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Oregon State Police troopers watch as members of Cascadia Forest Defenders protest in front of the Department of State Lands building Dec. 9, 2014 before a meeting about the Elliott State Forest. The board exploring options to sell the Elliott State Forest to another government or public-private partnership.

The State Land Board says interest groups that have battled for years over the Elliott State Forest must begin to trust each other, in order for the state to reach a longterm solution for the parcel near the southwest Oregon coast.

The land board, composed of the governor, secretary of state and state treasurer, is currently exploring options to sell the Elliott State Forest to another government or public-private partnership that would commit to the goals voiced by the public, which range from protecting old growth forests and coho salmon spawning grounds, to supporting Oregon timber mills.

It met Tuesday for a progress report on the search for possible solutions.

Gov. Kate Brown said that opposing interests essentially killed two bills in the Legislature this year that were supposed to help the board transfer the forest to another owner. Secretary of State Jeanne Atkins said that any potential solution for the forest will require a degree of trust among the various interest groups.

“Everybody has to hold hands to take some of those risks together,” Atkins said.

Brown, Atkins and State Treasurer Ted Wheeler all reiterated it is their fundamental duty to manage the Elliott State Forest for the benefit of schools, and any future agreement must satisfy that mission.

Under the Oregon Constitution, the state is required to manage the forest to raise money for public schools. But the forest also provides habitat for federally protected species, and environmental lawsuits forced the state to scale back timber harvests in recent years to the point where the state lost money on the operation.

Although the board and Department of State Lands describe the sale option as a land transfer, the mandate to generate revenue for schools means any recipient of the trust lands must pay full market value for them. School trust fund property accounts for approximately 90 percent of the Elliott State Forest.

Earlier this year, the Department of State Lands sought to gauge interest by groups that could manage or purchase the land. The agency received responses from three groups.

A national conservation and economic development nonprofit, The Conservation Fund, works with companies that need to offset the environmental problems caused by their projects.

For example, the fund wrote in its letter to the state that it worked with a variety of groups to purchase and transfer ownership of coastal forestland with mitigation funds from the 1999 New Carissa oil spill.

The Conservation Fund is leading an effort to purchase land that would provide Northern spotted owl and marbled murrelet habitat to mitigate the impact of a proposed energy development project. The group would then transfer the parcel to a government agency or public-private partnership.

Although The Conservation Fund did not identify the energy project involved, federal regulators have acknowledged the proposed Jordan Cove liquefied natural gas project in Coos Bay would likely harm the owl, murrelet and other species.

The second proposal came from U.S. Forest Capital, LLC, a consulting firm owned by former Gov. John Kitzhaber’s forestry adviser Tom Tuchmann. Tuchmann wrote that he was working with equity investors who would partner with a community forest organization to purchase the Elliott State Forest. Eventually, the nonprofit community forestry group — which Tuchmann wrote would include environmental, timber, county government, finance and other members — would buy out the forest from the equity investors.

The Cow Creek Band of the Umpqua Tribe of Indians also submitted a letter of interest in either managing or acquiring the Elliott State Forest, but the tribe did not describe specifically what it would do with the land.

Department of State Lands director Mary Abrams said the agency needs to work more on the forest sale option, and she plans to provide more information about options to the State Land Board at a meeting in August.

Abrams also updated the land board on two other options the Department of State Lands considered: using a private contractor instead of the Oregon Department of Forestry to manage the land, and developing a federally-approved habitat conservation plan that could provide more predictable timber harvests.

Potential land managers told the state they were wary of taking on the risk of lawsuits unless they were co-owners of the land, and Department of State Land employees concluded this option would cost more than the status quo.

The state might be able to reach agreement with the U.S. Fish and Wildlife Service and National Oceanic and Atmospheric Administration on a 10-year plan to allow some logging on the Elliott while also protecting endangered species. That could lead to $2 million to $6.1 million in annual net revenue for schools, although that does not include the cost of potential lawsuits.

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