Portland-based Ecotrust receives $50 million in tax credits to spur investment in forest restoration in rural Northwest areas
Depressed timber towns in the Northwest will see at least $50 million of new investment in restoring cutover forests through a federal program usually focused on reviving blighted urban neighborhoods.
The federal government Wednesday gave $50 million in tax credits to Portland-based Ecotrust, a nonprofit that is changing the conventions of conservation. Ecotrust has begun buying forests to restore their wildlife and other values through careful logging that maintains older and larger trees.
Its goal is to cut trees at a sustainable rate that supports low-income, rural communities but also retains the natural role of forests vital to the region, said Bettina von Hagen, vice president of Ecotrust's natural capital fund and forestry program.
The tax credits will help maintain the region's forests at a time when there is increasing pressure for faster logging and development, she said.
Ecotrust will use the credits, called New Markets Tax Credit, to attract investment money for forest purchases and restoration. Investors that may include banks, individuals or others will be able to claim a 39 percent tax credit over seven years.
The money will support local jobs in restoration work such as reviving damaged salmon streams. The tax credit will make up for reduced revenue from the slower logging, versus the more intensive but also more profitable logging commonly seen on industrial lands.
"It does open up some new avenues," said Grant Munro, president of a timber-management firm in Port Angeles, Wash., working with Ecotrust. "The forest can produce a little smaller return but still a good return for the investor."
The investment money will target remote rural regions with unemployment 50 percent higher than the national average and poverty rates greater than 30 percent, mainly west of the Cascade Range in Oregon, Washington and Northern California.
Many logging communities were left feeling shorted by federal aid programs meant to soften the collapse of public lands logging in the region more than a decade ago.
The tax credits received by Ecotrust were among $2 billion in credits handed out by the Treasury Department on Wednesday to organizations around the country. They are designed to stimulate economic growth and jobs in low-income areas.
Most of the credits target urban projects. Ecotrust is one of the few recipients with an environmental mission.
Ecotrust wants especially to buy forests in places considered important habitat for wildlife such as salmon, northern spotted owls and marbled murrelets that suffered from aggressive logging of the past, von Hagen said.
The land is likely to be forest that was clear-cut and replanted with uniform crops of seedlings. It may take decades before the trees yield much of a profit, but thinning and other actions in the meantime can lead to a more diverse and valuable forest later, von Hagen said.
Ecotrust hopes to prove that growing trees longer and larger can be more profitable in the end, although timber companies have shifted to cutting trees when they are younger and smaller.
That shift is driven in part by international competition from cheap timber flowing off vast tree plantations in other countries. Lumber manufactured from smaller pieces of wood has made it unnecessary to grow the large trees that once supplied the nation's lumber.
"This is a moment of great transition in the forest industry," von Hagen said. "The concern is that a lot of the values of forests are associated with older and diverse forests, and we want to maintain them for the future."