EIP Completes Innovative Land Exchange in Minnesota in Partnership with The Conservation Fund

February 12, 2015

February 12, 2015

On January 22, EIP completed the acquisition of 21,292 acres in St. Louis County, Minnesota comprising most of the Sax-Zim Bog, one of the most important bird watching areas in North America. In what has been called, “a historic land preservation deal” by the Duluth Audubon Society, Ecosystem Investment Partners worked with The Conservation Fund to plan and execute a series of land transactions with the ultimate goal of establishing a large wetland mitigation bank to serve the Lake Superior watershed of northeastern Minnesota.

One of the major challenges to conservation and restoration needs in the region is the historic land ownership pattern.  A vast amount of the land in northern Minnesota that is both at risk of development and is in need of ecological restoration is owned by the State and county government. Most of the state ownership is land held for the School Trust, a fund managed exclusively to generate revenue for the all the Minnesota school districts. These areas were extensively ditched for farming in the early 20th century, but never drained sufficiently to be able to support agricultural production.  As a result, these properties remain both economically and ecologically unproductive, as wetlands that are quite altered and degraded from their natural state. Much of this land reverted to county ownership as landowners forfeited their land for failure to pay taxes. The state and county’s fiduciary mandate to realize maximum financial return from these lands does not allow them to dedicate the land for conservation without compensation.

Because School Trust lands or tax-forfeit lands cannot simply be sold, EIP’s acquisition had to be accomplished through a land exchange. On behalf of EIP, The Conservation Fund (TCF) orchestrated a sophisticated land exchange, one of the largest in state history, that resulted in the state and county owning approximately 9,000 acres of productive timberland owned by Potlatch Corporation that the State and County had identified as top priority to consolidate their respective timberland holdings in St. Louis County.  On September 9, 2014, the State Land Exchange Board formally approved the exchange of the 17,668 acres desired by EIP for the approximately 9,000 acres purchased from Potlatch by TCF.  These ‘land swaps’ with the County and State were completed in December 2014 and January 2015 respectively.  EIP is now in the process of obtaining approval from the Army Corps’ St. Paul District and St. Louis County to establish this additional acreage as a wetland mitigation bank.