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LIBERTY COUNTY, GEORGIA -- After Hampton Island Preserve manager Ron Leventhal vowed a lawsuit, Plum Creek was left sitting on the bank Tuesday night when Liberty County commissioners tabled a request to rezone land for the massive development.

"We believe it’s a taking. It undermines our values," Leventhal said of his $200 million development that neighbors the proposed 10,000-acre, mixed-use community south Riceboro’s Retreat Road.

Leventhal fears granting a planned unit development permit over such a massive development gives Plum Creek free reign, while shirking government oversight for future variances.

And it leaves the county and surrounding property owners to deal with the effects of 7,800 residential units and a mix of industrial and commercial areas over some 5,000 usable acres.

Tom Ratcliffe, representing Plum Creek, said the landowner has not picked developers, set building locations, buffers and other details.

"But we know, generally, what the pattern is and we know where its uses are and we know what the constraints are," Ratcliffe said.

"If we only had one bite of this apple, we’d be concerned. But it’s our first bite. It’s not our last bite," the attorney said, mentioning a specific development plan in the future.

Incomplete plans for a 30-year project, that many won’t live to see completed, should be a red flag, Leventhal said.

He said a company listed on the New York Stock Exchange should be able to plan and provide advanced commitment that it will mitigate development effects on surrounding infrastructure, particularly traffic on Retreat Road.

"Why can’t it be figured out now?" Leventhal said. "They’re a powerful, multi-billion dollar company, for God’s sakes."

The permit would allow one dwelling unit per acre, according to Liberty Consolidated Planning Commission Director Sonny Timmerman.

Leventhal wants the board to have details on the property before "densifying the daylights out of it."

Charles Ezelle of Plum Creek said the company would make improvements to the intersection of Retreat Road and Highway 17 during the building of the first 2,500 units.

"After that point, the traffic generated by the development would require significant upgrades to the roadway," Ezelle said, mentioning widening, additional lanes and even another overpass on I-95.

"I think once this PUD is approved, up to 2,499 units, the developers are going to say ‘tough luck’," Leventhal said. "They’re going to have an edge, legally."

Commission Chairman John McIver was also skeptical of road use.

"There will never be…allowing for that kind of development to reach that point on Retreat Road, knowing that road can’t accept that kind of traffic." he said.

Leventhal thinks Plum Creek should be arranging water and sewer now, before getting the permit.

But that would be premature, according to commissioner Pat Bowen.

"It just doesn’t make sense to me to spend that type of money if you can’t get it rezoned," Bowen said.

Commissioner Eddie Walden did not want to see Plum Creek soley responsible for road improvements, considering other property owners in the area.

"Let’s hold the rezoning to the rezoning until we get the road fixed," Walden said.

"All I can say is we need the tax dollars," District 1 Commissioner Marion Stevens said.

McIver and Walden voted against tabling the decision.

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Plum Creek Timber Co. says the weak housing construction market requires closing the company's facilities at Evergreen, next to Kalispell, and eliminating the jobs of 63 people.

COLUMBIA FALLS, MONTANA -- Plum Creek Timber Co. says the weak housing construction market requires closing the company's facilities at Evergreen, next to Kalispell, and eliminating the jobs of 63 people.

The Seattle-based company on Thursday announced the June 26 closures of its Evergreen sawmill and a facility that removes defects from wood and processes it into stud-grade lumber. The closures will be indefinite, Plum Creek said.

"The company's manufacturing business has been hard hit by industry turbulence over the past several months," said Rick Holley, Plum Creek president and chief executive. Holley said the company has "done everything possible to keep these facilities running," but improving their efficiency is not enough to sustain them.

"The housing market remains dormant for new construction, which is directly tied to the wood products we make at the Evergreen plants," Holley said.

The Evergreen mill closed in early January and restarted in May.

Plum Creek also is preparing to close its sawmill in Pablo, where 87 employees got the federally required 60-day notice in April. Evergreen workers received similar notice, as did Plum Creek employees in Columbia Falls.

The company said Thursday that a slight improvement in prices for the pine boards manufactured in Columbia Falls likely will allow the mill there to continue running, if operating costs are reduced.

In March, Plum Creek permanently closed its mill near Eureka, shedding 90 jobs.

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OLYMPIA, WASHINGTON -- The state Board of Natural Resources approved a land swap with the Plum Creek Timber Company.

The state gets 21,000 acres of forest land in eastern King County along the North Fork of the Green River. It's in the drinking water watershed for the city of Tacoma.

The company will get 6,000 acres of land of equal value - about $23 million - elsewhere in the state.

In other transactions Tuesday, the board approved a 500-acre swap with the Kitsap parks department for a future park near Silverdale. And the board approved the sale of 42 acres in Spokane County for a veterans cemetery near Medical Lake.

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The Board of Natural Resources today approved a land exchange with Plum Creek Timber Company, which will add 20,681 acres to state trust forestland holdings in eastern King County. Plum Creek will receive 6,033 acres of equal value—about $22.9 million—elsewhere in the state. The Washington State Department of Natural Resources (DNR) will manage the newly acquired land for revenue to trusts that support construction of public schools and the University of Washington.

"DNR will keep these lands as healthy, viable forests providing habitat, drinking water to Tacoma, and non-tax revenue to building schools," said Commissioner of Public Lands Peter Goldmark.

"Plum Creek was pleased to work cooperatively with the Department of Natural Resources to achieve this outcome which benefits the State, public schools, Tacoma Water and Plum Creek," said Rick Holley, President and Chief Executive Officer, Plum Creek Timber Company.

Most of the acquired land becomes part of the Common School Trust which helps fund school construction. DNR also will manage about 350 acres in the area to support University of Washington capital projects. The property, which is located along the North Fork of the Green River and east of the Howard A. Hanson Reservoir, will remain closed to public access because it is part of the watershed supplying drinking water to the City of Tacoma.

Many of the state parcels exchanged with Plum Creek were isolated from larger blocks of DNR-managed forestland; several were bordered by housing and other development not consistent with effective habitat management and natural resource production. Four public meetings and two public hearings about the exchange were held across western Washington during 2008.

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BANGOR, MAINE -- The Maine Land Use Regulation Commission is holding what's expected to be its final deliberations on Plum Creek Timber Co.'s massive development plan for the Moosehead Lake region.

LURC gave its approval in September to the project that includes nearly 1,000 house lots, two large resorts and more than 400,000 acres of land conservation.

No public comment will be permitted at the meeting Tuesday in Bangor, although parties who submitted recent comments will have a brief opportunity to address the commission before deliberations begin.

Seattle-based Plum Creek offered its proposal four years ago. The plan has been revised three times, but critics still maintain that it calls for too much development in key areas, including Lily Bay.

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BC lumber companies, led by West Fraser Timber, are now the largest in the world despite the devastating collapse of wood products markets, according to a survey on the global lumber sector. Wood Markets International (WMI) reported that in 2008 West Fraser stood alone at the top as the world’s largest lumber producer, a spot it captured for the first time by maintaining productivity in 2008 while other global giants faltered. West Fraser replaced Tacoma-based Weyerhaeuser, now No. 2, as the world’s largest. WMI lists BC’s Canfor Corp. at No. 3, Finnish company Stora-Enso at No. 4, and BC company Tolko Industries at No. 5.

Despite obstacles at its Canadian mills, like the softwood export tax of 15 percent and the mountain pine beetle infestation, West Fraser kept its production levels almost as high in 2008 as in 2007, when markets were stronger. It also began increasing production at mills in the US South that it acquired in 2006.

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Plum Creek announced plans to permanently close its Pablo sawmill. The Pablo mill near Polson, Montana, which produces pine boards, has been operating at one shift. The mill will continue to run for the next 60 days or until log inventory is depleted, whichever comes first.

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Timber company Weyerhaeuser Co said on Friday it was unlikely to convert to a real estate investment trust (REIT) structure this year, although that might change if economic conditions improve.

"Several factors, including the low level of timber income this year ... make it unlikely that conversion to a REIT will be beneficial in 2009," Chief Financial Officer Patricia Bedient said at the company's annual investor conference.

"However, if economic conditions improve that outlook could change," she said, noting the company's board had considered a potential REIT conversion, but had made no final decision.

Weyerhaeuser, which has been undergoing a multiyear restructuring, has been under pressure from analysts and investors to adopt a REIT structure, which is more tax efficient than its current corporate structure.

Last year, at the same event, Bedient had ruled out converting to a REIT in 2008 or 2009, saying such a move given the dismal U.S. housing market conditions would not be tax efficient and would only increase the company's debt burden.

On Friday, she said: "It remains clear to us that to maximize the value of our timberlands, we must use the best tax structure."

She noted Weyerhaeuser had made some recent changes, including adopting a calendar financial year, "so we would have the flexibility to change to REIT status if it is advantageous."

But this year, in addition to lower income from timber as demand slumped in the recession, she said REIT status would require the company to carry forward net operating losses.

Also, she said, distribution of earnings and profits under a REIT structure would require a distribution of $1.3 billion in cash, when the company's cash-in-hand at the end of March only totaled $1.7 billion.

Asked about the advantages of changing its corporate structure to a REIT, she said the company believed its portfolio of timberlands, lumber production, home construction and sales was "manageable within a REIT structure.

"But the most important part is not the structure, but how the businesses generate attractive returns for shareholders."

Weyerhaeuser has cut its quarterly dividend to 25 cents per share from 60 cents, as the company reported a wider first-quarter loss and she said it expected challenging market conditions to persist in the second.

Weyerhaeuser stock was down 6 cents at $33.33 in afternoon trading on the New York Stock Exchange.

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Rave reviews followed the Liberty Consolidated Planning Commission unanimous recommendation to rezone more than 10,000 acres of unincorporated Liberty County for a mixed-use development.

Plum Creek, which is requesting the rezoning, plans to put up 7,800 residential units and an undetermined mix of commercial and industrial units on the property south of Riceboro’s Retreat Road.

