The grand dupe in the great north woods

In 2009 this blog and most northern Minnesota lawmakers, business people and policy types backed the idea of a legacy forest in Itasca County. This would be private land owned by UPM Blandin made available for public use for the vast majority of time it’s not being logged. Blandin took a $44 million payday from the state’s new legacy and heritage fund to cement the long-term public lease and a “win-win” situation was supposedly entered into the books.

Today it looks like the people of the state, especially here in Itasca County (MinnesotaBrown World Headquarters, by the way), are being duped on this deal.

The Star Tribune reported Sunday that Blandin is suing for a lower property tax valuation on the land because of the new land status, a factor not raised during the run-up to the new arrangement. If successful, the suit would cost Itasca County, its residents and businesses millions in revenue that would have to be made up through other taxes or massive service cuts. (Bear in mind, the county will be cutting a great deal already because of state aid cuts).

Mind that the paper company will still be able to use this land on its normal logging schedule, which is how the value of these particular acres have always been calculated.

This is not only bad for the people of Itasca County and the noble intentions of the legacy forest’s many architects, this is the sort of thing that could end up dragging down the whole legacy amendment program. A generation of complacency, inconsistent leadership, and the seeping influence of foul national political brinksmanship has created an environment where powerful monied interests (both corporate and political) are able to run rough shot over whole regions. We will be asked to defend this sort of deal, and there is no liberal or conservative defense for this kind of shenanigan.

To take $44 million and then try to get millions more from a county that provides health, human service and law enforcement protection to a county with one of the state’s higher poverty levels? Who does that? They only do this because they think they can get away with it. And that’s why this must not stand.


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    Lake Country Blogger said…
    Aaron –

    I don’t blame you for getting the impression from the story that the claims the land was overvalued by the assessor are based on some diminished value from the conservation easements. That is the story’s narrative. Unfortunately, there does not appear to be any actual facts to support that, just a lot of speculation.

    Its perfectly plausible that UPM is simply going to argue that forest land is worth a lot less than it was a few years ago. That would not be a surprise since it not exactly a boom market for timber right now.

    The story says assessors are supposed to determine the value of the land based on its “highest and best use.” So, its certainly possible some of the UPM lands were previously being valued based on their development potential. The conservation easements would then reduce their value. But its not clear that is what is happening.

    Simply appealing an assessment isn’t much of a story. So the STRIB seems to have invented one that is a lot more interesting.

  3. The county people are genuinely worried about this. Is forest land losing value? I don’t know about that. And if logging should be supplanted as the highest and best use of the land we’ve got much bigger problems.

    If this were a residential plot an assessment review is no big deal. But Blandin is the county’s largest land owner by far, and they just took $44 million in taxpayer dollars. For that reason I think this is a real story. I’ve been hearing about this for weeks prior to the Strib story, it’s just finally come to a very public head. And that is good.

  4. That this is a big story seems clear. What it actually means remains to be seen.

  5. Sounds like double dipping, so to speak.

    We have a conservation easement on a lovely no-road-access lake property on a lake that is in the beginning of big development. We obtained that about 10 years ago to preserve this property. When one does that, one does hope for some kind of tax advantage, but that can’t be the primary reason to do so, because that isn’t promised. But we did have to pay for an assessment and legal work and we also had to pay a “contribution” to the organization that facilitated this legal work. The reality is that we own it but can’t ever have a cabin, nor could we easily sell it. We knew this. We hoped for a tax advantage and we got one, but it wasn’t all that big. Yet two years ago, the county (St. Louis) tripled the land value and taxes! When we inquired, they had some hokey, fictional reason about a 20 ft swath of land that could be developed, and an equally fictional statement that our land had been undervalued 10 years ago, so therefore they were bringing it up to speed. (I’m not making that up.) Unfortunately, legally, our questions to the assessor constituted a challenge to the assessment, which was quickly denied.

    So if Blandin hadn’t gotten the big $$, I would sympathize, and I would sympathize if they couldn’t log in the future, but not with the double dipping.

  6. Aaron –

    Yes, its a big story in Itasca county if the largest landowner is challenging their assessment for whatever reason. After all, if their property is worth less, then their share of the property taxes is less. That means every other property owner’a share will be more.

    While that is important to those of us who live in Itasca County, its probably not a very interesting story for the STRIB or worthy of its attention.

    What makes it uubteresting is what you say here:

    “The Star Tribune reported Sunday that Blandin is suing for a lower property tax valuation on the land because of the new land status”

    Except, the story doesn’t really say that or anything like it. It certainly implies that, but there is nothing in the story to support it.

    Frankly, if they are legally entitled to lower taxes because of the easements, then someone at the county dropped the ball. That should have been an obvious issue. The St. Louis County Commission certainly raised a ruckus about lost property taxes during the discussion of creating a park on Lake Vermillion.

  7. Agreed and the best defense I’ve seen for Blandin’s suit is that it’s within their rights to go for the lower assessment. Indeed, it might be. But the spirit of the deal seem to be violated by this whole notion. I know the Strib lacks a citation but the implication is consistent with conversations I’ve had with local officials on background. We’ll see, but there’s no reason for us to take this like it’s OK.

  8. “the implication is consistent with conversations I’ve had with local officials on background.”

    No doubt the same officials the STRIB is talking to … its the way a media narrative gets created absent any facts.

    As I understand it, if the highest and best use of these lands is for forest production, the conservation easements should have zero effect on their value. If they were being assessed for their development value, then someone dropped the ball in not pointing this out when the deal was made.

  9. What the company has done is seek reassessment of the same land it just got $44 million for to grant public easements. I think the proper response to that is “WHAT?!” If the company has a good explanation I’m all ears. The county has been assessing logging land for a very long time. I find an error there to be the less plausible of the two scenarios. I could be wrong. But I’ve stated my piece.

  10. is this really so?

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