This story has been updated
KEIZER -- The Elliott State Forest's fate must wait until 2017.
After a more than four-hour meeting and hearing from dozens of residents Tuesday, Gov. Kate Brown directed the Department of State Lands to "work toward developing" an offer with Lone Rock Timber Resources and the Cow Creek Band of Umpqua Tribe of Indians, which together submitted the lone bid for the 82,500-acre forest.
Yet Brown simultaneously asked staff to explore a second option to the alliance's $220.8 million offer: Issuing as much as $100 million in general obligation bonds to free a portion of the forest from its constitutional requirement to produce timber revenue for the Common School Fund. Brown said that could allow the land to remain in public hands or come under tribal management.
"We left $237 million of bonding on the table," Brown said in an interview, referencing her state budget recommendations. "There's clearly the bonding capacity available under my proposal to do $100 million."
But Tuesday's meeting of the State Land Board brought no closure to the long-standing controversy over what to do with the forest, and ensured the debate will stretch into the new year and, in all likelihood, the upcoming legislative session.
The meeting attracted a standing-room-only crowd in Keizer, and most of the roughly 80 people who signed up to speak opposed the proposed sale. Dozens arrived at the Keizer Civic Center more than an hour before the meeting, carrying signs and banners.
During public testimony, a group of middle and high school students from the Portland area spoke together. A father from rural Lane County brought his two young children to argue against the proposed sale. Representatives of conservation groups from across the state also testified against the deal.
The Elliott forest spans Coos and Douglas counties and is home to such threatened species as coastal coho salmon, marbled murrelet and northern spotted owl. Long a workhorse for the Common School Fund, now valued at $1.5 billion, the forest has in recent years become a money loser for the state. Logging plunged in 2012 amid lawsuits from environmental groups.
Josh Laughlin, executive director of Eugene-based Cascadia Wildlands condemned the proposed sale as a threat to public access. "The steel gates will be slammed shut, the forest will be clear-cut and Oregonians will be left questioning what went wrong," he said.
Bob Sallinger, conservation director at the Audubon Society of Portland, asked Brown to step up. "There's simply no way around the fact that this is privatization."
But some argued it's long past time the state respect its financial obligation to the Common School Fund.
A representative from the Oregon Education Association, which represents nearly 50,000 public education officials, urged the state to sell the land.
The Common School Fund distributed about $55 million in 2015 for schools, compared with the overall $7.3 billion K-12 budget for the current biennium.
Some conservation groups have pushed for the state to sell or free itself of the constitutional requirement to make money off natural resources like the Elliott.
Jim Green, deputy executive director of the Oregon School Boards Association, was more circumspect. "We're asking that you either approve this sale or divest," he said.
Before the testimony, Lone Rock and tribal officials advocated for their unique collaboration. Michael Rondeau, president of the Cow Creek group, said the proposed deal is "aligned with our long-term land acquisition and management plans." The tribe is landless, he said, and has suffered for more than a 150 years.
Toby Luther, CEO of Roseburg-based Lone Rock, stressed to public officials that the land's management would be a team effort - not just led by the timber company. "This is actually a proposal of proposers," he said.
Jim Paul, director of the Department of State Lands, said before public testimony that the Lone Rock bid did meet the state's general guidelines outlined more than a year ago. The plan calls for preserving public access on at least 41,000 acres, he said, and would set aside some 20,625-acres of older growth forest as protected from harvest.
But Paul acknowledged that the bid wasn't perfect. "The plan does include some gaps, uncertainties and ambiguities," he said. For example, the state needs reassurances about public access, he said.
Brown will be the only returning member on the State Land Board in 2017. Secretary of State Jeanne Atkins is retiring, and Ted Wheeler leaves at the end of this month to become mayor of Portland. They will be replaced by Dennis Richardson and Tobias Read respectively.
After dozens of speakers alternatively challenged the State Land Board to "show leadership" and find a way to decouple the land from the Common School Fund, Wheeler gave a roughly 10-minute speech expressing his thoughts.
While he, as did Atkins and Brown, thanked the tribes and Lone Rock for their involvement, Wheeler said he didn't think the current plan was the right one. "We're on the right road," he said, "But we're not there yet."
Wheeler then turned to Brown. "We have heard a very clear consensus, governor, that we should separate the Elliott State Forest from state funding," he said, referencing the $1.5 billion Common School Fund.
Wheeler said he wants the state to "step forward with public funds."
"Governor Brown, you are the right person to lead this effort," he said, while adding that the audience needs to support Brown in 2017 while pushing the Legislature.
Brown said she is open to other partners emerging to work with Lone Rock and the tribes.
But the governor, who was elected in November, had thoughts for those who have asked for other options: Come back in 2017 with more answers. "I expect that you will work quickly and collaboratively and thoughtfully," she said.
The land board is expected to meet again in February.
Update: A previous version of this story misstated the name of the Oregon School Boards Assocation.
--Andrew Theen
atheen@oregonian.com
503-294-4026
@andrewtheen