The corporate landowner giant has had its sights on doing the planned unit development for almost a year.

"We’re all familiar faces," said local attorney Tom Ratcliffe, speaking on behalf of Plum Creek at Tuesday evening’s commission meeting before the vote.

After a brief reference to the request being tabled last month, commissioners gave the nod with little discussion.

"This thing has been on our table nine months, 10 months," chairman Don Hartley said.

"A long time coming," added Sonny Timmerman, LCPC executive director.

"Well done. Excellent process. Looking forward to working with ya’ll," Hartley said.

But Plum Creek still has to get the ultimate go-ahead from county commissioners.

LCPC recommendation comes under the condition that Plum Creek will preserve wetlands with 50-foot buffers and study historical and archeological sites.

Rivers and marshes, mostly on the eastern side of the development, make up about half of its 10,000 acres.

"So basically starting from the marsh going toward I-95, the density will increase," said Gabrielle Hartage, who presented the zoning analysis to the board.

Because of its size, the project will be reviewed by the Georgia Department of Natural Resource’s Wildlife Resources Division.

Hartage explained how other surrounding properties are zoned for PUDs, so Plum Creek would not be considered spot zoning.

However, the impact on streets and utilities would have to be studied as development progresses. She said it is possible property values may increase.

Riceboro Mayor Bill Austin also recalled hesitation from residents during a public hearing in Riceboro.

"At that meeting there was some concern that was raised how their development would affect existing development on Hampton Island," Austin said.

Hampton Island Preserve, a high-end housing development southeast of Riceboro, also neighbors the development.

Hartley said Hampton Island submitted a letter of support to the board.

Austin was also concerned with traffic, but said the city will work with Plum Creek to add roads to lessen the impact.

"What we wanted to do was make sure there was some public access to that community," Austin said.

Overall, Plum Creek fits into Riceboro’s plans to stimulate growth, the mayor said.

"Part of the development calls for commercial light industrial [to] continue throughout our city," Austin said. "So we think that will help our local economy and provide employment opportunities for our citizens."

He said he welcomes the development.

"And we’re totally in support of it," Austin said. "We think it’s going to benefit our area from a growth standpoint. We’re very happy to have them as neighbors."

County commission approval or denial could come as earlier as its next meeting June 2.

About Plum Creek: Plum Creek is the largest private landowner in the nation, with more than 7 million acres in timber producing regions of the United States. The company produces lumber, plywood and medium density fiberboard. Plum Creek also operates a real estate development business known as Township 110 Land Company.

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One of the world’s largest forest companies has teamed up with one of the world’s largest oil companies, in a bid to crack bioenergy’s holy grail: Converting trees and plants to hydrocarbons.

Catchlight Energy, a joint venture between Weyerhaeuser Co. and Chevron Corporation, laid out its ambitious plans to forest industry executives attending a recent PricewaterhouseCoopers’ forest and paper products conference in Vancouver.

Catchlight Energy president Michael Burnside said the company’s goal is to accomplish through technology what it takes nature millions of years to do: Turn biomass grown on Weyerhaeuser’s vast U.S. tree farms into a green hydrocarbon fuel.

It would be no different than the gasoline or aviation fuel derived from fossil fuels, except it would be made directly from plant life.

Burnside said the businesses of the two parent companies encompasses the full spectrum of forests to fuels, providing Catchlight with a broader perspective on how to get from one to the other. The catch: it’s going to take tens of millions of tonnes of biofuel to make a commercially viable hydrocarbon-based fuel, he said.

To grow sufficient biomass, Catchlight is going back to an old but proven sustainable agricultural model, moving away from monoculture to growing several crops on the same site. Burnside framed Catchlight’s land husbandry breakthrough, called intercropping, as a new concept.

Weyerhaeuser intends to grow a native American prairie grass call switchgrass between the trees planted on its southern U.S. lands. The grass grows fast and can be harvested every year, roughly doubling the biomass grown per hectare.

Weyerhaeuser provides a ready source of biomass but it’s up to Chevron to develop the key to making a fuel that can go straight into a car, truck or jet airliner.

This next-generation biofuel is based on chemical conversion technologies similar to those found in the petrochemical industry. The advantage is that they can directly replace fossil fuels using existing infrastructure. Green hydrocarbon fuels, according to the National Science Foundation of the United States, are essentially the same as those currently derived from petroleum except that they are made from biomass.

"It’s a difficult nut to crack," Burnside said of the task in producing a hydrocarbon-based biofuel. "The industry in general is waking up to the fact that biomass and biomass at scale, in a cost efficient way, is a huge challenge."

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HELENA, MONTANA - A $3.5 million deal to buy 2,623 acres of prime wildlife habitat in Western Montana's Blackfoot River Valley has approval of the Montana Fish, Wildlife and Parks Commission and now goes to the state Land Board for final action.

The Little Doney Lake Project in the Ovando area covers lands owned by The Nature Conservancy, which bought them from Seattle-based Plum Creek Timber Co.

Under Plum Creek ownership the property was "threatened" with conversion from timberland and wildlife habitat to residential and commercial uses, the Department of Fish, Wildlife and Parks said in a briefing paper prepared for Thursday's commission meeting.

In a draft environmental assessment last year, the department said the potential for "houses, fences, driveways, garages, barns and other structures constitutes a direct loss of exceptional winter habitat for ... deer and elk populations."

State officials say that besides supporting deer and elk, the Little Doney Lake Project lands provide habitat for grizzly bears and lynx, plus nesting opportunities for loons and trumpeter swans and will contribute to the conservation of bull trout and westslope cutthroat trout.

The Nature Conservancy's Jim Berkey said the organization bought the lands, which are next to the state-administered Blackfoot Clearwater Wildlife Management Area, in phases beginning in 2004 and ending in 2007.

The purchase would be covered with money from the Department of Fish, Wildlife and Parks, federal dollars and private sources. The Fish, Wildlife and Parks funds include $1.5 million from Habitat Montana, a program for the protection and enhancement of wildlife habitat. That program's money comes from fees for Montana hunting licenses.

The department held a public meeting in Ovando in November to hear comment on the Little Doney Lake Project. No one spoke against it, officials said.

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West Fraser Timber displaced Weyerhaeuser as North America’s top lumber producer in 2008, according to International Wood Markets Group. Each company operated 27 sawmills in the US and Canada during part or all of 2008. Total softwood lumber production by the top 20 Canadian companies declined by 16.7% compared to 2007, according to Wood Markets’ annual survey. Similarly, total Canadian softwood lumber output dropped 20.5% to reach 23.8 billion board feet in 2008, as compared to 29.95 billion in 2007. Eastern Canadian firms in the top 20 had the largest average production decline of close to 27%, while Western Canadian firms saw an average decline of about 12% in 2008 vs. 2007.

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Weyerhaeuser Company will permanently close its Bay City log export facility in Aberdeen, Washington. "We are taking this action due to continued weak demand for wood and wood products," said Rich Wininger, vice president of Weyerhaeuser’s Western Timberlands operations. "We will consolidate log sorting and exporting at our other facilities in the region, located at Longview and Olympia, WA."

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Weyerhaeuser Company announced it will close its lumber mills in Wright City, OK, and Dallas, OR, effective immediately. The announcement will affect approximately 307 employees. "Demand for wood products continues to decline due to a slowdown in the housing market," said Tom Gideon, executive vice president, Forest Products. "Unfortunately, extraordinarily weak market conditions in the homebuilding industry require that we take decisive action."

The company has closed 10 wood products manufacturing facilities this year and virtually all sites are experiencing reduced operations. Since the beginning of 2009, Weyerhaeuser has announced the closure of four softwood lumber facilities with an annual capacity of 870 million board feet. In addition, the company has eliminated operating shifts at its other lumber facilities, resulting in an annual capacity reduction of 280 million board feet. Since January, Weyerhaeuser has reduced its softwood lumber volume by over 1.1 billion board feet to balance its production with customer demand.

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Weyerhaeuser will offer for sale approximately 200,000 acres of prime timberland in Washington State, according to RISI’s Timberland Markets Report. Based on 2008 comps in the Northwest, the deal could fetch around $600 million.

Weyerhaeuser is in a financial crisis so deep the largest US lumber producer turns down the heat in its offices to save money and is contemplating upending its corporate structure after 109 years to become a real-estate investment trust. Other US timberlands managers have converted to REITs to slash corporate taxes. The move would reward Weyerhaeuser shareholders by returning most profits to them as dividends. At the same time, it may force the spinoff of more non-timber assets.

The company has been shedding them under CEO Daniel Fulton, who has closed 10 wood-products mills this year, halved capital expenditures, sold off packaging businesses, frozen salaries and eliminated almost half of the work force, now at 19,850. A record $1.2 billion loss on $8 billion in revenue last year and the likelihood of negative cash flow through 2010 has put Fulton into "conservation" mode, said Joshua Zaret, an analyst with Independence, Ohio-based Longbow Research.

"We missed the depth and severity of this homebuilding crisis," said Fulton, 60, who headed the real-estate unit for seven years before becoming CEO last April. "The primary business going forward is the one we started with in 1900, which is timberlands ownership and management." Fulton told reporters after the meeting that the housing market may hit bottom later this year. "We’ll start to see some modest recovery in 2010 and pick up steam in 2011," he said.

Weyerhaeuser, which calls itself "the biggest homebuilder you’ve never heard of," was slow to consider REIT status partly because it didn’t want to shrink, Zaret said. Under REIT rules, 75% of pretax income must come from real-estate property. No more than 25% can come from manufacturing, including homebuilding.

Now, Fulton is telling shareholders Weyerhaeuser qualifies for 2009 REIT status, after selling businesses including a packaging unit for $6 billion to International Paper in August. It may make the REIT switch as early as next April, when the company files income taxes, he said. "I’m not fighting it."

