CARTER STILLEY WETLAND & STREAM MITIGATION BANK - American Timberlands Company
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CARTER
STILLEY
WETLAND & STREAM
MITIGATION BANK
66 TheLandReport | FAL L 2016 LANDREPORT.COM
Investment Timberland
DOING WELL
BY DOING GOOD
HAS ENABLED
AMERICAN TIMBERLANDS
TO CONSISTENTLY BEAT
MARKET RETURNS
F
or centuries, timberland has been
recognized as a proven performer,
an investment that has not only
girded portfolios but has also formed
the basis for multi-generational estates.
Numerous Land Report 100ers own
timberland, including Maine’s Pingree
family, whose holdings date back to the
early 1800s. One key attribute is that
timberland weathers market turmoil
far better than financial instruments.
A recent NASDAQ study noted that,
“Timberland returns show significant
positive correlation with inflation,
while stocks and bonds do not.” Yet
in the right hands, timberland can do
much more than better the market.
It can better the land.
Text by Corinne Garcia
SHUTTERSTOCK
LANDREPORT.COM FALL 201 6 | TheLandReport 67
68 TheLandReport | FAL L 2016 LANDREPORT.COM
THIS PAGE: Each year, timber companies plant
hundreds of millions of seedlings nationwide.
OPPOSITE: Few realize that timber ranks as
the number one cash crop in the United States.
F
ew Americans realize that our country’s Yet since 2005, American Timberlands has “Timber is the basic attribute. But we’re
most valuable cash crop isn’t corn or bested industry benchmarks by a whopping looking for land that has other attributes that
beans or even marijuana. It’s timber. 700 basis points annually. Their secret sauce? we can manage simultaneously to timber.
Makes sense, doesn’t it? Consider the value American Timberlands looks beyond typical We’re looking for environmental mitigation,
PHOTOGRAPHY BY SHUTTERSTOCK
of a felled tree. Now factor in hundreds of timber investments — biologic growth plus mining, commercial opportunities, conserva-
millions of acres of forestland in the United land appreciation — to incorporate a third tion, and in a few cases, low-density real
States. But such a large scale also implies very factor: sophisticated land management. estate development,” Rowland says.
typical returns. A good rule of thumb is a “We’re investing in land that has options Wetland mitigation banking has proven
6 to 8 percent annual return based on two for management opportunities that will to be one area that accelerates returns while
factors: the biologic growth of the timber provide other returns,” says American aligning with the company’s skill sets as well
and the appreciation of the land. Timberlands CEO Thomas Rowland. as its mission to be land stewards.
LANDREPORT.COM FALL 2016 | TheLandReport 69
SHUTTERSTOCK
A
paramount example of this would be same time, wetlands were restored. Today, The creation of a wetland mitigation bank
American Timberland’s Carter Stilley Carter Stilley looks much like its former self. develops a valuable income stream from a
Wetland and Stream Mitigation Bank. Not your typical timber investment, right? timberland investment that enhances typical
The 3,170-acre tract near South Carolina’s Well, there’s an added twist. Take the initial timberland yields. It also adds to the recre-
Myrtle Beach was prime wetlands until a timber value of the pine. Restore the wet- ational and aesthetic value of a property.
paper and forest product company acquired lands to create a mitigation bank. Then And it also benefits the environment while
it in the mid-1900s. After felling the hard- sell the credits. The result is a hefty ROI. simultaneously providing for economic
woods, Carter Stilley was ditched, drained, The Clean Water Act states that there development.
and converted to upland to facilitate faster can be no net loss of wetlands in the United With Carter Stilley, American Timberlands
growth. For the next 70 years, it was a pine States. This means that no matter if you are knew it was sitting on a good investment.
plantation. When American Timberlands the US Department of Defense, a state high- The tract was located in a coastal wetland,
acquired it in 2014, it was in rough shape. way department, a real estate developer, or a and after doing some due diligence, manage-
“By virtue of our experience working for private landowner, you cannot impact, fill, ment realized that the bank would be the
forest product companies, it’s very easy for us or destroy wetlands without supporting the first in South Carolina to have coastal stream
to identify sites where this kind of thing has creation of another wetlands within the same restoration credits. “There were many stream
taken place,” Rowland says. region. So building a highway or a shopping restoration credits available but not coastal
First, the pine trees were harvested. Then, center can also mean buying credits from a stream credits, so we knew that there was a
native hardwood species were planted. At the mitigation bank such as Carter Stilley. market there,” Rowland says.
