Railroads & Clearcuts

Railroad Land Grant
Corporations in the News: 2006

FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of the land grant issue. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C.Section 107, the material on this site is made available without profit to those who have an interest in receiving the information for research and educational purposes.


Current news

News from 2011

News from 2010

News from 2009

News from 2008

News from 2007

News from 2006

News from 2005

News from 2003-2004

Articles on Blixseth

Land grant corporation profiles

Railroads & Clearcuts homepage


Potlatch positions itself for change. Lewiston Tribune, Dec 31, 2006

It was a year of change for Potlatch Corp., its land and the people who use it for recreation.

The company completed its conversion to a real estate investment trust on the first day of the year. That change brought a new chief executive officer for the timber products company and an evolution of its public access policy.

Michael Covey replaced the retired L. Pendleton Siegel as the top man at the company. He was hired for his experience in moving Plum Creek timber company in Atlanta to a real estate investment trust, known as an REIT. The new status gives Potlatch a tax advantage when it buys and sells land. And the company has set a course to make a profit from its land. Under Covey the company has increased harvest of its Idaho timberlands by 25 percent.

Potlatch owns 670,000 acres of timberland in Idaho and is the state's largest private landowner. In the past its land has always been open to hunting, fishing, hiking and other recreation.

The company announced that it will end its policy of free public access to its timberland and in its place institute a pay-to-play access policy with a goal of adding to the company's bottom line. The new policy could include selling permits to those who want to use the land for recreation and exclusive leases for those willing to pay for the privilege. But the details of the new program have yet to be announced.

Potlatch also completed an analysis of its land holdings throughout the country. In November company officials announced they intend to sell large chunks of its timber base.

Potlatch officials want to rid themselves of land that is either scattered far from the company's manufacturing facilities or not well suited to growing timber. But the company also identified parts of its land it deems more valuable for development or backcountry recreation than it is as a timber base. Those lands will be sold.

In Idaho that could mean Potlatch will sell more than 100,000 acres over the next decade and as much as 25,000 acres next year. Nationwide the company plans to sell as much as 300,000 acres in the next 10 years.

But Covey said the company will also be purchasing more land and has a strategy to grow its timber base in places, such as the Intermountain West, the Great Lake states and the South. Earlier this month the company announced it is buying 76,000 acres of timber in Wisconsin.


Two Timber Firms Pretending To Be 'Green,' Groups Allege. Environmentalists Want Companies' Lucrative Certification Revoked. By Blaine Harden. Washington Post, Dec 24, 2006.

Two of the nation's largest timber companies, Weyerhaeuser and Plum Creek Timber, have polished their public images for years by participating in a program that certifies that their logging is environmentally friendly.

But in separate challenges this month from the far corners of the United States, environmental groups in Washington state and in Maine are accusing Weyerhaeuser Co. and Plum Creek Timber Co. of using the forest industry's green-labeling program as a cover while they log in ways that harm endangered spotted owls in Washington and violate forestry laws in Maine.

The Seattle Audubon Society and the Natural Resources Council of Maine have demanded in documents sent to the Sustainable Forestry Board that it revoke certification for the companies until they comply with standards they have pledged to uphold.

Both companies say the demands are unjustified and show ignorance of relevant facts.

The requests mark the first time that mainstream environmental groups have publicly attempted to turn the forest industry's green certification process against big timber companies by insisting that they be suspended from the program, the Sustainable Forestry Initiative, said William H. Banzhaf, president of the forestry board, which oversees certification.

Green labeling is a major marketing tool in the timber industry. It allows companies to reach a bigger marketplace while assuring increasingly sophisticated consumers that their purchases are not harming the environment.

As worry about global warming increases, green building codes are becoming politically fashionable. They have recently been adopted for private construction in the District, Montgomery County and Pasadena, Calif. Eighteen states and 11 federal agencies use such codes for their own buildings. And green codes often give credit to builders who use timber certified to have been logged in a sustainable way.

The timber industry's main lobby, the American Forest & Paper Association, developed the Sustainable Forest Initiative in 1994. That was a year after the Forest Stewardship Council, a group of environmentalists, forestry experts, sociologists and indigenous groups, created another certification system that is often described as far less friendly to the interests of big timber companies.

The competing certification regimes are usually referred to by initialisms -- SFI and FSC -- that can be easily confused. Some environmentalists say this is an intentional industry effort to muddy the green-labeling waters and confuse the public. Timber companies dispute that assertion.

Unlike the industry-created SFI program, FSC rules allow virtually no cutting of old-growth forests, nor do they allow operators to log off a diverse stand of trees and replace it with a plantation forest dominated by a single species, which is often done to enhance the commercial value of forestland.

Home Depot, Ikea and Williams-Sonoma are among the major retailers that have announced their preference for FSC-certified lumber or paper. The U.S. Green Building Council, which oversees green standards for construction in the District and Montgomery County, among other places, credits only builders that use FSC lumber. But other retailers, such as OfficeMax, have preferences that do not distinguish between certification systems.

The Seattle Audubon Society and the Natural Resources Council of Maine argue that the Sustainable Forest Initiative could lose all credibility if its board does not suspend Weyerhaeuser and Plum Creek until they clean up their forestry practices.

Banzhaf, president of the Sustainable Forestry Board, said the complaints from responsible environmental groups in Washington and Maine are an "important" challenge to the certification system and will be thoroughly investigated.

At the same time, Banzhaf defends the integrity of the SFI certification process, noting that since 2002 it has been "independent of all influence by the forestry trade association."

The program hires third-party certification companies and is financed through licensing fees and foundation grants, he said. Its board members include leaders of major environmental groups, such as the Nature Conservancy, as well as senior state foresters and the heads of several major timber companies, including Plum Creek and Weyerhaeuser.

The separate but nearly simultaneous challenges to the forest industry's certification program appear to be a coincidence.

Over the past year, the Natural Resources Council of Maine has used the state's freedom-of-information law to uncover 18 previously unpublicized violations of state forestry laws by Plum Creek, the largest private owner of timberland in the United States, with more than 900,000 acres in Maine.

The council learned that Plum Creek, without public notice, had been fined $57,000 for its repeated forestry violations, the largest such fine in Maine's history. The violations included cutting too much timber without proper plans and failing to notify the state about clear-cuts.

"Our concern is that consumers in Maine are being routinely misled into thinking that Plum Creek is managing sustainably, when, in fact, they are not complying with basic laws," said Cathy Johnson, the group's project director for the North Woods.

Maine's chief forester, Alec Giffen, confirmed Plum Creek's violations between 1998 and 2002. "We have not had any other case that involved a $57,000 fine, nor have we had any other case where there was this number of noncompliant timber harvests," he said.

But Giffen said Plum Creek self-reported many of the violations and has taken corrective actions. "They have a good compliance history since 2002," he said.

An executive at Plum Creek said it would be "absurd" to revoke the company's SFI certification.

"We get it right 99 percent of the time," said Jim Lehner, who was general manager for Plum Creek's northeast region during the time of the violations and is now its director of community affairs. "It was certainly a mistake. We made a mistake. The fine was a big one. We haven't had any violations since."

Lehner said the Natural Resources Council of Maine is trying to discredit Plum Creek as part of its campaign to halt the company's plans for large-scale residential development in the North Woods around Moosehead Lake.

In Washington state, the Seattle Audubon Society does not allege that Weyerhaeuser, the largest manager of timberlands in the world, broke any state or federal laws. But Audubon says that the company logged its forestland in southwestern Washington in a way that harmed the habitat of four endangered Northern spotted owls and violated SFI certification standards by failing to "protect known sites" of imperiled creatures.

Northern spotted owls were placed on the federal endangered species list in 1990, but their numbers have declined by 50 percent since then in Washington state, in part because of continued loss of habitat.

To protect the reclusive birds, the U.S. Fish and Wildlife Service urges timber companies in the Northwest to refrain from logging more than 60 percent of older trees in areas around known owl nests. Those areas are called owl circles.

The Audubon group, however, cites government and industry estimates showing that circles around four owls on Weyerhaeuser land were much more aggressively cut, leaving between 8 percent and 22 percent of the suitable habitat.

That logging concerned James Michaels, a supervising biologist for the U.S. Fish and Wildlife Service and an expert on spotted owls. His agency wrote a letter to Weyerhaeuser last year, asking the company to stop.

"It was enough of an issue to raise a flag with us to say we wanted to work with Weyerhaeuser so as not to put those birds at risk," Michaels said.

After Weyerhaeuser was warned about the risk, Michaels said, it suspended further plans for cutting trees near the birds and has been willing to work with federal officials.

A Weyerhaeuser spokesman, Frank Mendizabal, said the company "has not received any notice from any public agency that we have caused any harm" to the owls.

He said that Audubon's assertions that the company has violated SFI standards are without merit and that Weyerhaeuser "operates at the highest standards" for sustainable forestry.

Weyerhaeuser and Plum Creek have 45 days to respond to the certification challenges by the Seattle Audubon Society and the National Resources Council of Maine. A full investigation by the SFI system is likely to take several months.


Potlatch to buy land in Wisconsin. [Spokane Wash] Spokesman-Review, Dec 20, 2006

76,000 acres will add to holdings in Lake states.

Spokane-based Potlatch Corp. will buy 76,000 acres of forestland in Wisconsin in a $64.5 million sale expected to close early next year, officials announced Tuesday.

The hardwood forest, located in north-central Wisconsin, is owned by Tomahawk Timberlands LLC and Tomahawk Highlands LLC. The majority of the land is located less than five hours from Chicago and Minneapolis.

The land complements Potlatch's other holdings in the Lake states, said Brent Stinnett, vice president of resource management. Potlatch also owns 310,000 acres in Michigan and operates two sawmills there. The company plans to continue working with current log customers but will also evaluate the land for future real estate sales.

Last week, the company announced that it expects to sell off 18 percent to 20 percent of its 1.5 million acres of timberland in Idaho, Minnesota and Arkansas during the next decade. With demand for recreational property rising, some parcels have become more valuable for cabins and trophy homes than growing trees, company officials said.

Potlatch put its timberlands into a real estate investment trust Jan. 1. The REIT is a more tax-efficient structure for buying and selling timberlands.

Mike Covey, Potlatch's CEO, said the Wisconsin purchase is timed to help the company avoid a large tax bill on future sales of company land.


Not a good deal. Lewiston [Idaho]Tribune, Dec 19, 2006

Potlatch, as we know it, is leaving town. Here are some signs:

Potlatch's new CEO, CFO and VP for land sales and development are all recent hires from Plum Creek. Plum Creek used to own hundreds of thousands of acres of Idaho timberland.

After liquidating the forest on it, they sold it all, giving cash to stockholders and spending the rest on timberland in Maine and other states. One week after Plum Creek's Mike Covey became Potlatch CEO, he announced the sale of 120,000 acres of Potlatch ground in Idaho: "Proceeds from the sales will be distributed to shareholders and used to acquire land more conducive to growing timber. The goal is to increase our core forest land holdings nationwide and in Idaho." (Lewiston Tribune, Dec. 12).

Potlatch has now completed its conversion from a regular corporation to a real estate investment trust.

REITs, established by Congress to encourage preservation of large working landscapes by giving corporate landowners significant income tax breaks, disconnect the land base from the manufacturing part of the company.

The last major capital investment Potlatch made at the Lewiston pulp mill was in 1992. Absent in the land sale announcement is mention of spending any of the money on upgrading Lewiston's rapidly aging mill.

Potlatch has until 2010 to meet the stricter water pollution requirements in their 2005 EPA permit for the Lewiston mill. Company estimates of that cost range from $50 million to $150 million.

There's more, including their plan to convert the No. 4 power boiler to a garbage incinerator. Get ready, Lewiston.

Mark Solomon


Potlatch plans purchase of Wisconsin timberland. By Eric Barker. Lewiston [Idaho]Tribune, Dec 2006

Less than a week after announcing plans to sell large chunks of the company's forest holdings, Potlatch Corp. officials said Tuesday they will purchase 76,000 acres of timberland in Wisconsin.

Potlatch is spending $64.5 million to acquire the property from Tomahawk Timberlands in north central Wisconsin. The move is consistent with the company's announced strategy to sell off pieces of its holdings that are either more valuable for development or not prime timberland, said Mark Benson, vice president of public affairs at Spokane. A key part of that strategy, he said, is using the money from land sales to acquire more property.

"This is a perfect example of the process we will use to grow our forest land base," he said. "The proceeds from higher valued lands will be used to acquire additional forest land."

Benson also said the company's strategy is to purchase land in areas where it already has land holdings and manufacturing facilities. Wisconsin is between Minnesota and Michigan, where Potlatch owns both land and mills. Eventually that strategy will see the company purchase more land in Idaho and the intermountain West, he said.

Company spokesman Matt Van Vleet at Lewiston said the purchase will make the company stronger and will help, rather than hurt, its Idaho operation.

"It reinforces the strategy that we are going to grow and we are going to acquire more forest land and add overall to our core industrial base," he said. "We are looking to do the same thing here in Idaho."

Last week Potlatch CEO Mike Covey said the company would sell 250,000 to 300,000 acres of its 1.5 million acres in Idaho, Minnesota and Arkansas over the next 10 years. That amounts to 18 percent to 20 percent of its holdings. In Idaho about 100,000 acres will be sold.

The company completed an analysis of all of its land and divided it into three broad categories -- core forest land, land not conducive to growing timber and land more valuable for development or recreation. It will keep land seen as central to its goal of producing timber products.

Less productive land, described as either too isolated from the company's manufacturing facilities or land not well suited to growing trees, will be sold. Land that may be good for growing trees but is highly valued for development or recreation will also be sold.

Benson said the company will take the same approach to the Wisconsin land. The purchase is expected to close next month.

Covey said the Wisconsin purchase would help Potlatch offset capital gains taxes from the sale of land elsewhere.


Potlatch to Acquire 76,000 Acres of Wisconsin Forestland. Business Wire, Dec 19, 2006

Potlatch Corporation (NYSE:PCH), a real estate investment trust (REIT), today announced its agreement to acquire approximately 76,000 acres of prime forestland in Wisconsin for $64.5 million from Tomahawk Timberlands, LLC, and Tomahawk Highlands, LLC. The transaction is expected to close in early 2007.

The forestland, located in the north-central part of the state, contains well-managed hardwoods and is made up of diverse age classes with significant amounts of mature timber. The vast majority of the land is concentrated in contiguous blocks less than five hours from Chicago and Minneapolis.

"The forestland, which consists of high-value mature timber, has been under excellent long-term forest management," said Vice President of Resource Management Brent Stinnett. "The land complements our existing holdings in Minnesota, has prime recreational values and will help further establish our presence as a leading forestland holder in the Lake States region."

Potlatch owns 310,000 acres in Minnesota, a sawmill in Bemidji, and has been operating in the region for more than 40 years. The company also owns a sawmill in Gwinn, Michigan.

"This acquisition is a perfect example of the execution of our strategy," said President and Chief Executive Officer Michael J. Covey. "Our objective is to maximize shareholder value through identifying and acquiring land with strong timber values."

"We are focusing our growth in areas where we have experience and know the lay of the land," added Covey. "Additionally, this purchase should allow us to utilize a 1031 exchange and avoid built-in gains taxes on any sales of like-kind properties that may occur."

"Through this acquisition, we will be able to better serve the needs of our existing long-term customers in the region while opening doors for new customers," added Stinnett. "And we very much look forward to working with the existing customers who have historically been supplied from these lands."

Potlatch is a REIT with 1.5 million acres of forestland in Arkansas, Idaho, Minnesota and Oregon. Through its taxable REIT subsidiary the company also operates 13 manufacturing facilities that produce lumber and panel products and bleached pulp products, including paperboard and tissue. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of our resources.

Contact: Potlatch Corporation, Media: Mark J. Benson, 509-835-1513, Investors: Douglas D. Spedden, 509-835-1549, www.potlatchcorp.com

Sale en masse. by Randy Stapilus. Ridenbaugh Press, Dec 17, 2006

The great forest lands of the Northwest are in largest part public - a whole lot are national forest lands, or state-owned lands. But big, significant portions of those forest lands are privately held, many by timber companies and others - a growing number - by companies simply managing them, with no particular tie to timber.

We’ve been accustomed to the idea that these lands are almost a supplement to the public lands - logged to a greater degree, yes, and privately held, yes, but seeming not so different. But they are different, always have been and most certainly will be, and a new report from Potlatch underscores that. (A hat tip here to the correspondent who pointed this out.)

Idahoans are accustomed to thinking of Potlatch as a timber production company, what with its big plants at Lewiston and elsewhere, and it still is to a point. But it has been formally reorganized as a REIT - a real estate investment trust - and while it did that for tax and other business reasons, the reorg also highlighted the way the company is changing and its ongoing direction. Potlatch is the owner of 1.5 million acres of land, about 100,000 to 120,000 acres in Idaho alone. Think about the value real estate has taken in recent years, and the development growth Idaho has seen, and the shape of things to come begins to emerge.

Here’s the key part of Potlatch’s statement from Monday:

"After reorganizing as a REIT earlier this year, we began a process of taking a very deep look at all of the values associated with our land holdings," said President and Chief Executive Officer Michael J. Covey. "Through this intensive land value stratification process, we have identified those lands that are non-strategic to our core forestland operations. These higher valued forestlands are available to be sold over time and the proceeds may be used to fuel the growth of the company through acquisitions, or to pay down debt or execute a share repurchase program."

Potlatch’s entire ownership of 1.5 million acres is located in desirable rural and mountain regions across the country. A significant portion of Potlatch lands have key attributes that make it superior recreational property. Additionally, in keeping with Potlatch’s long tradition of managing forestland using the highest levels of stewardship, our forestlands are third-party certified.

"Potlatch’s Idaho land holdings are located in the beautiful north-central part of the state, which has long been known for its spectacular wilderness, white water rivers, salmon, trout and steelhead fishing and big game hunting," said Vice President Land Sales and Development William R. DeReu. "Potlatch properties in Minnesota are rural, forested and located within a few hours drive from Minneapolis and St. Paul. The Arkansas ownership, like Minnesota, offers exceptional opportunities for hunting and outdoor recreation in a beautiful mixed hardwood and conifer forest," added DeReu.

This should be considered new-directional, since Covey took over as CEO only earlier this year - this has the mark of a direction with the new administration’s brand on it.

Imagine a large part of 110,000 acres up for sale in north-central Idaho: the region could be transformed.

Of course, we don’t yet know how many of those acres will actually be posted for sale or new use. And there are limitations. A correspondent notes that "Potlatch entered into an agreement a couple of years ago with Trust for Public Lands, The Nature Conservancy and the feds to place conservation easements (logging ok, no development) on up to 70,000 acres of their Idaho lands for which they were to receive $40M from the federal treasury" - and that may be a significantly limiting factor. Or, in the nature of these things, possibly not as limiting as we think.

But you can get some indication from recent developments in Oregon, where Plum Creek Timber has filed a huge Measure 37 land use claim which could open the door to development - residential, commercial, industrial? - of 37,000 acres of forest land in Lincoln and Coos counties. That claim could fail, for several reasons, and even if it passes legally it might never be (probably would not be) fully executed.

But it shows the direction publicly-held timber companies, with their huge asset base and limited ability to accelerate their quarterly profits the way some others do, may be looking. Some of those directions could change very face of the Northwest.


One Response to "Sale en masse" msolomon Says: December 18th, 2006 at 6:56 am

Slight corrections to your post: Potlatch owns 660,000 acres in Idaho and have identified 120,000 acres for sale; Covey became CEO two weeks ago, one week before announcing the sell-off of land assets.

Reporting on the story in the Lewiston Tribune quotes DeRue saying $$ from sale will be distributed to shareholders (to a large extent that means the Weyerhauser family) and to purchase other timber land nationwide ala Plum Creeks move into the NE and SE. And OR as you point out. No mention of reinvesting any of the $$ in Potlatch’s aging mills, but that’s one of the wonders of an REIT: there is an actual tax disincentive to investing land/timber revenues in the manufacturing side of an REIT. Without access to that revenue stream, the outlook for needed major capital investments in the Lewiston pulp mill are very grim, especially as required water pollution permit requirements come due in May 2010 with an estimated price tag ranging (according to company estimates) of $50-150M.


Weyerhaeuser closing one state sawmill, building another. Puget Sound Business Journal, Dec 15, 2006

Weyerhaeuser Co. said it will change its lumber strategy in Washington by closing a sawmill in Toutle and building a new lumber mill at an existing operation in Longview.

Construction on the new Longview sawmill will begin next month. The facility will begin operating in mid-2008 and employ about 230 people.

When the Longview mill begins operation, the Federal Way-based wood-products company will close its Green Mountain mill in Toutle, putting 130 employees out of work.

Weyerhaeuser said Longview was a good choice for a new mill site.

"It has good rail and transportation links, good proximity to customers, will be relatively easy to construct and will provide room for future growth. The announcement indicates the level of confidence Weyerhaeuser has in the ability of this community to provide the people and resources for a new mill," said Rob Taylor, a Weyerhaeuser vice president, in a statement.


Potlatch announces sale of timberlands. By Eric Barker. Lewiston Idaho Tribune, Dec 12, 2006

Strategic analysis identifies some land holdings as more valuable to developer

Potlatch Corp. will begin selling large swaths of its 1.5 million acres of timberlands in Idaho, Minnesota and Arkansas in an attempt to capitalize on booming population growth there.

The company announced plans Monday to sell 250,000 to 300,000 acres scattered across the three states in the next decade, equaling 18 percent to 20 percent of its holdings.

Potlatch officials recently completed a six-month strategic analysis of their timber holdings and identified as disposable land not well suited to growing trees and land that is more valuable to developers and those seeking recreational opportunities than it is to the timber products company.

Bill DeRue, vice president of land sales and development said in a conference call with reporters and financial analysts the company wants to take advantage of aging baby boomers seeking a piece of the rural good life.

"Three out of five boomers want to retire in rural areas or small towns," DeRue said. "That is our sweet spot."

Proceeds from the sales will be distributed to shareholders and used to acquire land more conducive to growing timber.

"The goal is to increase our core forest land holdings nationwide and in Idaho," said Potlatch spokesman Matt Van Vleet at Lewiston.

None of the lands to be put up for sale have been identified by the company. But 100,000 to 120,000 acres will be available in both Idaho and Minnesota and 50,000 to 60,000 acres will be available in Arkansas. The land will be offered through real estate brokers and could hit the market in one to three months, Van Vleet said. Potlatch owns about 670,000 acres in Idaho, 473,000 in Arkansas and 320,000 acres in Minnesota.

During its strategic analysis the company divided its land into three broad categories. It will keep land seen as central to its goal of producing timber products. Less productive land, describes as either too isolated from the company's manufacturing facilities or land not well suited to growing trees, will be sold.

Potlatch will also sell productive timber land that that borders, streams, rivers and lakes and is highly valued for its recreational or scenic amenities.

DeRue said Potlatch could double its earnings from the marginal land by selling it and profits from the high valued land could jump four fold if sold.

Chief financial officer Mike Covey said Potlatch would no longer seek to make money by selling conservation easements on its land.

"We will not do conservation easements for the purpose of selling development rights," he said. "We will consider conservation easements where the underlying amenity is wildlife or a habitat feature where we think that is the best way to provide protection."

Potlatch sold conservation easements on about 25,000 acres of land in the St. Joe drainage over the past five years and last month sold a conservation easement on 16,000 acres of land in Arkansas. In 2002 the company said it would consider selling conservation easements on up to 600,000 acres of its land in Idaho, a move that it said at the time could bring $40 million in revenue.

Covey said Monday some of the land in the St. Joe River basin currently under easements would have been considered for sale if not protected.


Potlatch to sell off timber land. by Becky Kramer. [Spokane Wash] Spokesman-Review, Dec 11, 2006.

Potlatch Corp. will cash in on the nation’s growing appetite for recreational acreage by selling off 18 to 20 percent of its vast timber holdings over the next decade, officials said today.

Potlatch is the largest private timberland owner in Idaho, with about 670,000 acres. The land is located in the north-central part of the state, an area known for its wilderness, whitewater rafting, and salmon, steelhead and trout fishing. The company also owns about 800,000 acres in Minnesota and Arkansas.

All three of the states are experiencing rapid population growth. Potlatch officials recently finished a six month review of its land holdings. In some cases, the development value of the land is four times higher than its value for growing trees, said Mike Covey, Potlatch’s chief executive officer. The company wants to capture that value for its shareholders, he said.

Parcels near lakes and rivers, with easy driving access, experienced the highest increase in value.

"We’re all aware of the Baby Boomer influence," Bill DeReu, Potlatch’s vice president of land sales and development, said during a conference call. "Three out of five of those boomers want to retire in a rural area or a small town. That’s a sweet spot for us."

The company expects to sell between 15,000 and 20,000 acres of land next year.

Over the next decade, Potlatch has identified 100,000 to 120,000 acres for sale in Idaho; 100,000 to 120,000 acres for sale in Minnesota; and 50,000 to 60,000 acres for sale in Arkansas.

Potlatch put its land holdings into a real estate investment trust on Jan. 1. Company officials see a larger role for land sales and purchases in Potlatch’s future.


Potlatch Announces Results of Land Value Stratification Analysis. Business Wire, Dec 11, 2006.

Company identifies 250,000-300,000 acres of land with higher values than timberland

Potlatch Corporation (NYSE: PCH), a real estate investment trust (REIT), today announced details of the company's land stratification analysis during an investor webcast and conference call from New York City (webcast replay available at www.potlatchcorp.com). Potlatch management presented the company's analysis of its lands with higher values than timberland and its strategies for land value creation.

"After reorganizing as a REIT earlier this year, we began a process of taking a very deep look at all of the values associated with our land holdings," said President and Chief Executive Officer Michael J. Covey. "Through this intensive land value stratification process, we have identified those lands that are non-strategic to our core forestland operations. These higher valued forestlands are available to be sold over time and the proceeds may be used to fuel the growth of the company through acquisitions, or to pay down debt or execute a share repurchase program."

Potlatch's entire ownership of 1.5 million acres is located in desirable rural and mountain regions across the country. A significant portion of Potlatch lands have key attributes that make it superior recreational property. Additionally, in keeping with Potlatch's long tradition of managing forestland using the highest levels of stewardship, our forestlands are third-party certified.

"Potlatch's Idaho land holdings are located in the beautiful north-central part of the state, which has long been known for its spectacular wilderness, white water rivers, salmon, trout and steelhead fishing and big game hunting," said Vice President Land Sales and Development William R. DeReu. "Potlatch properties in Minnesota are rural, forested and located within a few hours drive from Minneapolis and St. Paul. The Arkansas ownership, like Minnesota, offers exceptional opportunities for hunting and outdoor recreation in a beautiful mixed hardwood and conifer forest," added DeReu.

The non-strategic lands identified in each region through the initial stratification efforts total approximately 100,000-120,000 acres in Idaho, 100,000-120,000 acres in Minnesota and 50,000-60,000 acres in Arkansas, or 18-20 percent of the company's current holdings nationwide.