The Weyerhaeuser of the future may be two companies, with its timber business separate from its lumber and real-estate arms, said Robert Willens, president of a New York tax advisory firm. While residential real estate could still be a taxable subsidiary of a REIT, shareholders might prefer a pure timber business, Willens said. A REIT pays no corporate income tax on timber sales.

Timberland owned by Weyerhaeuser may be worth $10 billion, more than the $6.5 billion market valuation for the company as a whole, said Russell Croft, a fund manager at Croft-Leominster in Baltimore, which holds 250,000 shares among $600 million in assets. "They have that underlying timberland asset, which is one of the reasons we like the stock," Croft said. The challenge will be preserving cash as the housing market remains depressed, said Ed Sustar, a senior paper and forest-products analyst at Moody’s Investors Service. In the fourth quarter, timber was the only profitable business for Weyerhaeuser.

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Analysts say that Weyerhaeuser Co.’s business decisions are putting it in position to convert to a real estate investment trust this year or in 2010. Weyerhaeuser builds houses and makes pulp and wood panels from trees it grows on 6.4 million acres of forest it owns. The company has been getting hit hard by the slumping US housing market, which has put lumber prices at historic lows. In 2008, Weyerhaeuser lost $1.18 billion, compared with a 2007 profit of $790 million. In 2008, Weyerhaeuser sold its packaging business to International Paper Co. for US$6 billion in cash, allowing it to pay down some of its debt, according to analysts. It also sold and retooled some wood products plants and split off its fine-paper division and combined it with an existing company, Domtar Inc. of Montreal.

Joshua Zaret, an analyst with Cleveland-based Longbow Research, said Weyerhaeuser is in a "cash-conservation mode," which will allow it to be ready when the economy comes back. Zaret said Weyerhaeuser’s deal with International Paper could be more important for what it did to enable the company to become a REIT. REITs own and operate income-producing real estate. They pay lower taxes than corporations but can do limited manufacturing. Weyerhaeuser’s leaders have indicated that becoming a REIT is a possibility. In January, Weyerhaeuser CEO Dan Fulton told the Puget Sound Business Journal that the company was positioned for maximum flexibility in terms of making a choice between operating as a C corporation or a REIT, and that he believed the company could function as either. Weyerhaeuser has $2.4 billion in cash on hand and $2.2 billion in bank lines of credit, for a total of $4.6 billion of liquidity, Zaret said.

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HELENA, MONTANA - The Montana Fish, Wildlife and Parks Commission has approved a $3.5 million deal to buy about 2,600 acres of prime wildlife habitat in the Blackfoot River Valley of western Montana.

The proposal now goes to the state Land Board for final action.

The Little Doney Lake Project in the Ovando area covers land The Nature Conservancy bought from Seattle-based Plum Creek Timber Co.

In a briefing paper for the commission, the Department of Fish, Wildlife and Parks says that when Plum Creek owned the property, it was "threatened" with conversion from timberland and wildlife habitat to residential and commercial use.

Buying the land from The Nature Conservancy would involve money from FWP, federal dollars and private sources.

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HELENA, MONTANA - Plum Creek Northwest Lumber Inc. has paid a $32,400 state penalty for a 2007 environmental violation at a Montana sawmill that closed in March, amid declining demand for wood products.

The Montana Department of Environmental Quality said Tuesday that testing on Nov. 28, 2007, indicated air pollution from a boiler at Plum Creek's Fortine operation, just south of British Columbia, exceeded levels allowed in the company's state air-quality permit.

DEQ enforcement specialist Larry Alheim says Plum Creek cleaned a pollution-control device upon learning results of the compliance test, and follow-up testing showed emissions were well within limits.

The Plum Creek operation in Fortine was the last major sawmill in Montana's Tobacco Valley.

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FORTINE, MONTANA - State regulators have fined Plum Creek Timber Co. $32,400 for an air-quality violation at the company's Eureka-area sawmill.

That mill, located in Fortine, was shuttered in March, as the lumber company struggled with falling consumer demand for boards.

Before the closure, however, the facility operated a "hog fuel" boiler. On Nov. 28, 2007, independent testers recorded that it was pumping out 14.8 pounds of particulate per hour. The company's emission permit allowed only 13.9 pounds per hour.

According to Larry Alheim, enforcement specialist at the state Department of Environmental Quality, mill managers cleaned and repaired a pollution-control device, and subsequent tests showed particulate emissions well within the permit limits.

"The problem resulted from an equipment malfunction," said Plum Creek spokeswoman Kathy Budinick. "Plum Creek self-reported the problem, then corrected it."

With the exception of a 2005 citation, "we haven't had a violation against Plum Creek, where we've taken a penalty, in almost a decade," Alheim said.

In 2005, DEQ fined Plum Creek $20,400 for missing a deadline for testing boiler emissions at a fiberboard plant in Columbia Falls, and then later failing that test.

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The view out the window of the Rocky Mountain Elk Foundation keeps changing.

Twenty-five years ago, it was a pine forest out back of Bob Munson's trailer home/real estate office in Troy - and the vision of four men who thought their favorite animal needed a helping hand.

Twenty-five years later, the Elk Foundation's executive offices command the second floor of a $14 million headquarters, overlooking a cottonwood bottom along Grant Creek in Missoula. And the vision encompasses 155,000 members who've protected or improved 5.5 million acres of habitat in 30 states for their favorite animal.

"It's a lot bigger," Charlie Decker said of the project he, Bob and Bill Munson and Dan Bull started in 1984. "When we started, there was an organization similar for sheep and for ducks, but we felt there was nobody doing anything for elk. So we kind of took a run at the animal, the one that we really loved. Since then, we've been drawn into a lot of issues, but you can't argue with habitat. If you've got habitat, you've got elk."

The foundation celebrates its silver anniversary this Saturday with an open house and a banquet. And its members will grapple with a vision for the next quarter-century, one with growing numbers of elk on shrinking acreages of habitat. The challenge will push the foundation back to its core principles, according to president David Allen.

"My to-do list is to keep focused on what we're really structured for - permanent land protection and habitat stewardship," Allen said. "When we get outside those two boxes, we tend not to do as well. We over-commit and under-deliver. We need to stay within ourselves."

That means staying away from involvement in issues surrounding elk hunting, topics like license fees or gun ownership or bear-baiting. RMEF staff might alert its members to debates on those issues, Allen said, but it won't be spending money or time drafting positions or organizing movements.

Rules have exceptions, Allen allowed. The RMEF board of directors recently offered a formal opinion on removing the wolf from the endangered species list.

"We've been hammered in the past about positions such as the wolf issue, where we weren't very strong on our stance, which caused us some problems," he said. "We've changed that. We definitely have a position, and it favors states' rights to manage wolves - period."

Another issue that slips over the border is hunting recruitment. An organization dedicated to preserving a hunting heritage can't be sanguine when the number of hunters declines 1 percent or 2 percent every year. RMEF conservation director Tom Toman said the foundation has sponsored 200 projects nationwide introducing people to archery, target shooting and hunter ethics, reaching half a million participants.

For Allen, the idea of helping an animal in order to hunt it holds no contradiction.

"If we didn't hunt our wildlife in this country, I don't think people really understand what kind of mess we would have," he said. "We don't live in a zoo. It's a very real wild world out there. We have to hunt to maintain the healthy populations we have."

There are plenty of people willing to argue that point. To them, Allen offered to compare accomplishments.

"Hunters are some of the best conservationists around," he said. "They certainly have put their money where their mouth is over the years."

In the Elk Foundation's case, that translates to a 44 percent increase in elk populations nationwide in the past 25 years. The foundation has developed partnerships that can multiply its dollar contributions three to nine times over with private, state and federal matching funds.

Such efforts are growing fraught. Nationwide, RMEF estimates wildlife habitat is consumed for human development at a rate of 2,500 acres a day. Conservation groups of all sorts are feeling the pressure to grab what they can.

"In the past several years, there has been tremendous pressure on federal managers to develop public lands even at the expense of fish and wildlife," said Bill Geer of the Theodore Roosevelt Conservation Partnership. "It is more important than ever for RMEF to advocate for land management policies favorable to fish and wildlife on public lands in the face of development, because that is where the future of hunting and fishing is."

In 2008, RMEF's 10,000 volunteers contributed $16 million in donated labor. Their projects included building watering sources for wildlife, pulling obsolete fencing and other land-management tasks. They also held more than 550 fundraising banquets to provide cash for land conservation.

"When you give a nod to the Rocky Mountain Elk Foundation, you're acknowledging thousands of individual people who've donated or fundraised or helped with banquets or helped lead conservation efforts," Thompson said. "It gives a bit of structure to their efforts."

Open house Saturday

To celebrate its 25th anniversary, the Rocky Mountain Elk Foundation will host an open house on Saturday at its Missoula headquarters.

The public is invited to stop by between noon and 4 p.m. at the RMEF Visitor Center, 5705 Grant Creek Road, which is just north of the Reserve Street exit on Interstate 90. Activities include tours of the office, games for kids and refreshments.

That evening, a fundraising banquet at the Hilton Garden Inn will feature two of the foundation's founding members; Charlie Decker of Libby and Bob Munson of Lynnwood, Wash. There will also be a benefit auction and dancing to live music. Tickets for the banquet are $50 per person; call (406) 532-4511.

RMEF by the numbers -- From the archives of the Rocky Mountain Elk Foundation, here are a few of the more interesting numbers:
Brochures in the first membership solicitation mailing in 1984: 43,000
Responses to that mailing: 233
Membership 25 years later: 155,000
Wild elk population in Kentucky, Tennessee and Wisconsin following RMEF restoration efforts: 10,400
Wild elk population in Kentucky, Tennessee and Wisconsin in 1984: 0
Total acres enhanced or protected by RMEF projects: 5,578,967
Acres enhanced in partnership with U.S. Forest Service: 2,640,792
Acres opened or secured for public access by RMEF: 875,336
RMEF staff in 1984: 4
RMEF staff in 2009: 123

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LIBBY, MONTANA - A recent addition to Libby's "new" economy sits in the town's abandoned mill yard.

