THE OPENER: DNR APPROVES GRAYMONT LAND TRANSACTION IN U.P.
It’s no secret that we have seen in Michigan and around the country an increased desire among local units of government to grow their taxable base to raise revenue. In doing so, some have claimed that public lands are a barrier to economic development; but on the other hand, there are also local units of government that have truly valued and embraced the public land in their jurisdiction for the economic benefits derived from the tourism, ecological values, and enhanced outdoor recreation and quality of life for its residents coupled with a low cost of community services the local unit of government must provide for that undeveloped area.
There has been an ongoing battle for public lands most recently in the initiation and approval of a major land transaction application by Graymont, a Canadian-based supplier of limestone and lime-based products that already operates a quarry and processing facility in Gulliver (MI). The company has been in discussions over their desire for access and/or ownership of more than 11,000 acres of public-owned State Forest land near Rexton (MI) in the eastern Upper Peninsula.
To be clear, MUCC does not categorically oppose the strategic divestment of public lands nor do we oppose the development of oil, gas, and minerals on public lands. We do believe, however, that the development of these resources and the use of the lands by which they are accessed be resolved in a manner that is protective of the public’s present and future interests as a first concern. The Graymont application, as it was originally proposed, did not meet this crucial standard and for that reason MUCC (April 2014), the Michigan Conservation Coalition (Feb. 2015), and even the DNR Deputy Directors and Chiefs (Jan. 2015) of the Wildlife, Forestry Resources, Fisheries, and Parks and Recreation Divisions opposed the transaction as it was originally presented.
Click map to download the full DNR memo on the Graymont Land Transaction Application
It was a difficult challenge to resolve these issues, as this was a highly significant and complex transaction request that was amended many times over the course of the discussion. The DNR Director, chiefs, and many highly committed DNR staff as well as members of the public worked on analyzing each component thoroughly to outline and clarify their concerns and Graymont, to its credit, mostly listened. This transaction is much improved through the work of people committed to ensuring the public was compensated for the loss of land, access and minerals. A special thanks to the leadership and expertise within the Michigan Resource Stewards for helping us navigate this complex process.
As a result of input from resource professionals and the public, the following changes were made from the initial application to the final approved transaction:
- Sale of “Surplus” Land: What was originally a request to purchase outright more than 10,000 acres, resulted in a sale of 1,784 acres (Tracts A and E), an exchange of 830 acres (Tracts B and C), and a purchase of 7,026 acres of underground mineral rights (Tract D) and an option to purchase a 55 acre easement across 535 acres of land.
- Retention of Public Access: The 7,000 acres over the underground mine will remain in state ownership and open for public access for hunting, fishing and trapping and other outdoor recreation outside of areas leased for exclusive use for mining . On the remaining 2,600 acres of Graymont-owned land, the public will retain access outside of active mining operations and there will be trail easement assurances provided for existing trails in Tract E. 830 acres of new public land will be acquired in exchange as well.
- Environmental Impacts and Reclamation: While the state’s mining laws do not regulate non-metallic mining or reclamation, mining plans will include hydrologic, archeological, and
site reclamation information. Relevant environmental permits will still need to be applied for in advance of development or mining activity, though there has been language added to ensure impacts to sensitive wetlands found in Tract E are minimized.
Royalty rate and minimum annual royalty payment: Graymont has increased the royalty ratefrom 18.75 cents/ton to a minimum of 30 cents/ton for limestone/dolomite removed and this will increase according to the Producer Price Index. A minimum annual royalty payment will begin in 2020. Now included in the purchase price of each parcel is $10/acre for other minerals and timber consideration in the purchase of Tracts A and E.
Local Economic Benefits: Graymont has committed to creating a regional economic development fund that will provide $100,000 a year for at least 5 years starting in 2015.
The total value of land rights involved in this transaction – including land value, timber consideration, and non-limestone and dolomite mineral rights – is more than $4.5 million. Revenue received from the land sale will be deposited into the Land Exchange Facilitation Fund and used to purchase other public lands. Royalty payments will go into the State Parks Endowment Fund for operations and maintenance at Michigan state parks and timber consideration fees will be deposited into the Forest Development Fund.
So that’s the story of how the headlines have changed with regards to Graymont. But we know this is not one and done for the U.P. and probably elsewhere. MUCC still has concerns this transaction could be precedent setting and send a bevy of developers and speculators, and even potato farmers, knocking down the doors at the DNR.
MUCC still takes issue with declaring more than 1,700 acres of public land “surplus” that clearly has value to the public for wildlife and fisheries habitat, recreation, ecological services, and timber. We have concerns that decades from now the future staff of Graymont, the DNR and MUCC and every other entity involved will forget to live up to or enforce the deals that were made should things go awry. And we know that the money in the Land Exchange Facilitation Fund already has a target on it so we must work overtime to ensure that the funds from the land sale actually go into replacing the public land that was sold. So how do we make sure? This process has highlighted the need to codify some of these agreements into state statute:
- The need to standardize and improve the transparency on the land transaction process, with more advanced public notification of applications for major land exchanges or sales and increased time for public comment before a decision is made;
- Clarifying criteria for declaring land “surplus”;
- Ensuring that all values of the public land are taken into consideration in the sale pricing, or in any agreement for timber consideration or royalties in perpetuity, no matter who owns the land;
- Reviewing existing land transaction application fee revenue and the effort that goes into application and field reviews;
- Adding major non-metallic mining operations into mining law requirements for having a mining and reclamation plan; and
- Adopting the DNR Managed Public Land Strategy and lifting the artificial cap on the ownership of public lands.
MUCC will be asking each and every one of you to help us keep “public lands in public hands” and ensure we are broadcasting and celebrating the vast benefits we derive from them. Stay tuned for more on this!
Leave a Comment