State looks to protect forestland in region

Bull Springs Tree Farm is among 400 square miles here that could become safe from development.

SALEM — More than 400 square miles of Central Oregon forestland would be protected from development — and remain open to recreational use and logging — under a potential four-way deal involving former holdings of Crown Pacific Partners.

Three tracts are part of the negotiations, including the Bull Springs Tree Farm, a 33,000-acre parcel northwest of Bend, and 140,000 acres surrounding the former logging town of Gilchrist. The last is east of Crater Lake.

If the parties can hammer out the deal, it will lead to the creation of a new state forest at the Gilchrist tract.

Officials at the Oregon Department of Forestry said in June they were trying to shepherd a deal that would transfer three major parcels once owned and managed by Crown Pacific Partners to as many as three buyers. The goal: to keep those lands — more than 250,000 acres in total — from being chopped up and sold for resorts and rural homesites.

The state has now identified the actual properties that could be part of the deal.

The parties have not disclosed the proposed purchase price, but the ability to develop about 10,500 acres — about 16 square miles — looks to be part of the deal.

The properties are now owned by Fidelity National Financial Inc. in the wake of Crown Pacific’s 2003 bankruptcy and have been largely logged over, and there is little likelihood they could support profitable forestry in the near future.

The third targeted Crown Pacific property is a roughly 95,000-acre swath known as the Mazama Parcel, which straddles U.S. Highway 97 east of Crater Lake National Park in Klamath County, said Ted Lorensen, an assistant forester who is working on the project.

Fidelity has said it hopes to develop 5,000 acres of the Bull Springs property and has released plans for a 5,500-acre destination resort on part of the Gilchrist tract, to be called Crescent Creek.

There is no development envisioned on the Mazama tract, said Brian Gard, who owns a Portland public relations firm and represents Fidelity.

“Fidelity is a business, so one of the requirements is to have the investment be a good investment in the long run,” he said. “From the very beginning, they have tried to approach this in a collaborative way with the communities and, as of now, they’re happy.”

The investors hope to win regulatory clearance for the envisioned developments, which will make the transaction more palatable, he said.

Plans call for the Mazama property to be controlled by the Klamath tribes, which are seeking the lands as part of water-rights negotiations. The Bull Springs parcel would be controlled by Deschutes Basin Land Trust, and the Gilchrist acreage would become a new state forest, Lorensen said.

He said some development is an appropriate trade-off. The reality is that if the overall parcels are not preserved as a working forest, it will be largely developed anyway, he said.

“We need to balance development rights with the state interest,” Lorensen said. “There are certainly legal and other issues, but we think this is important enough that it is well worth exploring.”

Among the thorny questions: “How do we meet Fidelity’s interest and break off a portion to allow some level of development?”

The state has not determined how it could finance its part of the purchase price — whatever that is — but one possibility would be to use its share of logging revenue from state forests elsewhere.

In addition, the 2009 Legislature would need to change state law and allow the Department of Forestry to buy property and finance it.

The Deschutes Basin Land Trust has dubbed the Bull Springs tract the “Skyline Forest” and hopes to acquire it through a mechanism known as a “Community Forest Authority.”

That method, allowed by the 2005 Legislature, allows governments to tap into lower-cost municipal bonds to buy forestland and then repay the debt with revenue from logging.

Brad Chalfant, the executive director of the land trust, said the nonprofit encouraged the state and Fidelity to start talking about the fate of the other former Crown Pacific holdings.

“From the beginning we were concerned about all the assets, because of what we are seeing nationally with forestland being broken up,” he said. “You lose the timber resource, the wildlife, the access for recreation. We’ve been concerned about all of that.”

Each of the properties is unique, and the ownership plans for each would respect the different needs, he said.

While most Oregon’s Cascade mountain forests are in government hands, the lion’s share is controlled by the federal government. There is just one state forest — the 27,000-acre Sun Pass State Forest in Klamath County — in the Cascades.

The state’s other forests are in the Coast Range, primarily in Tillamook and Clatsop counties.

The management philosophy would be similar if the state is able to acquire new forestland — at least, once the largely lodgepole pine landscape recovers from aggressive corporate logging.