70 TheLandReport | FAL L 2016 LANDREPORT.COM
PHOTOGRAPHY COURTESY OF AMERICAN TIMBERLANDS COMPANY
Rehabilitating a timber tract to mitigation
bank standards is a substantial undertaking,
one that utilizes a host of techniques such
as controlled burns (opposite) and rebuilding
streams (above).
Fortunately, American Timberlands has and replanting hardwood trees to re-create
the experience, depth, and skills necessary the wetlands. Thanks to strong working
to bring a project like Carter Stilley together relationships with the regulatory community “Our mantra is
from start to finish. It partnered with an and agencies that buy credits, the company
environmental consulting firm to develop the is in the management phase of Carter Stilley. doing well by doing good.”
mitigation banking instrument, a document Could a landowner create a mitigation
that outlines the development and credit bank using a property in his portfolio? — Harris Chewning
potential of the land. The instrument also The answer is yes, but the potential pitfalls
sets up milestones that have to be reached are numerous. Director of Capital Markets,
throughout the project. Credits are received “It’s not a risk-free venture,” warns Row-
when milestones are met. Upon completion, land. “From the very beginning, it’s a sizable American Timberlands Company
Carter Stilley had to be approved, permitted, investment. To get a permit takes time, and
and is regulated by the Army Corps of the work has to be done just right. You could
Engineers. The Corps also decided how get to the end and find out that you really
many credits the bank would receive. don’t have the right site. If your bank isn’t in
From there, American Timberlands the right marketplace, or you don’t have the
contracted much of the project themselves right buyers, you might have a lot of credits
at a much-reduced cost, rebuilding the stream and no buyers.”
LANDREPORT.COM FALL 201 6 | TheLandReport 71
PHOTOGRAPHY COURTESY OF AMERICAN TIMBERLANDS COMPANY
Maximizing returns from a timber tract can
be a complex task that requires a skill set
far more advanced than a forestry degree.
M
itigation banks are definitely not and we are driven by the returns generated For more information on
do-it-yourself projects. Fee-based from the success of the bank and the associ-
consultants can assist landowners. ated land investment.” Carter Stilley
But American Timberlands prefers working American Timberlands has found a sweet
with landowners as partners. A vested inter- spot in the land investment business, one and
est means all parties are in it for the long haul. timberland owners and investors appreciate
“We do this because we love it. We are on many levels. “Our mantra is doing well American
determined to be the best land stewards in by doing good,” says American Timberlands
Timberlands Fund III,
the country,” Rowland says. “But we also do Director of Capital Markets Harris Chewn-
it to generate returns. As a partner, we’re ing. “We are doing really good things for the go to
driven by a different set of goals than a environment and simultaneously generating
consultant might be. They are driven by fees, significant returns by doing so.” AmericanTimberlands.com
LONG VALLEY RANCH WESTERN POCAHONTAS CASON CALLAWAY
www.landandwildlife.com www.landvest.com WOODLAND ESTATE
www.cypruspartners.com
This contiguous block of 16,441 acres One of the largest hardwood timberland
in Oregon’s Ochoco Mountains features opportunities on the market today, these Surrounded by 33,000 acres of conservation-
substantial timber holdings that harbor 147,345 acres are located in West Virginia, focused neighbors, this 7,456-acre Georgia
trophy elk and mule deer. Kentucky, and Maryland. estate has been managed for turkey and deer.
72 TheLandReport | FAL L 2016 LANDREPORT.COMYou can also read
