MeadWestvaco's Proposal Would Blend Development, Conservation
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Thursday, May 3, 2007
By Sammy Fretwell and Ben Werner
The StateMeadWestvaco wants a national park-sized area of forests near Charleston developed into what it calls an environmentally friendly community.
MeadWestvaco executives said they want to provide a model development in the 72,000-acre area, east of the Edisto River, that combats sprawl in the booming Charleston area.
Some of the land would be developed. Other parts — the size now unknown — would be preserved. The idea is to cluster new homes, schools, shops and other amenities together.
The company didn't say how much of its remaining 320,000 S.C. acres would be sold, developed or preserved. However, it said some of that land would be sold over the coming decades.
What happens to the 72,000-acre tract is important because of its size — three times bigger than Congaree National Park in Lower Richland — and its location near the rapidly growing coast. The area is a buffer between Charleston and the acclaimed ACE Basin nature preserve.
MeadWestvaco previously has sold S.C. timberland for development, moves that were criticized for not involving the public.
"We want to be part of the growth solution," said MeadWestvaco chief executive John Luke Jr.
The project, to be called East Edisto, would include green space and natural areas. The project's master plan, to be developed after receiving public input, would guide which areas are developed and which are protected.
The 72,000-acre tract straddles the Charleston-Dorchester county line, west of the Hollywood-Ravenel area.
Conservationists have expressed concern MeadWestvaco could sell off the land for development that would ruin the feel of coastal South Carolina.
The 72,000-acre tract now has historic sites, forests and wetlands. Bald eagles, alligators and ducks have been found in the area, as well as rare wood storks.
S.C. Department of Natural Resources director John Frampton said he would rather the company protect all the land from development. But the company's willingness to seek public input is encouraging, he said.
That's different from what some other forest products companies have done. "The other companies have just unloaded their property," Frampton said. "I'm looking forward to sitting down with MeadWestvaco."
Bob Scott, president of the S.C. Forestry Association, said timber companies have been selling much of the land they no longer need to investment firms that keep the property in trees.
"It used to be people would buy land and get a return on the investment through timber value," he said. "Now, the return on investment is based on real estate and recreation value."
MeadWestvaco's master plan will be devised after it holds public meetings and seeks other comments. That's important given the different constituents in the rapidly changing area on U.S. 17, south of Charleston. The area has a mixture of longtime landowners, as well as new property owners lured by its peaceful nature and scenic wetlands.
MeadWestvaco said it has hired a San Francisco land planning firm to help with the process.
What comes out of the process at East Edisto likely will be upscale developments enhanced by natural areas, Charleston real estate agent John Templeton said.
Mark Robertson, director of the S.C. Nature Conservancy, said the master plan for the 72,000 acres will guide development for the next three decades.
"It brings a certainty to the future," he said. "I'm confident they'll come up with a better plan than piecemealing" development.
However, Robertson said the future of the company's other 320,000 acres in South Carolina should be looked at closely, too. There are numerous tracts within that property worth protecting from development, he said. "We hope that the conservation community will have the opportunity to protect other lands."
For now, MeadWestvaco said only that it will keep the remaining 320,000 acres in South Carolina as forestland, while planning some "strategic sales over time."
The company already has said this year it is selling 300,000 acres in Alabama, Georgia and West Virginia. It will hold on to an additional 800,000 acres in the Southeast; how long is unknown.
Speaking with securities analysts Wednesday, MeadWestvaco CEO Luke hinted his company plans to use its land as a source of cash during lean financial years over the next two decades.
Instead of selling off its land all at once, as other wood products companies have done recently, Luke said he plans to, "execute sales over time to maximize cash flow and value for investors."
During the next three years, Luke said, the company expects income of $400 million from land sales. The idea is MeadWestvaco possibly could double the sales prices it gets by selling smaller parcels, including land sold to developers and timber investors.
MeadWestvaco's total land holdings could fetch nearly $1.9 billion over time under current market conditions, according to the calculations Luke gave analysts Wednesday. Those calculations value the company's S.C. land outside the East Edisto area at about $750 million.
MeadWestvaco's plan for East Edisto makes a lot of sense, said Mark Vitner, senior economist with Wachovia. "I would guess they're gearing up for the next housing cycle."
The Carolinas housing market has slowed, Vitner said. He estimates demand for new houses will rebound in 2009, at the earliest, and gain speed by 2011.
Vitner also said the East Edisto area probably is getting special attention from MeadWestvaco because it is in a sparsely developed area near Charleston.
He expects MeadWestvaco's development will be popular with people looking for second homes or to retire — similar to Sun City, near Hilton Head Island.
"It's a beautiful area, and I'm certain it will be full of retirees and sold out," Vitner said.
Reach Fretwell at (803) 771-8537. Reach Werner at (803) 771-8509. Staff writer Joey Holleman contributed to this story.
ABOUT MEADWESTVACO'S PLANS
Forest products company MeadWestvaco formally announced plans Wednesday to develop some of a 72,000-acre tract that it owns near Charleston.
Q. How do other S.C. preserves compare with the 72,000 acres MeadWestvaco plans to use for development and conservation?
A. The tract is about twice the size of the Jocassee Gorges mountain preserve in the Upstate and about three times as large as Congaree National Park near Columbia.
Q. How much of the 72,000 acres will be developed versus conserved?
A. That's not known. The company says it won't know until after hearing from the public and devising a master plan for the property. The general idea is to protect some open space and develop some of the property.
Q. Development will mean people, children and cars. Who will pay for the new roads, schools and water lines they will need?
A. The costs likely will be shared by Westvaco and the public, the company said. No cost estimate was available.
Q. What's on the 72,000 acres now?
A. Pine forests, the Caw Caw Swamp, historic sites and old rice fields. The land is home to rare wood storks, as well as bald eagles, alligators and numerous species of ducks.
Q. What will happen to the other 320,000 acres Westvaco owns in South Carolina?
A. Westvaco says it will keep much of that property as forestland but will sell some over the next 20 years. The company did not specifically say how much of the S.C. land it will sell.
TIMBER COMPANIES SELLING OUT
MeadWestvaco's plan to develop some of its S.C. land is part of a trend by forest product companies to sell off property. Some large S.C. tracts sold by the timber industry in recent years include:
Bonneau Ferry: MeadWestvaco, 16,000 acres, Berkeley County, purchased by conservation groups, managed by state Department of Natural Resources
Edisto River frontage: MeadWestvaco, 5,800 acres. Natural Resources bought a conservation easement; property is adjacent to the 72,000-acre tract in Charleston and Dorchester counties the company plans to develop parts of.
Hamilton Ridge: International Paper, 13,281 acres, Hampton County, purchased by conservation groups, managed by Natural Resources
Palmetto Bluff: International Paper, 20,000 acres, Beaufort County, sold to developers
Poplar Grove: MeadWestvaco, 4,500 acres, Charleston County, sold to developers
Keystone tract: International Paper, 4,500 acres, Charleston County, bought by investment firm
Watson Hill: MeadWestvaco, 6,600 acres, Charleston County, sold to developers
Wee Tee State Forest: John D. Hollingsworth Trust, 12,439 acres, Williamsburg County, purchased by conservation partnership, managed by S.C. Forestry Commission
Woodbury: International Paper, 25,668 acres, Marion County, purchased by conservation partnership, managed by Natural Resources
