Recreation, however, has its own problems. Environmentalists charge that developed recreation can have serious environmental effects. Workers worry that recreation jobs pay less than commodity jobs.
This preliminary feasibility study focuses on a community that faces a declining commodity base. The Thoreau Institute has selected Wallowa County, in northeast Oregon, as the site for the study, but the results are applicable to many other areas.
Wallowa County has been losing population for over sixty years. Further losses are likely as much of the county's economy is based on a national forest timber and grazing program that is likely to decline in the next few years.
Although it is potentially a recreation paradise, the county is relatively undeveloped for tourists. Yet there are signs of a growing interest: Housing prices are increasing as outsiders move in, and a major new recreation development has been proposed. Growth in the recreation industry appears inevitable, but unplanned development could ruin the rural character of the county without really benefiting local residents.
Can a community with a high recreation potential develop that potential without destroying the very things that make it attractive to its residents? This paper suggests that the answer is yes, but only if new institutions are developed that give people an incentive to cooperate rather than fight over their alternative visions and goals.
This study proposes a set of institutions that can take advantage of recreation opportunities while meeting the following goals:
A full feasibility study can determine whether these proposals will work. It would also produce a business plan that can be adapted to many Western communities wishing to promote a smooth transition from commodities to amenities.
Communities in western Oregon and western Washington have received shock after shock in the past decade as the national forests reduced timber sales from 3 billion board feet per year to 2 billion feet and then as little as 1 billion feet. Towns in other parts of the West worry that what started in the western Cascades will spread to the Sierras, Blues, and Rocky Mountains.
Some communities have turned to recreation for their dominant economic base. Yet large-scale recreation has often completely transformed the communities that rely on it. People who grew up in towns like Ketchum, Idaho, Bozeman, Montana, and Aspen, Colorado find that they cannot afford to live in their hometowns because wealthy recreationists have bid up the price of land and housing. Most people who work in Aspen and Sun Valley must commute from many miles away.
Once an area is discovered by outsiders, it is often beyond the power of local residents to prevent major sprawl and land development. Individual landowners are pressured to develop their land before the land boom dies. Large numbers of transient visitors tax the road, water, and sewage treatments systems far beyond the ability of full-time residents to pay. A few people get rich; most pay higher taxes and accept low-paying jobs or move out.
Can a community with a high recreation potential benefit from that potential without destroying the very things that make the community attractive to its residents? This paper suggests that the answer is yes, but only if new institutions are developed that give people an incentive to cooperate rather than fight over their alternative goals for their towns.
Chapter one of this paper describes Wallowa County, Oregon, which is used as a prototype for any of a hundred Western communities facing this dilemma. Chapter two shows why recreation development under current institutions will lead to serious environmental and social problems. After briefly considering alternatives in chapter three, chapters four and five propose five new ideas which together can help Wallowa County and other counties like it gain income from urban visitors while they protect their rural identity.
Chapter six presents preliminary calculations indicating that these ideas can be both profitable and beneficial to Wallowa County. However, this paper is only a preliminary study. A full feasibility study would determine whether these proposals will work and prepare a business plan for this program. Chapter seven identifies questions that such a feasibility study must answer.
This is exactly the problem that faces Wallowa County. Located in a remote corner of Oregon, Wallowa County contains extraordinary scenery and enormous recreation potential. Yet residents are ambivalent about a recreation industry, on one hand welcoming a source of income, while on the other resenting changes in lifestyle imposed by newcomers and tourists.
Yet it is only a matter of time before the area is discovered and hordes of wealthy Portlanders, Californians, and others move in on a temporary or permanent basis. This could lead to ugly urban sprawl, pollution, congestion, and increases in the cost of living. Some county residents are already seeking ways to prevent this from happening.
Situated in the northeastern corner of Oregon (figure one), the area was once inhabited by the Nez Perce Indian tribe. Their famous leader, Chief Joseph, was born in Joseph Canyon in what is now the northern part of the county. Wagon trains of European settlers arrived in the area in the 1860s, and many current residents are descended from those settlers.
The pioneers relied mainly on farming for their livelihoods, and agriculture was the county's main industry in 1920 when the population reached 30,000 people. But the green revolution elsewhere reduced the demand for Wallowa County produce, and the population has declined steadily ever since. Today, the county has fewer than 7,000 people. By comparison, Delaware, which is just two-thirds as big, has a hundred times as many people.
Wallowa Valley, at the center of the county, is a remote area of spectacular natural beauty, resting between 2,000 and 4,000 feet in elevation. Residents, inspired by the surrounding 10,000-foot granite peaks, high river valleys, and mountain lakes, have dubbed the area Little Switzerland.
This beauty makes Wallowa County a potential recreation paradise. It is surrounded by wilderness on three sides, including the 214,000-acre Hells Canyon Wilderness, the 358,000-acre Eagle Cap Wilderness, and the 177,000-acre Wenaha-Tucannon Wilderness. The area supports year-round recreation, including skiing in the winter, white water river running in the spring, hiking and camping in the summer, and hunting in the fall.
Sixty percent of the county is publicly owned, mostly in the Wallowa National Forest. The Forest Service has had an active timber program, but sales are declining due to forest health problems and conflicts with other resources. While much of the outdoor recreation takes place on national forest lands, the Wallowa Forest's recreation budget is small compared with its timber budget.
In 1992 the Forest Service itself admitted that the Wallowa-Whitman National Forest lost money from its logging activities.1 Most of these losses probably took place on the Wallowa, whose timber is generally less valuable than the Whitman's. In response, the Forest Service proposed to phase out timber sales from the forest.
Many people who visit Wallowa County fall in love with its spectacular beauty and rural character. Not surprisingly, the county is being discovered by wealthy Portlanders, Californians, and others seeking to relocate, purchase second homes, or retire. Housing prices are visibly rising and some landowners have proposed new luxury housing developments. This is leading to controversy and polarization as some residents support development and others want to freeze the county as it is today.
