NEW YORK, NY, January 25, 2007 Having recently announced it will revise its controversial development plan for the Moosehead Lake region of Maine, the Plum Creek Timber Corporation can potentially alter the plan’s mix of development and conservation and still earn a significant return, according to an analysis by the Open Space Institute (OSI), in partnership with the Margaret Chase Smith Policy Center and Industrial Economics, Inc. (IEc).
OSI’s analysis, contained in three separate reports released today, is intended to provide community, environmental, and public policy leaders with objective, impartial information needed to assess Plum Creek’s proposed lake concept plan, a rezoning request currently before Maine’s Land Use Regulatory Commission (LURC). The studies compare and contrast the plan, which covers 421,000 acres of company holdings in the Moosehead Lake region, with the mix of conservation and development likely to occur without a region-wide concept plan, and calculate the financial return to the company under both scenarios.
“We applaud Plum Creek for its decision to revise the plan to further address public concerns that have been raised,” said Peter Howell, Executive Vice President of OSI, a New York-based land conservation organization that has facilitated the protection of large-scale forested landscapes in Maine through its Northern Forest Protection Fund. “Based upon our financial analyses, we believe that Plum Creek has the opportunity to make significant changes and still have the resulting development remain financially attractive to the company.”
Under its current plan, Seattle-based Plum Creek, the nation’s largest landowner with almost 900,000 acres in Maine, proposes to develop 975 residential lots, as well as two resorts that could result in hundreds of additional lots. Plum Creek would also donate easements on 72,000 acres as mitigation (“conservation for balance”). The company has linked plan approval from LURC to a binding agreement to sell to The Nature Conservancy $35 million of land and working forest easements on an additional 345,000 acres in and near the region.
OSI’s analyses suggest that Plum Creek stands to earn about $63 million from development under the region-wide concept plan compared with about $31 million were it to develop without such a plan. The company earns more under a region-wide concept plan because it can develop more land in less time than it can by developing under standard LURC zoning and regulations, defined as the “baseline" in the analysis.
Under the concept plan, OSI’s report estimates that Plum Creek will forgo approximately $10 million through donation of conservation easements, leaving an estimated return to its shareholders of almost $20 million above what would be expected from development under the baseline scenario. Therefore, $20 million is the maximum amount that Plum Creek could relinquish by reducing the amount of development, increasing the amount of its donated conservation or some combination of both.
“Under the plan, Plum Creek could develop almost twice as many shorefront lots, and a third more back lots as it could without a concept plan,” said Mike Donlan, Principal with Industrial Economics, Inc. “But it also would commit to much more permanent conservation of shorelands and forest lands than under the baseline.”
In assessing Plum Creek’s plan, OSI’s reports note several key strengths:
1. Conservation easements would protect 59 water bodies, with development focused on only seven other water bodies.
2. The amount of permanent protection (144 shorefront miles) compares favorably with other lake concept plans considered by LURC.
3. Permanent protection of the ecologically significant 61,000-acre Moosehead/Roach Pond tract.
4. Protection of 144 miles of trail easements.
The OSI analysis also notes some weaknesses:
1. Significantly increased amount of development under the plan compared with the amount likely to occur without the rezoning.
2. Broadly defined resort development that could add hundreds more residential lots.
3. Larger number of “non-adjacent lots” than Plum Creek’s own initial estimate, which could trigger a requirement to provide more permanent conservation.
4. Little or no development potential at some locations proposed for conservation (e.g., wetlands) that could limit their value as mitigation.
5. Subdivision design in several locations that is inconsistent with LURC standards.
6. Residential lot sizes that exceed LURC norms.
“Ultimately, LURC will have to determine whether Plum Creek’s plan achieves an acceptable balance of development and conservation,” said Peter Howell of OSI. “We believe there are strong incentives by all parties to come to agreement on a concept plan.”
News