PotlatchDeltic Corporation has an agreement to sell approximately 72,400 acres in Minnesota – 10,310 of them in Hubbard County – to The Conservation Fund (TCF) for approximately $48 million in cash.

Kim Berns-Melhus, Minnesota state director for TCF, met with Hubbard County commissioners Tuesday to discuss the transaction and its impact on the county.

Calling it “a monumental conservation project,” Berns-Melhus said the acreage spans 14 counties. The bulk of the land is in three counties: Koochiching (21,950 acres), St. Louis (15,150) and Hubbard.

Hubbard County is in the top three in terms of acreage that will be transferred from Potlatch to The Conservation Fund.
Hubbard County is in the top three in terms of acreage that will be transferred from Potlatch to The Conservation Fund.

The property being sold to TCF will be sustainably managed as a working forest to supply logs to lumber mills and protect the essential jobs required to deliver and process the trees, she said.

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TCF is a nonprofit organization (www.conservationfund.org) that has worked in all 50 states since 1985 to protect more than eight million acres of land, including more than 311,000 acres in Minnesota. It is certified by the Sustainable Forestry Initiative.

Potlatch moving out of Minn.

Berns-Melhus said Potlatch will retain land around Baxter and operate the Bemidji lumber mill, which is located in Hubbard County. TCF is currently working with the company to purchase some of its acreage by the Boundary Waters as well.

“They’ll be, pretty much for the most part, out of the state of Minnesota, but they will still own a few acres,” she said.

According to Berns-Melhus, at one time, Potlatch owned over 350,000 acres of forest land in Minnesota. “They’ve been actively selling it off for the last 20 years.”

Potlatch moved operations to the south, like Arkansas, because trees grow faster there. Being a publicly traded company, they need to make a profit, she explained.

Kim Berns-Melhus, Minnesota state director for The Conservation Fund, said Minnesota's patchwork of land ownership is unusual compared to other states.
Kim Berns-Melhus, Minnesota state director for The Conservation Fund, said Minnesota's patchwork of land ownership is unusual compared to other states. (Map courtesy of The Conservation Fund)

Sustainable forestry

TCF differs from other conservation organizations, Berns-Melhus said, in that they “see a dual role between conservation and economic outcomes.”

“At The Conservation Fund, one of the pillars of our organization is our concern about the loss of working forests and these large tracts of forest,” she continued. “In the past 30 years, we’ve lost over 36 million acres and we’re expected to lose another 37 million acres within the next decade.”

Some of the loss is due to tax structure. “A lot of these timber companies have turned into REITs, which are Real Estate Investment Trusts, and they make more money by selling off and chunking up these forests into 40-, 10- and 80-acre parcels,” Berns-Melhus said. Typically, those land holdings are no longer managed as working forests and are owned by private individuals.

County commissioner David De La Hunt asked if that private land was being developed and trees removed.

“A lot of it’s being converted to agriculture, especially here in Hubbard and throughout the state of Minnesota,” she replied.

Paying property taxes

The Conservation Fund raised $150 million from private investors and secured a bond. “Our goal is to invest those proceeds into projects like this one,” she said, adding that 31,000 acres are located within the Mississippi River headwaters and 27,000 are within the Bois Forte Reservation.

The largest tract of Potlatch land in Hubbard County is the Laden Lake area, near the Paul Bunyan State Forest, “but there are scattered parcels throughout the county.”

Berns-Melhus said this project “very much dovetails” into the county’s no net loss policy for public land. Commissioners were concerned about the loss of property tax revenue for the county, township and school district when the Minnesota Department of Natural Resources or a conservation land trust purchases private property and converts it to public land.

Berns-Melhus said TCF will pay property taxes on this land. “We are tax exempt, but we have made a decision, again to the economics, that it’s really important in these communities that we are part of those communities as landowners.”

The red patches are Potlatch lands that The Conservation Fund is acquiring this month. Pink represents tax-forfeited land. Gold belongs to school trust, while yellow is tribal. Tan is Minnesota Department of Natural Resources land. (Map courtesy of The Conservation Fund)
The red patches are Potlatch lands that The Conservation Fund is acquiring this month. Pink represents tax-forfeited land. Gold belongs to school trust, while yellow is tribal. Tan is Minnesota Department of Natural Resources land. (Map courtesy of The Conservation Fund)

Conservation with economic benefits

TCF’s goals are to support working forests; conserve forestlands for clean air and water;

maintain climate resilient habitat for wildlife, recreation opportunities and climate change

mitigation; support local economies and support timber-related jobs.

“Our goal is to hold these lands as we work through different solutions with counties for up to 10 years,” Berns-Melhus said of future land adjustments. “We’re happy to work with you on different solutions. … And we’re very sensitive to the revenue loss issue.”

In this case, De La Hunt said Clay Township would “get whacked hard.”

Berns-Melhus reiterated, “This is about working with your county to figure out what works for you. We haven't made any decisions at all. We’ve got 10 years to work through this.”

Board chair Char Chriestenson asked if the land would be accessible to the public while it’s harvested and managed.

Berns-Melhus said TCF will honor the hunting leases that are currently in place. Other land will be open for walking and hiking. Those that want to hunt should ask TCF for permission and a permit may be granted.

TCF has hired Compass Land and Associates of Wisconsin to manage the forests.

If the county were to buy the land, Christenson asked if they could sell it to private individuals or would there be conservation requirements.

Berns-Melhus said the goal would be that it remains as working forest, conservation land or public recreational land – and “not parcelled off.”

County commissioner Ted VanKempen asked if adjoining landowners might be able to purchase small parcels.

Berns-Melhus said she’s keeping a list of interested parties, but there are no plans to sell. She can be reached at kberns@conservationfund.org or 612-702-5277.