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State Land Board moves ahead on sale of Elliott State Forest


< Treasury Secretary Tobias Read (left) proposed amendments to the sale of the Elliott State Forest in a State Land Board meeting Tuesday. He said it was an attempt to balance his duty to funding schools and to maintaining public lands.
(Photo by Jake Arnold / OSBA)

The State Land Board’s differences on a proposal to sell the Elliott State Forest stood in stark contrast Tuesday morning, Feb. 14.

Gov. Kate Brown: Scrap the deal.

Treasury Secretary Tobias Read: Amend the deal.

Secretary of State Dennis Richardson: Do the deal.

Ultimately the board voted 2-1 – with Read and Richardson winning the day – to amend the protocol outlining the sale requirements and continue with negotiations. But Brown also instructed the

Department of State Lands to further study options for public ownership of the land, over Richardson’s protests.

OSBA applauded the focus by Richardson and Read on the board’s responsibilities.

“Both new members of the State Land Board, State Treasurer Tobias Read and Secretary of State Dennis Richardson, clearly understand their fiduciary obligations as trustees of the Common School Fund,” said Jim Green, OSBA executive director. “Both spoke about the need to have an undivided loyalty to the current and future schoolchildren of Oregon.”

“Treasurer Read’s actions in making sure the sale of the Elliott can move forward is encouraging, and we greatly appreciate his efforts today.”

The Elliott State Forest, an 82,500-acre parcel, was created in 1930 to benefit the Common School Fund, mostly through logging. Since 1930, it has generated more than $400 million for schools, but increased environmental regulations have reduced its timber production in recent decades. From 2013 to 2015, maintenance costs exceeded logging income, costing the Common School Fund approximately $1.35 million a year.

In 2015, the forest was put up for sale, with some conditions. Prospective buyers had to set aside at least 41,250 acres for public recreation, and had to provide 40 jobs a year for 10 years. The plan also had to protect streams and old-growth areas. School funding advocates said the conditions reduced the value of the sale, but they preferred to see the land sold rather than continuing to cost the Common School Fund money. Under the requirements, the land was appraised last year at $220.8 million.

The state got only one proposal. The Lone Rock Timber Management Co. with a minority stake from the Cow Creek Band of Umpqua Tribe of Indians offered a plan that met the board’s requirements. The State Land Board considered the plan in December without taking action, and the Department of State Lands set about working out the protocol details for the meeting held Tuesday.

Since December, however, the makeup of the three-member board has changed, with Richardson and Read new to the board. Board members can’t talk to one other without forming a quorum, so their differing expectations and plans came to the front Tuesday.

Brown last week proposed using up to $100 million in state bonding capacity to buy sensitive habitat and old-growth stands within the forest. The money would go into the $1.4 billion Common School Fund, a trust fund for K-12 education, while decoupling a portion of the forest from the fund. The rest of the land would be managed for timber harvests. The Legislature would have to agree to using state bonding authority.

Brown had offered similar language in December, and she had challenged environmentalists and other parties to come forward with a plan to keep the land public.  

On Tuesday, Brown reiterated her desire to hold the land in public trust. She also expressed disappointment in the land’s low appraisal value. Initially, the Department of State Lands had expected an appraisal in the neighborhood of $360 million, but an extensive process came up with the $220.8 million.

Brown proposed ending the protocol.

Read said he was guided by an “undivided loyalty to the fund’s beneficiaries.” He spoke of his efforts to balance his fiduciary duties to the school fund against his desires to protect and maintain public lands. The protocol wasn’t perfect, but he said he thought the board needed to move forward. 

“It is the best and most realistic proposal we have before us,” Read said.

Read proposed amending the protocol to strengthen the requirements for forestry practices, give the tribes some additional rights to decisions about the land and give the state the opportunity to buy back up to $25 million in sensitive habitat. Those proposals formed the basis for amending the sale protocol.

Read said key considerations were access, conservation, managing trust lands for the most benefit for kids and the opportunity to “right historic wrongs” by returning some of the land to tribes. Under the Lone Rock proposal, the Cow Creek Band, which is landless, would recover some of its ancestral lands. The Confederated Tribes of the Coos, Lower Umpqua and Siuslaw Indians also would hold a conservation easement to help enforce some of the protocol’s provisions.

Richardson said he was disappointed in the land’s low appraisal as well and said that if he had been on the board earlier he would not have accepted the deal. He was adamant that he was not in favor of selling but the work that had been done had to be respected.

“I believe it is unethical to come forward and disregard what we were offered,” he said. “A deal was offered; a deal was made.”

Jim Paul, director of the Department of State Lands, said that under the protocol, technically an offer of sale has not been made and the board could terminate or amend the protocol.

The unusual nature of the meeting was signified when Senate President Peter Courtney, declaring he had never even been in the State Lands Building before, addressed the board as an interested citizen. He was careful to say he wasn’t using his position to try to interfere in the land board’s duties.

“I can’t say I’m feeling a lot of warmth,” he said of his reception from the board.

Courtney argued for keeping the lands in public ownership. The Legislature would have to approve any bonding. He said it would be difficult for the Legislature to provide lottery bonds, but he suggested revenue bonds, which would be paid for by income from the land.

“If I can help in any way with revenue bonds, I will try as hard as I can,” he said.

Use of the land for hunters, hikers and anglers was one of the concerns, but the land has limited recreational possibilities.

According to Dave Lorenz, Oregon Department of Forestry, much of the Elliott is too steep and rugged for hiking, camping or hunting. Because there are no permits for use, the department has no hard numbers on usage. But anecdotally, rangers have seen few people in the forest.

Amending the protocol for the sale will likely take weeks, according to Paul. The State Land Board’s next meeting is April 11.

- By Jake Arnold, OSBA