tuesday, the Oregon Senate President, Peter Courtney, D-Salem, suggested using revenue bonds payable from revenues generated by the forest.

Courtney, although he believes the land should stay in public ownership, said he wanted to help the board, regardless of its decision.

Read, the state treasurer, said he was reluctant to sell the forest but felt that the state had to meet its fiduciary responsibilities first.

"I think it is the best and most realistic proposal we have in front of us," Read said of the protocol, before proposing some changes.

The amendments Read proposed include: allowing the state to buy back up to $25 million worth of acreage in high-value areas; having the department's negotiations include certain conservation principles; clarifying plans to protect old forest stands; and include a right of first refusal for the five federally recognized Native American tribes in Western Oregon, should any part of the land be put up for sale again after it is sold to the LLC proposed by the Cow Creek Band and Lone Rock.

Warren Brainard, chief of the Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians — which under the Lone Rock proposal would hold a conservation easement on the land — said that he understood that the land board had a difficult decision to make and that the tribes would maintain an interest in the land regardless.

Tension arose between Brown and newly minted Richardson — the only Republican on the land board and an advocate of the sale.

He voted for Read's proposal and argued the state would otherwise be reneging on its promises.

"I feel in a very difficult position because I am not in favor of selling the forest and I would not have voted for it," Richardson said. However, he said, he felt that the "deal" had to be abided by.

The land board is legally permitted to terminate the process, according to Department of Justice attorney Chris Matthews. The board has identified a potential buyer but not made a formal offer of sale.

Richardson also claimed the Cow Creek Band of Umpqua Tribe of Indians spent more than $500,000 complying with the sale protocol and that the Department of State Lands has spent more than $3.5 million complying with the sale protocol.

Brown said she is "adamantly opposed" to amending the protocol "on the fly," and wanted to end the protocol altogether. She also said she wanted to keep all bonding options on the table.

Read pointed out that there is nothing preventing the Oregon Legislature from making a proposal — although multiple projects compete for the state's bonding capacity every biennium.

Brown's plan also calls for 20 million board feet being harvested every year for the long-term.

Preliminary numbers from the State Lands Department suggest that the forest was profitable in 2016, for the first time in several years, according to DSL Director Jim Paul.

The state initially entered into the sale process because the forest was losing money, and thus not meeting constitutional obligations to the Common School Fund.

Paul said that initial estimates show that the lands likely had a positive revenue stream in the past fiscal year — for the first time since 2012.

The board meets again in April.