Colorado billionaire takes on solar plans
November 30, 2010
DENVER – Reclusive billionaire Louis Moore Bacon is emerging from the shadows in a southern Colorado showdown over solar-power transmission lines.
One side of the environmental clash paints the 54-year-old hedge-fund-managing land baron and conservationist as a natural-resource champion protecting one of the state’s last unspoiled ranches. The other sees a deep-pocketed NIMBY guarding his own private Eden and thwarting Colorado’s pioneering push for statewide solar energy.
Bacon’s goal is to stop Xcel Energy and Tri-State Generation and Transmission Association from running solar-transmission lines across his 171,400-acre Trinchera Ranch, home to the state’s third-highest peak, Mount Blanca. He calls the peak and its surroundings a “state and national treasure.”
“Having helped many others in their fights against outside, profit-oriented polluters, I couldn’t shirk this battle when I know there is so much at stake for the San Luis Valley residents, the range, the environment, the animals and for all of Colorado,” he said in an e-mail interview with The Denver Post.
The transmission project, however, is supported by Western Resource Advocates, a Boulder-based environmental law and policy group.
Three of the valley’s county commissions – Alamosa, Saguache and Rio Grande – also have voiced support for the line, which they see as helping to ensure electricity reliability and promoting economic development.
The utilities argue that the long-planned transmission lines not only meet requirements of new clean-energy legislation but provide a loop system that protects the flow of power to the San Luis Valley.
Initial hopes to have the line ready by 2013 are now stalled by at least several years, in large part because of Bacon’s effort to push the $180 million project into more intensive environmental review.
“The losers here are the people of Colorado who have clearly expressed their desire for us to develop solar potential,” said Xcel spokesman Mark Stutz.
Utility companies rarely lose fights for transmission upgrades, which many view as an essential step toward providing alternative energy. But utility companies seldom confront deep-pocketed conservation stalwarts like Bacon.
“He’s never scared of a fistfight,” said environmentalist Robert Kennedy Jr., whose Waterkeeper Alliance has tapped Bacon’s bounty for protracted legal fights against industrial hog farms in North Carolina and a coral-reef-threatening development plan in the Bahamas. “He is our single largest supporter. He’s one of the few supporters out there who are willing to fund litigation and fight long term.”
Bacon’s conservation ethic traces back to his boyhood in North Carolina. Born in 1956 in Raleigh, Bacon grew up hunting and fishing. While studying American literature at Vermont’s Middlebury College, he spent spare time stalking deer in the Green Mountains.
“I realized then that an upbringing as a young sportsman was differentiating,” he said.
Today, the twice-married father of six is an accomplished skier and bow hunter with a yen for bull elk. He visits Trinchera every season, and even though he finds plenty of elk, he’s missed his trophy the past four years. He also skis at the ranch, hiking and using snowmobiles to access backcountry runs spilling from Trinchera’s three fourteeners, Lindsey, Blanca and Little Bear.
Bacon’s grandfather Louis T. Moore was an early environmental champion who earned the nickname “Bully” for his fight to protect the regal trees from road development in southeastern North Carolina in the early 1900s. Nonetheless, many of his efforts failed, and those treeless tracts in his grandfather’s hometown of Wilmington, N.C., resonate with Bacon.
“It reminds me that partial victories are important and that defeats can serve to raise public awareness that some things are greater than any of us as individuals,” he said. “Once they’re gone, we can never get them back.”
Bacon bought Trinchera in 2007 from Malcolm Forbes largely for its undeveloped nature. Forbes, who in 2004 permanently removed development rights on 81,400 acres at Trinchera, sold to Bacon based on his promise to continue the ranch’s environmental legacy, a Forbes spokeswoman said. The $175 million deal marked the highest price ever paid for a single- family home in U.S. history.
Bacon’s personal fortune is estimated at $1.6 billion by Forbes magazine, which ranks him as the 238th-richest American. He amassed it investing and trading, with a large-bet, large-yield style that revolves around risk management.
His Moore Capital Management today controls some $16 billion in investments spread across several funds and is one of the few remaining players in the world of macro investing, which involves “discretionary traders” using their own intuition and judgment to swiftly move huge amounts of money around in currency, equity, stock and bond markets.
“Everyone calls him the ultimate risk manager,” said Jay, a longtime hedge-fund insider whose Market Folly website tracks more than 40 hedge funds. (He cannot use his last name because of confidentiality agreements with the Dallas financial firm where he works.) “He excels at risk management.”
It’s a lesson Bacon learned early in his career, when a mentor shot himself at age 37 after a bad stock bet. Bacon also lost his student-loan money on bad investments three straight terms while in graduate school at Columbia University.
He rarely makes bad bets anymore. Since starting his firm’s first fund in 1990 with a $25,000 inheritance from his mother, Bacon’s 20-year-old flagship Moore Global Investments fund has climbed from $1,000 a share to more than $42,000, averaging 22 percent returns every year and enduring three negative years. Barron’s ranks the fund at No. 33 among the top 100 hedge funds.
This year, however, is not tracking toward a banner year for Bacon, who in April paid a $25 million fine to the Commodity Futures Trading Commission, settling charges that a former portfolio manager manipulated futures prices for platinum and palladium during the final minutes of daily trading in late 2007 and early 2008. The practice is known as “banging the close.”
