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06/Timber investment group to buy Conn. Lakes Headwaters Forest 

By Edith Tucker, Coos County Democrat

The vast Connecticut Lakes Headwaters Forest in northern Coös is changing hands.

The Heartwood Forest Fund, managed by The Forestland Group (TFG), LLC, a North Carolina-based timber investment management organization (TIMO), will purchase the 144,400-acre conservation-easement-protected forest in Pittsburg, Stewartstown, and Clarksville from the Lyme Northern Forest Fund, also a TIMO, managed by The Lyme Timber Company of Hanover in early summer, according to Peter Stein, a managing director at Lyme Timber.

The per-acre purchase price will not be known until after the closing has taken place and been recorded at the Coös County Registry of Deeds, Mr. Stein explained in a telephone interview.

“We did fine for our investors,” he said happily.

TFG owns other forests in New Hampshire and Vermont, as well as former Champion lands in the Adirondacks in New York, purchased at the same time that Wilhelm Merck purchased the Champion lands in Essex County, Vt.

“TFG owns other lands with conservation easements held by state agencies,” Mr. Stein said. “They are high-quality institutional investors that practice sustainable forestry management.”

According to its website, TFG acquires and manages timberland investments for institutions, families, and individuals with an emphasis on naturally regenerating hardwood and pine forests in the eastern U.S. Currently TFG has 2.7 million-plus acres under management in 20 states, plus Costa Rica.

The legal provisions of the state-monitored working forest conservation easement that covers the Headwaters Forest “runs with the land” in perpetuity, guaranteeing public access and sustainable forest management practices without fear of fragmentation or development, Mr. Stein pointed out.

An existing timber supply agreement with Domtar, Inc. of Canada to buy low-grade certified Forest Stewardship Council (FSC) wood fiber for use in making paper, as well as camp leases and snowmobile and other trails will be transferred to the new owner and also remain in effect.

Upland Forestry, however, which has managed the day-to-day forestry for Lyme Timber on the Headwaters Forest, will no longer manage the tract. Instead, TFG plans to contract with LandVest, which maintains an in-state office in Concord, Mr. Stein said. LandVest, however, will occupy the same woodland office on Route 3 in West Stewartstown that has served as the tract’s office for nearly 100 years.

Lyme Timber established an investment fund in 2001, Mr. Stein explained and purchased five “working” sustainably managed forests in New Hampshire, the Berkshires, the Adirondacks, Maine, and Pennsylvania, of which one is the soon-to-be-sold Headwaters property.

It will be the third of the five forests to be sold. The business model calls for these properties to be sold over a timeframe of four to 10 years. The 

Lyme Northern Forest Fund, capitalized at $65 million, attracted 71 investors who invested sums ranging from $100,000 to $8 million. Without providing specifics, Mr. Stein said that the Fund has provided investors’ a good cash flow, even as many other investments have lost value.

Even though it is a business and he is pleased with the results of Lyme’s purchase of the Headwaters Forest, Mr. Stein allowed as how he has mixed feelings about its pending sale. “We all put our heart and soul into its purchase,” he said. “No property that Lyme has purchased has been more complicated, so it’s with a bit of reluctance that I’m overseeing its sale.”

His two children — 21-year-old Willie and 25-year-old Ali (Alexandria) — fell in love with the Headwaters lands and the family bid on and secured a lease campsite.

“Ali and Willie plan to build a board-and-batten camp next summer,” Mr. Stein said, adding that he hopes he will be allowed to fetch-and-carry some of the materials as they go about constructing it.