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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
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

``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

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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Deal near on Headwaters
By Robert Salladay
EXAMINER CAPITOL BUREAU Tuesday, July 28, 1998


Lawmakers, Wilson would pay Hurwitz for part of forest to boost habitat
protection elsewhere

SACRAMENTO -- The Legislature and Gov. Wilson are near agreement to expand
environmental protections for the Headwaters Forest and give financier
Charles Hurwitz $130 million for a portion of the towering redwood forest,
sources said.

Environmental groups, suspicious that a back-room deal will weaken
protections for the coho salmon and endangered birds, want the Legislature
to scrap more than a decade of negotiations with Hurwitz and take their
chances in court using the Endangered Species Act and other environmental

But Wilson and lawmakers, currently negotiating the state's $75.8 billion
budget, want to finish the deal soon, perhaps within days. A do-nothing
strategy, they say, would be worse for the Headwaters Forest than a package
deal that contains at least some stronger environmental protections.

"I think we are coming to the closing moments," said Assemblywoman Carole
Migden, D-San Francisco, who is helping negotiate a deal. "The governor,
environmentalist legislators, as well as those who are not as hard-line,
are willing to find a middle ground. Politics is the art of compromise."

A tentative agreement allows the government to buy 7,500 acres of the
Headwaters redwood grove for $380 million, protecting it from any logging.
Wrapped around the deal is a 1,000-page environmental plan for 210,000
surrounding acres that Pacific Lumber Co. would log.

The state's share of the deal is $130 million, which would be included in
this year's budget. Before giving up the money, California lawmakers want
to expand "buffer zones" around streams and tributaries so runoff from
logging won't spoil the spawning grounds for the endangered coho salmon.

Under the environmental plan already worked out between Pacific Lumber and
federal authorities, no logging can take place within 30 feet of large
streams and within 10 feet of smaller tributaries. For an additional 140
feet from the water, the company must leave 10 trees per acre standing.

The ancient forests, some with trees 300 feet tall, are home to 160
wildlife species, from the furry, weasel-like fisher to coho salmon, plus
rare orchids and imperiled salamanders.

A deal being considered in the Legislature would expand the stricter
no-cutting zones to 100 feet from the water, sources said. That's a
significant compromise for environmentalist lawmakers, who wanted far
greater protections.

"The governor's office actually is kind of in tune with what our office has
been doing with Headwaters," said Senate President pro tem John Burton,
D-San Francisco. "There are certain conditions that should be met, and
they're supportive of that."

Sean Walsh, spokesman for Wilson, said the governor was making sure the
agreement was something Hurwitz could accept as well. There is a fear that
without an agreement with Hurwitz, the state would be taking a perilous
chance fighting the logging company in court to uphold environmental
"Some environmentalists may be able to forum-shop for a favorable judge on
the first step or maybe even the second step," Walsh said, "but they will
eventually lose."

Pacific Lumber, which Hurwitz controls through the Maxxam Corp. holding
company, is resistant to changing the environmental agreement worked out
with the federal government. The company says environmental protections are
adequate and scientifically based.

Some state lawmakers, however, are concerned about protections for several
old-growth redwood groves -- so-called "lesser cathedrals" -- outside of
the main Headwaters area. And they worry about a previously unknown section
of the environmental plan that allows Pacific Lumber to build more logging

Pacific Lumber president and CEO John Campbell said the company already had
agreed not to log in the lesser cathedrals, which are important for the
survival of the marbled murrelet, a seabird. The agreement is for 50 years,
but environmental groups worry that loopholes will allow for intermittent
logging during that period.

Campbell also said the current 30-foot buffer zones kept nearly 30,000
acres free of logging. And he said the company would be closing some roads
and improving and expanding others, but not adding to the number of roads
in the area.

"We've got far more environmental protections than are required for any
other private forest land in California," Campbell said Monday. "We think
we've negotiated a very good deal . . . and it's appropriate for the state
to step up and fund the deal."

Pacific Lumber has already sued California and the federal government,
alleging their land has been unconstitutionally taken from them because of
the environmental restrictions.

Without an agreement, "It would force us to restart our litigation, and
then we'd be doing everything on a project-by-project basis," Campbell
said. "More importantly, from an overall conservation strategy, I think it
would be a tremendous setback."

But environmentalists and scientists point to federal studies that show
buffers zones up to 300 feet are needed to protect the streams and
tributaries for habitat.

Fraser Shilling, an aquatic scientist at UC-Davis, said anything smaller
than a 200-foot buffer zone was inadequate. He said the 10-foot buffer
zones around the tributaries must be expanded up as well, and certainly
should not be smaller than the buffer zones for major streams.

"They're just playing with numbers," Shilling said. "Biologically, it
doesn't mean anything."

