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Usal Redwood Forest Management
Frequently Asked Questions
(July 2009)

  • What is Usal Redwood Forest's governance structure and how is it related to the Redwood Forest Foundation?

    The Redwood Forest Foundation is a 501(c)(3) nonprofit organization whose board of directors includes regional community members with backgrounds in finance, forestry, conservation, academics, business and philanthropy. This unique mix of expertise allows individuals with historically conflicting forest management perspectives to make joint decisions regarding the Usal Redwood Forest's environmental, economic, and social attributes. A local citizens' advisory committee has been formed to provide the board with additional perspectives on regional forestry issues.

    Usal Redwood Forest RFFI has chosen to form a wholly owned subsidiary that owns the Usal Redwood Forest. This subsidiary was created to protect the financial and forest management integrity of this particular acquisition. Management recommendations are made by a subset of the RFFI Board who serve on a Usal Management Committee. A representative from RFFI's lender, the Bank of America, serves in an ex officio capacity on this Committee. This Committee can only make recommendations to the RFFI Board, which retains final authority and responsibility for all management decisions.

  • Who is managing the Usal Redwood Forest for RFFI?

    The Redwood Forest Foundations Board makes all major decisions regarding the management of the Usal forest. A subcommittee of the Board, including its President, Treasurer, Executive Director and two Registered Professional Foresters, manage and oversee Usal business matters. A representative from RFFI's lender, the Bank of America, serves in an ex officio capacity on this Committee. This subcommittee is responsible for taking policy and business decisions to the Board. A Community Advisory Board also provides the subcommittee with input on forest management decisions.

  • How does RFFI take community perspectives into account?

    RFFI has two formal Advisory Committees to provide local direction and guidance to the Board. The Mendocino Advisory Committee has been instrumental over the years in setting up RFFI's organizational structure, giving input into the purchase and management of the Usal Redwood Forest and representing RFFI within the community. The Humboldt Advisory Committee is active in community outreach to educate people about the benefits of Community Forestry and has played a role in identifying and negotiating potential forestland acquisitions.

    RFFI is also in various stages of establishing working groups to solicit advice relative to the management of the Usal Redwood Forest. Groups focus include; addressing controlling Tan Oak / use of herbicides, access / recreational use of the forest, cultural /Native American issues and future disposition of excess revenues.

  • What development and fragmentation pressures exist on the Usal Redwood Forest?

    Approximately 75% of the nation's industrial forest changed hands between 1996 and 2008. Many of these new owners split off development parcels and then fragment the larger tracts when they decided to exit (sell) their property, usually over a 5 to 15 year period. While such transactions may be in decline during the current economic downturn, this trend is expected to continue during the next recovery.

    The Redwood region has been relatively fortunate in that the development pressures that are prevalent in other parts of the state, such as the Sierras, are not as acute in the region. However, while housing and condominium developments may not be sprouting up at the same scale, development pressure does exist. There have been many small tract sales that were generated by timberland investors as well as a number of large timberland sales that went to financial investors. While it is clear that a number of the new owners prefer to maintain timber production, it is also clear that subdivision and fragmentation could provide significant financial value and therefore incentive to fragment these forests should land ownership objectives or the landowners themselves change in the future.

    It is within this context that RFFI chose to pursue acquisition of the Usal Redwood Forest. There is a good chance that the forest would have been acquired and split up by an owner in the next 50 years. By acquiring the property now, RFFI is able to assure its long-term conservation and acquire it at a price that is primarily based on its timber values as compared to its development value.

  • What kinds of forest management activities are taking place to support sustainable forestry?

    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 is currently undertaking 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 has created what we call a "Base Conservation Plan" that will be integrated into a conservation easement that:

    • Prohibits fragmentation and development of the property;
    • Limits harvest to 2.9% of inventory;
    • Creates buffers along intermittent streams;
    • Transforms the property from an even-age to uneven-age management approach; and,
    • Provides for Forest Stewardship Council certification within 5-years.

    The reason RFFI calls it a Base Conservation Plan is because it will serve as a base, or floor, from which conservation benefits will grow over time.

  • What public benefits will be assured through sale of a conservation easement?

    There is an array of environmental and community benefits associated with the sale of a conservation easement. The easement will be acquired and held by The Conservation Fund. The Fund is an independent nonprofit conservation group that has conserved 6 million acres across the United States including nearly 40,000 acres in the Garcia, Salmon Creek and Big River watersheds.

    The Conservation Fund and RFFI created the proposed conservation easement. RFFI believes that the most important public benefit of selling an easement is assuring that the Usal Redwood Forest will remain as working forest in perpetuity. The easement will provide additional public benefits, including:

    • Increased protections for intermittent streams to control sediment and maintain appropriate water temperatures for salmon and steelhead runs;
    • Limitations on the amount of timber harvest to assure the forest is not over cut;
    • Move 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 in 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 has paid back its loans;
    • Maintaining a constant timber supply for regional mills;
    • Maintaining the properties contribution to the regional tax base; and
    • Creating resource-related jobs.