It's the Lucky Logger Casino, and Jeff Gruber calls it "one of the cruelest ironies."

On Friday morning in Missoula, as W.R. Grace & Co. officials were acquitted in an environmental crimes case on one side of Missoula, Gruber traced the rise and fall of the lumber industry in Libby on the other.

A Libby native and high school history teacher there, Gruber was the opening speaker at a county history initiative conference at Fort Missoula's Heritage Hall, part of a larger weekend of presentations, tours and Saturday's Preservation Fair billed "Preserving Our Heritage in a Changing Landscape."

Gruber's was a story of a town that grew up around a family-owned lumber mill where long-term timber management was both practiced and preached.

"They were really pioneers of sustained yield," he said of Julius Neils and his sons, who moved J. Neils Lumber Co. to Libby in 1911 as the forests in Minnesota played out.

Even after J. Neils sold to the St. Regis Paper Co. in 1957, the mill kept the Neils name, its managers and its philosophies intact.

"In the words of one longtime employee, St. Regis bought us and forgot us," Gruber said.

Dark clouds appeared in the 1970s, when timber corporations began wholesale liquidation of forests "for quick monetizing of timber" and replanting them with faster-growing trees.

High-powered financiers became attracted to timber companies like St. Regis. A British financier eyed the company, then corporate raider Rupert Murdoch.

"No longer strong enough to fend off another attack, St. Regis looked to Champion International as its white knight," Gruber said. The companies merged in September 1984.

Gruber read from a 1985 forestry report of Champion's Libby timberlands, which said, in part, "The forestry department goal, starting in 1975, was to double the growth of timber on fee lands at Libby by the year 2000."

A forestry program was developed with yearly goals to reach that goal.

"This is where it started, folks," he said.

Champion cut trees around Libby faster than the local mill could saw them, Gruber said. Hundreds of truckloads were shipped off to Champion's Bonner plant.

The company's logging department was eliminated in favor of contract, or gyppo, loggers. The mill's long-running Montana Light and Power Co. was discontinued, as were its box factory, Presto log plant and paneling and molding operations.

Champion focused on high volumes of commodity boards and lumbers and, in 1989, the Libby mill churned out a record 187 million feet of lumber and plywood.

Two years later, Champion was running out of wood and looking for a way out of its Montana operations, including 867,000 acres of timberlands.

Gruber said Champion, working with managers of the two plants, agreed not to break up the lands and mills, though it was "widely known" that Plum Creek Timber Co. wanted the timberlands. In the end, however, Champion didn't live up to its pledge - Plum Creek bought only the timber holdings for $269 million.

"To soften the blow to the communities of Libby and Bonner, Plum Creek searched out Stimson Lumber Co. to buy the plants for $10.5 million," Gruber said.

Under Stimson, jobs at the Libby mill were cut from 650 to just over 300. The old-line sawmill and studmill were auctioned off in May 1994, and fire broke out as the sawmill building was dismantled. The flames crippled the powerhouse that provided steam, and electricity to the plant was crippled. Stimson didn't rebuild the plant, and soaring electricity prices in the late 1990s added a new financial burden.

The company received another setback when asbestos-contaminated vermiculite was discovered at several sites around the mill - byproducts of W.R. Grace & Co.'s mining operation outside town. Health insurance and workers' comp premiums went up over $1 million a year. With timber supplies diminishing, Stimson shuttered its Libby mill on Dec. 27, 2002.

His town is not alone among communities hit by the loss of primary industries, Gruber said.

"But Libby is unique among them, for generations of Libby residents saw and heard and believed in the connection between land and community," he said.

Logging has always been a part of Libby's culture, Gruber said. Visiting football teams are met with roaring chain saws as they enter Logger Stadium. Logger Days have been celebrated since 1960.

Schoolchildren take "woods tours" and bring home seedlings to plant at home. There's a "Lumber Shelf" at each school library, and for years new teachers were given tours of the mill and timberlands to familiarize them with the local industry.

"Whether it was J. Neils, St. Regis, Champion or Stimson, community projects always received help and assistance," Gruber said.

Community stability was tied to careful land and timber management.

"The abruptness of the change � to profit being the only consideration has been cruel for Libby," Gruber said. "They feel betrayed and angry that they have been ‘monetized.' "

Stacks of wood cut locally by local hands have been replaced by the blinking neon lights of the Lucky Logger Casino.

"There is," Gruber said, "nothing lucky about it."

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Plum Creek Timber Co., Seattle, Wa., is permanently closing its Pablo, Mt., sawmill and june also shut down mills in Evergreen and Columbia Falls, Mt., due to the tepid residential construction market. The pine board in Pablo will run at one shift until late June, unless log inventories run out earlier. In late April, Plum Creek also issued 60-day notices that the other two plants would be evaluated and either kept running or closed, either temporarily or permanently.

"It could go either way," said spokesperson Kathy Budinick. "We'll just have to look at the market and see how its doing."

Since the first of the year, Evergreen and Columbia Falls have experienced temporary shutdowns, while a sawmill in Ksanka, Mt., was permanently closed. It will be dismantled and its equipment sold-the same fate that awaits the Pablo facility if a buyer cannot be found.

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Marion County's primary land-conservation program has taken a major leap forward.

The County Commission on Tuesday spared 1,958 acres from future development through a deal with a Seattle-based timber harvester, more than doubling the land preserved under the county's Transfer of Development Rights, or TDR, program.

The land, owned by the Plum Creek Co., is part of a 4,116-acre tract at county roads 315 and 316, just east of Fort McCoy, and is about a half-mile from the Ocklawaha River.

On Tuesday, the board unanimously granted Plum Creek a conservation easement that forever prohibits development of the site.

The four-year-old TDR program allows owners of rural or environmentally sensitive lands to swap rights to develop their property for credits to build elsewhere in the county.

In Plum Creek's case, commissioners cited the value of the native soils and vegetation on the site as well as its sizeable amount of wetlands and proximity to the river. Nearly half of the land covered by the agreement is wetlands.

Lisa Walsh, a senior planner in the county Planning Department, also told the board the property was "highly vulnerable" to pollution run-off.

Commissioner Barbara Fitos, whose district includes Plum Creek's property, hailed it as a "significant acquisition" for the county. The "infusion of this 1,958 acres says we are serious about our TDR program," said Fitos.

Todd Powell, Plum Creek's southern region director, who is based in Gainesville, said, "This puts sensitive land under conservation at no expense to taxpayers" - a vital consideration since land-preservation programs at the state and local levels are threatened by falling government revenues.

Powell said Plum Creek had been monitoring the county's comprehensive land-use plan and decided that changes to it and the land-conservation initiative made it advantageous to act.

Under the TDR program, landowners with at least 30 acres to preserve receive credit to build one home for each acre placed into conservation. Those credits are then utilized to build in areas the county classifies as Urban Reserve, or places on the fringe of urbanized areas where the county anticipates future growth.

Credits can also be sold to other developers.

The TDR idea is not new, having been discussed by commissioners nearly 20 years ago.

When the initiative was finally launched in 2005, participating landowners were granted credits equal to three homes for every 10 acres placed in conservation.

Commissioners changed that to one home per acre in November 2007. The board also opened the program to landowners outside northwest Marion County, which has been designated the Farmland Preservation Area.

Since the changes, interest has seemingly grown in the program, with two-thirds of the preserved land being added in the past year or so.

"The TDR program is in its infancy, and we wanted to put our toe in the water and see how this turns out," Powell said.

While the county's pact with Plum Creek prohibits all development on the land, the company can conduct other activities there. Those include silviculture, hunting and ecotourism.

Powell said the company will continue tree-harvesting operations on the property and hold its development credits until the real estate market turns around.

The rest of the adjacent land will be kept as is, he added.

"We're landowners, not developers," said Powell, noting his company is the largest private landowner in Florida.

Plum Creek, according to him, holds more than 600,000 acres across 22 Florida counties. More than 11,000 acres are in Marion County.

The commission's vote Tuesday more than doubled the land preserved by the TDR program, from 1,240 acres to 3,198 acres. That also put the county almost two-thirds of the way toward its goal of saving 5,000 acres by 2015.

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Weyerhaeuser Co., the largest U.S. lumber producer, had its credit rating cut to below investment grade for the first time in the company’s 109-year history.

Weyerhaeuser’s rating was lowered two levels to Ba1 from Baa2 by Moody’s Investors Services, the credit-rating company said today in a statement, citing the lumber producer’s "weakened financial position" and a slump in U.S. housing construction. The cut affects about $6 billion of debt, Ed Sustar, a Toronto-based Moody’s analyst, said in the statement.

"The company’s performance will remain challenged until U.S. housing starts recover towards trend levels," Sustar said.

Weyerhaeuser Chief Executive Officer Daniel S. Fulton is selling land, closing wood-product mills and firing workers to reduce costs and conserve cash amid the worst economic slump in at least 50 years. The annual pace of U.S. single-family housing starts has fallen by 80 percent since the first quarter of 2006, according to Commerce Department data.

The cut brings Moody’s ratings on Weyerhaeuser to the lowest since at least September 1960, Sustar said today in a telephone interview. The ratings have fallen eight levels since peaking at Aa2, the third-highest credit rating, between 1974 and 1981, he said.

"It’s been a slow and steady decline," Sustar said. "It’s new territory for them being non-investment grade."

$1.8 Billion Cash

Bruce Amundson, a spokesman for Weyerhaeuser, said the cut was the lowest ever for the company, which got its start in 1900 when German immigrant Frederick Weyerhaeuser bought timberlands in Washington state the size of Rhode Island. The company now has 6.4 million acres of U.S. timberlands.

"If you look at it from a practical standpoint, we still have $1.8 billion in cash on our balance sheet and can access $2.2 billion in unused credit facilities," Amundson said today in a phone interview.

