Carving Up Downeast Maine: Forest Liquidators Converge on Washington County

By Phyllis Austin, Maine Environmental News ( 11/13/02

There are deep mossy bogs and meadows and granite cliffs that drop down as much as 150 feet along the 17-mile "Bold Coast" between the towns of Cutler and Lubec.

WHITING - The dazzling lakes and coastal woodlands of Maine’s eastern Washington County once seemed a "world apart" from the rest of the state. This land of vast scenic beauty is laced with lakes, rivers and streams that shelter the last significant remnants of the endangered Atlantic salmon. There are deep mossy bogs and meadows and granite cliffs that drop down as much as 150 feet along the 17-mile "Bold Coast" between the towns of Cutler and Lubec.

Snuggled up to the border with Canada, Washington County is sparsely populated. Twice the size of Rhode Island, it has just 35,000 residents. Until recently, the end-of-the road region was too remote to come under the recreational and development pressures of other natural jewels, such as Rangeley and Moosehead Lakes in western Maine. But all that is changing.

International Paper (IP), the county’s largest landowner, is selling out. Joel Swanton, manager of sustainable forestry for IP’s northern region, wouldn’t divulge the exact number of acres being sold. But 40,000 acres – essentially all IP owns east of Machias -- is the figure that is being bandied about by conservation interests working with the company to acquire the most ecologically significant parcels. The company considers the land, which it bought from Champion International in 2000, as "non-strategic" to its operations.

Dozens of parcels are up for grabs, mostly in Whiting, Marion, Edmunds, Townships 19, 14 and 10, and they contain extensive waterfront. IP’s divestiture has attracted liquidation harvesters and developers, known for heavy-handed logging, followed quickly by subdivision.

IP’s prices are based on the land’s real estate value, not on the timber value, according to Whit Beals, associate director of land protection for the New England Forestry Foundation (NEFF). The liquidators can afford to pay "close to standing timber value" because they are going to cut right away, he says. "They are pressed into quick harvests to pay off expensive equipment, and they don’t have time to wait for trees to grow for another harvest, so they cash in on the real estate value for themselves or sell to people solely in that business."

Cut, subdivide and auction

The most prominent Maine liquidators who have purchased IP land are Herb Haynes of Winn, Orland Dwelley of Waite, the Griffin brothers of Dennysville and Scott Hanington of Wytopitlock. Haynes’ subdivision entity, Lakeville Shores, has bought land from IP but hasn’t put it up for development yet. Dwelley subdivided his land on Gardner and Second lakes. Real estate agent Mary Gregor, who operates under the name Meadows and Mountain Trust, has bought land from the liquidators and subdivided it into housing lots. (She was convicted in 1996 of mail and wire fraud and using false names when she sold land she did not own and in sales of land mortgaged to third parties. She was sentenced to five months in prison, to be followed by five months of home detention, for defrauding 36 victims of nearly $192,000 in Aroostook County and ordered to pay $159,677 in restitution.)

The most prominent Maine liquidators who have purchased IP land are Herb Haynes of Winn, Orland Dwelley of Waite, the Griffin brothers of Dennysville and Scott Hanington of Wytopitlock.

There are other buyers, some from out-of-state, practicing the same liquidation practices. For instance, in March, 2000, Dale Thomas of Crest Hill, Ill., purchased 7,915 acres in the Marion-Whiting area for $1.2 million from Five Islands Corp., another Herb Haynes entity. Thomas has cut the marketable timber, and at auction on Oct. 12, sold 16 of 20 parcels at auction. He advertised the property as Six Lakes Ranch with wooded shorefront "within minutes of the seacoast and the quaint town of Machias." The auction brought $516,521, reported the auctioneer from JP King Auction Co. Inc.

The auctioneer, Carl Carter, wouldn’t identify the buyers. Whether they will own the land long-term, resell it in smaller pieces or subdivide it themselves remains to be seen. But in general, the trend is greater fragmentation, unsustainable forestry and changes in traditional recreational "freedoms." Local people, in particular, have roamed the old paper company lands – Champion, Georgia Pacific and IP – for generations, but the new individual owners may not be as open to the public hunting, fishing and camping on their property.

