Gov. Pataki Announces $20-25 Million Deal on Earth Day
State to Preserve International Paper's 257,425 Acres in Adirondacks
IP Contributed over $50,000 to Pataki's Campaigns
In celebration of Earth Day, April 22, 2004, Gov. George E. Pataki announced the biggest acquisition of land in the Adirondacks yet 257,425 acres of International Paper Co. forest in nine counties and 34 towns within the Adirondack Park, nearly all of IP's Adirondack holdings. In a deal involving the Conservation Fund, the State will own about 2,000 acres in fee simple and will acquire perpetual conservation easements in approximately 255,000 acres. These conservation easements will transmit the development rights to the State, allow the State to control the harvesting of timber in an environmental sensitive manner, and allow public access for recreation, according to the Department of Environmental Conservation (DEC) press release.
The press release referred to the scheme as one of "protecting" the acreage, but the land was not threatened by development and no complaints existed about timber harvesting methods. The outcome of the sale is more likely to be a loss of financial connection to the land on the part of the firm that will become the formerly largest owner of private land in the Adirondacks. State real estate tax policies indicate the drift. When the title is split, the State's own allocation factors for real estate assessment and tax payment purposes attribute 85 to 90 percent of the value to such conservation easements. The State will have acquired by far the dominant stake in the land. IP will retain only ten to fifteen percent of the value. This means that their stake will be small and it will be a similarly small step for them to totally divest the vast tracts.
International Paper just closed its paper mill in Corinth, which is located on the southern edge of the Adirondacks. Its mill in Ticonderoga, which is more modern and employs about 700 people, processes pulp harvested in the Adirondacks from the company's and other private forests. IP owns, or as former DEC Commissioner Tom Jorling, now IP's Vice President of Environmental Affairs, was quoted in the DEC press release, is "steward of" 19 million acres of forest world-wide.
In addition to the State picking up the tab for real estate taxes on the portion of the value attributed to the conservation easements, the small tax bill on the residual title could also be reduced because of the forestry tax exemption program that timber harvesting property owners can apply for.
A report on campaign contributions by Michael Gormley of Associated Press caused a controversy to erupt the day after the land deal was announced. AP reported, "Gov. George Pataki and state Republicans have accepted more than $95,000 in campaign contributions from the company that would receive up to $25 million in public funds under Pataki's huge Adirondack land deal announced this week, records show."
"State Board of Elections records show International paper Co. contributed $25,000 to Pataki's campaigns since 1999, $70,000 to the State Republican Committee since 2000 and another $60,000 to the National Republican Senatorial Committee," AP reported on April 24.
Another report, published in October 2002 by the Public Policy and Education Fund of New York, compared campaign contributions to Governor Pataki with amounts and timing of funds disbursed from the Empire State Development Corporation (ESDC), which was created under Pataki to integrate other State development corporations and is headed by Pataki's former chief fundraiser, George Gargano. During the period studied, the 1998 and 2002 re-election campaigns, International Paper contributed $50,000 to Pataki's campaigns and ESDC disbursed benefits totaling $1,629,437 to the company. By comparing contributions back to 1998, this report found double the direct contributions to Pataki's campaigns than the AP report.
Since the properties were not threatened by development, it could be argued that the average of $20-25 million to be paid outright, and the 80-90 percent perpetual real estate tax relief, amount to a big Christmas present from the State of New York to IP. However, AP reported that Robert Stegeman, IP's spokesman, pointed out, "We have a mill worth millions and millions of dollars to us and the land is strategic to the mill We have an economic reason to keep these lands working forests and that's one of the reasons why we looked for a deal like we did." However, IP is indeed divesting assets in the North Country. Not long ago, the company also sold its two hydroelectric dam sites near the Corinth mill for $250 million to a Canadian firm, TransCanada Pipeline.
Since Gov. Pataki took office, according to the Governor's office's press release, the State has "protected" 780,000 acres, equivalent to the size of Rhode Island. The great burden of Pataki's land acquisition binge falls on the Adirondacks, where the State will hold a form of title to perhaps two thirds of the land, either in fee simple or conservation easements. The land to be "protected" is located in Clinton, Essex, Franklin, Hamilton, Herkimer, St. Lawrence, Saratoga, Warren, and Washington Counties. The DEC press release pointed out that the land comprises nine percent of the remaining private holdings in the Adirondack Park.
DEC is touting the acquisition as opening up more land to the public, but some hunting camp leases, those said to be "in environmentally sensitive locations near water bodies," will be ended. Forty additional lease camp buildings are allowed in DEC's agreement with IP. It is rumored that to pacify the hunting clubs they will be allowed to keep the existing leases until the lifetime of the current leaseholders ends, which would gradually eradicate the hunting club culture, but the DEC announcement does not bear out this report.
The DEC press release promises more access for snowmobilers, a good strategy to please environmentalists, who went all out to battle what they pronounced as environmentally insensitive snowmobile policies on the State Forest Preserve during DEC's current reworking of the comprehensive Adirondack snowmobile plan. By moving many snowmobile trails off the lands considered to be Forest Preserve (as opposed to conservation easement lands, which DEC claims are not Forest Preserve), DEC would please the powerful environmental groups while claiming to respond to the hundreds of vociferous snowmobilers who came to the many public hearings about the comprehensive snowmobile planning.