The CCI Story


The Story of CCI’s Land

In 1987,  I appraised around 60 entire lakes, portions of 30 other large lakes, and 30 river blocks, all under one appraisal contract from Cliffs Forests...all told, about 45,000 acres.  I appraised similar recreational type land in 1990 under contract with Benson Forest, which had purchased from Cliffs Forest. This was the Two-Hearted River Watershed, and the Pictured Rocks National Lakeshore buffer acres... about 70,000 acres.. 
   
In these two appraisal experiences I played an unwitting bit part in one company’s saga of land fragmentation. But it was a fortuitous role as well: I gained an understanding of these people in this area of the Upper Peninsula, and  these two large appraisal blocks provide a foundation for Four Parks. One is one of the Parks, and the other supplies trade stock to create it or trade the private owners out.

In recalling that first appraisal, I remember how the president of Cliffs Forest, which was a subsidiary of CCI (Cleveland Cliffs Incorporated) came to my home office, and we talked. Shortly afterwards, I was offered the opportunity to sneakily and quietly appraise all their lake and river lands in Schoolcraft, Alger, and Luce counties. Since earlier in my career I had worked for one of the most successful land development companies ever here in the UP, I had confidence in my abilities, and did not even think twice about accepting the project, nor did Cliffs question my qualifications (that I know of) it. It was fun work to me.

The agreement was: for each individual parcel appraisal, I’d be paid 150 dollars, whether  a huge lake or a tiny one, a forty or a square mile with river front. I had access to all of their maps, and permission to travel as I needed.  I was to write up answers to specific designated questions, including giving my opinion regarding recreational value, and also provide eight normal-sized photos and one large photo of each parcel  We had a slight difference of opinion about the questionnaire; I wanted a more free-form reporting format. But they were the boss, and in the end I conformed to their standard--an general overview of most of their recreational lands.

I would walk or canoe around each lake, walk every river parcel, whether a whole mile or a forty.  I remember walking right down the middle of the Fox River, tennis shoes and all.  I used my tape recorder, my truck, motorcycle, camping gear, and my camera.  It took 8 to 9 months.  I would camp for a 3 to 5 day period.  I even rated their lakes: which were the pearls, and which were slightly less.  I also was willing to determine their pH (acid content), but they did not want to know, so I raised my eyebrows and dropped the matter.

I remember when I presented my first batch of appraisal results (individual lakes), the photos were so beautiful that John Hermann, the CCI forester I reported to, nearly didn’t read the writing at all.  He just looked at the pictures, and showed them to the whole office, playing and dancing about.  He later acknowledged that in regards to CCI’s water properties, I knew them better then anyone else, including Mr. Hermann himself, who was a career forester there, and had been through 75% of CCI’s land. My pictures continued to flow in, and he continued to gaze at them, probably taking a nape in glee.  John had become a friend of mine.

About three years later, he mischievously called and asked , “What do you want for another set of your photos?”  Surprised and taken aback I stuttered, “Do you mean all of them?” After teasing me for a bit, he convinced me he was serious.  I was mindful of the fact that I had made no money so far that year. John said CCI (Cliffs) would  pay–just send them a bill. So I took all my negatives (thank goodness I still had them), and had another whole set made. It comprised two photo albums packed full of stunning pictures. I delivered them and got paid.

I did not realize something very important was going on. A few weeks went by and John called again. I wondered in the first split second or two what he was up to now. He asked if I was sitting down.  He wanted two more sets. We both laughed.  I said, “It will cost you.”  Again he said to just bill them. I ended up earning about $7500 total for the reprinting of these photos  -- my only income for that year. 

John  told me a revealing story about three years later. Ben Benson, a wealthy investor, purchased the land because of my pictures. They would show Ben a lake in rainy weather, but then pull out my picture, and everyone would ooh and aah. They’d go to another lake on a rainy, dreary morning   but then another photo of mine would save the day: “Wooooo,”  the crowd would carry on again. I later asked Ben about this story. He said to me privately that due to my photos, Cliffs should have paid me a sales commission. I laughed ruefully, and Ben smiled---a slight, sneaky thing.  I walked out poor as a church mouse, but still happy as a lark, yet trying not to think about it.

Before the appraisals, Lorin Ameen, a man I played racquetball with and who was of a similar spirit as myself, had explained to me some fascinating history of CCI. In the company’s  earlier days, its forests were just beautiful, superbly managed for timber production. They owned hardwoods in the eastern and central UP, slightly more then 300,000 acres.  Lorin’s eyes would light up as he carried on when he spoke of their timber.  This expanse of trees was somewhat of a hobby for CCI, whose principal occupation was mining the vast iron ore deposits once extant in the Marquette area (it is said that the Marquette iron ore built the United States in the early days)..

So this company has all this forest land that it is playing with.   The story proceeds as follows. (Keep in mind that the timber was superb on all its land in the UP.) In the 1970's and 80's, America was experiencing a wave of corporate takeovers. The president of CCI felt threatened by this possibility; he would lose his job. Iron ore prices were low--not what the shareholders liked.  He needed to create more income for the company at large, and so not lose his job. He decided to extract revenue from Cliff’s forests. 

