After the SDS Lumber Company announced it was selling its vast forest and mill assets last year, the collective freak-out that occurred across the southwestern Washington was understandable. After all, the private company headquartered in tiny Bingen, Wash., had been an economic and civic powerhouse in the region for 75 years.
New owners would mean … what exactly?
No one likes uncertainty.
With the sale of the company’s 96,000-plus acres of land to three separate entities finalized on November 17, details about the ownership transition are coming into focus.
The basics: the consortium of buyers is comprised of Seattle-based Silver Creek Capital’s fund Twin Creeks Timber; Carson, Washington-based WKO, Inc.; and Virginia-based The Conservation Fund. According to a press release issued jointly by all three buyers and SDS, now that the sale is complete, each entity will solely manage its own acquired lands or assets.
As manager and co-investor in Twin Creeks Timber, the Green Diamond Management Company will manage 61,000 acres of the timberlands as working forest.
Wilkins, Kaiser & Olsen, Inc. (WKO) acquired and will continue to operate the Bingen mills under the SDS Lumber name.
Through an affiliate, The Conservation Fund acquired over 35,000 acres of the SDS timberlands—more than a third of the land up for sale—including important oak habitat, river frontage and municipal drinking water sources.
“This unique transaction sets the stage for one of the largest conservation victories in the Pacific Northwest,” said Larry Selzer, CEO of The Conservation Fund, in the press release.
A key figure in the acquisition is Evan Smith, senior vice president of conservation ventures at The Conservation Fund. After spending 15 years in the organization’s Portland office, Smith has been based in Los Angeles for the past three years.
Via Zoom, Columbia Insight spoke with Smith last week to find out how The Conservation Fund intends to manage its new assets.
Columbia Insight: The Conservation Fund acquired over 35,000 acres of former SDS land across the Columbia River Basin. How were specific parcels decided on?
Evan Smith: Start with the context that the SDS Lumber Company was assembling these parcels over generations. It’s a 70-year-old-company and they would buy parcels as they came on the market. … You can see (on the map) some big blobs and we went through and tried to identify those areas that were a high priority for us. Even though it looks kind of split up it’s a really intact landscape. It’s not like a parcel stops and there’s a shopping mall. There’s this network of state and federal lands, projects by the Columbia Land Trust, (other) efforts … that are really helping tie this whole forested landscape together.
CI: What’s The Conservation Fund’s plan for the land now under its domain?
ES: We think continued sustainable forest management is important. We will continue to be harvesting logs. There will be public access provided in various forms. We’re still working through some of the details of specific forest management plans for each tract.
CI: Does that include recreational opportunities?
ES: We plan to continue some form of public access.
CI: Some may be surprised to hear an organization called “The Conservation Fund” is going to log the forestland it acquires.
ES: We really believe that we need to integrate both environmental protections and sustainable community economic development; that if you focus exclusively on one that it won’t last. We were founded as an organization with this idea that we really need to bring together both the community economic development and retaining jobs and rural livelihoods with environmental protection. That’s been part of our organization from the very beginning.
Forests when they’re well managed can provide multiple benefits. They can provide clean drinking water. They can provide salmon habitat. They can provide carbon storage. They can provide jobs for loggers and the mills and also for mountain bike guides and things like that.
CI: How do Conservation Fund logging practices differ from those of a traditional logging company?
ES: We need a little more time working on the property and meeting with partners before developing the forest management plans and policies, but I can confirm that we will prioritize protection of water quality and wildlife habitat in addition to generating revenue.
CI: Will timber harvested from lands under Conservation Fund care be milled in the region?
ES: We intend to sell logs to WKO and to all three of their mills.
CI: Any plans for wildlife protections?
ES: Yes. I would start by saying protecting wildlife habitat, protecting water quality, is, of course, really important to us. We’re continuing the Safe Harbor Agreement that was put in place by SDS for the northern spotted owl. At a tract level we’ll be putting together specific forest management plans, restoration objectives and priorities over the next few months. It will take a little to digest all of this.
CI: Is spotted owl habitat included in Conservation Fund lands?
ES: Yes. We tried to acquire what was regarded as the better, best, spotted owl habitat. There’s spotted owl habitat across this entire ownership.
CI: Looking at the map of newly acquired lands, what areas jump out at you as special?
ES: I’d say this whole ownership is important. It’s important not to say like, “Oh, we got the important parts or Green Diamond didn’t.” They’re all important, they all provide benefits, they’re all part of key watersheds.
What we liked and what was really appealing about this ownership as a whole is the White Salmon and Klicktat Rivers are really healthy, intact watersheds, thanks to the work of local groups in large part and really committed landowners. So we’re starting from a position of fairly healthy watersheds, so that’s important to recognize. We saw this as a chance to really be able to support that effort around watershed restoration and salmon recovery.
