With housing construction down and timber industry finances described ''as the worst since the depression,'' this would not seem to be the time to offer investors an opportunity to own timber. But William H. Gregory had a different idea and found quick success.
Mr. Gregory, a one-time forest products tax accountant in the Portland office of Arthur Andresen & Co., is now head of William H. Gregory & Co. here, which has made successful offerings of three limited partnerships in timber ownership that attracted a total investment of $12 million.
And when he's not offering partnerships, Gregory is running two sawmills of his own, a sideline he keeps separate from the partnership investments.
The success of these offerings, Gregory said, reflects today's trend to invest in natural resource industries and the search by investors for tax benefits. Each of Gregory's first limited partnerships has 35 limited partners, whose liability is limited to their financial investment. Gregory assumed the general and limited partner liability in each.
Mr. Gregory's basic idea was to provide much-needed equity capital to the forest products industry by forming partnerships to buy timber-cutting rights - on federal, state, and private lands. These rights are then given to sawmills in exchange for tax benefits growing out of timber ownership and a share in the increasing value of the timber.
''We cruise the timber and accept deals that are beneficial. Mill owners are in the manufacturing business and why should they have to bear the risk of holding standing timber?'' he says.
What Gregory has done is match up investors with mill operators who have timber and who need outside funds. ''What we are,'' Gregory says, ''is investment bankers in the timber industry.''
The first two partnerships purchased a total of 187 million board feet of standing timber.
Timber acquisitions by the Gregory firm are no hit-and-miss thing. The firm employs four experienced foresters whose advice is closely followed in making purchases.
The concept developed by Mr. Gregory has a general partner and 35 individual units for investor purchase. Upon recovery of the partners' investment, earnings are split, with 70 percent to the limited partners and 30 percent to the general partner.
Initial investors came from Washington and Oregon and Gregory will look to Texas and Massachusetts for more.
Mr. Gregory's familiarity with the forest products industry goes back school vacations when he worked with various firms, and later, with Arthur Andersen. Many of his clients with the auditing firm were in the timber industry, and others were substantial investors.
This acquaintance with lumber has helped Gregory in his other ''occupation'' - that of mill operator. He is personally active as owner of two mills in the vicinity of Klamath Falls, in southern Oregon, which he bought from the Robert Dollar Company of San Francisco. He now spends three days a week in Klamath Falls supervising his 225 employees.
In no way connected with the limited partnership operations, the Dollar properties were bought by Mr. Gregory for $3 million, a purchase that he says puts him closer to the timber industry.