The State of Pennsylvania is inappropriately using funds meant for rural development for special land deals to favored companies.
That is what PA State Representative John Lawrence (R-13) claims in a press release dated May 3, 2018.
“What would you think if you learned that a New Hampshire-based private timber company was approved for a $50 million loan from the state of Pennsylvania to purchase timberland in northwest Pennsylvania?” The release rhetorically asks.
“Or that this $50 million loan, for the purchase of private timberland by a private company, comes from a taxpayer-subsidized state program that is, by law, required to fund improvements to water and sewer plants?”
The question that Rep. Lawrence poses refers to a deal given to the Lyme Timber company to purchase land in seven rural counties throughout Northwestern Pennsylvania through a program called PENNVEST, which is meant to fund sewer and storm water projects.
According to the State website, “PENNVEST was founded on March 1, 1988 and services the communities and citizens of Pennsylvania by funding sewer, storm water and drinking water projects…These projects not only contribute to improving Pennsylvania’s environment and the health of its people, they also provide opportunities for economic growth and jobs for Pennsylvania’s workers.”
“So why would PENNVEST, whose legal mission is water and sewer infrastructure improvements, lend $50 million to a private timber company to buy real estate?” Rep. Lawrence stated in the release. “Good question.”
Tom Shepstone, writing about the PENNVEST deal on naturalgasnow.org gave his opinion on the situation:
“Indeed, it is the actions of the Pennsylvania Department of Conservation and Natural Resources (DCNR) that should disgust you, not those of Lyme Timber. DCNR has put together a deal to help Lyme Timber acquire over 60,000 acres of forest land in Northwest Pennsylvania using $50 million of 1% loan money from a state authority intended to finance sewer and water projects.”
Most timber companies finance land purchases at a rate of 4-6% interest, stated Arthur Stewart, President of the Caledonia Land Company, during a hearing held by the PA House Agriculture and Rural Affairs Committee on the subject.
“Any borrowing that Caledonia does is at commercial interest rates of 4% to 6%. On $6 million the savings in interest in one year alone between 1% PENNVEST money and a commercial rate of 5%, would be $240,000,” Stewart explained.
“When you allow PENNVEST money to be used to benefit one private business owner over another, what kind of Pandora’s box are you opening?”
Keith Klingler, member of the PA Forest Products Association, the Venango County Planning Commission, the PA Forest Stewardship Committee, and President of the PA Landowners Association explained at the same hearing that many municipalities have been declined funding through PENNVEST, in what Klingler claims were proposals actually in line with PENNVEST’s founding mission.
“If there has been legislation to expand the scope and use of PENNVEST funds I am not aware of it, and neither are most legislators. My township was turned down by PENNVEST three consecutive years when we requested funding for a public sewage project.”
Klingler went on, “I am aware of multiple other municipalities that have been denied funding, and I will soon have a list of all these.”
Diving deeper into the deal finds that Lyme Timber has agreed to a conservation easement on part of the land purchased through PENNVEST. The Nature Conservancy defines a conservation easement as a restriction placed on a piece of property to protect its associated resources. Local, county, and state governments across the country are using conservation easements to buy up land in rural communities and restrict it from development.
Rep. Lawrence also addresses this in his press release: “For its part, Lyme Timber agreed to place 9,362 of the 60,000 acres into a ‘working forest conservation easement’ held by DCNR, to allow some public access to the property, and to mitigate an existing acid mine drainage issue at an estimated cost of $750,000.”
But the broader issue of conservation easements was just as troubling as the PENNVEST deal to some of those who testified at the hearing.
Arthur Stewart explained the problems with these programs in his testimony, specifically the problems posed to rural Pennsylvania by conservation easements. “A forest conservation easement is another limitation to development opportunity,” Stewart explained.
“Unfortunately, stores, houses, machine shops and restaurants are the manifestations of a healthy human population. Pennsylvania’s rural society is already unhealthy-the data clearly tells us that Pennsylvania’s rural schools spend much less per pupil than is spent in more developed areas, that rural income significantly lags the rest of the State, and the rural population is old.”
“The limits inherent in the forest conservation easement further aggravate these health problems!” Stewart concluded in his testimony.
Tom Shepstone went even deeper into some of the motivations behind the deal in his article, concluding the easement is part of a broader agenda for left-wing groups and Governor Tom Wolf’s administration.
“It appears another key player in this campaign and the facilitation of the loan was The Conservation Fund, a 501(c)3 charity with annual income of $215 million and 19 management staff making over $200,000 per year in 2016.”
Referring to Cindy Dunn, Secretary of the DCNR, Shepstone says: “[Dunn is] determined to make a Northwest PA wilderness on the backs of taxpayers and residents of [Cameron] county and its neighbors for the sale of those many wealthy visitors who want a wilderness experience uncluttered by real people and their enterprises; people who have to get their hands dirty making a living and don’t have the luxury of trips from Philly or Pittsburgh for weekend hikes.”
The developing story in rural Pennsylvania has similarities to that of Martha Boneta in Virginia, where environmental groups tried to use conservation easements to force Boneta off of the property she worked to maintain and turn into a profitable farm.
Martha Boneta eventually won her battle, and got landmark legislation passed in Virginia to protect property rights.
Rep. Lawrence concluded in his statement: “These concerns require immediate answers from the Wolf administration. From all outside appearances, this looks like a classic backroom deal, favoring a well-connected private business with cheap and easy public money. The people of Pennsylvania deserve better.”