One of the first signs of this development is a proposal to develop Elk Trout Estates north of Wallowa Lake, and another proposed development east of the lake. The developer of Elk Trout Estates, a local artist employed by Valley Bronze of Joseph, plans to subdivide the area into 42 one-half acre lots that will sell for roughly $25,000 to $50,000. Luxury homes will be built starting at $250,000. Many residents in the community oppose this development, and have appealed it to the Land Use Board of Appeals (LUBA) of the Land Conservation and Development Commission (LCDC).2
Complicating matters is a fierce belief in freedom and independence held by many long-time residents. They may wish to see the county remain undisturbed by hordes of outsiders, but they don't want to tell their neighbors what to do with their land.
County leaders have traditionally supported commodity uses of the area as an alternative to the changes caused by recreation development. In 1993 the Wallowa County Court amended its land use ordinance to include a section on Custom, culture and community stability.3 This amendment describes the importance of traditional uses of the land such as timber harvesting and ranching to the character of Wallowa County, and the wishes of the County Court and residents to continue these traditions.
But this strategy is failing as commodity uses continue their 70-year decline. Today, agricultural use accounts for only 370 jobs in Wallowa County -- half ranching and half farming -- while the timber industry employs just 380.4
The appearance of the Elk Trout proposal is the next step towards the transition of this county into what has been dubbed by New York Times writer Timothy Egan as a golden ghetto. Egan is referring to the transformation of Western rural communities such as Jackson Hole, Wyoming and Sun Valley, Idaho into meccas for the wealthy elite. Development of agricultural lands into sites for luxury homes and boutique ranches raises the communities' property values. This in turn, raises the property taxes that have to be paid by area residents.
Landowners will soon feel pressured to develop their lands by property taxes that are based on the highest and best use rather than the actual use of the property. Even landowners whose land is in special farm use zones will have to pay higher taxes to support the infrastructure needed by the new developments. People who are unable to pay these taxes will relocate to neighboring towns, and commute to work in Wallowa County.
Increases in population, property values, and property taxes in a rural community like Wallowa County would produce secondary effects on other aspects of the economy. Infrastructure costs such as sewers, roads, and power would increase. Health care costs and other social services would also increase. This could increase the burden on the original residents of the community.
All these changes would replace the rural character and traditional values of Wallowa County with a congested, recreation-based economy that brings in large numbers of outsiders whose values are completely different. So far, county residents have not found a successful formula for preventing these changes. This is because they have not yet diagnosed the root problem: institutions that fail to promote cooperation among residents and landowners.
At the root of most environmental problems is a commons. A commons is a resource whose costs are shared by many but whose benefits can be captured by just a few -- usually those who are first to use it or who try to take the most.
The classic example of a commons is a community-owned grassland. The grassland might be able to support two cows per farmer. But each farmer is tempted to let more cows use the grassland because they will benefit from the extra cattle while the costs are shared with all the other farmers. Everyone has the incentive to exploit the good until it is destroyed or no longer useful. As the good is destroyed, the losses are shared among the common owners, but only the exploiters get the benefits.
Any commons presents individuals with a dilemma: Should I overuse this resource while I have a chance, or should I place the public good above my own gain even though I know that others are likely to overuse the resource?
Everyone likes to believe that we would do the right thing when faced with a commons. Yet most people pollute the air -- a commons -- by driving or riding in cars. Most people pollute water -- another commons -- by consuming paper and other products whose manufacture caused water pollution. If people think about these problems at all, they reason that the benefits they gain from driving or using paper are greater than the environmental costs. The problems of a commons cannot be solved by voluntary means because everyone has a powerful incentive to do things that pollute or otherwise harm the commons.
The scenic beauty of regions like the Wallowa Valley is a commons. No one owns this beauty and everyone can enjoy it. But some can especially profit from it by subdividing or otherwise developing their land. Each development reduces the scenic beauty, but the cost is shared by everyone, not just the developer. Eventually the beauty of an area may be so transmogrified by development that it is unrecognizable to its original inhabitants. Western towns like Aspen, Colorado, and Jackson, Wyoming, stand as reminders of scenery as a commons.
The existence of the commons problem explains the incentive people have to exploit Wallowa Valley and develop its beauty. The presence of the Elk Trout developers is the most recent step in this direction. A development of this sort will be followed by other developments. Each development reduces the scenic beauty of its neighbors.
Eventually, the market for recreation resorts and second homes in Wallowa County will be saturated, partly because many people won't want to move to a highly congested area. Thus, only the first to develop their land will make money; others will simply see their property taxes rise to pay for the services demanded by new residents. Everyone pays the cost -- both through taxes and through reduced scenic beauty -- but only the first to develop get the benefits.
Problems like scenic beauty are illustrated by a game called the prisoners' dilemma. In the classic example, two prisoners are caught in the act of a crime. The police tell each that, if one confesses, the other will get a five-year sentence, while the confessor gets only a 90-day sentence. But if both confess, they each get three-year sentences, while if both remain silent, they get a one-year sentence. They don't get to consult each other before deciding.
If one confesses, the other will save two years on their sentence by confessing. If the first keeps quiet, the other will save nine months by confessing. No matter what one does, the other does better by confessing. The dilemma is that when both confess they both get three-year sentences, while if both kept quiet they each would receive only one-year sentences. For the common good -- the minimum amount of time both will serve -- both should keep quiet. Yet one or both are likely to confess to minimize their personal sentence, so they end up serving more time than if both had kept quiet.
The scenic beauty of Wallowa County presents residents with just such a dilemma, a temptation to act in such a way that is ultimately not in their best interests. Everyone may agree that developments would ruin the scenic beauty and rural character of the county. But individual landowners must also realize that, if they alone develop their land, they could realize huge profits. Of course, if everyone developed their land, the rural and scenic qualities they cherish would disappear.
This dilemma is compounded by the fact that county residents also have a strong belief in individual freedom. They may not want a lot of development, but they don't believe they have a right to tell others what to do with their land. With this combination of circumstances, large scale developments that will detract from the scenic beauty and rural character of the land are inevitable.
The key to the prisoners' dilemma is that neither prisoner is allowed to know what the other decides. The dilemma would be solved by letting the prisoners communicate and make their decision openly. Landowners can do this, and often do so when there are only two or a handful of people involved.
The problem with communities like Wallowa County is that there are too many landowners to allow easy cooperation. With so many people, the temptations to develop far exceed the urge to cooperate -- especially since each development has only a small apparent effect on scenic beauty.
