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State puts $16.6 million land deal on fast track

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The Natural Resource Damage Program (NRDP) last week opted to fast-track a $16.6 million grant request from Montana Fish, Wildlife and Parks (FWP) for a land acquisition deal on the Spotted Dog complex northeast of Deer Lodge, launching the June application into a 45-day public comment period and exempting it from the NRDP's normal grant process cycle. It's an unprecedented rush for the program, and could prompt the NRDP to dip deeper into a Clark Fork River restoration fund than ever before.

The rush comes largely from a recent rash of interest in the property from the private sector. The 27,497 acres in question—currently owned by YT Timber LLC, but listed by the NRDP under the company's affiliate, RY Timber—have been up for sale for years and officials fear the land could attract offers from parties interested in future development. FWP Regional Supervisor Mack Long says the Spotted Dog could "sell out from under us in five minutes."

"There's a lot of developable land on that [complex], and if somebody ever wanted to, it could all just go to subdivisions," Long says. "Do you just sit back and wait to see what happens and run the risk of somebody coming in and picking it up? That's the urgency. All the stars lined up; the opportunity's there to make the request from the NRD program."

Montana Fish, Wildlife and Parks has applied for a $16.6 million grant from the state’s ARCO restoration fund to purchase more than 27,000 acres of prime habitat near Deer Lodge, marked in the lower left. The hashed sections are those subject to the purchase. - PHOTO COURTSEY OF  FISH WILDLIFE & PARKS
  • Photo courtsey of Fish Wildlife & Parks
  • Montana Fish, Wildlife and Parks has applied for a $16.6 million grant from the state‚Äôs ARCO restoration fund to purchase more than 27,000 acres of prime habitat near Deer Lodge, marked in the lower left. The hashed sections are those subject to the purchase.

FWP released its draft environmental assessment for the Spotted Dog on June 28, outlining proposed seasonal access for public recreation in the area. Long says the agency has eyed the acreage for the past nine years for its sizable elk herd and the sensitive fisheries that feed into the Clark Fork River. A previous grant request through the NRDP fell apart six years ago, Long says, but recent backing from FWP Director Joe Maurier and Gov. Brian Schweitzer gave the plan renewed momentum. If the purchase is successful, FWP will designate the Spotted Dog a wildlife management area.

"This is the second largest piece of intact habitat west of the Continental Divide in Montana," Long says. "It's got a huge opportunity and lots of public benefit, and we have the opportunity in working with the NRDP to put something together now."

The Spotted Dog tracts were formerly owned by the Rock Creek Cattle Company, a historic ranch with holdings throughout the Deer Lodge area, but the company sold to YT Timber several years ago to allow logging on the forested portions of the property. Rock Creek has an option to repurchase the land before Nov. 1, 2011, for $9 million, says Managing Director Greg Lane. That option will be enacted to allow the company to sell its holdings to the state.

FWP hired Hall-Widdoss and Company of Missoula to appraise the Spotted Dog property this spring. Compared to the existing $9 million option, the final appraisal and $16.6 million grant request seem strangely high. Long asserts that's because the agency is required to make an initial offer at fair market value.

"We have to buy at appraised value or near to it, so that's what we're operating on," Long says.

Lane says he's seen continuous interest from the private sector to purchase the Spotted Dog complex over the past six to eight months at price points around $625 an acre—well above the state's offer. None of those interests managed to "pull the trigger," he says, so Rock Creek began entertaining the offer from FWP.

"We've had a really good relationship with the state, so [we] wanted to give them the opportunity to acquire it and retain our main goal with the property, which is to preserve it," Lane says.

If approved, FWP's request will represent the largest single grant to date culled from a Clark Fork River restoration fund established by the state's legal settlement with the Atlantic Richfield Company (ARCO) in 1999.

"To this point, our expenditures have not exceeded the interest revenues to the program," says Carol Fox, restoration program chief for the NRDP. "But what we're looking at is...we're at the point where we could be getting into the corpus with all these requests that are occurring."

Despite the high cost, the state maintains the Spotted Dog purchase fits with the original intent of the ARCO restoration fund. Schweitzer says that while some of the money can be used to clean up the ecological mistakes of mining activity in the Upper Clark Fork River Basin, deals like the Spotted Dog purchase are intended to replace tracts within the watershed that have suffered irreversible damage.

"Every once in a while, there is an extraordinary opportunity to protect the permanent interests of the people of western Montana," Schweitzer says, "and this is one of those opportunities."

Fox says the Spotted Dog grant request has been rushed to public comment alongside an amendment to the established grant procedures. However, the application will still have to meet all other criteria in the NRDP's grant process. After the 45-day public comment period expires, the Trustee Restoration Council and the fund's advisory council will each review the request and subsequent comments before making recommendations to Schweitzer.

"When we spoke to the [NRDP] about it, we emphasized that we understood that this was something that was outside the regular process," says FWP Deputy Director Art Noonan, adding that the late application was due to sudden willingness on the part of Rock Creek to negotiate. "It had to be because of the choosing of the landowners, not us."

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