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MOUNTAIN WINTER 2012
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EXPLORING LIFE & LAND IN SOUTHWEST MONTANA
SCOT SCHMIDT COMES HOME
LIFE LOST ONLONE MOUNTAIN: THE SEARCH FOR BRAD GARDNER
FEATURED OUTLAW: LUKAS NELSON
ESCAPE TO B.C.
PHOTO ESSAY THE CROW FAIR
PATAGONIA SURCHANGING THE FACE OF LAND CONSERVATION
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WARREN ADAMS IS AN IDEAS MAN AND A SELF-DESCRIBED NATURE LOVER.
The 45-year-old Harvard MBA created the first-ever social networking site, PlanetAll, in 1996. It sold to Amazon.com two years later, and he stayed with Amazon for two years as a director of product development.
Then in 2000, Adams and his wife Megan—also a Harvard MBA—spent a year traveling the world. They visited Alaska, the Galapagos, the Himalaya, India, New Zealand and Patagonia.
“Patagonia stood out among all those beautiful places for both of us, for its grandeur, the gaucho culture and the biodiversity,” Adams said. The sweeping panoramas and unspoiled ecosystems of southern Chile captured them.
Over three months, they backpacked, visited national parks, stayed at the high-end eco-tourism lodge, Explora, and took a boat to Antarctica. Although land was cheap, and they loved the idea of having a permanent connection to Patagonia, it wasn’t that simple, Adams says.
“It takes time to find the right property, to fully understand the complex issues around title rights and man-made risks such as mining and hydroelectric dams… and then from a distance to manage a property for either construction or protection. It was daunting.”
They returned home to Martha’s Vineyard, built a house and started a family. Adams spent six years as an angel in-vestor, commuting between Martha’s Vineyard, New York and Boston.
ALTERNATIVE
PATAGONIA SU
A SUR FOR!PROFIT GROUP MAY CHANGE THE FACE OF LAND CONSERVATION
But he couldn’t get Patagonia out of his head. “I knew that such an amazing and beautiful place needed protec-tion from inevitable development. But also, I thought it needed a sustainable economic engine.”
In 2006, he decided to do something about it. His goal: bring together Chileans and foreigners to pool capi-tal, conserve Patagonian landscapes, and make a profit through sustainable development.
Adams founded Patagonia Sur a year later, with Ameri-can Steve Reifenberg, and Chileans Felipe Valdés Ar-rieta and Arístides Benavente Aninat as partners.
The business model, Adams says, “starts with the as-sumption that we’re going to protect the land. Then it
asks, ‘what environmentally-friendly things can we do with it to create competitive returns for investors?”
Patagonia Sur now owns 60,000 acres on six remote properties across Chilean Patagonia, and plans to grow to 100,000 acres. The company has raised two-thirds of a $30 million investment goal, 30 percent of which came from Chile. It also operates a thriving eco-tourism business through a membership club. Out of the 100 memberships, 53 have been sold.
They’ve already planted thousands of native trees on deforested landscapes and then generated income by selling carbon offsets. Several universities and corpora-tions have signed major carbon offset contracts.
BY EMILY STIFLER
PHOTO BY ALEX VERHAVE
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Adams’s vision could add an entirely new financing engine to con-servation worldwide.
“Conservation is not an add-on or auxiliary focus of the business. It is what drives Patagonia Sur,” said Brian Ladd, Director of Business Development.
To make a return for investors, the company has several business sub-models: ecologically-appropriate limited development, a membership-based eco-tourism club, real estate brokerage, eco-con-sulting services, carbon sequestration and selling carbon offsets, and ecologically-friendly aquaculture, agriculture and forestry.
“Patagonia Sur is proving that conservation is profitable,” Ladd said.
It’s what sets them apart from the handful of other foreign investors and nonprofits that have also bought and protected large tracts of land in Chilean Patagonia, including Ted Turner, Goldman-Sachs, the Benetton Group, British financier Joseph Lewis, and Conserva-ción Patagonica.
By working with other major landowners to expand the new con-cept, Adams thinks it could impact the entire region and add traction to conservation efforts.
Patagonia Sur has built positive relationships with federal and re-gional governments, as well as with local municipalities and schools. The majority of the team is Chilean, and the sustainable land uses on the properties generate new employment opportunities for local communities.
These communities also benefit from The Patagonia Sur Founda-tion, which sponsors English language and conservation education programs in the towns near its properties, and supports various micro-enterprises such as a weavers’ cooperative and organic veg-etable farmers.