Existing institutions of land ownership fail to overcome this dilemma. Residents of Wallowa County and other Western communities will have to solve this problem or face the pain of large-scale defection.
One solution to the scenic beauty dilemma is a zoning system such as that imposed by Oregon land use laws. Because these run counter to Wallowa County's ethic of individual freedom, their success is questionable. For example, the developers of the Elk Trout Estates convinced the county to change zoning laws to allow their development. Although this has been appealed, advocates of scenic beauty cannot expect to always win out over developers.
If zoning could prevent all future development, it could actually make the problem worse. Since only a few are allowed to develop their property, only those few get rich. Since the outside demand for pieces of paradise remains the same, land and housing prices rise even higher than when no restrictions are placed on development. As a result, local residents are quickly priced out of the market.
The Hells Canyon Preservation Council advocates the creation of a national park in Wallowa County. Few local residents actually support this idea, and voted it down in a recent election.
The creation of a national park will reduce commodity usage and promote tourism. However, it will not solve any of the problems caused by increased tourism. In fact, a national park may make the problems worse by bringing more people into the county without channeling the pressures for development.
Park advocates maintain that changing the agency that cares for federal land in Wallowa County from the Forest Service to the National Park Service will provide the means for a smooth transition from a commodity-based economy to an amenities-based economy. Certainly, the Forest Service does not have the institutional flexibility and incentives to solve the problems facing Wallowa County. However, neither does the Park Service. Changing agencies will not solve the problems. It will merely change them.
A June workshop held near Joseph seeks a new relationship between Wallowa County residents. Twenty local residents spent three days with Inclusivity, Inc., of Portland. The meeting encouraged dialogue and trust among historically polarized groups.
Ranchers, artists, wilderness guides, and other community residents sat down together to discuss common problems and shared values and goals. This is a promising step towards cooperation and away from the polarization the county has seen in the last twenty years.
Unfortunately, trust and common goals may be necessary, but they are not sufficient to eliminate the pressure on individual landowners to develop their land. Under existing institutions, residents will have to force their views on their neighbors -- violating their faith in individual freedom -- or accept unmitigated sprawl.
A recreation economy need not be harmful to the environment. Moreover, it can be very rewarding to local residents. However, meeting the four goals of environmental sensitivity, social equitability, no subsidies, and minimal coercion will require innovative financing and planning strategies. Five basic steps are needed:
Recreation development of Wallowa County is probably inevitable, but a Wallowa Recreation Company (WRC) can insure that resort and recreation areas are well planned and environmentally sound. The company's goal will be to preserve county amenities while producing income for residents and landowners. The use of a company rather than a government agency will improve the efficiency of planning and management.
The company should be formed by Wallowa County residents. All residents will be given one share of common (voting) stock and will be invited to purchase more. Initially, people from outside the county will only be allowed to purchase preferred (non-voting) shares of stock. Additional funds may be raised by selling bonds.
A conservation easement is a legal agreement a property owner makes to restrict the type and amount of development that may take place on his or her property. Each easement's restrictions are tailored to the particular property and to the interests of the individual owner and purchaser of the easement. More detail about the legal basis of easements can be found in appendix two.
The first job of the Wallowa Recreation Company would be to purchase conservation easements from as many county landowners as possible. These easements would allow and even encourage preexisting uses of the land. Farmers and ranchers could continue to farm and raise livestock. Homeowners could maintain, upgrade, and add to their homes. Timber owners could practice historic forest activities. The easements would only restrict major changes in land use, such as the subdivision of a farm into a housing development or the demolition of homes and construction of a hotel. Effectively, the recreation company would play the role of a land trust. It would manage scenic beauty and other resources valuable to recreationists in trust for Wallowa County landowners and residents, sharing the benefits with everyone and insuring that no one pays an unfair share of the costs created by inviting recreationists to visit the valley.
Each landowner in the county would be encouraged to negotiate specific terms for their easement. Some landowners may want to perpetually forbid further development of some or all of their land. Their deeds would be altered to forbid this development. Other landowners may be willing to grant the WRC the authority to build certain kinds of facilities on their land. No one other than the WRC would have that right.
Landowners could even require that, as a condition of the sale of an easement to their property, the WRC not build any facilities within their viewshed. This would allow every landowner to have a say in where and how any recreation developments would take place.
The point is to avoid sprawling development. In most cases, the WRC will never exercise any rights it has to develop a piece of land. Should the WRC decide to develop an area, it would then pay the landowner the difference between the land value, under its current use, and the amount already paid for a conservation easement.
For example, say that a farmer owns 160 acres appraised at $1,000 per acre. The WRC might offer to pay the farmer $200 per acre for the conservation easement. If later the WRC decides to build a recreation facility on one of the acres, it would then pay the farmer an additional $800.
After the WRC has raised adequate funds, it would offer to purchase conservation easements from all landowners in the county up to a certain date, or until a large percentage -- such as 80 percent -- of the landowners have agreed to sell, whichever comes last. The WRC might offer to pay 10 percent of the appraised value of people's land in cash, and another 10 percent in shares of stock in the corporation. This would give people incentives to sell their development rights.
When the company begins to earn a profit, all shareholders will enjoy a fair share of those profits. Thus, the developments will benefit all landowners, and not just those who happen to be the first to subdivide or develop their land. In the event of the dissolution of the WRC, the development rights would revert to the current landowners.
After purchasing conservation easements from most or all private landowners, the Wallowa Recreation Company will begin to plan and build a set of recreation facilities that will earn profits for shareholders, provide jobs and income for county residents, and yet have minimal effects on scenic beauty and the rural character of the county. Any such developments would be carefully designed to meet the restrictions imposed in the negotiated easements.
Planning has become a dirty word, implying bureaucratic red tape, adversaries squaring off over resource allocations, and endless delays and lawsuits. The WRC will avoid these problems by giving everyone incentives to work together. The WRC's goals are the goals of county residents: to earn an income while maintaining and enjoying the amenities the county has to offer.
Initially, the WRC might plan six to eight overnight facilities. These would average about 50 rooms and a restaurant, although they may vary widely from the average.
