STARTING A MODEST SIZE URBAN FOREST PRODUCTS BUSINESS: PLACE, SCOPE, & SCALE

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1 STARTING A MODEST SIZE URBAN FOREST PRODUCTS BUSINESS: PLACE, SCOPE, & SCALE Sam Sherrill, Ph.D., author Harvesting Urban Timber: A Complete Guide 2011 Texas Tree Conference ISA Texas Waco, TX October 5-7, 2011 Why start and urban forest products business? Supply: 3-4 billion board feet of urban hardwood available and is under-utilized as mulch, fuel, or being discarded as green waste. Acquisition cost is low, resource base very large. Demand: consumers more interested in origin and environmental impact of products. Also interested in owning unique wood products that are affordable. Businesses must be self-initiated private sector creations. To start, government can help. But government cannot be in the urban forest products business. Urban forest products as emerging industry must be sustainable, robust, and nationwide. ISA can and should help. Why ISA? No industry closer to urban trees and aware of their values that urban tree service companies and arborists. Best position to encourage/support/start urban forest products businesses. Why Texas ISA? The state has a lot of urban trees: by one estimate about 141 million of them (Dwyer, John F. et al Connecting People With Ecosystems in the 21 st Century: An Assessment of Our Nation's Forest. General Technical report PNW-GTR-490. U.S. Department of Agriculture, Forest Service. Pacific Northwest Research Station.) Question: Thinking about starting an urban forest products business? What is involved? Following not a business plan template. Rather, these are basic questions & issues to consider about place, scope, & scale. Based on experience of UFP businesses. Consider Place: business location or locations, Scope: includes felling, sawing, drying, selling wet/dry lumber, to making a variety of urban wood products. Scale: size of business measured by output of urban forest products. 1

2 PLACE SCOPE SCALE Five Basic Questions to Ask Yourself 1. In size & species, will area support an urban timber business? Few trees of saw log size & marketable species, no business. Best data on size/species: local tree inventory that directly measures saw log content of urban forest: David MacFarlane, Associate Professor of Forestry, Michigan State University. (MacFarlane, D.W Quantifying urban saw timber abundance & quality in southeastern Lower Michigan, U.S. Arboriculture & Urban Forestry 33(4): ) 13 counties in southeastern MI covering Detroit, Lansing, and Ann Arbor originally EAB infested. Survey results could represent similar areas. Tree Survey Goal: measure the quality, quantity, & accessibility of urban timber. Survey Findings: 72% of the trees were judged to be easily or moderately easy to extract. Total standing urban timber in 2005 was about 327 million board feet: of this 235 million board feet were accessible. 89% of saw timber is commercially valuable hardwoods: walnut, oak, ash, soft/hard maple, hickory, poplar, basswood, & birch. By USDA FS commercial saw log standards (1 being the highest quality), the distribution was: grade 1: 11% grade 4: 4% grade 2: 13% grade 5: 48% grade 3: 24% Subtotals: 48% 52% About 4.7 million board feet are available each year from dead & dying trees. Assuming about 2% is harvested annually. Supply minimum annual needs of 5 small saw mills. 2% conservative, may be higher given storms & infestations. Used Detroit survey in Cincinnati in the following way: Greater Cincinnati area 3809 sq. miles Detroit, Lansing, Ann Arbor area 6564 sq. miles Cincinnati tree canopy cover 51% Detroit, Lansing, Ann Arbor cover 38%.51 x 3809/.38 x 6564 =.78 x 4.7 million bd. ft. = 3.7 million bd. ft. available for annual harvesting in the Greater Cincinnati area. Assumes distribution by tree size, quality, & species about equal in two areas. 2. Without a survey, what are other sources of information valuable species and adequate size? Look for convergence of information from: parks/public works departments state and federal foresters tree service companies utility companies landfill operators commercial & residential developers owners of large forested properties university departments of natural resources 2