A NEW FRAMEWORK FOR CONSERVATION
ALTERNATIVE
PHOTO BY ALEX VERHAVE
PHOTO BY CHRIS LAURSEN
PHOTO BY ALEX VERHAVE
Warren Adams with his daughter overlooking a Patagonia Sur propertyPHOTO BY MEGAN WEEKS ADAMS
“CONSERVATION IS NOT AN ADD!ON OR AUXILIARY FOCUS OF THE BUSINESS. IT IS WHAT DRIVES PATAGONIA SUR”
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In January 2011, Patagonia Sur brought on a new partner, Henry Tepper, as the company’s Chief Conservation Of-ficer. Tepper spent the last two decades working in private land conservation in the U.S., mostly for nonprofits like The Nature Conservancy and the National Audubon Society.
He’s implementing Patagonia Sur’s ambitious plans to permanently protect the company’s land holdings, while pursuing profitable sustainable land uses, a conservation framework called Productive Protected Lands.
In Chile, Tepper says, there’s growing interest among landowners, nonprofit organizations and government agencies in voluntary strategies and tools for conserving private land.
“In some ways, the climate for conservation in Chile [is similar] to the conditions in the U.S. 40 years ago,” he said. That’s when the private land conservation, or “land trust” movement was launched, making it easier for private land-owners to protect their properties.
Conservation easements are one of the most powerful tools for private land conservation in the U.S. and Canada, and Patagonia Sur and its partners are working hard to adapt easements to Chilean law.
In the U.S., conservation easements are voluntary agree-ments that allow a landowner to protect property by donat-ing development rights to a qualified nonprofit or govern-ment agency. They’re popular because they enable the landowner to maintain ownership, they’re tax deductable, and they allow a range of sustainable land uses. They’ve resulted in tens of millions of protected acres.
The creation of a Chilean conservation easement would be a breakthrough for protecting land, Tepper says. Working
with private sector leadership in Chile, he and Patagonia Sur are supporting conservation easement legislation cur-rently being considered in the Chilean Congress called the Derecho Real de Conservacion—literally, ‘a real conserva-tion law’.
Using existing Chilean law, it’s already possible to cre-ate a form of conservation easement. Called servidumbres ecológicas, these agreements are modeled closely on their U.S. counterparts, but carefully adapted to conform to existing Chilean law.
“We’re moving simultaneously to protect our land with the servidumbre ecológica agreement, and we’re supporting the passage of the Derecho Real de Conservacion, which will make using conservation easements even easier,” Tep-per said.
Patagonia Sur is moving to place servidumbres ecológicas on their properties, starting with the 8,000-acre Valle Califor-nia. The agreement will ensure its permanent conservation, while accommodating a variety of income producing sus-tainable land uses, including a limited number of private residences.
CONSERVATION EASEMENTS
PHOTO BY CHRIS LAURSEN
PHOTO BY MEGAN WEEKS ADAMS
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RETURN ON INVESTMENT
Adams and his family spend between three and six months a year in Chile, and they love the safe, calm nature of Patagonia.
He compares it to the American West. “If you like Montana and Colorado, you’ll love Patagonia. Imagine those places 200 years ago.”
Plus, the country has significant amounts of privately owned land and the highest standard of living in Latin America. Its expanding economy has a big surplus and no debts.
So conservation is possible. And it matters right now.
“Development is happening. Roads are going in, industries are growing,” Ad-ams said. “If we don’t get ahead of that and protect these ecosystems, they’ll quickly be fragmented.” That, he says, would be forever irreversible, in terms
of building a coordinated approach to development.
And Chile is listening.
Its economy is built on timber, mining, agriculture and fisheries. Exports are key to grow those industries. But if it Chile wants to export to the U.S. and the European Union with stricter sustainability regula-tions, it will have to keep up.
This is a turning point for Chile, Tepper says, and other Latin American countries are watching.
Patagonia Sur is working with several universities and corpora-tions including Colgate, Harvard Business School and Land Rover, selling carbon offsets.
“As a conservation person, it’s really exciting,” Tepper said about the program. “Patagonia
was largely burnt to the ground by settlers 100 years ago [to cre-ate pastures for farming], and much of it is still a deforested landscape. We’re creating land-scape scale reforestation and new Patagonian forest, then sell-ing the offsets into the voluntary carbon market.”
Selling the offsets in voluntary market space means companies, universities and individuals are purchasing them because they think it’s the right thing to do, or it’s good for their business—not because they’re required.
CARBON OFFSET PROGRAM
WHY IT MATTERS NOW$30 MILLION OF CAPITAL FOR THE
INITIAL FUND
$20 MILLIONALREADY IN HAND
PLANTED .5 MILLION TREES LAST YEAR
PLAN TO PLANT1 MILLION
TREES IN 2012
SOLD 53 OF THE 100 FAMILY MEMBERSHIPS
SELLING A LIMITED NUMBER OF PROPERTIES
RANGING FROM $300,000 TO
$3 MILLION
To evaluate each property, Patagonia Sur uses a sustainable land use matrix, which means looking at an ecosystem with an eye for input costs and for sustainable uses that would generate income.
