Oregon’s $1.2 billion Common School Fund, the trust fund for the state’s education system, is planning to sell its stake in the Elliott State Forest, which it has held since 1997.
The Common School Fund, managed jointly by the State Treasury and the Oregon Investment Council, has incurred losses on the 84,000 acres of forestland since 2013, in the wake of an endangered species protection act resulting in a significant reduction in timber harvesting, according to Julie Curtis, public information manager at the Department of State Lands (DSL).
In 2013 this incurred a net deficit of $3 million down from net revenues as high as $17 million in 1999.
DSL will work on issuing a request for proposals (RFP) for alternative ownership sometime in the second half of 2015, according to Curtis. It hopes to select an owner in early 2016.
DSL will “seek proposals that lead to ownership by a public entity or a consortium that includes public interests and that compensates the Common School Fund for the value of the property,” reads a release on the DSL website. This includes a “community forest approach as possible ways to optimise benefits from the forest”, continues the release.
The Oregon Department of Forestry manages the land assets and owns about 10 percent of the Elliott Forest.
The capital is likely to be re-invested into land although most likely commercial, residential and industrial land “which prove to have a higher rate of return”, said Curtis.
“We have a real estate asset management plan that governs how we manage our real estate portfolio – outlining goals for divesting lower-performing lands and reinvesting land with higher revenue-generating potential,” she added.