Summer 2000, Volume 9, Number 2
THE SOUTHERN INDIANA FOREST BANK
Standing timber can now equal money in the Bank. For the First time, a new option for managing and conserving private woodlands known as The Forest Bank is available to woodland owners in limited areas of southern Indiana. Created by The Nature Conservancy this program offers forest owners a guaranteed annual income and quick access to the cash value of their standing timber. In return for these financial benefits The Forest Bank receives from the woodland owner a permanent conservation easement that will keep the land as forest for all time.
For example, if a forest owner has 40 acres of timber appraised at $500 per acre, he
could deposit the total value of his timber in The Forest Bank. His deposit value would
then be $20,000. This deposit would pay the woodland owner regular annual payments of 4%,
or in this case $800 per year, each and every year. While the timber is deposited in the
bank neither the forest owner nor the Forest Bank may harvest the timber unless both of
them agree it will improve the vigor and health of the forest.
At some point in time, however, the forest owner may decide to withdraw his deposit of $20,000 for some financial need. He can then contact The Forest Bank and soon after receive a check for the full amount. At this point, his annual payments cease and The Forest Bank receives the right to manage and cautiously harvest the forest in the future - thereby conserving the forest for years to come.
What are the benefits to a Forest Bank depositor? First, the depositor receives an immediate annual income from the forest that can be counted on as long as the deposit remains in the bank.
Second, the depositor has access to the cash value of the standing timber without otherwise needing to completely harvest it.
Third, the depositor continues to have all rights to his land including hunting, hiking, firewood cutting or any other activity consistent with conserving the forest. And only those invited by the landowner have any right to access the land.
And fourth, the depositor has the assurance that healthy forests, clean water, abundant wildlife and carefully harvested timber will always be the future of his land.
Timber deposits in the Forest Bank are guaranteed by The Nature Conservancy, the largest conservation organization in the United States. And 4% is the minimum payment rate a current depositor will ever receive. However, if The Forest Bank does well by carefully managing its timber assets, it may eventually pay an even higher yield.
Although conserving forests, and not generating large profits, is the primary goal of The Forest Bank, the Bank will seek to be modestly profitable and share those profits with its depositors. In fact, those who keep their deposits in The Forest Bank for 10 years will have their timber reappraised at current market rates and may see an increase in the value of their deposit if forest growth has been appreciable and timber markets are strong.
At this time forest owners in parts of Clark, Crawford, Floyd, Harrison, Washington and Orange Counties who own at least 15 acres of forest or have a standing timber value of at least $15,000 will meet the minimum deposit requirements of the Bank.
Anyone interesting in the Forest Bank may contact Allen Pursell at The Nature Conservancy, 227 N. Mulberry Street, P.O. Box 5, Corydon, Indiana 47112. Or call 812-738-2087. E-mail tncblue@otherside.com.