North Carolina State University (NCSU) announced on July 1 that it has reached a new lease agreement with timber investment management firm, Resources Management Services (RMS).
The $78 million, 50-year deal gives RMS the right to sustainably grow, harvest, and replant timber assets on 54,334 acres of working forest land within the 79,000 acre Hofmann Forest owned by the North Carolina State Endowment Fund.
Under the terms of the agreement, students and faculty will retain the right to access and conduct research on the property, while RMS will be called upon to meet sustainable forest management certification requirements and to plan for an improved age class distribution of trees at the conclusion of the 50-year term.
“RMS is pleased to acquire these timberlands as part of its southern U.S. investment portfolio and looks forward to working closely with NC State University and the Foundation to continue forestry research and educational opportunities on the Hofmann Forest,” said Ed Sweeten, executive vice president at RMS in a university press release,
The proceeds from the contract will be invested in the Endowment Fund of NC State University providing a steady income of approximately $3 million per year that will be earmarked to support programs of the College of Natural Resources.
Although a leader of the Wildland Network, an organization that has been working to block the sale of the forest, Ron Sutherland told JD News that he supported the deal. “RMS has a good reputation in the sustainable forest management world, and it is very likely they will achieve the terms of the contract and return the forest in better condition at the end of 50 years.”
The timber lease is part of a larger deal announced in March of last year by the university addressing possible profitable uses for the forest including the sale of easements and leases of about 18,000 acres known as the Big Open Pocosin to the U.S. Navy and Marine Corp, to be used or military training exercises. The university also said that there is the potential for the sale of a 1,600 acre farm for the continuation of agricultural production.
The announcement of the lease agreement with RMS appears to be the conclusion of almost three years of contention, ever since the university announced its initial plans to sell the forest to Walker Ag Group, an Illinois-based agribusiness for $150 million.
Not only does the deal satisfy conservationists, but benefits the university with a dependable source of income and the mitigation of risk.
Mary Watzin, dean of the school’s College of Natural Resources told Carolina Coast Online, “The consistent annual funds (from the timber deed) replace variable yearly income previously generated by the foundation’s management of the forest, enabling the college to better plan for and utilize resources to benefit its educational mission. The agreement also reduces the Endowment Fund’s investment risks and gets the Natural Resources Foundation out of the business of managing a commercial forest.”
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Lynda Kiernan