The Usal Redwood Forest Co is a Limited Liability Corporation that is a wholly owned subsidiary of the Redwood Forest Foundation – a 501(c)(3) nonprofit organization. The Redwood Forest Foundation, Inc. (RFFI) was developed and is governed by a board of directors that includes community members from the redwood region with backgrounds in finance, forestry, conservation, academics, business, timber industry and philanthropy. This divergent mix of expertise allows individuals with conflicting forest management perspectives to make joint decisions regarding the Usal Redwood Forest’s environmental, economic, and social attributes. In addition, the Redwood Forest Council is a group of local residents who provide the board with additional perspectives on regional forestry, environmental, economic and social issues. This unique governance structure directly impacts the way that the Usal Redwood Forest is managed as a sustainable working community forest.
The Usal Redwood Forest Company manages the Usal Redwood Forest for RFFI. The Redwood Forest Foundation Board makes major decisions regarding management. A subcommittee of the Board, including its Chairman, Treasurer, President and CEO and a Registered Professional Forester, manage and oversee Usal business matters. Representatives from RFFI’s lender, the Bank of America, serve in an ex officio capacity on this Committee. This subcommittee is responsible for bringing policy and business decisions to the Board. The Redwood Forest Council also serves as advisors to the subcommittee. The day to day operations are handled by the Usal Redwood Forest Company based on the guidance and directions received from the Board and subcommittee.
The RFFI Board of Directors provides diverse geographic and expertise and stakeholder perspectives. Further, the Redwood Forest Council of community advisors provides local direction and guidance to the Board. Over time, RFFI has convened working groups and engaged relevant professionals for the purpose of soliciting specific types of advice relative to the management of the Usal Redwood Forest. Topics have included: forest management; controlling Tan Oak/ use of herbicides; biochar and uses of excess woody biomass; access / recreational use of the forest; cultural /Native American uses of the forest; development; and future disposition of excess revenues.
Approximately 75% of the nation’s industrial forest changed hands between 1996 and 2008. Many new owners split off development parcels and then fragmented the larger tracts when they decided to sell their property, usually over a 5 to 15 year period. The social and economic consequences are devastating for small resource-dependent communities and the environmental consequences impact the planet.
In 2011, RFFI sold a conservation easement to The Conservation Fund. The Fund is an independent nonprofit conservation group that has conserved 6 million acres across the United States. In 2015, The Conservation Fund transferred the conservation easement to California’s Department of Forestry and Fire Protection (CAL FIRE). CAL FIRE monitors RFFI’s compliance with the terms of the conservation easement.
RFFI sold the conservation easement in order to protect one of the largest nonprofit-owned ‘working forests’ in America- a forest almost twice the size of San Francisco. Forest conservation at this large landscape level provides economic and social benefit to the community and significant environmental benefit. The Usal Redwood Forest is undergoing extensive forest restoration and wildlife and fish habitat improvements. Beyond that Usal is a prolific carbon sequestration machine. Coast redwood (Sequoia sempervirens) stands have the largest measured biomass per acre, making them a species that is desirable for long-term carbon sequestration. Recent university studies confirm that redwoods remove and store more carbon from the atmosphere per acre than any other forest on earth.
The conservation easement does not change the ownership of the Usal Redwood Forest. The Redwood Forest Foundation (RFFI) continues to own and manage the Usal Redwood Forest, located on the Mendocino-Humboldt county line, for the long-term economic and ecological benefit of the region. The 2011 conservation easement is permanent and runs with the land, prohibits subdivision, development and fragmentation of the forest. It also imposes a 2.9% annual harvest limitation, requires forest stewardship certification and the transition to uneven-aged management within 60 years. These permanent protections are consistent with RFFI’s long-term vision and will be monitored by CALFIRE as the easement holder.
The easement will provide additional public benefits, including:
Increased protections for intermittent streams to control sediment and maintain appropriate water temperatures for fish;
Limitations on the amount of timber harvest to assure the forest is not over cut;
Moving toward uneven age management;
Prohibition against mining and other surface activities that impact the forest;
Development of a recreation plan that provides public access in an environmentally responsible manner;
Development of landscape connectivity between important public lands; and
Protection of threatened and endangered plant and animal species.
