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Published Saturday, July 18, 1998, in the San Jose Mercury News

Headwaters Forest plan has politicians at loggerheads

Saying it's not enough, Sher holds up agreement
BY PAUL ROGERS
Mercury News Staff Writer

For the past 12 years, environmental activists have chained themselves to
trees and hung off the Golden Gate Bridge trying to save the ancient
redwoods of Northern California's Headwaters Forest from logging.

Yet in perhaps the most important showdown yet, the struggle has moved away
>from the TV cameras and the police in riot gear to a new arena: Gov. Pete
Wilson's office.

And now it's crunch time.

A $380 million deal to buy 7,500 acres of the forest from Pacific Lumber
Co. of Humboldt County is tangled up in negotiations this weekend among
``The Big Five'' -- Wilson and the top Sacramento lawmakers haggling over
the state's budget.

One person more than any other is responsible for holding up the redwood
deal: state Sen. Byron Sher, D-Redwood City. And environmentalists couldn't
be happier.

Congress already has approved $250 million for the deal. The remaining $130
million must come from Sacramento.

But the deal shortchanges taxpayers and doesn't go far enough to protect
salmon streams or old-growth trees, Sher says. So, the 70-year-old Stanford
University law professor, widely viewed as the environmental dean of the
Legislature, earlier this year succeeded in pulling the state's $130
million share out of the budget, where Wilson wanted it. Instead, Sher
wrote a separate bill demanding tougher logging rules across all of Pacific
Lumber's remaining 200,000 acres as a condition of receiving the money.

But he has found himself caught in a powerful bipartisan squeeze from
Wilson -- California's most powerful Republican -- and U.S. Sen. Dianne
Feinstein -- the state's most powerful Democrat -- both of whom
painstakingly negotiated the deal with Pacific Lumber owner Charles Hurwitz
and now want to see it survive.

``It's high noon for this deal,'' said Carl Pope, national executive
director of the Sierra Club. ``Byron Sher is under a tremendous amount of
pressure. I'm delighted he has been firm.''

The question now is who will blink. The answer could come any day now.
Wilson and the Republicans could go along with Sher and require the tougher
standards. That could happen under a scenario where Wilson compromises on
Headwaters to win from Democrats his top goal, a cut in the state's car
licensing fees. But one risk is that Hurwitz will walk away from the table.
Or top Democratic negotiators -- Senate President Pro Tem John Burton,
D-San Francisco, and Assembly Speaker Antonio Villaraigosa, D-Los Angeles
-- could abandon Sher, cutting a deal with Wilson that gives them what they
want on issues such as education funding.
Environmental and timber lobbyists have spent weeks frenetically trying to
sway lawmakers.

``Of course I'm nervous,'' said John Campbell, president of Pacific Lumber,
based in Scotia, near Eureka. ``We've spent over 10 years at this. And now
at the 11th hour people are saying it's not enough.''

Sher's bill, said Campbell ``is too restrictive. The company could not
remain economically viable.''

Feinstein also says Sher is driving too hard a bargain.

``There have been at least 10 separate efforts to save Headwaters over the
last 12 years,'' she said, describing herself as ``incredulous.'' ``Every
one of them has failed. This saves virtually more redwood than any other
effort I know of.''

If Sher keeps pushing for a stricter deal, she said, that could endanger
$250 million in federal money already approved by Congress and signed by
President Clinton.

Funds coveted

``There are murmurs back here from other senators about what they would
like to do with the money instead,'' said Feinstein. ``I can say 100
percent that if this doesn't go through, then the federal money is gone. I
feel I've done everything I could over a long period of time to get the
best I could. At some point people have to trust that and recognize that.''

Headwaters Forest, 15 miles south of Eureka, is the world's largest
privately owned old-growth redwood forest. It has been a flash point of
national controversy since 1985, when Hurwitz, chairman of Houston-based
Maxxam Inc., acquired Pacific Lumber in a hostile takeover, doubled the
rate of logging and threatened to clear-cut Headwaters Grove.

After huge protests, Feinstein and other officials reached an agreement
with Hurwitz in 1996 to buy 7,500 acres -- about half of it old growth --
for parkland.

The deal also requires Pacific Lumber to prepare a ``habitat conservation
plan'' for managing its remaining 200,000 acres of forest during the next
50 years.

This week, details emerged in a 2,000-page document from the U.S. Fish and
Wildlife Service, negotiated with Pacific Lumber.

The plan calls for banning logging within 30 feet of endangered salmon
streams. By contrast, Sher's bill calls for 170-foot buffer zones.

And although the plan would preserve 11 smaller old-growth groves, Sher
wants another, Owl Creek.
He said he's not scuttling any deal, just representing the taxpayers of
California.

``I know that Senator Feinstein has invested a lot in this,'' Sher said.
``She deserves credit for getting the agreement. And she was instrumental
in getting the appropriation.

``But I don't believe I was elected by my constituents to rubber-stamp a
deal that was made behind closed doors in Washington. The Legislature had
no influence over it, and then they say OK, give us $130 million.''
If he were almost any other Senate member, Sher probably would have been
steamrollered by now.

But on environmental topics, he carries considerable influence.

As an assemblyman in 1988, Sher wrote the state's Clean Air Act. In 1989 he
wrote the law that required California cities and counties to reduce by 50
percent their trash, through recycling, by 2000. He also has written laws
to toughen drinking water standards, monitor acid rain and put scenic
rivers off limits to dams.

``We have a responsibility to see if this is a good deal for the state of
California,'' said Sher. ``And frankly it has serious flaws in it,
particularly in protecting coho salmon.''

So far, Sher appears to be winning.

In a key test on Thursday, Republican Cathie Wright of Simi Valley
attempted to put the $130 million in Headwaters money back in the budget
bill. She was rebuffed by budget conference committee Chairman Mike
Thompson, D-Napa.

Deal is possible

Thompson, who is running for Congress this November to represent the North
Coast district that includes Headwaters Forest, signed on two weeks ago as
a co-sponsor to Sher's bill.

``Senator Thompson thinks the Sher bill makes the agreement stronger,''
said Ed Matovcik, chief of staff for Thompson.

Meanwhile, Wilson's staff hinted on Friday that he may be willing to wheel
and deal on Headwaters.

``It has been the administration's preference to pay for the Headwaters
agreement out of the general fund,'' said Ron Low, a spokesman for the
governor. ``That's the governor's preference. But as to any deals,
negotiations are ongoing.''

To approve the funding in any form will require a two-thirds vote of the
Legislature.

If the entire deal collapses, environmentalists will be in court fighting
Hurwitz on each timber cutting plan. They say that would be better than the
precedent-setting deal.

But the company says having the deal fall through would be a disaster.

``I just hope the issue is put to bed,'' said Campbell. ``It's crucial to
our 1,500 employees. It will finish a very divisive period on the North
Coast. Otherwise, we're back to square one.''



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