PACIFIC?COUNTY - Weyerhaeuser Co., (Weyco) the largest landowner in Pacific County for the past century, is on the verge of selling most of its remaining forest acreage here.

Last Thursday, Weyco said it is seeking buyers for five tracts of land along the southwest Washington coast, a total of 82,000 acres or 128 square miles in Pacific County, where the company currently owns 136,445 acres in its own name.

At the same time, Weyco said it is selling almost all of its timberland in Clatsop County for about $300 million to an entity affiliated with The Campbell Group LLC, a Portland-based timberland investment company.

Altogether, the land in question represents about 10 percent of Weyerhaeuser's holdings in the Pacific Northwest, the company reported. It will still own and manage about 6 million acres of timber nationwide. In 1911, the company owned about 364 of the 933 square miles of land in the Pacific County. After this sale, it would be down to about 85 square miles.

This news comes close on the heels of Weyco's sale of about 15,000 acres (23.4 square miles) of Pacific County timberland between South Bend and Nemah on June 26 to FIA Timber Growth LLC for $34.4 million. FIA is an acronym for Forest Investment Associates. It is a timber investment management organization or TIMO, which like The Campbell Group buys and manages forestlands on behalf of large institutional investors. This is a sweeping trend in timberland ownership, wherein insurance companies, pension and mutual fund managers direct land-use decisions based on what will deliver the most profits to investors.

It is unknown at this time whether Weyco will sell its Pacific County tracts to FIA, The Campbell Group or some other party. While The Campbell Group has managed land in the county in the past, it apparently does not do so now, at least in its own name.

Cautionary note Conservationists and forestry analysts caution that the new owners will likely invest less in the local community and environment as they seek profits for their investors.

The Campbell Group is one of the largest TIMOs, which help investors avoid corporate taxes and long-term capital gains. The tax savings give TIMOs an economic advantage over corporations like Weyerhaeuser in managing timberland.

The Campbell Group already manages 2.85 million acres and $5.3 billion in timberland assets as a subsidiary of an international investment firm, Old Mutual Asset Management of London.

Owning timberland is just one way investors can diversify their holdings, said Bettina von Hagen, vice president of the Portland-based nonprofit EcoTrust, which manages a sustainable forestland investment fund.

In general, she said, the transition from an integrated timber company with forestland and sawmills to a financial management firm is not good for the local community or ecology because for the institutional investors in a TIMO timberland is just one category of their portfolio.

"You have investors who don't have the same long-term investment in communities,"?she said. "The capital is more flighty. It can go anywhere. It doesn't have to stay in the community."

Whereas integrated companies such as Weyerhaeuser had an incentive to build long-term relationships in the communities surrounding their timberland, von Hagen said, investment managers do not. As a result, land changes hands more often and owners have less knowledge of the specific characteristics of the timberland. Timber companies like Weyerhaeuser, Longview Fibre and Willamette Industries often have an employee who lives in the community and gets involved in social service organizations and community events.

"You have less of that with financial management," she said. "There's less commitment to community relations."

Weyco's reasons in Clatsop Weyerhaeuser spokesman Greg Miller said the Clatsop land sale does not include the company's Warrenton sawmill, which currently employs 93 people. But the sale will affect 11 employees in Weyerhaeuser's Seaside office.

"My understanding is that The Campbell Group will be talking to those folks as they work through the transition," Miller said. "The sawmill will have to source its logs on the open market, but it's a competitive sawmill."

Miller said Weyerhaeuser decided to sell the Clatsop County timber tracts because the company has a competitive advantage in growing and processing Douglas fir, and the local timberland is largely made up of hemlock and spruce.

"These are what we would consider nonstrategic acreage," he said. "Most of the land sold is high quality land. It's very productive land but the stands are predominantly hemlock and spruce. That was the rationale. It more or less represents strategic rebalancing of our timberlands."

Miller also said the sale "represents Weyerhaeuser's continued focus on improving financial flexibility and liquidity."

Weyerhaeuser's second-quarter earnings fell from $102 million last year to $71 million this year. Much of the latest quarter's profit stemmed from a $34 million sale of non-strategic land, primarily in the southwest Washington state area.

Good reputation Jim Geisinger, vice president of Associated Oregon Loggers, said The Campbell Group generally has a good reputation as a timberland manager, he said, though it remains to be seen how the company will manage its new holdings.

"The Campbell Group owns a lot of land in the Northwest, and from what we can tell they're good land managers," he said. "It hasn't had that track record of subdividing and developing timberland. If that holds true in this case, that would be good."

But it's too early to tell whether that will be the case, he said.

"Depending on what the expectations of those investors are, there could be more timber harvested, or there could be less timber harvested."

Gary Lettman, economist for Oregon Department of Forestry, said timber companies like Weyerhaeuser have been shedding timberland rapidly over the past 10 years, as well as contracting out the jobs that they used to keep in-house. Timber companies used to own timberland and sawmills and had an incentive to keep both operations going. Now, timberland management organizations can decide whether sending logs to the mill is the most profitable use of their asset.

"The idea is going to be to maximize returns to stockholders,"?he said. "These logs are going to be marketed to the highest and best use. That might not be the Weyerhaeuser mill. Campbell Group could sell the land if the highest and best use is for development."

Chuck Willer, executive director of the nonprofit Coast Range Association of Corvallis, said the Clatsop County land sale is the latest move in a financial shell game that controls large swaths of Coast Range timberland.

"We're just pawns in an endless game of outside eastern capital coming and going,"?he said. "Each one shows up just to extract whatever they can from the land and then leave. Nothing will change. We can anticipate them leaving down the road like all these other owners have left. The model is export as much gain as possible to private owners and socialize the cost on the local communities."

When The?Campbell Group sells out, he said, local communities should be ready to buy so they can regain some control.

"It's out of the New York financial center that our lands are slung around on this tether," he said. "The speed and the way we're slung around is determined ultimately by the global situation. Capital is a global phenomena. It's always looking for a return. It just so happens now there's a tax angle that allows it to come in as timber management organizations."

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