In its largest-ever single land deal, the state of Maryland will acquire about 58,000 acres of forest and wetlands on the Eastern Shore, as part of a three-state deal to protect it from development.

Virginia and Delaware will purchase about 9,000 acres each, bringing the total to 76,000 acres in parcels scattered across the Delmarva Peninsula.

"Ultimately, this could be our Adirondack State Park, our Jersey Pine Barrens," said John R. Griffin, the former Maryland secretary of Natural Resources, who was involved in part of the negotiations. Adirondack State Park and the Pine Barrens, are huge, preserved open spaces that define upstate New York and central New Jersey.

Gov. Parris N. Glendening said the purchase is "an extraordinary opportunity to preserve vital parts of Maryland's environment.

"If we are able to work out all of the details it will truly be the crown jewel in our Smart Growth program."

Under the agreement, which is not completed, Maryland will purchase about half the acreage and receive the remaining land as a gift from the Richard King Mellon Foundation after the foundation has developed plans for a sustainable forestry operation.

The acreage, nearly 120 square miles, is all the land owned by Chesapeake Forest Products Co. on the Delmarva Peninsula. Maryland's portion, taken as a whole, is slightly larger than the city of Baltimore.

Chesapeake signed a letter of intent in April to sell 278,000 acres in Maryland, Delaware and Virginia, including the Eastern Shore property, to a timber subsidiary of the John Hancock Mutual Life Insurance Co. for $186 million, and conservation groups moved quickly to try to preserve the land.

The Chesapeake lands, which include 11,155 acres of unaltered wetlands, rank at or near the top of a list of ecologically valuable lands being compiled by Maryland's Department of Natural Resources.

The Delaware land, in the lower third of the state, is valuable to Maryland because it links with Maryland purchases along the Nanticoke, which according to a 1984 Maryland study "represents the least developed major river valley segment in Maryland and the longest unbroken pine forest on the Delmarva Peninsula."

Delaware's legislature is to meet in a special session today to appropriate $5 million for what officials call a "first installment" of the state's payment for its land. The allotment is part of a $464 million bond bill for the state's annual capital construction budget.

The price for Delaware's portion will be about $10 million to $11 million, according to Mark Chura, a land preservation official in Delaware's Department of Natural Resources and Environmental Control.

"We're very excited," said Chura. "This is a unique chance to put together a block of lands [with Maryland] on the Nanticoke River."

'Fire sale' prices

Others in Delaware have characterized the cost as "fire sale" prices.

"We jumped on it," says Delaware state Sen. Robert Venables, whose district encompasses most of the land his state is buying. "At $1,000 an acre, it's a good deal. It's mostly in the headwaters of the Nanticoke River, and forested; good for wildlife and good for pollution control."

Chura, Venables and Rep. Roger P. Roy, co-chairmen of Delaware's bond committee, confirmed that Delaware's purchase is part of a larger one involving the acreage in Maryland and more in Virginia. The Delaware deal was brokered by that state's chapter of the Nature Conservancy.

Officials in Virginia failed to return repeated calls.

The estimated $33 million cost of Maryland's portion of the land works out to about between $576 and $586 an acre.

Half of the money will come from a matching grant from the Mellon Foundation, with the state's half coming from its Program Open Space Fund. The Maryland agreement was brokered by the Conservation Fund, a private, nonprofit group based in Arlington, Va., that specializes in environmental preservation.

The state will take possession of about half the land immediately as additions to public natural resources lands.

The Mellon Foundation will hold the rest while it develops the forestry plan. The lands will then become state forests, although timbering there may be privately managed.

It is unclear how long that will take, according to Mike Morrill, the governor's press secretary.

Although the land comes off the tax rolls, the five counties involved -- Caroline, Dorchester, Somerset, Wicomico and Worcester -- will not lose revenue. They may receive more under current funding formulas for state forests, Morrill said.

Those are details to be worked out, he said.

Negotiations for land

Shortly after Chesapeake announced it was selling the land, the Conservation Fund, which has preserved 1.7 million acres of environmentally sensitive land nationwide since its founding in 1985, began delicate and secretive negotiations to purchase the property.

The Conservation Fund is a trustee for the Mellon Foundation and has been a conduit for the $20 million to $35 million it spends annually on land preservation. The Mellon Foundation also has ties to the Chesapeake Bay Foundation through a trustee who is on the Bay Foundation's board.

The negotiations involved the fund, the Chesapeake Bay Foundation, all three states, Chesapeake, John Hancock, the Mellon Foundation and St. Laurent, a Canadian firm that is buying Chesapeake's two sawmills in Princess Anne and West Point, Va., a chip mill in Pocomoke City, and a lumber plant in Milford, Va.

St. Laurent was involved because its contract with Chesapeake guarantees it a 15-year supply of lumber for the mills.

The transaction had to be concluded under a tight deadline because the Chesapeake-John Hancock deal had to close by Aug. 24.

Conservationists had worried that the land was becoming vulnerable to development. After it sold its paper and pulp mills in the past two years, Chesapeake began turning more of its prime waterfront lands over to Delmarva Corp., its internal development arm, according to company managers.

As for Hancock, insurance funds that have bought timberlands have argued that their fiduciary responsibilities to investors take priority over preserving land for wildlife habitat.

Part of the land to be purchased in Maryland is along five major Eastern Shore rivers, the Nanticoke, Pocomoke, Blackwater, Wicomico and Marshyhope.

It also involves tracts that Chesapeake has voluntarily set aside for wildlife and water-quality protection and other areas the company has timbered lightly because of their value as wetlands. Among them are islands in the Nanticoke in Dorchester County covered with pine and hardwoods, a 4,000-acre hardwood forest on the Pocomoke and dense woods along the Marshyhope downstream from Federalsburg, also in Dorchester County.

Pub Date: 8/03/99