Math Change – 56,000 acres should generate $700-$800 per acre when first thinned at 15 years and $2,000-$3,000 per acre when clearcut at 25 years. Take an average of $3,200 per acre and that’s $179,200,000/25 years = $7,168,000 in annual revenue. Add another $780,000 at a below average hunt lease per acre price of $10. There is another 23,000 acres of swamp and agriculture which should generate income. State has a School of Forestry that places graduates in corporate america where the whole concept is to maximize profit. Why State hasn’t taken the same approach over the last 80 years with this asset is beyond me. Heads would roll in a corporate setting if 79,000 acres only generated $900,000 to $2,000,000 in revenue per year.
Keep in mind that nature does all the work in this scenario. State doesn’t have to maintain a fleet of trucks and logging equipment. Thinning and clearcut bids are received from the paper company which does all the work. State contracts out the cleaning, spraying and replanting of pine seedlings.
Money is not static and even though the sales price of $131 million is probably below market value, that does not mean the proceeds can’t be invested wisely. Will the $131 mil generate close to $8 million in revenue per year after broker or advisor fees? I doubt it but hope springs eternal.
I know I have a biased slant in that selling a family heirloom is a sin. This is the largest University held forest in the world. I just wish ownership between my alma mater and the State of North Carolina could have gradually changed hands at a fair price.