The facilities would be designed to supplement, not compete with, existing resorts and motels. In fact, existing operations would probably benefit from publicity generated by the WRC, and the company would work with resorts to supplement their business.
The plans will be submitted to the board of directors and possibly to the common shareholders as a whole. The conservation easements will ensure that facilities are located in the most environmentally sound locations rather than sprawling across the landscape. This type of carefully planned development will give Wallowa County residents complete control over the future of their land.
To help preserve the rural character of the county, new recreation areas should rely on mass transit rather than automobiles. Wallowa County has a rail line that can provide an attractive form of transportation.
This rail line goes through a scenic river canyon that is largely inaccessible by highway. The right of way is currently owned by Union Pacific Railroad, and is used exclusively for transportation of lumber from the Boise-Cascade and Rogge lumber mills. The line connects the four major Wallowa County towns with La Grande, a city served by Amtrak and a municipal airport.
Steam-powered passenger trains operated from La Grande to Joseph as late as the 1940's. The WRC could reestablish such service for users of its hotels and anyone else who wants a unique entry to the county. A steam-powered train would be an important attraction for the WRC's resorts.
Visitors to WRC facilities would start their vacation at La Grande, taking the train to resorts located along the rail line. Local residents would still be able to use their automobiles. However, they would also be encouraged to use mass transit through discounts or annual passes on the rail line.
Once in the county, further transportation could be by bus, bicycle, horseback, wagon trains or other unconventional means. Thus, the transportation system would at once protect the environmental quality of the county and be a part of the attraction.
Although this transportation proposal seems appealing at first glance, there are several problems. The tracks are in poor condition, keeping train speeds down. The 75-mile trip currently takes 3 to 4 hours to complete. Considerable work will be needed to upgrade track to passenger standards at a reasonable schedule of about 2 hours per one-way trip.
The Union Pacific Railroad is currently negotiating with Rio Grande and Pacific of Fort Worth, Texas, to sell the line from Elgin to Joseph, and lease the line from Elgin to La Grande. The WRC could negotiate with the line's new owners to help finance track work and use the line for passenger trains.
A major barrier to the success of private recreation programs in the West has been unfair competition from the West's largest landowner: the federal government, which charges little or nothing for recreation on most of its land. To eliminate below-cost recreation and insure that the WRC receives a fair return on its investments, Wallowa County residents should encourage the Forest Service and other public agencies to charge fair market value for recreation.
Once public agencies begin to charge fees, timber companies, ranchers, and other large landowners could also collect fees for hunting and other popular recreation activities. This would give them an incentive to modify their management practices to enhance recreation experiences. They might improve wildlife habitat to attract hunters and protect water quality to maintain fisheries.
The Forest Service estimates that over 40 percent of the outdoor recreation in Washington and Oregon takes place east of the Cascades.5 About 600,000 recreation visitor days (RVD) of use take place on the Wallowa Forest -- mostly in Wallowa County -- each year.6 Recreation fees averaging $3 to $5 per day would produce nearly as much revenue as timber, which earned about $3 million for the Wallowa National Forest in 1991.7
This suggests that recreation fees would give land managers a powerful incentive to consider recreation, wildlife, and related values. They will also substantially increase payments to Wallowa County under the 25 percent fund.
Actual recreation fees would differ for different types of recreation. General recreation use might cost as little as $1 per day, while hunting trophy elk might be much more. Local residents could purchase annual permits so that their cost per day would be far lower than to occasional users.
Boise-Cascade is a large private landowner in Wallowa County. Once the Forest Service begins to charge fees, company managers will soon realize that revenues from recreation and hunting can be lucrative and will begin to charge fees as well. This will give them an incentive to modify their timber practices to protect scenic beauty, wildlife habitat, and other resources that recreationists prefer.
This change will be in Wallowa County's best interest. The likely scenario if the status quo continues is not. Timber landowners in Union County have subdivided their lands for luxury housing.8 They could easily be tempted to do the same in Wallowa County. The combination of conservation easements and recreation fees will reward both private landowners and public land managers for protecting the county's environment.
The five ideas suggested here would give Wallowa County residents the chance to control the future development of their community. Moreover, they meet the four goals specified for the valley's future: They are environmentally and socially sensitive, and they require no subsidies and minimal coercion.
The conservation easements, paid for with stock in the Wallowa Recreation Company, take the pressure off of individual landowners to promote sprawl development. All company stockholders -- including all landowners -- share the benefits from development. This means that the company can site developments in places where they will have the least scenic and other environmental effects.
Heavy reliance on the railroad for transportation, combined with bus and jitney service to locations off the rail line, will eliminate problems with congestion, air pollution, and land use associated with the automobile.
Recreation fees will also lead to environmental improvements as public and private land managers modify timber and agricultural management to promote recreation.
The facilities developed by the WRC will create many jobs for county residents. But more important are the jobs that residents can create themselves. As more visitors come to the valley, residents will find local markets for their produce, crafts, artwork, guiding, and other products and skills. This will lead to much more income per job than the stereotypical recreation job.
Development usually leads to high property values that make it impossible for residents of rural communities to afford to remain in the community. Planned recreation development will stabilize property values to eliminate this forced migration.
The process of negotiating conservation easements relies on the self-interest of property owners to protect the values they want. Therefore, the needs of all property owners, rather than just those who develop their land first, will be satisfied. As common shareholders, residents who don't own property will also have a chance to get involved in the planning process.
In addition to the overnight facilities, the WRC would provide special facilities for boating, paragliding, and other recreation opportunities. The discussion below describes community-based facilities followed by a presentation of other potential recreation facilities. The final decisions, of course, would be made by the WRC working with Wallowa County shareholder-residents.
The WRC will probably want to locate overnight facilities in each of Wallowa County's four major towns -- Enterprise, Joseph, Wallowa, and Lostine, all of which are on the rail line. Other facilities might be strategically located at Rondowa and Minam, which are on the rail line, and Imnaha and Flora, which are not.
Joseph is home to a museum of cultural heritage, a local theater group and outdoor theater, and the tranquillity of Wallowa Lake. The Wallowa Lake State Park hosts many music festivals and other cultural and educational events, such as The Wallowa Lake Jazz Festival, and Fishtrap.
