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Forest Bank LLC We noted three years ago The Nature Conservancy's announcement of an intention to launch a program called "Forest Bank" in central Appalachia, under which the conservation group would acquire a permanent easement on all or part of subscribers' timberland, assigning to TNC exclusive harvesting and development rights. In return, TNC would pay subscribers an annual royalty. On the face of it, the proposal sounded like an ambitious attempt to reverse the trend toward forest fragmentation by providing a framework for integrated management across small ownerships. On the other hand, many found the paternalist nuance offensive and doubted that a national environmental organization would be likely to act in the best interests of the landowner in perpetuity. On July 2, the Wall Street Journal reported that the federal Securities and Exchange Commission had approved the creation of Forest Bank LLC, a company that will allow timber owners to "deposit their logging rights in return for an annual dividend of about 4% on the appraised value of their trees." Members of this landowner base will have "little or no rights" to manage the company, nor may they or their heirs opt out and redeem their easement by buying it back. The Journal does not indicate whether TNC expects to take the project to a national level; the launch, however, will be in Virginia's Clinch River Valley, where, by 2007, the new enterprise hopes to have signed up a modest 15,000 acres. The Journal doesn't specify what the institutional relationship between TNC and Forest Bank LLC will be in the long run; for now, TNC is committed to providing $1.5 million in "cash and services" over the next five years to support the venture. Back to "News" Forest Resources Association
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