These forest were like money in the bank.  The first thing he did was instruct Cliffs to sell a small mill they had at Shingleton, and Cliffs obligated itself via contract to provide timber to the new mill owners. After a few years of cutting, Cliffs lowered their diameter limits, taking smaller and younger trees. This was the real killer, since it damaged the future of their forests. Next they decided to understand their recreational lands, the better to exploit them.

This was where I came in. I was set loose into their lands. It  took me 8 to 9 months to do this, to evaluate most of their recreation land, which is and was the last large cluster of water properties in the UP.  Next they sold Grand Island.  Then they sold the entire subsidiary company, Cliffs Forest, including lakes and rivers I’d appraised, for $25 million. Now they were mostly done.  CCI had blundered away forest assets that had taken years to create. This is the story I was told.  Another who has the knowledge and nerve to speak echoes the same thing: Cliffs gave away these assets.

This story makes sense to me. I knew what over-cut forests looked like, and I saw such about 75% of the time when I was appraising CCI’s forests.  But when I met Ben Benson, I realized it was the lakes and rivers  he loved.  He even asked me for my tapes, on which I had recorded all my observations.  I think I gave them to him. The beauty of the lakes was a huge responsibility.   Further, his choice of divisions of his purchased lands was curious.....he retained the beautiful lakes, but sold Lake Superior shoreline. 

Mr. Benson’s personality and feelings made it tough for him to deal with the reality of the formerly superb but now quite shorn CCI forests. In a conversation with him, he explained that CCI had retained its land around Marquette and Ishpeming for mining purposes, but obligated by their earlier blunder, had ceded the timber rights to the Shingleton mill.  This contract obligation was passed on to Ben–he had to keep supplying wood to Shingleton off his newly acquired land, thereby really butchering the forests  further. The public saw the butchering and blamed him, but one must trace events back to CCI’s original, injurious and blundering mill sale and cutting contract. Please recognize that I would like to verify all of this story, and I am hopeful for correction, should there be any. Each timber company story is fascinating in itself, don’t you think?

Connors Forest lands were subsequently purchased by Benson also, thereby increasing his holdings to around 400,000 acres. I know Connors had always butchered its forests; their lands were terrible, and known for being so. Benson later sold some of his prime waterfront. Later, as I understand it, Ben Benson was bought out by the Bishop’s trust, which later sold the entire acreage to Heartwood Forest for around $150 million. 

It has been 10 to 15 years since I have been in the former Cliffs forests. But after the heavy cutting I’ve seen and heard of, I don’t see how these 400,000 acres can have recovered in any meaningful way, especially since Benson had such a terrible timber contract to fulfill.  In my mind, Heartwood will want a return, but  it will be slow in coming from forests already so depleted and damaged. Therefore, they will probably continue the policy of divesting themselves of recreational lands.

I must admit, I do not know beyond doubt that Heartwood is selling off  recreational land.  But, and listen to this carefully, on this subject I have not been wrong yet.  Throughout my 28-year career, I have seen nearly all the timber companies (that I know of) gradually dispose of these low-producing acres, because the burden of holding them is just not compatible with timber profitability. When a company can get two to five times the acres in trade or value for its lakes and river frontage, why in the world would it hold them?  Perhaps a very few parcels, but that’s it.  That timber company can even go to the private sector, or the general market, and buy timber-producing land....It is said that around 30% (estimated) of the UP is privately held.   The point is, there is plenty of opportunity for timber companies to purchase better-yielding land. They just have to work at it.

A continued sad story: Former governor Engler in 2002 announced  how he intended to work with the Nature Conservancy to buy this land (this 400,000 acres owned by the Bishop trust which was then offering it for sale), retain the development rights, then resell to a hypothetical timber company. I thought to myself, what a joke--a sick one at that.  The timber is no longer there, so why would a timber company do such a thing.  To me, Engler’s scheme was just so much diversion from the issue of fragmentation and development, yet I admit it’s sad to face the hurtful truth that it’s just public relations. In the end, Heartwood Timber came along as the buyer, and the window of opportunity closed on Engler’s unworkable  yet praiseworthy idea..

When you see the beauty of these lakes, maybe you will understand so. The loss of an opportunity to purchase, to preserve. This annoyed me so bad, I thought out the Four Parks concept at that time. This Four Parks vision is workable, because its key is trading value for value with the timber companies. It can be done!

I have heard some people, unfamiliar with the area,  refer to the UP as a god-forsaken place.  Whereas, when I return to troll-land to visit relatives, I can surely see how parts of the Lower Peninsula could be labeled as god-forsaken. I do not want to make such a statement, except to make a point–it’s a matter of perspective and values. For example, a friend refers to expressway din as “the collective screaming of an insane society.”   So let’s move forward.

Conclusion: 300,000 to 400,000 acres, the last large UP  forested block containing block lakes and streams, will most likely soon become fragmented. As part of Four Parks, however, the forest could recover and in time become a very nice timber block, maybe even a superb one,    Everyone would enjoy the recreational land, and the animals and plants would be happy too, to have so much connected and undeveloped habitat to revel in.