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Editorial: Diversifying state trust into grapes toastworthy

Tue., May 25, 2010

In the 1980s, then-Commissioner of Public Lands Brian Boyle had an idea. What if the Washington Department of Natural Resources acquired the Davenport Hotel and leased it to a private operator?

It wasn’t as crazy as you think. Timber sales, which dominated the state trust revenues, had begun to tank, and Boyle was interested in diversifying the trust lands that provide funding for school construction and a handful of other public capital expenses.

Meanwhile, the venerable Davenport was shuttered and at risk of being demolished. A state takeover might have solved both problems.

The deal never panned out, but with timber revenues in decline, Boyle continued his push for more income out of the agency’s commercial holdings, or “urban trust lands.”

The move for diversification persists, as demonstrated last week on Red Mountain in the Tri-Cities area, where a grape-planting ceremony marked the beginning of an enterprise that in time will generate some $375,000 a year – for more than half a century – for the Common School Trust fund. It’s a promising linkage between the state and a booming, $3 billion-a-year slice of the state economy.

Wine grapes grow well on Red Mountain – so well that the U.S. Tobacco and Alcohol Tax and Trade Bureau designated an American Viticultural Area there nine years ago. Three years earlier, DNR had acquired 980 acres in a land swap with the federal Bureau of Land Management. Almost all of it is leased, although the 404-acre project commemorated Friday is said to be a first, with multiple layers of lessees plus an eventual state cut on the wine produced.

Most important, while timber harvesting still carries about 75 percent of the revenue load for the state trusts, that’s down from the 90 percent that once was the case. Picking up the slack are other management options including agricultural leases such as those on Red Mountain, commercial property including wind farms, and communication towers.

Timber will always be a significant part of the trust land picture, but it faces unavoidable political and environmental obstacles. Plus, as current Commissioner of Public Lands Peter Goldmark noted, it takes decades to grow a new tree, but you get another grape crop every year.

The Red Mountain lease not only strengthens the Common School Trust, it also bolsters a regional industry that generates jobs and taxes. Current lease holders have plans to build five more wineries in the area, DNR officials say.

The trusts are as old as the state, but it’s good to see the management of them keep up with the times.