FYI - Don't know how much is factual, but interesting. Rose

Redwoods deal near collapse

By Dan Walters
(Published Dec. 11, 1998)

Headwaters Forest is one of the largest stands of old-growth redwoods left in
private hands and for well over a decade, a fierce political and legal battle
has been waged over its fate.

Years of demonstrations by environmental zealots and political firefights
seemingly came to a climax last September. The Legislature appropriated $245
million to match $250 million in federal funds and purchase nearly 10,000
acres of Headwaters Forest from Pacific Lumber Co. southeast of Eureka. It was
a particular triumph for U.S. Sen. Dianne Feinstein, who had played a key role
in the compromise.

As it turns out, however, the Headwaters Forest deal is gasping for air and
the incoming governor, Democrat Gray Davis, will find it on his desk when he
occupies the governor's office next month.

Aides to the outgoing Republican governor, Pete Wilson, Pacific Lumber and
federal Department of Interior officials are negotiating details of a "habitat
conservation plan" for other Pacific Lumber lands that must be approved before
the purchase can occur. A deadline for the plan is looming next week and the
entire deal, sources close to the negotiations say, is threatened by late-
blooming factors.

Federal environmental protection agencies, beset by criticism from redwood-
lovers that the protection plan is too weak, have proposed 13 pages of
amendments that are receiving a negative reaction from Pacific Lumber. "They
have gotten cold feet," one Wilson administration official says of the feds.

If negotiations fail, the Headwaters deal will begin to collapse. And
deadlines are relatively inflexible because a series of reaction periods are
required before the purchase can be finalized and the federal appropriation
expires in March. Feinstein is warning that if the federal money expires, it's
uncertain that it can be renewed.

Even if the new differences are overcome, however, an agency controlled by the
new governor must give its final approval, certifying that the habitat plan
will, in fact, protect wildlife, before state money can be released. So Davis
may have the final word and he's under increasing pressure from critics of the
Headwaters deal to kill it. He's appointed Robert Hight, executive officer of
the State Lands Commission, to monitor the situation for him.

Beyond the stiffening federal attitude toward the habitat plan, several other
factors have arisen to threaten the purchase scheme.

A big one is that Pacific Lumber has run afoul of the state's forestry
regulators for its logging activities. Opponents of the Headwaters deal are
contending that the company can't be trusted to carry out any logging
restrictions in the habitat plan. Even a high-level supporter of the purchase
agrees that "those who would crater the deal have been given all the cover
they need by the company" because of its lax logging practices.

Another factor is that when the state's money was appropriated, there were big
budget surpluses. But deficits now loom because of an economic slowdown and
legislative liberals, who didn't like the deal in the first place, are arguing
that the money should be used elsewhere.

Still another is that Barry Munitz, director of the Getty Museum, is Davis'
top adviser on forming his new administration but once was a close aide to
Charles Hurwitz, the Texas tycoon who owns Pacific Lumber and who is an arch-
villain to environmentalists.

One source close to the situation describes it as "a precarious deal right
now." And if the deal does collapse, the stage will be set for more years of
demonstrations and legal battles whose outcome cannot be predicted.

DAN WALTERS' column appears daily except Saturday. E-mail:
dwalters@sacbee.com; mail: P.O. Box 15779, Sacramento, 95852; phone: (916)
321-1195; fax: (916) 444-7838. Find previous columns here

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