Potlatch is a REIT with 1.5 million acres of forestland in Arkansas, Idaho, Minnesota and Oregon, and through its taxable REIT subsidiary the company also operates 13 manufacturing facilities that produce lumber and panel products and bleached pulp products, including paperboard and tissue. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of our resources.



Seeing the Forest for the Trees. By Steve Thompson. Missoula Independent, Dec 7, 2006.

Home Depot, Plum Creek and the effects of media spin

When Missoula’s next big-box retailer moves onto Reserve Street next summer, western Montana’s forest activists might actually have something to celebrate.

That’s because Home Depot, the nation’s largest home improvement retailer, has pledged to stop selling wood products from environmentally sensitive old-growth forests and to give preference to green-label wood that has been independently certified as coming from well-managed forests.

Contrary to recent reports in the Missoulian, however, the "green" lumber on Home Depot’s shelves isn’t likely to carry the logo of Plum Creek Timber Company. And that relieves Montana conservationists who commonly refer to Plum Creek as the Darth Vader of the timber industry.

"Quite simply, Plum Creek hasn’t been a good neighbor in Montana," says Bob Ekey, regional director of The Wilderness Society. "They have liquidated their forests, degrading water quality and damaging wildlife habitat throughout western Montana."

Earlier this month, the Missoulian carried a front-page article about Plum Creek’s self-ballyhooed "environmental forestry" program. The news peg was accounting giant PriceWaterhouseCoopers’ audit that verified Plum Creek has complied with the guidelines of the so-called Sustainable Forestry Initiative (SFI), a creation of a national timber industry group.

Of particular interest to conservationists, the articles strongly implied that Plum Creek’s forestry practices meet Home Depot’s new guidelines for certified wood products. Plum Creek touted the accounting firm’s audit as the independent guarantee it needed to satisfy Home Depot’s environmental criteria.

Not so quick, said Kim Woodbury of Home Depot this week.

Plum Creek’s Sustainable Forestry Initiative does not provide the independent stamp of approval that Home Depot requires for certification, she said. In particular, Home Depot’s purchasing guidelines require the application of external standards developed outside the industry itself. Those standards must consider social as well as environmental issues.

"It’s important to look at all areas of forest management," said Woodbury from Home Depot’s Atlanta office. "We want to drive the industry to a higher standard."

Although a small step in the right direction, industry’s self-developed SFI guidelines do not achieve a higher standard, conservationists say. They are broad, weak and open-ended, with few on-ground performance requirements. A third-party audit using SFI standards doesn’t signify much.

Plum Creek is a particularly poor poster child for the Sustainable Forestry Initiative, enviros say. "Whatever you might say about Plum Creek, you probably wouldn’t use the word ‘sustainable,’ says Bruce Farling of Montana Trout Unlimited. "They can hire all the ad people they want, but the landscape tells the story. It doesn’t look sustainable to me."

In fact, Plum Creek has provided ample evidence that its management of 1.5 million acres in Montana has been anything but sustainable. A decade ago, Plum Creek earned the "Darth Vader" title in the Wall Street Journal after company executive Bill Parsons scoffed at the notion of sustainability.

"We have never said we were on a sustained-yield program, and we have never been on a sustained-yield program," Parsons said. "Let’s get to the heart of it. Sure, it’s extensively logged, but what is wrong with that?"

Parsons’ blunt assessment was confirmed in 1997 in documents Plum Creek filed with the Securities Exchange Commission. "By the year 2000, the [company] anticipates that it will have nearly completed the conversion of slower growing forests to younger, more productive stands in the Rocky Mountain Region, at which time it anticipates a moderate reduction in the region’s harvest levels." In other words, the big trees were converted to stumps much faster than new trees can grow.

Plum Creek’s rapid liquidation of its mature timber in Montana was near completion when the company shifted its investments last year to purchase a million acres in Maine. To feed its own mills in Montana, Plum Creek has increased its purchase of public timber in northwestern Montana, outcompeting smaller, independent mills.

Woodbury said that Home Depot endorses the process developed by the international Forest Stewardship Council, which includes environmentalists, timber companies and community advocates and which has certified 40 million acres worldwide. Similar independent certification efforts are being developed around the world, but the U.S. industry’s SFI does not pass muster, she said.

(In the interest of full disclosure, my work as a natural resource consultant has included coordination of FSC’s standards-development process in the Rocky Mountains by a 24-person working group of foresters, conservationists, loggers and scientists.)

Woodbury acknowledges that forest certification is complex and often confusing, creating confusion that environmentalists say has been compounded by misleading claims by companies like Plum Creek. However, as demonstrated by hundreds of thousands of comments on government organic agriculture standards a couple years ago, Americans increasingly care where products come from.

"People are very tuned into this topic and people are going to be paying attention," says Home Depot’s Woodbury. "We think it makes good business sense, and we want to do it right."


Former Plum Creek executive to be chairman of Potlatch. Business Wire, Dec. 4, 2006

Chairman L. Pendleton Siegel to Retire; Board Names Michael J. Covey as Successor

The Board of Directors of Potlatch Corporation (NYSE:PCH) has announced the election of Michael J. Covey, 49, current President and Chief Executive Officer, to the position of Chairman of the Board, effective January 1, 2007. Covey will succeed L. Pendleton Siegel, 64, who will retire as Chairman and from the Board of Directors, effective December 31, 2006. Siegel also served as the company's Chairman and Chief Executive Officer from 1999 to February 2006, and is Chairman until the end of this year.

Covey joined Potlatch in February 2006 when he was elected President and Chief Executive Officer and a member of the Board. Prior to that, he spent 23 years with Plum Creek Timber Company. In his new role he will serve as Chairman, President and Chief Executive Officer.

Potlatch Corporation's Board consists of 11 directors, all of whom are independent other than Covey. The Board has a lead independent director who serves in the capacity of vice-chairman.

Potlatch is a REIT with 1.5 million acres of forestland in Arkansas, Idaho, Minnesota and Oregon, and through its taxable REIT subsidiary the company also operates 13 manufacturing facilities that produce lumber and panel products and bleach pulp products, including paperboard and tissue. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of our resources.


Revealing the true game behind Measure 37. Oregonian EDITORIAL, Dec 4, 2006.

It was not really so much about fairness as it was a grab to open land to developers

Property-rights Measure 37 was sold to voters with the quaver of an elderly voice. The measure was crudely drawn, but when it was approved two years ago, voters had every reason to think they were freeing some of their fellow Oregonians from a cruel time warp.

An elderly widow, Dorothy English, and other backers of Measure 37 portrayed it not as a developer's bonanza -- wrecking farm fields, forests and Oregon land-use policies -- but as a way to alleviate an injustice, inflicted in part by time. Undeniably, some property owners purchased their land before the 1970s, when the state's land-use controls went into effect. Some of these Oregonians expected to build a home or create a modest development only to discover the ground rules had changed beneath their feet. The time sequence, the fact the purchase came before the rules changed, is what created the perception of unfairness.

But the rush to file Measure 37 claims before today's deadline shows it wasn't so much about righting wrongs as it was about razing farms and forests and enriching developers.

And never mind about the time warp, either.

As The Oregonian's Laura Oppenheimer reported last week, an out-of-state timber company just delivered the most massive claim yet filed under Measure 37, which could trigger development of 32,000 acres of coastal forestland in Coos and Lincoln counties. This company acquired its Oregon timber holdings five years ago as part of a merger with the subsidiary of another timber company. So, a perplexed voter might ask, how does this claim have anything to do with addressing a long-held property-rights grievance? The short answer is:

It doesn't.

The Seattle-based company, Plum Creek Timber, is apparently prepared to argue that its massive claim is valid, despite its relative newcomer status. But if the company's interpretation holds up, then all bets -- and land-use rules -- are off. This interpretation would trigger a land rush for developers. It's starkly at odds with the way Measure 37 was sold.

Remember that time warp we mentioned? Measure 37 said if the purchase had, indeed, come before new rules were applied, local governments had to compensate property owners or let them break the rules. That created a new injustice, for neighbors, and it was also objectionable in principle, in effect paying people to break the law or giving them a way to blackmail local governments. But you could understand why Measure 37 had some appeal for voters, especially given the stories of individual hardship -- and that quaver in the voice.

Apparently, it would have been more honest if appeals for Measure 37 had been accompanied by very different sound effects. The whine of chainsaws, for instance.

Or the rumble of bulldozers.

Two years after the voters approved it, Measure 37 appears to be not so much rectifying injustice as inflicting it. Oregonians, even now we hope, are waking up and recognizing we've been had. In truth, we are the ones caught in the time warp.

This destructive law is speeding our state toward a bleak and ugly future our land-use policies were carefully designed to avoid.


Measure 37 claims beat deadline. By Laura Oppenheimer and Richard Cockle. The Oregonian, Dec 2, 2006.

Development - Counties are deluged with timber companies' proposals, covering tens of thousands of acres

Timber land owners from Oregon's coast to its northeast corner filed significant development proposals this week, squeaking in before a Monday deadline for the state's property rights law.

The vast and largely undeveloped East Moraine of picturesque Wallowa Lake could get a collection of new homes under a Measure 37 claim filed by the owner of Montana-based RY Timber Co.

Portland-based Stimson Lumber Co. -- the donor of this year's holiday tree at Pioneer Courthouse Square -- filed 135 claims with the state on Friday, land-use director Lane Shetterly said. He didn't know details, and a company representative could not be reached Friday evening. But three Stimson claims in Lincoln County asked to be excused from land-use restrictions on 3,400 acres.

Meanwhile, Plum Creek Timber Co. spelled out details of the largest known Measure 37 request: allowing housing on 32,000 acres of coastal forestland.

It's been two years since voters approved Measure 37, requiring governments to waive land-use restrictions or compensate owners when their investments are harmed. But claims have flooded county and state offices this week, reflecting the deadline to apply without extra steps and expenses.

"We'll start to get a sense of what's in the inbox, but it's going to take a long time," Shetterly said.

Plum Creek, a Seattle-based real estate investment trust, filed nearly 100 applications Thursday. The company proposes allowing residential development on 22,000 acres in Lincoln County and 10,000 acres in Coos County, spokeswoman Kathy Budinick said. Rules that prevent development on forestland have cost Plum Creek $94.8 million, the claims allege.

The company's shareholders want to keep options open on lower-producing land in areas where housing would be desirable, Budinick said Friday.

"Sometimes we do sell land or work with others to develop it," she said. "But I don't see any immediate planning efforts to that end."

Measure 37 claims cover 9 percent of the company's 375,000 acres in Oregon, most of it acquired when Plum Creek merged with a subsidiary of Georgia-Pacific in 2001. Budinick said the terms of the merger should qualify the company for Measure 37.

Timber companies footed most of a $1.2 million bill to pass the measure. Yet forestland has accounted for less than 20 percent of claims, according to analysis by the Institute of Portland Metropolitan Studies at Portland State University.

Forestland owners have said they supported the measure to prevent additional regulations and, perhaps, to be able to consider development on slivers of unproductive land.

During an earlier interview, Ray Wilkeson of the Oregon Forest Industries Council predicted "isolated instances of forestland being converted to other uses. But I think for good reason -- not because people are trying to get rich or cash out."

Leaders at 1000 Friends of Oregon, a land-use advocacy group that opposed Measure 37, have a different interpretation of this week's claims.

"Obviously they've known about this law for two years now," said spokesman Eric Stachon.

"I think they're doing it at the last minute to avoid negative publicity."

Linda Yanke of Boise, owner of RY Timber, filed a claim Thursday asking Wallowa County to waive land-use regulations that prevent her from subdividing land on the East Moraine of Wallowa Lake. As an alternative, she would accept $8 million in compensation, said attorney Rahn Hostetter of Enterprise. Yanke owns most of the moraine -- 1,604 acres, including roughly 14,000 feet of its 81/2 miles of shoreline. She and her late husband, Ron, bought the land in 1991.

Since then, state land-use regulations restricted development because of the property's scenic, cultural, geologic and archaeological values, Hostetter said. A waiver of the rules would allow Yanke to break the land into 160-acre parcels for 10 homes, he said.

The gravel moraine is zoned for agriculture and too steep to build on in many places, but its summit, east side and south end probably would be suitable for construction.

"I guess it depends on how it's done, and she would be very sensitive to how it's done," Hostetter said.

Other than a long-abandoned rodeo arena on the summit, the East Moraine has seen much less development than the West Moraine, where more than 100 homes are partially hidden within a forest.

Wallowa County commissioners must rule on the claim within 180 days of Thursday's filing. So far, they have waived land-use ordinances in Measure 37 cases rather than paying compensation.

The county doesn't have the resources to pay off such a large claim, so people might have to donate money to guarantee that the moraine won't be developed, said Wallowa County Commissioner Ben Boswell.


Plum Creek Timber Co. proposes to build homes scattered across the coastal region in two counties. By Laura Oppenheimer. The Oregonian, Dec 1, 2006

A national timber company has filed the biggest development proposal yet under Oregon's property rights law, joining a mad dash to beat a Monday deadline for Measure 37 claims.

Seattle-based Plum Creek Timber Co. delivered nearly 100 applications at Lincoln and Coos county offices Thursday, asking to construct homes on forestland scattered across Oregon's coastal region.

Planning directors from both counties said they hadn't had time to analyze the applications Thursday afternoon. But they said a Plum Creek representative told them in separate meetings last week to expect claims on as much as 10,000 to 15,000 acres in each county.

Until now, Measure 37 has been fairly low-key in Lincoln County, said planning director Matt Spangler, who accepted 64 Plum Creek applications.

"We haven't generated a great deal of interest from surrounding property owners," he said. "With a large claim like this, it could be a different story."

Voters approved Measure 37 in 2004, requiring governments to waive planning rules that have restricted the way people use their land -- or pay for lost value. Because no money was raised, state agencies and county planning departments are giving the green light for development.

The application process gets more complicated after the two-year mark, which arrives this weekend. Most governments will still accept claims on Monday. By all indications, a tally of 3,600 claims statewide as of mid-November is ballooning.

At state offices in Salem, workers set up a conference room on Thursday as they accepted 568 applications. Claims were delivered by mail, by courier, by lawyers and by citizens lining up to turn them in, said Alice Beals with the Department of Administrative Services.

Even smaller governments, such as Wallowa County in northeastern Oregon, have seen an influx of Measure 37 claims this week. As planning director Lance Bailey put it, "The floodgates are just open."

Though the Plum Creek filings are technically separate claims, their collective impact would outstrip any other Measure 37 proposal. The largest claim through mid-November covered a little more than 6,000 acres, according to an analysis by the Institute of Portland Metropolitan Studies at Portland State University.

Plum Creek representatives could not be reached Thursday to discuss their plans. A company Web site says the real estate investment trust owns more than 8 million acres of timberland nationwide, including 285,000 acres in Oregon.

Oregon planning rules prevent forestland from being split and developed. Spangler and Patty Evernden, the Coos County planning director, said Plum Creek did not specify how many homes the company hopes to build -- or when. The planning directors said they got the impression company shareholders want to explore possibilities on their less productive lands.

The Plum Creek Web site describes the company's general philosophy like this: "We work to capture the most value from every acre that we own. This means continually assessing the value of the trees growing on the land, the value of the natural resources that reside below the surface, and the value of the land itself."

The biggest issue in evaluating Plum Creek's claim, Spangler said, will be ownership history. To qualify for Measure 37, landowners must have acquired their property before restrictions took effect.

Plum Creek acquired its Oregon land during a 2001 merger with a subsidiary of Georgia-Pacific. Similar ownership transfers have sunk other Measure 37 claims, but the company official told Spangler the terms of this business deal prevent such a problem.

Governments have 180 days to respond to Measure 37 claims, and county officials said these claims will be labor-intensive. They expect the proposal to be a hot conversation topic for the public.

Some Lincoln County residents want more development opportunities, said Terry Thompson, a county commissioner. The Plum Creek claims may test just how much.

"We're trapped between the ocean and the timber land," he said. "In one sense, this may allow some construction away from the ocean buffer zone. It may not be all that bad."

He paused. "I'm trying to look somewhere to find a silver lining."


Justices question antitrust award in Weyerhaeuser case. By Greg Stohr. Bloomberg News. Seattle Times, Nov 29, 2006.

Justice David Souter critical of instructions to jury

U.S. Supreme Court justices voiced concerns Tuesday about a $79 million antitrust award against Weyerhaeuser as they struggled to establish rules for claims that a company tried to drive out competition by overbidding for supplies.

Federal Way-based Weyerhaeuser is fighting allegations it monopolized the Pacific Northwest market for finished alder, a wood used in furniture, by paying above-market prices for scarce hardwood logs.

A federal appeals court upheld a jury award to Ross-Simmons Hardwood Lumber of Longview.

In arguments Tuesday in Washington, D.C., several justices criticized an instruction to the jury that asked whether Weyerhaeuser bought "more logs than it needed" and prevented Ross-Simmons from acquiring logs at a "fair price."

Justices David Souter and Samuel Alito suggested the judge's instruction was too vague to provide meaningful guidance.

"That basically left the jury on a free float, didn't it?" Souter asked.

Other justices were hesitant to go as far as Weyerhaeuser wants in restricting so-called predatory buying claims.

Weyerhaeuser, the world's biggest forest-products company, wants the high court to apply a legal standard it used in a 1993 predatory-pricing case. That decision required proof an antitrust defendant sold its product below cost and was likely to recoup those losses after competition had been driven out.

Chief Justice John Roberts said the two situations are "a little different." He said courts have set a high bar for predatory-pricing cases because lower prices are "a direct benefit to consumers."

The Weyerhaeuser case is one of two antitrust fights before the court this week. The justices on Monday questioned the basis for claims Verizon Communications and three other local-telephone providers agreed not to compete in one another's territory.

The court is scheduled to rule by July in both cases.

Weyerhaeuser's lawyer, Andrew Pincus, said courts should be reluctant to penalize companies for trying to outbid a competitor for raw materials. "There's a high risk of mistaking aggressive competition for anticompetitive behavior," he said.

Michael Haglund, the lawyer for Ross-Simmons, said overbidding meant "moving prices in the wrong direction for consumers."

That argument drew resistance from Justice Stephen Breyer, who said federal antitrust laws are designed to protect suppliers as well as consumers. Breyer later said Weyerhaeuser might have been aggressively buying logs as a means of "storing up nuts for winter."

Ross-Simmons, which went out of business in 2001, accuses Weyerhaeuser of artificially increasing alder prices to deprive smaller competitors of needed supplies.

A Portland jury in 2003 said Ross-Simmons was entitled to more than $26 million, an amount that tripled under federal antitrust rules.


Supreme Court hears antitrust suit against Weyerhaeuser. By Jennifer A. Dlouhy. Seattle Post-Intelligencer, Jan 29, 2006.

The lawyer for a now-defunct sawmill told the U.S. Supreme Court on Tuesday that timber giant Weyerhaeuser Co. broke federal antitrust laws by overpaying for more logs than it needed and then cutting its prices on the finished lumber used to make guitars and furniture.

The strategy drove the smaller timber processor, Ross-Simmons Hardwood Lumber Co., out of business at the same time it allowed Weyerhaeuser to strengthen its foothold in the Pacific Northwest alder saw-log market, said the lawyer, Michael Haglund.

"Weyerhaeuser artificially increased the log market above where it otherwise would have been," Haglund said. "We have a situation where they warehoused large -- unprecedentedly high -- volumes of lumber because they" wanted to keep it out of competitors' hands.

Ross-Simmons now wants Federal Way-based Weyerhaeuser to pay nearly $80 million in damages for the business tactics, which it says were part of a ploy to monopolize the market. The Longview-based sawmill says Weyerhaeuser's tactics forced it out of business in 2001 by driving prices for saw logs higher than it could afford and by depleting the supply of the trees.

The price of alder saw logs and that of finished lumber made from the material are usually tied together. But from 1998 to 2001, Ross-Simmons argued in court filings, the price of saw logs rose even as the price of finished lumber dropped.

In its defense, Weyerhaeuser contends it was only making smart business decisions and could afford to pay more for the logs because it was more efficient at processing the wood.

The two lumber mills are feuding over the appropriate legal standard for determining when buying practices are predatory, and therefore a violation of federal antitrust laws.

A federal district court in Portland ruled in favor of Ross-Simmons and said the lumber company did not have to prove Weyerhaeuser took a financial loss to prevail. Instead, the district court found, it was enough that Ross-Simmons proved in court that Weyerhaeuser had decided to cut its profit margin on finished lumber made from alder saw logs.

Ross-Simmons won a verdict of $78 million, an award that was affirmed by the 9th U.S. Circuit Court of Appeals, which said Weyerhaeuser had intended to monopolize the alder saw-log market in the Pacific Northwest.

Weyerhaeuser appealed to the Supreme Court. The company has the backing of the Bush administration, which says aggressive buying tactics make for good business competition by ensuring that companies have access to enough raw materials to manufacture more products.

Businesses far outside the Pacific Northwest are watching the case because it will force the justices to draw the line between savvy business strategies and illegal anti-competitive behavior.

Tactics that may appear underhanded may simply be aggressive -- but legal -- business competition, said Andrew Pincus, Weyerhaeuser's lawyer.

"It's very hard to distinguish ... between hard-fought competition and anti-competitive intent," Pincus said. "Increasing the prices that are paid for inputs -- like lowering sales prices -- is a mechanism by which a firm competes. It's a result that we would expect from a buyer's ordinary competitive instincts."

Chief Justice John Roberts noted that while predatory selling can benefit consumers by lowering prices, predatory buying does not help them. Given that, Roberts asked, shouldn't predatory buying be judged by a looser standard?

Justice John Paul Stevens seemed concerned that a ruling for Weyerhaeuser would mean an end to cases in which there is clear evidence -- such as internal company memos -- that a business paid more for raw materials as part of a ploy to drive a competitor out of business.

In the absence of evidence, Justices Stephen Breyer and Ruth Bader Ginsburg wondered how to judge what motivates a company's buying practices.

"If you're trying to decide whether people are hogging goods unnecessarily for bad purposes or (are) storing up nuts for winter for good purposes, then a very good key to that is (whether) these people expect in the long run to make money out of this," Breyer said.

The Supreme Court is expected to rule on the case by July. The case is Weyerhaeuser v. Ross-Simmons, 05-381.


Group turns up heat on Plum Creek. By Kevin Miller, Bangor Daily News, Nov 16, 2006.

AUGUSTA - An environmental group is ratcheting up the heat on Plum Creek Timber Co. in a report released Wednesday that details fines against the company, permit problems and logging in areas important to deer survival during winter.

The Natural Resources Council of Maine said the report highlights serious concerns about Plum Creek's record on sustainable forestry, environmental protection and wildlife management. Group members contend that the documents also raise questions about the Seattle-based company's trustworthiness as it moves forward with development plans for the Moosehead Lake region.

A Plum Creek spokesman acknowledged past mistakes but said the company works closely with state agencies to correct them. One state official added that he was encouraged by the company's recent cooperation on protecting winter "deer yards."

Using internal state documents obtained through the Freedom of Access Act, NRCM compiled a list of violations and official complaints against Plum Creek, including:

* A $57,000 fine for violations of Maine's timber harvesting laws, the largest such fine in state history.

* Construction of a 7,500-foot-long power-line corridor outside of Greenville without the necessary permits.

* Water quality violations in Somerset County.

* Multiple instances of logging within areas that state biologists said was needed to protect northern Maine's fragile deer population during winter.

The report is NRCM's most serious salvo to date against Plum Creek and the company's petition to sell 975 house lots and land for two resorts near Moosehead. The proposal, which also includes more than 400,000 acres of permanent conservation, would be the largest subdivision ever in Maine if approved by state regulators.

Cathy Johnson, NRCM's North Woods project leader, said she believes Plum Creek's environmental and forestry record are relevant to the company's Moosehead plans, which the group contends will harm the region's wilderness character.

"Plum Creek is saying, 'Trust us, we'll do a good job in the development plan,"' Johnson said. "Yet when you look at their record, they cannot be trusted."

Jim Leaner, manager of Plum Creek's northeast region, interprets the company's record differently.

"We have been here [in Maine] eight years, and certainly we've made a few mistakes. We're not perfect," Lehner said. "But I think the key there is when we do have an issue, we get on it right away and work closely with the agency and resolve it."

Much of NRCM's report focused on logging on Plum Creek land that has been identified as winter habitat for deer, which are at the cusp of their range in northern Maine. These areas, known as "deer yards," offer shelter from the deep snow and bitter winter weather under the interlocking crowns of adult conifer trees.

In 2005 and early 2006, biologists with the Maine Department of Inland Fisheries and Wildlife sent a bevy of e-mails to their superiors in Augusta blasting Plum Creek for cutting in deer yards against their recommendations. Several biologists questioned whether the state's cooperative approach on deer yards with Plum Creek was working, suggesting instead a move toward the more heavy-handed protective zoning.

In a January 2006 e-mail cited in NRCM's report, DIF&W wildlife biologist Eugene Dumont called the company's history with deer yards "feeble and dismal" and suggested Plum Creek was the worst major landowner in the state on the issue.

In another e-mail, biologist Douglas Kane lamented the loss of additional deer wintering areas, or DWA, along the East Outlet of Moosehead Lake as well as what he described as years of unproductive negotiations with Plum Creek.

"Unfortunately, we have accomplished absolutely nothing in terms of conserving shelter for wintering deer on their ownership," Kane wrote in a January 2006 e-mail. "In fact, we have lost important acres and continue to loose [sic] what little DWA shelter is left on their ownership in my region."

On Wednesday, Lehner said the company has since halted harvesting in deer yards identified by DIF&W biologists and is working with the department.

Kenneth Elowe, head of DIF&W's Bureau of Resource Management, said many of those e-mails were sent at a time when staff were experiencing their "peak frustration" toward Plum Creek on the deer issue. Elowe said things have improved considerably and that he is encouraged by the change.

"Since then, I would say since April or May, we have seen a lot of progress with them," Elowe said. "They have become much more cooperative, especially on the biological basis of what deer need."


Group assails Plum Creek. Associated Press. [Lewiston Maine] Sun Journal, Nov 16, 2006.

PORTLAND - An environmental group battling Plum Creek Timber Co.'s development plan for the Moosehead Lake region detailed Wednesday what it said was the company's pattern of disregard for Maine's forestry laws and wildlife habitat protections.

The Natural Resources Council of Maine said Plum Creek's illegal practices were spelled out in internal documents from state agencies that the group obtained under the state Freedom of Access law.

The NRCM said Plum Creek this year was fined $57,000, the largest such fine in state history, for repeated violations of Maine's Forest Practices Act that limit timber harvesting.

The group also documented incidents linking Plum Creek to destruction of deer wintering habitat and to polluting streams and developing land without a permit.

"There's a systematic avoidance of Maine's environmental laws," said Cathy Johnson, NRCM's North Woods project director, who told reporters that Plum Creek's record shows that it cannot be trusted.

Included in the documents released by NRCM are e-mail messages between state employees. Several messages sent in 2005 by Strong-based Department of Inland Fisheries biologist Chuck Hulsey addressed deer wintering areas.

Deer wintering areas are stands of forest that provide shelter and food sources for deer during the colder winter months. In the messages to DIFW regional management Supervisor Eugene Dumont, Hulsey outlines his concerns about ongoing harvest operations in Lexington Township near Kingfield, between Upper Pierce Pond and the Dead River in northern Somerset County and Indian Stream Township, southwest of Moosehead Lake.

