Opponents 'appalled' by lack of transparency in Hofmann Forest sale

jprice@newsobserver.comOctober 29, 2013 

  • The Buyer

    Walker Ag Group is a family-owned business based in Danville, Ill. According to a farm subsidy database maintained by Environmental Working Group, the company is involved with farming corn, soybeans, cotton, wheat, rice, sorghum, sunflowers, oats and barley in Indiana, Illinois, Oklahoma, South Dakota, Texas, Louisiana and Arkansas.

— The trustees of N.C. State University’s Endowment Fund have agreed to sell the 79,000-acre Hofmann Forest near Jacksonville to an Illinois-based agribusiness company for $150 million, the university announced Tuesday.

The buyer is a family-owned, multistate firm headed by a third-generation farmer named Jerry Walker, NCSU officials said.

According to the contract, the company intends to sell the U.S. Department of Defense easements that will allow aviation training over about 70,000 acres of the property. That land could be used for timber or farming but not development for, say, houses.

Technically, the land is owned by the Natural Resources Foundation, a nonprofit organization that supports NCSU’s College of Natural Resources. The money from the sale will be placed in endowment funds, and income from its investment will be used mainly to benefit the college.

Investments from the proceeds of the sale are expected to bring in about $6 million a year, NCSU Chancellor Randy Woodson said.

Timber sales from the forest had been generating about $2 million annually for the College of Natural Resources, but that had dipped recently. Last year, it generated $861,000, which created problems, said Mary Watzin, dean of the college.

“The college relies on the forest to provide that $2 million or so of income every year for ongoing programs, and it was a struggle; we were going into the hole,” she said. “So we were looking at whether there was a way to have a more consistent budget. When you’re subject to market fluctuations like that for your budget, that’s a hard, hard thing to deal with.”

That additional income also would help counterbalance the loss of funding to the university from the state, which has been shrinking for years.

“As an asset, the forest’s full potential was not being realized,” Woodson said. “We have an obligation to our stakeholders – our students, faculty, staff and alumni – to ensure our colleges are positioned to provide a robust academic environment that attracts world-class faculty and the best and brightest students.”

Opponents of the sale, a group that includes conservationists, forestry experts and landowners, filed a lawsuit in Wake County Superior Court last month. Their suit says that the state was required to consider public input and the potential environmental impact of selling the land, among other things. A judge denied a temporary restraining order to stop the sale after lawyers from the state Attorney General’s Office argued that the sale wasn’t imminent.

‘Lack of transparency’

Plaintiffs said Tuesday that they were blindsided, given that the university’s defense – given just weeks earlier – had been that no sale was in the works and that the judge had scheduled a hearing on the case for Nov. 12.

“I think it’s safe to say that we are appalled by the sale and the lack of transparency with which it was undertaken,” said Fred Cubbage, a tenured professor in the Department of Forestry and Environmental Resources at N.C. State and one of five plaintiffs in the case.

They will continue to pursue the suit, unless their attorney tells them the deal has somehow made that futile, Cubbage said.

The forest is named for Julius “Doc” Hofmann, who was hired in 1929 to set up the forestry program at what was then N.C. State College of Agriculture and Engineering. It was bought by the foundation’s predecessor in 1934. The foundation gave it to the university’s endowment fund in 1977 specifically to aid the College of Natural Resources.

That’s what allowed the endowment board to sign the deal Tuesday. No further approvals from university or state officials are required, and the deal must close within 180 days, according to the contract.

Income for the school

According to historical documents at the university, one of Hofmann’s first goals was to acquire forestland for laboratory, research and demonstration purposes. Unable to get funding from the university or the state, Hofmann and some of the college trustees incorporated the N.C. Forestry Foundation, which sold bonds to purchase forest land and then paid off the bonds with money earned by the sale of timber.

NCSU leaders say that in recent years, the college has mainly been using Hill Forest in Durham County, which is much closer to the university, for education programs. They say less than 2 percent of the college’s sponsored forestry research is performed in Hofmann, so its main function had come to be generating income for the college, Watzin said.

NCSU officials have said the intent of any sale would be that the buyer would continue to maintain a working forest, that the Hofmann name would stay attached to the forest, and that students and faculty would be allowed to continue performing research there.

No guarantees?

The contract says that the buyer intends to do those things. But one of the plaintiffs in the lawsuit, conservation scientist Ron Sutherland of the Durham-based Wildlands Network, said that it doesn’t guarantee them.

Another issue, Sutherland said, is a clause that says those aren’t conditions that are attached to the deed. That means the buyer could resell the land, and the new owner wouldn’t feel any of those obligations, he said.

Fred Hartman, a spokesman for the university, said in an emailed response to questions that NCSU believes the buyer “has a long-term interest and intent to utilize the property for the purposes identified in the contract.”

“However,” Hartman wrote, “as with any sales agreement, the stipulations of this contract only pertain to this buyer and affiliated entities.”

The opponents of the deal have long said that if the forest were developed, it could irreparably damage wildlife habitats, including that of black bears and an endangered rattlesnake. They say it also would harm three important coastal waterways: the White Oak, Trent and New rivers.

About 1,500 acres of Hofmann are now used for agriculture, and about 56,000 acres are considered working forest. Some of the property is too swampy to develop.

The military easements wouldn’t allow the owner to develop the property, but more of the forest could be cleared for agriculture so Hofmann Forest could essentially become “Walker Farms,” Sutherland said.

Military’s interest

Woodson, who started his academic career as a plant scientist, said it seemed unlikely that Walker’s company was planning substantial farming.

“This is not corn and soybean property,” he said. “If it were, there would be a heck of a lot more of it down in Jones County. I think the real value of it, other than timber, is the military’s interest.”

Late Tuesday, the Marine Corps said it wants to continue using Hofmann Forest for aviation training and perhaps more.

“We will likely also look into the use of Hofmann Forest for specific, intermittent ground training purposes as well,” said Nat Fahy, public affairs director for Marine Corps Installations East, based at Camp Lejeune.

It’s unclear what changes Walker is considering. A woman who answered the phone at Walker’s company, Walker Ag Group, said Tom Percival of Percival Land and Timber Consultants in Lumberton was its spokesman on the deal. Percival declined to talk about the company’s plans.

“We’ll just let the news release from N.C. State do our talking,” he said.

News researcher Peggy Neal contributed to this report.

Price: 919-829-4526

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service