Forest Capital sells it all

<p>Equipment beside a road earlier this year on Forest Capital land north of Wallowa near West Grossman.</p>

On Friday, July 13, Forest Capital Partners LLC, of Boston, announced it had concluded a sale of 1.88 million acres of timberland it owned in the United States to two companies.

Forest Capital was, and now another Boston company named Hancock Timber Resource Group is the largest private timber owner in Wallowa County.

Forest Capital, which launched in 2000, spent $1.65 billion in a six-state land acquisition in 2005 to acquire land formerly owned by Boise Cascade LLC. Among that total was BCC’s timber holdings in Wallowa County.

Although terms of last Friday’s sale were not released, Sustainable Business Oregon, a publication of the Portland Business Journal said industry experts estimate the total sale price exceeded $2 billion and possibly reached as high as $3 billion.

That publication reported that Forest Capital now is out of the timber business and will concentrate energies on its oil and gas holdings.

In the original press statement jointly released by Forest Capital, Hancock Timber, and the third party, Molpus Woodlands Group, it was stated, “The vast majority of Forest Capitals’ employees associated with the timberlands will be merged into operations of the respective new managers.”

Brian Shipley, director of external affairs for Forest Capital’s Portland office, says, “For a practical matter, I don’t expect this change in ownership will impact much of what is happening on the ground.”

Forest Capital has employed a clear-cut philosophy in its timber harvests, meaning that trees in selected areas are cut in 100-acre swaths that won’t grow back into marketable timber for about 50 years.

According to Shipley the two presidents of Forest Capital, Matt Donegan and Scott Jones, were employed by Hancock Timber before heading out on their own and forming Forest Capital.

Hancock Timber, founded in 1985, manages about 6.6 million acres in the U.S., Brazil, Canada, New Zealand, and Australia.

The largest statewide percentage of this entire 1.88 million acre sale is in the state of Oregon; 573,000 acres (more than 30 percent of the entire sale,) with about 148,000 acres of Oregon’s total within Wallowa County.

Two companies bought Forest Capital’s timber portfolio: both Hancock Timber Resource Group and Molpus Woodlands Group, of Jackson, Miss.

Hancock Timber purchased all of Forest Capital’s timberland in Oregon and Washington and some of Forest Capital’s timber holdings in Louisiana and Idaho. That computes to nearly 72 percent of the entire 1.88 million acre sale.

Molpus purchased all of Forest Capital’s timberland in Minnesota and some of its timberland in Louisiana and Idaho.

Six weeks ago, on May 30, in a Chieftain article entitled ‘Forest Capital says it’s in it for the long haul,’ Forest Capital’s director of policy in that company’s Portland office said, “Forest Capital doesn’t enter into agreements thinking we will withdraw our operations after the harvest.”

Of prime importance for lumbermen in the county is whether or not Hancock Timber will honor the contract Forest Capital had in place to supply an annual amount of board feet of timber to Boise Cascade through 2014. That determination is of prime importance both to locals fearful that timberland in northern Wallowa County will be overcut and to others concerned that timber supplies to the five Boise Cascade sawmills in the general northeast Oregon area immediately would be shorted.

That question was answered early Monday evening by John Sahlberg, Boise Cascade’s vice president of human resources/communications.

Sahlberg said, “Yes, Hancock Timber has agreed to honor that contract through 2014 and we’ll be sitting down with them in the next few months in hopes of negotiating an extension to that contract.”

Because the state of Oregon collects no sales tax, no one in Oregon will benefit tax wise from the multi-million-dollar sale.

To gain an understanding of how much money Oregon’s lack of a sales tax might have saved Forest Capital, one can take a lowball overall sale figure of $2 billion, figure in the 30 percent of total acreage located in Oregon, and pair it with neighboring Washington state’s equivalent property tax figures which range between .0128 percent and a high of .01278 percent if local governments maxed out their potential assessment.

This calculation would yield a hypothetical $678,000 to $1.068 million savings for Forest Capital.

However, the amount received from property taxes in Oregon should not change. Wallowa County treasurer Shonelle Dutcher Pryse says during the last fiscal year that companies operating under the Forest Capital umbrella—named by the Wallowa County Assessor’s office as Colter Ridge Properties Inc., Forest Capital Partners, and Gallatin NE Oregon Land and Timber LLC—had 77 different accounts and paid Wallowa County a total of $280,573.65 in property taxes.

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