Buyer plans to develop part of Hofmann Forest
Posted November 14, 2013
Raleigh, N.C. — The Illinois-based agribusiness company that wants to buy Hofmann Forest put together a prospectus to attract investors to develop part of the 79,000-acre research forest while promising North Carolina State University officials that the forest would remain a timber and agricultural site.
Hofmann Forest, which is in Jones and Onslow counties, has been owned and managed for the benefit of N.C. State’s College of Natural Resources for nearly 80 years. Officials said it is the largest university-owned teaching and research forest in the world. A university endowment said last month that it had agreed to sell the forest for $150 million.
A group of N.C. State professors, foresters and environmentalists have sued to halt the pending sale, but a judge denied their request for a preliminary injunction on Tuesday.
The 22-page prospectus circulated by Hofmann Forest LLC, the company formed to acquire the land, calls the forest "one of the most unique properties in the nation" but identifies several "higher and better uses" for the property, including commercial development along U.S. Highway 17 and subdivisions to accommodate Jacksonville's growing population.
"The flexibility of the Hofmann Forest allows the buyer the option of going in several different revenue-producing directions, all while making a substantial return on your investment," the prospectus states.
The prospectus notes the timber in the forest alone is worth $117 million. Converting 40,000 acres for agriculture would conservatively bring in $160 million, and 10,000 acres for commercial development could potentially fetch another $100 million.
That's $377 million – more than double the sale price – with one-third of the forest left untapped. The Department of Defense also has asked about leasing a chunk of the forest for training, according to the prospectus.
"It's not a great deal at all for N.C. State when you look at it that way," said Ron Sutherland, an N.C. State alumnus and one of the plaintiffs in the lawsuit.
N.C. State officials were caught off-guard by the plans outlined in the prospectus, spokesman Fred Hartman said.
"This is the first N.C. State has seen or heard of this document, and it includes information that is not contained in the sales agreement," Hartman said in an email to WRAL News. "We are contacting the buyer to determine when the document was prepared, its accuracy and whether it reflects the buyer's current views regarding potential use of the land."
The company said Thursday that the document was put together earlier this year for "internal purposes" as managers considered the purchase.
"Since this document was created, the LLC, under the guidance of Jerry Walker, has recognized the value of the Hofmann as a forest and has no plans to develop the property into a large commercial and residential community," the company said in a statement.
Last week, Mary Watzin, dean of the College of Natural Resources, told WRAL News that the university was "looking for a buyer who wanted to continue to operate the forest as a working forest." But maintaining Hofmann Forest as a forest was never guaranteed in the sale agreement.
"That's really not something that's typically written into a contract," Watzin said.
Opponents of the sale said they had warned the university that selling the forest would jeopardize its future.
"The university leadership needs to be held accountable for letting this happen," said . "Either they're naive and incompetent, or they knew this was going on all along."