The WRC will probably locate an overnight facility in Joseph or near Wallowa Lake. The location near Wallowa Lake will provide easy access to swimming, hiking and boating in the summer, as well as sleighing, snow shoeing and cross-country skiing in the winter. The site would also be a jumping off point for expeditions in the Eagle Cap Wilderness.
Enterprise is the heart of Wallowa County. The many stores and restaurants cater to both local residents and visitors, and act as informal meeting places. A health food store and a new Safeway supermarket are recent additions to the town. Enterprise is surrounded by many beautiful family ranches and farms.
The WRC will probably locate a major facility in Enterprise. This would be centrally located to all recreation in the valley. In addition to overnight accommodations, it would include a restaurant and shops for local artists and crafts workers.
Many year-round activities will be available, including hunting, hiking, fishing, horseback riding, and skiing. Local dude-ranches can offer additional opportunities, such as cattle-drives and special meal services, to visitors.
The close proximity of the Lostine facility to the Eagle Cap Wilderness will provide local residents the opportunity to develop businesses that guide visitors through the wilderness in unique ways. Llama tours, horseback rides, and technical climbing are a few examples of these opportunities.
Downtown Wallowa is quite small, with two restaurants and a few taverns. Surrounded by cattle and sheep ranches, it has the feel of an old Western town. The sheeps' wool provides raw material to a resident who has revitalized the art of building manual wooden spinning wheels.
The WRC will probably locate an overnight facility in Wallowa. Visitors can participate in many recreational activities, including hiking, hunting, wildlife viewing, skiing and others.
Imnaha is at the gateway to much of the Hells Canyon National Recreation Area. Imnaha also provides access to the Imnaha and Snake Rivers. The WRC will probably want to put a major facility here to serve visitors to the NRA. It might also encourage the development of new dude ranches in the area.
Imnaha is the only town mentioned thus far that is not on the rail line. Therefore, transportation into Imnaha will have to be by bus or, for the adventurous, wagon train.
Recreationists who take out of the Grande Ronde or Snake rivers will enjoy overnight accommodations in Flora. Hunters and hikers in the Joseph Canyon and Hells Canyon may also use this facility. Since Flora is not on the rail line, bus service will be required to Enterprise as well as to the rivers and wilderness trailheads.
The WRC can promote many unique or unusual recreation opportunities to visitors. These will employ local residents and add to the attractiveness of the county while protecting its scenic beauty.
The WRC will encourage many people to start new enterprises, ranging from artwork to tour guides to dude ranching to music festivals and theater. In addition, property owners can diversify the economic benefits that they receive from the land through user's fees and other things. For example, ranchers can take people on cattle drives, mill owners can take people on sawmill tours, and engineers can take people on the railroad.
Many recreational services require technical skills often unavailable outside of the local area. River guides, hunting guides, and ski guides require knowledge about the terrain as well as information about the culture and custom of the area.
Cultural events, like symphonies and music festivals or bookstores also require specialized knowledge. Local residents will have the opportunity to promote these activities, which in turn will draw new types of visitors to the region.
The WRC will promote traditional forms of recreation such as fishing, hunting, skiing, and hiking, as well as more modern forms such as paragliding, cattle drives, and cultural events. Many of these are described below.
Wallowa Valley is home to 252 miles of wild and scenic rivers, including the Imnaha, Snake, Eagle Creek, Joseph Creek, Minam, North Fork John Day and Lostine rivers. Runs of Chinook, steelhead and sockeye salmon, and numerous species of trout including lahotan, cutthroat, bull, rainbow, brown, and brook live in these rivers, making Wallowa County an excellent spot to practice fly and bait fishing.
Fishing and fish-watching are both popular sports in the Northwest. The U.S. Fish & Wildlife Service reports that during the 1991 season in Yellowstone Park, more than 520,000 people spent nearly 97,000 hours watching fish at two fish-watching hot spots in the park. In fact, the agency found that during twelve of the past fourteen years, more people have stopped to watch fish at Fishing Bridge than have fished in all of Yellowstone.9
Successful promotion of fishing will give residents the opportunity to increase their income. For example, local fishing enthusiasts could serve as guides to steer guests toward the most sustainable fishing grounds. Residents who manufacture fishing rods and flies, fishing outerwear, and maintain fish habitats may also prosper.
Landowners will be able to benefit from the introduction of hunting and wildlife viewing on their land by charging user fees. Hunts for trophy species such as bighorn sheep can particularly lucrative for landowners.
Hunting is not the only use for wildlife. A recent survey by the U.S. Fish & Wildlife Service found that in 1985 Americans spent some $14.3 billion on non-consumptive wildlife recreation.11 International interest in outdoor recreation and wildlife watching in the United States is increasing, and could benefit both the economy and the landscape of Wallowa County.
Landowners will be able to benefit by charging user fees to visitors to participate in cattle drives and dude ranching on their property. Rodeos can be staged as well. Secondary industries such as western clothing, food and art will develop and provide income to local residents.
Paragliding requires instruction from people who are skilled in the art. Local residents can be trained by experts such as Dave Raybourn of the Hangliding School of Oregon or from other instructors. Secondary industries will develop from the establishment of this resort such as equipment rental and retail shops, and outerwear shops. Many other industries will develop simply from the many people who will come to watch the flyers.
Paragliding is not new to Wallowa County, or Oregon in general. In fact, paragliding pilots used to have access to the Mt. Howard lift up until last year. Then, lift privileges were revoked due to infighting between two paragliding groups. Steve Rodey, the past president of the Cascade Paragliding Club, is presently in negotiations with the lift owner to resume flying.
Last year, the town of Lakeview, in southeastern Oregon received the very prestigious Unique Tourism Award from Governor Roberts for its successful promotion of hangliding. This year, the United States Hangliding Association will present an award to Lakeview for the overwhelming support the local people and government has given to the sport.
The city and county of Lakeview, U.S. Forest Service, the BLM and Oregon Lottery all contributed funds to upgrade hangliding facilities. According to one estimate, in 1992 hang- and paragliding brought three times as much revenue into Lakeview as hunting and fishing combined.12 In addition, flyers tend to stay in local hotels and eat in local restaurants, injecting money into local economies.
