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State seeking 'side pact' in Headwaters deal By JOHN HOWARD Associated Press Writer GARBERVILLE, Calif. (AP) -- California authorities, fearful that long-term environmental protections in the $480 million Headwaters Forest agreement may be inadequate, are quietly seeking an agreement with Pacific Lumber Co. to protect wildlife habitats for at least 50 years. State officials described the potential accord as a "side contract" or "side agreement" over and above the 1996 Headwaters Forest accord. It would ensure that environmental protections remain in effect on Pacific Lumber's 200,000-plus acres of holdings after the state pays its $230 million share to purchase a portion of an ancient redwood forest and turn it into a public preserve. The Davis administration, which Capitol sources say inspired the new round of negotiations, declined to discuss the issue. The president of Pacific Lumber said he was unaware of any "sidebar agreement" with the state. The company is negotiating on a site-by-site basis as part of the larger agreement with the state and federal governments, he said. The negotiations gained momentum last week. They have created political tension in Sacramento, Washington and Scotia, Calif., where Pacific Lumber is based, as the deadline nears for the Headwaters deal to go into effect. One problem: The federal government, including U.S. Sen. Dianne Feinstein and the Interior Department, want the controversial transaction consummated. But the state, beginning to echo the concerns of environmentalists, is moving far more cautiously. If the deal isn't concluded by Feb. 28, government funding will expire. A state senator said California Justice Department lawyers are drafting the contract, which must be signed by the state and Pacific Lumber before the California's $230 million share is disbursed by the Wildlife Conservation Board. The terms of the contract are expected to be disclosed the final week in February, just days before the deadline, in Sacramento At that special meeting of the board -- the final major hearing of the Headwaters negotiations -- the board also is expected to formally spend the money. The side contract was not part of the main Headwaters Forest deal, under which the state and federal governments jointly would purchase some 10,000 acres of Pacific Lumber timber, including 3,000 acres of ancient redwoods. But state sources believe the deal could collapse if the contract, pushed by new Resources Secretary Mary Nichols, isn't signed. Environmentalists agree, and believe the contract is an opportunity to protect the public. "This is absolutely a necessary thing. It is necessary for the state to actually implement the conditions they had in mind, to ensure that what they intended in the legislation is actually going to happen," said Paul Mason of the Environmental Protection Information Center of Garberville. Generally, Maxxam Corp., Pacific Lumber Co., the Interior Department and Feinstein -- who brokered the Headwaters pact -- support the agreement and the federally written Habitat Conservation Plan, or HCP. That revised environmental document, a crucial part of the deal, describes Pacific Lumber's long-term logging and forest-management strategy on its holdings in Humboldt County. But the newly installed administration of Democratic Gov. Gray Davis has raised questions about whether Pacific Lumber or the federal government could weaken or amend the HCP after the state has paid its money. At issue are environmental restrictions on all of Pacific Lumber's property, not just the 10,000 acres encompassed by the deal. The side contract is viewed by the state as an ironclad guarantee that environmental safeguards wouldn't be weakened over time, said state Sen. Byron Sher, D-Stanford, a key legislative player in the Headwaters negotiations. "In our view, that's what we are paying for," Sher said. "It's not just to acquire public ownership of 10,000 acres, but also we are buying 50-year protection on 220,000 acres that will remain in private ownership. "You need to have protections on how the company manages its land, and you can't do that just by looking at the final HCP," he said. "The protections have got to be built in." "They want it bulletproof. No loopholes," added one person familiar with the negotiations who spoke on condition of anonymity. The contract restricts for 50 years how close to streams the company can log, the impact on watersheds and the so-called "lesser cathedrals" of old-growth timber, how its logging roads would be constructed, whether fowl and wildlife habitats would be disturbed and other issues. But the company believes the proposed environmental restrictions are driven at least in part by politics rather than sound science. "Our idea is to get away from one-size-fits-all, which is in the document at the moment. We are designing site-specific restrictions to replace the one size-fits-all," said John Campbell, president of Pacific Lumber. "We think this should be a science-driven procedure, rather than a politically driven one." He said the company wanted to make sure it remained economically viable. "This is something we've said all along: The company will not accept a bad deal, and when I say bad, I mean bad for our employees, bad for the local economy and the economic viability of our company," Campbell said. As the deadline nears, several more bureaucratic steps remain. In the final week, federal authorities are likely to issue several documents -- one is known as a "biological opinion" examining the HCP's impact on wildlife, another is a "record of decision" examining the deal in detail. Finally, the government will issue an "incidental take permit," which in effect is the final authorization for the HCP. Also to be decided are the state and federal tax impacts on Maxxam Corp. and Pacific Lumber after the $480 million changes hands. The original Headwaters agreement says the Internal Revenue Service and the state Franchise Tax Board will work out what the accord describes as an "acceptable" tax arrangement. No details were provided, and Maxxam and the government declined to discuss the issue Friday.
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