Last-Minute Deal Reached on Headwaters

In a dramatic, last-minute reversal, the Pacific Lumber Co. agreed to a $480-million deal to save California’s Headwaters Forest after government officials substantially raised their estimates of the amount of timber that the company would be allowed to cut.

The agreement was reached Monday just before midnight, when the federal share of the purchase price would have been withdrawn, and the 12-year-old campaign to preserve the last large stands of privately owned ancient redwoods would have been lost.

“This agreement accomplishes what many people worked toward for so many years,” said John Campbell, president of Pacific Lumber. “We were able to preserve Headwaters and at the same time give the company the stability it needs to remain a vital part of the North Coast economy.”

The agreement transfers about 10,000 acres of the North Coast forest into public ownership and sets strict new guidelines for protecting water quality and wildlife habitat on more than 200,000 acres of surrounding forest that will remain in Pacific Lumber’s hands.

The majestic trees are a remnant of the redwood empire that once extended from the Oregon border to Big Sur. Today, only about 5% of the original forest is still intact, almost all of it in publicly owned parks and preserves.

The trees and streams of the Headwaters Forest are home to several dwindling species of wildlife, including the northern spotted owl; the marbled murrelet, a small seabird that nests in large trees; and the coho salmon, whose numbers have plummeted in recent years.

The strategy for protecting wildlife was at the heart of the agreement because it determined how much of Pacific Lumber’s land would remain off-limits to logging.

Last week, state officials estimated that Pacific Lumber would be able to cut 138 million board-feet of timber annually. But by Monday, officials said that the initial estimate had been in error and that the proper figure was closer to 180 million.

Campbell, meanwhile, said that he expects his firm to be able to cut close to 200 million board-feet under the terms of the agreement. Last week, he had said that 210 million board-feet was the minimum amount acceptable to the company.

Several environmentalists expressed concern Tuesday that wildlife protection may have been compromised to reach the final accord.

State and federal officials insisted that the conditions had not been altered and said that the resulting pact will prove historic.

“This will go down in history as one of the great achievements of our time, along with [the creation of] Yosemite, Sequoia and Kings Canyon National Parks,” said U.S. Interior Secretary Bruce Babbitt at a Tuesday morning news conference where he was joined by White House Chief of Staff John Podesta and Sen. Dianne Feinstein (D-Calif.).

“It establishes unprecedented safeguards for endangered species,” Podesta said.

A Long-Running Environmental Battle

President Clinton, who has included the preservation of Headwaters among his environmental priorities, praised the accord Tuesday, describing the redwoods as “a national treasure” and comparing their value to that of “the world’s great libraries and cathedrals.”

The agreement could bring an end to one of the longest-running environmental battles in the nation. The siege of Headwaters has been marked by massive civil disobedience, thousands of arrests of people protesting the logging of 1,000-year-old trees and the death of a protester killed by a tree that was being cut down by a logger last fall.

The conflict dates back to the takeover of Pacific Lumber in 1986 by Houston-based Maxxam Inc. and that company’s decision to triple the rate of logging, a course of action that eventually would have liquidated all the big trees.

Many environmental groups hailed the final agreement.

“It is a terrific accomplishment to bring the largest groves into public ownership, plus it breaks new ground on the protection of timber on private land,” said Jay Watson of the Wilderness Society. “The prohibitions on logging near streams far exceeds state standards.”

Besides prohibiting logging near streams, terms of the deal bar cutting trees for 50 years in about a dozen old-growth groves that remain in private ownership.

Moreover, the agreement establishes penalties “that are higher than any ever imposed” on timber companies in the past, said Mary Nichols, California’s Secretary of Resources.

If Pacific Lumber takes down a tree in a no-cutting zone, the company would be fined $1,000 to $3,000, plus up to 250% of the tree’s pre-milled value, state officials said. The pact capped three days of intense negotiations after Pacific Lumber and its parent company, Maxxam, rejected the government’s terms last Friday. Officials of the companies said that the proposed logging restrictions, which are tougher than state law now impose, would have made it impossible to pay off $867 million in bonded indebtedness for which Headwaters timber is the collateral.

Babbitt and Gov. Gray Davis said Tuesday that the terms of the deal had not been watered down since Friday.

“We did not move off [our] position,” Davis said Tuesday.

“Nothing was backed away from. The habitat protection stands,” said Feinstein, who was widely credited with keeping the talks going.

At a separate news conference Tuesday, Pacific Lumber President Campbell said that “clarifications” of the complex agreement convinced the company that it could log significantly more wood than was announced last week and that some of the timber could be cut in areas of the forest prone to landslides that previously were thought to be off-limits.

“We also had some flexibility in areas of instability on the property where the consensus was reached that we could do some selective cutting rather than clear-cutting and that could boost volume,” Campbell said.

In rejecting the agreement last Friday, Campbell referred to a California Department of Forestry estimate that Pacific Lumber would only be allowed to harvest about 138 million board-feet a year.

But David Hayes, counselor to Babbitt, said Tuesday that “state and federal biologists recognized right off the bat that CDF was in error.”

Over the weekend, federal officials wrote to Campbell, raising the estimates of projected annual timber volume to the nearly 180 million board-feet level.

One letter, dated Saturday and signed by two senior federal wildlife officials, states that some land now considered too unstable to log was “misidentified” and will be eligible for logging in the near future.