"I asked Plum Creek to defer harvesting in this area until either an agreement was made between MDIFW and Plum Creek, or formally rejected," Hulsey wrote in a June 2005 memo regarding deer wintering areas near Upper Pierce Pond.

"Plum Creek ignored this request and cut the area so heavily it will not be a functional DWA for another 30 years," Hulsey wrote.

In an October 2005 message to Dumont, Hulsey again expressed concern and surprise that Plum Creek was continuing to heavily harvest deer wintering areas. He also details meetings he had with Plum Creek where he believed an agreement had been reached to modify the harvest levels but those agreements were not followed.

"This is now the third time that the landowner has gone in and harvested wood, without a plan, contrary to what was agreed upon, and without notifying MDIFW," Hulsey wrote. "This DWA cannot continually experience this level of poor management and sustain wintering deer now or in the future."

Jim Lehner, Plum Creek's general manager for the Northeast, acknowledged that the company has made mistakes but maintained it always works with the appropriate agency to resolve the issue.

"We can always do better. We learn from our mistakes," he said.

Seattle-based Plum Creek, the nation's largest private landowner, is seeking a zoning change on 420,000 acres in the Moosehead region as part of a 30-year plan to develop 975 house lots, two resorts and an industrial park. The Land Use Regulation Commission's review of the proposal is expected to last well into next year.

The NRCM has maintained that the project, which is the largest such development ever proposed in Maine, could have a damaging and irreversible impact on the region that serves as the gateway to the state's North Woods.


Environmental group cites Plum Creek violations. Associated Press, Boston Globe, Nov 15, 2006.

PORTLAND, Maine --An environmental group battling Plum Creek Timber Co.'s development plan for the Moosehead Lake region detailed Wednesday what it said was

The Natural Resources Council of Maine said Plum Creek's illegal practices were spelled out in internal documents from state agencies that the group obtained under the state Freedom of Access law.

The NRCM said Plum Creek this year was fined $57,000, the largest such fine in state history, for repeated violations of Maine's Forest Practices Act that limit timber harvesting.

The group also documented incidents linking Plum Creek to destruction of deer wintering habitat and to polluting streams and developing land without a permit.

"There's a systematic avoidance of Maine's environmental laws," said Cathy Johnson, NRCM's North Woods project director, who told reporters that Plum Creek's record shows that it cannot be trusted.

Jim Lehner, Plum Creek's general manager for the Northeast, acknowledged that the company has made mistakes but always works with the appropriate agency to resolve the issue.

"We can always do better. We learn from our mistakes," he said.

Seattle-based Plum Creek, the nation's largest private landowner, is seeking a zoning change on 420,000 acres in the Moosehead region as part of a 30-year plan to develop 975 house lots, two resorts and an industrial park. The Land Use Regulation Commission's review of the proposal is expected to last well into next year.

The NRCM has maintained that the project, which is the largest such development ever proposed in Maine, could have a damaging and irreversible impact on the region that serves as the gateway to the state's North Woods.

"Our level of concern is heightened further by this information about Plum Creek's poor timber practices, the company's total disregard for the protection of deer wintering habitat and Plum Creek's failure to obey Maine's environmental laws," the group said.


Report cites violations by Plum Creek. By John Richardson, Portland Press Herald, Nov 16, 2006.

Plum Creek Timber Co., one of Maine's largest owners of forestland, repeatedly violated environmental standards in the years before 2003, the Natural Resources Council of Maine said Wednesday.

The advocacy group, which issued a report citing state records related to the company's logging practices, also said the company continued to destroy established deer habitat until early this year.

The report, which challenges Plum Creek's corporate image as a protector of Maine's environment, noted, for example, that the company paid a $57,000 fine in June for a series of logging violations from 1995 through 2002, by far the largest such penalty ever imposed in Maine.

"This is really a systematic avoidance of Maine's environmental laws," said Cathy Johnson of the Natural Resources Council.

The group has been a leading critic of Plum Creek's plans for two resorts and about 1,000 house lots in the Moosehead Lake region. The company's logging record, Johnson said, indicates it shouldn't be trusted to develop sensitive areas in the North Woods.

Plum Creek's general manager in Maine, Jim Lehner, said the company has taken responsibility for its violations and works with the state agencies to avoid problems.

"Whenever an issue comes up, we address it immediately," he said. "We're proud of our record."

The company is certified by the Sustainable Forestry Initiative, he said. "Does it mean we don't make any mistakes? No, we do make mistakes."

The council's report focuses on improper clearcutting and other logging violations, and the destruction of crucial deer-wintering areas over the objections of state biologists.

The group also criticized the company for failing to get a permit before starting construction of a 7,500-foot-long powerline corridor near Moosehead Lake in 2003, and for altering stream beds near a logging road in 2002. The company cited a miscommunication and paid a $4,000 fine for the powerline violation, and it repaired what it said was unintentional damage to the waterway, according to the state.

The report also raises questions about how aggressively the state has regulated Plum Creek and whether state agencies have helped protect the company's image.

For example, a final news release from the Department of Conservation about the Plum Creek fine in Juneis missing a sentence from a draft that said the company was penalized $57,000. The final notice does not include the fine amount or otherwise indicate that the action was more than a routine technical settlement. Also, the word "clearcuts" in the draft was changed to "harvesting" and "harvests" in the final version. The action got little, if any, publicity at the time.

The leaders of several agencies that regulate forestry and land use in northern Maine said Wednesday that they have treated Plum Creek no differently than any other landowner.

"Nothing was done to accommodate or to alleviate Plum Creek's violations of the Forest Practices Act," said Conservation Commissioner Patrick McGowan. The information was available to anyone who was interested, he said.

The $57,000 fine imposed in June was in addition to a $9,000 fine the company paid in 2003 for a clearcut that violated the Forest Practices Act. The 2003 case led to a selective review of Plum Creek's logging practices back to 1995, the process that concluded in June with the $57,000 fine.

The review of the eight-year period found that Plum Creek violated the law at 48 previous harvest sites throughout its more than 900,000-acre property.

The discovery of so many past violations shows how difficult it is to monitor logging and enforce the law in a 10-million-acre forest, officials said. But it also shows that the Maine Forest Service did its job, said Director Alec Giffen.

Until June, the largest single fine imposed under the 17-year-old law was $19,500, assessed to International Paper in 1998 and Jay McLaughlin in 2001.

Lehner, the Plum Creek manager, said the violations were the result of not precisely measuring cuts as required by changes in the law in 1999.

"We were interpreting those rules incorrectly. It was a huge mistake for us," he said. The company has since retrained its foresters, he said.

State Forest Service officials say Plum Creek cooperated in the review of its lands and has not been found in violation of the law since the 2003 settlement.

Plum Creek's logging in deer-wintering areas has not violated any laws, but it did earn the company a bad reputation among some state officials last winter. The record also shows a clear disregard for protecting wildlife habitat when it interferes with profits, according to Johnson.

Deer-wintering areas are stands of mature spruce, fir and hemlock where deer can find shelter from cold, wind and deep snow. The so-called deer yards are considered critical for sustaining the species so far north.

Most deer yards are protected only through voluntary cutting limits agreed to by landowners and the state's Department of Inland Fisheries & Wildlife.

Biologists in the department grew frustrated last winter by Plum Creek repeatedly cutting down known deer areas. In one e-mail among staff members, a biologist said Plum Creek had a "dismal and feeble history" and probably the worst record of any major landowner in Maine. In January, another biologist warned that the cutting of deer yards had accelerated even as pressure was building for the company to stop.

Shortly after, the agency called for a meeting with Plum Creek and the two began negotiating an agreement regarding deer areas. That process is continuing, said Ken Elowe, director of resource management for Inland Fisheries & Wildlife.

"They have become more understanding to the needs of deer and more understanding that they should work with us," Elowe said. At the same time, state officials are now talking about protecting more deer habitat through formal regulation.

Lehner said the company is working to resolve the dispute and pointed out that the deer areas at issue are not legally off-limits. "This is all well above and beyond what is required by law," he said. "They asked us to stop cutting and we did."

The company is still planning to place house lots inside some deer-wintering areas, Lehner said. Those plans will be reviewed by Fisheries & Wildlife.

Johnson said some of the company's aggressive cutting has been on land it intends to develop.


Investigation Exposes Plum Creek Timber Violations. Largest Fine for Logging Law Violations in Maine History. ENVIRONEWS, Natural Resources Council of Maine, Nov 15, 2006.

SEE FULL REPORT, GRAPHICS AND MORE AT http://www.maineenvironment.org/pc_foaa_report.asp

Documents gathered using Maine’s Freedom of Access Act (FOAA) disclose that this year Plum Creek was charged a $57,000 fine -- the largest fine ever assessed in history for breaking Maine’s timber harvesting laws. Other documents included in an investigation by the Natural Resources Council of Maine reveal that Plum Creek has destroyed wildlife habitat across its ownership in Maine that state biologists identified as priority areas for deer to survive Maine’s harsh winters. State documents also show that Plum Creek has polluted streams and developed land without a permit. This information was gathered through a FOAA investigation conducted by the Natural Resources Council of Maine, utilizing documents gathered from several state agencies.

"Plum Creek claims to be practicing sustainable forestry and acting as a good corporate citizen in Maine, but that’s not the picture that emerges from our investigation of internal documents," said Cathy Johnson, North Woods Project Director for the Natural Resources Council of Maine. "Quite the contrary, our investigation shows that Plum Creek has been willing to break Maine’s forestry laws, destroy wildlife habitat, and ignore repeated requests of biologists from Maine’s Department of Inland Fisheries and Wildlife."

A Republican congressman from Washington State once called Plum Creek Timber Company "Darth Vader," because of its aggressive logging practices, but the company has claimed that it has improved its forestry practices since that time.

"Actions speak louder than words," said Johnson, "and Plum Creek’s actions in Maine are deeply troubling. A company that receives the largest penalty for violating Maine’s timber laws does not jump to the top of anyone’s list of good corporate citizens."

NRCM’s investigation uncovered internal staff memoranda and e-mails in which agency staff expressed deep concerns and alarm about Plum Creek’s timber practices. Examples include:

* A LURC staffer expressed disbelief that a large and sophisticated company like Plum Creek would build a 7,500’ powerline corridor, without applying for a permit: "I would like to know more about the circumstances under which they ‘forgot’ to get a permit."

* A Maine Forest Service employee said in an e-mail that he had a CD-ROM full of pictures of Plum Creek’s violations of water quality laws – the highest concentration of them he had ever seen; and

* A Department of Inland Fisheries and Wildlife biologist described Plum Creek’s "feeble and dismal history to protect deer wintering areas. Probably the worse [sic] record of any major landowner in the State."

"These documents make for troubling reading, because they show the outrage felt by state agency employees and biologists over how Plum Creek has been managing their land," said Johnson.

"I've seen first hand what happens when deer yards are wiped out," said Gil Gilpatrick, a deer hunter and Maine Guide with a camp in Little Moose township. "The protection of deer wintering areas is key to the future of hunting and guiding in Northern Maine. By systematically destroying so many critical deer yards, Plum Creek is putting the future of hunting and guiding in the North Woods at risk."

One IF&W e-mail contained the following dispirited commentary: "By the time each of you read this short email another important patch of DWA [deer wintering area] shelter in Region E [the Moosehead Lake Region] will probably be on the ground."

Plum Creek purchased more than 900,000 acres in Maine in 1998, and claimed at the time – and repeatedly since – that the company would practice sustainable forestry in Maine and be a good corporate citizen. Over the past eight years, however, NRCM has heard from loggers, registered Maine guides, property owners, camp owners, and hunters that Plum Creek has logged in a very aggressive fashion – which some believed was destroying important wildlife habitat and possibly violating Maine’s laws for protecting our forests and environment.

NRCM conducted its review of internal documents about Plum Creek’s practices under Maine’s Freedom of Access Act. NRCM reviewed files relating to Plum Creek at the Maine Forest Service, Land Use Regulation Commission, Department of Inland Fisheries and Wildlife, and the Department of Environmental Protection (DEP). - end -

Judy Berk * Natural Resources Council of Maine * 3 Wade Street * Augusta, Maine 04330 * ph - 207-622-3101 X 203* fax - 207-622-4343 * e - jberk@nrcm.org * web - www.maineenvironment.org.


Conservationists buy Turtleback Mountain; hikers can visit soon. By Stuart Eskenazi, Seattle Times, Nov 14, 2006.

Turtleback Mountain will remain undeveloped and become open to hiking as conservation groups have successfully raised the $18.5 million necessary to buy the Orcas Island landmark from the Seattle-based Medina Foundation.

"Turtleback Mountain will be a gift from our generation to those that will follow," said Tim Seifert, executive director of the San Juan Preservation Trust, one of three organizations involved in the deal, which closes Wednesday.

Although not the highest peak on Orcas Island, Turtleback turned into a symbol for maintaining the region's quality of life, eliciting passion from those not wanting to see luxury homes built on it. The fundraising effort drew more than 1,500 donors.

The San Juan County Land Bank, which contributed $10 million via a bond sale, will manage the property. Lincoln Bormann, land-bank director, said public access will be via existing logging roads until hiking trails are built, with the property opening in about two weeks.

Of the $18.5 million raised, $17 million is to purchase the land and the rest is for building trails and maintenance.

The Trust for Public Land, a national group, also helped in the fundraising. While residential and private-resort developers expressed interest in Turtleback, the Medina Foundation agreed to sell to the conservation groups at a lower price.

When he was Weyerhaeuser CEO, Norton Clapp began assembling Turtleback's 1,578 acres in the 1950s as a private retreat and, upon his death in 1995, bequeathed the land to the foundation.

Medina put the property up for sale in August 2005 to raise money for its philanthropic mission of alleviating poverty and improving education. The Turtleback sale will push its endowment to $104 million, said Tricia McKay, Medina's executive director.

"This is the ideal outcome," she said. "People in the Pacific Northwest have a treasure they can have access to, and more money can be invested in the community to address issues related to poverty."


Lawmakers still let firms pay travel tab. By Daniel Lathrop. Seattle Post-Intelligencer, Oct 20, 2006

The Seattle area's congressional delegation racked up plenty of frequent-flier miles in the past year, with private interests footing the bill.

And Seattle-area companies -- led by Microsoft Corp. -- paid tens of thousands of dollars to fly those members of Congress and their colleagues around the country.

$62,216 Microsoft
$14,138 Plum Creek
$10,729 Amgen
$7,297 Weyerhaeuser
$2,543 Boeing

"There is ample evidence that the junket mentality continues, even after Abramoff," said Sheila Krumholtz, executive director of the Center for Responsive Politics, a watchdog group that released its own database of congressional trips this month. The database contains trips taken from July 2005 until August this year.

The practice of privately funded travel by congressional officials has been under scrutiny since details of improper trips paid for by disgraced former lobbyist Jack Abramoff emerged. Abramoff, who once worked in the Washington, D.C., office of Seattle law firm Preston Gates & Ellis LLP, has since pleaded guilty to related criminal charges.

In all, the city's congressional delegation and their staffs took more than 40 privately funded trips worth more than $100,000, according to a Seattle P-I analysis of travel data provided by Krumholtz's group.

Local companies underwrote a few of those trips but were very active sponsoring trips for other congressional officials. Sponsors based in Seattle or with major facilities here were responsible for at least $100,000 worth of trips, according to the center's data.

The most active was Microsoft, sponsor of at least 29 trips worth a total of more than $60,000. Also active were Weyerhaeuser Co. and Plum Creek Timber, according to the group's report of congressional records...


Weyerhaeuser, Safeco among big businesses on high court's docket. Associated Press, Seattle Post-Intelilgencer, Oct 2, 2006

The Supreme Court is about to plunge into an agenda laden with business sector issues, including cases involving the Weyerhaeuser Co. and Safeco.

Of the 38 cases the court has agreed to consider so far in the term that begins today, 17 are business related, "an unusually high fraction," Washington lawyer Roy Englert says.

Chief Justice John Roberts was managing partner of a major law firm that had a very sizable portfolio of business clients and is "comfortable with the issues presented in business cases in ways that Chief Justice William Rehnquist" was not, Pepperdine University law professor Douglas Kmiec says.

The Weyerhaeuser case is one of two antitrust cases set for this term so far. The Bush administration wants the justices to throw out a $79 million verdict against lumber industry giant Weyerhaeuser in a lawsuit brought by a smaller company. At issue is whether "predatory bidding," or paying too much for raw material, is an anti-competitive practice...


Swan Valley adds protected land. By Vince Devlin. Missoulian, Sept 26, 2006.

The effort to preserve fisheries and wildlife habitat in the Swan Valley took another big step Monday, when several groups announced 1,761 acres of Plum Creek Timber Co. land had been protected.

A $10.7 million grant from the Bonneville Power Administration made it possible. BPA, Plum Creek and the Trust for Public Land made the announcement.

"It's part of a much broader project that started in 1998 to protect all the Plum Creek checkerboard land in the Swan," said Eric Love, Rocky Mountain program director for the Trust for Public Land.

Land ownership in the Swan Valley forms a checkerboard pattern, where one-square-mile sections alternate in private and public ownership. Plum Creek is by far the largest private landowner in the valley, with more than 70,000 acres.

Monday's agreement means that by 2008, a third of Plum Creek's land in the valley will be protected.

Love said the new additions - 640 acres in the Elk Creek drainage near Condon, and completion of a conservation easement on the final 1,121 acres of a 7,204-acre project on Plum Creek lands in the Goat and Squeezer creek drainages at the north end of the valley - were important for everything from bull trout to grizzly bears.

"The Swan has the highest grizzly bear population in Montana, and perhaps in the lower 48," Love said. "As a wildlife corridor between the Bob Marshall Wilderness and the Mission Mountains Wilderness, it's largely an intact ecosystem still. This is important for grizzly bears, bull trout and everything in between."

The Montana Department of Fish, Wildlife and Parks, the Confederated Salish and Kootenai Tribes and the Trust for Public Land played key roles in designing the projects.

The BPA will receive credit for its obligation to mitigate for fisheries losses resulting from the construction of Hungry Horse Dam and Reservoir in the deal. The agreement allows for sustainable timber harvest on the land, but prohibits subdivisions or other development, Love said.

The first phase of the Goat and Squeezer creek conservation easement, covering 6,083 acres, was completed in February. The U.S. Department of Agriculture's Forest Legacy Program, designed to conserve high-value forest lands at risk of conversion to non-forest uses, provided significant funding for that portion of the project. The addition of the 1,121 acres to the easement completes this element of the conservation protection strategy for the two watersheds.

The Elk Creek property has been conveyed equally to the Salish-Kootenai Tribes and the Swan Ecosystem Center. The BPA holds the conservation easement.

All three creeks have excellent spawning habitat, and the watersheds produce high-quality cold water that benefits many species.

"Bull trout has been a very important species of concern for the tribes," said Tom McDonald, division manager of Fish, Wildlife and Conservation for the tribes. "We need cooperative projects like this, particularly in these times, when it's getting harder and harder to pull off conservation projects of this size."

"This project makes a significant contribution to protecting habitat and public access in the heart of the Swan Valley," Anne Dahl, executive director of the Swan Ecosystem Center, said. "We're looking forward with enthusiasm to working on a cooperative management plan with the tribes."

The Trust for Public Land has worked with Plum Creek to acquire about 8,650 acres of fee title and 7,200 acres of conservation easement interests on its Swan Valley lands. Fee lands have been conveyed to the U.S. Forest Service, the Swan Ecosystem Center and the tribes, while state easements are held by the Montana Department of Fish, Wildlife and Parks.

Other groups, such as the Nature Conservancy, the Montana Land Reliance and Vital Ground Foundation have protected another 5,000 acres in the valley.

The Trust for Public Land maintains an option to purchase approximately 10,000 additional acres from Plum Creek.


Kim Williams Elected to Weyerhaeuser Board of Directors. Company news release, Sept 6, 2006

Weyerhaeuser Company (NYSE: WY) today announced the election of Kim Williams, 50, to the company’s board of directors effective Oct. 1. Williams replaces Robert J. Herbold who retired from the board earlier this year.

Williams recently retired from Wellington Management Co. LLP where she had served as a senior vice president and partner since 1995. In her 26 years in the investment management business, Williams established strong credentials as a financial analyst with more than 20 years experience covering industries including paper and forest products, publishing, metal and mining, and home improvement. During her career, Institutional Investor Magazine repeatedly recognized Williams as a "Best of the Buy Side" analyst.

While at Wellington, Williams was directly responsible for managing $1 billion in client assets, which included investments in Weyerhaeuser.

"We are extremely fortunate to have someone of Kim’s stature join our board," said Steven R. Rogel, chairman, president and chief executive officer. "As our board works with our management team to chart our strategic direction, we will benefit from Kim’s investment experience and understanding of industrial companies."

Williams began her career as an investment analyst with the Imperial Chemical Industries Pension Fund in London, England in 1979. She also worked at Loomis, Sayles and Co., Inc. in Boston before joining Wellington in 1986. Williams holds a masters in economics from the University of London.


Windfall creates investment opportunity. Missoulian, August 13, 2006.

With the Schweitzer administration now projecting a state general fund balance of some $500 million by mid-2007, ideas for spending the extraordinary windfall are hatching like mayflies. Gov. Brian Schweitzer is proposing a $400-per-household rebate totaling $100 million statewide. He also wants to use $20 million to replace a tax for sorting out water rights, and he's kicking around a few more big-ticket ideas. Republicans, meanwhile, are calling for nearly $200 million in tax reductions. Everybody quietly acknowledges the deep pool of red ink massing in state-employee retirement funds, and at least some of the surplus will probably flow into that abyss.

In the weeks and months leading up to the 2007 legislative session, expect to see many, many more ideas. Many legislators also can be trusted to head for Helena next winter relaxed, freed of the anxiety that comes from having to make hard decisions about budget priorities. Five hundred million extra dollars buys a lot of freedom from hard choices.

But no one believes the surplus is anything other than a budgetary blip. More than likely, it's a one-time windfall resulting from a brisk economy and high energy prices coming at the end of a period of relatively restrained spending. Montana's never had $500 million in spare change before, and it may be a good long while before such a windfall comes again.

So, we should use it wisely. And we have an idea for doing so.

Of course, rebating to taxpayers a large portion of the money makes sense and is only fair. The state accumulates a surplus by taxing more than it needs. Giving "extra" dollars back to taxpayers is good economic and political policy.

But we know much of the money's going to be spent. If it's used to expand government programs and services, we'll all be sorry when the windfall's gone and we face a choice of cutting those programs and services or raising taxes to sustain them.

Instead, we'd suggest investing much of what isn't rebated to taxpayers - investing in land.

The state windfall arrives as Montanans increasingly worry about the fate of tens of thousands of acres of lands owned by the state's largest private landowner, Plum Creek Timber Co. A wood products company-turned-real estate investment trust, Plum Creek is working to sell some of its timberland for residential or recreational development. Plum Creek has a policy of selling off lands that can't be logged or that have higher value for other uses and using the money to buy new timberlands - most likely elsewhere.

Although there's nothing wrong with this, legally, economically or morally, Plum Creek's strategy spells trouble for Montanans.

Converting industrial timberlands to residential subdivisions will erode the state's timber base. It will create suburban and rural sprawl. It could geometrically expand the so-called wildland-urban interface, vastly increasing the property and lives at risk from wildfires and complicating wildland firefighting. It will fragment wildlife habitat and close to the public access to lands the company has traditionally (and generously) made available for hunting, fishing and other recreation. With all this development will come new demands on local and state governments and public safety agencies, driving up the cost of government for everyone. The sale of each parcel, every subdivision proposed, every change of land use contemplated will spawn much controversy and conflict.

We propose that the state dedicate a significant portion of the windfall to acquiring land that Plum Creek has for sale. One hundred million is a nice, round number. We're talking strictly willing-seller, willing-buyer deals at fair market value.

Plum Creek, once open and engaging on the subject, has turned squirrely and won't publicly discuss its land sales. Its secrecy does nothing to ease public concerns about what may be in store for a state where boundary lines between public land and Plum Creek property have never been posted. A spokewoman for the company indicated, however, that the company would be open to offers from the state.

Lands acquired from Plum Creek could be added to existing state forests, part of the State School Trust, managed under a mandate to produce the maximum long-term revenue while also protecting the environment. They would produce revenue for Montana schools for generations to come, as well as provide a host of other public benefits - from recreation to watershed protection to better-managed growth.

Years later, these acquired lands would be worth as much or more, paying us all dividends of one sort or another. Today's windfall would become part of a legacy for the future. That's at least worth considering alongside the inevitable legislative proposals for conventional spending on things that would leave us with little or nothing to show at the end of the next budget cycle.


Special Report: Moosehead: Furor in the Forest. By Jeff Clark. Down East Magazine, August 2006

Plum Creek is proposing the largest development in Maine history around Moosehead Lake. Is this the end of the North Woods or its economic salvation? Either way northern Maine will never be the same.

Luke Muzzy figures that twenty years from now the people of Greenville will either consider him a saint or they'll be burning him at the stake. He doesn't have to wait. Some feel that way already. Muzzy works for Plum Creek.

Study a satellite photograph of New England taken at night and civilization is easy to see. Blotches of white light mark towns, cities, and suburbs. The New York-New Jersey metroplex sprawls across the landscape, and Cape Cod tails away from the huge urban area surrounding Boston. Maine's own southern coast and Portland, Lewiston-Auburn, Bangor -- all are easily identified by their collective coronas of streetlights and neon signs and vehicle headlights.

But look north and it all fades away. Greenville and Jackman and Fort Kent are dots of light bounding a blankness where nothing shines bright enough to make its mark from orbit. That is the North Woods, the largest undeveloped area east of the Mississippi. Not wilderness exactly -- this is working forest after all -- but definitely a place quite unlike anyplace else.

It is also where Plum Creek Timber Company wants to create the largest development in the history of Maine. The Seattle-based real estate investment trust has filed an application with the state Land Use Regulation Commission (LURC) to carve out and sell 975 building lots on and near Moosehead and the surrounding lakes, along with two resorts and a campground.

In exchange, Plum Creek says, it will give the state conservation easements on 71,000 acres and set up a locally controlled loan fund for recreational trails and local education financed with a donation of 1 percent of every lot sale. If the plan is approved, a separate deal with three major environmental groups would protect another 330,000 acres.

The plan is staggering in its scope, encompassing some seventy lakes and ponds and more than four hundred thousand acres scattered across ten townships. The application alone runs to more than one thousand pages. At just the prospect of facing the project, LURC won extra funding from the legislature to hire two new staffers and a handful of consultants, as well as permission to drastically increase its fee schedule.

It also promises to be one of the hardest-fought environmental battles in more than two decades. For the first time in Maine, a developer has mounted a sophisticated public relations campaign that includes television ads urging public support for the project. Plum Creek has hired the four top environmental and politically connected law firms in the state, used the promise of land protection to split its potential opponents in the conservation community, and courted endorsements from businesses, towns, and statewide organizations such as the Sportsman's Alliance of Maine and the Maine Snowmobile Association. Its point man in Greenville is Luke Muzzy, a fifth-generation native whose family built the landmark Indian Hill Trading Post. He enthusiastically insists that the project will turn Greenville from a rural 1,600-person community in decline into a year-round boomtown with an increasing population, a thriving school system, and a healthy future.