3 where available, local tree inventory data (for example, see i-tree at street-based inventories) MI survey focused only on saw logs that would yield lumber meeting commercial standards. Survey excluded logs & lumber from trees that are special by virtue of their history, place of origin, personal value, or artistic worth based on unusual dimensions (especially width & thickness), grain, or figure. Unique value of urban trees cannot be captured by large companies. Competitive edge for small/medium urban forest products firms. Exploit history, origin, personal value, special dimensions & grain as sources of additional value. Return to this point later. 3. Next Place question: are local residents, businesses, and governmental agencies likely to support an urban tree business in a timely & adequate way? Examples: Asheville, NC versus Cincinnati, OH. Asheville, specifically the Biltmore Estate Co. plus local investors, & woodworkers supported idea immediately. By contrast, in Cincinnati idea slow to catch on after a ten year effort. EAB infestation forced local action. Would not have occurred otherwise. Cities, like people, have personalities. Some open to new ideas & are willing to experiment. Others, not so much. Given money & effort, critically examine areas for business. Look for area offering highest annual return. May pick area with lower return for personal reasons: want to continue living in current city. Opportunity cost of personal reasons is lower return on investment & effort. 4. Is timely local support available from: private property owners, tree service & utility companies developers parks departments waste management agencies woodworkers mill work & cabinet shops woodworking stores retail lumber businesses architects new business incubators universities media. Answers will have a major impact on the success. 5. What kind of answers are supportive? Property owners: suppliers who will donate trees from yards & business properties. (Incentive: federal/state tax deduction for donations environmental contribution) Tree service companies: suppliers identify saw log trees, buck in saw log lengths, haul logs to the mill for modest fees. Utility companies: suppliers like tree service companies. Developers: suppliers donate/sell trees from land clearing operations. Parks departments: suppliers work co-operatively to use park & street trees in public projects. Possible partner in state/federal grants. Woodworking community: buyers for furniture, turning, & crafts projects. Possible partners on specific woodworking projects for owners of trees. 3

4 Mill work & cabinet shops: lumber buyers. Retail woodworking stores: buyers (e.g., Rockler, Woodcraft) Architects/interior design: influence buyers & sellers by incorporating local lumber into design & building specifications for LEED credit. Waste management: grants to develop businesses that divert trees from landfills. Universities: natural resource & business colleges offer advice, student participation, & research support. Business incubators: assist in writing business plan. Based on my experience & answers, would I recommend Asheville, NC & equivalent cities? Definitely Yes. Would I recommend Cincinnati, OH & equivalent cities? Probably Not. Again, the question is: which area provides the greatest return on money & effort in a timely & adequate way? PLACE SCOPE SCALE Three Questions & Several Recommendations 1. From sawing to finished products: what are the options? Sawing Drying Standard/special lumber (slabs) Finished wood products 2. What basic equipment is necessary to start a modest size urban timber business that can produce dried lumber? Mill & truck: plus adequate size & properly zoned property for log drying & storage. For tight suburban lots, ways to move logs if tree service companies won t. Options are: Log carriers & arches (& ATV): Another option, available at tool rental companies, is pipe carrier (brand name, Grasshopper) usable by one person. Less than 3 feet wide, fits through gates of fenced yards. When very large logs not easily accessible or easily moved. What then? Two options: a slabbing chain saw can reduce logs to manageable pieces for moving/sawing. Or, more extreme option (video). Back to question: basic equipment necessary for urban forest products business? saw truck log mover slab saw crane truck or trailer with crane or hauling trailer forklift kiln: size & type (vacuum vs. dehumidification) should be carefully researched. Check & USDA FS publications. To start, consider either using available kiln in area or building own (example, CALFIRE shipping container kiln at Palomar College). 4