"When IP purchased the 930,000 acres of Champion lands in Maine, it acquired some of the most spectacular rivers, lakes and parcels in coastal Downeast," says Karin Tilberg, Maine director of the Northern Forest Alliance. This region of pristine ponds, undeveloped watersheds of significant rivers and bogs and wetlands, full of diversity, is remote and less well-known than some other regions of the North Woods. Now, this quiet, and in some ways, mysterious place, is facing immediate threats from land division," she said. "[It] poses the greatest danger to the wildness . . . and the remarkable heritage and traditions of this region."

Tim Cooper, manager of Moosehorn National Wildlife Refuge in eastern Washington County, believes that the county "has finally stepped into the spotlight" for conversion from commercial timberlands to second home development. The refuge borders IP land currently on the market, as well as that owned by liquidators. With little acquisition money and boundary restrictions, Cooper says, "I fear we have little ability to influence the ultimate fate of the larger parcels up for sale."

Alan Brooks, executive director of the Quoddy Land Trust, and Geneva Duncan-Frost, a Maine Forest Service forester and member of the land trust board, know how the land matters to local people. They are both working to insure the protection of the most environmentally significant lands. "When people subdivide and no-trespassing signs go up, it’s the locals’ backyard that is being shut off," says Brooks.

Duncan-Frost is concerned that area residents, who began to witness the ownership changes a half dozen or so years ago, aren’t as informed as they should be about the threats to the character of their homeland and their recreational traditions. There is only so much that land trusts and charitable foundations can do to buy important lands outright or acquire development rights, and the clock is ticking, she says.

State and regional conservation groups, such as the Land for Maine’s Future Board (LMFB) and The Nature Conservancy, and NEFF are interested in several IP properties and negotiating acquisitions of a few properties. The Northern Forest Alliance has asked for $l million in federal Forest Legacy funds in fiscal 2003 to acquire 11,000 acres from IP along the Machias River. LMFB and other partners are also working to secure funds for the Machias project.

But with so much commercial forestland on the auction block statewide, competing protection projects, and the stock market woes, conservation money is more difficult to come by than a couple of years ago. Tom Rumpf, the land acquisition director for TNC, reckons that it will be as difficult to raise the $15 to $20 million in cash and pledges needed for the Katahdin Forest Project as it did to raise $35 million for the St. John River Project.

IP’s Swanton downplays the land sale impacts. While acknowledging that "we’re seeing fairly rapid change of ownership, we’re not seeing a huge amount of land going out of [timber] production" and into development, he says. "We are heavily regulated and that slows or restricts land development."

Back in 1988, the National Parks and Conservation Association (NPCA) proposed the creation of a national park along the Bold Coast. The plan gave rise to a property rights group, Save Washington County Alliance, that railed against a federal purchase, and NPCA’s idea fizzled. The more ambitious Downeast Lakes conservation area was later proposed by the Northern Forest Alliance, and the organization is slowly making headway on protecting salmon spawning waters from Fourth Machias Lake to West Grand Lake. State and private groups are also seeking protection of waters and lands in the area.

Jonathan Reisman, a long-time conservative activist and first selectman of Cooper, says there is no property rights movement in the county to respond to new public land acquisition initiatives. "The environmental/conservation movement is in control of the state and the media," he says.

"I can’t say I have strong feelings one way or another about [IP’s departure]," Reisman adds. "I understand why they’re selling. It’s pretty clear that the forest products industry is going downhill . . . and they’re getting top dollar [for their land]."

Most of Washington County was held for years by sequential industrial owners – St. Regis Paper, Champion and Georgia Pacific (GP) -- and they provided jobs to independent logging contractors, such as Herb Haynes and Orland Dwelley. But when the large ownerships began breaking up all over the state in the late 80s, the contractors had to reinvent their businesses. Those who could afford it began buying their own timberland to cut and then sell as quickly as possible, preferably to a developer willing to pay real estate, not stumpage, prices.

