Here’s an idea: Let’s give a foreign-owned corporation $44 million in cash. The money will come from the taxpayers of Minnesota, courtesy of the Minnesota Legacy Amendment.
In exchange for this pile of dough, the corporation will agree to place the forest land it owns in Minnesota into a conservation category – meaning they will not exploit the forest land and eco-system to an unnecessary degree.
But even though we give this foreign-owned conglomerate $44 million of our money to protect Minnesota forests, they will still be allowed to cut the timber on the land.
To be clear: $44 million for land conservation but they still get to cut down the trees.
This is the deal the state of Minnesota made about three years ago with UPM Blandin, which owns tens of thousands of acres in northern Minnesota. Blandin is owned by a company based in Helsinki, Finland, the multi-national UPM-Kymmene Corporation.
But what really turned heads was this: Shortly after pocketing $44 million in state tax-payers cash, UPM Blandin promptly filed documents with the Minnesota Tax Court to demand considerable tax breaks. The company petitioning to have their local county property tax rates slashed in Itaska, Aitkin and Koochiching counties.
Sound like a good deal for all concerned? This deal originally had heavy popular support from local conservation groups, and also the Lessard-Sams Outdoor Heritage Council. Some among these groups expressed surprise at UPM move to score huge tax cuts, but most still maintain it was a good deal in the long term.
Even so, local county officials are deeply concerned what might happen to their bottom line and tax base if UPM Blandin prevails in Minnesota Tax Court. I spent the morning calling around to local county officials – but no one is willing to say much at this point – in fact, next to nothing. They all repeat the same mantra: “It’s in the courts so we can’t comment on it."
Itaska County Assessor Brian Connor did tell me, however, that to date nothing has happened with the case. He also added that it his understanding that UPM’s legal challenge of its property tax status “has nothing to do with the Legacy conservation easements.”
In case you’re wondering, here is more information about the company that got $44 million in Minnesota money:
• UPM-Kymmene is a multinational corporation based in Helsinki, Finland. It's in the pulp and paper business.
• The President and CEO is Jussi Pesonen. His total annual compensation is about $5.1 million per year.
• UPM-Kymmene has total assets worth 13.8 billion Euros = about $16 billion.
• Net Revenue: 561 million Euros = $697 million U.S. dollars.
• Employs 24,000 people in 16 countries.
• One of the largest private land owners in Minnesota.
By many accounts, UPM would appear to have a positive record in terms of its environmental policies. For example, the company was recently praised by Greenpeace for ceasing operation in Indonesia, where rainforests are being destroyed for wood products, including paper.
The company also claims to have, over the previous 20 years, reduced its carbon emission by 90%s, has learned to use 35% less water, has 90% less production waste and achieved the “EU Ecolabel” in 2007.
But many questions remain: Was giving UPM $44 million a good idea? Shouldn't the company be a good steward of the environment without being paid $44 million? What kind of conservation arrangement allows the cutting of timber on the land? And what will happen to property tax rates in three Minnesota counties if UPM prevails in court?
Stay tuned.
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