The Redwood Forest Foundation packaged three separate loans and borrowed 100% of the necessary capital ($65,000,000 purchase price plus transaction expenses) from the Bank of America to purchase the Usal Redwood Forest. The financing package was specifically structured to support RFFI’s goal of selling a conservation easement for the property within the first three years of operation and to forgo intensive timber harvest when economic downturns occurred. In essence, the financing package included a “bridge loan,” thus providing RFFI with the flexibility to obtain more permanent financing once the bridge loan was paid by the funds from the sale of a conservation easement and ecosystem services, such as carbon sequestration credits.
The negotiated purchase price for the Usal Redwood Forest was based on an independent third-party appraisal prepared for Bank of America by Russell E. Forsburg, RPF, ARA. The purchase price and loan terms were actively negotiated by the parties, each of whom is sophisticated in matters relevant to pricing and structuring the financing of timberland purchases such as the Usal Redwood Forest.