published Tuesday, November 10, 1998, in the San Jose Mercury News

Tree deal is tricky

Agencies endeavor to meet deadline for Headwaters buy

SACRAMENTO (AP) -- A host of state and federal agencies are struggling to
find the right way to spend $380 million set aside for the purchase of the
Headwaters Forest, witnesses said Monday at a legislative hearing.

With a March 1 deadline looming, there is no consensus on how to acquire
from Pacific Lumber Co. the 7,500-acre Headwaters Forest, the world's
largest privately held stand of ancient redwoods.

The land is to be set aside as a public preserve.

"This can't wait until the last minute," said state Sen. Byron Sher,
D-Redwood City. "This deal's got to be wrapped up."

It remained unclear Monday whether the land 280 miles up the coast from San
Francisco will be owned and administered by the state, the federal
government or both.

The Bureau of Land Management has been designated to handle administration
of the Headwaters Forest for the federal government, said David Nawi, a
U.S. Interior Department attorney.

The California Wildlife Conservation Board, part of the state Resources
Agency, is handling California's end of the purchase.

The Headwaters agreement is by far the largest and most complex purchase
the board has handled, said Assistant Executive Director Jim Sarro.

"It's a very short deadline, but we can meet it," Sarro said.

The board is considering four purchase options and will present the
Legislature with an agreement in February. The simplest of the four -- a
direct purchase of the deed -- isn't feasible because there isn't enough
time for the board to complete an appraisal required by law, he said.

Other options include a grant of state money to the federal government and
a court settlement that involves land-for-cash and a dismissal of Pacific
Lumber's lawsuits against the state and federal government.

Sher, a legislative leader on Headwaters, said he was worried that state
lawmakers were being left out of the process as he claimed they were when
the Headwaters agreement was first reached two years ago.

"I'm concerned we're going to get into the same box where we don't know
what's going on," Sher said. "You're asking for disaster if you proceed in
talking to federal agencies and keep us out of the loop."

Further complicating things, the Headwaters acquisition is linked to
logging on Pacific Lumber's remaining 200,000 acres of timber, home to 36
federally protected species.

Legislators authorized the Headwaters purchase as the clock ran down on the
1998 session after Pacific Lumber made some last-minute concessions.

The company agreed not to log within 100 feet on either side of streams
where the threatened coho salmon and other fish swim or within 30 feet of
tributaries of those streams. Pacific Lumber said the no-cut zones lock up
12,000 acres of timber.

Lawmakers said that part of the Headwaters price tag includes compensating
Pacific Lumber for agreeing not to cut near the streams.

"We want to get what we pay for," said Assemblywoman Carole Migden, D-San

Pacific Lumber says the no-cut zones and other logging restrictions
represent a "quantum leap" beyond current forest practice rules in
California, some of the most restrictive in the nation, and could set the
standard for California's $1 billion timber industry.

Other timber firms are concerned that Pacific Lumber has made too many
concessions and agreed to restrictions other companies could not meet and
still stay in business, said John Campbell, president of Pacific Lumber.

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