Sale of NC State’s Hofmann Forest draws potential buyers, criticism

relder@newsobserver.comMarch 9, 2013 

 

RALEIGH

  • Forest income

    Hofmann Forest generated $4.6 million in income in the year ending last June, including more than $3 million from timber, according to an audit by Williams Overman Pierce CPAs. Expenses were $3.2 million for the fiscal year, and the foundation returned $1.53 million in income to the N.C. State University College of Natural Resources. Of that amount, $612,000 went to the forestry department.

    The college has about 1,680 students: 630 in the forestry, about 900 in parks, recreation and tourism and 150 in wood and paper sciences.

N.C. State’s Natural Resources Foundation has received interest from about 20 potential buyers for its 80,000-acre research forest near Jacksonville, as well as criticism over the decision to market the property at a time when timber land prices are low.

Potential buyers have until March 29 to submit proposals to purchase the land in Onslow and Jones counties, which the N.C. State forestry program has used since the 1930s for forestry and environmental research.

A large number of faculty, alumni, and friends of the forestry program have spoken out against the sale, and more than 700 have signed an online petition asking the university to take the land off the market. The N.C. State faculty senate approved a resolution last month asking the foundation to halt the sale pending additional discussion of the issues.

“It doesn’t surprise me that some people would be opposed to the sale,” said David Ashcraft, executive director of the Natural Resources Foundation and chief of fundraising and communications for NCSU’s College of Natural Resources. “There’s a lot of fear of who might own it and whether they can maintain access.”

Named for the founder of the N.C. State forestry program, Julius “Doc” Hofmann, the land was acquired in the mid-1930s for research and to provide income for the forestry program through timber harvesting and related activities. Forestry evolved through the years to become one of three departments in the College of Natural Resources, which has needs that could be better met through sale of the land, Ashcraft said.

“The board is looking at the needs of the college going forward – what we could do with the Hofmann if we kept it, versus how the money, if it is sold, might be used for research in those same areas, plus others,” he said.

Potential buyers so far have “run the gamut,” Ashcraft said, ranging from nonprofit and government agencies to for-profit corporations and timber land investment trusts.

Two members of the Natural Resources Foundation board have resigned since talk of the sale began last April. The resignations were intended to avoid conflicts of interest, as their companies expressed interest in bidding on the property, Ashcraft said.

He declined to name those members, citing confidentiality of board activities. He said one member resigned in April and another in January of this year.

Rick Malm, a forester with Timbervest in Atlanta, resigned in January. Reached this week by phone, he declined to discuss his reason for leaving the board, citing confidentiality of board activity.

The Natural Resources Foundation Board voted unanimously in favor of the sale Jan. 19, and the N.C. State Endowment Fund Board voted to endorse the sale Feb. 21. Ashcraft said the process was open, but some have specific information about the impending sale was not well publicized public before the board took action.

Barney Bernard, a Durham-based forestry consultant who formerly served on the Natural Resources Foundation Board, called the decisions “surprising and disturbing.” He also said their timing is poor if the foundation board hopes to get a top sale price.

“The timber industry has been depressed since about 2008,” Bernard said. “The price of standing timber fell a good 40 percent. Recovery has been slow.”

N.C. State forestry professor Joe Roise also criticized the timing of the sale.

“Selling at the lowest point in the market is a violation of their fiduciary duties,” Roise said, adding that he thinks for that reason the sale may be “illegal.”

In a letter dated Feb. 20, the “faculty, alumni and friends of the Hofmann Forest” urged the foundation board, the N.C. State Board of Trustees and the university’s endowment fund board to keep the forest as an asset for education and research. Hofmann Forest is believed to be the largest educational forest in the United States.

“Decades of professional management have slowly transformed the rugged swamplands into the valuable forest asset it is today,” the letter states. “North Carolina State University and the College of Natural Resources have reaped a large financial benefit from the Hofmann and can take many steps that have not been aggressively pursued to increase its net returns to CNR. Those opportunities bear consideration before a sale is made.”

Fred Cubbage, a forestry faculty member who brought the letter to the faculty senate, said some of the forest’s economic troubles have been brought on by the foundation board’s decision to overcut timber for several years.

The acres of timber harvested rose from 900 in 2006 to 2,270 in 2010.

In addition to financial support, the forest provides a unique location for researchers to conduct experiments on a variety of subjects, including natural resources management, forest economics, ground water supplies and wood quality, Cubbage said.

According to Ashcraft, N.C. State researchers will be able to continue working in the forest after the sale.

The price will be just one factor in the foundation’s evaluation of purchase bids.

“We’ll be looking for someone willing to maintain it as a working forest, provide access to the existing research that’s there and establish a process of initiating and continuing new research,” Ashcraft said.

Elder: 919-829-4528

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