Articles / 05.17.2017
Last week, I was fortunate to travel with a client to northern California for an annual meeting with Lyme Timber, one of their asset managers. Per their homepage, Lyme is a “private timberland investment management organization (TIMO) that focuses on the acquisition and sustainable management of lands with unique conservation values.” This meeting afforded my client and me with a great opportunity: to learn more about the manager’s strategy; to tour one of their timberland properties, which is well-stocked with coastal redwoods; and to witness firsthand their logging operations.
Wait. Logging? Redwoods? Wouldn’t that make famed preservationist John Muir turn over in his grave? How, a skeptic might ask, could this be considered impact investing?
If you’ve ever been to Muir Woods, you would likely oppose the harvest of redwoods. After all, those trees are sublime; the land is ethereal. To wander through that forest is to travel through time. This makes sense, when you consider the park has been federally protected as a national monument since 1908.
Lyme’s property – over 100,000 acres in Mendocino County – is also beautiful, serene, and abundant. It hosts important riparian habitats, in which coho salmon (a federally listed species), Chinook salmon, steelhead, and tidewater goby all reside. It contains approximately 85% of the Ten Mile River watershed, a critical asset for a region that recently experienced a historic drought. And the lands include mountain lions, northern spotted owls, and old-growth redwood trees.1
That said, unlike Muir Woods, Lyme’s property is a working forest, which means that it contains zones designated for timber harvest. And though Lyme is committed to conservation, the asset manager will also continue to cut down redwoods. Yes, some of the trees that Lyme harvests are quite majestic. That said, these aren’t the centuries-old redwoods through which one can drive. Rather, the trees of this forest have been harvested for decades.
But let me be clear on one thing: Lyme is not going to clear-cut this forest. Simply put, the decision would be bad for business, since the land would be worth much less when Lyme is forced to sell toward the end of the fund life. Plus, California’s laws on this matter are extremely stringent. By way of example, one regulation prohibits the harvest of the 13 biggest trees within a riparian buffer.
Indeed, there are several reasons why this property will be in much better shape because of Lyme’s investment. First, the asset manager practices advanced silvicultural techniques to selectively harvest trees not only for timber production but also ecosystem integrity. By strategically thinning the canopy, Lyme can diversify the age of its tree stands, thereby optimizing the collective growth of the forest. (Interestingly, one ecologist detailed how the placement of fallen trees in the nearby river supports the spawning efforts of salmon.) The fact that this property is also third-party certified by the Forest Stewardship Council further ensures responsible management.
Another reason I’m confident this forest will thrive under Lyme is their partnership with the California chapter of The Nature Conservancy (TNC). Without going into too much detail, I’ll simply state that a working forest conservation easement will ensure that most of this land will remain unspoiled by commercial development. TNC also engages in critical habitat research for the benefit of the aforementioned wildlife, an outcome that will offer heightened ecological sensitivity.
There is one closing point one cannot overlook when considering timber production. Redwoods are certainly significant, but they have a unique ability to regenerate after being cut down. Human livelihoods are also quite important, but their professional opportunities are not quite as resilient within the region. This rural property is four hours north of San Francisco, which is to say that it is in an isolated area with limited options for employment. As I was grilling one of the foresters with my environmental questions, he politely – but purposefully – detailed the social benefits of sustainable timberland management. Ecological vitality should not be overlooked, but neither should the economic viability of the surrounding area. He pointed out that far too many logging operations had come and gone through the forests of northern California, leaving many communities in limbo. So he appreciated the fact that, yes, trees could be carefully cultivated – albeit in a methodical manner, where they co-exist in symbiosis with their inhabitants and neighbors.
1 The Lyme Forest Fund IV – 2016 Annual Report.