On the other side is the Natural Resources Council of Maine, the Maine Audubon Society, and a loose coalition of local opponents organized as the Moosehead Regional Futures Commission. At stake, they say, is nothing less than the soul and the future of the North Woods and Moosehead Lake. And perhaps even of Maine.

"This is all about the character of Maine's future -- who we are going to be and, more important, who will control our destiny," declares Brownie Carson, director of the Natural Resources Council of Maine. "Will it be the Plum Creeks and the Wal-Marts and other big corporations, none of them based in Maine? Or will it be Maine's people?"

Plum Creek first came to Maine in 1998 and quickly became one of the state's largest landowners when it acquired more than nine hundred thousand acres of former Sappi Paper Company territory. Today it owns some 929,000 acres in Maine and more than 8.1 million nationally.

Created in 1989 as an offshoot of the resource management arm of Burlington Northern Railroad, Plum Creek's hard-cutting forest management practices in the West earned it a reputation as the Darth Vader of the timber industry.Com pany officials have worked vigorously in Maine to persuade skeptics that those days are past. It also has played down its history of selling off its high-value property as recreational land, although company officials flatly deny they ever publicly or privately took real estate development off the list of options when the company acquired its Maine forestlands.

In 2001 the company created and sold an eighty-nine-lot subdivision on First Roach Pond, near Kokadjo, east of Moosehead Lake. Three years later, Plum Creek announced plans to carve out up to 1,200 lots, two six thousand-acre resorts, and an industrial park on more than a dozen ponds and lakes in the Moosehead region [Down East, March 2005], some of them remote and undeveloped. Rather than permanent land conservation, Plum Creek proposed only a thirty-year nondevelopment agreement.

The proposal set off a firestorm of protests. "When Plum Creek first came into this area, some folks were afraid something like this would happen," recalls Greenville resident Sandy Neilly, staff coordinator for the Moosehead Region Futures Committee, which has offered its own, more limited vision for development in the area. "Now it's happening. There's a real fear we'll end up looking like Sebago Lake or Winnipesaukee."

LURC and Plum Creek held a series of four "scoping sessions" to hear comments and concerns about the plan -- among them worries that the proposed subdivisions were too scattered and that the sheer scale threatened to overwhelm the region's character and infrastructure. Emotions ran so high that one night last November vandals mounted a coordinated attack on three offices and three homes associated with Plum Creek and its employees, smearing manure, animal carcasses, paint, and foul-smelling chemicals on buildings in Greenville, Oakland, Fairfield, and Hallowell. The vandals have not been caught.

In April Plum Creek unveiled a revised thirty-year concept plan that called for 975 house lots, a four-season resort on Big Moose Mountain near the existing Big Squaw Mountain ski area, and a five-hundred-acre resort on Lily Bay -- some 4,200 acres altogether. Subdivision proposals were pulled off eight backwoods ponds and concentrated along Moosehead and Brassua lakes and a handful of other ponds. Plum Creek would donate conservation easements on 71,000 acres and give permanent public access to 144 miles of hiking and snowmobile trails.

The release of the revised plan came only a few days after the company announced a startling deal with the Maine chapter of the Nature Conservancy, the Appalachian Mountain Club, and the Forest Society of Maine -- an agreement to protect 330,000 acres east and west of Moosehead either through easements or outright purchase. No price was announced, but estimates ran from $25 million to $35 million and up.

All three organizations insist that their participation does not constitute an endorsement of Plum Creek's plan, but Plum Creek officials freely admit that the deal depends on state approval of their development application. Nor has Plum Creek been shy about trumpeting the agreement as part of the plan's conservation component, even though it's not part of the LURC application and there are no assurances the three groups will be able to raise the money to pull it off.

Tying the two issues so closely together has raised accusations that Plum Creek is intentionally muddying the waters of the debate to make the project look more "green" than it actually is. Critics also accuse the company of holding the conservation plan hostage to put more pressure on regulators and silence some of its potential opponents.

So why not defuse the criticism by separating the two issues? Jim Lehner, a forester who is Plum Creek's general manager in Maine, offers a complicated reasoning for the linkage that boils down to preserving the larger property's development potential if the concept plan doesn't go through. "Part of what we're offering is the frontage on seventy ponds," he explains. "The easement strips out all of that value. If we go ahead with the conservation deal and don't get the ability to develop in the areas proposed under the concept plan, we would lose the value of that shorefront for the future."

"It raises the issue of trust," Carson allows. "Plum Creek says it has changed from the bad old days. But if it's serious about conservation and devoted to timberland management, like its Web site says, why is it doing this?"

Lehner and other company officials readily allow that Plum Creek could have gone ahead with a piecemeal development strategy along the lines of its original First Roach Pond subdivision without anywhere near the level of review and conservation in its concept plan. On a floatplane flyover of the company's Moosehead properties, Luke Muzzy points out a remote pond surrounded by forest and says, "I could sell that whole piece to you today without any LURC review at all."

Asked why the company prefers a single huge plan over a more gradual approach, Lehner falls back on the explanation he has offered for the past several years: "It's a matter of predictability," he offers. "The advantage to us, once the plan is approved, is that we know exactly where we're going to go and what we're going to do when we get there."

"I would argue that the Plum Creek plan takes the development that's going to happen anyway, organizes it, and tries to mitigate its impact," says John Simko, Greenville's town manager. "Absent that, we're going to have a little bit here and a little bit there and end up with the North Woods that everyone loves being ruined by all the people who love it."

Brownie Carson remembers canoeing across Moosehead from Rockwood to Kineo to Northeast Carry as a teenager back in 1961. "It was then and still is stunningly beautiful," he says. "Where can you find another virtually pristine lake that size? You can't, not in this country. It's a magical place. Maine is one of the few places left in the United States where, within a day's drive of eighty or ninety million people, you can have a wilderness experience like that."

That treasure is becoming more valuable every day as the traditional forest industries in Maine shrink. Greenville has largely made the transition to a tourist town, and the region's future increasingly depends on nature-based tourism. "What's the value of paddling along the shore in Lily Bay and looking up at a subdivision full of McMansion-size 'cottages' on the slope above?" Carson asks rhetorically. The Moosehead region's future depends on a wilderness reputation that might be difficult to justify in the face of development on Plum Creek's scale.

No one, not even Carson, denies that development in the region is inevitable. The big debate is where. The Natural Resources Council is willing to cede the southwestern side of the lake between Greenville and Rockwood, where the Big Squaw Mountain Ski Resort already creates a natural focus for seasonal home and recreational development. Carson admits that the shift of a planned resort from Brassua Lake to Big Moose Mountain, near the ski area, is a significant improvement.

"There's a way to do [development] so that the character and values of the area are protected," Carson insists. "But if the state allows multiple sprawling subdivisions on Prong Pond and Brassua Lake and elsewhere, that would be a very serious loss."

Liz Munster, owner of Spalding, Mellon & Munster Real Estate in Rockwood, says protecting the unique atmosphere of the community where she grew up is more important to her than selling more house lots. "What makes people come here and spend their money is what we have -- the quiet, the solitude, the peacefulness," she explains. "If we change too soon too fast, you'll start hearing people say, 'I want streetlights. I want paved roads. I want a 7-Eleven.' Well, guess what? Most folks live here and visit here because we don't have a frigging 7-Eleven."

Luke Muzzy counters that Greenville has seen its school population drop by almost half in twenty-five years to 255 students, the local hospital is operating at 40 percent capacity, and housing prices are already too high for young families to be able to live in Greenville. "We've lost a lot of the year-round population," he states, although U.S. Census figures show the town's population has stayed at about 1,600 since 1990. "The second-home market is keeping us alive right now." He points to an economic impact study by economist Charles Colgan of the Muskie School at the University of Southern Maine predicting that the Plum Creek project alone would bring in 1,200 new jobs -- and the families that go with them.

It's a claim many people view with skepticism. Munster has served on the Greenville planning board and the local economic development committee. She has watched hundreds of new seasonal homes be built in the area. "I didn't see the taxes go down or the school enrollment go up or a ton of new businesses come into town because all those new subdivisions were built in the past ten years," she observes. "Why should anyone think hundreds more cottages will make a difference?"

Wendy Weiger looked all over the United States for a new home outside the cities. A physician who had spent most of her career in research at Harvard University, she chose Moosehead Lake in 2002 because it was close to Boston but on the edge of that big blank spot on the satellite photo. And she promptly bought a lot on First Roach Pond from Plum Creek.

Today Weiger admits she bought the land, which remains empty, without understanding the issues and trends it represented. "I didn't come up here to be involved in environmental activism," she says. "I was coming from Boston, where the population density is more than 12,000 people per square mile, and going to Piscataquis County, with a density of four people per square mile. The whole area looked vast and unlimited. My urban viewpoint changed drastically when I moved here and realized how fragile and endangered the North Woods are."

Ninety-nine percent of the people saying that this is a great plan have never seen the places that are going to be destroyed," adds John Willard, owner of the 11,000-acre Birches Resort near Rockwood. "People in Augusta, Portland, Bangor, outside Maine, they don't understand the impact this will have." He includes Simko and other Greenville town officials in that list, noting wryly that none of the development they support so avidly will occur in their town.

Willard has some experience in the matter. His four-season resort includes some shorefront development designed as part of a concept plan in conjunction with LURC, as well as a large piece of land protected with conservation easements.

"The smart way to do this would have been to go to the public before they had a plan," Willard muses. "Meet with people in every town and lake association. Explain to them: 'We need to make money on our investment. How would you like to see it done?' That's what I did. That's what Big Squaw Mountain did. That's not what Plum Creek did."

And doing it smart now will mean a lot down the road, Willard adds. "What's going to happen when the next million-acre landowner comes along with a big development plan?" he asks. "What happens now sets the pattern for the next one. We've been lucky that most of the land up here has been managed for timber production. But a development like this instantly pushes up the value of the land far beyond its timber value. There's a guy who owns twenty thousand acres on the east side of the lake. Who knows what he will do now?"

And there may lie the single most important principle to come out of the Plum Creek application process. "I can point to at least five other landowners who are watching this and waiting to see how it turns out," says Brownie Carson. "I think everyone is looking at how LURC handles this project as a signal for what the northern forest will look like in a generation or two. Will we still have large tracts of working forest, three- or four-week canoe trips through the wilderness, guide services, and sporting camps as the underpinnings of a new forest economy as the pulp and paper industry continues to shrink?"

The project faces at least a year of public hearings, LURC staff study, and public debate before any decision comes from the commission itself. And whatever it decides will almost undoubtedly spark legal challenges.

"We have to emerge from this with a plan that protects the fundamental character and economy and natural resources of the region and also provides a clear map of where appropriate development may occur," Carson says. It needs to be a plan, he adds, "that at the end of the process we can all say will work for a generation, two generations. Maine and the Moosehead region are too valuable not to think that far ahead."


Plum Foolish. By Ted Williams. Audubon, July 2006

If the plan for Maine’s biggest development ever goes through, it could spell disaster for millions of acres of forestland across the northeast.

For 40 years I’ve been collecting images from Maine’s north woods: the unbroken canopy of green flashing past as my crewmates from the old Kennebec Log Drive Company and I floated down the Roach River on our backs, hauling ourselves onto logjams and breaking them up with peaveys; moose draped with lily pads; the fragrance of balsam and sphagnum moss; the tremolos and yodels of loons on a hundred wilderness ponds and New England’s biggest lake; wild brook trout with ivory-trimmed fins and flanks the color of the sunset sipping my mayfly and caddis imitations; bats flittering through twilight; hills and mountains going from green to purple to black; the banter of barred owls; spruce smoke rising into brilliant northern nights undefiled by ambient light. . . .

The north woods haven’t changed much in my lifetime, but the Seattle-based Plum Creek Timber Company—the nation’s largest private landholder, with 8.5 million acres—is telling me and other reporters how it’s going to fix that. April 4, 2006, is a "great day" for Maine, an "exciting day," a "pivotal day." Something "grand" is about to unfold in the East’s wildest forests, near its best trout ponds, along the remote headwaters of the Penobscot, Kennebec, Moose, Roach, St. John, and Allagash rivers, on the spectacular, mostly unpeopled shores of 40-mile-long and 12-mile-wide Moosehead Lake. Video cams track the speakers. Tape recorders, including mine, are thrust in their faces. Plum Creek is holding a press conference at the Maine State House in Augusta to announce a development plan whose size dwarfs anything the north country or even the state has ever seen.

Jim Lehner, Plum Creek’s regional manager, proclaims that his firm, which abandoned its original plan last January after being pilloried at four public hearings, has heeded the people of Maine: "You spoke. We listened." His case seems weak. There has been scant change in the project’s size or footprint, and the number of housing units remains about the same. Flipping through charts, Lehner shows us how the proposed resort at Lily Bay has been scaled back, how a second resort has been expanded but moved to a less remote area near Big Moose Mountain, how one of the four RV Parks has been canceled. But the company has clearly ignored the public’s plea that the 10,000 acres of development be centered in and around the existing lakeside communities of Greenville and Rockwood instead of wandering off through the wildest sections of the watershed and thereby degrading thousands more acres with roads, powerlines, traffic, sewage, fertilizers, pets, and all the other blights that drive fish and wildlife from suburbia. >From Long Pond, 30 miles north of Greenville on the west side of the lake, to Lily Bay, 15 miles north of Greenville on the east side, there will be 1,725 dwelling units—975 of them house lots, the others connected with the resorts. A conservation easement on 71,000 acres is included in the revised plan, and Plum Creek promises that if its development is approved by the state, it will sell easements on an additional 269,000 acres to nonprofit entities at prices of its choosing.

Plum Creek calls to its podium one George Smith, director of the 14,000-member Sportsman’s Alliance of Maine (SAM), who rhapsodizes about how all the guaranteed access makes this massive development a terrific deal for hunters, anglers, and snowmobilers. Other invited speakers extol the economic boom the development will bring. But after Plum Creek’s speakers finish, the pillorying resumes. "We’re very disappointed," Cathy Johnson of the Natural Resources Council of Maine (NRCM) tells the TV networks. "Plum Creek may have listened, but it didn’t hear."

"As goes Plum Creek so goes the rest of the large landowners and all of that big block of undeveloped forestland. We have one chance here to do it right."

My press packet asserts that Plum Creek has offered a new "legacy for the Moosehead region." Indeed it has. But there’s another possible legacy—not just for Moosehead but for the 26-million-acre Northern Forest that embraces it, the last really wild woods and water in the East and a stronghold for Canada lynx, bobcats, pine marten, forest-interior birds, loons, and countless other species we’re running out of elsewhere. Plum Creek by itself cannot extinguish all this wildness. But other large landowners, not just in Maine but in New Hampshire, Vermont, and New York, can, and they are watching carefully. "As goes Plum Creek so goes the rest of the large landowners and all of that big block of undeveloped forestland," says Johnson. "We have one chance here to do it right."

Plum Creek cuts and sells pulp and saw timber, but it is also a developer recently reorganized as a real estate investment trust (REIT), an investor-owned company excused from corporate income taxes by paying out at least 90 percent of its taxable profit in dividends—a prescription for land abuse. "Here’s Plum Creek’s unrelenting MO," declares Bruce Farling, director of Montana Trout Unlimited. "Buy it, log the hell out of it, subdivide it, log it again, and put it on the recreational real estate market. And when the neighbors politely ask the company to ease up, the reply is always: Buy it or else. . . . The company bloats its environmental reputation with ad-agency spin. Meanwhile, many professional foresters quietly ridicule the company’s silvicultural practice of whacking the best trees while leaving scraggly, genetically inferior stock for reseeding weed-infested clearcuts that, in a masterful Orwellian broad-brush, the company no longer calls clearcuts. They are ‘regeneration cuts,’ or ‘overstory removals.’ "

When I asked Mark Vander Meer, a highly respected independent forester and soil scientist in Montana’s Swan Valley, to assess Plum Creek’s land stewardship, he said: "About as bad as you can get. Plum Creek is entirely untrustworthy. They’ll tell you whatever you want to hear. They kept saying, ‘Why would we sell timberlands; we’re in the business of growing timber.’ " Plum Creek officials repeatedly offered the same assurances when they showed up in Maine eight years ago, and within two years they had announced an 89-lot development on First Roach Pond, pristine trout and landlocked salmon habitat in the Moosehead watershed. "Plum Creek promised us they’d be ‘good neighbors,’ " says Joan Wisher, president of the First Roach Pond Improvement Association. "Then they took the big hardwoods, destroying our shade canopy, making a permanent dust bowl, and silting the pond. The dust covered everything and gave me prolonged fits of coughing. We went to them as an association and begged them to give us a no-harvest buffer zone; they refused. We begged them not to develop the north inlet, a pristine area where people go to watch moose and where eagles nest; they refused."

Plum Creek responded to criticism of the mess it made at First Roach Pond by professing that no more major development was on the horizon. Then, on December 14, 2004, it announced a plan for the biggest development in the history of the north woods or of Maine.

All that, however, is the nature of REITs, and most straight forest-products companies are no less brutal to fish and wildlife habitat, facts that render Plum Creek’s nickname in the West—"the Darth Vader of the timber industry"—unfair. Moreover, I have always thought that environmentalists are wasting their time by criticizing Plum Creek for its cut-out-and-get-out logging and slapdash development. Vader, after all, was habitually lawless; Plum Creek almost always obeys laws. If environmentalists in the West or in Maine don’t like what it does to land and water, they need to talk to their legislators, not Plum Creek.

Mainers are no more ready for REITs now than they were eight years ago, when Plum Creek bought 905,000 acres of the state from South African Pulp and Paper International. Before that, paper companies owned most of the 10.5 million acres of northern Maine’s "unorganized territory." "They were far from perfect," remarks Kevin Carley, director of Maine Audubon. "But they had a certain level of stewardship because they wanted to ensure sources of fiber for their mills forever. The old owners, the guys who ran the mills, hunted and fished in the north woods; that’s where they had their camps. There was a level of connection." Mainers assumed there could never be a time when the unorganized territory grew houses instead of trees, so they made little effort to protect it. Few states have a lower percentage of publicly owned land than Maine (6 percent), yet it contains 58 percent of the Northern Forest.

About a decade ago paper companies in northern New England and New York found themselves beset by a largely self-induced crisis. Because they had allowed their mills to become obsolete and dilapidated, because they had "high-graded" their timber (cut the best and left the rest), because they had engaged in massive clearcuts instead of sustainable forestry, and because labor costs were high, they had difficulty competing in the world timber market. The easiest solution was to sell out. Since then about 40 percent of Maine’s commercial timberland has changed hands, and today scarcely any Maine forestland is owned by U.S.-based forest-products companies. Virtually everything is in the hands of REITs and pension funds, most of which promise investors 12 percent returns and liquidate about every 10 years.

"The old owners, the guys who ran the mills, hunted and fished in the north woods; that’s where they had their camps. There was a level of connection."

The same thing is happening in the rest of the Northern Forest—in fact, in the rest of the nation and world. For example, on the day of Plum Creek’s press conference, International Paper announced the sale of 5 million acres of its forestland, mostly in the South but also in Michigan, to various real estate investors for $6.1 billion. The U.S. Forest Service predicts that, largely due to development pressures, 44 million acres of private forests will be sold over the next 25 years. Forest stewardship doesn’t pay fast enough, so—after stripping your timber, of course—you hawk the stump fields for condos, second homes, and resorts, and what sells best and fastest is the shorelines of wild rivers, ponds, and lakes. In one of its more savage abuses of the language, Plum Creek calls this "higher and better use."

Development in Maine’s unorganized territory is managed by the Land Use Regulatory Commission (LURC)—a seven-member, independent board appointed by the governor, confirmed by the legislature, and assisted by full-time staff. LURC’s mission is to protect the remote character and current uses of these wild woods and waters.

Maine— whose citizens oppose massive development of the Moosehead region by two to one, according to a poll by the Portland, Maine–based research firm Critical Insights—has had eight years to get ready for Plum Creek’s proposal. But instead of beefing up LURC, the governor and legislature have consistently slashed its budget and staff. In 2005 a group of citizens, including a former Maine attorney general, Jon Lund, petitioned LURC to consider a moratorium on large-scale developments until it could formulate a new plan for the Moosehead region. Despite the fact that LURC itself had declared it needed a new plan and despite the fact that Plum Creek’s application makes anything it had handled in its 35-year history look insignificant, it rejected the petition without serious discussion.

Wild (unstocked) brook trout ponds—virtually nonexistent in other states—are for everyone, but not for everyone all at once. Wild brook trout are as important to Maine as are redwoods to California or grizzlies to Alaska, and because they evolved in sterile water and can’t afford to pass up the chance to eat, few if any species are more vulnerable to fishing pressure. Easy access wipes them out. Even more hurtful to hunting and fishing than overkill is habitat destruction and fragmentation. So you’d think that hunters and anglers would worry about north woods sprawl—and maybe they do. But the fact that they allow George Smith to do their talking for them illustrates how unprepared they are for slick, smart REITs.

One of the first things Plum Creek did when it blew into Maine was take Smith on a junket to Montana to view selected and utterly uncharacteristic examples of its forest practices. The company then started pumping money into Smith’s Sportsman’s Alliance of Maine, and it hired his sister to help organize its media blitz. Even before the company allegedly "listened" to the public and even before SAM’s board voted to support Plum Creek’s revised plan, Smith was whooping it up for the original plan—the one Plum Creek later rejected on the strength of public commentary. "Consider it a wonderful Christmas present—a lasting gift that will never wear out, a gift that will go on giving unto all future generations," he effused in a December 22, 2004, editorial for Maine newspapers. "Our Christmas stocking is filled today with a real plum, a splendid north woods gem wrapped in an effective package of economic development and land and water conservation. . . . What a gift. . . . I was privileged to be on the inside as this plan progressed, and it was hard to keep the proposal secret, knowing just how spectacular the final result would be. . . . Hallelujah!"

Jon Lund, an avid and accomplished hunter and angler himself and publisher of the Maine Sportsman, New England’s largest outdoor periodical, is less sanguine about Plum Creek’s proposal. "A glaring omission in the economic planning of this state is that apparently, we have no handle on the economic value of the hunting and fishing and tourist activities in the north woods," he wrote in the November 2005 Maine Sportsman. He has urged LURC to "just say no" to Plum Creek. And he is disappointed in SAM for promoting the proposal as well as for opposing an initiative that would offset at least a little of the damage by adding Katahdin Lake and 6,000 acres of de facto wilderness to Baxter State Park. The whole parcel will be open to fishing, but only a third to hunting. That’s a higher percentage than Baxter Park itself, but Smith worked tirelessly to sabotage the deal, very nearly succeeding. "George has decided that sportsmen need access to every place for hunting," Lund told me. "Well, I have a theory about that, and it’s this: If hunters are going to insist on hunting every place, they’re going to end up hunting no place. Hunters are a minority in this state, and the next time a hunting issue comes up for public vote, they’re going to be looking for friends. When they ask for help, people in the conservation community are going to be very hard of hearing."

In a masterful Orwellian broad-brush, the company no longer refers to clearcuts. They are "regeneration cuts," or "overstory removals."

At the press conference I sat next to Elizabeth Swain, a trained forester, a former chair of LURC, and now one of the army of PR professionals, lawyers, and lobbyists Plum Creek has hired to promote its development. She described the old and new plans to me as "remarkably innovative" and "extraordinary," respectively. "Find me one other private landowner that is doing this much conservation so voluntarily," she said. "Seventy-one thousand acres conserved at no cost to anybody. . . . Plum Creek could have done most of this development without putting this land in conservation."

But REITs don’t do things "voluntarily." Plum Creek’s application to LURC is a request for massive development of wildland currently zoned for forestry and primitive recreation. In exchange for zoning variances there’s a legal requirement that applicants offer something in return for damaging fish, wildlife, the remote character of the region, and current uses. According to NRCM’s Cathy Johnson and Jym St. Pierre, a former staff director of LURC, Plum Creek cannot proceed sans conservation. Johnson told me this: "Plum Creek could do some development without the easements. For an area the size of what it is proposing, we would expect to see somewhere around 260 new dwelling units over the next 30 years, if history is any guide." And St. Pierre weighed in as follows: "It is true that Plum Creek could do a couple lots per year without going through rezoning and subdivision permitting. And Plum Creek could propose a subdivision that wouldn’t have to pass the conservation-development balance test, but it’s pretty unlikely that it would get approved. Someone asked me the other day, ‘Why isn’t anyone in the media calling this what it is: extortion.’ What Plum Creek is saying is, you can have conservation if you give us our development."

Lund suggests two alternatives to the legacy Plum Creek envisions for the East’s best and wildest woods and waters. One is public acquisition, perhaps a national park, which is what a Concord, Massachusetts–based outfit called Restore: The North Woods has been pushing for northern Maine, including the Moosehead region, since 1992. "A poll [by the Hatfield, Massachusetts–based research firm Abacus Associates], shows that most [60 percent] of the people in Maine, not just in the southern part of the state, support a park," says Lund. "And yet all the politicians act as if it’s the plague. They won’t even take a look at it." Hunting and snowmobiling wouldn’t have to be banned because there are plenty of national park units that permit these activities, and you can fish almost everywhere in the park system. Still, SAM has used the alleged threat of a Maine national park as its most effective fund-raising tool: "Now we offer those frustrated [forest] workers and sportsmen a place to turn," writes George Smith. "We urge them to join SAM, and to join our battle to drive Restore back across the Kittery Bridge [to Massachusetts]. They can take their agenda someplace else. There is no place in Maine for a new national park."

The other alternative Lund sees is "getting really tough," something Maine agencies, including LURC, tend not to do and something Lund thinks isn’t going to happen. "LURC is a permitting agency," he says. "Their thing is to give permits."

