Sustained forests; sustained profits

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The Bottom Line

"What will it cost?" is a typical question asked about a typical project. Lasting Forests is not typical. It potentiates investments in land. It "mines" billions of dollars spent on satellite technology and forestry and wildland research over 50 years. It develops a resource base for an uncertain future. Its influence on the region as context for other enterprises is evident. It may provide inestimable public relations values. It reduces losses and has its own special security and limited fire protection program. It shows an alternative to agency management of land and current tax rates and destructive real estate taxes. Of course there are costs, but expected net returns (including reduced risks) from investments are of interest.

Parks and forests in the public domain are usually financial drains. Even if direct costs are ignored, they represent a loss of land for taxation for communities. The cost of owning land is, at minimum, the annual tax burden on the landowner. The bottom line for success of the Lasting Forests is that, at least, the annual tax equivalent of associating landowners is paid by the project operation.

Depending on inventory, adopted accounting procedures and policies, and the planning horizon, the costs of system development can probably be paid for exclusively from funds derived from the Forests. Development capital is needed to implement 22 units or enterprises within the first 2 years for stability and continuous development. (A slowly developed, less profitable, and more uncertain venture of 13 units is discussed below). We may cautiously gain funds from the various properties and activities (intensive use of forests, pastures, facilities, and creative development of ancillary operations). Driven by incentives, the shared profits gained will build the enterprise.

The preliminary estimates for start-up work are based on emphasizing:

Gross estimates of the costs to develop each unit to initial readiness are presented below. Funds required in a 2-3-year development period of staffing, acquisition of equipment, initial site work, and start-up work. The gross estimate is for an investment of approximately $2 million in the first year and about that much in the second year, a total of $4 million start-up costs. Annual profits of about $4 million are estimated being made by the end of the 5th year after debt repayment.

There are uncertainties in these estimates but they are conservative. They are based on a sponsoring company or group of investors holding tracts of 10,000 - 20,000 acres, the land having residual tree resources, and the land having some generally attractive appearance and no major toxic or other traits that will exclude use of the land. Generally, the area imagined was that in Virginia in the vicinity of Roanoke and westward and into West Virginia. It may include abandoned surface-mined land. The more mature the forests, the larger the area, the better the access, the more amicable the people, the greater will be the successes. These topics are yet unknown. The cost estimates expected during the first 2 years are shown.

Unit Name First Two Year
Development Costs
Likely Fifth Year Profits
1. Forests (Main and Associated) 200,000 200,000
1a. Walnut Vales 30,000 60,000
1.b The Foresters 30,000 40,000
1.c Fire Force 200,000 200,000
2. Memorials 50,000 50,000
3. The Wildlife Group    
3a. Official Avi 400,000 200,000
3b. The Wild Turkey Group 80,000 90,000
3c. The Raccoon Group 30,000 50,000
3d. The Deer Group 150,000 200,000
3e. Good Dog 60,000 8,000
4. The Pest Force 80,000 80,000
5. The Fishery 200,000 100,000
6. The Range and Pasture Group 50,000 100,000
7. Nature Folks 80,000 100,000
7a. The Plant People 35,000 90,000
7b. The Owl Group 45,000 90,000
7c. Coyote 60,000 90,000
7d. The Butterfly Band 45,000 60,000
7e. Wilderness Group 30,000 50,000
7f. Wildland Walkers 30,000 100,000
7g. The Wildland Crew 50,000 40,000
7h. Stoneworms 190,000 20,000
7i. The Rollers 30,000  
7j. Prospectors 30,000 50,000
8. The Lasting Forests Camps 100,000 50,000
8*. Writers' Camps 17,000 60,000
9. Ranging 50,000 60,000
10. The Tours Group 20,000 300,000
10a. China Tour Example 45,000 80,000
10b. Grandeer Tours example 20,000 30,000
11. NovoSports 50,000 80,000
12. Viewscapes 40,000 20,000
13. The Products Group 50,000 150,000
14. 160,000 400,000
15. The Certification Group 50,000 100,000
16. The Wildland Knowledge Base 50,000 150,000
17. Competency 100,000 150,000
18. Stables 80,000 50,000
19. Outfits 100,000 150,000
20. The Warehouse Group 30,000 150,000
21. The System Base 45,000 55,000
22. System Central 300,000  
22a. The Trevey 50,000 250,000
22b. The Energy Core 30,000 5,000
22c. Research 150,000 10,000
22d. Publications 10,000 5,000
22e. Security and Safety 50,000 80,000
22f. Teams 2,000  
Total $3,907,000 4,468,000

Some productivity, at least by the middle of the second year, is expected. Conservative estimates of the likely profits from each unit are shown. These are strongly influenced by an effective System Central and by supportive ancillary units being developed well. ("Complete failure" of any unit (difficult to imagine) does not jeopardize the success of Lasting Forests.)

A new personal incentive-driven procedure is available.

A modest development might be selected. It reduces risks in managerial skills but increases the risks of the total system failing to perform at expected levels. It delays the development of the total system by many years. The following proposals are based on deleting certain units from the above list, emphasizing low-cost and high return units, and cutting back on the scope or size of others.

The 2-year development costs of the modest option are:

Forests 100,000
Foresters, Anglers, Stalkers, etc. 100,000
The Deer Group 100,000
The Fishery 100,000
Stoneworms (trails) 100,000
Writers' Camps 100,000
The Products Group 50,000 100,000
Certification Group 50,000
Outfits 50,000
System Central 300,000
The Trevey 50,000
Total 1,200,000

Profits are not estimated for this set of costs since this is perceived as a more-slowly taken path to the profits estimated above. They are likely to be one-third of those estimated above for the 5-year development period.

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Last revision January 17, 2000.