Usal Redwood Forest Purchase
Will RFFI own the forest and what financial pressures will they be under?
Frequently Asked Questions
RFFI will own the forest at close. However, like an individual that borrows money to buy a house, they will be required to pay back their lenders or forfeit their ownership.
In this case, the Bank of America has provided patient capital over a 20 year period.
The bank is partnering with RFFI in its fiduciary responsibility to the forest. RFFI at a minimum must adhere to the base conservation plan that was set up by RFFI or be in default of the loan. In other words, RFFI can't log at a rate higher than this plan.
The Foundation expects to service its debt primarily through sustainable timber harvest and the sale of conservation easements. In addition, the Foundation will aggressively pursue alternative revenue sources such as carbon credits, conservation banking and other ecosystem services.
Will there be a preservation component to the property?
RFFI is acquiring the property to assure the long-term conservation of a large working forest where sustainable forest management will provide environmental, social and economic benefits. Nonetheless, there are a number of coastal acres that hold important ecological, scenic and recreation value that could be managed as a park. RFFI would welcome a land sale of this important area where it would not materially impact their core tenets and operations.
Will the property be FSC (Forest Stewardship Council) certified?
Because of the current condition of the property and the need to restore its ecological attributes, timber harvests are projected to be insignificant in the first 5 to 7 years. It is the Foundation's intent to implement FSC type forestry practices during this initial period and obtain FSC certification by the end of this period, before harvest levels increase.
What kind of public financing is associated with this deal?
The Usal Redwood Forest transaction was funded by private financing provided by Bank of America. The Bank's commitment to this conservation forestry transaction is evidenced by the financing structure that serves as a bridge to a conservation easement sale and subsequent to such sale, allows for the rest of the debt to be paid through sustainable timber harvest.
Who opposes this transaction?
There is no known opposition to this transaction, however, it has been negotiated under a confidentiality agreement. Current supporters include individuals who fought each other during the timber wars of the last three decades. While we cannot guarantee that everybody will support this deal, we believe that opposition, if there is any, will be limited given the fact that:
- The buyer is comprised of business and environmental representatives who used to "war in the woods;"
- The property will remain in open space and be managed under sustainable forest practices;
- Private financing is being used; and,
- Mills will continue to have access to forest products supplied by the property.
What is Bank of America's role?
Bank of America is proud to provide the Redwood Forest Foundation with financing that respects the conservation attributes of the property.
The bank believes this is good business because they receive a financial return. The Redwood Forest Foundation believes this is good business because the Bank is providing them with patient capital that will allow them to restore a forest, which is a good investment in the community's future.
What is the role of AB 32 and the California Climate registry?
The Redwood Forest Foundation will aggressively pursue registering the carbon that is stored on this property as a result of their management. The property is ideally situated to provide such credits as its current inventory is low and the Foundation's management will grow this inventory over time.
Will there be public access?
The Redwood Forest Foundation will continue to have active forestry operations. A public access program will be developed to provide public safety and limit liability so that people can enjoy this magnificent forest and associated coastal property.
Does RFFI have an advantage over the private sector given their nonprofit status?
No, while their "cost of capital" may be lower, they will not be maximizing economic returns.
Who previously owned the Usal Redwood Forest?
See: Transaction Participants
Who will be managing the Usal Redwood Forest?
See: Transaction Participants
Where is the Usal Redwood Forest?
See: Location Maps
How many acres is the Usal Redwood Forest?
See: Transaction Summary
Who will eventually get the profits from timber harvest in the Usal Redwood Forest?
See: Community Forestry: Sustains communities
What is the distribution of tree species on the Usal property?
See: Standing Timber
What will the harvest plan look like over the next 50 years?
See: Projected Harvest
What is the current state of the Usal Redwood Forest property?
See: Description of the Usal Redwood Forest
How will the Usal Forest be managed??
See: Usal Management FAQ (2009)
Questions about the Redwood Forest Foundation?
See: RFFI FAQ