Standard & Poor’s today affirmed its stable outlook and BBB- rating on Weyerhaeuser. The rating is S&P’s lowest investment-grade ranking.

While S&P said it expects Weyerhaeuser’s credit measures to be weak for as many as two years, "we continue to believe its cash-flow performance will improve over the next several quarters."

Shares Decline

Weyerhaeuser, based in Federal Way, Washington, fell 68 cents, or 1.8 percent, to $36.09 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have climbed 18 percent this year.

The company, which owns six residential builders, said yesterday its first-quarter net loss widened to $264 million, or $1.25 a share, from $148 million, or 70 cents. The results followed a record $1.21 billion fourth-quarter loss.

"Industry conditions across all four of Weyerhaeuser’s business segments of timber harvesting, cellulose fibers, wood products and home building are not expected to improve significantly in the near term to materially reduce the company’s expected cash burn levels," Moody’s analyst Sustar said in the statement.

Weyerhaeuser’s ratings are supported by its standing as North America’s second-largest private timberland owner and its cash holdings, Moody’s said. Any moves to sell forestlands to pare debt may not be easy.

"We believe the market value and the salability of large tracts of timberlands are uncertain in the current environment as many of the potential buyers of timberland have significantly less liquidity," Sustar said in the statement.

Plum Creek Timber Co. is the largest private U.S. timberland owner.

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The Weyerhaeuser lumber company has been targeted as part of a shareholder movement to improve corporate governance.

A proposal to bar Weyerhaeuser's CEO from also serving as chairman of its board of directors received 59 percent of the vote at an annual shareholders meeting April 16.

The vote fell short of the two-thirds "supermajority" required to change Weyerhaeuser corporate policy, but supporters of the proposal hope it will nonetheless resonate with the firm's leadership.

The company's board recommended that shareholders reject the proposal, which was submitted by the Laborers' International Union of North America's pension fund.

"We're hoping the weight of the shareholder vote will cause the board to change its mind," said Jacob Hay, spokesman for the union.

The group supports similar proposals at other public companies in which its pension fund owns shares.

"It helps cut down on conflicts of interest and increases transparency," Hay said.

A similar proposal to separate Weyerhaeuser's CEO and board chairman positions received about 41 percent of the vote in 2008, according to the RiskMetrics Group financial research firm.

The last person to hold both positions, Steve Rogel, stepped down as CEO in 2008 and resigned as chairman during the most recent meeting.

Dan Fulton, Weyerhaeuser's president, replaced Rogel as CEO. Chuck Williamson, a board member and retired executive vice president of Chevron-Texaco, was appointed board chairman.

The positions have been filled by different people for the past year, but the union wants to prevent one person from assuming both roles again in the future, Hay said.

Hay said Rogel received a compensation increase in 2008 even though Weyerhaeuser's financial performance was poor, which may have prompted the backlash from shareholders.

Weyerhaeuser spokesman Bruce Amundson said Rogel's salary decreased in 2008. The increase in his total compensation was primarily due to Rogel cashing in on deferred income from prior years in anticipation of his retirement, he said.

"It's not that he got more that year," Amundson said.

The decision to appoint two people to the CEO and chairman positions demonstrates Weyerhaeuser is open to that alternative, he said.

The board opposed making the separation mandatory, since the directors didn't want to limit their choice of candidates, Amundson said.

"Basically, they wanted the option of choosing who is most appropriate," he said.

The majority of Weyerhaeuser's counterparts on the S&P 500 index do not prohibit the CEO from serving as chairman, but the movement to separate those positions has been picking up steam in recent years, according to RiskMetrics.

In 2008, about 38 percent of S&P 500 companies had split roles, up from 37 percent in 2007 and 34 percent in 2006, according to RiskMetrics.

Dan Rohr, an analyst at the Morningstar financial research firm, said Weyerhaeuser's board won't likely jump on that bandwagon.

Previous initiatives that would have allowed a simple majority of shareholders to approve proposals also received strong support, but the board hasn't acted on them, Rohr said.

"They haven't been all that amenable to shareholder proposals," he said.

In its evaluation of corporate stewardship, Morningstar docks points for companies that employ the same person as chairman and CEO, Rohr said.

"Our opinion is that the board should only have one master: shareholders," he said.

Even so, the firm gives Weyerhaeuser a B grade in corporate governance, whereas companies typically earn C grades on average, Rohr said.

That's because the company has been responsive to the current downturn, reducing operating costs and dropping bonuses for top executives, he said.

"They've been fairly proactive at cost-cutting," Rohr said.

Weyerhaeuser had a tough year in 2008, losing about $1.2 billion dollars, but Rohr said the company has the mettle to survive.

"It's definitely something they can get through," he said. "Their balance sheet is a lot better a lot of folks'."

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The founders of the Yellowstone Club are trading blame over who is responsible for the financial collapse of the Montana haven for the rich that has fallen more than $400 million into debt.

Members of the private ski resort — including former Vice President Dan Quayle and Bill Gates — pay substantial sums for the privilege of building expensive homes in the gated resort but they do not own the club itself.

Its founders, recently divorced Tim and Edra Blixseth, blame one another for the problems that led the club to file for federal bankruptcy protection.

Edra Blixseth has owned the club outright since last August. But Tim Blixseth was in control in 2005 when the Yellowstone Club took a $375 million loan through the firm Credit Suisse.

Most of that money went to the Blixseths' private accounts, to be spent on luxury jets and estates in California, France, the Caribbean, Mexico and Scotland.

"I assumed when no one said to me there's something wrong with it, there's nothing wrong with it," Tim Blixseth said during testimony Wednesday in the club's bankruptcy trial. He was referring to one of several money transfers — totaling more than $300 million — that the club made to a corporation Blixseth had sole control over.

"I was the manager and I did what I felt was an appropriate decision at the time," he added.

The club's creditors and members accuse Tim Blixseth of "looting" the resort. They say the loan was fraudulent and should be voided because Credit Suisse knew it would not benefit the club.

Edra Blixseth's attorney latched onto that claim during opening statements Wednesday.

"The corporate greed of Credit Suisse coupled with Mr. Blixseth's sense of entitlement is a very, very bad situation," said attorney Troy Greenfield.

Tim Blixseth's attorney, Mike Flynn, said the fact that some of the money went to his client was a red herring. "If anyone in America builds a business and wants to take money out of the business ... they're absolutely entitled to do so," Flynn said.

Edra Blixseth last month declared personal bankruptcy. Her former husband says the club was making money when she took it over, and that she drove it into the ground.

But attorneys for the creditors have cast Tim Blixseth as the engineer of the 2005 loan that makes up most of the club's debts. And despite the millions she made off the loan, Edra Blixseth says she objected to the deal at the time.

The loan was one of at least six Credit Suisse arranged for upscale resorts now in financial trouble. The deals were marketed to resort owners who then took massive and early "profit dividends" before the developments were completed.

During his testimony Wednesday, Tim Blixseth said he was told by Credit Suisse that other owners also took "distributions" from the loans made to their resorts.

Credit Suisse brought in third-party investors to fund the loans, and made its money off fees — $7.4 million in the case of the Yellowstone Club.

A Credit Suisse attorney, George Zimmerman, defended the loans and pointed out that the Yellowstone Club kept up with its payments for three years before it fell in bankruptcy.

A club member and Boston real estate investor, Sam Byrne with Crossharbor Capital Partners, has offered to buy the resort for $100 million. The price could be driven higher during an auction scheduled for May 13.

Tim Blixseth accuses his former wife of colluding with Byrne to "prepackage" the resort's bankruptcy so Byrne could later pick up the club at a bargain price. Credit Suisse has made similar allegations, but so far the judge has rejected them.

Tim Blixseth has said he will bid to regain control of the club during the upcoming auction. He developed the 13,600-acre resort with his former wife in the late 1990s, after making his riches in the timber industry.

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Plum Creek Timber Co. says it will permanently shut down its Pablo sawmill, and says it may close sawmills in Evergreen and Columbia Falls.

The company said Monday it has issued federally required 60-day notices to 87 employees at the Pablo mill near Polson, which produces pine boards. It has been operating at one shift and will continue to run for the next 60 days or until log inventory is depleted, whichever comes first.

Plum Creek says it issued similar notices to 69 workers at its Evergreen sawmill, and 130 employees at the Columbia Falls sawmill. The company says those two mills will run for 60 days, and Plum Creek will evaluate whether to keep them open longer.

Workers at Pablo will be paid through the 60-day period, company spokeswoman Kathy Budinick said, and will use the time to work through existing log inventory. After that, they get one-month severance and qualify for federal retraining programs.

Employees of the Evergreen mill also qualify for retraining, and "we have submitted an application to work to get our Columbia Falls sawmill certified, as well," Budinick told the Missoulian newspaper.

In March, the company permanently closed its Ksanka sawmill, shedding the last 90 jobs there. That Eureka-area mill will be dismantled, Budinick said, and its equipment sold at auction.

Budinick said its possible another operator will be found to run the Pablo mill. Otherwise, it will be dismantled and auctioned.

"The waning demand for our wood products is directly linked to the troubled housing market," Rick Holley, Plum Creek president and chief executive officer, said in a press release.

"Housing starts dropped again last month and we expect economic conditions to continue to put pressure on new construction. Unfortunately, we must, once again, take steps to attempt to match supply with the eroding demand," Holley said. "We regret that the Pablo mill closure will affect a number of our valued employees and their families."

The Columbia Falls pine board sawmill, which was idle from early January through mid-March, is currently operating with 1 1/2 shifts and employs 130 people.

The Evergreen stud sawmill near Kalispell, which employs 69 people, has been closed since early January. Evergreen employees will return to work on May 4 to restart the mill.

At the end of the 60 days, Budinick said, those mills might stay open, might shut down temporarily, or might close for good.

"It could go either way," she said. "Well just have to look at the market and see how its doing."