1998 San Francisco Examiner
Examiner Hot News Feedback

Headwaters deal saved by 'miracle'

By Nancy Vogel
Bee Staff Writer
(Published Sept. 2, 1998)

<Picture>After 10 years of battling over the grove of gigantic, ancient
redwoods known as Headwaters, California has put money on the table to buy
the trees.

Early Tuesday, in what a key legislator called "a minor miracle," the
Assembly agreed with no votes to spare to spend $245 million to purchase
Headwaters and at least one nearby redwood grove. The Assembly and the
Senate, which approved the measure just hours before, tied the money to
tougher stream protections on Pacific Lumber Co.'s Humboldt County land.

Gov. Pete Wilson is expected to sign the bill, and a weary-sounding Pacific
Lumber President John Campbell described himself as "delighted with the

"After 10 years and 10 failed efforts," said U.S. Sen. Dianne Feinstein,
who spent two years brokering a deal on the federal level, "the Headwaters
is saved."

The state money, plus the $250 million Congress set aside two years ago for
Headwaters, will buy 9,500 acres of redwoods -- much of it old-growth.

If, as expected, state and federal agencies approve a plan to protect
endangered sea birds and salmon on the company's remaining 192,000 acres,
company owner Charles Hurwitz will get the money and the public will own
the groves.

Thus will conclude an epic battle over some of the world's most rare
forest, its combatants of proportions as exaggerated as the 12-foot-wide
virgin redwoods. They include Hurwitz, a Houston billionaire who took over
the family-run Pacific Lumber Co. in 1986, activists who padlocked
themselves to logging equipment, and a woman named Butterfly who's spent
the last nine months living in a redwood tree on Pacific Lumber Co.

If the Legislature hadn't appropriated money for a Headwaters purchase
before the end of the session Tuesday morning, a two-year effort to save
the grove probably would have collapsed; Congress had set a March 1, 1999,
deadline on use of its $250 million.

The deal marks the first time that politicians -- in this case, the
California Legislature -- have altered a habitat conservation plan. Such
plans are designed to protect endangered species on private land and are
supposed to be based on the best available science.

The Headwaters HCP invited more political interference than most: It was
part of a larger deal that required Congress and California legislators to
spend hundreds of millions of taxpayer dollars buying land.

State Sen. Byron Sher, D-Palo Alto, and several other Democratic lawmakers
refused to rubber-stamp the key elements of a habitat conservation plan
hammered out last winter by Hurwitz, Feinstein and federal officials.

Sher said he didn't think the plan did enough to protect salmon streams,
and his bill increased the no-logging buffers along those streams from 30
feet to 100 feet. That standard will be in place for several years, until
federal scientists assess each watershed on Pacific Lumber Co. land and
write logging restrictions on a stream-by-stream basis.

"They said it couldn't be done," said Sher. "When we raised these questions
at the beginning, they kind of patted us on the head and said the deal's
already made."

On Tuesday, Feinstein phoned to thank Sher and three other legislators key
to the negotiations -- Sen. Mike Thompson, D-St. Helena, Senate President
Pro Tem John Burton, D-San Francisco, and Assemblywoman Carole Migden,
D-San Francisco.

The lawmakers, with backing from Republican Gov. Pete Wilson, added $115
million to California's $130 million share of the Headwaters deal. Of that,
$15 million will go to Humboldt County for lost property taxes. Up to $100
million will be used to purchase the 904-acre Owl Creek grove, with the
price to be based on an appraiser's estimate. Any money left over will go
toward the purchase of Grizzly Creek grove.

Under the original agreement brokered by Feinstein, one of those two groves
would have been cut. A provision that will stand from the earlier agreement
bans the company for at least the next 50 years from logging scattered
redwood groves covering another roughly 7,000 acres.

The deal approved Tuesday will be incorporated into a habitat conservation
plan that must be approved by state and federal agencies by next March.

While the Legislature's 11th- hour negotiations put the Headwaters deal on
a fast track to completion, grumbling continues.

To environmentalists, the logging restrictions still fall short. They had
sought 300-foot buffers along streams used by salmon.

"What we're seeing is pretty substantial protection for ancient groves,"
said Elyssa Rosen, Sierra Club salmon coordinator. "Unfortunately, what
gets overlooked are the salmon and the streams."

The Environmental Information Protection Center in Garberville attacked the
financing of the deal, calling Pacific Lumber Co. "some of the best
shysters in America." President Paul Mason noted that Hurwitz, who bought
the entire company in 1986 for $870 million, may now earn $480 million for
giving up less than 5 percent of his land.

But Sher and Feinstein said there was no way to preserve the groves without
compensating Hurwitz for trees worth $20,000 or more each.

"If you start with that attitude that he's an evil man and not one dollar
should be paid to him," said Sher, "then these wonderful forests and the
chance of survival for these endangered species are going to be lost."

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