Jym St. Pierre is no more hopeful, noting that "LURC has a very weak leadership now and not a particularly strong commission." St. Pierre is a lifelong Mainer. He is unconfrontational, low-key, laconic even. And besides being the former director of LURC, he is the current state director of Restore: The North Woods. I have never believed that Restore is radical, just that the people who rail against it are parochial and naive. The idea for a national park in northern Maine is neither radical nor new. It has come out of Concord, Massachusetts, twice now—the first time in 1853, when Henry David Thoreau, inspired by the view from Maine’s highest peak, Mount Katahdin, called for "national preserves where no villages need be destroyed, in which the bear and panther, and some even of the hunter race, may still exist, and not be ‘civilized off the face of the earth.’ "

Thoreau was much on my mind the bright summer day I climbed Big Spencer Mountain with Jym St. Pierre. From the 3,230-foot-high summit we gazed out over Plum Creek’s holdings and most of the 3.2-million-acre Maine Woods National Park that Restore and its allies are promoting. To our east rose tundra-cloaked Mount Katahdin and OJI Mountain, named for the landslides that carved those letters. Lakes and rivers—which belong to the people of Maine and America, not to REITs—stretched as far as we could see. To the northeast lay Chesuncook, Ragged and Caribou lakes; to the northwest, Lobster Lake; to the southwest, Moosehead. Apart from the chartreuse scars of clearcuts and a cloud of dust over a logging road, the scene from this elevation hadn’t changed since Thoreau described it: "There it was, the State of Maine. . . . Immeasurable forest for the sun to shine on. . . . No clearing, no house. It did not look as if a solitary traveler had cut so much as a walking stick there. Countless lakes—Moosehead . . . Chesuncook . . . Millinocket . . . and mountains, also, whose names, for the most part, are known only to the Indians. The forest looked like a firm grass sward, and the effect of these lakes in its midst has been well compared, by one who has since visited this same spot, to that of a ‘mirror broken into a thousand fragments, and wildly scattered over the grass, reflecting the full blaze of the sun.’ "

The Spread of Private Forests. The Economist, June 8, 2006

A new breed of investor is taking over America's forests

THE tiny town of Roslyn, 90 minutes' drive east of Seattle, clings tight to its coal-mining and timber-cutting past. In future, that may be harder. As many as 3,000 expensive houses, interspersed with golf courses and resorts, are planned for the hills surrounding Roslyn, dwarfing the town's few hundred dwellings.

Those hills were once covered in forests owned and managed by the Plum Creek Timber Company, which is based in Seattle. But as development land became increasingly valuable, Plum Creek sold the land around Roslyn to two other companies. These are now busy planning the new community, which is to be called Suncadia.

Across America, vast swathes of land may go the same way. Since 1900, when Frederick Weyerhaeuser, a German immigrant, and 15 partners purchased 900,000 acres (364,217 hectares) of land from a railway company in Washington state, big timber enterprises have held land for decades. They harvested trees for lumber or paper pulp, replanted, and patiently waited for another harvest in 50-60 years. It was a conservative, relatively safe business; the demand for wood and paper, although it has ups and downs, has remained generally strong.

Investments in timber land proved a good hedge against inflation, and often did well when stocks on Wall Street fared poorly.

Now all that has changed. New tax rules, demand for building land and the influence of big investors such as pension funds have transformed the ownership of forest land. In recent years most tree-owning and lumber companies have sold their land to Timberland Investment Management Organisations (TIMOs), in which private investors pool together to buy timber holdings. Forest-products companies then buy trees from the TIMO-owned land and convert them to lumber or paper. In early April, for instance, International Paper, which is based in Connecticut, sold its 5.1m acres of American timber land for $6.1 billion to two TIMO investor groups.

Other companies, such as Plum Creek, have become publicly owned real estate investment trusts (REITs), which are also attractive to investors and reduce corporate tax. Plum Creek now owns more than 8m acres of forest land and reaps profits from timber, property and minerals. Today only two large publicly traded forest-products companies--Weyerhaeuser, based just outside Seattle, and Temple-Inland, based in Austin, Texas--still have substantial forest holdings.

(Weyerhaeuser owns or leases 6.5m acres in the United States, Temple-Inland owns about 2m.)

Since 1996, 30m acres of private forest lands have changed hands, causing turmoil in the industry. Some of those most disturbed by the trend are the same greens who bitterly fought logging on federally owned lands during the 1980s and 1990s. They admit that logging in private forests, too, often wrecked the landscape. But companies such as International Paper were also diligent about re-planting trees and creating new forests that became valuable wildlife habitat and sources of clean water. Moreover, in many parts of the United States, timber companies allowed local people to hike, hunt or fish on their lands, a tradition greens fear may be lost.

The biggest current battle on this front is taking place around Moosehead Lake in northern Maine. Plum Creek owns 421,000 acres around the 117-square-mile (30,303-hectare) lake, and would like to build as many as 1,000 houses, as well as lakeside resorts. The development would "fundamentally change the character of Moosehead Lake", now a quiet, rural region of hunting and fishing cabins, says Pete Didisheim of the Natural Resources Council of Maine. Plum Creek counters that it is also preserving vast tracts of land around the lake. Critics, unconvinced, are fighting a rezoning proposal which the company needs to proceed. In many other parts of the country there is fear that new forest owners will quickly log their land, then sell the denuded ground for housing.

Others see opportunity as forest ownership changes. In Wisconsin, for instance, the Nature Conservancy and the Department of Natural Resources negotiated an agreement under which investors bought 101 square miles of land from International Paper as part of that company's big woodlands divestiture earlier this year. The land will continue to produce maple, oak and cherry lumber--all very valuable--while also remaining open for recreation and wildlife conservation. "Because these forested areas are for sale, it's a great opportunity to buy them for preservation and sustainable forestry," says Bill Ginn, who works on forestry matters for the Conservancy. Groups such as Mr Ginn's also hope to make state tax rules more favourable to owners of forests.

No doubt, in years to come, some of the forests' new owners will opt for a quick and dirty profit from their lands, selling to Boston or Seattle residents who want a place in the (former) woods. But trees were wiped out across much of the United States during the agricultural and economic expansion of the 1800s, and managed to grow back. Perhaps the natural patience of forests will prevail.


Weyerhaeuser agrees to sell composite mills. Puget Sound Business Journal, June 1, 2006.

Weyerhaeuser Co. will sell six composite mills in the United States to Flakeboard Company Ltd. for an undisclosed sum, the company announced Thursday.

The deal is subject to regulatory and board approval, and is expected to close in the third quarter.

Federal Way-based Weyerhaeuser said it agreed to sell mills in Albany and Eugene, Ore.; Bennettsville, S.C.; Malvern, Ark.; and Simboro, La. The company did not identify a sixth mill.

Flakeboard is based in Markham, Ontario, Canada, and operates mills in Ontario and New Brunswick.

Steven Rogel, Weyerhaeuser chairman, president and CEO, said the mills were "no longer a strategic fit" for the company.

"We believe that the skilled employees at these highly competitive and efficient mills will provide greater value to Flakeboard, which is more focused on this line of business products," Rogel said in a prepared statement.


Weyerhaeuser said [July 31] it had completed the sale of composite panels plants in five cities to Flakeboard America Ltd. The plants are at Albany, Ore.; Bennettsville, S.C.; Eugene, Ore.; Malvern, Ark.; and Simsboro, La. The mills, which produce medium density fiberboard or particleboard, have the capacity to produce a total of 1.1 billion square feet annually. Flakeboard America is a U.S. subsidiary of Canada's Flakeboard Company, based in Ontario. It had plants in Ontario and New Brunswick prior to the Weyerhaeuser transaction... Terms of the deal were not announced. (AP, July 31, 2006).


Governor announces northwest Montana conservation project. The Missoulian, May 10, 2006

Montana Gov. Brian Schweitzer Wednesday announced approximately $6.1 million in funding for land acquisition and conservation easements in the Swan Valley and also reported that the Confederated Salish and Kootenai tribes are negotiating up to $7 million in land acquisitions in 2006.

The funding is part of a memorandum of agreement among the Bonneville Power Administration, Montana Fish, Wildlife, & Parks, and the tribes.

The Northwest Power and Conservation Council distributes BPA mitigation dollars through its fish and wildlife program and approved the Swan Valley projects during its monthly meeting in Walla Walla, Wash. The council previously approved funding the tribal acquisitions.

The Swan Valley projects involve about $1.1 million in funding to MFWP to complete a conservation easement on Plum Creek Timber Co. lands in the Goat and Squeezer creek drainages at the north end of the valley. The other part involves the acquisition of about 640 acres of Plum Creek lands in the Elk Creek drainage at the southern end of the valley at a cost of $5 million.

"These projects represent a win-win situation for everyone," Schweitzer said. "Montana and its tribal co-managers get some very important fish and wildlife habitat protection, and BPA gets credit for its obligation to mitigate for losses resulting from the Hungry Horse dam and reservoir."

Schweitzer directed the Montana members of the NPCC, Rhonda Whiting and Bruce Measure, to aggressively pursue mitigation of BPA’s obligation to Montana and the tribes because "these lands aren’t going to get any less expensive."

Council members acknowledged that much of BPA’s funding goes to endangered salmon in the lower Columbia River while Montana and the tribes suffered dramatic fish and wildlife losses with the construction of Hungry Horse and Libby dams.

"These are important projects that will protect precious lands and benefit fish and wildlife for years to come," Measure said.


Agreement expected to stabilize lumber market. By Jim Mann. The Daily Inter Lake, May 9, 2006

Small mills still may be vulnerableA tentative softwood trade agreement with Canada will provide greater predictability and stability in North American lumber markets, according to a Flathead Valley man who participated in the negotiations.

"It’s 20-plus years of this dispute," said Hank Ricklefs, vice president of manufacturing operations for Plum Creek Timber Co. "And ultimately, we have only sought one thing, and that is a reasonably level playing field."

Ricklefs said the agreement, developed by U.S. and Canadian negotiators at the end of April, is intended to prevent severe lumber price drops that led to lost production capacity in the United States. Ricklefs has been one of the negotiators for the U.S. Coalition for Fair Lumber Imports for the past several years.

Although the Montana congressional delegation and others have praised the agreement as a remedy to a long and complicated dispute, skeptics exist.

Jerry Hall, president of the Flathead-based Tobacco Valley Lumber Co., predicts trade grievances will continue.

"I don’t think this will be the end of it," he said. "I think it was a better deal for the Canadians than the Americans, and I don’t foresee all the problems going away for the producers of this country."

Ricklefs said the agreement will be a safeguard for U.S. lumber producers at times when lumber markets drop below certain thresholds. For years, Canadian producers have reacted to declining prices by increasing production, with the frequent result of Canadian softwood flooding U.S. markets to the severe detriment of American mills.

That’s possible largely because Canadian producers are granted huge allotments of provincial timber to harvest as they please, whereas American producers must competitively bid for each public timber sale.

"It’s not market-based pricing," Ricklefs said. "It’s an administered price ... There is very little competitive pressure."

That difference has been the common denominator in a dispute that has led to tariffs against Canadian producers. It has been the focus of reviews by North American Free Trade Agreement panels and World Trade Organization panels.

Ricklefs said the agreement reached last month offers Canadian producers two choices when composite softwood lumber prices in the United States drop below $355 per thousand board feet.

One option was designed for lumber producers in eastern Canadian provinces that have been entirely resistant to export taxes but were willing to limit their export volumes.

The other option, intended for British Columbia producers, would set higher taxes but allow unconstrained volume shipments.

The $355-per-thousand trigger is lower than the 10-year average composite price of about $370 per thousand.

Ricklefs said that the 10-year price average is made up of some severely low-end fluctuations.

"When it dips, it dips hard," he said about the U.S. lumber market. "We had times within the last five years when that average was below $300."

Those periods were "disastrous" for U.S. producers, Ricklefs said. Canadians "not only ramped up production, but they were shipping into a smaller U.S. market so their market share was growing."

And those exports occurred even with steep tariffs imposed by the United States to protect American producers.

Under the agreement, Ricklefs said, there is a second price trigger at $315 per thousand board feet and a third at $300, each with steeper taxes or steeper export limits.

Canadian producers will "have to choose one of the two paths," Ricklefs said.

Hall said he remains skeptical about the agreement, partly because the Canadian lumber industry has proven to be wily, even "conniving," when it comes to finding ways to get around trade barriers. After tariffs were imposed on stud and dimension softwood, some Canadian producers got around it by shipping pre-drilled or notched studs. When that was stopped, he said, they started sending angled lumber.

Although the agreement may improve market stability for larger American lumber producers, Hall said small or mid-sized independent mills will remain at risk.

"They could still really get sandwiched between low lumber prices and high log prices" that result from a public timber market that is still short on supply and highly competitive.

British Columbia pushed hard for the ability to ship without volume limits, mainly because about 5 billion board of timber has been killed by a massive beetle infestation.

"It gives them the option to move that bug-killed timber and ship down here," he said.

There are people in the lumber business who believe British Columbia is lining itself for an eventual supply problem, Hall said.

"The key for mills on this side of the border is to survive for five to seven years, at which point B.C. will have a supply problem of their own ... because of overharvesting," Hall said.

Another major part of the agreement is the proposed dispensation of $5 billion in tariffs that has been collected from Canadian producers. About 80 percent is being returned to Canada, with the remaining 20 percent retained.

Of the roughly $1 billion that’s kept, about 50 percent will be distributed to mills that have been part of the ongoing trade challenge, and the other half is being retained by the U.S. government for what Ricklefs described as "meritorious causes" as defined primarily by the U.S. government in consultation with the lumber industries in the U.S. and Canada.

The meritorious cause technically does not direct the government to spend the money on anything related to the timber industry, but Ricklefs said the intent was for the money to "help build lumber demand in North America."

Of more interest to Hall is what will become of the $4 billion in tariff collections that will be returned to Canada.

"What worries me is how much of the $4 billion plus will go back to the mills in Canada," he said. That money easily could be poured into technology and automation improvements that would make Canadian mills "even more difficult to compete with."

Hall’s Tobacco Valley Lumber Co. is a sales agent for three mills, and it used to broker sales for a fourth — the Owens and Hurst mill that closed in Eureka last year.

Jim Hurst, who co-owned and managed the mill, said it’s unclear how much money the business will get from the $500 million in tariffs that will be distributed among U.S. producers who were part of the trade dispute.

"That remains to be seen," he said. "I’ll believe it when I see it."

He questions what percentage of the money would go to small or mid-sized mills, compared with the distributions to larger producers.

Ricklefs said the agreement will involve a "tremendous amount of details" and he expects it will take several months to be finalized and ratified by the United States and Canada.

Speaking for Plum Creek, he said, "We view this as good news for the North American lumber market. It has replaced a lot of uncertainty with a fairly clearly defined arrangement. We view it as help prevent serious deterioration of lumber prices to the point where [production] capacity in this country is lost," he said.


Judge orders port to open files on log export deal. Weyerhaeuser records don’t warrant privacy, court rules. By Jim Szymanski. The Olympian, May 5, 2006

Port of Olympia officials have failed to prove that correspondence and e-mails related to a lease with Weyerhaeuser Co. should be kept private, a Superior Court judge ruled Thursday.

Port officials have maintained that publicly releasing the documents would injure their competitive business position with other state ports. Those seeking the records include the Thurston County League of Women Voters and residents Walter Jorgensen and Arthur West.

Weyerhaeuser plans to establish a log export business on the Olympia waterfront this summer. Community activists have sued to obtain the records generated before the port signed a five-year lease with Weyerhaeuser last summer.

Port commissioners must decide whether they want to challenge Judge Richard D. Hicks’ ruling in the state Court of Appeals or release the records for public review.

Hicks found that the great bulk of the records are not sufficiently sensitive to withhold.

The port’s executive director, Ed Galligan, said he wasn’t sure what the three commissioners want to do because they hadn’t met regarding the court ruling.

Commissioners Bob Van Schoorl and Steve Pottle said they weren’t yet sure how to respond to the ruling.

A port attorney, Carolyn Lake of Tacoma, said she had not yet read the ruling.

Hicks was responding to a port request for reconsideration of an April ruling in which he ordered the port to release records and observed that the port had an "overly protective attitude" toward the documents. The port agreed to release most of its Weyerhaeuser records following the April ruling.

Hicks said he found some of the correspondence, including e-mails, to be vague and not sensitive to port business.

The port’s lawyers claimed that e-mails to them were protected under attorney/client privacy privileges.

"The court is not convinced that the ... privilege applies when there is a communication between the port and Weyerhaeuser and an attorney is one of many people copied in on the mail," Hicks wrote.

West hailed the ruling as a victory for public disclosure.

"The port again tried to obstruct access to public records, and, again, they lost," West said.

West said he is suing because the port refuses to release the records, not because he anticipates finding any specific information.


Weyerhaeuser CEO Steven R. Rogel Agrees to Defer Retirement Until 2009. Company news release, May 3, 2006

Weyerhaeuser Company today announced that Steven R. Rogel, chairman, president and chief executive officer, has agreed to defer his retirement until 2009 at the request of the board of directors. Rogel, 63, had intended to retire in 2007...

Rogel joined Weyerhaeuser in 1997 as its president and chief executive officer and was elected chairman of the board in 1999...


Logging access at park opposed Plum Creek Timber Co. wants easement to landlocked property near Vance Park. By Ernest Herndon. Enterprise-Journal, May 3, 2006

Aldermen went on record Tuesday opposing a request for an easement across the Ethel Vance Natural Area for logging and other access.

Joe Stedman of Prudential Stedman & Associates Realtors in Natchez, who represents Plum Creek Timber Co., requested an easement to a 58-acre landlocked Plum Creek parcel on the south side of the park.

Stedman said a buyer for the tract needs a temporary easement for timber removal and a permanent easement for access to the land.

The 288-acre Vance park is owned by the Mississippi Department of Wildlife, Fisheries and Parks, which leases it to the town. Department officials asked for town input before deciding on the request.

"I personally am against giving them an easement to haul logs out because they’re going to tear our roads up," said Mayor Ricky Stratton, referring to a blacktopped road through the park built by Amite County supervisors.

Board attorney Reggie Jones added that if the Plum Creek property is developed for housing, through-traffic could pose a problem in the park.

A softball league formerly based at Centreville recently rented the park’s ballfields to play 13 games over a seven-week period — among many public events held at the park west of town.

Stedman said this morning that log trucks would use a dirt track that goes along the east side of the ball fields, not the main paved road. Logging shouldn’t take more than 10 days, he said.

"We would certainly respect the fact that if someone’s playing ball or there’s some kind of equestrian (event), we wouldn’t haul timber out of there while that’s going on," Stedman said.

Only cars and light trucks would use the main park road, he said.

Stedman said he considers it unlikely anyone would develop housing on the Plum Creek property.

"This is low-lying land that is subject to overflow. Why would somebody want to build a housing project down there?" he said, adding the land is most suited for timber and recreation.

The property lies near the Amite River but doesn’t border it.

Stedman said that while Plum Creek lacks an official easement, users of the tract have been crossing the park land for years.

In a letter to wildlife department executive director Sam Polles, Mayor Stratton said: "The Town of Liberty Board of Aldermen is against granting any easements across Vance park. Over the past 20 years, the town of Liberty, Amite County and countless volunteers have worked diligently to improve Vance park. As managers of the park, we have obtained grants to construct a livestock pavilion and softball fields. Nature trails, bike trails, primitive and RV camp sites are maintained for the use and enjoyment of those who travel to our area.

"We have great concern on how the land will be used once it is sold. We are also concerned about how the improvements that have been made may be damaged by access to this property through the park."

Stratton said wildlife department and Nature Conservancy officials have expressed interest in acquiring the Plum Creek parcel to add to the park.

Attorney Jones earlier asked Plum Creek to consider donating it. "They said, ‘We’re not in the business of donating land,’ " Jones said.


Plum Creek Updates Assessment of High Value Timberlands. Company news release, May 1, 2006

Following the conclusion of Plum Creek's Annual Meeting of Stockholders today, Rick Holley, president and chief executive officer, updated investors on the company's continuing efforts to identify high value lands throughout its 8.2 million acres of timberlands.

In his presentation, Holley outlined the company's ongoing process of evaluating its timberland portfolio. The company's current assessment includes 6.1 million acres of core timberlands located in excellent long-term timber markets and 420,000 acres of non-strategic timberlands that do not fit the core timberland criteria. The company increased its estimate of timberlands with higher-value alternative uses by approximately 400,000 acres to 1.7 million acres. These lands are expected to be sold over time for recreation, development, or conservation purposes.

"During the past three years, we've built a disciplined process that gives us a comprehensive view of the value of our diverse timberland portfolio – be it for timber management or an alternative higher-value use," said Holley. "Through our experience, we've gained valuable insight into rural land markets throughout the United States. As a result, we've developed an intimate understanding of what makes our lands uniquely valuable. We've incorporated these insights into our current assessment of our land portfolio."

The company's current assessment of timberlands with higher values includes approximately 975,000 acres of recreation lands, 225,000 acres of lands suitable for responsible development, and approximately 500,000 acres of conservation properties.

"We are executing strategies to capture and deliver the value from our sustainable timber management and our unique land base. As rural land markets continue to evolve and grow, I believe Plum Creek is well positioned to identify additional high-value opportunities." concluded Holley.

Plum Creek is the largest and most geographically diverse private landowner in the nation, with more than 8 million acres of timberlands in major timber producing regions of the United States and 10 wood products manufacturing facilities in the Northwest.


Plum Creek calls plan'modest'. Bangor Daily News, April 29, 2006

Plum Creek officials are touting their Moosehead Lake plans as an unprecedented opportunity for reasonable and "modest" development that stimulates the economy yet still preserves the wild character of Maine's North Woods.

At more than 1,000 pages in length, Plum Creek Timber Co.'s rezoning application for the Moosehead region is chock full of maps, analyses and bureaucratic paperwork intended to win over Maine's Land Use Regulation Commission.

But the application's first 20 pages offer a glance at the company's likely battle plan during the coming regulatory brawl. LURC staff must certify the application, filed Thursday, as complete before beginning the public review process.

Throughout the application's introductory remarks, Plum Creek officials repeatedly tout the company's offer to conserve more than 400,000 acres around Moosehead. Additionally, the company claims its plan contains less development per acre - and considerably more land preservation - than any concept plan previously approved by LURC.

"In sum, this plan provides the opportunity for 413,000 acres (twice the size of Baxter State Park) of permanent conservation in exchange for modest development," the introduction states. "Indeed, when fully implemented, the plan will achieve one of the largest land protection and conservation deals in United States history."

Critics likely will disagree with the company's use of the word "modest," however.

The Seattle-based timber company wants to sell 975 house lots and build two resorts on roughly 11,000 acres near Moosehead, Maine's biggest lake and the symbolic gateway to the undeveloped North Woods.

Roughly half of those lots would be located on the shores of Moosehead or six neighboring lakes and ponds. The remaining 495 would be "backwoods" lots, many of which likely would offer stunning views of the surrounding water and wilderness. Although prices have not been set, the lots are expected to fetch top dollar.

Plum Creek and its supporters portray the plan as a thoughtful blend of development and conservation that will bring much-needed jobs and tourism dollars to the region.

The company moved some of the house lots closer to Greenville and other nearby communities in response to residents' concerns over sprawl, and it relocated one resort to Big Moose Mountain. A resort planned for Lily Bay peninsula also was scaled down.

Opponents have dismissed the aspects of the plan revealed in recent weeks as sprawl that will result in few permanent jobs, strain local infrastructure and ruin the wilderness character that makes Moosehead a tourist destination.

In the introductory statements, Plum Creek officials also stress that the conservation plan is contingent on LURC approval of Plum Creek's concept plan.

Company officials point out that Plum Creek still could build hundreds of houses - perhaps 1,000 or more -on the 421,000 acres it wants rezoned around Moosehead under Maine's traditional subdivision laws without setting aside conservation land.

By submitting a concept plan, the company officials state, Plum Creek is agreeing to set aside potentially large swaths of land for conservation and getting the public more involved in the review process.

"The predictability afforded by an approved concept plan helps provide the public with an accurate portrait of what development will occur, where it will occur and what areas will not be developed," the company states.

"Equally important in terms of preserving the cultural heritage of the region and enabling local businesses to invest with confidence, the plan guarantees forever the tradition of access to Plum Creek lands upon which the public depends."

But some environmental groups have criticized Plum Creek's conservation proposal as well as the way it was negotiated.

Plum Creek has offered to set aside 72,000 acres as conservation land at no cost in order to "balance" out the development. LURC requires concept plans to contain conservation land to compensate for development.

The remaining 341,000 acres could be conserved through outright purchase or conservation easements financed by outside groups. The company partnered with The Nature Conservancy, the Appalachian Mountain Club and the Forest Society of Maine to negotiate the conservation framework.

Diano Circo, the North Woods policy advocate with the Natural Resources Council of Maine, criticized Plum Creek for saying the conservation framework is contingent on LURC's approval.

"The conservation is tied to Plum Creek getting what they want right now," Circo said. "Plum Creek can walk away at any time ... unless they get exactly what they want."

Circo had not read the revised concept plan yet but was familiar with details that have trickled out over the past several weeks through the company and the media.

He disagreed with Plum Creek statements that the company had consolidated development closer to communities. Based on Circo's calculations, between 90 percent and 94 percent of the development in the original plan was still in the same location in the new plan.

"It doesn't look like Plum Creek listened to what people had to say," Circo said.

Copies of Plum Creek's concept plan are available in Augusta, Greenville, Rockwood, Beaver Cove and Jackman. LURC staff also will prepare an electronic copy of the application upon request.

The plan also is available online at www.maine.gov/doc/lurc or call LURC staff at 287-2631.


Plum Creek to release plan quietly. By John Richardson. Portland Press Herald, April 26, 2006

High anticipation and concerns about security have led Plum Creek Timber Co. executives to agree to stop talking about when they will submit formal development plans for the Moosehead Lake region.

A state official asked the company to keep its schedule private in light of an unrelated protest at the State House this month and a rash of vandalism aimed at Plum Creek employees last fall.

The impending filing with Maine's Land Use Regulation Commission has fueled publicity and controversy, unlike a more typical application that is filed first and then presented and debated.

Jim Lehner, Plum Creek's general manager for the Northeast, said the plan will be submitted in the next month, without any more advance notice or news conferences. "We're not going to make an announcement," he said.

The company has held two press conferences in recent weeks to tout parts of its plans. The formal application to the state has been delayed, however, while details are finalized and the documents are printed, Lehner said.

Those who are waiting to see the final details were expecting a company announcement and a formal filing any day. But Lehner said this week that he would no longer discuss the company's timing, citing security concerns as one reason.

"I asked Plum Creek to tone it down a little," said Catherine Carroll, LURC's director. "I'd rather they just bring it in like any other project... (The actual filing) deserves a press release, and it should come from LURC, not Plum Creek."

Carroll said that while the company has a right to hold press conferences and promote its plan, Capitol Security officials have discussed the risk of a disruptive protest.

As an example, she cited an incident this month in which a woman who opposes waste disposal legislation chained herself to a railing in the gallery of the House of Representatives.

That protest had nothing to do with the Plum Creek plan, but, Carroll said, "the gallery incident just heightened awareness."

State officials said there is no specific threat of a disruption. But they also were mindful of the Halloween vandalism targeting Plum Creek employees and affiliates last year. The vandalism of three homes and three office buildings with spray paint, rocks and animal feces has not yet led to any arrests.

Plum Creek's preliminary press conferences and publicity intensified the interest in the actual plan, Carroll said. Such pre-filing publicity is unusual, but won't affect LURC's review of the impending plan, she said.

"The thing is, nobody knows what's in front of LURC, because there isn't anything there," Carroll said.

Plum Creek has said its plan will include 975 house lots and two resorts scattered around Moosehead Lake. Plum Creek also has said it plans to donate future development rights on 71,000 acres of forestland and sell development rights on another 330,000 acres.

The new plan is a revised version of a proposal submitted a year ago, which was criticized by residents in the region as too large and spread out too far from existing towns.


Weyerhaeuser holds fast to timber, shareholders told. By Bill Virgin. Seattle Post_Intelligencer, April 21, 2006

Weyerhaeuser to Wall Street: We're keeping our trees.