  • Will Usal Redwood Forest be turned into a park?

    RFFI's governing bylaws require that the overwhelming 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. Given the importance of certain environmental attributes, RFFI is pleased to sell approximately 957 acres to the Save the Redwood League at the same time the conservation easement is sold on the remainder of the property. The park parcel contains the old-growth "Trees of Mystery" grove along with a scenic coastline. In addition, the sale will improve public access to the adjacent Usal Beach property that is already held in park ownership. Finally, the League, California Parks and RFFI hope to work together on a forestry strategy in the Shady Dell watershed that will restore the health of the property's redwood forests.

  • Is RFFI Operating Under an Option A or Option C plan?

    RFFI is currently drafting a plan under the State's "Option A" guidelines. An Option A plan documents how forestry will be practiced over a 100-year period for forest owners of more than 50,000 acres. The Plan must demonstrate the entity's ability to address the Long Term Sustained Yield (LTSY) of timber products over the planning horizon.

  • What is the basis for managing under a 2.9% inventory cap?

    The 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.

  • Will the inventory cap allow RFFI to complete the thinning and tan oak control necessary to restore the forest?

    Yes, an aggressive thinning program can be implemented under the inventory cap. More specifically the inventory cap was structured to allow the Foundation to use an array of silvicultural tools, including commercial and pre-commercial thinnings, over the entire property. RFFI's foresters believe that many small diameter trees could be removed without getting close to the volume limitation for two reasons:

    • The cap is based on a five-year average annual harvest which will allow concentrated projects over a multi-year period; and
    • The cap is limited to conifer volume, which will allow RFFI to control its significant tan oak volume without violating the cap.

  • What are the ecological benefits of restricting harvest on Class III streams?

    California defines Class III streams as those where no aquatic life exists and has 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.

  • Will RFFI seek to certify the carbon that is sequestered as a result of its forest management approach?

    Yes, RFFI is currently working to certify the carbon that will be sequestered through implementation of its conservation strategy. This carbon will be certified with the Climate Acton Registry. Once the carbon is certified, RFFI will seek to sell its certified carbon credits to help pay back its loans so long as it makes economic sense to do so. If carbon pricing does not provide positive cash flow as compared to forgone timber harvest, RFFI will likely delay certification until such time as it makes sense to do so.

  • What are RFFI's projected harvests in the first decade and beyond?

    RFFI believes that restoring an acceptable level of forest inventory is one of its most important short-term decisions. With this in mind, RFFI plans to reduce harvest in the first decade and then increase harvest in the second decade and beyond when a minimum inventory threshold has been achieved. RFFI estimates that average annual harvest under its conservation management will be:

    • 5.4 mbf / year for the first decade (mbf = million board feet);
    • 18.8 mbf / year for the second decade; and
    • 22.0 mbf / year for the third through fifth decade.

    Please note that RFFI is undertaking a detailed forest management planning process and expects to generate a revised harvest estimate after the conservation easement has been sold and implemented.

  • What is RFFI's recreational access plan?

    RFFI's recreation plan is being developed to address public enjoyment of the property while minimizing the negative impacts of un-managed public access. RFFI's initial desire to work with the Save the Redwood League is an example of providing public access by working with an organization that has the structural capacity to address the many aspects of liabilities, trail maintenance, interpretive signage, and user amenities. RFFI will work with the community and other interested people to develop a recreational access plan in the context of its forest planning process.

  • How did RFFI finance the Usal Redwood Forest acquisition?

    The Redwood Forest Foundation, through a package of three separate loans, 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 was a "bridge loan," thus providing RFFI with the flexibility to obtain more permanent financing through the sale of a conservation easement and ecosystem services, such as carbon sequestration credits, after the initial purchase of the Usal Redwood Forest.

    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.

  • How can RFFI reduce harvest and service its loans at the same time?

    RFFI paid market value for Usal based upon projected harvest levels that would be permitted under the California Forest Practices Act. RFFI's Conservation Plan that projects lower harvest than allowed under the Act will, however, guide 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 a its Conservation Plan; 2) a sale of conservation easement to nonprofit and/or public organizations; and, 3) the sequestration and sale of carbon credits or other ecosystem services. The Bank of America financing provides great value in that it allows RFFI to implement its conservation scenario while it is securing funds from these various sources.

  • What happens if RFFI cannot pay back its loan?

    To meet its conservation objectives while remaining in compliance with the financing package, RFFI must sell an easement, 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. RFFI will be unable to meet its debt service obligations without the sale of a conservation easement. More specifically, RFFI will be in violation of certain loan covenants within 3 ½ years (end of 2011), which will allow Bank of America to foreclosure on the Property and find new ownership.

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