Plum Creeks employment statistics in the Flathead Valley have been in steady decline for months. If the Columbia Falls and Evergreen plants close in 60 days, along with the Pablo mill, only 650 employees will be left on Plum Creeks Montana rolls, down from 1,450 just two years ago.

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The bill enabling the state to buy 26,000 acres of former Plum Creek Timber Co. forestland east of Missoula finally won Senate approval Friday, some eight days after initially being stalled.

The Senate voted 37-13 in favor of House Bill 674, gaining the two-thirds majority needed for final approval and sending the bill to Gov. Brian Schweitzer for his signature into law.

HB674 is part of a two-bill package to assist Montana’s struggling timber industry. The other half is HB669, which creates a $7.5 million revolving loan fund to assist small timber mills and other timber businesses.

The latter bill gained final approval from the Legislature earlier this week and is on its way to the governor’s desk, for signature into law.

HB674 authorizes the state to issue $21 million in bonds to finance state purchase of the former Plum Creek timberlands in Missoula County, near Potomac.

It needed approval by two-thirds of both the Senate and House because it creates state debt. The bill fell six votes short of the two-thirds majority in the Senate a week ago, but the Senate later revived the bill and delayed a final vote until Friday, as the measure was caught up in the final-week negotiations on unrelated budget bills.

The state plans to purchase the forestland and manage it as state forest, with an eye toward providing timber for mills that need supply and allowing access for hunting and other recreation.

The purchase would be part of the Legacy Project, which is transferring 310,000 acres of Plum Creek timberland in western Montana primarily to public and nonprofit ownership. The goal is to preserve all of the land for timber management and public access for recreation.

The Nature Conservancy and The Trust for Public Land are two of the main groups involved in the project, in addition to Plum Creek Timber.

Rep. Chas Vincent, R-Libby, the sponsor of both bills, said Friday that the purchase of the 26,000 acres of timberland in Missoula County won’t happen overnight.

The state Department of Natural Resources and Conservation will examine the property and present the purchase to the state Land Board, which must approve the transaction.

The agency also must decide the "rate of growth" for timber harvesting on all state forests, given the addition of new acreage, before increased logging can occur, Vincent said.

"I’ve been an optimist the whole time with this package," he said. "I think the promises made on this package will be fulfilled."

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Two measures designed to help Montana's struggling timber industry survived a Senate vote Wednesday, putting them close to final passage - although one made it without a single vote to spare.

The close shave came on House Bill 674, which authorizes the state to issue $21 million in bonds to finance state purchase of 26,000 acres of former Plum Creek Timber Co. timberlands near Potomac in Missoula County.

Because the bill creates state debt, it needs approval by two-thirds of the 50-member Senate, or 34 votes.

It received exactly 34 votes, setting up a final, binding vote on Thursday. Sixteen Republican senators voted against HB674.

Rep. Chas Vincent, R-Libby, the sponsor of both bills, said afterward he's hopeful he can convince a few more senators to support the measure on the final vote.

HB674 has been moving through the Legislature along with House Bill 669, which creates a $7.5 million revolving loan fund to assist small timber mills and other timber businesses.

Vincent and the bill's chief co-sponsor, Rep. Jill Cohenour, D-East Helena, have said the two pieces of legislation can work together to help sustain Montana's timber industry, which is struggling to survive.

HB674 would transfer ownership of the 26,000 acres of former Plum Creek timberlands to the state, which would manage them as state forest, for logging and recreation.

The purchase is part of the Legacy Project, which is taking 310,000 acres of Plum Creek timberland in western Montana and transferring it primarily to public and nonprofit ownership. The goal is to preserve the land for timber management and public access for recreation, such as hunting and hiking.

As part of the project, the state plans to take control of about 100,000 acres, including the 26,000 acres authorized for purchase by HB674. The latter acreage is primarily east of Missoula between the town of Potomac and Interstate 90.

The state Senate on Wednesday easily endorsed the loan-fund bill, but HB674 faced opposition by senators who questioned why the state needs to control more land.

"How much more land do we have to have?" said Sen. John Brenden, R-Scobey. "To bail out one company on 300,000-some acres of land? Pretty soon we won't have any private land left in the state."

Sen. Jeff Essmann, R-Billings, noted that the bill requires the state to offset the purchase of forestland by selling state lands elsewhere in Montana. That "elsewhere" is likely to be in eastern Montana, he said.

"At my end of the state access to public lands is getting increasingly limited," Essmann said. "The no-net-gain (of state land) provision in this bill is going to result in the sale of lands in my part of the state, that are very valued by sportsmen and recreaters."

Supporters, however, said the 26,000-acre purchase is a great opportunity for the state to create productive timberland that can help keep struggling mills open.

"Those of you who support the timber industry can't turn your back on this bill, because (it and HB669) go together," said Senate Minority Leader Carol Williams, D-Missoula. "We can't have a healthy timber industry in this state and protect our mills if we don't have the timber."

Supporters also said most state land sold to offset the 26,000-acre purchase would be "nominated" for sale by adjoining landowners, who often already control the access, and that 26,000 acres is only one square mile in each of 41 counties.

"I think we're making a mountain out of a molehill here," said Sen. Kelly Gebhardt, R-Roundup.

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The state Senate on Thursday blocked a bill enabling the state to buy 26,000 acres of former Plum Creek Timber Co. forestland east of Missoula, but lawmakers said the measure isn't quite dead.

House Bill 674, part of a two-bill package to assist Montana's struggling timber industry, could be revived as soon as today, but may end up as a bargaining chip in the final days of the Legislature.

"It's not dead by any means," said Senate President Bob Story, R-Park City. "Nothing is ever over with" until the Legislature adjourns, he said.

HB674 authorizes the state to issue $21 million in bonds to finance state purchase of the former Plum Creek timberlands in Missoula County, near Potomac.

The bill needs approval by two-thirds of the 50-member Senate, because it creates state debt. It received the minimum 34 votes from the Senate on a preliminary vote Wednesday. But on a final vote Thursday, only 28 senators voted for it.

Supporters of the bill said they expect it to be revived Friday by a motion to reconsider, after which its fate is uncertain.

Eric Love of Bozeman, Rocky Mountain program director for The Trust for Public Land, said the group is "really disappointed" with the Senate vote on Thursday.

"I think we're missing a big opportunity to support our timber industry when we need it the most," he said. "This bill package is about jobs and it's about keeping working forests working. In the end, that benefits all of us. We hope that it can be CPR'd to life."

Transferring the land to state ownership would allow it to be managed as state forest, providing timber for mills that need supply, supporters of the bill have said.

HB674 has been paired up with HB669, which creates a $7.5 million revolving loan fund to assist small timber mills and other timber businesses.

The Senate endorsed HB669 by a wide margin Wednesday, but has yet to take a final vote on that bill.

Rep. Chas Vincent, R-Libby, said Thursday there's still a "glimmer of hope" that HB674 can gain approval from the Senate.

The purchase authorized by HB674 is part of the Legacy Project, which is transferring 310,000 acres of Plum Creek timberland in Western Montana primarily to public and nonprofit ownership. The goal is to preserve the land for timber management and public access for recreation, such as hunting and hiking.

Opponents of the bill said Wednesday they object to the state buying more private land, and questioned why the state should incur debt to do so.

On Thursday's vote, seven senators who voted "yes" on Wednesday changed their vote to no: Republicans Greg Hinkle of Thompson Falls, Verdell Jackson of Kalispell, Dan McGee of Laurel, Rick Ripley of Wolf Creek, Don Steinbeisser of Sidney; and Democrats Steve Gallus of Butte and Jonathan Windy Boy of Box Elder.

Sen. Rick Laible, R-Darby, changed his vote Thursday to a "yes."

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Weyerhaeuser Co. agreed to protect land around a historic waterfall east of Seattle in 2004 in exchange for rights to build houses nearby. The deal worked well for the waterfall.

Dirt plots marked with blue and orange stakes outnumber finished homes in a Snoqualmie, Washington, neighborhood where Weyerhaeuser carved subdivisions out of a hillside. Record profits from real estate in 2005 turned to $847 million in losses for the company last year. So much residential property is for sale in Snoqualmie that there’s a three-year backlog, said George Isaacs, a local real-estate agent.

"Remember the movie ‘The Perfect Storm?’ We’re in that boat right now," Isaacs said.

The misadventure in Snoqualmie helps explain why the largest U.S. lumber producer is in a financial crisis so deep it turns down the heat in its offices to save money and is contemplating upending its corporate structure after 109 years to become a real estate investment trust.

Other U.S. timberlands managers have converted to REITs to slash corporate taxes. The move would reward Weyerhaeuser shareholders, who hold their annual meeting today at the headquarters in Federal Way, Washington, by returning most profits to them as dividends. At the same time, it may force the spinoff of more non-timber assets.

The company has been shedding them under Chief Executive Officer Daniel Fulton, who has closed 10 wood-products mills this year, halved capital expenditures, sold off packaging businesses, frozen salaries and eliminated almost half of the workforce, now at 19,850.

55 Degrees

A record $1.2 billion loss on $8 billion in revenue last year and the likelihood of negative cash flow through 2010 put Fulton into "conservation" mode, said Joshua Zaret, an analyst with Independence, Ohio-based Longbow Research.

"His priorities are stemming the cash leakage and battening down the hatches," said Zaret, who has a "neutral" rating on the shares.

Weyerhaeuser has lowered the thermostat at headquarters to 55 degrees on weekends and after hours, said Bruce Amundson, a spokesman who wears a sweater when he works late. Fulton also cut costs this month by shutting a public bonsai garden, eliminating one full-time and one part-time position.

"We missed the depth and severity of this homebuilding crisis," Fulton, 60, who headed the real estate unit for seven years before becoming CEO last April, said in an interview. "The primary business going forward is the one we started with in 1900, which is timberlands ownership and management."

