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It’s been six months since Oregon State University was chosen by the State Land Board to take over management of the controversy-plagued Elliott State Forest, and the message coming out of OSU is this: Not so fast.

The Elliott became the latest battlefront in Oregon’s timber wars in 2012, when Cascadia Wildlands, the Audubon Society of Portland and the Center for Biological Diversity filed suit to halt clear-cut logging on portions of state forests used as nesting sites by the marbled murrelet, a bird that’s federally protected under the Endangered Species Act.

The state suspended timber sales in those areas shortly after the suit was filed, and the harvest reductions became permanent when the suit was settled in 2014.

But that left the state with a problem. By law, state forests in Oregon are supposed to support the Common School Fund, and over the years logging receipts from the Elliott had been a major source of revenue for the fund.

In 2016 the State Land Board – made up of the governor, state treasurer and secretary of state – proposed selling the 91,000-acre forest to a group led by Lone Rock Timber and the Cow Creek Band of Umpqua Indians for its appraised value of $220.8 million, with the money going to the Common School Fund.

But that idea sparked a backlash: Environmental groups argued that private ownership could lead to accelerated logging that would harm the murrelet and other threatened species such as coho salmon and the northern spotted owl, while hunters and fishers balked at losing public access to the forest.

The Land Board took the sale off the table, and Gov. Kate Brown proposed selling $100 million in state bonds to protect part of the forest while selling off the rest. Meanwhile, Treasurer Tobias Read approached OSU about coming up with the remaining $120.8 million and taking over management of the entire Elliott State Forest for research purposes.

OSU officials produced a memorandum of understanding outlining a possible framework for the deal, and last December the board voted unanimously to endorse the idea of transforming the Elliott into a research forest, directing the Department of State Lands to work with university officials to hash out the details and come back in a year with a finished plan.

Halfway through that process, the notion of transferring the Elliott to OSU is anything but a done deal.

Unanswered questions

At its Dec. 18 meeting, the Land Board laid out a number of conditions that must be met before it would transfer title of the Elliott State Forest, including:

• Keeping the forest publicly owned and maintaining public access.

• Decoupling the forest from the Common School Fund, compensating the fund for the value of the forest and releasing the forest from its obligation to generate revenue for schools.

• Developing a habitat conservation plan that would protect sensitive species while allowing for continued timber harvest.

• Providing for multiple benefits from the forest including recreation, education and working forest research.

The OSU College of Forestry formed a nine-member committee to put the plan together in consultation with the Department of State Lands, but at this stage there appear to be more questions than answers.

At the top of the list of unanswered questions is this one: Where would OSU get the $120.8 million to complete a purchase of the Elliott State Forest?

“I’ve tried to be really clear with people: We don’t even have the .8 right now,” said Anthony Davis, acting dean of the College of Forestry. “It’s not there at this point.”

For the moment, he said, the committee is not working on a purchase plan.

Instead, it’s grappling with even more fundamental questions, such as: Should the College of Forestry take on the task of managing the Elliott as a research forest? And, if so, what sorts of research would it do there?

OSU already owns eight research forests totaling 15,000 acres, but those holdings would be dwarfed by the Elliott. In fact, it would be the largest academic research forest in the country, outstripping even a 79,000-acre tract owned by North Carolina State University.

The Elliott’s considerable size — along with the requirement that it be managed for multiple uses, including conservation, recreation and timber harvest — creates research opportunities on a scale the college has not had access to before.

“This kind of forest could be a critical place to study how we use forests and how we manage them to allow for other interests we want to protect,” Davis said.

“This is society’s opportunity to say we have to answer these big questions — let’s get in front of them,” he added. “If we want to define sustainability, we can’t do it on a small scale.”

But given those multiple use constraints, can the college design experiments that would really take advantage of the Elliott’s scale? Or would it simply be repeating the work it’s already doing on its other forests?

“The question has to be how does this serve our mission,” Davis said. “How does this fit with what we’re trying to do now or 25 years from now or 50 years from now?”

There are other potential downsides as well. The forest’s relatively remote location, in the Coast Range southeast of Reedsport, makes it hard to get to from Corvallis. It has more than 400 miles of road that require maintenance. It attracts hunters, anglers and other recreational users, creating possible liability issues. And lingering controversy over its use could invite bad publicity for the college and the university.

Is the college prepared to manage all those risk factors?

Answering those questions is the first step in creating a management plan for an OSU-owned Elliott State Research Forest, Davis said, and that will be a big part of the university’s report to the State Land Board, which is scheduled to be presented at the board’s Dec. 10 meeting.

“If this conversation keeps going (after that meeting), that’s when we would bring in some real financial expertise and start examining ways to pay for it,” Davis said.

‘A sense of potential’

Ali Ryan Hansen, a spokeswoman for the Department of State Lands, also acknowledged that a lot of things still need to be worked out before the state would transfer the Elliott to OSU control — including a viable plan for paying off the remaining $120.8 million obligation to the Common School Fund.