Personally, I’m really excited about the oak habitat above the Klickitat River. It’s just a really neat habitat for all kinds of wildlife, rare birds and beautiful wildflowers. How can you not like that, right? It’s not necessarily a lot of moneymaking from a commercial timberland perspective, but really important habitat and for protecting the river corridor. This part of Klickitat County has like 90% of the oak habitat of Washington State. It’s one of the (state’s) only large concentrations of oak habitat. Oak provides lots of unique attributes for wildlife.
CI: Do you have plans to increase buffer zones around streams?
ES: I haven’t looked at it in that much detail yet.
CI: Is The Conservation Fund considering partnerships with local organizations, such as Mt. Adams Resource Stewards or Friends of the White Salmon River?
ES: Yeah. The Columbia Land Trust has been an advisor throughout this whole process. We’ve done projects with them before. They have tremendous credibility and expertise in this landscape, so they’ve been kind of our key advisor throughout.
Part of the nature of buying forestland in these transactions is you’re subject to non-disclosure agreements. So we haven’t been able to share any information with community groups. So, the next few months will be a bit of our chance to do that. I certainly know Friends of White Salmon and Mt. Adams Resource Stewards and look forward to being able to talk with them.
CI: Do Conservation Fund lands include the White Salmon wild and scenic corridor?
ES: The wild and scenic designation is a little arbitrary in spots. Dare I say that about our federal government? So, we could have overlaid them on this map [above], but if I remember correctly it runs south from where that 141 number is.
CI: On the map I’m curious about the big chunk of land just southwest of The Dalles. What’s going on there?
ES: There’s one large block that’s right on the Hood River, Wasco County line that’s nice productive forestland that’s going to Twin Creeks. Then the kind of chunk south of there is actually part of the watershed for The Dalles, for their municipal drinking water supply. From my perspective it’s really important to conserve that.
CI: How did this deal come together? Did the Conservation Fund hear about the SDS sale and jump right in? Did another party bring this to you?
ES: I’d start by saying this is a well-regarded ownership across the Pacific Northwest, so as a conservationist that’s worked in this area it’s something I knew of and really respected SDS Lumber. So, yeah, when we first heard this was coming up for sale we jumped right in, because we knew that was a conservation priority.
CI: Did you think The Conservation Fund had the financial resources to acquire more than a third of the land SDS was putting up for sale?
ES: It’s a stretch for us. I think that’s the nature of it. We want to be able to conserve working forests across the country, so we’ve been really trying to do more. That requires, you know, we issued $150 million in bonds a year and a half ago, for example. And they’re all spent. So it’s important to take these opportunities when very important properties come on the market.
CI: Was there ever a point during the negotiations when you thought it might fall through for you guys?
ES: (Long pause) I don’t know how to answer that. I’d say I was always optimistic, but I’ve been in this business for a while now and you lose more often than you win.
CI: Your press release says The Conservation Fund acquired this land through an affiliate—can you name that affiliate? And how much money was paid to SDS for these 35,000 acres?
ES: On the map it says “Lupine Forest” and that’s the name of the affiliate. It’s just an LLC that was set up for this. All of the parties to this will give you the same answer, which is that we’re not disclosing the price of the transactions.
CI: When does all of this take effect?
ES: Yesterday (November 18).
CI: Are carbon offsets part of your plans?
ES: We’re evaluating them, but “I don’t think so” is kind of our first reaction. We’ve done other carbon-offset projects. They certainly can be valuable. I don’t think they’re a great fit here. It’s unlikely.
CI: How long have you been with The Conservation Fund?
ES: Since the summer of 1995.
CI: How does this compare with other Conservation Fund acquisitions during your tenure?
ES: I would say it’s the most ambitious and most complicated.
CI: What makes it complicated?
ES: All of the elements of this, from a transaction perspective as well as just thinking about this landscape and all the different things going on, whether it’s from an ecological perspective or community interests, the concern about maintaining jobs, you name it. Just about every issue you might find across the West is present here in this one little spot.
CI: You’ve been smiling through this entire conversation. Just your personality or is there something in this deal that has you really happy?
ES: I’m excited. This is a really important. A lot of people worked really hard on this. … Of course I’m biased but I feel like this is a pretty darned good outcome for the community compared, you know, to some kind of real estate speculators that we see acquire timberland elsewhere.
Chuck Thompson is the editor of Columbia Insight.
Columbia Insight, based in Hood River, Oregon, is an online, nonprofit publication focused on environmental issues of the Columbia River Basin.
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