Bucking an industry trend of forest products companies spinning off their timber holdings or dramatically restructuring themselves, as well as calls by some investors for Weyerhaeuser to do the same, Chief Executive Steve Rogel used his speech at Thursday's annual shareholders meeting to reinforce the message that "timberlands are the nucleus of this business."

Some forest products companies, reacting to investor pressure to boost their stock prices, have resorted to such measures as selling off their timberlands (as International Paper did) or converting to a real estate investment trust (as Plum Creek Timber and Potlatch have done and Longview Fibre plans to do).

Weyerhaeuser, too, has been under pressure to boost its stock price by doing something with its timberlands. "We've had many calls to do many things with our timber," Rogel said after the meeting.

Weyerhaeuser prefers its model of extensive timberland holdings feeding its lumber, panel, paper and packaging units.

"Many shareholders tell us they hold Weyerhaeuser shares because of our well-managed timberland assets," he said. "Weyerhaeuser knows timberlands -- this is the core competency of the company."

Weyerhaeuser's preference would be for Congress to change the tax code, which Rogel says puts traditionally structured timber companies at a disadvantage. Weyerhaeuser says gains on timber sales are taxed at 15 percent in a real estate investment trust, versus 35 percent for a conventional company.

"We're optimistic we can achieve tax relief in Congress," Rogel said.

If Weyerhaeuser doesn't get that help, it has some other options in mind, which Rogel declined to specify.

The company is, however, restructuring other parts of its business. On Thursday it announced that its multiple wood-products businesses have been consolidated into one, called iLevel; the aim is to have one contact point for builders and dealers to buy lumber, panels and engineered wood products.

Weyerhaeuser also has been selling or closing mills and operations (it closed a lumber mill in Aberdeen and a specialty pulp mill in Cosmopolis) it doesn't think fit its long-term strategies. Late Thursday, Weyerhaeuser announced that it is negotiating with two companies to sell its composite panels business in the United States (including two mills in Oregon) and in Europe.

Rogel said the company has retrenched in containerboard, as more manufacturers who once used its boxes move production overseas. Establishing a market presence in China has proved to be "a daunting task," Rogel said. Instead the company is turning its attention internationally to South America.

This year's annual meeting was much more subdued than last year's raucous affair, which ended in disorder. Reversing a policy that angered critics last year, Rogel took questions directly from shareholders and guests, rather than requiring that they be submitted in writing.

Weyerhaeuser also changed the physical layout of the meeting, held at its corporate headquarters. Instead of being seated in the front rows facing a raised dais, directors and senior executives sat in chairs facing the audience. Rogel himself, in answering shareholder questions, came down from the dais and sat in a raised chair.

While the tone was more orderly and civil, Weyerhaeuser still faced pointed questions about its environmental policies. Most had to do with a controversy in Ontario, where the Grassy Narrows First Nation is objecting to timber harvesting.

The environmental group Rainforest Action Network has been holding demonstrations and news conferences targeting Weyerhaeuser housing developments that it says use wood from the Grassy Narrows area. It warned that Weyerhaeuser's reputation with customers will suffer if it doesn't change its practices.

"I fear Weyerhaeuser is not ready to listen to concerns of thoughtful citizens," said Michael Brune, executive director of Rainforest Action Network.

Rogel said the dispute is one of several across Canada involving tribal land claims, adding that Weyerhaeuser doesn't do the timber harvesting itself, but buys timber from Abitibi Consolidated, which holds the lease.

Representatives of Grassy Narrows and RAN took the step, unusual in corporate shareholder meetings, of nominating three candidates directly from the floor. Weyerhaeuser said the candidates were nominated by shareholders but weren't shareholders themselves, and said none received a vote.

Shareholders approved two resolutions. One, which received 55 percent of the votes cast, calls for a majority rather than a plurality of votes to ratify director nominees. The other, with 69 percent, asks the company to require only a simple majority on matters submitted to shareholder vote, instead of higher percentages. The resolutions are advisory only, but Rogel said the board will consider them.


Weyerhaeuser Company Launches iLevel(TM) to Improve Residential Structural Framing Industry. Company news release, April 20, 2006

Today Weyerhaeuser Company announced the consolidation of five separate operating units into a single, unified business -- iLevel(TM) by Weyerhaeuser (www.ilevel.com). iLevel(TM) represents a new, innovative business model for the residential structural frame industry, combining Weyerhaeuser's high-quality products and services, leading distribution network and innovative, proprietary design software. Established Weyerhaeuser products and services -- Trus Joist(R), Structurwood(R), plywood, lumber, and distribution -- will become part of iLevel(TM). Together, these businesses represent more than one-third of Weyerhaeuser's $22.6 billion in company-wide revenue.

The new approach will result in a unified solution for residential builders and dealers -- which aims to reduce the time needed for installation and construction while increasing profitability with value-adding products and services.

"The strategy behind iLevel(TM) is simple: help our customers succeed by simplifying the business of home construction," said Kurt Liebich, vice president of marketing for iLevel(TM). "In launching iLevel(TM), Weyerhaeuser is taking the lead in the structural frame market by going beyond the traditional role of a wood products manufacturer and supplier to that of a value-adding provider."

As builders and dealers now require a higher level of service to meet their customers' needs, Weyerhaeuser has refocused its entire residential structural frame business around those builders and dealers. By combining high-quality products with integrated distribution and technology enablement, iLevel(TM) supplies customers with the tools to build and optimize residential structural frames.

iLevel(TM) delivers value by working with its dealers via Strategic Sales Representatives to coordinate resources with the expertise and knowledge to answer questions and provide custom solutions for home structures. And for builders of all sizes, iLevel(TM) represents a commitment to improving bottom-line profitability with the following benefits:

-- Reduce time, labor and call-backs
-- Optimize structural frames to reduce waste
-- Make custom designs and design changes easier
-- Ensure efficient, reliable delivery of products and services
-- Simplify the way we do business

"As the homebuilding market changes and competition increases, providing dependable on-site technical support along with consistent products and high quality services is paramount for success. And, iLevel(TM) provides support for a broad range of builders -- from national and regional players to smaller, custom homebuilders," added Liebich.

Many of Weyerhaeuser's high quality products and tools, on which our customers have come to depend, will remain the same -- but now these products and tools are available through a coordinated effort in iLevel(TM) by Weyerhaeuser. Trusted product brands include:

-- iLevel(TM) Trus Joist(R) Engineered Lumber
-- iLevel(TM) Structurwood(R) Engineered Panels
-- iLevel(TM) Performance-Tested Lumber
-- iLevel(TM) Services Integrated Building Resources

Standard lumber will continue to be offered under the Weyerhaeuser brand name.

"The iLevel(TM) model is the result of detailed research and analysis, including extensive conversations with builders and dealers as well as industry experts," stated Lee Alford, senior vice president of Residential Wood Products for Weyerhaeuser. "But perhaps most notably, Weyerhaeuser is changing from a product-driven manufacturing business to that of an integrated, market-driven culture -- a necessary approach to remain successful long into the future."

About iLevel(TM) by Weyerhaeuser:

iLevel(TM) is Weyerhaeuser's new integrated business resulting in a seamless, unified solution for residential builders through dealers. By combining Weyerhaeuser's high-quality products and services, distribution and technology, iLevel(TM) efficiently supplies customers with all the necessary components for building the residential structural frame, and solving builder and customer needs within that frame as well. Visit www.ilevel.com, or call 1-888-iLevel8, to learn more.


Weyerhaeuser and Ducks Unlimited Canada Team Up to Protect Alberta Migratory Bird Habitat. Company news release, April 20, 2006

Weyerhaeuser Company Limited and Ducks Unlimited Canada (DUC) are pleased to announce a new five year, $2.5 million ($1.25 million each partner) conservation project that will provide science-based information to help manage migratory bird habitat in all three of Weyerhaeuser's Alberta forest management areas.

"The partnership with Weyerhaeuser will help facilitate the development of a watershed-based conservation plan that will protect key wetlands, help maintain watershed health, enhance best management practices which will further advance sustainable development, and provide better information to protect key nesting and stopover areas for a multitude of North America's migratory water-birds," said Garry Stewart, DUC's manager of conservation programs for the western boreal. "These watersheds of the western boreal forest are vital to northern communities and provide unparalleled economic, environmental and social benefits to all Canadians."

The project will begin in July 2006 and include collaborative research and monitoring initiatives that protect the integrity of watersheds, riparian habitats, water and wetlands.

"Weyerhaeuser is pleased about developing another partnership with an environmental organization as progressive and successful as Ducks Unlimited Canada. Projects such as this are invaluable in providing necessary scientific data for our foresters to use in enhancing our sustainable forest management practices," said Tom Holmes, Vice-President, Forestlands, Weyerhaeuser Company Limited.


Weyerhaeuser nearing sale of composite business. Puget Sound Business Journal, April 21, 2006

Weyerhaeuser Co. said it's close to a final deal to sell its composite panels business to two companies.

In the United States, the Federal Way-based forest products company (NYSE: WY) is finalizing a deal to sell its composite mills to Flakeboard Co. Ltd. of Markham, Ontario, Canada.

Those six mills are in Albany, Ore.; Bennettsville, S.C. (two mills); Eugene, Ore.; Malvern, Ark.; and Simsboro, La. The mills make medium-density fiberboard (MDF), or particleboard, and can produce 1.1 billion square feet a year.

In Europe, Weyerhaeuser is dealing with Coilite of Dublin, Ireland, to sell its Medite MDF facility in Clonmel, Ireland. That mill can make 230 million square feet of MDF a year.

Weyerhaeuser didn't disclose how much money it's asking for the mills.


A.G. King Announces Conviction of Timber Thief. Alabama Office of the Attorney General, April 19, 2006

Attorney General Troy King announced the conviction this week of a Lamar County man for first-degree theft of pine and hardwood timber that he cut and sold from property belonging to others. Gregory Hayes Sanford, 45, of Millport, pleaded guilty on April 17 in Lamar County Circuit Court to one charge, and agreed to pay restitution to complainants in return for the dismissal of additional charges in both Lamar and Pickens counties.

"It is a huge problem for landowners and the timber industry when thieves trespass, cut trees to which they have no right, and sell these trees as their own," said Attorney General King. "This defendant admitted that he knowingly took timber that belonged to someone else, and he then sold it as though it were his own. The land and timber owners in this area are fortunate to have the excellent services of the Alabama Forestry Commission, whose agents Kenneth Elmore and Harold Jordan conducted a thorough investigation to bring this case to a successful conclusion. I am proud, also, of the good work in this case done by Assistant Attorney General W. Brent Woodall of my Public Corruption and White Collar Crime Division, and Special Agent George Barrows of my Investigations Division."

The particular charge to which Sanford pleaded guilty was first-degree theft of property having a value exceeding $1,000 which belonged to the Weyerhaeuser Co. These trees were on property in southern Lamar County that Weyerhaeuser was leasing from International Paper Co. Additional charges involving theft of timber belonging to International Paper, and to CCC Inc., had been pending in Lamar and Pickens counties. After his guilty plea yesterday, he was sentenced to five years imprisonment, which was suspended for a period of five years probation during which he will be required to pay restitution to complainants. A restitution hearing will be set to determine the value of the stolen timber and to set the amount of compensation due to complainants.


With spotted owl count falling, lawsuit is planned. Audubon Society tells Weyerhaeuser, state they are violating species act. By Robert McClure. Seattle Post-Intelilgencer, April 19, 2006

More than a decade after the Clinton administration's Northwest Forest Plan was launched to save the threatened spotted owl, a Seattle environmental group says the bird's population in Washington is plummeting.

Citing "overwhelming evidence" about the decline of what became a focal point in the battle between environmentalists and the timber industry in the 1990s, the Seattle chapter of the Audubon Society launched a legal assault Tuesday on Weyerhaeuser Co. and the state agency that regulates timber cutting.

Joined by the Kittitas Audubon Society, the Seattle group cited five spots in southwest Washington where the state allowed extensive logging by Weyerhaeuser near owl nests. The logging, and more that is planned, violate the Endangered Species Act, the environmentalists contend.

Weyerhaeuser says it follows state regulations and even exceeds them in some ways.

While the spotted owl was the focus of intense clashes between environmentalists and timber-industry supporters in the early 1990s, those fights centered mostly on national forests. There, logging has long been severely curtailed to preserve the owl and other species that thrive in older forests.

The plan for saving the owl focused on protecting federal land in national forests. But that didn't work. Spotted owls are declining in number in Washington at more than twice the rate predicted by federal biologists. Environmentalists point to state commitments that private lands would make some contribution.

"Everyone knew it was biologically questionable to shift all the recovery to federal land," said Peter Goldman, a lawyer with the Washington Forest Law Center who is representing the Audubon chapters. "The state's never done its share, and now we're really in a panic mode. ... It's not just about the owl. It's about broken promises."

While Weyerhaeuser told the government years ago that it would establish a long-term plan to protect spotted owls on its extensive Southwest Washington holdings, the plan was never completed.

Instead, company biologists carefully monitor the owls, Weyerhaeuser says, and logging is designed to maximize owl survival by leaving intact areas considered important to the birds.

On Tuesday, the environmental groups filed an official notice to Weyerhaeuser and to state Lands Commissioner Doug Sutherland of their intention to sue.

"We've got protections across the state for spotted owls, and those do not extend to Weyerhaeuser," said Alex Morgan, conservation director for Seattle Audubon. "You've got one bad apple that is not living by the rules that other landowners have to live by. ... Instead, we have an entire region of the state that has zero protection for spotted owls."

Responded Frank Mendizabal, a company spokesman: "We are not aware that any of our operations, either ongoing or proposed, pose any threat to any northern spotted owl. We follow all the rules and regulations."

Spokeswoman Patty Henson at the state Department of Natural Resources said Sutherland would have no comment until state lawyers can study the filing.

Environmentalists threatened a similar suit in 2003 when they saw U.S. Timberlands Co. logging heavily around spotted owl nests on the eastern slopes of the Cascades. That launched a discussion of 2 1/2 years that culminated in the Forest Practices Board last year rejecting more-rigorous reviews of logging in 13 "spotted owl special emphasis areas."

Frustrated, environmentalists scouted out the best examples possible of where logging is harming owls. They centered in on a five-site region in Southwest Washington that was never tagged a "special emphasis area" for the birds despite being nominated for protection by state scientists.

The same sites were cited last year by the U.S. Fish and Wildlife Service in notifying Weyerhaeuser that federal biologists were concerned about the company's logging.

Since then, the company has met with federal officials and explained its system of carefully studying the owls to help shape timber cuts, said Kevin Godbout, the company's director of external and regulatory affairs.

"We've been able to ease some of their concerns, and some of their concerns are ongoing," Godbout said.

He said the Southwest Washington conservation plan promised by the company, which was to cover owls and a number of other species, was developed but never put into effect because "we just weren't able to get as much consensus as we wanted among the various stakeholders."

Mendizabal said Weyerhaeuser has an extensive program to locate and protect spotted-owl nests. Its scientists share data they collect with state and federal officials.

He said the company actually goes further than the regulations require. Outside the "special emphasis areas" for owls, loggers can cut down a tree where spotted owls have nested so long as they wait until the nesting season is over.

Weyerhaeuser doesn't do that, though, Mendizabal said. Only after the birds have left and several nesting seasons have gone by with no sign of them is that patch of forest cut, he said.

In addition, Godbout said, the company routinely leaves more than the 70 acres around spotted-owl nests required in many situations by state rules. And in some of the places where the environmentalists are complaining, he said, it appears a spotted-owl competitor, the barred owl, has moved in and displaced the spotted owl.

"We take this responsibility seriously," Godbout said. "We manage with a wealth of information."

Pat Ward, a spotted-owl biologist working with the environmental groups, said cutting big swaths of forest near a nest can be almost as harmful as cutting the nest tree itself, because the owls need forest to find prey.

If Weyerhaeuser is allowed to continue logging near owl nests, "the probability that those owls are going to survive through time is really low," Ward said. "There's a very high likelihood that they will not do well if they persist at all."


A partial history of the northern spotted owl issue:

1989: Federal officials propose to protect spotted owl under Endangered Species Act.

1990: Owl officially declared "threatened" and granted protection.

1991: U.S. District Judge William Dwyer forbids U.S. Forest Service to allow logging in spotted owl habitat. Forest Service halves logging in national forests. Weyerhaeuser CEO George Weyerhaeuser lobbies Congress and the Bush administration, which agrees to drop Weyerhaeuser and other private timberlands from proposed habitat protections.

1993: Clinton administration convenes nationally televised Forest Summit to develop plan to save owls while preserving the timber industry. Weyerhaeuser executive Charlie Bingham promises to develop a plan to protect owls and other threatened species on 100,000 acres of company land in Southwest Washington.

1994: Dwyer approves Clinton administration's Northwest Forest Plan, the result of the 1993 Forest Summit. It calls for large rollbacks in timber cutting in national forests.

1995: State Forest Practices Board designates 13 areas for "special emphasis" in protecting spotted owls on private land, but rejects state scientists' recommendation to extend protections to the northern Olympic Peninsula and Southwest Washington.

Late 1990s: Weyerhaeuser drops effort to develop Southwest Washington habitat-conservation plan.

2003: Environmentalists threaten suit under Endangered Species Act, saying state has allowed too much timber cutting near spotted owl nests by U.S. Timberlands Co. on eastern Cascade slopes. Negotiations with the state ensue.

2005: State Forest Practices Board rejects environmentalists' request to tighten logging on 115,000 acres in the "special emphasis areas" for owls.

2006: Environmentalists file notice required by Endangered Species Act, saying they will sue Weyerhaeuser and the Forest Practices Board.


Layman Lumber to close. By Leah Beth Ward. Yakima Herald-Republic, April 18, 2006

Layman Lumber Co., a fixture in Naches for 50 years, will lay off most of its 50 employees by the end of the month and shut down for good by the middle of June.

Owner Kathy Kratzer, daughter of founder George Layman, said Monday that timber supplies aren't sufficient to operate the sawmill, which produced lumber mostly for the housing industry.

"Without timber, you can't make lumber," Kratzer said in a telephone interview.

She also blamed poor prices and changing environmental regulations but declined to elaborate on the company's financial situation.

"It's just become impossible. Let's just leave it at that," Kratzer said.

Layman Lumber, which has produced about 25 million board feet of lumber a year, is representative of the small mills that once dotted the Northwest, said Mike Pieti, executive secretary and treasurer of the Portland-based Western Council of Industrial Workers. The union didn't represent Layman workers but Pieti, who once worked at the former Boise Cascade mill in Yakima, said it couldn't have been competitive against today's big, modern mills.

"It's sad, but mills today will do about 10 times what Layman could do," Pieti said. "I think George Layman kept it going out of loyalty to employees."

George Layman died five years ago.

According to trade groups, the Northwest has about 240 sawmills compared with 702 in 1987.

The former Boise Cascade sawmill in northeast Yakima closed in August, costing 116 jobs. It was the city's oldest continuously operating manufacturing business. Owner Yakima Resources continues to operate the adjoining plywood mill, which has about 200 employees.

Kratzer said older employees at Layman are vested in the company's profit-sharing plan and will receive a pension.

The 92-acre site, which includes separate large- and small-log operations, will close at the end of April, followed by the planer at the end of May and the shipping department in mid-June. About 10 employees will stay on for cleanup and security, Kratzer said. At full tilt, the company employed 70 people.

The U.S. Forest Service is no longer harvesting timber in any significant quantity, said Kratzer. Changing ownership of other big suppliers, like Boise Cascade and Plum Creek, also hurt Layman Lumber's supply, Kratzer said.

Naches Mayor Charles Ross said the closing won't hurt the city too much financially because the complex sits on county land. He said it's the generosity of the Layman family to local charities and the family-wage jobs that will be missed.

"The idea of not having them there is something that pains us," Ross said.

Kratzer said the family doesn't have any plans to sell the property.

"We think we want to do something with the site," she said, declining to elaborate.


Trace to meet with company on land buy. WDAM.com [Laurel-Hattiesburg Mississippi], April 13, 2006

Longleaf Trace directors received some good news Tuesday from the Plum Creek Timber Company, owner of a parcel of land along the rails-to-trails project they would like to buy and develop.

Company officials agreed to meet with the board later this month to discuss the land.

The lookout point at Beaver Lake in northeast Lamar County is one of the most popular spots on the Longleaf Trace. But It sits on land owned by the timber company.

The Longleaf Trace board would like to purchase 24 acres, including Beaver lake, and build a dam to help raise the water level. Plans for the area include camping sites and a walking trial around the lake.

"We really want to clean it up, make a more attractive spot out of it and those that want to fish can come here, have a picnic, whatever," says Lynn Cartlidge, board president.

Cartlidge is optimistic that a deal can be worked out with the timber company.

"Plum Creek is a huge corporation that bought out Georgia Pacific and this pond area, they may have other plans too, but it would be real attractive spot for us on the trail," he says.

Board members plan to meet with Plum Creek officials April 25.


Weyerhaeuser "Built Green" houses not so, groups claim. By Hal Bernton. Seattle Times, April 13, 2006

Quadrant Homes has touted environmentally friendly construction techniques that minimize wood waste, increase energy efficiency and rely on sustainable forestry.

Weyerhaeuser's credentials as a "green" homebuilder are being challenged by a Canadian tribe and an environmental group, which has tracked the wood used to build Puget Sound-area homes to disputed logging zones in Canada's northern forests.

The laminated-wood products are used by Quadrant Homes, a Weyerhaeuser subsidiary and major homebuilder that has touted environmentally friendly construction techniques that minimize wood waste, increase energy efficiency and rely on sustainable forestry. In a report released Wednesday, the environmental group Rainforest Action Network accuses Weyerhaeuser of misleading marketing.

"They say they have an environmentally friendly product; and that's a lie and we have to stop that," said Steve Fobister, deputy chief of the tribe, the Grassy Narrows Band Council, which has asked Weyerhaeuser to stop buying logs from the disputed harvest zone, the Whiskey Jack Forest in northwestern Ontario.

Weyerhaeuser stands by the marketing of Quadrant homes, which carry a three-star "Built Green" certification from the Master Builders Association of King and Snohomish Counties. They say that the logs, which they buy from another forest-products company, are logged in a sustainable way.

"It's not an endangered forest," said Paul Barnum, a Weyerhaeuser spokesman. "To say that the wood is somehow tainted simply because it's coming from this particular area of Canada is simply not true."

The Whiskey Jack forest covers more than 2,000 square miles of Ontario that the 1,200-member Grassy Narrows Band claims as ancestral lands. The area has been logged for years, but in 2002, when the logging approached the Grassy Narrows village, the tribe erected a blockade.

Since then, the company that logs that area, Abitibi-Consolidated, has agreed to stop logging within approximately 6 miles of the village and has tried to negotiate with the tribe about future logging.

But the tribe has sought management authority and reparations and has made other demands that would require an agreement with the Ontario provincial government, according to Denis LeClerc, Abitibi's director of corporate affairs.

The controversy highlights the difficulty Weyerhaeuser faces in trying to position the Federal Way-based corporation as an environmental leader while tapping into the northern — or boreal — forests, which have been the focus of international conservation efforts.

The boreal forests cover 35 percent of Canada's total land area and include some of the world's largest expanses of unlogged timber. They shelter wildlife, provide clean water and store carbon dioxide that, when released into the atmosphere, contributes to global warming.

The provincial governments now face new demands from conservation groups that seek to set aside more of the native forest and leave more trees behind in logged areas, and from tribes — known in Canada as First Nations — that want more control over the harvests, and the revenues they generate.

Weyerhaeuser and Abitibi both have been asked by the Rain Forest Action Network to adopt new logging standards that would be developed under the umbrella of the Forest Stewardship Council, a group that seeks to promote "responsible forest management" and encourages extensive consultations with tribal groups.

Several other Canadian forest companies have agreed to this certification, but Weyerhaeuser and Abitibi have opted to use other certification programs that the Rainforest Action Network contends don't offer enough forest protection.

The Master Builders Association of King and Snohomish Counties endorses the forest-stewardship standards.

But there is no requirement that only those trees be used to get the "Built Green" label on homes, said Aaron Adelstein, who directs the Master Builders program that bestows it.


Potlatch hires Plum Creek land manager. Business Wire, Apr 11, 2006

Potlatch Corporation (NYSE:PCH) today announced that effective May 15, 2006, William R. DeReu, 39, will join Potlatch in the new position of Vice President, Land Sales and Development, reporting to President and Chief Executive Officer Michael J. Covey.

Most recently, DeReu was Director, Land Asset Management Services, for Plum Creek Timber Co., Inc. In his new position with Potlatch, he will manage and direct the company's efforts to identify, market and develop higher and better use lands to maximize their value and returns to Potlatch stockholders, and to assess higher and better use land opportunities in future land acquisitions. He will be located in the company's Spokane headquarters office.

Covey noted, "Bill brings nine years of real estate experience to his new role at Potlatch. During his career with Plum Creek in Montana and Wisconsin, Bill was instrumental in identifying, marketing and developing rural land with alternative values to timber production. He also negotiated conservation sales and easements with both private and public agencies. Importantly for Potlatch, Bill has experience working under the complex structure of a REIT and has extensive experience with 1031 land exchanges and the use of the internet as a marketing tool," Covey concluded.

DeReu has a degree in Business Administration/Finance from the University of Montana and worked in commercial banking prior to beginning a career in real estate.

Potlatch is a REIT with 1.5 million acres of forestland in Idaho, Minnesota, Arkansas and Oregon. Through a taxable subsidiary, the company also operates 13 manufacturing facilities that produce lumber and panel products and bleached pulp products, including paperboard and tissue products.


It's tax cut or job cuts, timber companies say. By Ryan J. Donmoyer, Bloomberg News. International Herald tribune, April 10, 2006

Weyerhaeuser and Temple-Inland are focusing on cutting more than trees these days.

The companies are leading efforts by the U.S. forest products industry to lobby Congress for a tax break worth as much as $500 million a year, suggesting that without it they might be prompted to move sawmills - and many of the industry's two million jobs - out of the United States to lower-cost countries.

In the meantime, the U.S. forest industry is undergoing a transformation in which companies like International Paper, North America's largest paper maker, have sold millions of acres of timberland to Wall Street and other investors. The companies seeking the tax break assert that without it, this trend will accelerate, leaving more and more of them as processors able to operate anywhere in the world.

Representative Artur Davis, an Alabama Democrat who supports the plan, said that if it is not approved, "companies are going to have all kinds of incentives to pull up and move."

The companies are seeking a provision in a $70 billion tax-cutting measure that would cut by 60 percent the capital gains taxes they pay when using their trees to make paper and wood products. They now pay rates as high as 35 percent, compared with zero to 15 percent for nonmanufacturing forest owners.

Advocates of the provision say high taxes on corporate-owned timber make it impossible for companies to earn the same high returns as investors buying timber through real estate investment trusts, or REITs, and so-called timber investment management organizations.

Last week, International Paper sold 85 percent of its timberland to two investor groups for $6.1 billion. Companies that have owned millions of acres of timber for more than a century are increasingly either selling their trees or becoming real estate investment trusts, as Plum Creek Timber did in 1999. To benefit from the lower tax rate, REITs are not allowed to derive more than 10 percent of their income from manufacturing.

