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Hofmann Facts

Introduction

The Board of Trustees for the Endowment Fund of NC State University in conjunction with the Natural Resources Foundation announced March 17, 2015, a long-term strategy for Hofmann Forest. The new strategy includes retaining ownership of the majority of the property and ensuring conservation over as much as 70,000 acres of the land.

Plan Details

The plan includes opportunities to maximize benefits and, over time, to realize greater financial returns from use of the land, while protecting the majority of the 79,000-acre forest from intensive development. It also preserves the Hofmann Forest name, maintains access for students and faculty and maintains a sustainable working forest, the same three goals that have been paramount in any transaction from the beginning.

Opportunities that will be pursued include the following:

  • Negotiating the sale of easements and leases to support the training needs of the U.S. Navy/Marine Corps.
  • Potentially selling a multidecade timber deed on the approximately 56,000 acres of existing pine plantation with requirements for certified sustainable practices.
  • Negotiating conservation easements for the approximately 18,000-acre Big Open Pocosin.
  • Potentially selling the current 1,600-acre farm for continued agricultural use.
  • Potentially selling the two mitigation banks, totaling about 450 acres, for continued mitigation use.
  • Developing a long-term strategy for the approximately 4,000 acres south of state Highway 17 near Jacksonville (known as Block 10) that considers its highest and best use.
  • Exploring additional conservation prospects.

This plan ensures the Endowment Fund keeps the majority of the forest, trading off short-term financial return for control of the property and greater return over many years to benefit the College of Natural Resources, its students and faculty.

Although the timeline has shifted, the Fund could see more than $125 million in return from this approach in the next several years and much more over the next several decades. Those additional resources will go to strengthen research and academic offerings within the College of Natural Resources by providing additional scholarships, funding new experiential education opportunities for students, facilitating interdisciplinary research and supporting new professorships.

To assist with the strategy, the Endowment Fund Board is seeking a conservation entity/financial advisor that will act as an agent to manage the process and facilitate discussions with interested parties. Proposals are being accepted until April 15.

Reason for New Approach

For many years Hofmann Forest has been providing minimal benefits to the students and faculty of NC State. Faculty and students have long been using college forests that are closer to campus for education and research, and the income generated from timber production at Hofmann has been decreasing.

The private NC State Natural Resources Foundation exists to benefit the college. In that role, the foundation board has an obligation to students, faculty, staff and alumni to ensure that the college is best positioned to provide a robust academic environment attractive to the best faculty and students.

Maximizing financial return from use of Hofmann Forest, while protecting the majority of the 79,000-acre forest, will enable NC State to make significant investments in the College of Natural Resources. Those additional resources will go to strengthen research and academic offerings within the College of Natural Resources in the following ways:

  • Attracting the best and brightest undergraduate and graduate students by providing additional scholarships
  • Funding new experiential education opportunities for students
  • Supporting new professorships in emerging areas important to our state and the nation
  • Facilitating interdisciplinary research in the areas of health and well-being, sustainability science and policy, energy, water and the environment

State support of higher education has decreased dramatically over the last few years, and there are no indications that this financial situation will improve in the near future. Today universities are challenged more than ever before to make the best use of all resources to ensure student success.

History

Hofmann Forest was purchased (not donated) in 1934 with private funds by the North Carolina Forestry Foundation Inc. The foundation, today known as the NC State Natural Resources Foundation, gifted the land to the NC State Endowment Fund in 1977 specifically for the sole benefit of the College of Natural Resources.

The NC State Endowment Fund, an entity that is separate from the university but exists to provide financial support to it, holds title to the property. The NC State Natural Resources Foundation, a private, nonprofit organization, serves as the manager of the forest and its operations, and the foundation retains a reversionary interest in the property.

Prior to the Forestry Foundation's purchase of Hofmann Forest in 1934, the property was primarily swampland. Following the purchase, the foundation gradually put the majority of the property into tree production. Currently, about 56,000 of the forest's 79,000 acres function as a working forest for timber and wood pulp production. This portion of the forest is a pine plantation where trees are planted and harvested for sale, and the land is then replanted to grow more trees. The pine plantation includes about 1,200 miles of ditches and more than 400 miles of road to support tree farming and timber operations. Due to these extensive forestry operations, the majority of the property is not open to the public.

