Trading With Blixseth

Proposed Idaho Land Swap Exposes Shifting Attitudes, Shifting Economics

By Jonathan Weber , 7-22-09

	Spruce Creek in the Upper Lochsa drainage. Photo courtesy of Western Pacific Timber, www.wptimber.com.

On a pleasant Saturday afternoon in late May, a group of woodsmen, retired foresters, local landowners and others gathered in the school gym of the Idaho panhandle town of Potlatch to talk about a land trade. Specifically, they had come to rally opposition to something which, historically, a logging community like this would have praised: the proposed transfer of local U.S Forest Service lands to a private timber company.

In a deal known as the Upper Lochsa Land Exchange, the Forest Service is looking to swap a hodge-podge of parcels in the Palouse district of the Clearwater National Forest (as well as some acreage in the Nez Perce and Panhandle Forests) - 28,000 acres in all - for almost 40,000 acres of checkerboard land in the Upper Lochsa River valley, near the Montana border. Consolidating the Upper Lochsa lands into public ownership would greatly solidify the wilderness ecosystem in the Bitterroot Mountain range, and would link up with other lands that are being protected as part of the Montana Legacy Project. Elk hunters - and, notably, the Rocky Mountain Elk Foundation - are especially enthusiastic about the idea, and in fact just about everybody agrees that the Upper Lochsa lands should be in public ownership.

The rub is that the lands on the Western side of the Clearwater National Forest - unlike the Lochsa lands - are pretty close to Potlatch, Moscow, and other Idaho panhandle towns, and people use them. They have been managed relatively carefully over the years for “multiple use,” according to several retired Forest Service rangers, and while much of the acreage has been logged, it’s wet enough that trees return quickly. Some of the tracts, such as those near the resort area of Elk River, are good candidates for real estate development. 

On top of all that, the person trading for the lands is Tim Blixseth, a well-known - and not very well-loved - timberland trader and founder of the famously troubled Yellowstone Club. The Upper Lochsa property, while spectacular, was heavily logged by Plum Creek Timber before Blixseth bought it in 2005, and much of it has burned in recent years as well.

“We all support blocking up the Upper Lochsa,” retired Forest Service ranger John Krebbs told the crowd. “But not at the expense of the Palouse district.”

Some of the opposition to the deal looks like classic NIMBYism: one speaker in Potlatch related, without irony, how he had gated his property to keep the occasional mushroom-hunter from crossing onto the public lands above - but nonetheless considered it an outrage that those very public lands might pass to private ownership and thus be inaccessible to him. The Forest Service, rather than being viewed as a protector of public assets, has often been seen in these parts as a usurper of property which, with a few skidders and chainsaws, could be put to productive use.

There’s also a lot of muttering about a back-room sweetheart deal allegedly engineered - albeit for reasons that no one can really explain - for the benefit of Blixseth. More rationally, there is nervousness that the public will come out on the short end of any trade with Blixseth and his company, Western Pacific Timber. Blixseth, after all, is perhaps the world’s shrewdest trader of mountain timberlands, and he bought the Lochsa parcels with the specific intention of trading for property that would be more valuable to him - for logging, for development, or for some combination.

But opponents of the trade, led by an ad-hoc group called Friends of the Palouse Ranger District, contend that the Palouse lands are well-managed and ultimately far more valuable than the Upper Lochsa acreage. The land to be traded to Western Pacific includes many separate parcels, and some of them are ripe for logging, some are regularly used by hunters and fishermen and berry-pickers and off-road vehicle enthusiasts, and some are good candidates for building. 

Local politicians, some apparently caught off-guard by the public backlash, are now lining up against the deal.

“I’m doing everything I can to make sure this doesn’t happen,” said Gary Schroeder, a state senator who represents the area.

Forest Service officials stress that the trade is anything but done. An environmental impact statement, including several alternatives to the proposed swap, is scheduled to be released in the fall.

