The Buffers, The Economics


THE  BUFFER  ZONES

This tentative Grand Plan includes a detailed exploration of  the Optional Buffer Zones.
The following are the steps to achieving the Four Parks vision:.

First: Have people read my complete Four Parks plan on my website. Knowledge is power.

Second: Talk with me, comment, give me the opportunity to answer your questions through vigorous yet civil discussion.

Third:  After any compromises have been made, LET IT HAPPEN–give me the latitude and flexibility to make this happen. Remember, “If you build it, they will come.” This includes creating a buffer of development around each and every Park.  (Please see details below).

Fourth: Develop the optional buffer areas.



The  Buffer Concept
For economic reasons, a buffer zone surrounding portions of the parks might be a worthwhile idea to investigate. These buffer acres, to be used for private development, will require more state land to trade in order to assemble them, thereby shrinking UP State and Fed forest even further than I estimate. However, these buffer areas would be divided in such a way that the state could profit between $100-500 million, depending! Because of the draw of the Four Parks, these buffer acres will  be more profitable to sell and/or develop versus other public UP lands, creating a unique and new real estate opportunity in the UP market.

These buffer-land sales will give the State monies for balancing the budget. At the risk of going too far afield, balancing the state budget is a short term fix, versus building our future with these buffers, which is comparatively more time-consuming and needful of careful and involved planning.  But since the State has put itself in this position, it has to pay the price.  Just the same, it might be a good idea. This all may have to occur fast, and I do not know if it can.

I am much more confident in creating the Four Parks, whereas this additional part is questionable to me, at this time in my thinking.  Also, my original intent was preservation of land from fragmentation.  Now, is the state asking this project to pull them out of their morass of debt?
I have had six months or more to formulate the Four Parks, but not solve debt problems of the State.  But here I have taken a stab at it. 

Personally, I do not like to pay off the state budget by selling off public forests.  For the record, I consider this a short-sighted strategy. But this will be the coincidental result should the buffer areas be created. And if this is the only way to assemble the Four Parks, so be it. Or if it is to give more control of UP land to Yoopers,  then I would consider it.

I am also concerned that the further out time extends, the less sure I am about debts the state might acquire.



Buffer property around the parks – Dollars and Cents

It’s a fact–approx. 400,000 acres were recently sold for $150 MILLION. Could  500,000 acres sold and divided (ie., developed) bring in $200 to 400 MILLION for the State of Michigan to ease its budget crisis? That’s what these buffer zones could do. Yes, the state could raise cash selling its currently scattered lands (many of which were acquired in the Great Depression), but this would rock the boat in the UP real estate market. Under my plan, the distinctive buffer area real estate market would be less effective on the regular real estate market here in the UP. Actually it would enhance it--studies do show this.

The following are estimated mathematical supporting numbers.

There are about 10.5 million acres of land mass in the UP, estimating around half is public, that is 5 million.  I guess probably 1 million of this public land is swamp.  Another million is existing important stuff, such as Taquamenon Falls, and other public recreational property unavailable for trade. Some of this retained second million will be within the Four Parks. Now add another 1 million which will be the new land in the Four Parks.
Let’s round up and summarize:
1 million swamp
1  million retained recreation land, incl. parks
1  million Four Park new acres
SUB TOTAL:     3 million

So, there are 2 million public acres remaining for the timber industry and state foresters to use, yet I suspect they also would use existing public recreational land .*  However, about 500,000 acres of this are needed to create the optional buffer areas around the Four Parks.

The key question on whether to go ahead and create these buffer zones is: Can the 500,000 public acres, now buffer, be resold and divided to the private sector;   with enough profit to the state  to make this buffer idea tempting for them? I believe it can, or is at least worth looking at.

I’m looking at a potential of $200,000,000 to $500,000,000 dollars. Please note, a form of comparable is:  if 400,000 acres of cut over lands recently sold for $150,000,000, in one lump sale; then I think  500,000 acres of good timber could trade/sell for up to $500,000,000, considering:
1. the parks right on their boundaries,
2. these acres would be divided up,
3.  creative thinking adds to the possibilities,
4.  some of their timber might be good

Let’s say we use 1,000,000 acres as buffer development land, instead of 500,000.  This is a possibility worth a look.  (At this time I cannot even get one legislator to talk with me about the general concept, let alone the detail of profits to the state for its budget)



Questions about these buffers.

These buffer areas are worth discussing with vigorous communication. I admit I have concerns,especially when it’s a million acres rather than 500,000 (a more careful look for me).

Could you get the timber companies to dispose of more recreational lands they possess? Could publicity help with these additional follow-up sales and changes in the make-up of the entire UP real estate market? Can the Four Parks carry this project through, creating the fever for purchases and development?  Would the Yoopers support such a massive change so fast?

Further
1.  Is this sustainable for tourism?
2. Are the timber companies sustainable in regards to the entire park creation, including the
buffer acres?
3.  A follow-up question: how can the traditional UP timber industry maintain itself within limits
that are profitable, and at the same time allow others to consolidate, preserve, and develop
resources of the UP in this new way?
4.  I am concerned because this is looking far into the future, and unknown factors may present themselves, including national and international economic conditions.
5.  How will the existing bill before the senate to lease more state forest for logging (against the advice and wishes of the DNR), affect matters?

Look at all these unknowns. But despite them, the state really has to think “outside the box”, whereas presently they can only see the interior walls.

I have heard that a Senate hearing was held on April 6 on increasing state forest timber contracts to timber companies (see # 5 above) or increasing volumes of wood taken from UP State forests, and that the DNR is opposed to this proposed change.