Shares of Weyerhaeuser, which reached a 52-week high on April 6, have risen 19 percent since November, when it first appeared that the provision might be included in the larger tax measure. Temple-Inland shares are up 24 percent in that period.

Proponents of the measure assert that tax changes since 1986, when a new law made corporations ineligible to claim lower capital gains rates on appreciated assets, are "driving the transition" in the industry.

This has created a tax situation in which a shareholder of a company like International Paper or Weyerhaeuser earns 51 cents of every dollar in profit from cutting down a tree; an investor in a real estate investment trust that owns the trees and not the manufacturing plants earns 85 cents. Pension funds and investors like Harvard University's endowment, until last year the largest institutional investor in timberlands, are tax-exempt. Institutional ownership of timberland increased to $15 billion in 2005 from $69 million in 1985, according to the Pulp & Paper North American Factbook, an annual industry survey.

Henson Moore, chief executive of the American Forest and Paper Association in Washington, whose members include Weyerhaeuser and Temple-Inland as well as the institutional investors, said his group was not emphasizing the tax differences between different types of U.S. owners in its lobbying effort.

Instead, he said, the association is trying to persuade Congress that higher taxes make the U.S. industry generally less competitive with foreign rivals. Moore said the real estate investment trusts were not opposing the effort.

"They're saying, 'It doesn't do much for us, but we're not going to oppose it,'" Moore said.

Critics of the tax break dispute the notion that taxes are the driving force in the sell-off of commercial forests. "They're trying to get a tax advantage for doing what they're already doing," said George Draffan, a researcher in Seattle on environmental and business issues for environmental groups and labor unions. "They're chasing fiber and cheap labor."

The forest products industry has lost 193,000 jobs since late 1999, according to the U.S. Bureau of Labor Statistics.

Davis, the congressman whose district includes Wilcox County, where Weyerhaeuser pays relatively high wages to 800 people, said it was crucial to retain the company and its jobs.

"The presence of Weyerhaeuser in the county is a lifeline," Davis said.

Although he could not cite the number of jobs at risk, Davis said that when other industries faced threats of job cuts, "the reality is always worse than the projections, and I fear the same thing here."


Weyerhaeuser leads campaign for tax break. Company threatens to move sawmills overseas. By Ryan J. Donmoyer, Bloomberg News, April 11, 2006

Weyerhaeuser Co. and Temple-Inland Inc. are focusing on cutting more than trees these days.

The companies are leading efforts by U.S. forest-product businesses to lobby Congress for a tax break worth up to $500 million a year, suggesting that without it, they may be forced to move sawmills -- and many of the industry's 2 million jobs -- to lower-cost locales outside the United States.

The lobbying effort is occurring amid a transformation of the U.S. forest industry that has seen companies such as International Paper Co., North America's largest paper maker, sell millions of acres of timberland to Wall Street and other investors. The companies seeking the tax break say that without it, that trend will accelerate, leaving more and more of them as processors able to operate anywhere in the world.

"The timber industry faces a much greater, much more onerous tax burden," says Rep. Artur Davis, D-Ala., who supports the break. If the tax cut isn't passed, Davis says he has been warned by lobbyists, unions and trade groups, "companies are going to have all kinds of incentives to pull up and move."

The companies are seeking a provision in a $70 billion tax-cutting measure that would reduce by 60 percent the capital-gains taxes they pay when they use their own trees to make paper and wood products. They now pay rates as high as 35 percent, compared with rates between zero and 15 percent paid by non-manufacturing forest owners.

Advocates of the provision say the U.S. tax code imposes the second-highest rate in the world on corporate-owned timber, making it impossible for companies to earn the same high returns as investors buying timber through low-taxed real estate investment trusts and so-called timber investment management organizations.

Since 1986, the NCREIF Timberland Property Index has climbed at an annual rate of 15 percent, compared with an 11 percent return by the Standard & Poor's 500 Index.

Last week, Stamford, Conn.-based International Paper sold 85 percent of its timberland to two investor groups for $6.1 billion. Companies that have owned millions of acres of timber for more than a century are increasingly either selling their trees or becoming real estate investment trusts, as Plum Creek Timber Co. Inc. did in 1999. To benefit from the lower tax rate, REITs can't derive more than 10 percent of their income from manufacturing.

The tax break being sought would benefit Federal Way-based Weyerhaeuser, the world's biggest lumber producer, and Temple-Inland because they are the two biggest companies with extensive land holdings, said Steven Chercover, a senior research analyst for D.A. Davidson & Co., an investment firm with offices in western U.S. states.

Chercover said tax changes since 1986, when a new law made corporations ineligible to claim lower capital gains rates on appreciated assets, are "driving the transition" in the industry. Since then, capital gains rates for individuals have been reduced to 15 percent from as high as 28 percent, while the corporate tax rate has increased to 35 percent.

That has created a tax situation where a shareholder of a company such as International Paper or Weyerhaeuser earns only 51 cents of every dollar in profit from cutting down a tree; an investor in a real estate investment trust that owns the trees and not the manufacturing plants pockets 85 cents. Pension funds and investors such as Harvard University's endowment, until last year the largest institutional investor in timberlands, are tax-exempt.

The companies referred questions to their trade associations. Henson Moore, chief executive of the American Forest & Paper Association in Washington, whose members include Weyerhaeuser and Austin, Texas-based Temple-Inland as well as the institutional investors, said his group isn't emphasizing the tax differences between different types of U.S. owners in its lobbying effort.

Instead, he said, the association is trying to convince Congress that higher taxes make the U.S. industry generally less competitive with foreign rivals. He said the real estate investment trusts aren't opposing the effort. "They're saying, 'It doesn't do much for us, but we're not going to oppose it,' " Moore said.

Critics of the tax break dispute the notion that taxes are the driving force in the sell-off of commercial forests. "They're trying to get a tax advantage for doing what they're already doing," said George Draffan, a Seattle-based researcher on environmental and business issues for environmental groups such as Rainforest Action Network and labor unions such as the Paper and Chemical Employees Union. "They're chasing fiber and cheap labor."


Sawmills lobby for tax break. When timber companies use their own trees, tax is onerous, they say. [Tacoma WA] News Tribune staff and Bloomberg News, April 11, 2006

Weyerhaeuser Co. is focusing on cutting more than trees these days.

The Federal Way-based company is part of an effort by U.S. forest products businesses to lobby Congress for a tax break worth up to $500 million a year.

The businesses suggest that without it they might be forced to move sawmills – and many of the industry’s 2 million jobs – to lower-cost locales outside the U.S.

The lobbying effort is coming at a time when companies such as International Paper Co., North America’s largest paper maker, sell millions of acres of timberland to Wall Street and other investors. One of Weyerhaeuser’s largest stock owners suggested last year that the company consider splitting its timber assets from the rest of the company.

The tax break could help these companies continue to own timberland in the United States. The companies seeking the tax break say that without it more and more of them might follow International Paper.

Weyerhaeuser’s lobbyists have worked on this issue, and the company supports the industry’s efforts, spokesman Bruce Amundson said.

He said he did not know how this would affect the company financially.

"The timber industry faces a much greater, much more onerous tax burden," said Rep. Artur Davis, an Alabama Democrat who supports the break. If the tax cut isn’t passed, Davis says he has been warned by lobbyists, unions and trade groups, "companies are going to have all kinds of incentives to pull up and move."

The companies are seeking a provision in a $70 billion tax-cutting measure that would reduce by 60 percent the capital-gains taxes they pay when they use their own trees to make paper and wood products. At present, they pay as high as 35 percent, compared with rates between zero and 15 percent paid by non-manufacturing forest owners.

Advocates of the provision say the U.S. tax code imposes the second-highest rate in the world on corporate-owned timber. That makes it impossible for companies to earn the same high returns as investors buying timber through low-taxed real estate investment trusts and so-called timber investment management organizations.

Last week, Stamford, Conn.-based International Paper sold 85 percent of its timberland to two investor groups for $6.1 billion. Companies that have owned millions of acres of timber for more than a century are increasingly either selling their trees or becoming real estate investment trusts, as Seattle-based Plum Creek Timber Co. Inc. did in 1999. To benefit from the lower tax rate, REITs can’t derive more than 10 percent of their income from manufacturing.

The tax break being sought would benefit Weyerhaeuser, the world’s biggest lumber producer, because it is one of the biggest companies with extensive land holdings, says Steven Chercover, a senior research analyst in Lake Oswego, Ore. for D.A. Davidson & Co.

Shares of Weyerhaeuser, which hit a 52-week high April 6, have risen 19 percent since November, when it first appeared the provision might be included in the larger tax measure.

"Their shareholders would benefit because presumably there would be increased dividends by having longer-term control of the land," says Chercover, who doesn’t own shares of any of the timber companies he covers.

The companies also might see an increase in credit quality, he says, because "timberland is some of the best collateral a company can have, whether it’s pledged or not."

The issue has grabbed the attention of 15 senators, including five Democrats from Arkansas, Washington and Louisiana, which have large swaths of corporate-owned forests. They have asked Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, to include the timber tax break in the tax-cutting measure that extends President George W. Bush’s 2003 cuts on dividends and most capital gains. The legislation is in the final stages of negotiation.


Timber baron offers land swap with state, feds: Idaho Statesman, Apr 11, 2006

Blixseth also has opened land to hunters, campers

A California resort developer and timber baron who has acquired large swaths of Idaho forest wants to show his good intentions as he prepares to offer a land deal that would convert up to half his Idaho acreage into public lands.

Billionaire Tim Blixseth has opened 178,000 acres of his Idaho lands to public use for pennies an acre. Blixseth also has pledged to match $500,000 in donations to renovate Idaho's proposed governor's mansion, donated by fellow billionaire J.R. Simplot.

"I'm putting my money where my convictions are," Blixseth said in an interview.

Blixseth owns 217,000 acres in Idaho, land equivalent to four times the size of Boise. He is preparing to offer up to 107,000 acres of that land to the state and federal governments. In return, Blixseth seeks lands he can develop near McCall and New Meadows. He has not not yet identified tracts he wants.

He bought the vast Idaho timber lands owned by Boise Cascade and Plum Creek in 2005. He plans to keep most of the former Boise Cascade tree farm, spread from Weiser north to New Meadows and south to Idaho City, in timber production instead of development.The lands he wants to trade include:

- Portions of the Lewis and Clark Trail near Powell in North-Central Idaho, including an historic expedition campground.

- Twelve miles of the canyon of the North Fork of the Payette River along Highway 55.

- Ten thousand acres of habitat critical to the survival of the endangered Northern Idaho ground squirrel.

"I think it's the right thing to do," Blixseth said. "Two generations from now no one is going to know my name, but the animals will use the habitat and the people will have the land."

He has convinced a few Idahoans of his good faith by keeping open public access on the former Boise Cascade lands, popular especially among hunters and campers. His company, Western Pacific Timberlands, made a deal in March with the Idaho Department of Fish and Game to open the tree farm at a cost of 6 cents an acre — enough to buy gates to protect timber, roads and wildlife.

"That really put him in the good-guy column with me," said Rod Davidson, a former Boise sportsman who owns a second home near Blixseth's holdings in Lake Fork. "But it doesn't mean he doesn't bear watching. He definitely wants something, and that makes people nervous."

Davidson and other critics were unhappy last year when Western Pacific clear-cut some of its land in Round Valley south of Cascade. But Blixseth said he's actually cutting less timber than Boise Cascade did.

Blixseth got into the land-trade business in the 1990s when he bought 164,000 acres of checkerboard timber lands throughout the Gallatin National Forest north of Yellowstone National Park. He cut a deal — approved by Congress — to sell and trade 100,000 acres to the Forest Service while keeping 13,400 acres of land near Big Sky.

He turned the area into the Yellowstone Club, a private ski and golf resort where members must prove they're worth at least $3 million and pay a $250,000 initiation fee and $16,000 in yearly dues over an above the cost of their land purchase.

He is closing a 100,000-acre land trade with Washington state that will protect big-game habitat with other former Boise Cascade lands he purchased.

Land trades are common, but trading to protect big private tracts requires big investments, Blixseth said. He said he's the only one willing to put up the money needed to protect large tracts like the 39,000 acres along the Lewis and Clark Trail he purchased in North Idaho. Those lands, originally granted to the Northern Pacific Railroad, are mixed into the Clearwater National Forest in the same checkerboard pattern as Blixseth's Gallatin lands.

"The idea of turning it into public land is fabulous," said Kimberly Nelson, a U.S. Forest Service spokeswoman in Orofino.

Blixseth and the Forest Service have only begun talks about the trade. Since it would include two national-forest regions and could end up in Congress, regional forest officials will lead the effort. Blixseth has not talked about lands in North Idaho he's interested in acquiring and has not revealed what he wants around McCall.

It's always easier to find lands to acquire than land that can be sold without controversy, said Dick Smith, Boise National Forest supervisor. "For every acre out there, there's someone that cares about it," Smith said.

Blixseth's business plan is simple. He buys places the public wants and offers solutions to public problems. He helped Big Sky expand its sewage-treatment facilities, which gave him the ability to develop more ground plus keep millions of gallons of pollution out of the Gallatin River — the river filmed in the movie, "A River Runs Through It."

He sees a similar opportunity in McCall, which has limited capacity in its sewage system and a moratorium on new hookups. He has land he is willing to offer to McCall so it can construct a sewage lagoon in exchange for the opportunity to develop other tracts.

"We happen to be in a position here at Western Pacific that if we spend $5 million to $10 million to lift the moratorium it's good for us and good for them," Blixseth said.

The arrival of Blixseth and other developers saddens Mary Hart, a former Valley County planning commission member and current McCall school-board member. The benefits of development are overrated, she said. And she's not convinced county and city government are prepared to protect the public interest in the face of Blixseth, Tamarack and other developers.

"What we have here in Idaho is so precious," Hart said. "I don't think we have the same interests at all."

Blixseth sees growth as inevitable. That's why, he said, he wants to place special areas under state and federal protection and develop in places that make sense. He wants to work with Idahoans to find common ground.

"If you are going to have growth, why not be sure to put it where you want?" Blixseth said.


Shareholders Prepare to ‘Wake Up Weyerhaeuser’ at April Meeting. Rainforest Action Network news release, March 21, 2006.

Today 100 top investors in Weyerhaeuser (NYSE: WY), the world’s largest lumber company, began receiving letters from Rainforest Action Network endorsing shareholder resolutions to improve the company’s social and environmental performance.

Calvert Group, the International Brotherhood of Teamsters, Grassy Narrows First Nation, The Boreal Forest Network, Rainforest Action Network, green-building industry leaders and other stakeholders are calling on the lumber giant to join a growing movement of multinational corporations bringing policies and practices into alignment with best practices on governance, the environment, and human rights.

Despite a recent green rush towards sustainability in the wood and paper sector, Weyerhaeuser still operates under an out-dated forestry practices policy originally developed by the company in 1971. Shareholders are challenging the company to adopt independent Forest Stewardship Council (FSC) certification, respect the rights of indigenous communities, and adopt a comprehensive environmental policy to protect endangered forests.

Triggered by Weyerhaeuser’s 11th hour decision to silence shareholders at its 2005 annual general meeting, the unlikely alliance of shareholder activists are reaching out to fellow investors to ensure that concerns about the company’s well-documented destructive forestry practices, human rights abuses, and $211 million fourth quarter loss are heard loud and clear at this year’s meeting in Federal Way on April 20.


The March 16, 2006 letter encourages investors to vote yes on resolutions filed by Calvert Group and The International Brotherhood of Teamsters. Calvert’s resolution requests that Weyerhaeuser assess the feasibility of earning FSC certification for its forestlands and forest products manufacturing facilities by November 1, 2006. FSC standards provide independent, third party certification to ensure strong protection of forest ecosystems, workers’ rights, and the rights of indigenous peoples to free, prior and informed consent for industrial activities on their traditional territory.

Inconsistent with current corporate governance best practices, Steve Rogel serves as both CEO and Chairman of the Board. The Teamsters’ filed a resolution requiring "an independent leader to ensure that management acts strictly in the best interests of the Company, especially when the Company is facing significant challenges." Citing a 2005 $457.8 million dollar judgment against the company for contract violations and recent plant closures which have left at least 700 Canadian Weyerhaeuser employees jobless, the Teamsters’ resolution asks for an independent Board of Directors that represents the best interests of shareholders.

The Nominees

Ms. Bonnie Swain is a mother and member of the Canadian Grassy Narrows First Nation community. The Grassy Narrows community, like many other indigenous communities across Canada including the Haida Gwaii and Hupacasath First Nations, assert that Weyerhaeuser has logged on their land without permission and have initiated lawsuits, public protests, and logging blockades to stop Weyerhaeuser from destroying the forests on their traditional territories. If elected, Bonnie Swain will help Weyerhaeuser adopt 21st century values and respect Native rights.

Mr. Michael Brune is the Executive Director of Rainforest Action Network and has helped dozens of companies develop business policies and practices that improve supply chain management and the integration of environmental values with sound business strategies. Mr. Brune has worked closely with many leading companies as they develop and implement modern environmental policies, including Home Depot, Lowe's, Kinko’s, many top homebuilders, such as KB Homes, and some of the world’s largest financial institutions, including Citigroup, Goldman Sachs and JP Morgan Chase.

Ms. Lynne Barker is a green-building specialist who develops policies and programs to advocate for higher standards in the commercial, institutional, and residential markets. The green building industry was named the number one emerging building trend in the Wall Street Journal in 2005 and there are currently over 2,000 LEED (Leadership in Energy and Environmental Design) projects completed or under development in the US representing 192 million square feet and $57.1 billion worth of capital investment. If elected to serve on the board of directors, she will guide Weyerhaeuser on how to get in on the green rush.

Weyerhaeuser and Human Rights

Grassy Narrows First Nation representatives recently sent a letter warning the chief executives of Weyerhaeuser to "immediately cease and desist from all logging and industrial resource extraction on our territory" or face a "fierce international campaign." The letter followed a decade of failed negotiations, lawsuits, environmental assessment requests, public protests, and a 3-year logging blockade- the longest running in Canadian history.

When representatives from Haida Gwaii First Nation spoke outside Weyerhaeuser’s AGM last year, their community was preparing for a third week of community checkpoints blocking Weyerhaeuser logging and asserting native land rights on their island in British Columbia. The checkpoints shut down all logging on the island for a month and the community seized $50 million worth of logs. Island residents say that failed negotiations, un-enforced laws and decades of destructive forestry had left them with no option but to block further industrial logging by Weyerhaeuser. The blockades enjoyed broad international support and resulted in an agreement with the Canadian government granting the people of Haida Gwaii more control over their traditional territory.

Weyerhaeuser and the Environment

Weyerhaeuser’s unsustainable operations in the Canadian Boreal Forest, which stretches across North America from Alaska to the Atlantic Ocean, have been widely publicized in the last year. Weyerhaeuser annually harvests more than 10.2 million cubic meters of timber from the Boreal entirely from areas that have not been FSC certified. The Boreal comprises 25 percent of the planet's remaining ancient forest and is considered as important to global environmental security as the Amazon. Some of the Boreal's key environmental services include regulating global climate, cleaning the air, purifying water, and serving as a lifebank in a time of unprecedented extinction. Less than eight percent of the Boreal is protected, and approximately half has been designated for resource extraction by the Canadian government.

Supporting Statements

"Weyerhaeuser is losing touch with the marketplace," says Brant Olson, director of Rainforest Action Network’s Old Growth Campaign. "No one wants to build a home with lumber stolen from First Nation communities. No one wants to invest in a company that ignores its shareholders. We’re working with customers, banks and communities worldwide to make sure that Weyerhaeuser changes its business practices to respect the environment, communities and indigenous rights."

"Weyerhaeuser has long ignored the people most affected by their decisions- both on the ground and in the board room," says Bonnie Swain, Grassy Narrows community leader and Weyerhaeuser Board nominee. "I welcome the chance to be heard as a Native person and a person who doesn’t profit off the land, but survives off of it. If a Native person went and started cutting trees they wouldn’t cut it all because there would be no animals, nothing to look at, nothing there. It is past time for Weyerhaeuser to start respecting Native wisdom and Native rights."

"FSC is leading the charge to restore trust in good forestry," says Dr. Michael P Washburn, Vice President of Brand Management at Forest Stewardship Council US. "For companies who truly believe they are doing the right thing on the ground, FSC is a no-brainer. For those not moving ahead, it’s fair to ask what are they trying to hide?"

"Weyerhaeuser has many stated policy commitments both to protect the boreal forest environment and to respect and honour Indigenous Peoples rights," says Don Sullivan, Executive Director of the Boreal Forest Network. "I say it is high time that Weyerhaeuser walk the walk instead of talk the talk and live up to what they have committed themselves to on paper for endangered boreal forests."

The clear-cutting of the land, and the destruction of the forest is an attack on our people," says Roberta Keesick, Grassy Narrows’ blockader, grandmother, and trapper. "The land is the basis of who we are. Our culture is a land-based culture, and the destruction of the land is the destruction of our culture. And we know that is in the plans. Weyerhaeuser doesn't want us on the land, they want us out of the way so they can take the resources. We can't allow them to carry on with this cultural genocide."


Weyerhaeuser buzz: trees or paper? By Melissa Allison. Seattle Times, Feb 26, 2006

Fighting for profit in a difficult industry, Weyerhaeuser has come to a crossroads.

It operates the way timber companies have for decades, with major timberland holdings that feed its factories. But that way of doing business has fallen out of fashion, and if Weyerhaeuser cannot generate higher profit with a recent overhaul, it could be forced to choose between timber and manufacturing.

Some competitors are selling businesses and changing their corporate status to appease restless shareholders who want higher yields from these old-line companies that for years went relatively unnoticed on Wall Street. Timber companies are considered ripe for greater profits now largely because of how valuable their land holdings have become.

Weyerhaeuser, one of the country's oldest and largest timber companies, is making strides. It is closing more than a dozen plants and mills, selling several operations, and improving the way it sells products.

But those moves might not be enough at a time when demand for many of its products is flat, the price of making them has risen, and low-cost competitors in Asia and Latin America are snatching up market share. Weyerhaeuser posted a 43 percent profit decline in 2005, and its stock has been torpid."The problem is, the paper business is not doing well at all for anyone," said Steven Chercover, an analyst at D.A. Davidson in Portland. "The whole world has changed, and the business has moved offshore. South Americans can grow trees faster, and paper use in North America is going down."

U.S. competitors have succumbed to the pressure in various ways, from selling timberland to converting to real-estate investment trusts (REITs), which pay lower taxes than corporations but can do limited manufacturing.

Such drastic moves would be difficult for Weyerhaeuser, but they are not unthinkable. Neither is the possibility of the company divesting its manufacturing operations, although that seems the least likely scenario.

"We believe the integrated approach makes us better able to compete," Weyerhaeuser spokesman David Larsen said. "We think [that] in the long term, it yields superior investment returns."

Weyerhaeuser began as a timber company without mills, but the manufacturing of paper, packaging and other wood products has become its core business. Even when paper and packaging products are losing money — together they sapped $449 million from Weyerhaeuser's bottom line in 2005 — the company remains a manufacturing powerhouse with a large slice of the U.S. market.

One possibility:

Sell manufacturing

Without manufacturing, Weyerhaeuser would look quite a bit like Seattle-based Plum Creek, a giant timberland owner whose stock has outperformed Weyerhaeuser in recent years.

Plum Creek was the first real-estate investment trust with major timberland holdings. Other timber companies have followed it by converting to the REIT structure, including Potlatch and Longview Fibre earlier this year.

REITs are attractive to investors because they pay much lower taxes (15 percent, compared with 35 percent for regular corporations), and they are required to pay out at least 90 percent of their timber income in dividends.

REITs have limitations: At least 75 percent of their assets must be in real estate, and at least 75 percent of their gross income must come from real-estate sources such as rent and property sales. REITs can sell trees but not logs, which sometimes leads to complicated contracts between an REIT and its non-REIT subsidiaries.

Because paper and packaging are so depressed right now, some timber companies could convert without having to divest significant manufacturing operations. But Weyerhaeuser is probably an exception because it is so large.

Company officials have said it would cost $15 to $20 a share to become a REIT, which amounts to $3.7 billion to $4.9 billion.

Another option:

Sell timberland

Another option is for Weyerhaeuser to sell its timberland, something that might seem impossible to fathom for the company that trademarked the phrase "Timber Is a Crop."

That's the avenue that another Stamford, Conn.-based International Paper, plans to take. It began marketing 6.8 million acres of U.S. timberland last year to help pay off debt and focus on its manufacturing operations.

Analysts say Weyerhaeuser would be stuck with a much larger tax bill than International Paper for selling its timberland, partly because Weyerhaeuser has owned much of its 5.6 million acres far longer and would have to pay enormous capital-gains taxes.

Timberland contributed more to Weyerhaeuser's bottom line last year — $784 million — than any other business.

It would be hard to let go for that reason and also sentimental ones. Weyerhaeuser was established in 1900, when Frederick Weyerhaeuser and 15 partners bought 900,000 acres of Washington timberland from the Northern Pacific Railway. At the time it was the largest private land transaction in U.S. history.

Weyerhaeuser also likes controlling its raw material — trees — for manufacturing.

"If you own the land, you have a long-term investment with more security that the timber will be there over the years," Larsen said. "If you let it go and it goes to other uses, you'll never get it back."

Still, Weyerhaeuser must consider the possibility.

The least pain: Congress cuts taxes

The company supports proposed federal legislation that would lower the tax on timberland businesses to 14 percent (paper and other related businesses would continue to be 35 percent). Proposed in both houses of Congress last year, the bill is touted as a way to help a struggling industry and to save jobs.

"If a paper company owns its own trees, it's more likely to keep an underperforming mill running longer," said Chip Dillon, a paper and forest-products analyst for Citigroup, with which Weyerhaeuser does investment banking. "Timber allows them to subsidize a money-losing operation in hopes that things will turn around."

The legislation's biggest beneficiaries would be MeadWestvaco, Temple-Inland (which investor Carl Icahn challenged last year), and Weyerhaeuser, which stands to save about $162 million a year in taxes, according to an analyst report from Deutsche Bank Securities. In 2005, Weyerhaeuser earned $733 million.

"If the tax structure does not change, we'll clearly have to do something else," Larsen said.

It might be too late for Weyerhaeuser to get the best price for its timberland, with two of the country's largest timberland owners flooding the market.

Harvard University's money-management arm beat International Paper to market last year when it sold an estimated $1.6 billion in timberland to Hancock Timber Resource Group, according to Deutsche Bank Securities. That is thought to be most or all of Harvard's U.S. land holdings.

Impatient shareholders

At least one major Weyerhaeuser investor is watching closely.

Peter Langerman, chief executive of Franklin Mutual Advisers in New Jersey, which owns more than 5 percent of Weyerhaeuser's common stock, believes the company is undervalued.

The tax situation is not the only problem, Langerman said. He likes the mill closings and sales announced last year and wants more of the same.

"We'd like to see the pace continue and accelerate," he said.

Franklin Mutual is the same company that, under its previous chief executive, David Winters, pushed Potlatch to become a REIT.