The mid to late 80s also was the era of an intense waterfront development boom. The Patten Corp. was the most notorious developer to target the Bold Coast. The Maine Coast Heritage Trust rescued several properties from subdivision, and the state purchased 4.5 miles of the rocky headlands and pebble beaches from the Hearst Corporation.

In 1999, GP sold to short-term investors, Wagner Timber Partners (Yale University’s endowment foundation and the McDonald Investment Co. of Birmingham) for $51 million, and Wagner began selling off waterfront properties that had historically been leased as seasonal camps.

Shortly after IP acquired the Champion lands, it began selling "surplus lands" under the name SP Forests LLC. In the last two years, some of the major sales have been:6,988 acres in Whiting, Edmunds, Northfield, Marshfield and Whitneyville to H. C. Haynes Inc. for $1,588,125; 2,681 acres in Cutler, Trescott and Whiting to DMG Enterprises (the Griffin brothers of Dennysville); 2,047 acres in Whiting to Hanington Timberlands of Wytopitlock; land in Township 14 to Lakeville Shores for $2,670,000; land in Township 16 MD to Haynes for $594,861.

Haynes resold the Whiting and Edmunds parcels to Dwelley for $1,414,943. Frank Faillace of New Jersey, doing business as Northeast Acreage and East End Properties, sold several thousand acres off Rt. 1 in the Whiting-Cutler area to Dwelley, who later flipped it to Mary Gregor for subdivision.

IP still has 10,000 acres to sell in Marion and 6,100 acres in Edmunds. Conservationists are currently discussing the purchase of the Edmunds land on Hobarth lake and stream. Protection of that tract is important to an abutter, Moosehorn National Wildlife Refuge. The Edmunds unit (a wilderness area) is bounded to the north by Hobarth Stream.

Refuge manager Tim Cooper says the stream’s water quality is very high, and historically it was a salmon stream. Today it shelters native brook trout. "We’d like to maintain the integrity" of the parcel, he says, and "IP is willing to talk." In the meantime, the refuge has picked up a 2,000-acre parcel from Wagner Timber Partners near Baring that is adjacent to Meddybemps Lake and abuts the refuge. "We were concerned with subdivision,’ he says.

Mystique of Remoteness

On a humid, cloudy morning, state forester Geneva Duncan-Frost and this reporter drive through some of the former IP property sold to Haynes and Dwelley, visiting parts of the 20,000 acres that are under "new management."

The owners' practices are nothing exemplary, says Duncan-Frost, but there are no documented environmental violations. "I see this trend of subdivision" after cutting, she says. "What's going to happen here when they are finished?"

There are numerous log yards indicative of active cutting. According to notifications filed with the Maine Forest Service, there are approximately 3,500 acres being harvested now. DMG Enterprises is cutting in Trescott; Haynes, in Northfield; Lakeville Shores in No. 15 Plantation; and Dale Thomas in Marion and Whiting. (The notifications cover a two-year period, and those four logging operations are scheduled to be completed in 2004.)

The forest is obviously not very old, although we see some mature trees by the roadside. Duncan-Frost seems impressed that there's still as much marketable wood left as there is, given the rumors that previous large landowners (Georgia Pacific and Champion) hammered the land before selling.

The impacts of cutting are less harsh than might be expected. In numerous places, there are narrow forest openings, slash left on the trails to cushion the effects of harvesting equipment. There is, however, one place we visit where Duncan-Frost is concerned over whether rutting is excessive or the cutting on a hillside is too steep, even if it’s legal.

One harvested tract off Rt. 1 west of Whiting was sold by Dwelley to Gregor for 40-acre house lots, just big enough to escape subdivision review before the statutory loophole was closed. She divided the parcel into 22 lots and sold most of them in quick order to Mainers and out-of-staters for $16,000 to $25,000 each, according to state property tax records. Gregor has a new subdivision in the works on formerly managed timberlands in the Trescott-Cutler area.