‘Not Fighting’

Weyerhaeuser, which calls itself "the biggest homebuilder you’ve never heard of," was slow to consider REIT status partly because it didn’t want to shrink, Zaret said. Under the rules, 75 percent of pretax income must come from real estate property. No more than 25 percent can come from manufacturing, including homebuilding.

Now, Fulton is telling shareholders that Weyerhaeuser qualifies for 2009 REIT status, after selling businesses including a packaging unit for $6 billion to International Paper Co. in August. It may make the REIT switch as early as April 2010, when the company files income taxes, he said.

"I’m not fighting it," Fulton said.

The Weyerhaeuser of the future may be two companies, with its timber business separate from its lumber and real estate arms, said Robert Willens, president of New York-based Robert Willens LLC, a tax advisory firm. While residential real estate could still be a taxable subsidiary of a REIT, shareholders might prefer a pure timber business, Willens said. A REIT pays no corporate income tax on timber sales.

‘Huge Advantage’

Weyerhaeuser would follow Seattle-based Plum Creek Timber Co., which converted to a REIT in 1999, and Potlatch Corp. of Spokane, Washington, which made the move in 2006.

Plum Creek is the largest non-government owner of U.S. timberlands, with 7.4 million acres. Weyerhaeuser, which got its start in 1900 when German immigrant Frederick Weyerhaeuser bought a swath of Washington state forest the size of Rhode Island, is No. 2, with 6.4 million acres.

"Plum Creek has a huge advantage," Willens said. "They’re avoiding taxes on 35 percent of their pretax income, so they have that much more to invest in their business and share with shareholders in the form of higher dividends."

Weyerhaeuser rose 1.1 percent to $31.15 at 10:32 a.m. today in New York Stock Exchange composite trading. The shares have slumped 51 percent in the past year, compared with a 24 percent decline for Plum Creek.

Underlying Asset

Timberland owned by Weyerhauser may be worth $10 billion, more than the $6.5 billion market valuation for the company as a whole, said Russell Croft, a fund manager at Croft-Leominster Inc. in Baltimore, which holds 250,000 shares among $600 million in assets.

"They have that underlying timberland asset, which is one of the reasons we like the stock," Croft said.

The challenge will be preserving cash as the housing market remains depressed, said Ed Sustar, a senior paper and forest- products analyst at Moody’s Investors Service. Moody’s put Weyerhaeuser on review for a possible multiple-notch credit- rating cut in February.

In the fourth quarter, timber was the only profitable business for Weyerhaeuser, which expanded into packaging in 1949, fine paper in 1961 and residential housing in 1969. It now owns six homebuilders across the U.S., including Pardee Homes in Los Angeles and Phoenix-based Maracay Homes, the latter added at the height of the bubble in 2006 for $213 million, plus a $40 million deferred payment in 2007.

"I did it; I’m the guy," Fulton said, acknowledging he misjudged the market.

‘Twin Peaks’

In February, the U.S. recorded 357,000 annualized single- family housing starts, down 79 percent from the peak of 1.7 million in 2005, according to U.S. Commerce Department figures. As the economy recovers, housing starts should return to 1.2 million to 1.4 million a year, Fulton said.

The slump in Snoqualmie, known to fans of the 1990s television series "Twin Peaks" for the scenes shot at Snoqualmie Falls and around town, shows how long the rebound may be in coming.

From 2000 to 2007, the town 30 miles (48 kilometers) from Seattle was the fastest-growing in Washington state. Population surged 361 percent to 7,516 from 1,631, according to U.S. Census figures, as Weyerhaeuser’s Quadrant homebuilding arm developed a master-planned community called Snoqualmie Ridge.

‘Shadow’ Inventory

In 2004, Quadrant agreed to provide $8.7 million toward preserving 150 acres adjacent to Snoqualmie Falls and Weyerhaeuser yielded development rights to 3,450 acres of forestland. Lots for houses Quadrant had wanted to build near the falls were allocated to a second phase of ridge development.

Today, only 400 of as many as 2,150 homes planned for that phase have been built, said Bob Larson, the city administrator. Isaacs, the realtor, said he’s watching foreclosures rise and buyers fall behind on payments, creating a "shadow" inventory.

"We knew it was a growing community, and it was supposed to be a wealthy community," said Olivia Oliver, 42, who started the Artisan Table, a gourmet market, in June 2007. Now she’s selling furniture and fixtures to make the monthly rent.

Weyerhaeuser is also finding cash scarce, and may have to stretch to cover the cash portion of an estimated $6.5 billion dividend it would have to give shareholders before becoming a REIT, said Sustar, the Moody’s analyst. The company had $4 billion in cash and bank credit lines at the end of last year.

"The burning issue is how to minimize the cash bleed," said Zaret, the Longbow analyst. "Everything’s going to depend on the timing of a housing recovery, and at this point there’s no light at the end of the tunnel."

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In December, Weyerhaeuser Company’s board of directors approved the adoption of December 31 as the corporation’s fiscal year end, a move that would be required if the company, now a "C" corporation, converts itself to a Real Estate Investment Trust (REIT), which some analysts expect it to do in 2010.

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Dan S. Fulton, chief executive of timber and wood products company Weyerhaeuser Co., received compensation valued at $4.7 million in 2008, according to an Associated Press analysis of a report filed with the Securities and Exchange Commission earlier this month.

Fulton, 60, has led the Seattle-based company since last May, received a salary of $792,427 and perks of $34,456. Most of the perks came as financial counseling. He also received stock awards and options valued at $3.9 million on the dates they were granted.

The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.

Fulton's predecessor, Steven Rogel, received compensation last year valued by Weyerhaeuser at $1.6 million, down 74 percent from 2007, when he served a full year as CEO.

In 2008, Rogel received a salary of $1 million, perks valued at $67,867, above-market earnings on deferred compensation of about $18,394 and stock awards worth $472,260 when they were granted.

Last year, the company recorded a loss of $1.18 billion compared with a profit of $790 million in 2007. Sales fell 26 percent to $8.02 billion.

Federal Way, Wash.-based Weyerhaeuser cited the continued decline in new-home starts, falling demand for lumber and structural panels because of lower levels of homebuilding, repair and remodeling and weakening log and wood products prices.

Shares of Weyerhaeuser fell nearly 59 percent in 2008. That compares with a 62 percent decline in the S&P 500 Paper & Forest Products index. The broader S&P 500 index fell 39 percent.

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Groups Seek Federal Funds for Sierra Nevada Checkerboard Buyout
from: Conserving America’s Landscapes by the Land & Water Conservation Fund Coalition

Tahoe National Forest, CA

Federal Land and Water Conservation Fund Project Need: $8 million

Acreage: 7,000

In the 19th century, in order to spur the construction of transcontinental railroads between the Pacific coast and the Mississippi valley, the federal government granted land to the railroads in alternating square miles. This "checkerboard" pattern of land ownership presents numerous challenges to landowners and managers. Fragmented ownership challenges public efforts in the

Sierra checkerboard to fight fires and to protect water quality, wildlife habitat, recreational access, and scenic views. The LWCF, in conjunction with state and philanthropic funds, is the primary federal tool in these efforts.

Acquisitions in the Sierra are focused on lands rich in natural resources: those that include or abut wild and scenic rivers, recreational trails, and wildlife migration corridors. Upcoming projects include parcels located in the watersheds of the North Fork American and the Yuba rivers. These and other Sierra rivers provide Californians with 60% of their water supply and support increasingly threatened fisheries and riparian corridors vital to wildlife. The parcels are also recreational attractions for winter sports enthusiasts, anglers, and hikers on the Pacific Crest Trail and at nearby lakes. Perhaps the greatest value of consolidated ownership lies in the preservation and restoration of intact ecosystems and watersheds, which are more likely to allow varied species to successfully adapt to the expected impacts of climate change. Sensitive species such as the American marten and Sierra Nevada red fox depend on habitat connectivity for their survival. Unfragmented forests recover faster and have significantly reduced damage costs from wildfires.

The Sierra’s natural resources have a profound impact on the entire state of California, and consolidation of the checkerboard is a multiyear effort that will eventually protect over 100,000 acres in partnership with federal, state, local, and private entities...

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map of land trade

One of the biggest land deals western Montana may ever see came together Tuesday with little fanfare.

Sen. Max Baucus, D-Mont., got diverted to Colorado for President Barack Obama's signing of the $787 billion federal economic stimulus bill. So he missed the planned gathering of conservationists and Plum Creek Timber Co. representatives who were going to memorialize a $250 million land transfer.

And Tuesday became a quiet paper-shuffling day, as title to 111,740 acres of forest in the Seeley, Swan, Lolo and Blackfoot valleys moved from Plum Creek to the Nature Conservancy and the Trust for Public Lands.

But the lack of a news conference didn't diminish the enthusiasm of spectators who'd waited a decade or more for the moment.

"I think this is an incredible deal for the public," said Condon resident Melanie Parker. "We'd been chasing parcel after parcel, first Lindbergh Lake, then Van Lake, then the Swan River (drainage). We were paying retail prices acre by acre. The only way to break that was a wholesale transaction."

Parker and her husband Tom run Northwest Connections, an outdoor education program in Condon. Tom Parker also has a guiding and outfitting business. Melanie said their observations on the ground in the Seeley-Swan convinced them the land had long-term value.

While much of the Plum Creek property has been logged at various times over the decades, it's woven in with national forest land that has been under different management. Eliminating those checkerboards and most of the private development potential does two things, Parker said.

First, it allows forestry and wildlife managers to work their craft by drainage and altitude, rather than by section line. And second, it means local counties are spared the management costs of private driveways, fire protection and backyard wildlife management that would come with a sprinkling of trophy homes in the woods.

Hellgate Hunters and Anglers board member Pelah Hoyt agreed on the backcountry home matter.

"Some areas have been harvested pretty hard, and many of us would like to see better forest management there," Hoyt said. "Trees will come back, but you put big trophy homes on it and it's never going to be wildlife habitat again."

