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TIMBER TRANSITIONS

A Look at Plum Creek’s Shift Toward More Real Estate


By Headwaters News, 2-05-07


The timber industry has been under numerous economic and environmental strains in the last few decades, and companies are forced to adapt or die. Perhaps no company has adapted more than Plum Creek Timber Co. Chronicling that adaptation, the Missoulian offers an excellent four-part series detailing the company’s move from being simply timber-based to expanding into the real estate and development industries.

The series by Michael Jamison and Tyler Christensen begins with a look at what Plum Creek is doing and those effects on the company as well as on communities surrounding the company’s land holdings, with a focus on western Montana.

The company, which is the largest private timberland owner in the county, is reclassifying its lands based on what it perceives to be the maximum amount it can make off of each acre. Beyond timber, lands are now slated for sale to developers, development, recreation and conservation.

As forest lands are sold off and transformed into luxury housing developments, the Missoulian reports, the state and counties have reason to worry.

*Missoula County has little control over how Plum Creek develops that land, because county planning regulations say that if a landowner owns the majority of the land in an individual planning zone, the county can do little to dictate development.

*More homes in forested areas mean more wildland-urban interface conflicts related to fire: who is going to foot the bill to protect those fires?

*The loss of approximately 1.3 million acres of timber-producing land will have economic effects on the state’s timber industry.

*More homes mean more burdens to local infrastructure, including roads and utilities. So far, Plum Creek has done little to help with that.

*One out-of-state company is dictating how counties are developed, with little local influence.

Counties and nonprofits are trying to buy up as much Plum Creek land as they can afford, but the money to do so isn’t always available. And legal fights are tough because the company is acting in accordance with the law, including laws that encourage such growth, even though those laws may not have been intended for a timber monopoly.

In 1999, Plum Creek converted its tax structure from a master limited partnership to a Real Estate Investment Trust (REIT), which allowed to it trade publicly for more money and raise more cash to buy more land. The reason the company wants more land is to diversity its timber holdings. Timber, company officials say, is still Plum Creek’s long-term investment plan. By owning timber-producing land in several states and regions, the company can sustain setbacks in one area, such as fires, floods or economic hardships.

Changing to survive and prosper isn’t a new idea for Plum Creek or other timber companies. Plum Creek grew out of railroad companies that were granted millions of acres of federal land by President Lincoln in 1864 to connect the Midwest with Seattle.

The railroad companies were given the excessive amount of land so they would have an economic resource with which to build the 2,000 miles of track in mostly wild or Indian territory. But the rules on how they were to create that revenue remain vague, or at least hotly debated among historians. Though the land was supposed to be sold cheap to homesteaders, much of it ended up with the Anaconda Copper company and Weyerhaeuser, another timber company.

What was left over once the railroad was built remains another unknown. Some say it was given to the railroad companies as a gift, while others say it was supposed to be sold off. The majority of it transitioned into timberlands, which are now transitioning again in to the New West style of “homesteads” — such as the trophy homes in the Meadowbrooke Subdivision currently being developed by Plum Creek near Kalispell in northwestern Montana.

Read more at www.missoulian.com.



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