August 06, 2018
The Lyme Timber Company LP Closes $20 Million of New Markets Tax Credit Capacity from CCML to Sustainably Steward West Virginia Forestland
Financing supports timberland purchase; introduction of new safe-logging technology
August 6, 2018 – An investment fund managed by The Lyme Timber Company LP (“Lyme”), a private timberland investment manager, has received $20 million in New Markets Tax Credit (NMTC) financing from CEI Capital Management LLC (“CCML”) to help it acquire 118,300 acres of timberlands in the Wyoming, McDowell, Mingo and Logan Counties of West Virginia.
This addition to Lyme’s portfolio is in keeping with the company’s approach to partnering with rural communities and landowners to sustainably manage working forestland with living wages paid to employees, and strategies including recreational leasing, the sale of carbon-offset credits, and restrictions on future commercial or residential development through the sale of working forest conservation easements.
Lyme’s West Virginia forestland purchase qualified for the NMTC program, which was designed by Congress to stimulate private investment and economic growth in low income communities that lack access to capital needed to grow businesses, create jobs, and sustain healthy local economies. The tracts are located in a highly economically distressed area of coal country that cites poverty rates as high as 37.9 percent, and unemployment as high as 14.8 percent.
Importantly, Lyme will work to introduce new worker safety and job quality standards to the local logging industry. Due to its steep and mountainous terrain, West Virginia woodlands are particularly difficult to safely harvest, with loggers using chainsaws on steep slopes, making them susceptible to injury when trees fall or are moved. To address these safety issues, Lyme will focus on bringing “winch-assist” harvesting technology to the region. The technology allows logging crews to operate harvesting machines on slopes that were previously logged by hand. Harvesting machines are tethered by cables to an anchor machine at the top of the slope supporting the harvesting machine to remain upright on the hill and protects workers by moving them inside a safety cab. Harvesting with machines also increases productivity and can create higher paying jobs with better benefits.
Though used in Canada, New Zealand, and the Pacific Northwest, tethered harvesting systems has yet to be used in the eastern US. The flexible financing from CCML via the New Markets Tax Credit (NMTC) program helps make the cost of testing its implementation possible.
With the new ownership and the skills needed to operate this new technology, this project will preserve two dozen current contracting jobs, create five new direct jobs and 18.5 new contractor jobs. All direct Lyme employees will receive pay substantially above the living wage for the area and include health, life and disability insurance and an employer-matched 401(k) retirement plan.
“This transaction squares with our mission to provide good jobs, grow environmentally sustainable enterprises and seed shared prosperity in rural places,” said CEI Capital Management CEO Charlie Spies. “We are glad to partner with Lyme to help diversify West Virginia’s coal economy with a next generation model of sustainable forestry and develop a skilled workforce.”
Also participating in the transaction, Capital One, N.A. provided the NMTC equity, while a Lyme affiliate provided the debt financing for the transaction.
About CEI Capital Management
CEI Capital Management creates and preserves jobs and improves quality of life in rural, low income communities by providing access to project capital through New Markets Tax Credits. Over 12 years CEI Capital Management has placed nearly $1 billion in 95 different projects across the U.S. In addition to fiscal soundness, CEI Capital Management evaluates each project according to its benefit to the local community, economic gain and positive impact on the environment. It is a wholly owned subsidiary of CEI, the Maine-based nonprofit community development financial institution which was among the founders of this important federal economic development program. For more information, visit us online at www.ceicapitalmgmt.com.
About The Lyme Timber Company LP
The Lyme Timber Company LP is a private timberland investment manager that focuses on the acquisition and sustainable management of lands with unique conservation values. Since its founding in 1976, the Company has follow a disciplined and value-oriented approach to investing in forestland and rural real estate in the US and Canada. www.lymetimber.com