by Jennifer Poole
The California Department of Forestry has now officially commented on the Strategic Timber Trust (STT) prospectus currently before the Securities and Exchange Commission that lists as an asset 79,000 acres of depleted timberland in Mendocino and Sonoma counties formerly owned by Coastal Forestlands, Inc.
The April 15 letter, signed by CDF's Deputy Director for Resource Management, Ross Johnson, does not directly state that inventory figures in the STT prospectus for the Coastal Forest property are inflated. It does, however, repeat the 1996 inventory figures in the Option A plan currently on file for the property, adding that assuming that continued harvest over the last two years balances any growth, "It is not likely that the inventory is substantially greater than the 1996 figures."
According to the Option A plan, there are 245,020 thousand board feet of redwood available for harvest in the Coastal Forest; the latest version (filed April 19) of the STT prospectus claims 398,249 mbf of redwood. Option A figures show 186,944 thousand board feet of Douglas fir; the prospectus claims 276,826 mbf of Doug fir. Figures for other species of "merchantable timber" -- hardwoods, sugar pine and whitewoods -- show similar discrepancies. In all, the Option A inventory figures show a total of 580,182 thousand board feet of all commercial species; the STT prospectus claims a total of 856,310 mbf of all species.
Johnson tells the SEC that "the past treatment of these coastal properties has produced a forest with 40 percent of the area occupied with low-value hardwoods, primarily tanoak. The conifer stocking is of variable quality, depending on the location. There are many locations on these properties where it is impossible to find what a forester would consider a åcrop' tree."
CDF's Johnson also warns of several restrictions that could significantly limit the total amount of timber available from the Coastal Forest property. For example, despite a theoretical, on-paper upper harvest limit of 40 million board feet a year, on-the-ground logging is limited to only 10 percent of the property each year. "Obtaining the projected harvest levels," Johnson writes, "would eliminate almost all of the available merchantable timber, unless growth is quite substantial."
Johnson also tells the SEC that until STT submits monitoring reports on tree growth that were due on March 1, and until CDF's analysis of these figures is completed, "the Option A plan is not valid." CDF officials have not yet reviewed the new version of the STT prospectus; Mendocino County forester Steve Smith, who originally raised questions about the accuracy of the document's inventory claims, has not yet had a chance to see it either.
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© Jennifer Poole... used withpermission of the author and The Anderson Valley Advertiser
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