“There’s many important conversations that are still ahead,” she said.

“Knowing that December is the next big deadline for the project, it may not be that everything is wrapped in a bow at that point.”

Nevertheless, Hansen added, OSU remains the State Land Board’s leading candidate to take on the responsibility of managing the forest.

“There’s a real sense of potential,” she said. “The board keeps narrowing the focus of what the future of the Elliott State Forest is going to look like, and right now we’re all focused on this Oregon State University opportunity.”

‘It’s a shell game’

Not everyone, of course, is excited about the prospect of an OSU-managed Elliott State Research Forest.

Rex Storm, forest policy manager for Associated Oregon Loggers, a timber industry trade association, thinks the state should keep the forest rather than issuing bonds and soliciting payment from OSU to decouple the Elliott from the Common School Fund.

“Why would one Oregon public entity pay for something taxpayers already own?” he asked.

“It’s a shell game at the expense of Oregon schoolchildren and taxpayers.”

Roughly 90 percent of the Elliott — 82,500 acres — is an asset of the Common School Fund. In the 10 years before the lawsuit halted old-growth logging on the Elliott, the forest was generating about $6 million annually for Oregon schools. Since that time, however, timber harvests have fallen off sharply, resulting in a net loss of more than $4 million to the fund.

The Common School Fund is currently valued at about $1.6 billion, and adding $220.8 million to the fund’s corpus would no doubt allow for increased investment returns. But would the additional return on investment exceed what the Elliott could produce if the state retained ownership and pursued a more aggressive harvest policy?

Storm thinks the state should do just that, despite the terms of the settlement in the marbled murrelet lawsuit.

“The State Land Board should be finding ways to make (the Elliott) more valuable instead of kicking the can down the road,” he said.

“I don’t think it’s fair to the taxpayers or the children of Oregon.”

‘High-quality habitat’

But the way environmental groups see it, the Elliott is far more valuable as a safe haven for threatened wildlife and a recreation area for residents of Southwest Oregon than it is as a cash cow for the Common School Fund.

According to Josh Laughlin, executive director of Cascadia Wildlands, roughly half of the Elliott has never been logged, making it a rare bastion of old-growth forest in Oregon’s coastal mountains. It also magnifies the conservation impact of the recently designated Devils Staircase Wilderness Area, 30,000 acres of protected land just a few miles to the north in the Siuslaw National Forest.

“It’s an incredibly valuable public asset (and) it’s incredibly important that we get this right,” he said.

“The Elliott State Forest stands out like a sore thumb for its high-quality habitat in a largely cut-over landscape.”

Laughlin thinks selling the Elliott to OSU offers the state an attractive solution to a difficult problem: how to make money for the Common School Fund without violating the Endangered Species Act.

But he’s also concerned that the university might be tempted to ramp up logging on the Elliott to the point that it damages habitat for sensitive fish and wildlife, either in the name of research or to help cover its share of the purchase price. He wants solid assurances that won’t happen.

“We want to see a durable and lasting solution for the Elliott, which may consist of Oregon State University being the owner, but we want to make sure the conservation sideboards are durable, lasting and enforceable,” Laughlin said.

“We don’t want to just change the archaic model of logging to fund schoolchildren to logging to fund OSU’s debt. We’re not going to go down that rabbit hole.”

Finding a balance

Which brings the whole debate back to the financial question: How is Oregon State University going to come up with $120.8 million to complete the decoupling of the Elliott State Forest from the Common School fund?

Davis insists the school won’t do anything rash just for the sake of acquiring the Elliott.

“We’re not going to do anything that puts the college or the university at risk financially,” he said.

“We can’t advance our research mission at the expense of our teaching and outreach mission.”

And while he’s not ready to discuss the details of a possible financing package, there may be some clues to the College of Forestry’s thinking on the matter in a recently issued request for proposals.

The college is asking for bids from consulting firms to prepare a feasibility analysis of the Elliott’s capacity for carbon sequestration and the potential value of that capacity in the emerging market for carbon credits.

The request for proposals also calls for modeling “a defined number of harvest scenarios and associated revenue streams” based on management objectives that would balance research and education with conservation “and other public values.”

In other words, the college is considering selling carbon credits to industrial polluters, which would generate revenue from growing trees rather than cutting them. And it’s also contemplating some limited logging activities — possibly thinning of second-growth stands — that would make money and create timber jobs while preserving habitat for threatened species.

Is it possible that Oregon State University can come up with a way to take over management of the Elliott State Forest — and pay for it — that makes all sides of the debate happy?

Davis certainly hopes so.

“Everybody needs to move on from being anchored in conflict around this forest,” he said.

“If we’re going to be stuck in the past, if we’re going to be focused on finger-pointing, then we’re never going to be able to move forward.”

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Reporter Bennett Hall can be reached at 541-758-9529 or bennett.hall@lee.net. Follow him on Twitter at @bennetthallgt.

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