79,000 Acres of Conflict

A battle over the North Carolina State Endowment Fund’s right to sell its 123-square mile forest to an Illinois-based agribusiness firm appears to have ended. On Friday, a Wake County Superior Court judge ruled that the sale could proceed without an environmental impact statement, which a group of ecologists, conservationists, students, professors and alumni had been pressing for. While an appeal is possible, it looks as though the issue is over for NC State, which claims it could receive as much as $6 million per year from the proceeds.

The Endowment Fund owns Hofmann Forest, a 79,000-acre tract of land 120 miles east of NC State. The forest has been affiliated with the university for almost eighty years. It was purchased with a private donation in the 1930s and eventually it was formally gifted to the Endowment. 

The forest was intended to provide students and professors with educational and research opportunities and to provide a source of revenue for what is now NC State’s College of Natural Resources.

In September, five plaintiffs—conservation and forestry experts, a landowner, and the former head of NC State’s Natural Resources Foundation—sued the board of trustees of the Endowment Fund and the Foundation, which manages the forest. Their goal was to stop the sale, or at the least to make the school conduct an environmental impact analysis pursuant to North Carolina’s environmental regulations.

According to opponents of the sale, Hofmann Forest is North Carolina’s largest state-owned parcel and the world’s largest university-owned research forest. Selling the land, they say, is an affront not only to environmental standards, but to current and future students and researchers who would otherwise have access to an unrivaled work setting. 

In the weeks leading up to the judge’s decision, the backlash reached a fever pitch, with such statements in local newspapers and social media as: 

  • “I joined this school and chose this major to save the Earth for my children and my children’s children. With all the talent and passion for conservation at this school, we should be looking for ways to purchase more land to save, not selling our Earth’s soul to the highest bidder,” wrote Amanda Lafferty, third-year zoology student at NCSU, in a letter to Raleigh’s News & Observer
  • The “Save Hofmann Forest” Facebook page, which has 663 “likes,” contains roughly a dozen links to opinion pieces critical of the sale, most from NC State’s student newspaper, the Technician. A separate online petition now has about 1,500 signatures; a faculty-generated petition garnered about 50 signatures from professors in the College of Natural Resources.

The university claimed from the beginning that it has the ability to sell the forest without triggering state environmental laws—primarily because the actual owner is a private foundation—and that the financial benefits of the deal for the school are too great to ignore. 

Opponents maintain that NC State and the Endowment Fund have been secretive about the sale and that there are no assurances that the buyer will not cut down the forest or use it for residential or commercial purposes in the future. They also argue that the university essentially owns the forest and thus is subject to environmental laws requiring an environmental impact analysis, something which can dramatically affect the use of the land and the terms of future sales, leases and easements.

In an e-mail to the Pope Center, Brad Bohlander, a spokesman for NC State, explained that the forest is no longer used extensively, and that only 2 percent of the College of Natural Resources’ research is conducted there. Most students have learning and research opportunities at nearby forests; Hofmann Forest is approximately 120 miles away from the university. Regarding the claim that the university has been secretive, Bohlander wrote, “there have been dozens of opportunities for multiple audiences to voice their thoughts. Dean Watzin and former Dean Brown communicated regularly with faculty, students and alumni.”

While research is conducted on the site, more than two-thirds of the forest is used for timber and wood pulp production to generate revenue for the College of Natural Resources. In the last ten years, revenues from pulp production (and hunting licenses) have averaged just over $2 million; last year, the college only earned $861,000. The university argues that selling the forest for $150 million and investing the proceeds in an endowment will earn the school $6 million per year, giving the college a steadier source of funding.

Frederick W. Cubbage, a professor in the college’s Department of Forestry and Environmental Resources and the lead plaintiff in the case against the Endowment Fund, sees things differently. He takes issue with the statistics cited by the administration—that only 2 percent of CNR research is conducted in the forest. Cubbage noted that there are about twenty long-term projects in the forest. He told the Pope Center that hundreds of NC State students visit the forest and “vast amounts” of workshops and tours take place there throughout the year. 

Cubbage has also expressed doubt about the alleged financial benefits of the sale. “If the $150 million sale price were received in one lump sum payment, if there were no reductions in the principal and if the stock market alternatives earned 4 percent per year without any loss of value, we would get $6 million per year (not including inflation losses). None of these ifs seems likely or guaranteed on a yearly basis,” wrote Cubbage in a recent op-ed in the News & Observer.  

Cubbage told me that the Endowment Fund has treated the forest as a “special class of land that is above the law.” He acknowledges that the Endowment Fund is legally considered a charitable organization, but he believes that the forest’s connection to NC State, a public institution, is strong enough to qualify the forest as public land. The defendant Endowment Fund has argued that it is a statutorily created private organization with no restrictions on the disposition of its property. 

“The role of this Court is not to decide whether the sale of Hofmann Forest is wise or ill-advised,” wrote Judge Shannon R. Joseph in Friday’s ruling. In their motion to dismiss, the defendants had argued that the plaintiffs lacked standing to sue, and that the legislature had given UNC system endowment funds a broad authority to dispose of funds and gifts in any way consistent with the terms stipulated by the respective donor. 

Throughout this process, NC State has tried to ease the opposition’s worries by pointing out that its bidding process was thorough and ensured that the buyer would “preserve the legacy of Hofmann Forest” and give “access for students and faculty to conduct research, and maintain a working forest.” If the sale proceeds, time will tell whether the new buyer, or future buyers, will satisfy those assurances.