“I think we’ve developed a pretty good range of alternatives,” said acting Clearwater Forest supervisor Kara Chadwick. She said the options include “dropping out some parcels that people are particularly attached to,” though that could involve adding other parcels, which could then spur further disputes. Scrapping the whole thing is also a possibility, though Forest Service officials and conservationists are nearly unanimous in their belief that the Upper Lochsa land needs to be in public ownership.

Ron Marcoux, who works with the Rocky Mountain Elk Foundation, said his group has been looking for ways to get the Upper Lochsa land into public ownership for years. “When Plum Creek started talking about selling the property, we started talking to the Nez Perce Tribe to see if we could find funding to get it into public ownership,” said Marcoux. “But Plum Creek was wanting to sell quickly.

“Then Plum Creek sold to Western Pacific Timber, and we approached them to see what we could do to work with them.” Western Pacific, said Marcoux, was not interested in a straight sale but rather an exchange, “and we felt it was worth going through the process to see what was there.”

Blixseth, for his part, wrote in an email to NewWest.Net: “It is our position that the trade is in the greater good of the public’s interest, and is also a reasonable deal for the company, if accomplished similar to it’s current configuration. The company lands are very valuable real estate parcels in a spectacular area of the state. But, since our philosophy has been for over 20 years to consolidate private and government ownerships, the company lands fit nicely into the USFS ownership.

“The company in most of these trades would do better financially if it held on to it’s existing lands, long term, but believing that these lands should be consolidated, causes us to at least attempt this goal. If the trade fails to materialize, the company is very pleased to continue to own it’s lands in Idaho. One thing to note is that from the day the company bought these lands, we instructed our foresters not to cut one tree on the lands and let the forest grow and flourish.”

People involved in the discussions say Western Pacific has consistently indicated that it is not interested in simply selling the lands, though one person who asked not to be identified said that position seemed like it might be softening a bit. With the mountain real estate market in tatters, development of high-end real estate on the Lochsa lands looks like a much different proposition than it might have a couple of years ago.

And Blixseth may need the money. He faces substantial legal claims in the wake of the Yellowstone Club bankruptcy, and if he loses a bankruptcy court trial that’s scheduled to resume this fall he could be on the hook for as much as $200 million. (Western Pacific Timber’s other big land holding, about 70,000 acres in Klickitat County, Washington, is currently being auctioned off, according to the company’s website.)

Assessing the market value of any of these lands is very difficult, and that is in some ways the root of the problem. If people use a parcel of public property for hunting and hiking and camping with their family, how do you figure those activities - and the memories that go with them - into the value? How do you put a price on potential Elk habitat, or slightly cleaner water? If you own remote acreage that could, in principle, make for a gorgeous vacation home, but lacks reasonable road access and doesn’t have any ready pool of potential buyers, what’s the value there? The ground that now makes up the Yellowstone Club, after all, was worth a few thousand dollars an acre before the club was developed, and is now worth hundreds of times more.

These tricky questions are hardly unique to this land deal; the Montana Legacy Project, a far more massive endeavor involving more than 300,000 acres and hundreds of millions of dollars, has faced some criticism for over-valuing logged-over land. Yet supporters say that keeping the remaining Northern Rockies forest ecosystem intact is worth almost any price.

For residents of the Palouse, though, these discussions are mostly academic.

“The Panhandle lands offered in the exchange are tracts scattered over hundreds of miles which have been managed for multiple use. Exchanging them for the Upper Lochsa land provides no benefit to the Panhandle region,” says Marilyn Beckett, one of the leaders of Friends of the Palouse. “Our lands are cherished and used by the public, who realize once made private, access will be restricted, habitats and watersheds will be impacted, and a precedent will be set for further fragmentation and exchange.”

Even today, that sentiment may not be the dominant one in Idaho timber towns. But this time around, and increasingly in the future, it’s likely to carry the day.

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