“If we’re going to spend $3 million to acquire an ecosystem, we want to know we’re making a competitive rate of return for our investors before we buy it,” Adams said.
Now Patagonia Sur has to make sure they execute and deliver. Adams is optimistic:“The beauty of this model is if we can do it right in Patagonia with the first $30 million, we can attract vast sums of capitol to expand this business model in Chile and elsewhere in the world.”
Investors should initially make around 9 percent annually from ecotourism, carbon credits, and limited real estate sales. Once the other sub-businesses are up and run-ning, that return could double.
“DEVELOPMENT IS HAPPENING. ROADS ARE GOING IN, INDUSTRIES ARE GROWING, IF WE DON’T GET AHEAD OF THAT AND PROTECT THESE ECOSYSTEMS, THEY’LL QUICKLY BE FRAGMENTED.”
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The company is showcasing its new Productive Protected Lands (conserva-tion and sustainable land management) framework at Valle California, an 8,000-acre property in the Palena region of southern Chile.
There, mountains rise above a broad valley, and the El Tigre River flows freely, fed by alpine lakes. The property and its surrounding mountains are home to diverse flora and fauna including the endangered huemul deer, puma, Magel-lanic woodpeckers, and the largest flying bird on earth, the Andean condor. The 122,000-acre Lago Palena National Reserve is nearby.
This spectacular, pristine and accessible landscape represents a key moment for Patagonia Sur. In 2012, they’ll begin selling properties on 7 percent of Valle California, limiting development to 25 houses. This will allow private residences and eco-tourism facili-ties and amenities, and owners will have use of the surrounding permanently protected Conservation Area. The property currently has six luxury yurts as
eco-tourism accommodations, fine dining, and guided horseback riding, hiking, fly fishing and whitewater rafting.
All of Valle California’s 8,000 acres are governed by a servidumbre ecólogica legal agreement, which re-quires permanent conservation and sustainable land uses throughout. To ensure objectivity, permanency and transparency, this agreement will be managed by one of Chile’s first independent, nonprofit land trust organizations.
VALLE CALIFORNIAPHOTO BY ALEX VERHAVE
HOW YOU CAN GET INVOLVED
Adams believes there is inherent value in undisturbed places. He hopes his company and their properties will engage and inspire others in that same sentiment, and ultimately they’ll become part of it as an investor, a member or a landowner.
Patagonia Sur has realized the dream of maintaining a connection to the wild country in southern Chile through land ownership.
And visitors are welcome. “The invitation is open,” Adams says.
patagoniasur.com
PHOTO BY ALEX VERHAVE
Chileans are gaining an understanding of the importance of conser-vation, Adams says.
The government owns 80 percent of the land in Chilean Patagonia, and federal agencies have recently looked to Patagonia Sur to help with land planning and sustainable, productive use.
The company has also consulted other conservation groups and private landowners, and is part of a bipartisan effort to make private land conservation more achievable through federal law.
“Like any start-up, it has ups and downs and roller coasters,” Ad-ams says, “but most days I wake up and say, ‘this is incredible.’”
Adams is passionate about his work, and is proud to involve his family in conservation. He likes working with people from Chile and around the world to create something new.
The final test will be their economic success. Adams says he expects 2012 to be the first year of significant revenue with strong growth thereafter.
He draws an analogy to starting online social networking in 1996. “Everyone looked at me like, ‘What? You’re going to get everyone in the world to be part of a database and be in touch and share info?’ And we did it. This is similar in that [we’re] proving there’s a viable concept that will then hopefully become commonplace.”
When Adams left a meeting one afternoon last year in Santiago, Chile, his 7-year-old daughter was waiting for him in his office. She handed him a drawing of the city. It showed cars, smog, the sun and someone planting a tree.
Looking out the office window, she’d counted all the cars that went by that hour, and guessed how many trees they should plant to offset the carbon dioxide they were releasing.
“The sun had a tear falling from one eye where the city was, and a smile where the tree was being planted,” Adams recalls.
Then she asked how much money it would cost to plant those trees, and how much of that she would keep.
“That showed me the importance of teaching conservation to kids and also the business side in its most bare form,” Adams said. “It is OK to make money by protecting this beautiful place.”
THE FUTURE
ALTERNATIVE
CONTACT
For more information about visiting or investing in Patagonia Sur, please contact Brian Ladd at [email protected].
ARGENTINA
CHILE
Buenos Aires
Lago Espolón
Valle California
Los Leones Valley
JeinimeniTortel
Melimoyu
PATAGONIA SUR PROPERTIES
SOUTH AMERICA
PATAGONIA
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