Based on the information I have now, I agree with the DNR, but for my own reasons. For one thing, why increase the subsidy timber companies are enjoy from the state? It’s unfair to the rest of Michigan’s businesses, and bad public relations for the timber companies to exploit the state forest resource that is supposedly owned by all.  And very importantly, such an increase may jeopardize my chance to provide enough incentives to the timber companies to cooperate with me in Four Parks land trading. But I am not sure--this is like playing Russian Roulette.  

Putting games aside, the very important principle remains: trade valuable forest lands to the timber companies, because they need good land, since they are using up all their wood (see essay on mill relationships).

I  want to offer an  irresistible combination of incentives to these companies: ridding themselves of their unproductive timber growing sites, acquiring better land to raise timber volumes, and vastly improving their image with the public. You see, going to the state for more wood without offering true value in return, outside of say a small percentage of their profits–how does that play with the public? Everybody wants help, subsidies, a generous boost from big daddy.  These state forests have healthy trees because state taxes paid the DNR to nurture them. If the timber companies covet this state property, let them give something to the state that the people can truly benefit long term.

These timber companies can improve public relations and at the same acquire valuable state forests with one easy painless decision: cut out their dead wood, their low-producing lands, and trade them to the state in return for the good land. The sites low in production offer to the people much needed recreational areas. It’s a classic win-win, with honor on all sides. 

Will the timber companies seize this opportunity, seeing that it offers them 1) improved public relations 2) ownership of much better forests  3) dumping their dead wood so to speak. Will they be fair or squeeze the state? (People tend to squeeze the state and feds).  It is too difficult to tell what will happen here–negotiations are complex and difficult to predict. There is no law that says the timber companies have to be fair, especially with a park movement.

The issue comes back to valuable timber producing lands, and that I communicate openly, and expect openness in return. Therefore it is to find the fairness between the parties.  And not to squeeze one another.


*1 The timber companies have their own acres and the private sector if they treat them right, and part of the expanded Four Parks, depending on its proper use.  See Governance.  There can be much logging  in the Four Parks, depending.   This is going to require much more communication in the early stages with the Yoopers–see Munising Ways, Burned out, UP Townships, etc.   



THE ECONOMICS

I want to support the idea and fact that: the creation of large parks benefits the adjoining acres  and provides gradual growth for neighboring communities,  as opposed to communities deteriorating as is expressed by some in Michigan.
           
To prove this idea, please refer to http://www.umt.edu/econ/papers.htm 

And read the data. The author’s name is Tom Powers an economics professor at the University of Montana.  This web site is full of articles containing studies and research about wilderness preservation, parks, monuments, etc.   Examples are:
1.  Economic Impact of Nature based Tourism.    A discussion at Bay Mills in the Upper Peninsula
2.  Making a case for wilderness in the community: it’s good business.  Excerpt  from, The economics of Wildland Preservation

Page 23 of 27  “Economic research has repeatedly demonstrated that areas with high quality natural environments that are protected by official wilderness or park status have been able to attract higher levels of economic activity.  As a result, those areas show signs of superior economic vitality.  Much of that research has centered on the Western United States because of the concentration there of many of the larger National Parks and wilderness areas, but other areas of the nation including the northern forests of the nation’s northeastern tier have also been studied.  Other studies are national in scope.”

Page 24 "the more of the land base that was in National Wilderness, Parks, Monuments, etc, the higher were the measures of local economic vitality.” Next paragraph “growth rates two to six times those of both other non- metropolitan areas”. “His research clearly indicated that the protected lands drew new residents who were willing to sacrifice a certain amount of income in order to live in the higher quality natural environments that they perceived federal protected landscapes provided”.

Next paragraph “the closer a location was to a designated Wilderness Area, the higher the likelihood of new construction”.

A few lines later “Another economist seeking to understand the spatial patterns of economic development in the rural Mountain West also focused on the tension between access to urban areas and closeness to protected natural areas”

Top of page 25 “Vermont’s Green Mountains revealed that the existence of designated federal Wilderness enhanced nearby land values”

Next paragraph: “The study, like many others, found that, in general, jobs were following people’s residential location decisions rather than people passively moving to where employment opportunities were.”

Next page “including high rates of population, job, and real income growth." “robust economic vitality.”

Next paragraph: “A study of the impact of state parks on employment and population growth in 250 rural Western counties found that state parks also served as an amenity, attracting population and supporting employment growth”

Next paragraph “these studies also confirm that people care where they live and act on those preferences, leading to in-migration and job creation in areas perceived to have higher quality living environments.”

3.  “Protected landscaps and economic Prosperity, A 21 century economic vision for North Dakota
4.  The economic Impact of Preserving Washington’s Roadless Forests.
5.  The Local Economic Impact of changes in National Grasslands Management in North Dakota
6.  "the economic impact of the proposed Maine Woods National park and preserve Sep. 2002"
7.  On another part of his web site www.umt.edu/econ/Power/kufm/2003/050503.htm is another article titled “Declaring an End to New Wilderness Protection”

The following is quoted: “Even more telling, the larger the percentage of protected public land in a Western county, the faster the rate of growth has been. The causal connection is the opposite of what the oilmen in control of the nation claim: The more carefully we protect the natural landscapes that define the West, the more economic vitality the local economy shows. These economic facts, however, are unlikely to be convincing to those who accept as an article of faith that the only way to show respect for the natural wonders that God has given us is to destroy them in the pursuit of corporate profits.”

My opinion and 30 years’ experience with land here in the UP confirms this mans statements.  I have seen repeatedly the demand to own land bordering Parks.  The prices are higher and the demand,  greater.  Actually, it is hard to buy land bordering a park of some kind.  To me, it is obvious to see.