"Weyerhaeuser is a bigger, more complicated company," Winters said. "They're tackling some very tough things, but some of these things you can't resolve overnight, even though Wall Street is obsessed with the short term."

Winters said he spoke with Weyerhaeuser before he left Franklin Mutual but didn't tell the company precisely how to improve its stock price.

Winters can't say whether his new Wintergreen Fund owns Weyerhaeuser shares because securities regulations prevent him from disclosing those holdings for the time being.

Weyerhaeuser is no stranger to big changes. It has moved in and out of businesses for decades, at one point running a steamship company whose vessels were ordered into service during World War II.

It also has felt pressure to sell its timberland before, said Paul Latta, an analyst at McAdams Wright Ragen in Seattle.

"It goes back 30 or 40 years, whenever real estate or timber does well," Latta said. "We're at the apex of the pressure for Weyerhaeuser to do something.

"If the real-estate investors continue to drive the market, [Weyerhaeuser] might knuckle under. But if they can sit on the sidelines for a couple years, I suspect the pressure will fade."


All Weyerhaeuser U.S. Mills Now Produce Certified Products. Company news release, Feb 22, 2006
Weyerhaeuser Company today announced that all of its 68 paper and wood products mills in the United States now meet independent standards for responsible wood purchasing. Outside auditors certified that all of Weyerhaeuser's U.S. primary mills meet the procurement provisions of the Sustainable Forestry Initiative (SFI(R)) Standard. To earn this distinction, mills must:
-- Know where their logs and chips come from and the type of supplier,
-- Monitor suppliers' compliance with state best management practices, and
-- Promote sustainable forest practices among log and chip suppliers.
"This is further assurance we can provide our customers with certified products," says Cassie Phillips, Vice President of Sustainable Forests and Products.
Among the certified products made by Weyerhaeuser's U.S. mills are:
-- Lumber, oriented strand board, Parallam(R) and TimberStrand(R)
-- engineered lumber, and plywood for construction
-- Hardwood lumber for furniture and cabinetry
-- Cellulose fiber for paper and absorbent products
-- Printing paper for books, magazines and office uses
-- Brown paper for bags and corrugated boxes
-- Liquid packaging board for beverage cartons and food service products
The SFI standard is governed by an independent board with equal representation from environmental organizations, the forest products industry and the broader forestry community. The SFI standard promotes the long-term health of forests through responsible forest management practices and through procurement practices by mills using logs or chips as their basic raw material.
All of Weyerhaeuser's U.S. forests have previously been independently certified as meeting the SFI standard. In Canada, all of the forests managed by Weyerhaeuser are certified under the Canadian Standards Association (CAN/CSA Z809) Sustainable Forest Management standard or the SFI standard. Today's announcement extends SFI certification to all of Weyerhaeuser's U.S. mills, which rely on wood from forests managed by Weyerhaeuser and other landowners.
In addition to its U.S. primary mills, all of Weyerhaeuser's U.S. office and printing paper converting plants have been certified to meet the SFI label-use requirements for secondary manufacturing facilities. To earn this certification, at least two-thirds of the material used in the product must come from independently certified forests or from suppliers who have an independently-certified SFI procurement system...

Weyerhaeuser: Weyerhaeuser Launches North American Coastal Shipping Service between Canada and Southern California. Webbolt, Feb 17, 2006. A new addition to its shipping fleet will make business easier for Weyerhaeuser and other companies who export products between Canada and the United States. By offering a new and competitive way to transport cargo by sea, Weyerhaeuser is providing an alternative to costly and often unreliable ground transportation.

Westwood Shipping, the company's commercial marine shipping subsidiary, will operate the newly acquired Westwood Pomona between ports in British Columbia and Long Beach, California.

"By adding this new service to our own shipping line, Weyerhaeuser is in a unique position to build value for its businesses and for new customers," said Craig Lawrence, president, Westwood Shipping Line. "As ground transportation becomes increasingly challenging due to congestion and higher costs, we're offering a strong logistical alternative with cost, reliability and environmental benefits."

Operating a safe and environmentally responsible shipping service is also important to Westwood Shipping, which now surpasses standards required for international shipping. The company has pledged to comply with the Port of Long Beach's new Green Flag vessel speed reduction program to improve air quality. "We initiated the Green Flag program this year," said Don Snyder, the Port's Trade and Maritime Services Director. "We want fleet operators like Westwood Shipping to join in helping us reduce air emissions from ships in Port."

The Westwood Pomona will make round trip voyages between British Columbia and the Port of Long Beach, carrying cargo for Weyerhaeuser and other companies.

Weyerhaeuser Real Estate Company Completes Acquisition of Maracay Homes. Company news release, Feb 13, 2006

Weyerhaeuser Real Estate Company (WRECO), a subsidiary of Weyerhaeuser Company, today announced that it has completed the acquisition of Maracay Homes LLC, a privately held homebuilder located in Phoenix, Arizona. Price and terms of the transaction were not disclosed. WRECO said the acquisition is part of its planned growth strategy. Maracay Homes controls more than 8,000 lots in the Phoenix market and closed approximately 650 homes last year. It has near term expansion plans into the Tucson market.

Nelson Forests Joint Venture to Sell New Zealand Assets, Company news release, Feb 12, 2006

The Nelson Forests Joint Venture today announced its intent to sell its New Zealand assets.

The assets are jointly owned by Nelson Forest Products Company, a subsidiary of Weyerhaeuser Company, and RII New Zealand Forests I, Inc., a timber investment fund advised by Global Forest Partners LP. The operations of the Joint Venture are managed by Weyerhaeuser New Zealand, Inc. The assets include approximately 67,000 productive hectares of plantation forests in the Nelson/Marlborough region and the Kaituna sawmill at Renwick, which has a log input capacity on a single shift of 80,000 cubic meters annually.

"New Zealand is an important component of a diversified international timberland investment portfolio," said Michael Edgar, Director of Asia Pacific Investments, Global Forest Partners LP. "The decision by the specific investor clients of GFP in the Nelson Forests Joint Venture to realize the value of their investment after a holding period of over 14 years does not represent a change by GFP in its view of New Zealand as an attractive forestry investment location. In fact, the vast majority of our global funds and separate accounts include at least one New Zealand investment within their portfolio."

Weyerhaeuser posts loss after quarter of revisions. By Melissa Allison, Seattle Times, Feb 4, 2006

Like much of the forest-products industry, Weyerhaeuser has it rough.

Competition in the paper- and wood-products segments is fierce, as is pressure to "unlock the value" of timberland as Spokane-based Potlatch has done by becoming a real-estate investment trust.

Weyerhaeuser addressed the challenges in 2005 by closing a slew of plants. The pulp mill in Cosmopolis is in the process of closing, and more closures are expected. The Federal Way company also wants to expand in areas, such as its real-estate division.

That strategy has worked, leading to fourth-quarter earnings of 94 cents a share before a series of one-time items, Weyerhaeuser announced Friday. That was 20 cents better than Wall Street analysts expected, according to Thomson Financial. Shares climbed 25 cents to close at $67.50.

But it was a messy quarter, including charges of $438 million to close plants and $25 million to settle a lawsuit. It had a one-time gain of $34 million on the sale of assets from its French composite panels business.

After all the noise, Weyerhaeuser posted a net loss of $211 million, compared with net income a year ago of $199 million.

"The industry experienced flat demand, excess capacity and high production costs for paper-grade pulp, fine paper and containerboard packaging," Chief Executive Steven Rogel said during an earnings conference call. "We understand the need to improve shareholder returns and the urgency with which we must act."

Weyerhaeuser is doing more than closing and selling plants, he said. It is changing the way it operates and works with customers.

One example is its containerboard and packaging business, which has been hurt by customers that have moved manufacturing operations out of the country. They buy their packaging overseas now, so Weyerhaeuser has to find new ways to do business here.

Analysts like Weyerhaeuser's focus on its real-estate business, which includes Quadrant Homes and other homebuilders across the country. It recently announced plans to buy an Arizona homebuilder.

"During down cycles, the real-estate business has been more of a steady performer," said Paul Latta, an analyst at McAdams Wright Ragen in Seattle. "It's been less cyclical than the other businesses."

The real-estate business contributed $250 million to pre-tax earnings in the fourth quarter, up from $217 million in the same quarter a year earlier. By comparison, the timberlands segment contributed $183 million, and wood products contributed $26 million.

The biggest drain came from the cellulose fiber and white-papers segment, which subtracted $477 million from earnings. That included $427 million in pre-tax charges from the announced closures of a pulp-and-paper mill in Prince Albert, Saskatchewan, and a paper machine in Dryden, Ontario.

A big hit also came from the containerboard, packaging and recycling area, which drained $188 million from pre-tax earnings for the quarter. That included a charge of $130 million from the closures of several facilities and a $38 million charge related to a settlement of linerboard antitrust lawsuits.

Steven Chercover, an analyst at D.A. Davidson in Portland, said it would not make sense for Weyerhaeuser to sell the manufacturing businesses that are not performing well.

"I don't think they could get a good price when it's not generating good results," Chercover said. "If you could get rid of the manufacturing, you'd want to fix it before you sold it."

Big changes in 2005

Fighting for profits in a beleaguered industry, Weyerhaeuser made some difficult decisions in 2005, closing and selling major parts of its business. The changes contributed to better-than-expected fourth-quarter performance.

Closed in wood products: Two hardwood mills, a large-log sawmill in Aberdeen, a veneer and plywood plant, an I-joist beam plant.

Closed in containerboard, packaging and recycling: Containerboard machine, four corrugated-packaging plants, two corrugated sheet-feeder plants, one retail paper-bag plant, one finishing line.

Closed in cellulose fibers and white papers: Cosmopolis pulp mill is closing, paper mill and paper machine.

Sold: Laminated beam plant, two composite panel plants.

For sale: Composite panels business, three corrugated sheet plants, one specialty packaging plant.


Plum Creek Timber ready to sign deal with Montana wildlife agency. By Susan Gallagher. Seattle Times, Feb 4, 2006.

Plum Creek Timber is expected to declare about 7,200 acres of wildlife habitat off-limits to development under an $8 million deal with the Montana wildlife agency.

The Department of Fish, Wildlife and Parks intends to buy a conservation easement for the Plum Creek land in western Montana's Swan Valley, a deal set to become final on Thursday, the agency's Steve Knapp said.

Seattle-based Plum Creek, one of the nation's largest owners of private timberland, would continue to own the property in the northern Swan Valley and would manage it as timberland in accordance with a state plan to protect wildlife habitat.

"Without this conservation acquisition, the lands would likely be sold for development," according to a briefing paper that Fish, Wildlife and Parks commissioners received in December, when they authorized buying the easement.

A Plum Creek spokeswoman declined to comment Thursday. "We're not prepared to announce anything because nothing's been finalized yet," Kathy Budinick said.

The easement is the first step in what state officials hope will ultimately be a project conserving nearly 11,000 acres of Plum Creek land in the Swan Valley, at a potential total cost of $27 million to $30 million. Besides placing roughly 7,200 acres under the conservation easement, the state wildlife agency anticipates buying as much as 3,680 acres owned by the timber company.

The agency will rely largely on federal funding, plus dollars from the nonprofit Trust for Public Land.

The lands, intermingled with the Swan River State Forest, support grizzly bears, black bears, deer, elk and moose, and include streams that support bull trout and westslope cutthroat trout. Besides protecting habitat for those species, the conservation easement helps ensure continued public access to outdoor recreation, as would the land purchases, state officials said.

Plum Creek drew the ire of some Swan Valley residents a few years ago when the company prepared to sell some of its valley timberland as residential property. At the time, Plum Creek owned about 80,000 acres in that scenic swath of Montana. Locals said real-estate sales would end some traditional land uses and change the valley's character.

Plum Creek has been selling "nonstrategic" timberlands in the United States and expects sales in its real-estate segment to total between $280 million and $300 million for 2006, the company reported early this week.


Is the Sky Really the Limit? By Sandra Ward. Barrons Online, January 30, 2006.

For much of its life as a public company, Plum Creek Timber has seen its shares climb nowhere but skyward. In the past decade, they have risen 11.5% annually, on average, compared with 9.5% for the S&P 500.

The action is emblematic, in a way, of the trees that Plum Creek holds as the nation's second-biggest manager of forestland, with just under 8.5 million acres stretching from Montana to Maine to Florida. The juicy yield offered by the Seattle-based real-estate investment trust, enhanced by the REIT's tax-favored structure, has attracted scores of investors. The stock has benefited, too, from increased investor interest, especially among big institutions such as pension funds, in timber assets as a hedge against traditional stock and bond investments; studies have shown that timber returns trump the S&P 500 in the long haul. In addition, Plum Creek's management, to its credit, has consistently managed to generate strong cash flow and has been opportunistic in making land acquisitions and sales. In November, it bought 650,000 acres of forestland on Michigan's desirable Upper Peninsula for $345 million, or roughly $531 an acre.

"Over a long time period, given the type of assets we have and the businesses we are in, we should clearly be able to do double-digit returns, as we have been over the last 10 years," asserted Rick Holley, chief executive of Plum Creek, in an interview with /Barron's/ last week.

That's the kind of management spirit that has translated into, well, plummy times for Plum Creek shareholders. At a recent 38.90, the company's shares have more than doubled since it converted to a REIT in 2001 and purchased Georgia-Pacific's Timber Co., the transaction that vaulted it from obscurity to a force to be reckoned with. From its days as a master limited partnership carved from the former landholdings of Burlington Northern Railroad in 1989, Plum Creek shares are up an astonishing 88-fold.

The bulk of Plum Creek's revenue comes from timber sales, though land sales are making a growing contribution.

*BUT TREES DON'T GROW TO THE SKY,* and shares have their limits, too.

Last year Plum Creek Timber underperformed, and lately more investors are viewing the stock as fully priced. With an expected total return of about 10%, analysts say, Plum Creek should trade in line with the general market.

The company is due to report fourth-quarter and full-year earnings today, Jan. 30. For the quarter, Morgan Stanley estimates that Plum Creek earned $62 million, or 34 cents a share, on $308 million in revenue, compared with $73 million, or 31 cents a share, on revenue of $327 million a year earlier. For the full year, the brokerage firm expects $329 million, or $1.78 a share, on revenue of about $1.5 billion. That compares with $362 million, or $1.49, on revenue of $1.5 billion in 2004.

Interest-rate and real-estate trends are weighing on the shares.

Moreover, the big demand for timber assets shown by endowments and pension funds in recent years could also be peaking; Harvard's endowment, for one, has been shedding timberland. As payouts begin to the first round of baby-boomer beneficiaries, the pension funds probably will sell some timber assets to help meet redemptions, putting pressure on the price of Plum Creek land. On top of that, a growing number of big companies are curtailing their defined-benefit retirement plans, reducing demand for timber assets.

A less tangible but no less potentially troubling risk: Plum Creek's carefully cultivated corporate image of environmentally conscious stewardship of forestland is endangered by its decision to aggressively sell wilderness lands to developers for resorts, vacation homes, golf courses and recreational-vehicle parks. Indeed, in an examination of Montana's environmental problems in last year's bestseller Collapse: How Societies Choose to Fail or Succeed, author Jared Diamond cites Plum Creek in a discussion of how corporate and public interests often clash.

The company's plan to sell nearly half of the million acres it owns in Maine's North Woods and Moosehead Lake region, a vast backwoods immortalized by Henry David Thoreau and revered by wildlife lovers and outdoor enthusiasts, has set off enormous controversy. Opponents refer to the company as Scum Creek and Plum Creep, and some of their outrage is reflected in vandalism at Plum Creek's Greenville, Maine, offices and the homes of some of its employees. Environmentalists submitted 5,000 petitions last week to Maine's Land Use Regulation Commission opposing Plum Creek's plans in the Moosehead Lake region. In a conciliatory gesture, Plum Creek is preparing to present the community with a revised development plan. Says CEO Holley: "One of the most important things we have is our reputation."

As for the stalled stock performance, Holley blames Wall Street misperceptions. "They don't understand the value opportunity" of the company's real-estate development plans, he laments.

But it's no secret that Plum Creek sees its future in developing its rural lands. CEO Holley actively promotes Plum Creek as a land- development concern rather than a mere timber company. "It's not just trees; it's the underlying value of the land" is a favorite Holley line in stump speeches to investors. The company has been moving in this direction since 2001, shortly after it reorganized into a REIT and hired Tom Lindquist from developer Trammell Crow to head its new real-estate-development division.

"The valuation is tight right now," says Len Davenport, portfolio manager at Fraser Management in Vermont, who maintains Plum Creek as a core holding in his clients' portfolios but isn't adding to positions.

"The good news is already discounted."

A Maine town meeting: Local anger moved Plum Creek to alter development plans.

The good news is the company's willingness to get the most value from its lands by taking advantage of demographic trends in which baby boomers build vacation homes, spend more time in leisure pursuits and invest more in hard assets. Depending on the economy's health, this is a source of demand that could last another 10 years or so before tapering off. Plum Creek's plan to partner with local developers in joint ventures -- it is teaming with LandMar in coastal Georgia and Eastland in Florida, for instance -- and share in any revenue without putting its own capital at risk is seen as a big plus.

The company should also continue to benefit from a major investing theme espoused by Fraser Management: global climate change. With the growing frequency of violent storms, especially along the Gulf Coast and Eastern Seaboard à la Hurricanes Katrina and Wilma, the output of Plum Creek's diversified timberlands should remain in high demand for repairs and reconstruction. Yet Davenport's acknowledges some clients have asked to have the stock sold from their accounts to protest the development plans.

More damaging, however, could be the upward trend in interest rates and mounting evidence that the red-hot housing market is cooling. Higher rates provide competition to its dividend yield and dampen demand for housing, which, in turn, diminishes the need for Plum Creek's logs. At 4%, Plum Creek's dividend yield is at a historic low, despite a couple of payout increases last year. Says Holley: "Our goal is to continue to grow the dividend as our cash flow grows." He gives no specifics, other than to note that Wall Street is expecting increases this year.

Joseph Tatusko, a portfolio manager at Westport Resources in Connecticut, notes that the yield has been in decline since 2002. He has grown more cautious on the stock, partly because he believes there are better opportunities for income investors.

Slackness in home-building and remodeling could also crimp timber sales.

Tatusko is wary, too, of possible fallout at the land-sales group, as housing inventories rise and mortgage debt hits record levels. "As a source of revenue, it slows," he says of the land sales.

CEO Holley believes the company is somewhat immune to a real-estate slowdown because the wealthy individuals and institutions buying its lands are less sensitive to interest-rate movements.

Still, he admits Plum Creek would be hurt by a housing slowdown, though he maintains it would be only a short-term hit. Plum Creek's hefty cash position, roughly $1 billion, gives it the flexibility to ride out an economic downturn, he says. If the company can't get its desired prices for its timber and acreage, it will opt not to harvest the trees and will hold onto the land.

Land sales in coastal Georgia and Florida are one thing, but Greenville, Maine, where the season runs largely from July through October, might be a harder sell. Sure, telecommunications titan John Malone bought nearly 15,000 acres around Spencer Lake, including 7,500 from Plum Creek in 2000. And investment banker Robert Greenhill Sr. of Greenhill & Co. is erecting a "cabin" on Moosehead Lake next to his own 2,000-foot runway.

But this is also an area so remote that McDonald's shuttered its operation after only two years.

Any slowdown in land sales would disrupt a business model Plum Creek is growing more reliant on. Besides its timber sales, it has been increasingly selling off "higher and better use" acreage for residential development for more money than it figures it could fetch from timber.

Though the bulk of Plum Creek's revenues come from timber sales, land sales also make a sizable contribution. About 55% of cash flow comes from timber sales, 35% from land sales and the rest from manufacturing wood products. Five years ago, land sales contributed $15 million; in

2005 that figure likely reached $250 million. Once run by two people, the land-sales operation is now staffed by 20. Plum Creek puts the value of its targeted 1.3 million acres of higher-and-better-use timberland, most of it in Montana, Wisconsin, Georgia, Florida and Maine, at nearly

$2 billion, assuming the HBU land would fetch $1,600 an acre for recreational lands and $3,000 to $7,000 for what it considers the best properties.

Factoring in the higher-valued land, Wall Street followers reckon the stock is worth slightly more than 40 a share, a tad higher than its current price, and only in the low 30s without the HBU lands. "It's pretty fully priced," says Alan Barr, an analyst at Arnhold & S. Bleichroeder's First Eagle Funds.

*The Bottom Line:*

Even Plum Creek's fans believe the company's shares are fully priced, or close to it, and could suffer if an aggressive land-sales and development program falters.

Valuation is also the biggest concern of Citigroup's longtime paper and forest-products analyst, Chip Dillon. He has been recommending selling the shares.

If long-term bond rates begin to tick upward and the yield curve steepens, that would spell trouble for a company whose assets are long-lived. Trees take between 30 to 70 years to mature. Long rates "have rarely been this low, and if the curve steepens, this is an asset class for which it would be a negative," notes Dillon. "Long-lived assets, whether it is a 30-year bond or a tree, are heavily influenced by what they are worth when they mature. The biggest factor is what you discount that 30-year cash at."

Timberland values already appear stretched as institutions and wealthy individuals continue to embrace this formerly ignored asset class. One sign of timber's current cachet is the decision by International Paper to sell its 6.8 million-acre portfolio -- what some are calling the biggest transfer of land since the Louisiana Purchase. Many expect Plum Creek to take a pass in the bidding. Holley maintains that the acreage, in the desirable Southeast, is appealing but the prices are "very high." It remains a "seller's market," he says.

That isn't true of Plum Creek's own shares. Not even the company, which is authorized to spend $200 million buying back its shares, has shown any interest. Not since 2003, when it spent about $40 million to buy stock at about $22 a share, has it shown any inclination to repurchase shares. "We will use our capital to buy shares," says Holley, if they continue to underperform.

Until that happens, investors might do better betting on another Seattle franchise: the Superbowl contender Seahawks.


Weyerhaeuser unit to buy Maracay Homes. By Melissa Allison, Seattle Times, Jan 31, 2006.

Weyerhaeuser's real estate division said today it plans to buy Maracay Homes, a privately owned homebuilder in Phoenix, for an undisclosed sum. The deal is expected to close in February.

Maracay, founded in 1991, controls more than 8,000 lots in Phoenix and closed on about 650 homes last year. It plans to expand into the Tucson market.

Weyerhaeuser owns several homebuilding businesses throughout the country, including Quadrant Homes in the Puget Sound area. Others include Pardee Homes in southern California and Las Vegas, Trendmaker Homes in Houston and Winchester Homes in the Washington, D.C., area.


[Weyerhaeuser's] Pardee loses in Livermore. By Katherine Conrad. East Bay Business Times, Jan 3, 2006.

Pardee Homes missed by a mile - more than a mile - when it asked Livermore voters to approve its housing project in what has become a no-man's land for developers: the 1,400 acres known as North Livermore.

But it was not for lack of trying and trying hard. Pardee, under the guidance of Carlene Matchniff, the company's vice president for community development, worked for three years to convince voters that 2,450 homes on the city's northern flank was just what Livermore needed.

The company dangled carrots worth $159 million in front of the voters in pledges to help schools, community art programs and, the biggest carrot of all, build a sports park. In the final days before the Nov. 8 election, the company promised to build a solar-powered community. It spent more than $3 million on the futile campaign.

In the end, none of that mattered. Pardee was up against a mayor, Marshall Kamena, and a City Council majority firmly opposed to the development. Pardee lost. Only 29 percent of the voters supported its project.

In December, the Weyerhaeuser Co., which owns Pardee, filed a report with the Securities and Exchange Commission, saying the company decided that a charge for impairment to the tune of $33 million is required. After reviewing its options, the company has decided to hold the property indefinitely for future development. Weyerhaeuser did not specify a timetable.

"Charge for impairment" is a term for writing off worthless goodwill - which may say it all.


Potlatch Board of Directors Authorizes Conversion to Real Estate Investment Trust, Effective on January 1, 2006

SPOKANE, Wash., Dec 20, 2005 (BUSINESS WIRE) -- Potlatch Corporation's (NYSE:PCH) Board of Directors today announced today that it has approved the final steps necessary for the company to begin operating as a real estate investment trust (REIT) on January 1, 2006. No other Board or regulatory actions are necessary for the conversion of Potlatch Corporation to a REIT.

"We plan to set a record date for a stockholder meeting for a vote that will have the effect of increasing the number of authorized shares," noted Chairman and Chief Executive Officer L. Pendleton Siegel. He added that increasing the authorized shares to 100 million from the current 40 million will provide the company with shares that can be used for acquiring additional timberland assets, future stock splits, or equity offerings to raise capital for acquisitions or other corporate purposes and, if necessary, for a portion of the company's taxable distribution of accumulated earnings and profits (E&P). The special E&P distribution is expected to occur in the first quarter of 2006, as originally announced.

Stockholders will have the opportunity to elect to receive this special E&P distribution of between $440 and $480 million in cash, stock or a combination of both, with the aggregate cash payment by the company to be capped at 20 percent.

Siegel noted that more information and instructions on how stockholders may elect to receive their distribution will be available following the announcement of the record date for the special taxable E&P distribution.

The company expects to pay its first regular quarterly distribution as a REIT at the end of February 2006. The distribution amount expected to be paid in the first quarter, $0.65 per share based on the current number of shares outstanding (or $2.60 per share annually), will be adjusted downward after the first quarter to reflect the additional shares that will be issued in conjunction with the stock portion of the E&P distribution.

Potlatch is a diversified forest products company with 1.5 million acres of timberlands in four states: Arkansas, Idaho, Minnesota and Oregon.

Except for the historical and factual information contained in this press release, the matters set forth in this press release, including statements as to our REIT conversion as of January 1, 2006, the expected initial dividend rate post conversion, the anticipated amount of our E&P distribution, and other statements identified by words such as "estimates," "expects," "projects," "plans," and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the possibility that we will fail to qualify as a REIT or fail to remain qualified as a REIT, uncertainties regarding the amount of the E&P distribution, that the dividend rate may fluctuate based on changes in our operating results and financial condition, cyclical conditions in our business and particularly our manufacturing operations, general economic conditions, competition, currency exchange rates, changes in significant expenses such as energy costs, unforeseen environmental or other liabilities and other risk factors relating to the planned REIT conversion and our business as detailed from time to time in our reports filed with the SEC. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Potlatch is restructuring its operations in connection with the REIT conversion and as part of this restructuring it plans to effect a merger involving a wholly owned subsidiary of Potlatch called Potlatch Holdings, Inc. Potlatch has filed a proxy statement to be used in connection with the stockholder vote on this merger. That proxy statement is contained in a registration statement on Form S-4 first filed by Potlatch Holdings on September 19,2005, and both companies have filed other relevant documents concerning the proposed merger transaction with the Securities and Exchange Commission (SEC). INVESTORS ARE URGED TO READ THE FORM S-4 AND PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain documents free of charge at the website maintained by the SEC at www.sec.gov. In addition, you may obtain documents filed with the SEC by Potlatch free of charge by contacting Corporate Secretary, 601 West Riverside Avenue, Suite 1100, Spokane, Washington 99201.