West Branch Project In Trouble

By Phyllis Austin, Maine Environmental News (www.meepi.org).

As the cost of the West Branch project rises, it fuels the debate over whether public purchase of conservation easements rather than full fee acquisition makes sense.
(Deborah M. Fowles photo)

Federal funding for the huge West Branch conservation easement project for the Penobscot River and Moosehead Lake region is in jeopardy, according to Ron Lovaglio, commissioner of the Department of Conservation (DOC). He confirmed that unless a deal is made with the landowner, Yale University, by the first of June, the already budgeted $17.1 million of Forest Legacy money will be shifted elsewhere by the House appropriations committee.

The $17.1 million was set aside for fiscal year 2000-2001. That’s a long time in the arena of competition for public dollars. The delay in DOC’s reaching an agreement with Yale and the increasing cost of the easement sparked a Congressional probe into the project in March. Investigators "unfortunately . . . concluded that the West Branch is in trouble," said DOC’s lead land negotiator, Ralph Knoll.

Tom Colgan, president of Wagner Forest Management, Ltd., which represents Yale’s endowment entity and its subsidiary, Yankee Forest LLC, said that Lovaglio "is in a position to know" about a deadline, and he couldn’t "speak to that." Colgan offered that he and DOC "haven’t stopped talking" but he declined to answer questions about the negotiations.

The state’s easement proposal, which would set a historic precedent, was presented to Yale last December. As months have passed without an agreement, various interested parties have speculated that the deal won’t come to fruition. But Lovaglio remains optimistic, even in the face of the June deadline.

Jeff Pidot, chief of the Attorney General’s Natural Resources Division and DOC’s legal counsel on the project, said he doesn’t know what Yale’s delay in answering means, "but I’m surprised at the length of time." He indicated that the amount of legal work that would be required to finish a deal by the end of the month is virtually impossible.

Jym St. Pierre, Maine director of RESTORE and a strong critic of the easement proposal, said his sources report that the key sticking point is price. When first announced, the cost of the two-phase project was estimated by officials to be about $45 million. The numbers kept growing, and now the price is up in the $60 million to $70 million range.

DOC’s Knoll said, "We’re looking at a $30 million package to address [Yale’s] ownership" of 330,000 acres and a similar amount for the other 320,000 acres included in the West Branch project that are owned by McDonald Investment Co. of Birmingham. Two-thirds of the money would come from public sources and the rest from private contributions, he said. The Forest Society of Maine, which would hold the easement, is raising the private money.

Besides the $17.1 million of Legacy funds, the state is asking for another $2.85 million from the same pot for fiscal 2003, Knoll said. The Land for Maine’s Future Board (LMFB) has set aside $1 million for the Yale easement but has not given its final approval. "The fundamental question remains: is the public going to get its money's worth?," said St. Pierre. There are limited public dollars and many land conservation projects on the table, he pointed out.

As the cost of the West Branch project rises, it fuels the debate over whether public purchase of conservation easements rather than full fee acquisition makes sense. If Yale winds up getting $30 million or more for an easement, that is almost one-third payback of the purchase price of $87.6 million. Yale bought the lands from McDonald after that family business bought 657,000 acres of the old Great Northern Paper empire from Bowater Inc. in 1999 for $155 million. McDonald stands to recoup a significant amount of its investment cost from the planned easement sale to the state.

Concern over the amount of Legacy money being committed to the West Branch and other Maine land projects apparently figured into the House committee’s decision to review the project. Rivalry among states for the conservation funds also played a role, according to environmentalists.

Drew Thompson and William Crocker III of the committee’s survey and investigative staff visited Maine two months ago, studying West Branch documents and interviewing a number of involved people. St. Pierre met with the staffers, and he said they wanted to know if the Legacy money appropriated to Maine was being well-spent.

Knoll, who also met with the investigators in Maine and later had discussions with House representatives in Washington, said the end result was "we were put on notice that we have got to do something [to finish the deal] sooner rather than later." Reached in Washington Monday, William Crocker declined to comment on the subject. "We are an investigative staff," he noted. Crocker did confirm that the report hasn’t been completed, and even when it is, it won’t be public. "Our reports . . . are purely for the committee, and they use them as they see fit," he said.

After receiving word of the pressure to finish the deal from Knoll, commissioner Lovaglio also met with committee staff in the Capitol. He assured the staff that he and King administration are committed to the project "and intend to see it get done." The committee is going to mark up the appropriations bill in late May," Lovaglio said. "I hear the message," he said, adding that he has passed on the word to Colgan.

"I’ve had conversations with Tom – ‘this is real, Tom . . . there is an urgency here," said Lovaglio. He told Colgan that failure of the project "would be a loss for the landowner and for the people of Maine. I think he understands," said Lovaglio. He characterized the current situation as "extremely dynamic. Lord knows, He works in mysterious ways, and things don’t happen," the commissioner said. "We dither away time, and we won’t have control."

Lovaglio believes that attorney Pidot’s memo to LMFB last August criticizing the easement proposal "slowed things right down. I think that affected [Yale]", as well as other landowners who were interested in future easement deals, he said. Pidot concluded that the proposal emphasized short-term forestry profits over land conservation benefits to the public. In the draft proposal, there was no requirement for sustainable forest management, and the state had no approval rights over the forest management plan for the West Branch lands. Pidot also said the language was weak on development and ensuring public access.

When word spead last fall that Yale’s $10 billion endowment owned part of the West Branch lands, students at the New Haven school joined critics of the easement over forestry issues. Students organized a group to review the easement and Yale’s forestry investment practices, asserting that the endowment forests should abide by the sustainable policies developed at the renowned School of Forestry and Environmental Studies. But they got no where with university officials. Forestry school dean Gus Speth sent a memo to students and others stating that people "should distinguish between our school’s forests, where we are responsible for management, and lands owed by the Yale Endowment, where we are not."

Since his memo, Pidot said there have been "hundreds of changes [in the original easement document] in response to my comments and those of others, such as state agencies. It has been a very therapeutic process." While the final easement proposal is stronger, he said, "It is a compromise," he emphasized.

The new language makes it clear the state expects the lands to be sustainably managed for a continuing flow of forest products. The state would have the right to comment on Yale’s forestry management plan but still would not have control over it. Portions of the plan, such as timber inventories and harvest schedules, would be confidential.

It remains to be seen whether Wagner may come back with a new proposal or a heavily revised one that weakens the state’s proposal. In any event, Lovaglio said the agreement wouldn’t be "thrown open to the public process," meaning there won’t be public hearings. "Will there be [public] information about it? Probably," he said.

Meanwhile, the fee purchase part of the West Branch plan has been completed. For $3.7 million, the state bought 4,200 acres around Big Spencer Mountain, a 233-acre old growth rare plant site and six miles of shorefront on Moosehead Lake, including historic Northeast Carry Landing. DOC’s Knoll said most of the money came from the state’s Land and Water Conservation Fund, and there were other public and private contributors.

Big Spencer, with one of the largest, most intact and best examples of mature hardwood in northern Maine, will become part of the ecological reserves program. It provides valuable habitat for neotropical migrant bird species, such as Bicknell’s thrush, according to Manomet Center for Conservative Science.