Biding its time | Plum Creek takes a wait-and-see attitude as the lastest challenge to Moosehead development unfolds
Despite declining corporate revenues and a chilly environment for real estate investments, Plum Creek intends to stay the course through the latest legal challenge to its resort development near Moosehead Lake.
Rick Holley, Plum Creek's president and CEO, told analysts in an April earnings conference call that the company is in a good position while the appeals process unfolds in Maine. The discussion primarily focused on the company's increasing volume and value of harvested timberland. But in its 2010 annual report, Seattle-based Plum Creek reported a $23 million net income drop from 2009, with a corresponding drop in diluted earnings per share of $1.24, down from $1.44 in 2009. And in Q1 2011, diluted earnings per share were 23 cents, versus 47 cents in the first quarter of 2010.
"The good news is given the development, business is slow anyway," Holley said in response to an analyst's question about Moosehead. "It's not like we'd be doing a whole lot right now. But we think within the next year, we'll have this thing put behind us."
This "thing" is the latest appeal of Plum Creek's plan to develop 16,000 of its nearly 1 million acres in northern Maine into a resort and housing complex, a plan that was initially floated in 2005, and then revised through a zoning review process that took six years. The final concept plan includes two resorts, more than 800 housing units, 150 miles of public access trails and more than 390,000 acres of conservation land.
The revised plan was unanimously endorsed by the Maine Land Use Regulation Commission in October 2009, triggering appeals through the state courts. Three environmental groups — The Forest Ecology Network, Natural Resources Council of Maine and RESTORE: The North Woods — successfully challenged the vote in Maine Superior Court. Now the state's attorney general, LURC and The Nature Conservancy are appealing that court's ruling to the Maine Supreme Judicial Court, a process lawyers estimate will take up to a year to resolve.
Mark Doty, community affairs manager for Plum Creek, says the concept plan was initially proposed as a 30-year project, and the company continues to take a long view of the development. "We are really just taking it a step at a time," he says.
In the interim, Doty says Plum Creek will continue working on the transfer of more than 390,000 acres into a conservation easement.
"We are following through with the interim conservation easement," says Doty. "We're not postponing that for the appeal process."
Plum Creek intends to permanently conserve 392,000 acres, most of it near Moosehead Lake, through a $10 million sale to The Nature Conservancy. More than 44,000 acres have already been conserved through a sale of 29,000 acres to the Appalachian Mountain Club for $11.5 million and a sale of 15,000 acres purchased jointly by The Nature Conservancy and the state for $3.6 million.
Doty says a Plum Creek team has been designated to oversee the interim conservation easement process. The interim easement mirrors the permanent easement, so if a final ruling endorses the concept plan, Plum Creek can quickly transfer the property. If a final ruling sends the plan back to square one, no one knows what will happen.
Tom Rumpf, associate director for the Maine chapter of The Nature Conservancy, hopes for the former.
"Once the final decision is rendered, we have 45 days to close," says Rumpf, who says the group has the resources and authority for a bridge loan to finance the $30 million deal. "Even though the real estate economy is down, it's going to come back — we're starting to see signs of that — and it will come back. This is the best strategy for them, the people of the Moosehead region and the people of Maine."
The basis of the appeal to the law court involves public comment procedures following a 2008 hearing. On its website, NRCM applauds the lower court's ruling, saying the process was flawed and deprived Mainers of the opportunity to voice concerns directly to LURC.
Carol Coultas, Mainebiz editor, can be reached at ccoultas@mainebiz.biz.
This story has been corrected from its original version.
Most Recent
Most Recent
Comments