A huge land deal to stem urban sprawl

Suburban sprawl would be stopped cold in northeastern King County under a proposed $185 million land deal announced yesterday that puts a chunk of forestland nearly twice the size of Seattle off-limits to development.

But there's a catch: To preserve the 104,000 acres from development, conservationists agreed to cut many of the trees there. And before the deal can be sealed, it may take an act of Congress.

"This acquisition really does represent a pioneering model for preservation of forestland," said Gerry Johnson, managing partner of the Preston, Gates & Ellis law firm and president of the non-profit Evergreen Forest Trust, which would buy the land from the Weyerhaeuser Co.

"The property will no longer be subject to the threat of development. ... It's virtually the entire horizon to the east," Johnson said.

The purchase appears to be the highest-priced private land conservation deal in U.S. history, experts say. It would easily outpace the largest in Washington state history -- a $16 million transaction in 1999 that used private donations to protect 25,000 acres in the Loomis State Forest.

"Dollarwise, it's going to be the largest" of private conservation efforts, said Elizabeth Bell of the Land Trust Alliance, a group that assists non-profit land trusts.

Several deals in the Northeast involved larger amounts of property, but not as much money. The next-most-expensive deal appears to be a $50 million purchase in Martha's Vineyard, Mass., last summer by The Nature Conservancy.

"This is a remarkable transaction in a number of ways," said Gene Duvernoy, a land-use consultant and board member of the Evergreen Land Trust. "It opens up a whole new way of financing conservation."

The forested foothills, part of timber baron Fredrick Weyerhaeuser's original Northwest holdings, stretch from Mount Si near North Bend to Mount Index in southern Snohomish County. It's typical of forests on the western Cascade slopes, including Douglas fir, hemlock, cedar, maple and other trees. Most of it is second-growth; some is third-growth.

Weyerhaeuser has a development arm that built the Snoqualmie Ridge subdivision not far from the property's southern end. But it would be difficult for Weyerhaeuser to develop the land in question because current zoning would allow no more than one home for every 80 acres on most of the property.

Yet, said consultant Duvernoy, "That land, over time, is going to be susceptible to sprawl."

The acreage involved is huge. After working in Washington for 40 years, The Nature Conservancy has protected about 372,000 acres, said spokeswoman Leslie Brown.

Unlike the traditional approach to protecting land in the private sector, though, Evergreen Land Trust's proposal is predicated on the land continuing to be a "working forest," in the vernacular of the timber industry, meaning the trust would continue to log most of the property for at least four decades.

However, the trust intends to immediately protect about one-tenth of the land, mostly beside streams, lakes and marshy areas, to benefit wild creatures that include salmon, spotted owls and marbled murrelets. Much of that land would have to be protected anyway under state logging rules, but Evergreen Land Trust's "light-on-the-land" approach to forestry would immediately benefit wild creatures, proponents said.

Assuming the timber farm turns a profit, the money borrowed to pay for it would eventually be repaid and more of the land could be protected, said Tom Tuchmann, a forestry consultant who helped structure the deal.

A conservation easement -- a legal property right forbidding development -- would be given to a conservation group called the Cascade Land Conservancy. It could be revoked only in extraordinary circumstances, such as if Mount Rainier blew up, Duvernoy said.

After 40 to 50 years, the debt is expected to be paid back. But logging will continue.

"What that level will be in 40 years will be (determined by) a combination of what's defined in the forest management plan today, and (which) environmental, business and community leaders are on the board at the time," Tuchmann said. (In the meantime, however, Weyerhaeuser has immediately laid off 60 workers assigned to the unit.)

To pull off the deal, the land trust will need special dispensation from the Internal Revenue Service, or an act of Congress. The land trust plans to argue to the IRS that it should be allowed to borrow money by issuing bonds whose earnings are not subject to taxes. That's done all the time for many public purposes, such as building hospitals or roads, but it has never before been used to finance a conservation-oriented purchase, Tuchmann and others said.

"We're really honored to be the first place in the country to do this," said King County Councilman Rob McKenna, who along with Councilman Larry Phillips is on the land trust's board of directors.

"We had to take a leap of faith that this financing mechanism will prove up," said Johnson, the land trust president.

The land trust will have to convince the IRS that the purchase would serve a public purpose, much as a hospital receives tax-free financing for agreeing to serve patients too poor to pay for their own care. In the case of this land, the trust will argue that the public will be better off because of the clean air and water it produces, the reduction in suburban sprawl, the conservation of threatened species and other benefits.

If the IRS doesn't agree, however, the high-powered conservationists and business leaders who run the land trust will turn to Congress. U.S. Sen. Patty Murray, D-Wash., has twice been able to pass legislation explicitly instructing the IRS to allow this kind of deal.

But those two bills both died in the House of Representatives. U.S. Rep. Jennifer Dunn, R-Wash., will again try to win passage of the bill.

Murray said if the IRS does not approve the bill, it will provide her a good argument to others in Congress that they should change the law. If the IRS does approve the deal, Murray said, she will still push forward with the legislation so the financing mechanism can be used elsewhere.

The Evergreen Land Trust is counting on that.

"We believe that many transactions will follow and that we will have many Evergreen forests around Washington in the years to come," said Johnson, the trust president.

P-I reporter Robert McClure can be reached at 206-448-8092 or robertmcclure@seattlepi.com

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