Skyline Forest Frequently Asked Questions
What is Skyline Forest?
Who owns Skyline Forest?
What does the landowner intend to do with Skyline?
Can the Forest be developed?
What is a Community Forest?
As a Community Forest would the Land Trust pay property taxes?
What is a working forest?
What is a Community Forest Authority (CFA)?
Will Deschutes County tax payers bear the burden of this CFA?
What happens if there is a default?
Who will own these working forest?
Will these bonds be available for purchase by the general public?
If CFA bonds are available, why raise funds?
Who is US Forest Capital LLC?
What is a TIMO?
Are there enough trees to pay the cost of purchasing the lands?
What is "sustainable forestry" and what does it mean?
Is the forest currently accessible by the public?
What about other forests owned by Fidelity?
What is Skyline Forest?
It’s a 33,000 acre tree farm west of Bend and south of Tumalo that has historically been known as the Bull Springs Tree Farm. The property has been a commercial tree farm for roughly 80 years and contains low elevation deer winter range as well as the foothills of the Cascades. The name “Skyline Forest” refers to the Land Trust’s vision for Bull Springs as a Community Forest that is managed by the Land Trust for the long-term benefit of our local communities.
Who owns Skyline Forest?
The property was previously owned by a large timber company called Crown Pacific, which transferred the land to its creditors when Crown Pacific was dissolved by a federal bankruptcy court in December of 2004. The creditors set up a holding company called Cascade Timberlands. Cascade Timberlands continues to own the forest, but in the spring of 2006, control of Cascade shifted to Fidelity National Financial of Jacksonville, FL, with management the responsibility of Fidelity’s subsidiary, Fidelity National Timber.
What does the landowner intend to do with Skyline?
Fidelity National Timber, the Deschutes Land Trust and a local land use watchdog, Central Oregon Landwatch jointly developed state legislation enacted in June of 2009, which would allow Fidelity (or its successor) to develop a 282 home subdivision on 1,200 acres on the north end of Skyline Forest, in exchange for selling 30,000 acres of Skyline Forest and 34,700 acres of the Gilchrist Tree Farm (running along the Little Deschutes River between Gilchrist and LaPine) to the Land Trust at the “timber” value, rather than “development” value, as well as donating a conservation easement on an additional 1,8oo acre to serve as a buffer between the Skyline Community Forest and Fidelity’s subdivision. However, because Fidelity’s “return on investment” comes from development and sale of the subdivision, rather than the sale of land to the Land Trust at timber values, the Land Trust has always assumed that Fidelity would delay utilizing the legislation until the economy began to revive. The 2009 legislation provided Fidelity or its successors up to 5 years to initiate the sale to the Land Trust. Note that until a formal purchase and sale agreement has been signed by the parties, Fidelity or its successor is free to pursue other options, including new legislation.
Can the Forest be developed?
Current state and county landuse regulations limit the type and amount of development today. However, landuse regulations can and likely will change over time and once Skyline Forest is broken up it would be nearly impossible to put it back together. Unfortunately, investor expectations, the proximity of Skyline Forest to growing urban areas (Bend and Sisters) and the loss of local timber mill infrastructure has made Skyline unattractive for commercial timber companies looking to manage for timber production. An independent study by the PNW Research Station analyzed development trends and confirmed that while the property would never likely be “fully” developed, a haphazard breakup of the property was highly likely, with lots being slowly subdivided into smaller and smaller units. It’s worth noting that portions of the old Bull Springs Tree Farm adjacent to Bend’s Shevlin Park have in the past been subdivided, fenced and are slowly being developed.
What is a Community Forest?
Community Forest is a term that refers to timberlands that are held by or on behalf of a local community and which are typically managed for wildlife, recreation, scenery and sustainably managed timber production.
As a Community Forest, would the Land Trust pay property taxes?
Yes, the Land Trust has committed to the Deschutes County Commissioners that the land would stay on the tax rolls.
What is a working forest?
Working forest is a term that refers to forests that are actively managed for timber production.
What is a Community Forest Authority (CFA)?
CFAs are quasi-municipal corporations that can be established by counties and cities in Oregon to issue tax-exempt bonds for the purpose of funding the purchase of working forests. State law specifies how a CFA works and the limitations of its authority.
Will Deschutes County tax payers bear the burden of this CFA?
No, any bonds would be repaid with revenues from the sustainable harvest of timber.
What happens if there is a default?
Any transaction and subsequent bond issue will have to face scrutiny under federal law from both bond counsel and of course investors. This insures that only sound transactions are funded through such bond issues. However, should a default take place, investors would look first to reserve funds, insurance proceeds and then to the asset, in this case the timberland.