Through the first quarter of the year, Bacon’s MGI fund was up 2.3 percent. But May, which Hedge Fund Research Inc. called the worst month for hedge funds since November 2008, saw Moore Global Investments plummet 9.2 percent, its worst month ever.
With his money, Bacon has amassed a billionaire’s trophy shelf of plantations, palaces and playgrounds in the Bahamas, North Carolina, New York, Great Britain and Colorado.
Bacon has quashed development potential on his 435-acre Robins Island off New York’s Long Island and the 540-acre Cow Neck Farm near New York’s tony Southampton, where home sites sell for millions.
He also has reaped millions of dollars in tax breaks on his development-shunning properties, many of which host a bounty of wildlife that feeds Bacon’s passion for hunting. Newspapers on Long Island report that Bacon often hosts wealthy pals for “driven” pheasant hunts on Robins Island.
He has tripled conservation spending since buying Trinchera, said ranch manager Ty Ryland, whose father managed the property under Forbes.
Bacon’s 2,385-acre “Sound of Music” ranch on Wilson Mesa above Telluride – which he bought in 2007 for $26 million – also is under an easement that limits development to eight homes. The 20,000-acre Tercio Ranch he bought near Trinidad in 1996 has become, like Trinchera, a national example for progressive fire mitigation and coal-bed methane development.
At Trinchera Ranch, Bacon provides weeklong teacher workshops, scholarships for local students, free firewood harvesting and public hunting programs.
The Colorado Division of Wildlife has even used the ranch as an outdoor laboratory.
“Trinchera, under Mr. Bacon, has become an integral part of several of our management plans for several species,” said Jerry Apker, head of the division’s Ranching for Wildlife program.
Still, Apker said Division of Wildlife experts suggest that transmission lines across Trinchera would “not cause any direct significant impact to any species.”
“It’s more aesthetic and visual impact,” he said.
Ranch manager Ryland, who has lived on Trinchera since he was a boy and speaks with the valley’s deliberate lilt, frets that the transmission-line fight could aggravate Bacon as similar hassles once did Forbes, who bought the ranch in 1969 for $3 million. When the state denied Forbes’ request in the late 1970s to fence a large portion of Trinchera as a wildlife reserve for trophy hunts – the wildlife of Colorado is public property – he carved 86,000 acres into 12,000 lots.
“Louis Bacon is absolutely the last person I would expect to develop a piece of property, but once you take the heart out of something and
someone, you just never know what could happen,” said Ryland as he nudged his new d iesel Ford truck up a gated track off U.S. 160 to an overlook on the ranch. “You can never really rule that out. I’ve seen it happen.”
Bacon is working to sway state leadership toward his camp. His team met in the summer with Lt. Gov.-elect Joe Garcia, who declined to comment on those talks. Bacon has given donations to Colorado’s state and national politicians from both parties. He has hired utility attorneys to design alternatives to the route through Trinchera.
Bacon, though, likes to point to local landowners who have rallied behind his well-organized effort as “the real leaders of the protest.”
“When a profit-seeking company proposes to take citizens’ private land away for its own gain, people should stand up for their rights,” he said. “All I did was slow down the utilities’ reckless effort long enough to give other landowners a chance to understand what they were being railroaded into.”
A “Solar Working Group” separate from Bacon’s Trinchera recently formed in the San Luis Valley and is urging, like Bacon, further exploration of alternative corridors.
Still, Bacon is an undeniable force behind the opposition.
He has paid Denver public-relations firm GBSM $100,000 in the past two years to help coordinate his fight against Xcel and Tri-State.
And he’s no stranger to ramping up a fight. Or even a petty squabble.
Last summer, police visiting Bacon’s Lyford Cay palace in the Bahamas found four high-end Meyer Sound speakers that local news reports described as “ultrasonic weaponry” capable of projecting powerful soundwaves across long distances. The speakers, typically used in outdoor arenas, can potentially damage structures and injure people.
The speakers, according to a statement by Bacon’s local attorney, were used to “counterbalance loud music” emanating from boisterous parties at the compound of Bacon’s across-the-cay neighbor, billionaire fashion designer Peter Nygard. Nygard’s attorneys, in a public statement, said the “sound cannons” caused Nygard to suffer “headaches and irregular heartbeats.” (The two billionaire neighbors remain locked in lawsuits over access and easements.)
“The continued escalation of Nygard’s late-night parties and his refusal to abide by Lyford Cay protocols left few options but an effort to return in kind the music that he broadcast,” read the statement from Bacon’s Bahamas attorney Pericles Maillis.
Bacon’s Colorado full-press PR campaign to highlight alternative routes for the transmission line is far reaching. Superstar crooner Sting this summer visited the Denver Art Museum and paused to gaze at a painting of Trinchera’s Mount Blanca, on loan to the museum by Bacon. As if on cue, Sting told a gallery of invited reporters he’d be “very upset if there was a huge system of power lines in front of it.”
“It’s so bizarre to defend ourselves from this big rock-star guy,” said Xcel’s Stutz. “It is unusual for us to deal with a landowner who hires his own PR firm and bevy of lawyers.”