5 moisture meter (and hand plane if meter is non-probe type) metal detector chain saw manual log lift wench back support belt modestly equipped woodworking shop for wood products (or just shaper for flooring): note angle grinder for shaping natural edges on straight end cuts. 3. What wood products? Some saw, dry, & sell lumber: Horigan Urban Forest Products, Skokie, IL Gia Carrozzi, True Cut Custom Milling, McKinleyville, CA Far West Forest Products, Sheridan, CA Evan Shively, Marshall, CA Urban Forest Products of Asheville (mainly drying slabs) Woody's Urban Forestry Products, Sacramento, CA Andy Trotter, VP, West Coast Arborist, Inc., Anaheim, CA In addition to lumber, some make other products such as flooring: Anderson s Alternatives, Mendocino, CA Rob Bjorklund, Local Wood, Santa Barbara, CA Dave Parmeter, CA Hardwood Producers, Auburn, CA John's Urban Timber, Whitmore Lake, MI Others produce lumber plus a variety of constructed products such as outdoor buildings & furniture: Don Seawater, Pacific Coast Lumber, San Luis Obispo, CA West Coast Arborists, Anaheim, CA Finally, there are those who process or can manage the processing of urban trees into lumber & make a range of products from furniture to building timber to art works: Jim Newsome, Urban Hardwoods, Seattle, WA George Hessenthaler, Urban Forest Woodworks, Logan UT Paul Discoe, Live Edge, LLC, Oakland, CA John Metzler (late), Urban Tree Forge, Pittsburgh, PA William Scroggins, Moonstone Redwood, Cambria, CA Sam Sherrill, Urban Forest Craftsmen, Milford, OH Recommendations Pick process you like: lumber production only, basic products such as shingles & small buildings furniture & wood art. Recognize that part-time or hobby very different than running full-time business. Full-time business means more time on marketing/management than sawing. Purchase as much equipment as affordable to reduce the amount of physical effort (injury). Consider used equipment. Greater physical effort, more likely injuries that shut down work, lose paying projects, reputation for reliability. Don t underestimate impact of injuries & illness. Minimum two-person operation: each being equally productive substitute for other. Both able to operate mill with equal skill. Seriously consider a kiln at start-up. Can control the drying process critical to production. especially for one-of-a-kind trees. Consider heavy-duty planer to produce s2s lumber. Recommend following to judge urban wood in addition to existing NHLA grading standard. Provenance (Biltmore Estate trees) History (Liberty Tree guitars) 5

6 Figure, Color, Dimensions (Nakashima walnut) Personal Meaning (individual property owners) Community Meaning (benches from public park trees) Between two standards, urban wood recovery rate higher than just NHLA. Can and should market urban wood by both standards. In marketing, emphasize CO 2 sequestration of urban wood products. At minimum, over 30 year period these products will sequester million tons of CO2. Equivalent of annually removing the CO 2 emissions of 723,000 automobiles for 30 years. For more information see: Bratkovich, Steve and Sam Sherrill Carbon and Carbon Dioxide Equivalent Sequestration in Urban Forest Products. Dovetail Partners, Inc. Minneapolis, MN. Go to 6

7 PLACE SCOPE SCALE Six Questions & Some Recommendations 1. Given choice about scope, how large should the operation be? Given demand and adequate log supply and two people: LT-70 or equivalent, chain saw/slab saw, truck, consider a trailer with crane & for hauling logs/lumber, consider log arch/carrier (and ATV), consider forklift, small kiln (2,000 to 4,000 bd. ft. capacity) moisture meter (essential) 2. Can start a smaller business with less & work up? From my experience: Yes. Started with an Wood-Mizer LT-15, Ford Ranger with 7 bed, and small trailer for hauling saw & small logs. Large logs went to a sawyer with large mill & lumber to closest kiln. Did not go beyond this because primary interest is furniture & pen turning. Mill without hydraulics requires much manual labor. 3. Thought been given to transition from hobby/part-time to full-time business? As scale increases, you will spend more time operating business & less time sawing and making wood products. More time with people & less with wood. People can be a whole lot more annoying than sawing and woodworking but then they have the money. 4. What about competition? Expect competitors because capital requirements are low & operating skills modest. Entry is easy, so is the exit. Charge higher prices if first, competitive prices if not. Differentiate from other businesses by linking to: tree service companies (referrals to/from) custom furniture makers kilns manage process from tree to finished product Expect competition from tree service companies selling firewood (cords & shrink wrapped). 5. What are sources of demand for urban lumber? Custom furniture & cabinet makers Architectural millwork firms Wholesale & retail lumber yards Manufacturers of wood products (e.g., plaques, kitchen cutting boards, decorative boxes (including jewelry boxes & humidors), picture frames, shelving, wooden toys, & spindles & dowels. Manufacturers of pallets, skid, crates, & dunnage Trucking companies for trailer decking 7