By assuring that the property will be maintained as a working forest, the easement indirectly creates a number of additional community benefits, including:
Creating a future funding source for local environmental, social and economic projects once the Foundation income exceeds its expenses;
Maintaining a constant timber supply for regional mills;
Maintaining the property’s contribution to the regional tax base; and
Traditional sustainable forestry principles dictate that a landowner not harvest more timber than is grown over a period of time. Over the last four decades, however, there has been considerable and often contentious debate over whether and how this definition incorporates other measures of sustainability including conservation of old-growth, native tree species, threatened and endangered species habitat and water quality. This evolving definition of sustainable forestry further recognizes what a forest can provide to local communities and the ecological services it renders.
RFFI conducted a long-term forest planning process to define how both traditional and recent definitions of sustainability can be integrated to maintain and enhance the region’s economy and environment. For starters RFFI created a “Base Conservation Plan” that was integrated into the conservation easement requirements:
Prohibits fragmentation and development of the property
Limits harvest to 2.9% of inventory;
Creates buffers along intermittent streams;
Transforms the property from even-age to uneven-age management; and,
Requires Forest Stewardship Council certification within 5-years.
This Base Conservation Plan serves as a base, or floor, from which conservation benefits are growing over time. For example, in 2015 after 8 years of soliciting advice, RFFI published a Forest Management Plan for the Usal Redwood Forest. Further, as part of this plan and the requirements of the conservation easement, RFFI secured Forest Council Certification in 2015. Cal Fire, and before them, The Conservation Fund monitor the forest’s management and issue yearly reports.
RFFI’s governing bylaws require that the vast majority of land that they acquire be maintained as a working forest. In this regard, RFFI is looking forward to maintaining 98.2% of Usal in working forest in perpetuity. Simultaneously, RFFI also seeks to enhance the environment and benefit the community. Given the significance and unique environmental attributes of certain parcels within Usal, RFFI was pleased to sell approximately 957 acres to the Save the Redwood League. This sale was coordinated with the sale of the conservation easement on the remainder of the 50,000 acre property. The park-like parcel, sometimes referred to as Shady Dell, contains the old-growth “Enchanted Forest” grove along with a stunning scenic coastline. This Shady Dell sale was also intended to improve public access to coastal trails and to the adjacent Usal Beach property that is already held in California State Parks ownership. In May 2016, the newly built, 2.3-mile trail that runs through the Shady Dell property was opened and is named for Peter Douglas, one of California’s most famous coastal champions. Finally, the League, California Parks and RFFI will work together on a forestry strategy in the Shady Dell watershed that will protect and restore the health of the property’s redwood forests.
2.9% inventory cap recognizes both substantive and community related goals. Substantively, a “percent-of-inventory” or “POI” cap will help recruit larger trees and higher inventories across the ownership regardless of market forces which may come into play. Many concerned citizens also believe that a harvest cap is one of the most simple and effective ways to assure that forests are not over-harvested.
Over time, RFFI plans on harvesting no more than 2.0% POI on an average annual basis over a five-year period. Given, however, the financial flexibility that is required to manage a forest and a desire to sell ecosystem services, such as carbon, RFFI determined that it would be best to sell an easement with a 2.9% POI. This cushion provides RFFI with increased management opportunities while also assuring that its forest management and sustainability goals are achieved.
California defines Class III streams as those where no aquatic life exists and having the potential to cause sediment problems in Class I and II fish bearing streams. Current law requires that landowners exclude equipment and in some cases modify their harvest practices in these areas.
Scientific research has shown that Class III stream buffers, which are usually smaller but collectively cover a much larger area than Class I and II streams, can contribute important downstream water quality benefits. There are three reasons for this. First, Class III buffers provide a level of temperature control beyond their immediate boundaries. This is because cooler air and water that is created by the shading from Class III buffers will flow down to Class I and II streams thus creating cooler water temperatures in those fish-bearing streams.
Second, restricting harvest along Class III waters will reduce the risk of sediment delivery that is released downstream. Class III streams can be a significant sediment source because they make up the many small tributaries that are often in steep headwaters and hollows. Increasing vegetative cover along these tributaries reduces the risk of sediment delivery and over the long-term should help improve water quality and fisheries values.