The demographics of Lakeview is similar to those of Wallowa County. Residents of Lakeview are delighted with the type of tourists who visit the town to hanglide, and with the spectacle of seeing them in the sky.
Wallowa County can take the example of Lakeview and use it to their advantage. The scenery around Wallowa Lake is far more dramatic than around Lakeview. The key is for Wallowa County to act quickly and market the area appropriately. The establishment of this facility in Joseph will continue to encourage the development of local cottage industries.
A downhill ski mountain, Ferguson Ridge, is located about ten miles from Joseph on the Imnaha Highway. A lodge and restaurant are located on the mountain, as well as a local branch of the National Ski Patrol.
Another package might start with a train ride to Lostine, and a dude ranch adventure that ends with a horseback riding trip into the Eagle Cap that comes out at Wallowa Lake. From there they might go into Hells Canyon or take the train from Joseph back to La Grande.
Recreationists will also be free to develop their own tours, riding the train or busses between trailheads, fishing spots, or ski areas, depending on the time of year. This flexibility will greatly increase the attractiveness of Wallowa Valley as a destination without leading to all of the development that is found in other destinations resorts such as Aspen or Jackson Hole.
The most important question is whether the company could earn enough money to make the initial purchase of conservation easements as well as construct new recreation facilities. Based on interviews with hotel operators and other businesses throughout the Northwest, The Thoreau Institute estimated the annual revenues and costs of the Wallowa Recreation Company.
The initial costs include conservation easements, construction and furnishing of facilities, and upgrading of the 75-mile rail line. The Thoreau Institute assumed that these would be paid for through the sale of 25-year bonds paying a 5 percent annual dividend.
The Thoreau Institute estimated that the revenues from eight overnight facilities plus the rail line would total $23.4 million per year. Operating costs are estimated at $17.5 million. After paying off the bonds at a rate of $3 million per year, net profits average $2.9 million per year. These will be paid to the stockholders, who initially will be landowners and residents of Wallowa County.
In addition to this income, the creation of a recreation company, purchase of conservation easements, and development of an alternative transportation system will provide enormous benefits to county residents that cannot be calculated in a dividend or paycheck. The conservation easements will limit developments to environmentally safe areas. The company will assure that developments are planned with the concurrence of residents and landowners. The transportation system will minimize congestion.
All numbers are tentative pending a full feasibility study. However, these preliminary numbers suggest that the project is feasible if eight overnight resorts are built, each with an average of 50 rooms and an adjacent restaurant.
The Thoreau Institute estimates that the overnight and restaurant facilities will employ over 500 people with a monthly payroll of $675,000. Many more jobs and much more income will be realized from other activities such as retail shops and outdoor guides. Complete details are in appendix one.
Up Front Costs Conservation easements $7,500,000 Land acquisition 2,000,000 Railroad upgrading 10,000,000 Planning and other 500,000 Total $20,000,000 Amortized over 25 years 1,400,000 Facility Costs Construction $20,000,000 Furnishings 3,200,000 Total $23,200,000 Amortized over 25 years 1,600,000 Annual Costs and Revenues Facility revenues $17,400,000 Railroad revenues 6,000,000 Total revenues 23,400,000 Facility operating costs 12,000,000 Railroad operating costs 5,500,000 Total amortized costs 3,000,000 Total annual costs 20,500,000 Net annual revenues $2,900,000 Jobs and Payroll Jobs 567 Annual payroll $8,100,000
A complete financial analysis is necessary to the success of this proposal. This analysis should tentatively identify actual sites for various recreation facilities and specify the size of each facility. Based on these tentative sites, the study would estimate:
Based on this information, the study could calculate the expected annual net returns, including dividends to shareholders. The study would also estimate the number of years that might be required before the WRC became profitable.
The environmental sensitivity goal of this proposal and its applicability for Wallowa County partially relies on the reintroduction of passenger trains on the La Grande-Joseph line. A further analysis should be done to determine the financial feasibility of renovating this line for passenger traffic, including:
The collection of recreation fees is key to this proposal. The study must analyze the feasibility of implementing recreation fees on the Wallowa National Forest.
The success of this proposal depends upon the willingness of local residents to cooperate together to guide their future. We need to know:
Many rural communities have shifted away from a heavy dependency on commodity production to a more diverse economy. Some communities, such as Silicon Valley, California, have become heavily dependent on manufacturing, and as a consequence, lost their rural way of life.
Other communities, like Bend, Oregon, have developed into tourist and retirement destinations for the wealthy. As in Silicon Valley, local residents have been forced to move elsewhere or drastically change their way of life.
Too often, distant bureaucrats or corporate executives end up planning these transitions. Even more often, the changes happen randomly to no one's benefit. The Thoreau Institute's proposals for Wallowa County incorporates the desires of local residents to control their destiny and reduce government and outside control over the future of the county. A random solution that allows a few developers to prosper at the expense of a majority of the local residents would be detrimental to the health and vitality of the county.
Residents also treasure the natural beauty of Wallowa County, and would like to see it remain intact. Conventional resort developers often harm the natural surroundings that they initially sought to profit from.
Change is going to take place regardless of the sentiments of individuals in Wallowa County. Our suggestions for institutional change advocate changes that meets specific criteria, namely, that they are environmentally sensitive, socially fair, and work without subsidies or coercion.
The Thoreau Institute's proposals allow residents to determine their own destiny by creating a recreation company, buying conservation easements from landowners, and locating developments in areas that have minimal environmental and social effects. The company would also use an alternative transporation system to minimize congestion and provide an additional attraction for visitors to the area.
Implementation of these ideas could successfully ease the transition from commodities to mixed uses without the social, political, or environmental problems found in other areas. We hope that Wallowa County and other interested communities can benefit from this analysis.
The up front costs are a combination of the cost of conservation easements, planning, land acquisition, and railroad upgrade costs. All costs are estimated to the nearest $100,000.
The Thoreau Institute assumes that the WRC must purchase conservation easements from at least 80 percent of private landowners in the county. The WRC will offer landowners 10 percent of the assessed value of their property in cash and 10 percent in stock.
Private land in Wallowa County is assessed at about $94 million.13 A 10 percent cash payment for 80 percent of this land will cost about $7.5 million.
