Posted on: Thursday, June 5, 2003

Michigan land to bring estate more than $100 million

By Andrew Gomes
Advertiser Staff Writer

Kamehameha Schools has completed a more than $100 million sale of Michigan timberland to a North Carolina-based forestry investment partnership.

A sale agreement, reported to have been reached with The Forestland Group LLC in December, closed late last week.

Kamehameha Schools did not disclose the sales price previously estimated at $150 million, but said it realized a net gain that will be reinvested to support the nonprofit trust's educational mission.

Kamehameha Schools acquired the 390,000 acres of timberland in 1994 for less than $100 million. The purchase followed the failure of a partnership with Benson Forests to develop a high-tech logging operation on the property using computers and satellite imagery to manage timber harvests.

The trust since had contracted for selective harvesting and generated some income on the investment, though the operation was not intensive, said Kamehameha Schools spokesman Kekoa Paulsen.

A year ago, the trust announced it would seek a buyer for the property and timber cutting rights to reduce exposure in Mainland real estate investments.

Kamehameha Schools senior asset manager Susan Todani said Forestland's reputation for environmentally responsible stewardship was an important factor in the trust's selection of the company's offer, which competed with others from The Nature Conservancy and the state of Michigan.

Forestland will manage a limited partnership formed to own the property, which is spread across 235 miles of Michigan's Upper Peninsula, including several miles of shoreline along Lake Superior, and used for sustainable timber harvesting, hunting and recreation.