8 Amateur & professional woodworkers: turners, crafts, & furniture Specific groups such as the PA Amish that buy logs to make furniture/crafts Tree owners: individuals & organizations Urban parks & recreation departments: benches, tables, playgrounds, trail steps & rails educational institutions that teach woodworking Sawmill & kiln operators Architects/interior designers who influence design & use of materials (e.g., LEED credit) Railroad companies for ties Retail woodworking stores such as Woodcraft & Rockler Landscaping companies for retaining walls & steps. 6. Does the cost of certification increase demand enough to pay for itself? Unlikely, if provenance known to owner or is known as an urban tree to buyers. Why would buyers pay extra for what they already know? Will, if designer, architect, builder, furniture maker, or owner wants green credit for projects. LEED may provide some points in certain categories for buildings but none pertain to urban wood directly. Rainforest Alliance s SmartWood Rediscovered Wood may be the best fit (see last page). FSC petitioned in June but voted against certification of urban wood as source for postconsumption products. Not a smart wood move on their part. Recommendations Actively explore private-private arrangements: example, Biltmore Estate Company with Urban Forest Products of Asheville. Also, private-public arrangements: example, Cinti. Parks Dept. fells public trees (and accepts as donations trees from private property owners), uses private mill owner to saw & privately owned kiln to dry, then sells to the Cinti. Public Schools via local architect for gym floors & furniture for school buildings. Whenever possible, leave live edges on lumber. Can trim later. Though drying time longer, special pieces should be 8/4 or better. There is growing market for live edge slabs (>8/4). To find & be found by buyers of lumber & sources of logs, seek free advertising in local media. Check site for accessibility: owners don t always provide accurate information. Photograph grounds before/after sawing on-site in case questions arise later about debris/damage. Check size/quality of logs: confusion between diameter, circumference, & height estimates off. Not in favor of buying urban trees as if they were part of a commercial timber stand: puts bounty on trees & could lead to a logging assault on urban forests. Paying to defray the cost of removal of a tree felled for other reasons (e.g., safety) I believe is ok. For furniture, all boards come from owners logs: good, bad, & ugly. Dried boards may not be as good as they were when just sawn. Need to Mirandize the owner: substitution ok? If drying, charge for storage after 30/60 days (the "dry cleaner" rule). Elsewhere: representatives of IL, MI, WI, & MN have formed the Urban Forest Products Alliance. Currently working through Dovetail Partners, Inc. National organization will represent urban forest products businesses and urban forest advocacy organizations. Consider organizing Urban Forest Products Association of TX and holding conference. Conferences held in San Francisco for CA urban forest products businesses and advocates and a conference will be held at the Biltmore Estate in Asheville, NC on 10/21/11. 8

9 Rainforest Alliance ( Whether salvaged from a riverbed, country barn or city brownstone, Rediscovered Wood and Underwater Salvage certification verifies the sourcing of your wood. The Rainforest Alliance's SmartWood program stamps its seal of approval on reclaimed wood that is procured using procedures that preserve the integrity of the environment as well as the health and welfare of workers and the community. As the demand for forest products grows, so does the pressure on virgin forests and overflowing landfills. Rediscovered Wood and Underwater Salvage certification is a sound choice for saving forests. A list of active Rainforest Alliance Rediscovered Wood clients is maintained for public review. Seven Steps to Rediscovered Wood Certification: 1. Candidate submits certification application. 2. SmartWood sends assessment budget proposal for candidate approval. 3. On-site evaluation of candidate operation is completed. 4. SmartWood certification assessment report sent to candidate for review. 5. Certification approval and term provisions agreed upon. 6. Contract and official certification completed with an awarded certification number. 7. Annual audits are performed every year as part of the commitment to Rediscovered Wood certification. Terms and Definitions: Rediscovered Wood Categories: the following categories of wood products are eligible for Rediscovered Wood classification and certification under the terms of this standard: 1. Wood by-products from secondary manufacturers; 2. Trees from (sub)urban areas (non-forest areas) that are dead, fallen, diseased, or a nuisance; 3. Orchard trees that are unproductive and cut for replacement; 4. Wood recovered from landfills. 9