The WRC will want an additional 400 acres of land dedicated to its facilities and will pay landowners $2 million for this land on top of the conservation easements.14
The costs of upgrading the railroad to passenger standards is estimated at $10 million. Another $0.5 million must be spent on planning the entire project.
Construction and furnishing costs for each of eight overnight and restaurant facilities will average $2.9 million, for a total of $23.2 million for all eight.15
All up front costs, including planning, easements, land, construction, and upgrading the rail line, total to $43.2 million. When spread out over 25 years at 5 percent real interest per year, the annualized cost is about $3 million.
Operating costs for the eight facilities average $1.5 million per year, while revenues average $2.1 million per year. The annual operating costs take into account food and beverage costs, payroll and employee benefits, utilities, repairs and maintenance, direct operating expenses, music and entertainment, marketing, administration and other general costs, property taxes and insurance, interest and depreciation.16
Operating two roundtrips per day over the rail line will cost about $5.5 million per year, and revenues will average $6 million per year. This accounts for crew, fuel, equipment maintenance, insurance, and per mile charges paid to the railroad. Total costs are assumed to average $50 per mile.
The expected annual revenues are a combination of the expected revenues from the overnight facilities, the restaurants, and the shops. The overnight facilities' revenues are based on average yearly occupancy rate of 80 percent,17 and a room rate of ninety dollars a night in the summer and winter, and sixty-eight dollars a night in the fall and spring, double occupancy.18
Restaurant revenues are based on the average meal costing fourteen dollars per person (including food and beverages). The occupants of each room are estimated to purchase an average of five meals a day.19
The WRC will construct and own an average of two retail shops at each overnight facility. The rental price from each shop is approximately $7200 dollars per year.20 Total annual revenues from all sources average nearly $2.2 million per facility.
The main benefit to residents of Wallowa County will be income from visitors. Some of this income translates directly into jobs in the hotels, restaurants, shops, and on the railroad.21
Occupation Number Wage Overnight Facilities Manager 8 $2,000 Administration 16 1,200 Maintenance 32 1,200 Front Desk 48 1,000 Housekeeping 48 1,000 Restaurants Manager 16 2,000 Chef 16 2,000 Wait Staff 240 1,000 Kitchen and Bar 80 1,000 Shops Manager 16 2,000 Support Staff 16 2,000 Railroad Train crew 15 2,000 Station crew 8 2,000 Maintenance 8 1,500 Grand Total Total 567 $675,600
Conservation easements are a way of protecting open space and natural land values without zoning or government coercion. In a typical easement, the property owner sells or donates certain development rights to another organization, often a nonprofit conservation group or government agency. The easements are recorded in the deed to insure that all future owners of the property know their rights to develop the land.
Easements generally allow a property owner, or any future owners of that property, to continue existing uses but not to build major new developments. The specific rights a property owner forgoes when granting a conservation easement are spelled out in each easement document. The owner and the prospective easement holder identify the rights and restrictions on use that are necessary to protect the values they care about. The owner then conveys the right to enforce those restrictions to a qualified conservation recipient, such as a land trust.
Nongovernmental conservation and preservation groups began using this approach to environmental protection in the 1960's. Since then, the use of and interest in easements has burgeoned and the legal underpinnings for them are now firmly established.22
Landowners who have sold a conservation easement can still sell their land or pass it onto their children. But no matter who buys or inherits the land, it remains subject to the terms of the easement.
Conservation easements can be as flexible as necessary to meet specific needs. For example, an easement can allow for the construction of a home when a rancher retires, or the building of a new artist's studio.
Each easement can be tailored to the property in question, the resources to be protected, and the desires of the landowner. The bottom line is that the restrictions must be adequate to protect something of public benefit.
Easements protect land for such diverse uses as public recreation and education, significant natural habitat, historic value, and open space for scenic enjoyment. This latter criteria includes farmland and forest land.
The intent of the easement is to give the private landowner as much flexibility as possible to adapt to changing market conditions over the years. Therefore, the farmland and forestland uses may allow such things as fish hatching, greenhouse cultivation, tree farming, sod farming, hydroponics, and timber production. Related secondary activities to many farm operations, such as farm mechanics, blacksmithing, or riding instruction may also be permitted with the easement.
Easements can either be perpetual easements or term easements. Perpetual easements ensure the owner of the property that the resource values of his or her property will be protected indefinitely, no matter who the future owners are.
A term easement may be written for a specified number of years. All easements run with the land, regardless of what particular easement the owner decides to use. That is, the original owner and all subsequent owners are bound by the restrictions of the easement. The easement is recorded at the county or town records office so that all future owners and lenders will learn about their restrictions when they obtain title records.
Conservation easements may be used to promote improved stewardship of private lands. For example, easement language may encourage the planting of high value crops such as canola oil or garbanzo beans. Or it might encourage the restoration of range lands to include native grasses and eliminate noxious weeds. These terms, of course, are negotiated with each individual owner.
Property tax assessment usually is based on the property's market value, which reflects the property's development potential. Since the conservation easements reduce the development potential of the property, they may reduce the level of assessment and the amount of the owner's property taxes. They can also reduce the estate taxes that are paid by inheritors of the property, thus helping landowners keep their ranches in the family.
Developmental pressures in Jackson Hole, Wyoming, threaten the scenic quality of adjacent Grand Teton National Park and have raised property values, making it difficult for families to hold onto their working ranches. The Jackson Hole Land Trust helps protect the scenic and wildlife qualities of the area by holding conservation easements on thousands of acres in the area.
Wallowa County is at a point in its history where Jackson Hole was twenty years ago. Widespread use of conservation easements can prevent the negative effects that tourism has had on Jackson Hole, while allowing the positive benefits.
A central part of this proposal is that all private landholders in Wallowa County will be encouraged to sell conservation easements to the recreation company. The aim of the easements would be to protect the customs, culture, and stability of the communities in Wallowa County.
The easements would explicitly allow the present deeded owners of the land to maintain the present usage of that land. The easements would restrict subdivision and development while allowing for structures and activities necessary for and compatible with agricultural, forest, or other existing operations. For example, private timber companies would continue to cut trees on their lands and ranchers could continue their cattle and farm operations.