The third reason relates to debris torrents, which commonly follow Class III channels. An overstory canopy won’t stop a debris torrent, but it will ensure that there are sufficient large logs mixed in with the sediment to mitigate the damage and make it more similar to a natural process.
Yes. RFFI has already accomplished this. The Usal Redwood Forest carbon project was approved by California’s Air Resources Board in late August of 2016. With ARB approval, Usal’s carbon was registered as “compliance” credits that can be sold to companies that are required to offset carbon emissions as required by California’s climate change policies.
This is the culmination of a complex, multi-faceted effort to certify the carbon that is and will be sequestered through implementation of its forest conservation strategy. In 2015, after four years of diligent work with our advisor Tom Tuchmann of US Forest Capital, RFFI successfully registered 3,166,372 tons of Usal Redwood Forest carbon with California’s Climate Action Reserve (CAR). The Usal Redwood Forest carbon project is one of the largest forest carbon sequestration projects in the country. CAR registration was a significant step towards registering the Usal Forest’s carbon project with California’s Air Resources Board (ARB). As part of CAR’s early action program, an independent third-party verified the carbon sequestered by Usal’s sustainable forest management practices. The second step, i.e., independent verification by a third-party verifier, was completed in May 2016.
The project was then verified and registered with California’s ARB in August 2016 allowing for the sale of compliance carbon credits now and in the future, as the market allows.
On May 5, 2016, the Redwood Forest Foundation was honored by California’s Climate Action Reserve as a Top 2015 Project Developer for Usal Redwood Forest Company’s Carbon Offset Project. RFFI was recognized for achieving the highest level of emissions reduction of any project in 2015.
Carbon registration is an essential step in RFFI’s long-standing plan to develop revenue streams that do not rely exclusively on timber production. The sale of carbon credits is part of a strategy that will allow the Redwood Forest Foundation to further its sustainable forest stewardship program. This revenue source will support RFFI’s sustainable forest management by reducing the financial pressure to harvest trees to service our debt, allowing RFFI to improve forest health and address climate change.
RFFI’s has engaged more than 450 residents in helping to develop recreation plans to address public enjoyment of the property while minimizing the negative impacts and dangers of unmanaged public access. RFFI has applied for grants to make some of these plans a reality. Unfortunately they have not been funded. On the other hand, RFFI’s work with California’s State Coastal Conservancy and the Save the Redwood League is providing public access by working with an organization that has the structural capacity to address the many aspects of user safety, trail maintenance, interpretive signage, liability, and user amenities. RFFI along with a coalition of Native Americans have jointly conducted research and forest restoration that has made It possible to establish the Chinquapin Springs Acorn Grove for acorn gathering by local Native Americans. The grove was dedicated in late summer 2012. The Cahto Tribe is providing coordination for tribal use of the grove.
RFFI and the UsaL Redwood Forest Company conduct periodic tours and continue to work with the community and other interested parties to develop plans for additional recreational access within the context of our forest planning process.
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.
RFFI paid market value for the Usal Redwood Forest based upon projected harvest levels that would be permitted under the California Forest Practices Act. However, RFFI’s Conservation Plan that projects lower harvest than allowed under the Act guides the actual harvest. With this in mind, RFFI realized that it was necessary to secure financing that allows debt service to be paid by: 1) timber harvest revenues resulting from its Conservation Plan; 2) a sale of the conservation easement to a nonprofit and/or public organization; and, 3) the sequestration, registration and sale of carbon credits or other ecosystem services. The Bank of America patient financing provides great value in that it allows RFFI to implement its conservation scenario while it secures funds from these various sources.
To meet its conservation objectives while remaining in compliance with the financing package, RFFI sold the conservation easement, and will sell carbon credits and/or other ecosystem services at a value that reflects the difference between the property’s market value (industrial timber harvest, development and land appreciation) and the conservation value of the property based on its forest conservation and management approaches – the latter of which does not allow fragmentation and implements a property-wide forest restoration strategy. If despite all of these efforts, RFFI were to be unable to meet its debt service obligations, RFFI would be in violation of certain loan covenants which would allow the Bank of America to foreclosure on the property and find new ownership. If that were to happen, RFFI has achieved significant protection of these resources by the placement of a conservation easement on the forest which assures it will remain an intact forest that can never be subdivided or fragmented. In fact, RFFI is making good progress on meeting its financial obligations.