“Areas subject to the initial prescription of no harvest . . . will change as a result of watershed analysis, boundary refinement, reassessment of the area definitions and more accurate mapping,” the letter states.

“We cannot predict the exact acreage that will be affected by changes. However, some timber harvest is expected on the 65,000 acres currently identified as areas of concern.”

A second letter, dated Sunday, from Hayes to Campbell, stresses that the environmental regulations are to be “flexible,” taking into consideration “practicality, which includes cost to Pacific Lumber Co. and economic feasibility and viability.”

Questioned about the letters, Babbitt said they are not legally binding and “not a part of any guarantee of any level of logging.”

Hayes downplayed the hazards of logging on the unstable terrain.

“We are not at all concerned about activities in that area,” Hayes said, adding that any logging will be subject to guidelines set by government biologists.

Logging on steep slopes and their highly erosive soil has been a bitter point of contention not only among environmentalists alarmed about damage to salmon streams but to many downstream residents. Some have sued Pacific Lumber, blaming intensive logging for landslides that have fouled drinking water and damaged homes and property.

Some environmentalists said the letters by federal officials compromised the agreement.

“It puts a huge onus on agencies that are supposed to be looking out for wildlife to consider the financial impact of standards that are supposed to be based solely on the needs of the species,” said Kathy Bailey of the Sierra Club.

Questions About Protection of Fish

“We have some very serious concerns about the loopholes that have been created in the plan and we are prepared to use legal means at our disposal to address them,” said Kevin Bundy of the Environmental Protection Information Center, a Northern California group that has been at the forefront of Headwaters protests for years.

Bundy said that any relaxation of logging prohibitions on steep slopes will have dire consequences for the fish in the streams below.

“It has taken us 10 years of litigation and protest to achieve partial protection for redwoods and it may take 10 more to save the salmon,” Bundy said. In contrast were the comments of Assistant Secretary of Commerce Terry Garcia, who oversees the National Marine Fisheries Service, the agency responsible for protecting salmon.

“The agreement is going to provide what the fish need for the long term for survival of Pacific Lumber property. The fish will sleep well tonight.”

Times staff writer Dave Lesher contributed to this story.

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Headwaters History

1986: Houston-based Maxxam Inc. acquires Pacific Lumber Co. of Scotia, Calif., and the surrounding Headwaters Forest, which contains the last large stands of giant redwood trees in private ownership. The deal is accomplished through a leveraged buyout engineered in part by junk bond wizard Michael Milken. Maxxam’s president, Charles Hurwitz, announces his intention of tripling the rate of logging in the forest, triggering 12 years of protest and controversial government regulation to protect trees and wildlife habitat.

May 1996: Pacific Lumber sues the state and federal governments, claiming that logging regulations have amounted to a “taking,” denying the company access to its own property and crippling its ability to make a profit from its forest. The company demands compensation and estimates the value of the timber at issue at about $500 million.

September 1996: State and federal officials strike a tentative deal with Pacific Lumber to buy and preserve about 7,500 acres in the heart of the Headwaters Forest for $380 million and to establish rules to protect wildlife in the rest of the forest.

April 1997: The National Marine Fisheries Service places the Northern California population of coho salmon on the endangered species list, estimating that the fish’s numbers have declined from several hundred thousand to fewer than 10,000. Scientists blame logging for the decline and point out that several of the streams that the coho have used for spawning are on Pacific Lumber land. Other endangered wildlife that are native to the Headwaters region are the northern spotted owl and the marbled murrelet, a seabird that nests in large redwood trees.

October 1997: Humboldt County law enforcement officers are criticized for rubbing pepper spray into the eyes of demonstrators blocking the doors to Pacific Lumber’s corporate headquarters in Scotia. The demonstrators contend that the company continues to log in violation of regulations protecting wildlife habitat.

November 1997: President Clinton signs legislation setting aside $250 million for the federal share of the Headwaters cost.

December 1997: The California Department of Forestry suspends Pacific Lumber’s license to log in the Headwaters Forest, citing more than 100 violations of the state’s Forest Practices Act. The license is later restored.

September 1998: Gov. Pete Wilson signs legislation authorizing up to $230 million for the state’s share of Headwaters plus two other stands of ancient redwoods owned by Pacific Lumber. The legislation contains provisions to prohibit Pacific Lumber from logging in 11 other old-growth groves for 50 years and to ban logging within 100 feet of fish-bearing streams.

September 1998: Earth First! activist David Chain, 24, dies when he is struck by a tree felled by a logger in the Headwaters Forest. Chain is the first casualty in 12 years of protests in the woods.

November 1998: The California Department of Forestry again suspends Pacific Lumber’s license to cut trees, citing numerous infractions of the Forest Practices Act. The license has not yet been reinstated. However, the company is permitted to employ contract loggers.

December 1998: Julia “Butterfly” Hill marks one year spent living 180 feet high in a Headwaters Forest redwood tree that she climbed to protect it from loggers. With a full-time volunteer support staff and worldwide media attention, the young woman has become an international symbol of resistance to old-growth logging.

Feb. 25, 1999: State and federal officials present their final offer to purchase Headwaters acreage.

Feb. 26, 1999: Pacific Lumber rejects the deal, saying it would impose conditions that would make it impossible to pay back the firm’s investors.

March 1, 1999: An agreement is reached moments before a midnight deadline in phone negotiations between federal officials in Washington, state officials and company executives near Eureka. If no deal had been struck, the federal share of the Headwaters purchase price would have reverted to the Treasury.