Depending on the specifications in the easement, major developments could only be done by the WRC. This will prevent the problem of sprawl and urbanization so prevalent in typical recreation areas.
Conservation easements will be exchanged for stock in the WRC and cash. In this study, The Thoreau Institute assumes that the WRC will offer private landholders twenty percent of the market value of their land up front. Half of this would be paid in cash and half in stock in the WRC.
In the event of the company's failure, the development rights would revert to the landowners. Should the company succeed, private landowners and community residents will prosper as the WRC prospers.
Conservation easements will prevent the threat of development and disruption of scenic beauty on private lands. However, a large majority -- perhaps 80 percent -- of private landowners will have to sell easements in order to realize these benefits. Significant holdouts could take advantage of everyone else's easements by developing their land. This would disrupt the county's scenic beauty and the WRC's development plans.
One solution to this dilemma is to hold off on paying landowners the full amount of the easement until owners of at least eighty percent of the land agree to sell them. This would encourage cooperation among private landholders to insure the desired result.
If the corporation is successful, the conservation easements will help avoid the many problems typical of traditional recreation developments. Landowners adjacent to recreation areas will gain without devastating their own land by virtue of owning stock in the corporation. This is because landowners would have the incentive to provide scenery that is palatable to visitors to the recreation areas. Timber land owners, for example, will minimize the visual effects of their logging so as to protect their interest in the WRC.
Many Wallowa Valley residents regularly speak about their sense of stewardship, heritage, and love of the land. In light of these desires, conservation easements are especially suitable for Wallowa County.
Wallowa County residents cherish their right to own and control property, and they frequently fight efforts by the government to take that right away. Conservation easements allow landowners to guarantee their property's permanent protection and still hold on to it. The WRC is not coercing the private property owners in Wallowa County to give up their land. Rather, conservation easement sales are voluntary.
Continued communication between the WRC and the property owners is an important part of the easement process. Occasional visits by a WRC representative will remind landowners to keep their property in its agreed-upon state. Landowners who retain their stock in the company will receive annual or regular reports about the company's progress.
When the terms of an easement are negotiated, both the WRC and the property owner should consider these provisions as unchangeable. However, one or both parties may wish to amend the agreement in light of unforeseeable changes. Therefore, the WRC should develop a policy to guide amendment decisions.
Any changes to the easement should either strengthen the easement or be neutral. For example, if the amendment changes the original easement terms so that permitted uses on the land would have fewer environmental impacts than the uses permitted under the terms of the original deed, then the easement may be changed.
If the amendment would neither strengthen nor weaken the original easement terms, then change might be feasible. For example, the amendment might allow new uses but restrict others, thus offsetting any environmental effects.
Although an easement is potentially of infinite duration, time may warrant that some terms be changed. For example, some towns in Wallowa County might need extra land to construct necessary public facilities such as new schools, hospitals, and housing.
If land is needed for a public purpose, the government may take possession of the land and compensate the owner for the value of the property. Thus, the government's power of eminent domain makes it unlikely that a conservation easement will, at some future time, prevent necessary public activity.
In conclusion, conservation easements present an innovative and sure way of protecting Wallowa County from unwanted development, while at the same time allowing carefully managed growth.
2. Interview with Diane Shelter, Wallowa County Planning Director, Enterprise, Oregon, July 15, 1993.
3. Wallowa County Land Development Ordinance, 1993 Major Amendment.
4. Interview with Jason Yohannan, Oregon Department of Human Resources, La Grande, Oregon, July 30, 1993.
5. USDA Forest Service, Regional Guide for the Pacific Northwest Region (Portland, OR: Forest Service, 1981), pp. 3-18-3-36.
6. St. Clair, Jeffrey, The Lost Dream of the Giant Yellowbellies, Forest Watch 12(8):11.
7. Knudsen, Karen and Randal O'Toole, Other People's Money: The Case for Reforming the 25 Percent Fund, Research Paper Number 25, (Portland, OR: The Thoreau Institute, 1992), p. 34.
8. Interview with Loren Hughes, owner of Birnie's Jewelry, La Grande, Oregon, July 11, 1993.
9. The National Park Service, Fish Watching: A Growing Pasttime, Yellowstone Today, Autumn, 1992, p.2.
10. The Environmental Studies Clinic, Not Another Yellowstone, (Missoula, MT: University of Montana, 1992), p. 9.
12. Interview with David Raybourn, Hangliding School of Oregon, Portland, Oregon, July 30, 1993.
13. Wallowa County Summary of Assessment and Tax Roll for 1992-93 Tax Year.
14. Interview with Harlan Menton, General Land Office Inc., Joseph, Oregon, July, 1993.
15. Interviews with Bill Oyen of Architect LA, Portland, Oregon, Bob McKenzie, owner of McKenzie River Pizza, Bozeman, Montana, and Paul Mosley, Sheridan, Montana, July, 1993.
16. Interviews with Dale McFarlene, Assistant Manager of the Hotel, and Bonnie Beard, Restaurant Manager for The Red Lion Inn, Yakima, Washington, June, 1993. Confirmed by Pannell Kerr Forster, Trends in the Hotel Industry, (Houston, TX :1992), pp. 77-87.
17. Interview with Dale McFarlene, The Red Lion Inn, Yakima, Washington, June, 1993.
18. Interview with Bill Goodman, Chief Financial Officer, McMennomen's Edgefield, Troutdale, Oregon, June, 1993.
19. Interview with Bob McKenzie, McKenzie River Pizza, Bozeman, Montana, June, 1993.
20. Interviews with Loren Hughes, La Grande, Oregon and Doug Doyle, Wilson Backcountry Bicycle and Ski Shop, Wilson, Wyoming, June, 1993.
21. All figures on jobs and salaries are estimations, and are based on conversations with managers at McMennomen's Edgefield Resort in Troutdale, Oregon, the Red Lion Inn in Yakima, Washington, and Paul Mosley, an independent fishing lodge owner in Sheridan, Montana, June, 1993.
22. Diehl, Janet and Thomas S. Barrett,The Conservation Easement Handbook, (Trust for Public Land, San Francisco, CA: 1988), 269 pp.