Closing the Northwoods
Molpus Woodlands Group should reconsider their tactics in tax dispute

An effort to prevent public use of 128,000 acres of land could create havoc in northern St. Louis County, denying hunters access to long-established hunting areas and closing highly-traveled snowmobile trails, including the Voyageur and Arrowhead trails.

The culprit is the corporate quest for profits, personified by the Mississippi-based Molpus Woodlands Group. The company is unhappy with a reduction in the property tax subsidies provided under the state of Minnesota’s Sustainable Forestry Initiative. Subsidies that once brought in millions of dollars to the state’s largest corporate landowners were capped two years ago at $100,000 annually. Several of those big landowners challenged the subsidy cap in the courts, but failed, so Molpus Woodlands is threatening to take it out on the public in an attempt to squeeze the state for a more favorable subsidy. It borders on extortion.

Molpus knew exactly what it was getting into when it acquired the Minnesota holdings of Forest Capital Partners in July. If the company was dissatisfied with the subsidy, or thought the state’s property tax on industrial forest land was too high, it should have looked elsewhere to buy land. It’s like buying a house then griping about the property taxes you knew you must pay.

If Molpus expects the public to rally behind its cause, company officials are sadly mistaken. For an out-of-state company to come stomping into Minnesota and immediately start threatening to close off popular hunting grounds, forest roads, and snowmobile trails that the residents of this region have been using for generations is asking for trouble. While Molpus officials are apparently hoping that their actions will put public pressure on the state to increase their subsidy, it’s just as likely to put the company under fire for its strongarm tactics. That’s especially true at a time when most Minnesotans are well aware of the state’s ongoing budget troubles and the long list of difficult cuts that many Minnesotans have had to face. When nursing homes are struggling, schools are facing funding holdbacks, and just about every other level of government is getting by with less, an out-of-state company whining about a reduction in its state subsidy is unlikely to generate much sympathy.

It’s not as if Molpus does not already benefit from taxpayer investments. As a now-major landowner in northern St. Louis County, Molpus benefits tremendously from public investment in the region’s transportation network—from forest roads to major highways—that allow the company to get its timber to markets in a timely manner.

To quote President Obama, in context, Molpus “didn’t build that.”

Without these investments made in the region over the decades, Molpus’s holdings would be next to worthless.

Rather than resorting to threats, the company would be more likely to find support for restoring its subsidy by seeking to build constructive relationships with stakeholders who benefit from the company’s commitment to SFI. That list is long and includes bird watchers, hunters, snowmobilers and the local tourism industry, to name a few. Gaining their support for an increase in the subsidy would be valuable in convincing legislators. Even so, it’s doubtful that subsidies will ever rise to their previous levels given the budgetary issues facing the state.

Still, it’s better to win friends than create enemies. That’s exactly the risk that Molpus is taking with its hardball tactics. It’s a terrible first impression for a company relatively new to most Minnesotans and sets a low standard for corporate citizenship.

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