Who will own these working forests?
The Community Forest legislation requires that these private working forests be held by private non-profit organizations specifically set up to hold and manage this type of land. The CFA cannot hold the land, but would issue the bonds and loan the proceeds to the non-profit to purchase and operate the Community Forest. Assuming that the CFA is used to help fund the purchase of Skyline Forest, the Land Trust would likely create a subsidiary of the Land Trust to hold and manage Skyline as a Community Forest.
Will these bonds be available for purchase by the general public?
Probably not. Typically, these types of municipal bonds issued in very large denominations. Typical purchasers include pension funds and other large institutional investors.
If CFA bonds are available, why raise funds?
At this time, the Land Trust is not raising funds for the actual cost of purchasing the forest. However, the Land Trust has and continues to incur substantial costs in pursing the acquisition of Skyline Forest. Additionally , should the Forest be fully donated, the Land Trust will still need to raise funds for its long-term stewardship, public access and educational use. A decision about whether to use CFA bonds will in part depend upon the market for such bonds at the time that a transaction is finalized.
Who is US Forest Capital LLC?
US Forest Capital is a private company based in Portland, Oregon, with extensive expertise in assembling large forest transactions with a conservation objective. US Forest Capital has been retained by the Land Trust to coordinate the effort to purchase and conserve the Bull Springs Tree Farm as Skyline Forest. For more information visit www.usforestcapital.com
What is a TIMO?
The acronym “TIMO” stands for Timber Investment Management Organization. TIMO’s differ in their size, area of operations and mode of operations. However, they typically are defined as being privately held companies or partnerships that purchase large blocks of private timberland with the goal of maximizing their investment return over a relatively short period of time (often 10 to 15 years).
During much of the 20th Century, private timberlands were typically owned by timber companies that harvested timber over an extended period of time to maintain a stable supply of logs for their mills. In the past decade, Wall Street investors have often viewed these timberlands as under performing assets, which could deliver a much higher return if timber was harvested more quickly and the land then sold or developed for other purposes (mining, residential development, etc.). In the past 10 years, roughly half of the nation’s private timberlands have changed ownership, with much of this land being acquired by TIMO’s responding to these higher expectations for return on investment.
Are there enough trees to pay the cost of purchasing the lands?
No, we don't believe that the timberland can support the full cost of purchase. The full purchase would come from a combination of the municipal forest bonds, state & federal conservation funding programs and both conventional and non-conventional charitable fundraising.
What is “sustainable forestry” and what does it mean?
The term “sustainable forestry” generally refers to an actively managed forest, in which timber or other resources are harvested at a rate or level that can be sustained indefinitely by the land. Various organizations and systems have been developed internationally to encourage and support “sustainable forestry” and the Land Trust will explore the most appropriate standards and partners for Skyline Forest. The Land Trust would seek to enhance wildlife habitat, protect scenic views and provide public recreation while maintaining an appropriate and sustainable forestry program.
Is the forest currently accessible by the public?
The 2009 legislation provided continued public access to the forest. The landowner has restricted motorized access to existing roads and a seasonal vehicular closure is in effect on the portion of the forest within the Tumalo Deer Winter Range, which runs from December 1st through April 31st. The Land Trust, in cooperation with Fidelity, conducts interpretive tours and hike on Skyline Forest during the spring, summer and fall. If you choose to visit the forest during the annual deer winter range closure, the Land Trust encourages you to leash your dog to avoid dogs chasing and stressing wildlife.
What about the other forests owned by Fidelity?
At the time that Crown Pacific went bankrupt, they held nearly 300,000 acres of commercial timberland in central Oregon. While each of these properties is unique and faces different levels of risks, the Land Trust has been working with several different partners to permanently conserve all of these timberlands. The Land Trust realized early in its efforts that it lacked the capacity to acquire all of these forest lands and chose to prioritize its efforts on Skyline Forest , which clearly faced the highest risk of development.
The 2009 Skyline Forest legislation provided an opportunity for the Land Trust and our partners to acquire another nearly 35,000 acres of timberland within the historic Gilchrist Tree Farm along the Little Deschutes River, south of LaPine. The Land Trust is currently working with the Deschutes National Forest to secure funding for the purchase and transfer of these Gilchrist Tree Farm lands to the National Forest. Additionally, the Land Trust has worked to support the Oregon Department of Forestry and their transaction partner, the Conservation Fund, to purchase other portions of the Gilchrist Tree Farm to create the new Gilchrist State Forest. To date, the Oregon Department of Forestry has acquired roughly 43,000 acres, with an option on another 25,000 acres.
