Minnesota officials are taking a critical look at fees paid to the Trust for Public Land, a respected national nonprofit, as part of its efforts to broker state land purchases for conservation.

The latest example is Mississippi Northwoods, a proposal to buy 2,000 acres of sprawling forest in central Minnesota. The purchase has the personal endorsement of Gov. Mark Dayton and is being described as a "signature" proposal as legislators consider the latest round of state Legacy spending on outdoors projects.

But the plan includes a potential $561,000 payment to the trust from the landowner, the Potlach forest products company, which would receive up to $14 million to sell the property to the state.

Bob McGillivray, a senior project manager for the trust, said the group's costs in assisting with the land sale "exceed $250,000," and that money not used to cover expenses would go to its other projects in Minnesota. McGillivray insisted that the payment was not taxpayer money, but rather part of a private agreement between Potlach and the nonprofit.

Rep. Jean Wagenius, DFL-Minneapolis, is skeptical.

"It's a very nice gig," Wagenius said at a House hearing last Tuesday, "but I question its appropriateness for state taxpayers. In fact, it's taxpayer money."

Records show that the trust, while involved in other state-funded land acquisition projects, has been collecting fees and "donations" in excess of its actual expenses. One report last year from the group, detailing its work on a 200-acre land purchase in Otter Tail County, said it received a $150,000 fee from the landowner, had $78,778 in project expenses, and that part of the excess money went into the group's "Land for People mission."

That mission, according to trust documents filed in the case, includes "overall conservation work in Minnesota including: public outreach and education on land conservation issues; coalition and partnership initiatives, meetings and reporting."

Susan Schmidt, the nonprofit's state director, said that while the group mostly does traditional land conservation, "perhaps one out of 50 times" it is asked to bring about a land sale. "We're asked to be involved, if you will, to lead, coordinate and facilitate the objectives of the different parties," she said.

Absorb expenses

Schmidt and McGillivray said the group was simply being reimbursed for costs that other nonprofits charged directly to the state, and that their organization had to absorb many other expenses not listed in state reports.

But Wagenius argued the trust was likely being brought in by landowners to help the sellers obtain a tax break from dealing with a nonprofit, and that the group was in turn carving out its own beneficial arrangement.

A study by the Legislative-Citizen Commission on Minnesota Resources, another state panel that distributes environmental money, shows that since 2007 the panel has paid $16.2 million for land transactions involving the trust -- and that the nonprofit got $1.1 million in fees. But the study showed that the group's expenses totaled just $386,745. The rest of the money, $728,380, went to "non-project efforts," the study said.

Trust officials disputed the study, saying parts were misleading.

'A huge number'

Rep. Denny McNamara, R-Hastings, chief House author of the bill that contains the Mississippi Northwoods purchase, said Monday he's unsure the project will survive legislative scrutiny. "Personally, $14 million is a huge number for me," he said.

McNamara said the project is under review, and said he did not feel "comfortable the votes are there" to move forward in a key House panel.

At hearings last week, state officials said the trust would get 4 percent of the eventual sale price for Mississippi Northwoods. Critics argued that the nonprofit, by leading the land's preliminary appraisal, was in an enviable position: The higher the appraisal, the bigger its fee.

Other legislators noted that the land, which lies between an airport and a landfill, is valued at only $4.1 million by the Crow Wing County assessor. Trust officials were, however, able to convince the Lessard-Sams Outdoor Heritage Council, a state advisory group that recommended $14 million for the project, that the appraisal was likely to be closer to $14 million.

In an attempt to curtail excessive payments to the trust and Potlatch, state officials have asked that the sale price not exceed a final appraisal, and that state officials be involved.

Despite the controversy, many outdoors advocates and state officials said the Northwoods property is an environmental jewel.  The property includes nearly three miles of Mississippi River shoreline, and Dayton said in a letter to legislators the land was “some of the finest habitat in central Minnesota.”

Legislators, however, retain doubts. “There still seems to be a large difference,” said Rep. Ryan Winkler, DFL-Golden Valley, noting the wide gap between the county assessor’s valuation and the Trust’s appraisal.   “It’s more than three times” as much.

Winkler also said he could not tell the Trust’s role in such transactions.  “I’m confused about whose role is what,” he said.

“We have been very honest,” said Becca Nash, the non-profit’s project manager for Mississippi Northwoods.

Mike Kaszuba • 651-222-1673