The deal remains a challenging work in progress for the conservation groups. They've already financed the first 130,000-acre phase with $150 million that's mostly made of loans against the Nature Conservancy's and Trust for Public Lands' own assets.

While the second phase is covered by $250 million in federal dollars, the land must pass muster for delivery to the U.S. Forest Service. The money's appropriation last fall partially implied that the deal was OK, but the two groups are still gambling that boots-on-the-ground review will back up their good intentions.

And the third phase of 70,000 acres in 2010 assumes a deal can be worked out with Montana state agencies that have an interest in some land. The bargain expects the state to pick up about $100 million of the tab, from a variety of pots.

The 2009 Legislature is now considering a "Working Forests Initiative" worth about $22 million that would pick up much of the acreage around Potomac.

Some might become new school trust land for timber harvest. Other sections might be bought through funds that Bonneville Power Administration provides to mitigate the impact of Hungry Horse Dam. Still more might come from an expected settlement with Pennsylvania Power and Light over back rent for its power-generating properties on state waterways.

Some money must come from a fiber agreement between the nonprofits and Plum Creek. That deal allows the timber company to buy logs from its former lands at market rates to keep its mills supplied over the next 15 years.

"It keeps some of the land in timber production and helps the economy," Plum Creek spokeswoman Kathy Budinick said Tuesday. "We want to be doing all we can to keep those mills running."

And finally, the two groups expect to raise about $40 million from land sales to private buyers. Another$100 million is planned to come from a charitable capital campaign.

"We know we were getting more land than what it's worth," said Nature Conservancy land protection specialist Jim Berkey. "We had to prove to our members we were getting good value for their money."

So although there was no ceremony, and a lot of work remains, the two groups' leadership in Missoula sounded excited.

"We're going to do the right thing - it's our mission," said Eric Love, program director for the Trust for Public Lands. "It's our hope that the U.S. Forest Service and the state of Montana get the best pieces for the best prices. And Plum Creek no longer owns any land in the Swan Valley."

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Two conservation groups on Tuesday announced the purchase of 111,740 acres of Plum Creek Timber Co. lands in Western Montana for $250 million.

The purchase is the second phase of the Montana Legacy Project, which ultimately will involve a total of 320,000 acres of Plum Creek lands being conveyed to state or federal agencies for a total price tag of $510 million.

The Nature Conservancy and The Trust for Public Land said the most recent closing involves lands in the Clearwater, Lolo, Rock Creek and Swan valleys that eventually will be conveyed to the U.S. Forest Service. The checkerboard lands in the Swan total 44,821 acres.

Money for the purchase came from provisions in the 2008 Farm Bill crafted by Sen. Max Baucus, D-Mont.

"I am really pleased to support this landmark conservation effort that will benefit Montana's environment, our working forests and local communities," Baucus said in a prepared statement. Baucus was scheduled to attend a press conference in Missoula announcing the deal on Tuesday, but instead attended the signing of the federal stimulus bill with President Barack Obama in Denver.

"It is also serving as a model for other places in the nation that want to conserve forests in the face of huge pressures to convert them to other uses," Baucus said.

The goals of the Montana Legacy Project are to assure continued public access to Plum Creek lands, along with other traditional uses, including timber harvest.

"We're all enormously thankful for the enduring work of Senator Max Baucus in making this historic project possible," said Kat Imhoff, state director of The Nature Conservancy in Montana.

"With this sale, we are proud that the company has placed more than 860,000 acres of land in the country, including more than 600,000 acres in Montana, into permanent conservation," said Rick Holley, Plum Creek's president and chief executive officer.

The first phase of the Montana Legacy Project was announced last December. It involved the purchase of 130,000 acres of Plum Creek lands in the Fish Creek drainage northwest of Missoula and the Potomac area east of Missoula.

The third phase of the Montana Legacy Project — scheduled to close sometime in 2010 — will involve about 69,000 acres, including additional lands in the Swan and Clearwater drainages.

Imhoff said those lands potentially could go to the Montana Department of Natural Resources and Conservation, depending on the state's funding abilities. The Montana Legislature is deliberating a bill that would authorize bond sales to raise up to $21 million for the project.

A hearing on House Bill 14 was held in the House Natural Resources Committee on Jan. 26, attracting considerable support.

"We had a lot of testimony," Imhoff said. "It was really compelling to hear people's passion for the landscape ... There's been tremendous support from the community in the Swan Valley."

But not everybody is ecstatic about the Montana Legacy Project. Flathead Valley resident Dave Skinner also testified at the hearing, criticizing the project for not being transparent enough and questioning the purchase prices for land with widely varying values.

"If this was supposed to be public, where was the public involvement?" Skinner asked Tuesday. "There really wasn't much at all."

Imhoff maintains that "a lot of public meetings' were held across Western Montana since the Montana Legacy Project's overall purchase agreement was announced at a press conference at Lone Pine State Park near Kalispell last June.

The Montana Legacy Project Web site lists 16 meetings held across the region, the last one in October in Bonner. Although the project was announced in Kalispell, no further public meetings on it have since been held in Flathead County.

Skinner said the public should have had greater influence in determining whether the lands are ultimately transferred to state or federal management and in knowing exactly what level of access will be maintained.

The purchase price on the second phase's 111,740 acres averages out at $2,237 per acre — an amount that Skinner considers widely excessive for some lands that recently have been logged and will not be productive again for decades.

But Imhoff said some of Plum Creek's lands in the Swan Valley were selling to private buyers for as much as $8,000 per acre while other lands that were purchased were valued as low as $400 per acre.

Imhoff said prices were arrived at through 'very long-term negotiations' carried out prior to last June's announcement of the overall purchase agreement. The purchases also required thorough appraisals, she said.

More information on the Montana Legacy Project is available online at:

http://www.montanaworkingforests.org

http://www.themontanalegacyproject.org

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Plum Creek Timber Co. said it may complete the second phase of land sales in Montana in February, 10 months earlier than expected.

The company may receive $250 million in cash for about 112,000 acres of western Montana forestlands in the transaction, Seattle-based Plum Creek said Wednesday in a news release. Plum Creek is selling the land to the Nature Conservancy and the Trust for Public Land.

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The agency intends to finalize a deal, which would build roads through timberlands, before Obama takes office. The president-elect has joined local officials in opposing the proposal.

The Bush administration appears poised to push through a change in U.S. Forest Service agreements that would make it far easier for mountain forests to be converted to housing subdivisions.

Mark Rey, the former timber lobbyist who heads the Forest Service, last week signaled his intent to formalize the controversial change before the Jan. 20 inauguration of President-elect Barack Obama.

As a candidate, Obama campaigned against the measure in Montana, where local governments complained of being blindsided by Rey's negotiating the policy shift behind closed doors with the nation's largest private landowner.

The shift is technical but with large implications. It would allow Plum Creek Timber Co. to pave roads passing through Forest Service land. For decades, such roads were little more than trails used by logging trucks to reach timber stands.

But as Plum Creek has moved into the real estate business, paving those roads became a necessary prelude to opening vast tracts of the company's 8 million acres to the vacation homes that are transforming landscapes across the West.

Scenic western Montana, where Plum Creek owns 1.2 million acres, would be most affected, placing burdens on county governments to provide services and undoing efforts to cluster housing near towns.

"Just within the last couple weeks, they finalized a big subdivision west of Kalispell," said D. James McCubbin, deputy county attorney of Missoula County, which complained that the closed-door negotiations violated federal laws requiring public comment because the changes would affect endangered species and sensitive ecosystems. Kalispell is in Flathead County, where officials also protested.

The uproar last summer forced Rey to postpone finalizing the change, which came after "considerable internal disagreement" within the Forest Service, according to a Government Accountability Office report requested by Sen. Jon Tester (D-Mont.). The report said that 900 miles of logging roads could be paved in Montana and that amending the long-held easements "could have a nationwide impact."

Tester and Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, then asked for an inquiry by the inspector general of the Agriculture Department, which includes the Forest Service.

"I think we need another set of eyes on it," Tester said Friday. "I don't think that's running out the clock. If this is a good agreement, then what's the rush? Why do it in the eleventh hour of this administration?"

Obama sharply criticized Rey's efforts during the presidential campaign, citing concerns that a landscape dotted with luxury homes would be less hospitable to Montanans accustomed to easy access to timberlands.

"At a time when Montana's sportsmen are finding it increasingly hard to access lands, it is outrageous that the Bush administration would exacerbate the problem by encouraging prime hunting and fishing lands to be carved up and closed off," Obama said.

Rey vows to act soon. In a Dec. 12 letter to Tester and Bingaman, he repeated his logic for granting Plum Creek the changes it requested, then closed with a promise to schedule briefings "to describe how we plan to proceed."

In a phone interview Wednesday, Rey said he would act immediately after the courtesy meetings with the lawmakers. "Probably in the next week or so, before this goes forward," he said. Tester said he had not yet heard from Rey's office to arrange a meeting.

On environmental questions, the Bush administration has a checkered record of following through on promised eleventh-hour changes, said Robert Dreher, a lawyer with Defenders of Wildlife.

"I suppose it's a legacy issue," Dreher said. "They've already backed off on a couple of things they said they were going to do," including proposed changes on marine fisheries and industrial emissions.

On the other hand, the Bush White House went ahead with controversial changes to the Endangered Species Act, despite opposition from environmentalists.

The Plum Creek deal could be accomplished with the stroke of a pen. Because it amends existing easements, the change involves no 30-day waiting period. But the step carries a political cost that the administration evidently has been assessing since June, when Rey said he expected to formalize within a month the change that half a year later is still unresolved.

"It's conceivable they don't want to leave office looking like bad guys," Dreher said. "There's been a lot of concern about the nature of the process and the lack of inclusiveness. You've got the county government in Montana angry over it. If they do this walking out the door, they're kind of ramming it down their throats."

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