Sustained forests; sustained profits

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The Bottom Line

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:

• Maximum exposure and marketing
• Minimum capital outlay
• Financial Incentives for early entry to the system
• Maximum use of undeveloped resources of the tracts
• Maximum local involvement to create support, employment opportunities, and good will
• Maximum use on other associated lands and resources of the systems that are developed.

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. WWW.LastingForests.com	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
WWW.LastingForests.com	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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This Web site is maintained by R. H. Giles, Jr.
Last revision January 17, 2000.