Gregor’s success says a lot about the increasing attraction of Washington County for second homes. The Whiting lots are nothing more than cutover woods – no water frontage, no stunning views – but within minutes of many lakes and waterways, the Bold Coast and the Atlantic.

North of Gregor’s subdivision is a 33-lot development by Dwelley on Gardner Lake in Marion. Approved by the Land Use Regulation Commission (LURC) in 2001, the subdivision is located on a peninsula with a shore frontage of 3.2 miles on Gardner and Second lakes. Of the 632 acres involved in the project area, 120 acres is directly affected by the development, with the rest undeveloped. Just under 340 acres is a common lot owned by the lot owners’ association. Another 137 acres was transferred to the Quoddy Land Trust. Dwelley says he has sold all but seven of the lots.

"I sold four lots to one fellow," Dwelley says. "The next thing I know a friend of his, an ironworker in New York City, has bought one of them and all he has seen is a picture," Dwelley says. "You’re seeing that a lot – buying it site unseen."

Dwelley, who is about to turn 64, has cut wood for 47 years, starting with a horse and chainsaw and working for all the major landowners at one time or another and has a close relationship with Herb Haynes, for whom he has cut work since 1974.

Dwelley got into the landowning business 10 years ago when the big companies started "cutting back" on hiring non-company loggers "and it was hard to get stumpage from small landowners," he says. Asked if he agreed with his reputation as a liquidation harvested, Dwelley says, "I don’t think so. I haven’t thought about it."

Dwelley praises Haynes for helping finance his operation and "being better to me than anyone else. If you meet Herb halfway, he’ll meet you halfway." But Dwelley admits he got in over his head financially with the Gardner Lake subdivision. "It was a lot more than I expected, a lot more expense than I expected," he said. Observers might think he stood to make a handsome profit, but he says they don’t know about the costs of roads and other costs.

He "didn’t try to stuff [lots] in there," Dwelley says of his subdivision plan. "I did what I thought was right. I donated the center to the Quoddy Land Trust, and I’m not sorry I did it." But he wouldn’t do another subdivision that was regulated by the Land Use Regulation Commission (LURC). "They’re good to work with," he says, "but there are a lot of legal hoops to jump through."

Dwelley plans to sell 1,083 acres of the 6,200 tract in Whiting and Edmunds to the wildlife refuge "if I can get the price I want." After the cutting is finished, he doesn’t know what he will do in Washington County, he said. His financial condition is so bad that "my boy, who’s 42, sold his house yesterday. The wood business is really tight. It’s survival of the fittest now," he says.

Alan Brooks’ office is in Whiting along Route 1, and tables there are thick with topographical maps – what’s protected and what’s not, what’s for sale. It’s important, he says, to educate residents about the goals of the land trust, especially given the rapid land turnovers.

The Quoddy Regional Land Trust (QRLT) was founded in 1987 by locals who were concerned about the "rapid, haphazard subdivision and development of environmentally sensitive land," according to its brochure. It has protected through easement purchases 1,325 acres; through fee purchases, 250 acres and assisted the protection of another 2,445 acres through both means. The total protected shoreland is 27.3 miles.

Route 9 (the Skyline) has been transformed from a four-hour, white-knuckle drive from Bangor and a major airport to a two-and-a-half easy ride over a wider, new highway.

The pressures now are similar to those in the 80s on the coast when Patten Corp. was the leading player, Brooks says. The Downeast coastal belt is even more vulnerable now because of improved highway access and people are generally more mobile, he says. Route 9 (the Skyline) has been transformed from a four-hour, white-knuckle drive from Bangor and a major airport to a two-and-a-half easy ride over a wider, new highway. Route 1 also has been upgraded.

"I’ve lived in the area 22 years," says Brooks. "Every road improvement makes it easier to get here." He mentions the growing popularity of the state’s spectacular 10-mile Bold Coast hiking trail and the increasing number of "trophy homes" on privately owned oceanfront. "We may no longer be remote . . . but we still have that mystique of remoteness, and it makes us attractive," Brooks says.

(This article appears is the November issue of Northern Sky News.)