Beyond tree production, there are other activities on the property. A farming operation was initiated in 1970, and about 1,600 acres are in agricultural production. Hunting activity has been managed on the property for several decades. In an effort to explore other ways to generate revenue from the property, in 2009, the NC State Natural Resources Foundation co-commissioned a study to examine commercial development of a 4,000-acre section of the property southeast of Highway 17.

Over the past 80 years Hofmann Forest has transitioned from being a teaching and research forest to primarily being a financial resource managed for the benefit of NC State's College of Natural Resources. The forest was once a place where many students learned forestry skills and faculty conducted research, but today only a few faculty members and graduate students use the forest for research and education.

Now more than 98 percent of the college's sponsored forestry research is conducted at sites outside of Hofmann Forest, and the overwhelming majority of College of Natural Resources students never see Hofmann Forest. Instead, students get hands-on learning opportunities at the college's Schenck and Hill Forests much closer to campus. The college's student summer camps have been conducted at Hill Forest near Durham since the late 1950s.

Ownership of the Forest

Hofmann Forest is currently owned by the NC State Endowment Fund, a separate entity existing solely to provide financial support for NC State University.

One role of the NC State Endowment Fund is to receive and manage assets in ways that best serve the university, which can include holding, developing, transferring, renting or selling property. In 1977, the NC State Natural Resources Foundation gifted Hofmann Forest to the NC State Endowment Fund for the sole benefit of the College of Natural Resources. Failure to comply with that gift restriction would cause ownership of the property to revert to the foundation.

Status of the EPA Review

The U.S. Environmental Protection Agency is conducting an administrative review of forest management operations on the property and has not issued a final conclusion. The Natural Resources Foundation and the Endowment Fund are fully cooperating with the review.

Status of the Lawsuit

The North Carolina Supreme Court dismissed the lawsuit in December 2014.

Forestry and Natural Resources Teaching and Research in CNR

The College of Natural Resources is unique in having multiple teaching and research forests. Students in the college use Schenck Forest in Raleigh on an almost daily basis for hands-on learning. The 2,400-acre Hill Forest near Durham is home to Camp Slocum, where students majoring in forest management and in fish, wildlife and conservation biology spend their summers learning in a residential field camp. These forests are central to the teaching mission of the college, and they are much more accessible for both teaching and research than Hofmann Forest. In fact, the vast majority of CNR students never see Hofmann Forest.

Over the years, the primary function of Hofmann Forest has evolved, such that it now serves mainly to provide a revenue stream to fund research and academic enhancements in the college. Unfortunately, those revenue streams have declined. Maximizing financial return from use of the land, while protecting the majority of the 79,000-acre forest, will generate unprecedented opportunities for CNR.

Priorities for the College of Natural Resources

CNR's mission is to provide solutions to the challenges of natural resources management, social and ecological sustainability, and human health and well-being by educating new leaders and professionals, generating new knowledge and technology, leveraging transdisciplinary insights and engaging with communities in North Carolina, the nation and the world.

CNR's vision is to be a world leader among universities that are creating a healthy and more sustainable future for all people. By 2020, the college will become the go-to place for solutions to natural resource challenges in both the built and natural environments.

CNR programmatic goals:

  • Enhance student success through educational innovation, both within CNR and through collaborations across the NC State campus.
  • Increase interdisciplinary research around themes that engage CNR faculty broadly, leverage cross-college collaborations and contribute to ecological and socioeconomic sustainability.
  • Expand and foster CNR external partnerships by leveraging the impact of research, academic and engagement initiatives.
  • Strengthen and enhance infrastructural support across the College of Natural Resources.
  • Reorganize CNR development to better support CNR's strategic plan.

The College of Natural Resources has identified three strategic thematic areas for development:

  • Sustainability solutions — CNR will develop practical approaches for quantifying, visualizing and analyzing alternative scenarios for a more sustainable future for businesses, communities and ecosystems across North Carolina and the world. 
  • Land and water — CNR will focus new energy on the challenges of water security by working across political, societal and economic boundaries to develop holistic solutions to the challenges of freshwater supply and management. 
  • Urban ecosystems and the intersection of built and natural environments — CNR will address the challenges of urban communities and the wildland-urban interface by providing practical solutions that improve urban ecosystem services and that support resilient, just and healthy community development and environmental stewardship.